The Equity Markets Are Insane Right Now | Jan van Eck

the equity markets and if you've seen semiconductors, you know, who have doubled in the last 12 months or more, memory stock companies, the stocks of memory companies, excuse me, I mean, there's insanity going on in the equity market. So, I do want to really, you know, Adam, you and I have never ever experienced the kind of appreciation that sectors of this market are providing and the related profit growth. So I want to walk through that.

It's great to be back, Adam. I really look forward to these quarterly catchups.

Oh, I love history and two of my four children were born on the 4th of July. My twins. So, it's Sam and John. Is that their names?

Wait, wait a second.

It's it's Wait, John. John Adams and Thomas Jefferson. Didn't they both die? Actually, one is named Theodore, but he's named after a president, but not a founder. It would have to be, you know, who hated each other? They twins get along great. But yeah, Jefferson and Hamilton, I guess. Right.

Um just one of the great 50 years after the signing of the Declaration, to the day. It's kind of spooky that people never really mention it.

I know it really is one of the great coincidences of fate. But anyways, last time you were on, if I recall correctly, you recommended a book for folks to go read. I know you said 1776 was a book that you really liked about the founding of the country, but there was another one. I'm blanking on the title. But you are a big student of history, American history in particular. Yeah, I think it's, you know, so many people don't really know the basics and it's great to go over the basic principles of our country, which of course are freedom but also the balancing of power within the government, right? So that we don't go too crazy and different branches interact and survive for 250 years. It's kind of amazing. The book that I was recommending or do recommend is Founding Brothers by Joseph Ellis, because it kind of gets at the principles that people believed but also a little bit the personalities without focusing too much on one founder or the military stuff, which I don't think is of lasting interest.

Joseph Ellis.

But you know, I've been like many people reading up and brushing up on my Revolutionary War history leading up to the fourth. And it's amazing because there was just as much disagreement and political friction going on back then as we've had throughout American history. And they were doing all this under duress in a short period of time. And it's just amazing how much they got right, how much of what came out of all that chaos and disagreement has been this founding structure that has endured and inspired so many other countries. It really is pretty amazing. We're fortunate to have had the people in place at the time and some of these people are some of the smartest Americans that we've ever had. But the odds of them getting that much right in one sort of desperate attempt is mind-boggling to me.

Yeah. I mean, there's a book called The Miracle. And it talks about the declaration and it is sort of an amazing coincidence. I think the other thing that's underappreciated is how impactful it was for the world, right? Because most of the world was monarchies at the time and this is the first really democracy, right? And those ideas transmitted to France which had violent consequences and elsewhere. And a British historian would say it was just part of the arc of power going to parliament over time. But still, I think this was a huge step forward in world history.

Um, well, listen, I'm going to review kind of what we talked about last time about halfway through the deck, but I know you always want to know what do I think about the weather? This quarterly taped interview is a great forcing mechanism for me to think about things. Last quarter, I was bullish on a lot of things. For one of the first times, I started reading the comments in the YouTube video that you post. Always a mistake. Actually, it was really good because someone said, 'This guy's just an asset manager, of course he's just selling all the time and he's bullish on everything.' My first comeback to that is I have been bearish on things. I've been bearish on Bitcoin coming into the year, but I was bullish on a lot of things at the beginning of the second quarter. I'm still bullish on a lot of things. But I want to explain myself, and that's why I'll get to the slide deck if that makes sense.

All right. So the topics that I wanted to cover today are the equity markets and if you've seen semiconductors, you know who have doubled in the last 12 months or more, memory stock companies, the stocks of memory companies, excuse me, I mean, there's insanity going on in the equity market. So I do want to really, you know, Adam, you and I have never ever experienced the kind of appreciation that sectors of this market are providing and the related profit growth. So I want to walk through that because it's either you're unnerved or you have to at least explain it. That's job number one because equities are the biggest part of everyone's portfolios obviously. I do want to drill down on what I see as the risks to Anthropic, which is kind of one of the darlings and has been in the headlines almost every week. Then I'll do a revisit of some of the opportunities that I saw at the beginning of Q2 and revisit what I think about them today. And then a quick run-through of macro forces. You know, a long-term risk that I see is the government spending rates in the US, so you have to keep your eye on your risks as well as understand your opportunities. For those who haven't listened to our quarterly updates before, I don't have an opinion on everything. I just see hundreds of charts, thousands of charts. I pick my favorite factoids. I'm not going to talk about the Iran war; I don't feel like I have to go through the headlines. I just try to focus on questions that I think are important to ask about the future in the markets. That's the perspective. So, ready to start?

