The AI Arms Race: Who Can Actually Win?

The AI revolution is here — but the road ahead is not without challenges. 

We break down the struggles facing OpenAI and other artificial intelligence companies as they navigate enormous capital requirements, energy demands, competition, and the challenge of turning groundbreaking technology into profitable businesses. 

Is AI overhyped, or are we still in the early innings of the biggest technological shift of our lifetime? 

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Transcript

SPEAKER_01 0:00

From Wall Street to managing hundreds of millions in client money, Nick and I used our alphabet soupe of credentials to discuss the investing and tax strategies that actually work. Oh, and we played Division I college football together. So strapped in. This one hits hard. Let's go.

SPEAKER_00 0:22

Alrighty, folks. I think there are actually four things that we must talk about this Monday morning with Taylor, CEO of Life Goal Investments, a 10-plus year Wall Street veteran. First, unfortunately, the war has escalated. Nine days of strikes, loss of life, unfortunately, is growing. We do have hyperscalers starting to report this Wednesday. We also will get something in my wheelhouse new home sales on Friday. But as I shared in my daily financial news from Monday, I believe OpenAI is destined to be a dumpster fire. I believe their go-to-market strategy that started out hot will actually turn out to be an Achilles heel. They are going to go to zero because there are better, faster, and cheaper models that the masses will start to use. Most recently, Kimi 3. Yes, it's a Chinese model, but I don't care if they have my mom's lasagna recipe. I don't care if they have my budget blah, blah, blah. It just doesn't matter. It is estimated that over 50% of tokens being used are already being used by Chinese models. So I want to ask a Wall Street veteran if I am right in OpenAI turns into a dumpster fire that burns hundreds of billions of dollars and ultimately goes to near zero or something less than today before getting acquired. I don't even know where to look. Where are we going to look for the signs of a dumpster fire? So, Taylor, I'm not asking you to agree with my opinion. I'm just want you to highlight Zuber, you would start to see the cracks here and here and here. And then we can get into whether you agree or not. But where would I find it?

SPEAKER_01 1:59

Zuber, you have already started to see the cracks form. Yes. A major, a major no, I and I don't think you're wrong, to be clear. I think their go-to-market strategy was very flawed and continues to be very flawed. But um, a big owner of that is Microsoft. And Microsoft stock has not done particularly well this year, and a lot of that has to do with the fact that they have a stake in open AI that's valuation had run dramatically, and it was a huge tailwind for them, and now it's becoming a huge headwind for them. Because what you saw in Q1, and I said this last week, was you saw Anthropic post 8,000% revenue growth, 8,000% revenue growth in one single quarter. And so what's happened there is OpenAI has not figured out how to monetize the end consumer, which is whom they're after. Whereas Anthropic has said, we're gonna take this B2B, and B2B actually has the checkbook and the wallet to back it if they can see the productivity.

SPEAKER_00 3:04

And so and and they are more likely to say, I don't want the Chinese to have my stuff, right? They have true IP, right? Which creates this moat uh for anthropic, but go ahead.

SPEAKER_01 3:18

Correct. And and the US government's not going to want our biggest and baddest uh companies utilizing Chinese models that are getting better and better and better. So the latest I heard over this past weekend from a very informed source is that the Chinese open software models that are not run on hard brute force compute horsepower that we're running our models on. So therefore, they are way more efficient, are about four months behind our best at this juncture. And that gap continues to close. So OpenAI, they were the name. They were the name that initially launched into this space. They were the one that everybody utilized and everybody got comfortable with it, but they gave it out for free. And then they said, hey, we're gonna put this in front of the masses, we're gonna get the maximum usage out of this per person. And the reality is people aren't willing to pay even the $20 a month that they're requesting for it, even for the lower end models. I do and I use it a lot. And where I use it for is um simple stuff, simple, you know, simple tasks, but I also utilize it to like in my social media work to cut words, trim fat. So it's not that they are producing a script for me, but they are taking out the 50 excess words in in a script, and it is very useful for that. But if it costs me from 20 to 40, I'm not doing it. And so like I actually have a very real use case, whereas most people I don't think do, and they're just not willing to pay for it. And I think you're gonna see it show up. You've already seen it show up in in Microsoft, you've already seen it show up in Oracle, you've already seen it show up in a lot of this circular financing type organizations, and uh, they're taking out they're they're being taken out behind the woodshed right now.

