Ep.89: The Fed & BoE Divergence And What It Means For Markets

Okay, hello and welcome to episode 89 of the Market Maker podcast, and Piers is back. Hello!

Look at that.

If you're watching this on video, so before we started this, I was trying to tweak my lighting, and I was— because we record this on, on Zoom— I was tweaking my lighting, trying to play with the webcam settings because Even though I'm half Chinese, which I guess I should have some sort of shade difference in skin color to you being Caucasian, Piers. You are significantly darker than I am right now because of this autumn— autumn, winter tan that you're rocking these days.

Where's your bronze filter? That's what you need to be finding. You need to check that box if you want to compete.

But look, you know, while you've been away, there's been, um, you know, just a couple things happening. Yeah, changing government, uh, a tech earnings bloodbath in some respects for some companies. Uh, I think, what was it, Amazon was down, um, the day after earnings in excess of 20%. Yeah, it was 20%, wasn't it? Yeah, which is huge. Um, Obviously Zuckerberg still treading water at this point. But yeah, I just wondered, when you were away, did you get a chance to catch any of those? Any thoughts?

Well, I did, you know, keeping my ear to the ground, obviously. I also got an email dropped into my inbox from a certain Mr. Anthony Cheung listing out in fine detail all of the numbers and the breakdown from the— yeah, the big the big tech guns. So yeah, thanks to you. Um, but yeah, I'm not gonna lie, I was kind of sat on the sun lounger just having a sneaky look, you know, on the phone. It's hard to, uh, it's hard to resist.

So if you, um, if you were gonna pick one though, when you read that list, it kind of jumped out to you, was there any specific one?

Well, um I guess probably Google. Um, I mean, look, Amazon I know got chopped in terms of share price reaction, um, much more aggressively. But, you know, the nature of that business, even though their AWS side of things of course is, is the jewel in their crown and is the fastest growing part of their business and has been for years, um, you know, of course it's still not not there yet in terms of size compared to the big retail, global retail kind of network. So obviously Amazon still is perhaps more vulnerable to a kind of macro headwind perspective, and because also Amazon run with much thinner margins as a function of that kind of retail distribution kind of business model. So I think with Amazon Still, don't get me wrong, I wasn't expecting such a bad report on the share price to drop 20%. I mean, certainly wasn't expecting that at all. But yeah, I think Google, um, has been incredibly resilient. I mean, Google, of course, a large part of their revenues is advertising, and so you might think traditionally then that, you know, that is vulnerable as a revenue stream heading into a recession. Historically, you know, businesses tend to when they're looking to trim costs, to tighten the belt, then often the advertising budget is the easiest and the quickest thing to kind of turn off and on. But Google's a bit different to normal advertising or companies that generate revenue through advertising. You know, it's less about, here, stick an ad on my platform so the people on my website can see it. Obviously for Google, people are going— it's a destination for people to go to, to very specifically search for something. And then, so it's a slightly different, much more resilient sort of advertising revenue. And they've been very resilient throughout this year so far and through the energy crisis and the inflation situation. So yeah.

And they do segment out YouTube.

Right.

Outside of the Google core search business.

Yep.

To effectively manage what you're describing.

Right, and you know, YouTube was hit more than that core kind of search side, of course. But given their resilience this year, I wasn't expecting quite the kind of negative report that we saw. So yeah, I think out of all of them, probably the Google one was the one that was like, wow, interesting, and actually a real kind of, well, you know, real kind of heads up to say you know, whilst a lot of this data we're seeing is showing that the economy is resilient, actually we're really genuinely now starting to see things turn.

Um, and then just looking, looking at the actual share prices, I mean, I was keeping an eye on them obviously in the aftermarket, but also conscious of zooming out and stepping back as any investor would to think, look, these tech giants, okay, Zuckerberg aside, these tech giants are here for the long haul. And so at what point is the pullback severe enough to— I guess the first destination would be technically, well, technicals aside, is where were we prior to the pandemic and how much have we pulled back now? And I know there's a bit of a difference with these big names.

