市场更新：蓝色浪潮对市场意味着什么

I am so mad at myself that I didn’t short oil. The only reason I didn’t is because I’ve been so used to the polls being biased to the left. I think the big revelation for me out of all of this is: trust Kalshi, trust Polymarket. They’re just right. Prediction markets are so much better than polls. They adjust for polling bias. If you had just looked at the Kalshi Democrat Index, you would’ve been able to trade this like a hero. I was too scared to do it, and I feel like an absolute moron.

Good morning, Jonah.

Good morning, Avi.

Good morning. Wow, that was a crazy night. What an experience to live through one of the biggest political wind changes we’ve seen in our lifetime.

Yeah, it was big.

That was a big night.

We all knew the pendulum couldn’t swing further to the right after what happened last time. It’s funny: in 2024, when Trump got elected, I was in London and you were in New York. We were having glasses of wine, celebrating on the pod. We were like, “This is it. Crypto’s going to infinity.” This time, I’m like, “It’s 10:00 a.m. Do I put some vodka in my tea here?” I feel like I should keep drinking. This is definitely not what I want as an out-of-touch crypto trader.

1. Affordability Drives The Election

What I thought was really interesting about this election, Avi, is that this was the first time the polls were kind of spot on, right? There was always this Trumpian thing where Democrats love to respond to polls and Republicans don’t. Democrats were polling ahead coming into the election, but usually you have to take a few points from the Democrats and give them to the Republicans to compensate for the fact that Republican voters were either coy about saying they wanted to vote for Trump or less likely to respond to polls.

This time, it swung even further to the left than the polls, which I think is a really interesting sea change. Honestly, I recommend everybody go pull up J.D. Vance’s latest tweet. He had the smartest take on the internet about what happened. Basically, the polls were right about turnout. All the Republican 2024 Trump supporters showed up to vote for Democrats, basically.

I think it boils down to 4 factors. I’m pulling up his tweet here. Maybe Brad can screen-share. Hold on. I’m going to screen-share right now, because I think this is literally the best encapsulation of what happened. There we go. The tweet is shared. Basically, he says, “Another pollster, one of the smartest people I know in politics, told me yesterday we’d lose the generic ballot by 13 points.” Even I was shocked by this—I being J.D. Vance. “In his polling, he saw that a lot of Trump ’24 voters were angry and planning to vote for Democrats. He asked those voters who had abandoned us what would cause them to come back on our team. The top 4 answers, accounting for nearly all of the responses, were: end the war in Iran, focus on the cost of living and inflation, put America first, change our relationship to Israel.”

I thought this was really interesting. I think the first 2 are correlated, and the fourth is correlated. They’re all basically the same thing: stop fucking around in foreign countries and focus on the price of eggs, the price of gasoline, and the pain that the average American is feeling. I have an electric car. I live in Los Angeles. I don’t really notice this stuff. But whenever I talk to anybody who’s outside of my bubble, it is tough to make ends meet, and that shouldn’t be the case.

I think Trump got elected because Biden had this problem. Trump got elected saying he would solve it, and the optics of the Iran war make it even worse. Some of the realities do, too: higher gasoline prices. I’m interested to see whether this blue wave carries through to the 2028 presidential election and how much grace voters are going to give the Democrats to attempt to solve this persistent problem of inflation, which I don’t think will go away under Democratic policies, as it didn’t under Biden. At what point do people just throw in the towel, give up on politics altogether, or vote for some incredibly radical solution in an attempt to curb the cost of living?

2. Trump Faces A Political Rebuke

All of these are good questions, but I think it just boils down to one thing, Jonah, and that one thing is affordability above all else. That’s what the voters care about. That’s what they want done. What was really interesting about all of this is that the Democrats, obviously in 2020 and really all throughout the Biden presidency, were very focused on social issues, and they were fighting a culture war. They pivoted extremely well to this idea of America first, affordability, making life better and easier for people.

The thing is that Trump’s messaging was so off. He came into power really running on 2 things: no new wars and securing the southern border and bringing down inflation. So, I guess, 3 things. He didn’t succeed on any of them except for securing the southern border, and even that was done in a very arrogant and aggressive way. I think we’ve talked on previous pods—I never really liked the videos they were putting out. I thought they were tasteless, and it wasn’t particularly smart to do so from a political perspective.

I think what it boils down to is arrogance. There was a certain level of arrogance. For me, and you too, Jonah, I think—maybe more me than you—I was definitely somewhat caught in my little bubble and unable to step back and realize that, despite wage growth looking okay and the stock market doing really well, your average person making $75,000 to $150,000 a year is struggling. The price of eggs is up. Diesel is $5 a gallon.

This is an important point: oil is down 8% today, which actually tells you something—the voters may have been right. This is a gut check for America. This is what a healthy democracy can do. They’re coming out and saying, “Look, you have made this a self-inflicted wound. What has happened over the last 2 years in America didn’t need to happen. We didn’t need to start a war with Iran. We didn’t need to be arrogant and aggressive with our deportation. We didn’t need all this.” They voted him out, and markets are up for a variety of reasons, which we’ll talk about. There’s a lot of dispersion in the markets. There are a lot of good trades here.