SPEAKER_00 4:59

Yeah, and again, I think it's really gonna boil down to the go-to-market strategy, right? They came out hot, they they were the name, right? They were the Xerox, the Google, whatever for the moment, right? They were the answer. But they went after the consumer at 20 bucks a month, which again, out the gate, there's mil you know, hundreds of millions of us, and lots of people like to be on the bleeding edge and will play with it for 20 bucks. But in order to kind of cross that chasm, um, you're just not gonna get there, especially if the Chinese model the last I read is better. It's now Kimi 3 or whatever it's called is the highest ranking LLM out there, faster and cheaper. Yeah, better, faster, cheaper. Is that good? Is that good? I think that I think that might be three for three, right?

SPEAKER_01 5:45

So we have we have a little conflicting data, but I'm not saying that your data is wrong and mine is right.

SPEAKER_00 5:50

Um, but even if we're four months behind for the consumer, we don't we don't need the bleeding edge. Correct. We probably don't even want the bleeding edge.

SPEAKER_01 5:58

That's the reality. We don't know how to utilize it, you know. You know, it's just yeah. So I no, you're you're you're you're spot on. And now what you're seeing is you're seeing earnings forecasts not change, but get called down to the office and say, we're questioning what you're forecasting here. And that's that's what's taking place, and that's why you're seeing some of the memory type stuff sell off. That's why you're seeing the the chip data kind of be be very wonky, and the the market is acting very unusually right now, and it's all a function of what we're talking about right here. It's it's all of a sudden is China gonna sneak in onto this game and just undercut the market because they have the ability to do it. They were crafty enough to do it via software, open source it, which they were that we forced their hand to do that because we wouldn't ship them our chips and our powerful, you know, underlying compute power. And so they got very crafty. And if they come in and undercut it, you're seeing big mega, mega cap stocks right now move eight percent, nine percent up and down within a day. That that is not a normal market environment.

SPEAKER_00 7:05

No, not at all. And again, it's it's funny. I'm glad I have the receipts. I think it was six months ago. I was, I think I was actually six months ago proposing like, hey, if I was China, what would I do? And I would execute you know what was called steel dumping in the 80s. Yeah, is I would just dump these LLMs and then blow up the debt market and just watch money burn. That's and and that's where I think it's coming.

SPEAKER_01 7:28

Well, what's funny is that when we first started to see all of this ridiculous capex, it was about a year ago. So a year ago, I think the number was 400 billion, and now it's 800 billion planned capex by the hyperscalers, which are numbers you really can't fathom all about.

SPEAKER_00 7:43

They're going cash flow negative. That's how big it is.

SPEAKER_01 7:45

They're going cash flow negative. But back when they were gonna spend 400 billion dollars, now they're 800 billion dollars. The question at that point was well, when does the productivity bleed through? When's where's the revenue? Where's the revenue? Where's the money coming from here? And that question has not been answered, but the market muted it and suppressed it, and it just stayed out of the headlines until right now.

SPEAKER_00 8:08

Yeah, and again, I'm trying to want because again, I this circular financing is a complete shh just it's just crazy how they let that stuff happen. But I'm wondering if open AI can't like open AI has burned more capital than any company probably ever. They just have this insatiable desire for cash.

SPEAKER_02 8:28

Yep.

SPEAKER_00 8:29

And if I'm right, they're they're right now. I think they're tiered up to be the third IPO, right? Anthropic, it appears, will be next. And they get in under the wire. Correct. I just don't think open AI gets to the finish line. And then I asked myself, what happens if they can't pay their bills? Do people go back and confiscate the GPUs or something? Is that is that collateral, or what happens? It was a it was a horse race.

SPEAKER_01 8:51

It was a horse race between anthropic and open AI. And at first it looked like open AI was gonna come first, yeah. And then I think the market told them you're not allowed to come to market until you can figure out how to make money. Or or at least, I mean, SpaceX isn't making money either, but at least show some sign, tell tell some story that we can actually wrap our head around. And that that just hasn't hasn't come to fruition yet, which is why they said, you know what, maybe we'll maybe we'll do this in 2027. We gotta get our shit together between now and then.

