Initial claims beat. Retail sales beat. Google crushed (obvs). Earnings season is strong (again). When no one thinks it is Goldilocks, and it is in fact Goldilocks, you should be bullish big picture. When everyone realizes it’s Goldilocks then we are fully priced.

AI FOR THE LONG TAIL JPM spends $50 Bn+ on compensation expense. They spend $10 Bn+ on technology development. How much of that $50 Bn in compensation expense - call centers, retail bankers, syndicate bankers, etc - will get replaced by AI? There's a lot of producitivty improvement we're going to see in Services businesses - and especially financial services. That should keep EPS growing for years to come. As long as you're on the right side of disciplined innovation, and avoding the 'AI Have Nots', should do well... $JPM

TIL: - Banks are embracing 'Originate to Distribute' - RIsk continues to move off bank balance sheets into Insurance & Private Equity - Seeing focus on transforming non-rated debt into rated debt 🤔 - Student loan market is transforming due to BBB - Internet Capital Markets... Video for more...

Student Loans, Originate to Distribute, ABS and Internet Capital Markets

Did you overweight small caps? No, the rally isn’t done. We still see value, EPS growth, and now a member of the band - momentum. From May 8th below

I look for mispricings. Benicio del Toro is a mispriced actor. Christopher Nolan was mispriced after he made Memento (back in 2000). The Audi A6 is mispriced relative to luxury brands. CoreWeave was mispriced at 15x PE in private markets. The ETHE / GBTC trade was mispriced at a 50% discount to NAV. A 2.5% 30 year fixed rate mortgage in Covid was mispriced. Uranium was mispriced when we interviewed the CEO of $ASPI last year. (Ditto $VIRT and $BETR both interviewer on Lumida Non-Consensus Podcast.) Solana was mispriced when @LumidaWealth interviewed @KyleSamani Hot sauna and cold dips are mispriced. JP Morgan and UBS were mispriced during the 2023 banking crisis. I believe the long-term benefits of having a family and memories to cherish is mispriced (eg, under-rated). Physics and Philosophy majors are mispriced. Rocket Lab was mispriced when Elon was ex-communicated from Trump’s orbit. Capitalism & entrepreneurship is mispriced. Certain business models are mispriced. Carl Jung and Joseph Campbell are mispriced philosophers. Stand up comedy is mispriced. I enjoy recruiting talent on Telegram or Discord because their intensity is mispriced. Consumer discretionary and semiconductors like $NCLH and $TSM were mispriced after tariffmageddon. People often classify strategies as momentum (trend following) or value (mean reversion). There is another bucket. I love mispricings.

Capital One beat EPS estimates by 50%. Look at the P/CF multiple vs EPS growth and tell me it’s still not mispriced. Further, tax cuts on low income will help Capital One credit portfolio. If you had bought $COF on the date of the post below you would be up 2.4x. $COF

Google is now within spitting distance of all time highs. All the fears around Apple and Perplexity were overblown and presented a great entry point. This is one of my top 3 positions. They will report soon and show strong EPS growth I expect. $GOOGL $GOOG

Remember when everyone freaked out about the inverted yield curve and the Sahm rule? We have a services economy fueled by boomers on T-Bills now. Different setup.

🚨 @bitsandbips is LIVE today at 4:30 ET/1:30 PT! 🚨 Tune in here on X and YouTube for the latest in crypto and macro with hosts @NoelleInMadrid, @Steven_Ehrlich, and @ramahluwalia, along with our guest, @PanteraCapital's @cosmo_jiang!