Okay. I would say probably not a lot, but let's start.

Um, so price to sales. I love multi-decade charts. This goes back to 1946. What you can see is today's market is more expensive by an order of magnitude than any other market over the last 60, 70, 80 years. Another chart that's extremely unnerving, not even a valuation chart, but this chart of the Korean stock market. 17 years basically of no performance whatsoever, and then it explodes upwards, driven by the memory stocks, SK Hynix and Samsung. It's just a rocket ship. That's why I said stocks are in orbit. This kind of price behavior is really distorting to markets and it's extreme. So you have to ask yourself that question. The reason I'm comfortable is because of profit growth. I love to look at profit growth reported last quarter and look forward. These are insane numbers for multi-trillion-dollar companies. Nvidia's profits going up 129%, Google's profits going up 80%, Meta 62. These are just insane numbers. Now, that's history. So let's look going forward.

Yeah, of course.

Placing a bet on the future. Whether that bet's going to play off, who knows? But obviously that goes straight to Nvidia's bottom line.

I think it's really a combination. To that point, Meta is now offering compute, or they said they were thinking about offering compute externally. It's interesting what I do is drill into the different business models of these companies. So I'll flip forward if you don't mind to answer your question. Right. So what I tried to do, ultimately, I'm bullish. Why am I bullish? Because Adam, demand for compute is still going up. We don't even know, but let's say five or six times a year, and supply is just not keeping up. Thank you. The question is at some point it will. Every time I talk to investors, they ask when do you think that'll happen? It doesn't seem like it's happening anytime soon. But let's say we don't know when it's going to happen. It seems a ways out. That's why I think you just have to stay fully invested. But when that happens, the question I ask is which of the companies have a moat? In 10 years, are they still with us? Basically whether they're 1.0 or a 2.0, are they going to be a 2.0 or get their lunch eaten by a 2.0? I love to oversimplify. To your point, I broke out the companies into vertically integrated, meaning they're customer-facing, they have compute, they have their own models, they have some chips. Alphabet, Google, Amazon, and SpaceX fall into that category, and they're hot, meaning their earnings are growing. As you saw, that was your question about Alphabet. The second category are potentially vulnerable because they might only have part of the tech stack. Like Intel and Cabras only do processors. The memory companies we're a little concerned about. They're very important, part of the bottleneck, more important than the Strait of Hormuz. But do they have a moat that will go away? I think they don't have a moat. Most of their profits, Adam, come because they jacked up prices. They're not even increased volumes that much. It's just that their memory chips are that much more valuable. That's why they're so profitable. I'm a little worried about them. The last one is the software companies. There's a fight right now. There are a couple of different business models. One is a single LLM model, like an OpenAI or Claude. Someone's trying to be the middleware, controlling your corporate AI environment. Then where AI is inside Microsoft or Apple, both backward-looking and forward-looking are in that 10 to 20% earnings growth rate, but they're relying on other people to provide the AI models and compute. They're just wrapping it. So that's how I categorize these companies. Looking backwards, the people with AI inside, Microsoft is in the 20% range, same as Apple. That's true going forward. Then the hotter, vertically integrated companies are doing really well, like the Amazons and Alphabet at 80% backward-looking earnings growth. Looking forward, I know there's a ton of data, but without going through all the numbers, if you look at implied earnings growth going forward, you see the blazing hot hardware shortage companies growing two to three times their earnings next year again, whereas Meta, Alphabet, Microsoft are in these lower profit growth categories. I don't know if that's helpful or not. I guess my main point is

I mean my main point is the implied earnings growth, the average earnings growth of these tech companies is 95% and the median is 40%. So these are just crazy profit growth. But this is the last slide on this. Look at tech profits relative to the rest of the market. They're just outstripping everything. The reason I think it's still sunny outside is because we still think these higher profit numbers are possible for the tech companies because of the continued shift in our entire computer infrastructure towards this AI-oriented software hardware combo.