But really, I think at its core, it was a repudiation of Trump. It was not a repudiation of conservative principles. It was not a repudiation of the culture war that I think the conservatives have still won in many ways. We’re still past peak woke. That is not, in my opinion, coming back. It was solely a repudiation of Trumpian politics. That’s my take.

That’s what’s so interesting about this—

Which, to me, is very funny because Trump comes out and says, “I wasn’t on the ballot.” Actually, you were. You were on the ballot. This was solely up to you. We’ve talked a lot about the Iran war and what happened there, and I’m ready to admit that it was a mistake for the Republicans to do it. Was it a mistake geopolitically? I’m not necessarily sure yet. But politically, it was. One reason it was a huge mistake is that the Democrats and the broader world managed to paint it as an unnecessary war, right?

The other thing is that the competency of prosecution was very low. We are now months and months into this war. We have not seen regime change. Oil is up, and that, at the end of the day, means there’s nothing to point to. There’s no victory. Trump, unfortunately, can never apologize for anything. He can never admit to his wrongs. So he just gaslit the American people. He went out there and said, “Look, this is going really well.” To be honest, I believed it for a bit. And still, from a geopolitical standpoint—

I think it’s mission accomplished.

But have we pushed back the Iranian threat? Potentially, yes, we have.

Yeah.

But will it last? This is the part of the game I guess I didn’t really pay enough attention to: you have to win politically as well. Because if the Democrats come back into power and the Iran war comes to an end, and regime change hasn’t been accomplished, all you’ve done is kick the can down the road another 5 years. That’s it.

From my perspective, this is the end of MAGA politics, which sets up, by the way, a great trade: short DJT. Short Trump coin forever. That thing is actually going to trade at a $50 million market cap once Trump is out of office and he’s a lame duck. The Democrats are already saying, “We’re going to subpoena. We’re going to go after Trump. We’re going to go after World Liberty Financial. We’re going to go after the grifters.”

Subpoena. Subpoena.

Yes. Subpoena.

Not subpoena.

That’s what I said.

Spoken like a man who’s never been sued.

Subpoena.

To subpoena.

That’s what I said.

You got subpoenaed.

No? Yeah.

Or they’re gonna subpoena him.

That’s what I said.

No, you said “subpena.” You pronounce the B.

All right. Whatever. Subpoena.

No, it’s okay. It’s okay.

Subpoena.

I hadn’t been subpoenaed when I was however old you are—23 years old—either. It’s okay. It’s just part of becoming middle-aged. You get subpoenaed.

3. Prediction Markets Call The Turn

Anyway, I have a markets comment, just a quick markets interjection. I am so mad at myself that I didn’t short oil. I would’ve totally done it, and I thought about it, but I didn’t. It’s down $23. The only reason I didn’t is that I’ve been so used to the polls being biased to the left. That would’ve been an obvious trade.

I think the big revelation for me out of all of this is: trust Kalshi, trust Polymarket. They’re just right. Prediction markets adjust so much better for polling bias than polls do. If you had just looked at the Kalshi Democrat Index or the Kalshi Abdul El-Sayed probability, you would’ve been able to trade this like a hero. I was too scared to do it, and I feel like an absolute moron.

What the Democrats winning means for markets in general: I don’t think it means lower oil over the long run, because I think the conflict will remain ongoing. If there’s one area where Trump retains unilateral control and probably gives less of a crap now than ever, it’s the military and foreign policy. Oil will remain volatile and probably elevated. It’s probably actually kind of a buy here. It’s not like the Democrats can solve that crisis.

However, crypto: stay out of the way. Anything that requires regulatory approval from Congress, stay out of the way. I would not want to be working in crypto right now. That is a terrifying place to be.

I don’t know. I have a slightly different take on this, because I actually went through and looked at all the people who were running and what their stances were on crypto specifically. What I found is that the vast majority of them—James Talarico, for example—actually voted for the Bitcoin strategic reserve in Texas. There’s only one senator, whose name I’m blanking on right now, who was against crypto. A couple of the others were really just against the ethics clause in all of the bills. They’re not ideologically opposed to crypto.

You see it—not to use Hunter Biden as an example, but as an anecdotal barometer—with people like him coming out and saying, “Look, I support Bitcoin.” I think what people are really upset about is the circumvention of regulation, the grift, and the enrichment. Once Trump is out, I don’t know. Elizabeth Warren tried to take down crypto, and she really didn’t get anywhere with it. It wasn’t popular, and it actually ended up turning a lot of voters off.

If you remember correctly, 4 or 5 years ago, crypto was not a Republican stronghold at all. The general framework was that if you were on the side of Ethereum, if you were an ETH head or liked altcoins, you were actually a Democrat. If you liked Bitcoin and were a Bitcoin maxi, you were a Republican because you were a classic libertarian. What ended up happening is that, because of Gary Gensler and Elizabeth Warren, the entire industry shifted to the right. People actually pulled some of their other opinions with them to the right, and that caused a huge cluster for the Democrats.