SPEAKER_00 9:18

But I mean, I don't know that they can survive. I, you know, again, they're they're as near as I can tell, and I don't know if this is true or not, but I read a report over the weekend that they're still losing money for every customer that they acquire.

SPEAKER_01 9:30

Yeah, that's not a great business model. That's not a great business model. You know what it is. It it is if you can it is. We've seen it successfully run by other companies, but there was a line of sight, there was a story, there was uh a game plan and a business proposal that said, Hey, we need to spend money to acquire this customer because the long-term value is X, but the long-term value isn't there if you can't convert them to pay $20 a month, let alone $100 a month, which is what it's gonna take you to be profitable.

SPEAKER_00 10:01

Yeah, and again, this is why the go-to-market of getting the masses while genius and gets you out early is gonna prove to be the thing that kills them because again, better, faster, cheaper is always gonna win.

SPEAKER_01 10:16

Well, at the end of the day, it's like the first mover advantage typically really is a first mover disadvantage, correct? Because you see exactly what folks did wrong, and then you come in with a superior game plan and you execute upon it. And and look who is the king of the castle right now. The king of the castle right now is Apple, who said, I'm not getting involved in any of that nonsense. Yeah, I'm not burning to do with AI. And and and now they're the one that that isn't spending. It like this earning season, which I know we're gonna go there. This earnings season is going to be incredibly well.

SPEAKER_00 10:48

Let's just jump to that. That was gonna be topic number two, but let's just jump to that since we're here. We'll we'll hit the war after this. But yeah, we the big tech earnings start next week. We'll we'll hit let's hit the finance bros first. Again, they always come out as expected. I think we said last week they're gonna be fine, they're gonna have record numbers, this, that, the other. Anything shock you in the big banks?

SPEAKER_01 11:07

Well, no, no, they were incredible, like we both said they were gonna be. Um, but they had a positive movement out of the stocks after earnings, and then they gave it all right back. Like the the two Goldman and Morgan had positive movements and then he gave it back. And it was just because nothing wrong with what they reported. They reported incredible earnings, and you knew it was gonna come because you had record deals from uh obviously SpaceX coming to market, but you also have debt issuance coming from companies that they're brokering. You've got a lot of MA starting to pick up and that market becoming unfrozen. MA, I think I said in the last one, up 50% versus the first six months of last year. Um, so so obviously that was all very, very productive. I think the market now says, like, okay, if everything is incumbent upon the success of AI, and now we're starting to question AI a little bit in the spending that's taking place there. Where do the finance bros garner their their next incremental dollar, incremental dollar? It can can they continue this fervor? And I think that that's that's why they they had a big win because the numbers were so good and the market was like, Yeah, but we knew the numbers were gonna be good. And what's coming next? Because that's the real question.

SPEAKER_00 12:19

I like it. I like it. Well, let's get to the hyperscalers. I think Google, aka alphabet or alphabet aka Google goes out Wednesday. Correct. Um, but we have a whole list of tech companies coming in the next 10 business days. What uh what do you think is coming? I don't know.

SPEAKER_01 12:35

So I think that they I think that they say that they continue the capex spend. I think the market has not talked them out of that yet.

SPEAKER_00 12:43

So let me let me poke at that a little bit. Near as I can tell, the last several quarters, not only have they said they're continuing, but near as I can remember, they've increased it every quarter. So do you think the increase continues, like they do it again?

SPEAKER_01 12:56

So that'll be interesting to see how the market takes that. So if they say, hey, we're gonna continue on the trajectory that we were on, meaning like we're not increasing, does the market then bleed that into oh boy, this were going like this with their forecast as to how much they're spending, and maybe they just level off. Does that is that kind of that could be the pen, right? Yeah, yeah. So I I I don't know. I think that you know, these things come into and out of favor. Last week was a really rough week, kind of broadly speaking. You actually had the Magnificent Seven catch a bid where that you had stuff sell out of memory and some semi-stuff, and it rotated over into the the Magnificent Seven. And that was just because I think valuations were getting relatively um compressed on that end, and people were buying the dip and rotating out of some of the more momentum stuff that was getting its face ripped off into the mag 7s. It I don't know. I think that probably they continue to accelerate their spend. I don't think that this was a long enough period of time of punishment that allows them to about face on something that seems to be a pilgrimage to who is going to be the fastest, the biggest, the best cloud provider, and have the most compute power. I still think that is the game plan.