I mean, I think so. Let's talk about Google for a second. I used to joke to our marketing department. It's not really a joke, but it's Google's world. We just live in it. Because all search was going through Google. They would determine whether we got web traffic or not. Google in the last 18 months, Adam, has completely transformed their business as an AI vendor. They're not selling blue links anymore, access to blue links. They are now a greater part of their ecosystem because they've taken all the knowledge on the web, processed it, and they are drawing you in to their ecosystem by giving you the answer from Gemini to most of your questions. Most people are not clicking through anymore. They're getting the answer through Gemini and that's it.

Look, we're not spending less money on Google. We still want to get placement through the old-fashioned way. Then there's a whole ecosystem of knowledge because they know the kind of customers that are coming to us. So we pay for analytics relating to that. Their business is so awesome because their revenue is going up while they don't have to increase their costs. AI is making their engineers more powerful. That's why they're growing earnings at 80%.

There's also, if you wanted to think of Q2, one of the things I would flag is that a lot of these corporations now have a venture arm that are contributing to profitability. So Google was one of the biggest shareholders in SpaceX. Nvidia has made a lot of venture investments in the ecosystem. So that is other income on their income statements. That's a whole separate webinar topic, but it's not insignificant. They're really making money throughout the ecosystem. Google also has Waymo. YouTube, the way most people experience what you and I are doing is through an ad platform or subscription. They have that vertical integration, dealing directly with corporate and individual consumers.

No, no, no. It's not right. And you know, we basically talked about the Mag 7 having the scale of customers. That's why I went back to this area. This is why I think this is so important. Because if you're interfacing directly with customers, you have that front-to-back. And if you're able to have the scale of inputs, it makes your product better. The more searches you do on Google, the better the results are. The more videos you post on YouTube, the same with content on Instagram for Meta. All these economies of scale benefit the bigger tech companies, right? And network effects.

It's completely mind-boggling. The maybe just flipping forward here, I found this chart to be helpful. This is from JP Morgan, looking at the top 10. The green line on the left shows the valuation. What's happening is the profit growth is so big. Another factor in the US equity markets is how these big tech companies have been driving the returns of the S&P, and that's why the market cap S&P has done so well over the last two years. But the profit growth has caught up, and now the valuations of the top 10 are almost the same as their average over this time period. The average is about 20.8 times forward earnings, and they're about 21.6 times. So there's not some kind of valuation distortion, Adam. That's why I think we can be really comfortable just riding this wave. On the right-hand side, even though it feels uncomfortable, the earnings of the top 10 have been increasing to support their market cap appreciation. Now, of course, they've come down a little bit in price, which has helped with their valuations, and that was a factor in Q2 relative to some of the blazing hot tech names. But that's kind of reassuring to me. Then the last slide, I like longer term slides. This is trailing 10-year returns of the S&P. I said, wow, equity investors have really done well over the last 10 years. How does that compare to history? We were talking about 1929 yesterday in the office. The trailing 10-year returns for the S&P through June is 15.5%. You can see that in blue, but it's not crazy high compared to prior equity bull markets. Those that have benefited from productivity from technology like AI have achieved those returns over a long time period. So if you will, the hump in the middle for the 1990s was a really good equity market for a long time.

Right. And go back to the previous slide for a second if you want. Because I mean, look in contrast to the dot bubble, where the market cap got way extended, rose way faster than the underlying earnings. Right. Right. And you're saying, hey, today it's actually different. They're moving in lockstep. The valuations as crazy as they might feel are supported because their earnings are growing at a pretty equally crazy rate. Yeah. And listen, we were right to be worried over the last couple of years because the valuations of these top 10 companies were elevated. They were well above 24 times forward, up to 34ish times. So it was something to worry about. But now it's flashing green. So Van Eck is still very bullish on the AI complex.