Originally, when you go back to the core of it, crypto came out of the Occupy Wall Street movement. It had that same vein: “We’re fighting the big banks. We’re fighting the big corporations.” Ideologically moderate Democrats, despite the fact that Trump is heavily involved with crypto, shouldn’t have a huge opposition to it. One, they tried and learned that it didn’t work. Two, they realized there’s a base that’s a one-issue voting base.

I think what we’re going to see is a takedown of assets that are bad, and perhaps we’ll end up with a better ecosystem. This is maybe just cope, but I don’t necessarily think it’s going to be bad for crypto. What it could potentially be bad for is Bitcoin, because Trump made Bitcoin such a focal element in everything. But—

Bitcoin is tech, though, I think.

I mean, Bitcoin’s up today.

The markets are telling you what this election means for various assets. I think what it basically means is that if you’re a new crypto project looking to get approval for something or banking on regulatory clarity, good luck. It’s not going to happen. Bitcoin is already post-regulation, so I don’t think it matters for Bitcoin. I think it matters more for institutional adoption of crypto and institutional adoption of blockchain. We’re going to see all the nightmares from 2020 to 2024 on repeat.

The last thing this group of Democrats wants to do is green-light fintech. They’re going to want to regulate and stall things and probably focus on other priorities, not this. It just won’t have room on the agenda. They literally won’t care.

I also tend to agree with that. I don’t think it’s going to be their focal point. The other thing is obviously data centers. That’s what a lot of people were worried about. When you look into it, there are really 3 things that the senators who got elected—and the governors, more importantly, the governors—want. They want union workers involved in building data centers. They want power contracts that hyperscalers or builders sign to say they won’t draw from the grid and increase the price of electricity and diesel for the average person. And third, some of them want environmental reviews, which is actually the worst part. That box is the worst because that’s how they stop anything from being built.

I do think I somewhat fell for the conservative psyop. I didn’t realize a lot of these people are more middle-of-the-road than I expected. Everyone except for Abdul El-Sayed, who’s a total lunatic nut job. The rest of them are straight down the middle. Look at James Talarico, for example. The Republicans tried to smear him specifically with this idea that he wanted to “trans the kids,” and he had totally repudiated that. He said, “No, that’s absolutely not true. I will support a federal ban on gender-affirming surgery for minors.”

There was a lot of misinformation out there, and I think this is just a good gut check for people to get out of their bubbles. I’m saying this as much to the audience and to you as to myself, right? I was out there saying, “Look, I think wage growth is okay. I think the stock market’s doing all right. I don’t think people are hurting as much as the polls are saying.” I was just wrong about that. I was totally, totally wrong.

The good news is that the way you trade the midterms—which you have to do kind of every time—is there’s de-risking into the midterms, and then you bottom on the midterms. That’s what happened this time as well. I think the market right now is actually quite healthy. We’re in a good spot to move forward.

One argument I find quite strong is that a slowdown in data center build-outs will be good for Amazon and Microsoft, and for the people who already own data centers and hold compute. If future supply comes down and demand keeps growing, then the price you’re paying for access to that compute goes up. That’s going to be good for the people who actually own it.

Not only that, we moved from financing data centers using free cash flow to financing them with debt, and that compressed the multiples for a lot of these Mag 7 companies. It made people nervous: “If they’re going to start raising debt, is the leverage going to get bad? How are they going to continue to finance the build-out? Are they overbuilding?” These questions are now being put aside because there’s probably not going to be as much build-out.

Who’s that bad for? It’s really bad for the chip makers, because they ran up massively on the idea of infinite build-out: we’re going to be building data centers for the next 2 years, and we’re just going to keep going. There are going to be huge infrastructure investments. So it’s bad for copper. It’s bad for chip makers like Intel, which I unfortunately sold out of. I took a huge bath on that trade. That was not great.

I want to talk about that at some point: looking at a negative 28% move after hours, what do you do in that situation?

But it’s not good for the chip makers, but it is good for the hyperscalers, and the hyperscalers are the market. Those guys are the market. And so I think combine that with the fact that Bitcoin disassociating with Trump may actually, and crypto disassociating with Trump may actually end up good. I like owning the top tech stocks. I like owning crypto. I do not like owning defense companies at all. I do not like owning chip makers at all anymore, and I don’t like owning neoclouds at all. The other two assets that are really interesting here that have done well today and honestly might be setting up a new trend are gold and silver. And so the framework for this trade is really the next three months. I think we’ve passed the point of fear heading into the midterms. We’ve got, quote unquote, “the worst outcome” that you could get for business and the stock market, because people are worried, obviously, about Democrat regulations. But now the fear has passed, and now we can focus on moving forward. So until the next crisis, I think the market can drift upwards here, and there will be buyers. Now, if you want to be smart, what you can do is take those pair trades. You can say, “Okay, I’m going to short the neoclouds that have exposure in Texas, that have these big plans to build out, and their entire valuation was built on these data centers.” So, for example, like Helios, Galaxy stock. Galaxy’s down a lot today, potentially does even worse over the next coming weeks because their entire value prop is building out this Helios data site in Texas. And if there’s a moratorium and they stop, and they haven’t secured all the power that they need yet and they haven’t built out the infrastructure, I mean, they’re totally cooked. That stock’s probably going to like eight bucks. So maybe what you want to do is buy Bitcoin, short Galaxy. But maybe that’s just getting too cute with it.