And just before we talk about the individual big name share price moves, I just want to make another point. Um, like, take an index like the S&P 500, and you take the big 5 tech firms, um, you know, Apple, Amazon, Microsoft, Google. Do I want to put Facebook in there anymore? I don't know. Let's, let's just keep them there, but I perhaps wouldn't include them for now. But, um, Point being, about 20— literally about 20 to 20— about 25% of the S&P index was those 5 companies, right? It's crazy how big the giants have become and, and how they dominate now in terms of market cap and, you know, on these massive indices. But what this— the story of this year, I would say, has been up until now, it's been the smaller guys, generally speaking, have been hit quite badly, talking about through Q2, Q3, through the summer. So you've had some stocks, particularly on the tech side, small tech, and they're down like 70, 80% from their highs from the end of last year, right? So big, big, big cutbacks, all right? But during that Q2, Q3 period The big tech giants were resilient. They weren't coming off anywhere near as much, so they were staying strong. So net-net, the index— talking about the S&P— yes, did come down, but really only 20%, right? Even though a lot of those names below the big guns are off 70, 80. What's happened in the last few weeks, or certainly last week, I think it's almost like the exact opposite. Where now you've got the big guns have been chopped back, but actually all the other little guys underneath, they haven't come off. All right, there's been a lot of volatility, but, but actually they're quite relatively stable. So you've kind of had this opposite effect. And net-net, the S&P, well, yeah, it has come down, but not by much, right? And we're certainly not, you know, the low of the year for the S&P is still mid-October. The S&P low of the year is around 3,600, and we're right now trading 3,736. So whilst the— this kind of tech earnings pullback has been, um, you know, interesting, the whole index hasn't really suffered, and we're still trading above the June lows, just about. So I think it's quite interesting. We've now seen the big guns get pulled back whilst the, the majority of the smaller guys have stayed steady. I think this is quite an interesting sign.

And, and that's almost a segue into talking about the Fed. It was Mike Wilson, who's the chief US strategy for equities at Morgan Stanley, he was talking about— he's now saying that stocks could go up, I think he said, to 4,150. So this was a— would, would be a 6% gain from last Friday's close, basically, or Friday's close. And he was talking about a short-term bullish call. To put context on this, he's the biggest bear by a country mile. Yeah, on Wall Street. And the rationale he was putting there was about the end of Fed tightening is near. And a lot of that came from a journal article from one of these informed sources that was talking about the Fed are just about ready to pivot now and start stepping down the increments of 75 basis points, but now we're gonna like reduce that and continue to do so going forward. We've hit peak. And that was why markets— before the Fed came out, um, we were trading what, back at nearly 4,000 in the S&P? Yeah, only a couple days ago.

Yeah.

But before we go into the Fed— yeah, tell me about the, the share prices though. Tech giants.