SPEAKER_00 14:08

All right. Well, uh, it's interesting. I obviously um South Korea, I think you probably saw that last Thursday or Friday. Uh memory serves that had 1.3 million accounts get margin calls, 350,000 estimated to go to zero or negative balances. What kind of leverage is in the US system? Because that those kind of numbers are wild in South Korea.

SPEAKER_01 14:29

Yeah, you you see margins expand every time the market continues to do well. So it's it's no big surprise that that people are are margins more than they have been. I don't think it's an uncontrollable amount of margin. You do have kind of like a confluence of three events playing out right now that I think the market's really struggling with. One is just relatively high valuations, and and valuations, you know, folks will make the argument, pundits will make the argument that valuations are fair right now. But what they aren't necessarily looking at as much as they should is the earnings growth rate. So basically, price to earnings is on a forward 12-month earnings forecast. And so, with everyone saying that we're just going to continue to spend like drunken sailors on this AI build-out, then the earnings forecasts are still really, really strong. You've got the next five years. This is shocking. The next five years, the average analyst has 23% earnings growth for a five-year period of time. For the for the index, for the index, the SP 500, the average estimate is that you're gonna get 23% growth per annum, which basically means from today over the next five years, earnings are going to triple.

SPEAKER_00 15:44

Yeah, I was gonna say I was just doing the rule of 72. It has to be a tri Oh my god, that's yeah.

SPEAKER_01 15:48

So if has that ever happened before, it has happened. It came right once to be clear, it happened once and it came right after the Great Depression. Oh, so it doesn't it doesn't count. So let me just tell you it doesn't count. It doesn't count the answer to that is actually no, yes, but absolutely no. Yeah, absolutely no. So if you look at it on that basis, wow, then you can look at it and say, okay, fair valuation. So I'm gonna go back to my overvalued comments. So we're at least at least richly valued. Richly valued, yeah. You've got richly valued, you've got kind of the retail consumer sentiment getting frothy, if not very frothy. And then you also have equity issuance for the first time in a very long time. So we went from everyone's buying back to now Google, who has more free cash flow than God, issuing debt and equity. And it's like, well, hold on, hold on. Where why why are they doing this? Why don't they have the confidence in it to deploy their own capital into this? Why are they going out and borrowing money or raising equity to bring in new capital, dilute their shareholders? It it 2026 feels a lot like 2021. 2021, you're coming out of COVID. It was the year after COVID, you start to have this insatiable demand pick up for stocks. You've got uh rich valuations, you've got the retail trading army that's backing the likes of GameStop, et cetera. And then you also had significant issuance. And so 2021 was a banner year. Let me remind folks. Like I think the market was up 25% or something like that. But then came 2022, and it was kind of the time of reckoning there. So I'm not saying it's a uh it's a perfect corollary there, but there are some similarities to 2021. And by the end of 2021, the market peaked, the market peaked, I think, literally December 31st, and then started to drift downwards.

SPEAKER_00 17:41

Okay. All right. Well, let's get to uh let's get to this war. Uh, unfortunately, this is something that's been topic for far too long, and unfortunately will be a topic probably for far too long. Uh, but we've had some major escalations, right? There was unfortunately the the death of three American soldiers, uh, which caused uh President Trump to now have nine days of bombing. Uh this does not seem to be going in the right direction. Of course, it's Monday, and of course, that just means there's a headline about peace talks, which is just complete nonsense at this point.

SPEAKER_01 18:11

Yep.

SPEAKER_00 18:11

Um, but this this thing does not seem to be going in a positive direction, in my opinion.

SPEAKER_01 18:17

No, it doesn't. I'm hoping that there is a timeline on the Iranians' calendar that they're looking at and going, hey, midterm date. Let's just push them to midterm date, get this guy out or or this guy's respective party out of control, and then replace it in. And I'm hoping that's what it is because I hate to say it, but that feels like a good scenario at this juncture.

SPEAKER_00 18:40

Yeah, exactly. That's like an okay outcome. And that just means you know, that's four more months of this nonsense.

SPEAKER_01 18:46

I don't I don't claim to be any military strategist or anything like that. By by far, nowhere even I'm speaking out of turn there, but I did listen to a couple podcasts this weekend with military strategists, and both of them said, and they were clearly very educated on the topic, that they don't see that we can get out of this without boots on the ground, which is it's it's just it's just it's something that nobody wants to hear.