I think it’s getting too cute. I think you just short Galaxy. I listened to their last earnings call. I almost never do that, but I’m very fascinated by that one because Galaxy is a pure play. I was thinking going into the midterms that this is a pure-play Republican-versus-Democrat trade. It’s a bet on crypto regulatory clarity and a bet on U.S. domestic high-yield data center construction. Both of those trades are literally that thesis and nothing else.

I think you’re okay being short that stock for a while. If you don’t have data center build-out and you don’t have crypto regulatory clarity, there is no business there. It’s just Mike’s P.A., and there’s not a lot of equity value in that. It shouldn’t trade at a multiple of book value. It should trade below book. So—

A hundred percent.

That is scary. But you mentioned a couple of things I want to talk about. The first is that the overall market looks healthy, and the second is that you talked about political messaging. On the point of the overall market looking healthy, I could not agree more. I think the stock market being unchanged right now speaks volumes. You made a very good point about that, and this overlaps with political messaging. It’s like, who won, right?

Abdul El-Sayed aside, because he scares the living bejesus out of me, it’s not like we got a big DSA wave. It’s not like Mamdanis and AOCs and Nithya Ramans and Abdul El-Sayeds took over Congress and the Senate. That didn’t happen. It got taken over by centrists.

That just means if a centrist Democrat wins in 2028 and you have the trifecta—the executive branch and both sides of Congress all blue—but it’s controlled by centrists, it’s just going to be more of the same. It’s just going to be up and to the right, more money printing. Maybe their priorities will be slightly different. Maybe they’ll be more focused on DEI and healthcare, among other things.

But honestly, I think the furthest left we’ll ever see the executive branch of government go—this could be cope—is what we got in the last 2 years of Biden, when he was brain-dead and being basically puppeted by some really radical people in his administration. I don’t think it’s going to be more left than that. I could be wrong, but the market is telling you it’s not, right?

At the moment, I think the setup is really good for a stock market rally, with the exception of a couple of pockets, like U.S.-centric, highly leveraged neoclouds and crypto portfolios trying to be crypto businesses. I definitely disagree with you on the chip makers. I think chips are a global commodity, and if the United States decides it wants to give up data center supremacy—I think 80% of the world’s compute lives in America right now. There’s a really interesting chart out there on that. I’ve got to find it later. Maybe Brad can put it up in the recording that gets released later today.

If the United States decides it wants to give up on compute, it’s not going to impact the demand for chips. It’s just going to shift it offshore. It’s not something with a speculative use case like crypto. Compute is real. There are offshore neoclouds like Nebius, which I think is based in the Netherlands. There are plenty in China.

It’s like oil. One thing that makes climate change agendas and policies so laughable is that for everything you implement in Country A to limit oil and gas proliferation, Country B seizes the opportunity. I watched it in real time at Vitol. It was a bit of a joke. Compute and chips are now global commodities, and you just cannot stop—

I don’t know if anyone will be able to match the projected build-outs and the CapEx expenditures of the hyperscalers, and they—

China. China.

Maybe.

All day, all night. All day, all night. China.

You think so?

Yeah.

And so you think the demand for chips will just shift all the way to China? I mean, that’s probably bad for Intel. It’s fine for SK hynix and—

It’s fine for Intel. It’s fine for Micron.

And—

China would love to buy all that stuff. What would be bad for Intel and Micron, the U.S. domestic chip makers, is if the United States said, “We’re going to focus on the environmental impact of data centers. We’re going to make them go through 3 years of environmental review,” thereby basically making new data center builds illegal, and simultaneously instituted an export ban on Intel and Micron.

I think doing those 2 things at the same time is too politically unpalatable for anybody except the Bernie Sanders wing of the Democratic Party. That goes back to my previous statement on our last podcast: nothing matters more for your bags than the Democratic presidential nominee chart on Kalshi for 2028. It’s just: who’s going to be in charge? Will Gavin Newsom ban data centers and ban exports? No. Will AOC ban data centers and ban exports? Maybe. Then maybe you have to think it’s the end of the AI trade and the end of Micron, but we’re just so far from that right now.

Yeah, I don’t think so. I don’t think China is going to speed up domestic production of data centers because the U.S. slows down. I think they’re just going to go at the maximum pace they want to go at. They’re not—

Dude, you don’t understand.

No?

They are already going as fast as they can. They’re desperately trying to beat the U.S. The thing that’s slowing them down is that they can’t get enough supply of silicon. If the United States tamps down on data centers but does not ban exports, all that silicon will just redirect east. It will go to China, and they’ll be ready to plug it in, attach it to power, and connect it to networking and cooling. The compute will just go overseas. Their bottleneck is chips. That’s all they’re missing.

That’s it. I can’t imagine that the U.S. is going to be happy about letting NVIDIA, Intel, and all these other chip makers sell massive amounts of chips—

They’re going to have a choice.

—into China.

Either Intel—

But, yeah, I mean, that’s—

If they ban domestic production, either those companies are allowed to export—

But it’s already—

—or they go to zero.