So, so, well, where do we start? Let's just mention Facebook as a— just, well, I was going to say an amusing side point. It's not amusing if you own shares in Facebook, it's the exact opposite. But I mean, obviously this year has been just an absolute car crash. Monster collapse in February, March, downward trending ever since then, and then our big nosedive, um, last week. But net-net down about 75%, um, year on year. And just looking back longer term, Facebook shares are back to where they were trading summer of 2015 now, um, and not, not far off, you know, a quarter of the— a quarter of the value of where they were sat, you know, this time last year. So obviously Facebook's a particularly extreme situation. Take Facebook out of it and take the other Big Four— Apple, Microsoft, Amazon, Google— well, Amazon first. I mean, trading below $90 now, so sub-$90 for an Amazon share. Um, and you know, they're down about 48% year on year, so they're the next worst with regards to year-on-year figures. Amazon are now trading back. It's quite interesting, they were trading at $90 back in July 2018. So we've got Amazon now at a level we haven't seen for 4 and a half years, um, giving back all of the pandemic— all of the pandemic bump. Um, so certainly if you're looking at which of the big 4 tech firms' share prices are currently trading at the largest discount relative to all-time highs, then Amazon is that one. But you've got to think about they're not just 4 tech businesses, they're not just the same business. Often people just push them into this bucket, they're just massive tech, but clearly they are very different businesses. Um, and so as we've already said, Amazon's perhaps a little bit more vulnerable to like a macro downturn just from a retail point of view, and they've got much thinner margins, as I've already said. So You know, Amazon's looking very attractive but could go, could go further. I mean, it's hard to judge, isn't it? And what I think— well, we'll perhaps talk about the kind of macro bit when we talk about the Fed. But, um, yeah, so Amazon's 48% down year on year. Um, if you take the next worst, which I believe is actually Google, um, they're trading at $85. Well, I say Google— Alphabet. Class A shares trading at $85, and that's off a $150 high that we saw back, um, 12 months ago. Um, so yeah, they're back to levels, um, seen at the end of 2020. So they haven't given back— like, pre-COVID they were trading at $60. So Google's still above that kind of pre-COVID levels. Um, Microsoft, year on year, down 35%. I mean, these are big numbers now, right? 35% and trading back to levels, yeah, since seeing the summer of 2020. And then what's quite interesting, so those are big numbers. So Amazon 48% down, Google, I didn't do the maths on that, let's just say 40%, Microsoft 35% year on year, Apple 7. It's only down 7% year on year. So out of all of this, Apple are still, I guess, the biggest one from a market cap point of view. And actually they're the last man standing, if you want to call it that, in terms of avoiding, you know, monster, um, kind of pullbacks. Um, and they're, they're trading— I mean, they're trading at levels we were seeing start of 2021. But I guess what happened to Apple was, which you've got to understand, is they didn't quite have the COVID explosion that these other businesses had. You know, Google and Amazon, of course, particularly had massive upside during COVID Apple, not so much. So whilst they didn't bump so much in COVID, it makes sense they're not pulling back so much, you know, sort of post-COVID. So there is that to factor in. Um, but yeah, so out of all of them, from just a year-on-year share price point of view, then, um, you know, these big guns have finally well, apart from Apple perhaps, have finally turned and slumped. Um, the whole index hasn't gone with it, which for me is a pretty interesting kind of behavioral sign. Because if you wanted a reason for another big leg lower in these indexes, then we had it last week, especially if you heap on top the hawkish Fed from yesterday. It's like if this thing wanted another big leg lower the whole index, I mean, then it probably would— this was the time and it hasn't happened. So I, yeah, for me I think that's quite a powerful signal that maybe the bottom's in.

Yeah, because the— if you actually were to look at a chart of the S&P 500, the October, um, kind of low is pretty much— I mean, we hit 3,500 through a bout of volatility Um, and with even with the sell-off that we've had in the last 24 hours or so, still trading at 37.5. So yeah, the Fed have come out, they've been quite clear, and we can just discuss this now, I guess, about their intention that, look, there's more pain to come, we've got to continue tightening, and stocks have reacted negatively. But you're right, the big forces here from a top level perspective down have come out and are clear from the bottom, going from a micro level. They've come out, and as you said, the biggest influential factors on these indices have come clean. And yet here we are, we're not smashing down through 35, we're far from it. Yeah, 250 points off it. Yeah, what else needs to happen? Well, exactly, uh, I mean midterms come out, but that's not going to shift the needle in that way. And if anything, history would tell us that actually indices tend to perform better because they come out of it at least with, again, clarification of what the latest status is. And so you remove the uncertainties, um, away from the table. So yeah, it's definitely interesting right now.