SPEAKER_00 19:09

That's the red line that that I've had since the very beginning is boots on the ground, forever war. Again, uh, it I'm I have believed since the very beginning that Iran's will willing to suffer more than we are, and that just that's a very dangerous. And oh, by the way, we shouldn't forget that there's a third party involved, Israel, yeah, who could do their own wild left-hand, you know, whatever, you know, strikes. And now we got Hezbollah coming on in the Suez Canal, and just we got uh I read over the weekend there was a bombing of a distillation plant, right? Or desalination, whatever it's called. It's like, guys, we start taking out infrastructure.

SPEAKER_01 19:46

This is it, and and you have a tanker on fire out there right now, or just had a tanker on fire out there off the sh off the shore of Oman. So, I mean, everyone's tactic in the shipping lanes have been just hug Oman and stay as far away from Iran as you can. And the latest headline that I saw there was, you know, uh, hasn't been confirmed who did it. I'm like, well, I think I think I got a pretty good idea here. Yeah, it's like it's not it's not a hard guess. So um, yeah, at the end of the day, but I I thought when that happened, not necessarily the markets, the markets have become completely numb, completely, completely numb. Oil is what over 80 bucks now? I mean, they're just yeah, so but I I would have thought that as soon as you start to see a ship on fire where now there's real action rather than saying, hey, if something happens here, we're gonna start doing this, and you start seeing real action there. I would have thought you got higher rally out of oil than you did. And I and I told you my theory on oil um last week that China is really the controller of global oil prices by their strategic petroleum reserve. They will buy it at 65, they'll cut off all buying at 100, and they're just gonna keep it in that window. So maybe some of that's going on there. But I would have thought the reaction would be significantly more given this weekend's headlines, given the death of Americans. Americans don't like seeing American soldiers die, especially when they feel it's unnecessary or not necessarily 100% at the hands of our own decision making, which I know is a big argument about the Israelis right now, um, etc. So yeah, but but the market isn't reacting, it's it's it's pretty well muted.

SPEAKER_00 21:20

I was yeah, I gotta tell you, I I I thought oil would have a more aggressive move this morning. I really did. Yeah, and to see it was actually down, at least at the open, at least a little bit. I don't know what it's doing now, but yeah, this um this does not seem to get better. I am tired of the all the bad shit happens on you know Friday to Sunday, and then suddenly a you know peace talks happen Monday. I'm like, God, get a new playbook.

SPEAKER_01 21:41

This is it well, what what is the theory? The market's not open over the weekend, so it can't just puke on itself when I guess happens immediately. I don't, but that is absolutely the playbook. There's no you know you can't argue. You can do it three times in a row and make you know a coincidental kind of thought out of it.

SPEAKER_00 21:55

Not 27.

SPEAKER_01 21:56

Right, exactly, right, exactly right. And I Uh it's frustrating that we have to continue to talk about this. It's more frustrating that we have to to lose lives over it. Um God, I think the total's now at 17, which is becoming a non negligible number. Um, and and not one is non-negligible, right? So um don't let me come off callous there.

SPEAKER_00 22:16

Yeah, no, it's um seven, yeah, that's that's not good. One one's not good. Um especially for yeah, anyways. Well, let's get to the third topic because again, we still have you still have an economy to deal with, and housing is you know 12 and a half, 13% of the economy. We've got new home sales on Friday. Any any thoughts on uh what might be happening on Friday? No, I want your thoughts. Uh again, I think um, well, I think the first thing, let's just let's talk big picture. Uh, new home prices are now at the median below existing home sales by about 20 grand. Yeah, right. So it's significant. That's not normal. No, it's not. Um people should be asking, well, why is that happening? Well, I can tell you why. In the existing home market, we do not have a distressed seller, right? Most sellers are even if they want to move because they're outgrowing their home, they don't have to. It's paid off, they have a two percent mortgage, they're they're uncomfortable, but fine, right? The cost of shelter is below you know historical norm. So they're fine. They they're just not a distressed seller. Home builders, they are forced sellers at some point. Home builders need to convert their build to cash to just lilique the system.

SPEAKER_01 23:31

Yep.