We’re already not—

NVIDIA is restricted from selling to China.

China’s restricted.

Intel is not. The UAE has restrictions on how much NVIDIA they can buy, how many GPUs they can buy. If NVIDIA is no longer able to sell in the United States at the rate they’re selling because data center builds get stymied, it just doesn’t seem possible to me.

Look, I don’t know. I really find it hard to believe that if we stop building data centers in the United States, China will be able to fill that entire capacity—

They will.

That we were going to build. I guess we’ll see. I think what you’ll see is in the prices of the chipmakers. We can check back in 6 months and see what the prices of chipmakers have done relative to the prices of hyperscalers if there are no export restrictions. But I don’t view the chipmakers as a good buy here because of that.

I think the chipmakers are fine. Here’s what I think will happen. I don’t think it’s possible to ban data centers nationally. I think it’s a states’ rights thing.

Okay, let me just—

10 more seconds. 10 more seconds.

Tell you something. Okay.

I think what will happen is the data centers will just get built in deep-red states like Alabama and maybe Florida. I don’t know what else.

It is a bipartisan issue right now. That is what I’m coming to understand. There were 41 local ballot measures on data centers across 10 different states on Tuesday. Every single one was 70% to 80% against. Red towns, blue towns, left, right. NBC’s exit poll found that 56% of voters called AI and data centers a major factor in their vote for Congress. People do not like this for some reason.

It’s not like they’re building refineries in people’s backyards.

I understand that. I’m not saying it’s logical or coherent or correct. I’m saying that’s what is happening. This is the same type of categorical mistake I made when looking at wage growth, the stock market, and economic data, thinking things were fine and not taking into account how people actually feel—their emotional and mental state.

I guess maybe I’m just a poll lover now. I trust the data, but to me, that suggests we’ll have a halt in the build-out. That means I probably don’t want to buy Intel until we’re in the $40s or something, until the multiples compress a little more. I don’t want to buy SanDisk until maybe we’re in the $600s, because I need the multiples to compress a little more.

Although, what’s also possible is that governors come out and moderate their positions because they realize this is the only thing driving the American economy, and they don’t want to be in the position of crashing us, right? If you look at Gina, the new governor of Texas, her position is that she hyperfixates on getting union workers involved and keeping power costs down. That’s it. That’s all. So I guess we just have to wait to see how it plays out.

Union workers—that’s not going to stop data center building.

Exactly. That’s kind of what I’m saying: there are these 2 competing tensions. People don’t want data centers built in their backyards, and politicians are responding by slowing things down. They might not be able to completely stop it, but that’s going to take a few months to play out.

In the meantime, the winners are the people who already have the compute. In the short run, as supply gets more constrained, you’re probably going to see revenue from Anthropic go up. You’re probably going to see revenue from OpenAI go up. This is probably good for their IPOs because I think we both agree that demand is going to continue to grow. If supply is constrained and demand grows, then prices are going to go up.

Yeah. Let me think about that.

4. Oil And The Iran War

So that’s really where I am here. The other thing that’s really good for the markets, by the way—and to take a step back, because I want to talk about the politics of it all, because it’s fascinating to me—is that the Iran war is probably totally DOA now. It’s over. Trump is not going to be able to prosecute it effectively in any meaningful way. I think he probably risks impeachment trials and all sorts of other things, so I think he’s going to be distracted.

Hard to disagree.

I think he’s going to be distracted.

That’s the last thing he has total, basically unilateral control over. He’s kind of Teflon. What he can’t do anymore is World Liberty Financial, like having Howard Lutnick’s kids take 5% of every company that does business with the government. But the Iran war—

Then why is oil down 8% today?

I think it’s a buy here. I think people are just—

Okay. Interesting.

Yes. I think people don’t realize that it’s going straight back up because this conflict is far from over. Basically, the genie’s out of the bottle. Here’s the big debate about the Iran war.

I don’t know. The Iran war is tied at the hip to Israel, and we just saw that Netanyahu and Trump agreed to end aid. We just saw J.D. Vance come out and say Israel is a big reason the GOP lost the election. I don’t think there’s an appetite for it. For all we know, they fire Pete Hegseth, throw him under the bus, and say the Iran war was all his fault. Then Trump tries to move on from it because he knows this is the least popular thing he has ever done as president, and it totally squandered the goodwill of the people, regardless of how good we think it was in reality.

What I’m really trying to get at is that reality and political values are no longer aligned in a meaningful way. I’ll give you an example. Young white males are saying, “Hey, I’m really fed up with Trump. I’m going to go vote for the Democrats.” There was a huge shift among white males under the age of 30, who went for Trump by huge margins. They went for Democrats this time in this election. A lot of the exit polling pointed to the Iran war and Israel.

They believed the Republican Party was the party of isolationism. Interestingly, the Democrats have managed to rebrand themselves as the party of isolationism. They’re the ones saying, “We’re not going to send your money overseas to bomb kids.” That’s a consistent talking point the Democrats use. But does it make sense? No, because what do the Democrats want to do? They want to fund Ukraine. They want to send $150 billion to Ukraine instead of sending $20 billion to Israel. They’re not isolationist. They want to finance Europe, finance Africa, and spend billions of dollars in aid through USAID building huts and wells. They’re not isolationist by any means.