Absolutely. In prior quarters, we've talked about the AI 2.0 trade. You need the old world to supply the new world. I didn't include the price of copper here, but that's just one example. I think it's sustainable because this capex buildout is really tremendous in the US economy right now. Not all of those segments have worked out; some have appreciated a lot and taken a pause. We've talked about nuclear in the past because there was a bipartisan change in policy that's going to be supplying electricity. Some of the data center independent power producers' stocks have taken a little bit of a pause, but overall, one of the ways we implement this is through those 2.0 beneficiaries.

Yeah. Absolutely. It's a huge tech shift we haven't really experienced before, but it's driven by profit. When I talk to summer interns about how to value companies, we start with PE ratios because earnings is what really matters. Price to sales is a very subsidiary valuation technique. The fact that price to sales ratio has gone up so much is more of a reflection that technology companies are dominating this market. They're what's growing, the bulk of earnings growth. They're becoming more of market cap. So it would be natural for price to sales to go up and not worry too much. But it's something I had to start with.

Price to sales in today's world because technology companies just operate differently.

Yeah. No, no, I think it's so that's the last piece of the overall equity market before I get to the next section is there were some really big losers so far this year, right? And the dispersion within the stock market is as high as it is maybe every decade or so, right? So, there was a lot of mayhem and a lot of stocks bouncing all over the place, right? So anyway, I just wanted to make that point. And then related to that, I'm sorry this isn't as clear as it could be, but this takes momentum against quality. And we have continued to be in a momentum market, but what's interesting is that quality is a factor. So quality are companies with sort of more consistent earnings over time and other financial metrics. Quality got destroyed so far this year. And it's basically the story is the big some of the biggest components of quality indices were SA software companies and those software companies, those SAS software companies, are being disrupted by AI. So it's not to say that there aren't losers. My colleague Angus basically says all the time like you have to think about AI and whether your business is going to survive, right? You have to be AI forward because AI is coming to eat everybody's lunch. Can you recreate Van? Can you, you know, all that kind of stuff. So anyway, so that's it. That's the market. Crazy performance, unbelievable profit growth supporting it. And a lot of dispersion.

Yeah. Well, listen, I think equities are really important for investors and it's really hard to time them in the short term. I don't know, Adam, you know that it's not my philosophy. I don't know what's going to happen tomorrow or next week or next month. That's why I like longer term charts. But we look at 10-year trends and there's basically three of them. One is AI, one is the rise of India, and then third is actually the risk of overspending by the US government. But we'll get there. But I just wanted to kind of remind people that we very much focus on these 10-year trends in terms of portfolio construction. Um, but you know, you ask for a quarterly update and I got to tell you how I see the weather. So, that's the answer. All right.

Well, let me tell you who I think is a little bit too hot. Um, and that's Anthropic. So Anthropic has clawed and I think there are some, it's sort of I think the emperor is naked here a little bit. Um, so Anthropic is facing these headwinds. Number one, yes corporations are spending on AI but they're cost-conscious consumers. So they're trying to cut their costs. Number one. Number two is there's a lot of competition in the model space. Number three, you now have people in the industry and in the government saying they're not to be trusted with you. They're basically ripping off their clients. And then number four, corporations who are the kind of people that are providing the revenue for Anthropic are, I think over time and starting now, moving to control basically their computer infrastructure so they can protect their client data, their intellectual property, and they can control costs which they can't if they're just reliance on one. So I'm going to try to tell this story quickly. So the graph, this is sort of a repeat, but I put the bullseye in there because the graph of the story of AI in Q1 was we finally have figured out how these AI companies are going to make money. They're going to sell it to corporations, right? That was the big news flash that literally we didn't know at the end of last year because OpenAI hasn't probably solved that revenue problem as much. Anthropic suddenly saw their annual run rate revenue. This is a dated chart. I mean, this shows at 30. It's probably got to be approaching 50 now. But what happened is now Anthropic has this bullseye on it, right? Where every time people are making a lot of money and everyone knows about it because they talk about it all the time, they're going to be a target for competition.