SPEAKER_00 23:31

So that's what you're seeing right now. So I still expect new home sales to disappoint, right? Um, you know, they they're gonna have to keep increasing uh their buy downs or giveaways. Um, their margins are going to be hit. Uh they're still positive, they're still, I think, single digits, they're not double digits anymore, but they're still single digits. And I think more and more builders are going to build to order versus build on spec. So we're just gonna continue to see the slow, right? Housing's gonna stay in a depression, simply said. Housing's in a depression.

SPEAKER_01 24:04

All right, and and I was just pulling up as a looked like I wasn't paying attention there for a second. I was just pulling up the home builders index, and it had a really, really nice rally with just the risk-on rally that started back kind of mid-May. And it's given back 15% of that rally in the last two weeks or something like that. Are you still seeing big, big buy downs out of out of the builders at this point?

SPEAKER_00 24:26

Yeah, you're you're I again, I think they were again, if you go back to the previous several months or quarters, they were starting to wane off of those. Yeah, I just think over the last 30 or 60 days, because rates are up. I mean, rates are very close to where they were.

SPEAKER_01 24:39

Year highs, yeah.

SPEAKER_00 24:40

Yeah, so year highs. So I'm gonna guess they had to, you know, reverse that trend and and go deeper to move to move product.

SPEAKER_01 24:48

It's interesting that if you're getting a discount on new homes, it's interesting that the top end of the K that has all the money, it's interesting that they don't step in and level that out, where they step in and say, Hey, you know, who cares if it's six and a half percent interest rates at this point? Like, we can afford it, we'll buy it in cash and at least bring that market to parity. Because, like, call me crazy, but a house that's 15 years old probably shouldn't be quite as expensive as a house that's brand new, but right now it's the ex opposite. So it's I think there's something, you know, obviously no one wants to wait a year for a house to be built. And building a house is I I've never done it before, my brothers in the process right now. It's it's not easy. Yeah, but at the same time, you also walk into something that is perfect, um, or at least what you perceived perfect to be going into it, um, etc. So has that ever uh maybe you know this, maybe you don't. Has that ever been the case where there's been this much disparity in no no this no?

SPEAKER_00 25:46

This this is uh, you know, at least in the last 40 years, this this is this is not normal. This is very unusual. And again, it's all because of the shelter costs. We have a whole generation of homeowners who took advantage of that window of COVID, yeah, who locked in shelter at artificial. You want to know why consumer spending is still good? Because we have a whole collection of people with artificially low shelter levels, yeah, right? There are people paying $1,200 a month that probably should be paying $2,400 under normal circumstances. Yeah, so that means they got $1,200 to deploy on Netflix and you know Uber Eats. That's we don't know how good we have it.

SPEAKER_01 26:23

Ask ask a Canadian how good we have it.

SPEAKER_00 26:25

Oh, I know the resets every five years. Yeah, it's like a commercial loan here in the States. Exactly, exactly. So, yeah, the 30-year gift just keeps on giving. That does that as time goes by, that that will wear off because you will have that second kit, that third kit, you have a job transfer that's you know 20 miles further than you were before, you will have death and divorce. So, this sticky shelter cost, the longer time goes by, the less sticky or inelastic it'll be. Right. Um, but it's got years to put it.

SPEAKER_01 26:57

I actually see this like opportunistically, if you're someone who has the thought that hey, I would love a new house and you're on the top end of the K, it's probably a good time to buy. Oh, I did probably a good time to start building.

SPEAKER_00 27:11

No, I I I did buy a new home. I bought I I bought a new home from a builder. I got a rate buy down. Rates when I bought rates were eight. I got a four nine nine fixed for 30 years. Uh, I in the market I chose, they have these things called lot premiums. The lot that I have is a view lot, it was over six figures. I got it for zero. Um I got all the upgrades I wanted for zero. And this is in this is in Vegas. This is in Vegas, yeah. And I got a hundred and forty-five thousand off list price. You took them to the cleaners. Of course I did.

SPEAKER_01 27:47

I was in the buy box. I knew what I was buying.

SPEAKER_00 27:49

Yeah, of course. Yeah. So I um uh that's you're absolutely right. If I was it, I am in the K, the top end of the K. You this you should you should go nuts, you should go hard. Again, I got more than 10% off, zero lot premium, zero upgrades. And the the beauty is I got a 499 30-year fixed rate mortgage.