But the emotional reality of the situation is that people care far more about Israel and the Iran war than these other things, despite these other things actually being less aligned with their political values. The other side is less aligned with their political values. It doesn’t make any sense from a logical, rational perspective, but it is what’s happening. I think that’s what I’m seeing in this country right now: a disconnect between your stated values and your revealed preferences.

Yeah. I think the best articulation I’ve heard of this is that Americans don’t care about policy; they care about the outcomes of policy. After a certain period of time, prices are just on the up and up. That’s why I have a 10-year, $1 million target for Bitcoin: the dollar’s just getting debased.

That’s basically the outcome of a policy that both Democrats and Republicans share, which is short-termism. I’d rather eat one marshmallow now than two marshmallows later. That’s the bottom line of all this. I’d rather stimulate the economy to make myself look good. I’d rather get elected by offering people free stuff. Democrats do it, Republicans do it, Biden did it, Trump does it. Eventually, that leads to the outcome people don’t like: an unaffordable life because of all this. Under Biden it was stimulus; under Trump it’s tariffs and wars. It’s not going away. Unless you’re a wealthy equity holder living off capital gains, these are tough times.

My point here is that I think oil’s going to go back up, even if the United States totally pulls away. Let’s say they decide, “Hey, Iran doesn’t matter. Kumbaya. Those ayatollahs just want to be left alone.” They totally pull out. Mark my words: oil will still be a volatile, insane bloodbath because Israel is now on a path of no return.

Even if they elect a bunch of bleeding-heart liberals in that country, at the end of the day, the IDF is not going to allow Iran to do what it wants to do, which is build a nuke and drop it on Tel Aviv. Iran is on an inexorable path toward that under the current regime, and Israel, with or without the United States, has an existential threat there that they’re going to have to deal with. Dealing with that will absolutely create problems in the Strait of Hormuz.

Now, the way that could potentially be stopped is if the United States intervened against Israel, which is Abdul El-Sayed’s platform. I do not think there’s political appetite for that for some time—years. So personally, I think the price of oil will go up. Whether people blame it on Israel or Iran or Trump or whoever doesn’t matter. Oil is not free of geopolitical risk.

Without geopolitical risk, it’s worth $50, so you can’t really be long or short at these levels. But I would like to bet that it goes back up on a renewed flare-up. I certainly don’t think Trump has anything to lose by finishing the job he started, because he’s already at basically a low point in approval ratings, and he just got shellacked. But he still has that power, and he won’t get investigated for it.

I think it depends. I guess it depends on your mental model of Trump, who has the ability to push him in the right directions, and what he cares about. What do I mean by that? Well, there are 2 outcomes here: one that’s good for the GOP and good for 2028, and one that might be good for Trump.

If Trump prosecutes this war and keeps going, and it goes well, I don’t know if there’s a huge benefit to the GOP, but there’s a huge benefit for Trump’s legacy. Huge benefit for Trump’s legacy. If he pushes forward and it continues to be stuck in a quagmire, and doesn’t really have any lasting impact on the bottom line of gas prices for Americans, and doesn’t have any actual regime change occur—if the ayatollahs remain in charge and he can’t point to a real victory because the American people see through his fake calls for victory—that’s really bad for 2028.

That’s going to be an albatross around the neck of literally any candidate associated with Trump, and the Republicans do not have a bench. They do not have people who aren’t associated with Trump. Whether it’s Rubio or Vance, all of them are tied at the hip to this administration. Even DeSantis, right? DeSantis is considered a Trump acolyte, and he’s involved, unfortunately. So I think what’s probably going to happen is that the people around him who are thinking about the future, and not Trump himself or his own personal legacy, are going to try to stop him from doing this.

If you have the Democrats working against him and the people around him working against him, I don’t know what he can accomplish, personally. So to me, I think oil is a continued short. The whole point of this discussion is to try to figure out what’s going to happen with the markets, and I think the cessation of the Iran war will lead oil to come down. It’ll bring inflation down, and it’ll be good for the stock market, the hyperscalers, and Nasdaq.

If your stance is that Trump is saying, “Okay, I’m going to continue fighting this war,” then you should be very nervous about the market, because that means oil is going to go up. I also think that’s going to be very antagonistic and set up fights between the Democrats and Trump, and that’s going to distract from everything. So I guess that’s where I stand. I’ll pause there, but that’s basically my take.

I mean, another take would be if Trump just says, “Okay, I just lost to the Democrats, so I’m going to totally cave to whatever they want and take my foot off the gas with the Iran war and hit the brakes, because that’s what the American people have said they think they want.” And then a bunch of crazy ayatollahs end up testing nuclear weapons, smiling, and threatening to send ICBMs at Washington, D.C., or Tel Aviv, or wherever. I don’t think that’s going to be great for Trump’s legacy either.

He went into this knowing full well it would be super unpopular and that it wouldn’t be something you could just end in a day, like the Venezuela thing, which is badass. One thing that boggles my mind about Trump is that his messaging is so on point as a political candidate and so off point as an incumbent leader. But his messaging is all over the place, right? He said climate change was invented by China for the benefit of Chinese people. He’s talked about all sorts of crazy shit on Twitter for decades.