The colors are what Coinbase is spending on AI models for tokens. So, right now, let's oversimplify the world. If

Um, so it's a whole bunch of different things. And the right I list some of them, right? But first of all, there are alternatives to Claude, you know, to Claude, right? To the latest model, right? So there are open source, there are free AI models, right? You still need to pay for compute, but the compute is a lot cheaper. So some of these Chinese models that have come out, you know, and anyway they're so, they're using, we looked at our usage, Adam, I didn't go through it but our usage at VanEck, half of what people use AI for they could just use Google for.

Okay, great. So, and that's basically what I'm saying is you're getting the compute for a lot less. Got it. In theory, you could go use DeepSeek and get it for free if you could use DeepSeek here. Yeah.

So, at VanEck, just to give you, you know, and we're way behind some of these tech companies, but our, just to oversimplify the story, our token usage has doubled since I saw you last from like 10 million tokens to 20 million kind of.

Yeah. Well, we talked right here in April. So, that's kind of like where my cursor is here. This just dropped a little bit here.

Yeah. And this for the most part excludes our OpenAI usage. So it's not a complete picture, but it's really more apples to apples. Okay.

So our, so yes, our VanEck use of Anthropic is growing, um, or has doubled in three months if you want to be extreme. But what you can see here is that what we're spending is leveling out a little bit.

We're doing the same thing. We're creating an environment where we can use multiple models.

Um, so that's number one. Okay. Number two, risk number two is there's competition. So the Claude models here, this is effectiveness and I won't get into the details of the calculation, uh, and this is only the latest model and there's a lot of leapfrogging, but these three on the left are all from Anthropic but the next three which are not that far behind are all Chinese open-source models. So the news flashed, you know, it's funny. You think not much happens in 3 months. The Chinese models have caught up with Claude, and you know I can give you other charts but I'm oversimplifying, but you know I can use these other models. They are almost as good and some tasks, Adam, a lot of tasks in business are not time dependent, right? There's like two categories of usage: there's cutting edge, I'm developing a new drug that's going to cure cancer or I need to swarm drones to defend my naval base in Qatar, whatever that is, that's one use and you need the most advanced models, right? But for a lot of business you do not, right? So anyway, so that's number two.

Then, um, I'd be curious. Did you see this interview?

Yeah. On CNBC.

If a viewer has not, you really have to go and listen to the whole thing. Uh, but basically now he's a competitor of Anthropic but he is effectively saying, look, companies don't trust Anthropic anymore because Anthropic is stealing, you know, is learning how those businesses run and in some cases, you know, competing with them and then competing with them. And the All-In pod talked about this and one of the stocks they cited was Figma, excuse me. And Figma's down like 73%. So they basically cooperated, right, with their client and then created a competing product against Figma, which is like a design tool, and now their customer stock is down 73%. Now, this is an argument from a competitor, right? I'm just stating it's risk number three. You don't really usually in business have an extremely successful CEO blasting another software company for basically lack of ethics.

Yeah. It's pretty dramatic. Again, I recommend people listen to it. I just think, look, Anthropic is going to hit some bumps in the road. Okay. Now, let me if I could pivot. I got a little bit of a time constraint today. Adam, so I got about 10 more minutes. But so this is the scorecard. So last April, at the beginning of the quarter, I was bullish on semiconductors including Nvidia. I was bullish on BDCs. I was bullish on alternative asset managers. I think we talked about Blue Owl and Ares and a bunch of them. I was bullish on India and I said listen, I'm long-term bullish on gold and bitcoin, and as I said that someone commented, 'What's you know, of course he's bullish on everything.' So, let me be really clear. Um, because I think the time frame is super important here and in what I'm saying. So I think it's a great time. I still think it's a great time to be buying BDCs. I think their yields are very attractive. I think the alternative asset managers like Blue Owl are attractive. I think but I would say like in a year you should be happy with these positions. So I'm more, I'll call it with a shorter term view. I think they sold off dramatically in Q1 and they're just giving longer, you know, giving some of us a buying opportunity. India, gold, and bitcoin to me are in a completely different category. They are like 10-year trades. You can't say, 'Yan, I lost money on gold and bitcoin in Q2 or Q3 or Q4 or whatever' because Yan's looking out for 10 years. So that's kind of that, I think a very important clarification that I want to add, like when I talk about some of these tactical trades.

