Do you think that was just people thinking there's going to be a recession and they piled in on utilities? Or do you think there's something else there?

Say again?

Do you think that people just thought there was going to be a recession, so they piled in on utilities? Or do you think there's something more there? They see

earnings growth. So the independent power producers in utilities, such as the Constellation Energies of the World and the VSTs of the World, they've done really well because they're inking deals with hyperscalers like Microsoft and Amazon that need insatiable amounts of energy to fuel AI. So that's the primary driver, right? You saw the headliner and Microsoft inking a deal with Three Mile Island nuclear plant. Talon Energy, which is a name that we had owned this year, they had inked a deal with Amazon. So nuclear is back. We love that theme as well, the nuclear renaissance. But yeah, utilities have done well. But to your point like the beginning of the year i would have said overweight utilities now i don't own utilities yeah

so

we're more tactical and dynamic that's because of the nature of markets today there's this hop all of liquidity that reprices assets quickly you have a two or three week move like you saw in china then it gives back yeah two or three week move uh in small caps uh and then it starts to soften you saw a parabola in digital assets in May, then that gives back. So we're responding to the condition of the market rather than trying to impose our will on how markets should behave.

Yeah, I find an interesting example of that is I hear your personal opinions that it sounds like you're a believer in seeing like an AI induced productivity boom and that it's the real deal. But then I also hear that you're more weighted to the value factor than the growth factor, which is kind of orthogonal to that.

isn't actually driven by AI yet, but the good is yet to come. I think this is driven by other factors. I think certainly founder-led business will be benefiting from that. But I still own growth names like NVIDIA, Meta, Google, App, and I believe they're cheap relative to other names. And I don't mind paying for growth if they can deliver. So if you own a growth stock today, it's like you're hiring LeBron James on a $100 million contract. You need him to post triple doubles every night. If he does not, you've got to pull the plug. So NVIDIA is cheaper than names like ARM. AMD has roughly the same four PE valuation as NVIDIA, which makes no sense. And so having exposure to that matters but picking your spots carefully is important you know nvidia is pulling away from the rest of semiconductor category yeah it is our dominant position in semiconductors and the earnings are

keeping up like i want you to explain this a little bit because people will you know will look at a chart of i don't know cisco in 2000 or something and compare it to nvidia and say oh, look, it's just the same repetition. But to your point, the earnings have actually been keeping up with the stock price. Like the 4B, there's a few times where stock was doubling, but I think the P was actually going down. Can you explain that dynamic a bit?

NVIDIA sells GPUs to the most cash flush organizations in the world, which are called these big tech companies like Microsoft, Amazon, Google, and Meta, who each independently have said, we're going to spend $50 to $100 billion in capital spending on AI. And they have to do it for existential reasons because if they lose the race for AI, they get disrupted. If Google loses the race for AI, then their market cap and multiple compresses. If Apple loses the race for AI, then meta launches a new form factor. If Microsoft loses the race for AI, then Microsoft Office is relevant. I'm not even sure you need Microsoft Windows, where we're going three years from now. So how much you're willing to invest to protect your market dominance position. If your market cap is trillions of dollars, yes, you're going to spend 50 to 100 billion dollars. And it legitimately is the future. I mean, if you, you know, we're using AI at Lumida's investment processes every single morning, I can see the analyst productivity rate of growth. So the point that people have missed is that NVIDIA has got tremendous earnings growth. I'm an investor in CoreWeave, which NVIDIA is also backed. 90% of next year's revenue is fully accounted for. They have a backlog. They're saying, hey, get in line. So the demand is there. You've got Saudi Arabia that wants to build 60 data centers. They're asking the U.S. Department of Commerce for access to NVIDIA chips. NVIDIA and these AI chips are going to refactor how we think about defense. You're going to have more hive drone warfare driven by AI technology. Cyber security is going to refactor with AI. You're going to see AI as a fraction of the defense budget. NVIDIA is actually cheaper on a 4PE basis than it has been at other points in history. Now, our last buy was at 105. Now, our base is a lot lower than it is now. So, you know, how you enter these names matter, right? So our last buy was when there was concerns about antitrust risk. They said the DOJ is going to... The price didn't move for two days. It dropped. For two days, it's hanging out there despite the fact that nvidia refuted that allegation yeah and so the bad news is there yeah bought that on discount so and then uh you know google antitrust news i think that's baked in if google's broken up the some of the parts worth more than the whole it's win there it's not broken up and the narrative cloud lifts as a win there as well you gotta have a long-term view. Meta has incredible distribution through WhatsApp, Instagram, Facebook, and training data that gives them a competitive edge. So we think that OpenAI is boxed out. OpenAI is competing with Microsoft, their parent company, who's going after enterprise. They're competing with Meta, who's going after the consumer app. They're also competing with Google. So they are flanked on all sides, and they're blowing lots of money on companies like CoreWeave to stay relevant. Yeah.