His messaging resonates with people who are pissed off. Basically, he got elected saying, “This is going to be a revolution of common sense. Enough with the wokeness, enough with the brain-dead president who they’re telling you has a brain. Let’s just take care of business,” right? People loved it.

Then he gets into office and starts doing things like that. He’s hyper-aware of what’s politically popular and unpopular. The end of the J.D. Vance tweet literally says Trump said the Iran war has cost him the midterms. He, of course, knew that this would happen. I’m willing to extend him the benefit of the doubt and say that while his yammering is crazy, it is somewhat disconnected from the reality of his thinking.

I think he would not have done something he knew full well would be unpopular and against his message unless there was an actual reason to use the military. He wasn’t just doing it for fun. There must have been an actual problem he thought he had to address for national security reasons. He wouldn’t have just gone and impaled himself for fun.

So the problem is less about what he did and more about the messaging behind it. Instead of coming out and saying, “Look, I didn’t want to do this. It’s going to hurt, but we’ve got to do it, otherwise we’re screwed, and the price of things will be even worse if we don’t. We have to take some short-term medicine here,” that never got said.

Zooming way back out to your bags and your positions and markets, I expect his messaging to remain FUBAR. But I do not expect him to cement a legacy where he went in there, scrambled things up, and then pulled out before finishing the job. In my opinion, based on my own personal study of geopolitics, I know just as well as he probably knows that if you withdraw from this now, you basically hand a nuclear weapon to an adversary who will use it, and that is not a good legacy.

5. The Voters Cross The Aisle

I want to talk about something positive here. I obviously did not necessarily want the Democrats to win, mostly because I was concerned about the social issues. But what I was very happy to see for the first time is that Americans crossed the aisle. Number 1, there were a lot of voters who went from Republican to Democrat, which means there’s still a large portion of centrist and normal people in this country who can have their opinions changed. This is really important.

For a long time, since 2020, we’ve had this massive culture war, left versus right, this butting of heads, and everyone seemed so deeply entrenched in their positions. What we saw last night were people willing to change their minds, and that’s what makes a country great, in my opinion. Even though I wasn’t happy with the outcome, I was happy to see that. Combined with the fact that the experts were right, this feels like a win for the experts. I tweeted that this was a win for the experts. This was a win for the pollsters. It’s honestly a win for traditional institutions.

It’s like Nate Silver was right. Nate Silver was right. What’s happening to this country? For the last 6 years, it was all about alternative information and alternative news. It was about being contrarian, about being against the grain. Now this movement was actually a cohesive movement about quality of life—quality of life and having rational people in charge.

Whether you think Trump is rational or not, I tend to think he’s more on the side of rationality than not. A lot of people don’t, and a lot of it is because of his personality and messaging. There was this coming-together moment where people crossed the aisle and elected people they thought were going to represent their best interests. It wasn’t about social issues or because of the other side. It wasn’t like, “I hate these people.” It was like, “You are not doing your job.” That’s different. That’s quite a different type of election and a different emotion in the population, and that, to me, is good.

What it also means is that the Republicans, through proper messaging and proper action, can win those people back. If the Democrats overplay their hand, if all they do is go for vengeance and revenge and they don’t do anything properly, and the Republicans are the ones who flip to affordability, flip to quality of life, and talk about how they’re going to impact your bottom line, that’s good for them.

All in, I actually think that gridlock might be good for the markets. If the politicians get nothing done and just end up fighting each other, that’s probably a good thing for the markets. You kind of just leave the markets alone. You can’t regulate, pass legislation, or get stuff done. That’s going to end up okay for the markets. I don’t know. One other thing I was thinking about as a potential trade is that I do think this is probably bad for LatAm and Venezuela investments.

You’re probably going to see people try to stop that, because there’s grift associated with it. There are a lot of Trump acolytes putting their money into Venezuela. You saw the articles that came out about crypto magnates like Fred Ehrsam investing in Venezuelan oil fields. You’re potentially going to see some pushback on that.

Basically, anywhere Trump has touched, you’re going to see pushback. Which is why I love the idea of shorting Trump coin. I mean, just long Zcash—

What’s it worth right now?

Dude, just long Zcash, short Trump coin forever. I should have shorted Trump coin a long time ago, but I guess it’s a $365 million market cap and $1.2 billion fully diluted. It probably goes down even more. What is DJT trading at? DJT is at a $1.38 billion market cap. That’s going nowhere. Trump Media is going nowhere as well.

These are some good trades, in my personal opinion. I don’t know. I’m humbled, Jonah. I’m humbled today, and I think it’s just a reminder to everybody: X is not the real world.

Yeah.

You need to step back. I didn’t have a strong opinion on anything except that I thought Abdul El-Sayed was going to lose. I was looking at Michigan data, and I thought, “I don’t know. It just doesn’t make sense that this arrogant guy running on affordability would win.”