Exactly. Exactly. So, you know, we've just been quoted. Look, there's a little bit of internal debate at VanEck like when do you buy bitcoin? Uh, everyone feels that to do it before October. So, you know, those of us who follow it are bullish and think this is a reasonable entry point. It went down from, I think, like 70ish to 60ish over Q2. Yeah, Q2. But, I have a chart on that. I'm not really worried. Okay. This is a little bit out of, just a thought bubble for you.

Sure.

Yeah. Yeah. And just over the last couple of weeks, you can see this at the tail end here of Ares, again they did have redemption amounts, but you know, they're basically flattish or up a little bit from the last time we spoke and they've paid an amazing dividend. So I know Blue Owl a little bit better, their dividend yield is like 9%, Adam, so even if the stock goes nowhere, I've made 9% over the course of a year, right? So, I'm perfectly happy with this kind of price behavior because I'm getting paid in the meantime. And you know, I felt in April that they had kind of done all the damage to the common stock, like all those fears had been priced in, and that at least was correct.

And it's up if you literally go back to the prior chart. It's up from our April interview. Um, India is, I just want to put the chart in here. It's just gotten cheaper. So, from a 10-year perspective, um, sorry, I don't know what this is. Uh, you know, it's still pretty good as far as I'm concerned. So,

Yeah. I think better to talk to us offline. Because you know, the market, so there's really two markets in the world, right? There's Korea that has big tech companies and it behaves like a venture startup, and then there's more mature, diversified, I'd call it light tech markets. And India, even though they have a lot of services, is a lighter tech market overall. Um, so it's been hurt by that. And it's been lagging, but you know, we just love the macro because of the effectively pro-growth business policies. I think will translate into good long-term equity returns. Earnings are growing over this time period. It's just that the stocks are getting cheaper. And that's not a bad thing if you're a buyer.

So that's a quick review of our recommendations from last quarter and you know, still sticking with them. Uh, you know, very much, I'm not bothered by this correction in gold. And last quarter, I guess I don't know if the war had started. I don't think so. I have a slide that's very fervent about, you know, gold is not driven by inflation in the United States, right? It hit all-time highs last year when inflation was moderating in the US. Um, it's more of an Asian wealth story. So, it's no surprise when Asia gets a gut punch from the Strait of Hormuz closure and the Iran war that gold sells off. That's just not a surprise to me. Um, I don't know anything else on this one.

Okay. Uh, yeah, thanks for that. And I'm sorry I've got a hard stop this time. Um, all right. So yeah, some in prior quarters, we've spent a ton of time and you're so happy that I don't have a chart of the fiscal budget deficit or anything like that, Adam. Um, I've spared you and you know, you haven't insisted on it, but I've tried to stick to a discipline of no repeat slides. So, but you have to look through the big picture and like what's happening, and the short answer is monetary policy is exactly as we said it was at the end of last year, which is we are going to have a less interventionist Fed period. It's exactly what Bessent said in fourth quarter of last year. We have a little bit more visibility on that but no change in monetary policy. Uh, number two, labor market. You know, people had been at the beginning of the year worried about AI job losses and all this kind of stuff. We have to look at that data, but no signs of that. Looks perfectly healthy to me. Um, federal budget deficit, of course, I needed to update that number because we've talked about a lot. Uh, so year to date is actually the wrong thing. It's updated through fiscal year. So the fiscal year starts October 1. Mhm.