SPEAKER_01 28:08

So, all in, what what do you perceive? I mean, you can literally do the math. I don't know if you have. All in, are you at a 30% discount? To what you're doing.

SPEAKER_00 28:16

Yeah, I think I think all in, I had to do a little guesstimate on the buy down they had to do. I think the buy down was five and a half points they had to do.

SPEAKER_01 28:22

Yeah.

SPEAKER_00 28:23

Um, so right now I think I think we got about 280,000 bucks off. So it's about 30. Yeah, that's incredible. That's incredible. That's incredible.

SPEAKER_01 28:32

I I don't think so. Like my market, I I to be no, you're the northeast.

SPEAKER_00 28:37

No, that market's different.

SPEAKER_01 28:39

I don't think that that that those those deals are are are here because uh we've got a couple new builds going in our community, and they're they're they bought a lot and the build is getting built for them. I don't think anyone's really specing here very hard. I don't live in the biggest town in the world. There's 30,000 people where we live in the town. It's a nice town, it's a relatively affluent town. Um, but it's in the northeast and it, you know, inventory is low everywhere, and the builds are are still being bought.

SPEAKER_00 29:05

Yeah. Well, let me uh we haven't talked recession in a while. Uh, I'm gonna guess you think the odds of a recession in 2026 are damn near zero at this point.

SPEAKER_01 29:13

Yeah, yeah. I just don't think you can get a reversal on CapEx quick enough to have that happen. And and that CapEx is what's causing the world to turn right now.

SPEAKER_00 29:21

I agree. Uh let's talk rates. I think the 10 year is up this morning again. I think it's at 455 or 456. Do you think this uh, you know, if the war goes the wrong way, and you know, do you think we could we could see four eight? We could see five on the on the 10 year.

SPEAKER_01 29:37

I I we've been in a range, and I I just yeah, the rate if you zoom out, it's pretty flat. Unless some exogenous, like the what's going on in Iran right now, like it's bad. You know, like it it is it it's bad. And so if if that can't shake it out, and that was a big driver of it once upon a time, yeah, then it's got to be inflation shaking it out or or you know, economic deterioration. We just talked about the fact that we don't see economic deterioration playing out.

SPEAKER_00 30:06

Yep.

SPEAKER_01 30:07

Inflation seems to be drifting downward, right? We got up, we got an impulse, and some of it was war driven, some of it was some some outside capex type stuff driven. Um, but you're starting to see a reprieve on that front, which should be the cap on rates. Um, and and if the war can't be the exogenous event that hey, all of a sudden now like real people are talking about putting boots on the ground. I don't mean real people being people out of DC, meaning the military strategists say we can't be successful unless we put boots on the ground. Maybe, maybe that, that maybe that would be that's uh yeah.

SPEAKER_00 30:39

I think I think if boots land on the ground, that's a red line to to reevaluate. And that's always been my fear that we have to go there.

SPEAKER_01 30:46

Yeah, yeah, yeah, yeah, yeah. And god forbid. I mean, yeah, no, it's that uh yeah.

SPEAKER_00 30:53

I'm about to go down a political rabbit hole, just stay right out of it. Nah, stay out of it. All right. Well, again, uh, folks aren't following you, they have to. Life goal investments, Instagram and TikTok. I still don't know how you create five minutes of value in 60 seconds, but you do it day in and day out. Give us your closing thoughts and wrap us up.

SPEAKER_01 31:11

Yeah, no, I think that uh this this week I'm I'm fortunate. I'm going down to do some some content from the floor of the New York Stock Exchange on Wednesday, I believe it is. So I'll you'll see me run around there like a knucklehead. But no, I I I appreciate the heck out of uh out of you um and and everything you do and and enjoy the heck out of our time and appreciate you. You you brought me on here before I had any followers. So um means a lot.

SPEAKER_00 31:33

There you go.

SPEAKER_01 31:34

Take care, man. Have a good day. Thanks so much. Uh-huh. Quick ask if you're enjoying the show, hit the follow and drop a rating. It helps more folks find our podcast. Thanks so much. Investing involves risk, including possible loss principal. Always consult a qualified financial professional before making any investment decisions. Past performance is not indicative of future results.