I guess the tariffs really impacted the way people perceived the economy. If the economy was just not doing well, or wasn’t doing as well as you’d hoped, but there were no tariffs, you couldn’t really blame it on anything. But a lot of people blamed their own personal struggles on the tariffs, which may or may not be true in some cases for some companies and some workers. That definitely came through. I guess I should have read the vibes better.

I’m humbled too. I was dead right that you shouldn’t sell all your stock or crypto going into the midterms. I maintain the belief that cash is trash, and you must be long equities, Bitcoin, Nasdaq, and various assets. I disagree with you on chip makers. I think if this is a dip, it’s an opportunity.

Well, we’ll see.

Let me just finish. What I will say is that I’ve realized something from this midterm election. I came into it knowing that the pendulum couldn’t swing further to the right. The opposing party always does well in the midterms after whatever happened in the previous elections. There’s no surprise there. I grasped that.

But the scale of this victory, of this tsunami, of this blue wave, made me realize that I’m out of touch with reality and need to work to get my fingers back on the pulse. It wasn’t on my bingo card that Democrats in California would vote for another 1% increase in sales tax, which is basically a tax on poor people, but not vote in the billionaire wealth tax. That one didn’t pass.

They would also vote in a bunch of DSA candidates at the city level. Nithya Raman’s going to win here. She basically believes in legalizing drug use on the streets and homelessness. I wish I were kidding. She makes Karen Bass, who literally trained with the Che Guevara youth under Fidel Castro during her college years, look like a conservative.

They legalized throuples here. All kinds of crazy stuff is happening at the city level that makes no sense: both wokeness and taxes on poor people. Then at the national level, a bunch of centrist Democrats won. Honestly, I feel discombobulated. When I’m not seeing the ball well, I like to stop for a bit, take a breather, and reevaluate how I’m trading and taking risk. At least the index trade is still intact. I wasn’t wrong about that.

The last thing I wanted to say is that I think the most important political trade to look for in the next 2 years is this: the Democrats got elected, but politics has been only about Donald Trump in America since 2015. The Democrats didn’t get elected with a vision for America. They got elected by playing on popular outrage related to Israel, the Iran war, higher gas prices, higher prices, higher tariffs, and calling Trump a jackass. They won on an anti-Trump message.

So yet again, this election was about Donald Trump, and it probably will be again in 2 years. But what happens after that? Where are the winds blowing? You’ll start to get whispers of it in 2028, and I think that will determine what happens with your positions and your bags. If it’s just about “Trump sucks,” it’s up and to the right for most stuff going forward. If it’s, “Hey, we have this new plan, it has nothing to do with Trump, and there’s a new set of people involved,” that may actually have a bearing on risk assets.

100%. The whole idea that there’s a new system we need to implement is the fear. This is why I was actually very heartened to see that the wealth tax—I think it was Prop 40—didn’t pass in California.

That scared the shit out of me.

That was a really good sign that this election was actually the voter base trying to return to normalcy, which makes me a little bit more constructive on markets. I think if the—

At the national and state level.

If the wealth tax had passed in California, number one, Zcash would be at $2K right now. But I would literally be fully in cash. I’d own treasuries. I would just own treasuries, because to me, it would suggest that the next few years are about rebuilding a system in many ways.

That’s actually a really good point.

And that is terrifying to me.

So locally, taxes are—

Wow, I love it. It’s a good point. I finally got a good point from Jonah.

Dude, you’re spot on. It’s crazy. Big blue city local politics are lurching to the left, but state and national politics are kind of responding. I think it’s millennials starting to come up with some common-sense centrist ideas, some of which I agree with. Honestly, that’s probably okay for markets.

What scares the shit out of me is if, like you said, at the state level, or worse, at the national level, DSA ideas take hold. Ideas like, “Let’s just take away money that people have already paid their taxes on,” or, “Let’s institutionalize crazy ideas that have been debunked.” That would be terrifying. But we’re not there yet, though we’re a little bit closer to it in some ways.

We are. I think that’s as good a place as any to wrap. We’re closer to nonsense than we ever have been in the past, and the next few months are going to be fascinating, I’ll tell you that.

I agree.

I’m really excited. Once all these people get sworn in, I’m excited to see what they do. But until then, we have some reprieve. I think the markets will go up for your Christmas presents.

People keep asking me about Intel. I’ll probably make a video on it later, and then definitely livestream on Friday. To wrap it up, I sold Intel at $74 after the earnings came out and they guided down Q4, which is really more about the PC market than anything. I was ready to buy back, but then this Democratic sweep happened. I know Jonah and I disagree on this, but I’m really not bullish on chip makers right now because of that. I have to put my foot on the brakes when it comes to investing in chip makers. I’m standing by, basically, waiting for better multiples on INTC.

Hmm. Okay.

All right.

Well, let’s wrap it up there.

Well, guys, that was really fun. That was a good one. There’s a lot to talk about.

Love you, bro. That was a great stream, as always. See you next week.

See ya.

Nothing said on the ThousandX Podcast is a recommendation to buy or sell any investments or products. This podcast is for informational purposes only, and the views expressed by anyone on the show are solely their opinions, not financial advice or necessarily the views of 1KX Media. Our hosts, guests, and the 1KX team may hold positions in the company's funds or projects discussed.