No one. Um, I think they're going to wait till after the midterms. And I think that's a good time politically to start getting into some of the slightly contractionary concerns around shrinking the balance sheet. So, more just we don't have to worry about it till the end of the year, but no big surprises from the Fed in terms of tightening or loosening. Uh, labor market, a lot of colors. But this is just sort of the sectors that have been generating jobs. And I'll decode this in a minute. The blue is education and health care. But just think about health care. We're getting older as a society. Not you and me, Adam, but everyone else is getting older. And so we just month after month, you know, are creating more health care jobs. So that's the blue line and that's a consistent theme. This shows the last two ones are first quarter and then the first two months of the second quarter. So it's up-to-date data, but you know, yes, healthcare spending and employment continues to be good. The second narrative is the gray block was job growth under Biden and then here in Q4 of last year job reduction from the government under Trump. So again no surprises, the basic picture is look no surprises. So this is the labor market and we can go sector by sector and maybe at some other time, but basically we are, you know, the labor market is, I think there's a ton of displacement but not overall job loss. So that's it. Okay, social security. So we learned something in Q2. We're going to run out of money, Adam, not in 2033 but in 2032. [laughter] So this, you know, the US government not living up to its promises is coming at us a little bit faster than we thought. Uh, I will just point out two solutions that were voiced. No one's really going to probably do anything until we have a crisis. Adam, I think we probably agree on that. Is this slightly interesting that one of the obvious solutions is to eliminate the cap on contributions, which means that higher income Americans are going to keep making contributions if they're earning more than whatever it is 140 grand a year. Um, you know, it's bipartisan. Elizabeth Warren got Bernie Moreno out of the Midwest to co-sponsor that. I don't know if it goes anywhere later this year. Adam, I would expect to talk about your former state's wealth tax, California, um, but anyway, not I don't think enough to talk about now, but that's just, I thought that was just sort of interesting. And then you know one potential thing that came into effect last weekend on July 4th were these Trump accounts, which are basically tax advantaged ways for all Americans to participate in the stock market. The basic problem of everything that we've talked about is it's great for investors but half of Americans are not investors.

Right. And so the government will be contributing $1,000 to every one of these accounts that are started, or anyone that's born in 26, 27, and 28. The problem is the people that aren't investing in the stock market are probably not going to be going to the Treasury Department website and signing up for these, right? It's like the people whose employer offers a 401k, but only half of them actually use it, right? Half just don't go through the motions. Yeah. So, but there's a twinkle in the eye here. I'm just saying of solving, okay, maybe social security won't give you all your money, but here's another kind of way to build up retirement savings for Americans. So, that's it.

Yeah. I mean, well, I would, you know, I'm going to be extreme. It's not bankruptcy, right? In 2032, they will cut payments by about 20%. So, you're not going to get what you were promised in your quarterly statement from Social Security. You're getting 80% of that. So, bankruptcy is coming. Again, wrong word, but bankruptcy is coming. Um, I don't think, I don't know. We'll see if politicians try to solve it, but these are just two of the policy solutions that are in the air. Got it. All right, just to summarize, equities are out of the world, out of off the, you know, they're in orbit, but profit growth is keeping valuations within reason. So no reason to get out of your equity positions. Um, and the AI trade as well, that's an overweight. It's totally reasonable to be taking profits on some of your extra gains in semiconductors or what have you, your AI trades. But that's, we're not eliminating them. That's what we're doing. We're taking profits. Um, I'd list some of the risks to Anthropic that I see. Um, I don't think they're priced in their private equity offerings and it hasn't hit their revenue, but I would be surprised if there weren't a revenue surprise to Anthropic over the next 12 months. We'll see. Then, you know, I still like the opportunities that revealed themselves three months ago. And on the macro front, actually, you know, marginally nothing to worry about, which is on fiscal spending, monetary policy, or the employment markets. But you know, you can't take your eye off it because interest payments are kind of like now the biggest part of, they're bigger than defense, and we're kind of losing control over our budget because of the debt levels.

Yeah. Well, we publish investment outlooks on our website. We're going to distribute it through your lists, Adam. Um, vaneck.com is the best place to go. I will occasionally comment on Twitter and LinkedIn, but, you know, this website's probably the best place to go.

Yeah. Well, we'll see. And I just want to, you know, it's funny. This is a great discipline to really rewrite all your investment thoughts every quarter and to have it on the record. I am bearish sometimes on different assets. So, you know, we were bearish on bitcoin coming into the year the summer of 24 when Nvidia was trading at 50 times sales. You know, I said, 'Nope, take some money off the table.' And so I just want people to put this in context. Don't blame me because I'm bullish. I'm just, you know, I can't, you know, it's just we look at the underlying technology, right, that's driving the equity markets, and I just think that the profits are supporting equities.

Good enough.

All right. Thanks, Adam.