I think with the Fed So look, yeah, I mean, you're, you're, man, um, you're super bear at Morgan Stanley who's turned bullish. You know, he was hoping, like I think probably the majority, that the Fed would come out, hike 75 basis points again for the fourth meeting in a row, but then signal, look, we're going to take the foot off the accelerator. Not, we're not going to stop hiking, but we're going to start to hike smaller increments, with potentially the last hike being maybe in December, right? But the, the kind of flip card that Powell slipped in there last night to turn the whole thing on its head was, yes, he kind of fulfilled that expectation, but then he added, but we expect the terminal rate to be higher than is currently being priced. And what was being priced was 4.6%, right? So if rates were at 4% now, you could have said one 50 basis point hike in December, maybe slide in a 25 hike in sort of end of January and then done, right? Finishing around about 4.5 to 4.75%. But now markets are pricing they're going to have to break 5%. So that terminal rate is the peak of the hiking cycle. And basically Powell said last night, look guys, it might be as high as 5, if not more. I mean, he didn't say the number precisely like that, but that's what markets were interpreting. So yeah, just that higher peak in the hiking cycle was that curveball last night that just took the— because the S&P rallied 1% initially off the back of Powell saying, look, we've gone 75 today, most likely it's going to be 50 in December, we're going to start to slow down. Bang, big upside, 1%. Then he said, but look guys, the terminal rate's going to be higher, and it all flipped, and the S&P finished down 2.6% on the day.

And then the one of the other points that he made, which kind of then starts to link in the Bank of England said policy needs to be more restrictive, and that narrows the path to a soft landing. Yeah, because one of the things the Bank of England was saying, who came out earlier today— we're recording this on Thursday— um, they talked about they now believe the economy, British economy, has already entered a challenging downturn this summer that will continue next year and into the first half of 2024. That will not be the UK's deepest downturn ever, but it does date back to, I think it's the 1920s. So it goes back to the longest since records begun in the 1920s. So the biggest downturn in history, but certainly since records began. So there's a challenging, hugely challenging period ahead. And one of the things I thought was interesting there was that leads us into the next election. And so Rishi's come in, we're about to be sat in a recession for his entire period. It's not like when Obama came in. You remember when Obama came in, stocks smashed between him winning the election. I remember in 3 months, I think the S&P fell like 30% or something ridiculous because he, he was coming in on the back of the previous administration, central bank decisions that had taken place. He came in, obviously rates got slashed and everything happened, and stock market bounced back. He'll take credit for that, of course. Um, Rishi, um, we're in a completely different cycle where you can't— the whole reason for the powerful Obama bump when he came in was because none of the creative stuff in a policy-easing sense was really deployed until that point. We've already gone through all of that post-COVID. You can't really go into that because we've got an inflation problem. I mean, Rishi, to say he's got his work cut out.

Yeah, talking about, you know, setting, you know, conservative, um, Prime ministers setting all-time worst-ever records, like Truss, shortest person in office ever. Well, yeah, it could well be Rishi sets a record where the economy— worst performing economic conditions under any tenure of a prime minister ever kind of thing. But going back to the Bank of England, on the one hand, they did exactly the same thing as the Fed. On the other hand, their message was the exact opposite. So they both hiked 75 basis points. Okay, but the bank— so, and the Fed said hiking 75, the, the terminal rate, the peak in the hiking cycle though, is going to be higher. It's going to have to be higher than markets are currently expecting. That was the Fed. The Bank of England hiked 75 basis points and said, you know what, we're probably going to stop here. Secondly, the peak in the interest rate hiking cycle is actually going to be lower than what markets are currently expecting. Super dovish. So the Fed did a hawkish 75 hike and the Bank of England did a dovish 75 hike by the language they use about what's coming next and further down the track. And some of the stuff the Bank of England— I mean, they basically came out with two scenarios from an economic sort of, um, let's just say forecasting point of view. One was like doomsday worst case, which— so this, this was it. They said interest rates would, would have to rise to 5.25%. So bearing in mind they've just hiked to 3%, okay. So doomsday is like, it's gonna have to— inflation carries on being a much bigger problem than we currently think. It's rates go up to 5.25%, and we enter into a recession that lasts for 8 quarters. So as you were alluding to earlier, like the worst recession for like a century, 8 quarters. I mean, that's just unbelievable. Unimaginably bad. Their positive scenario was, and this is their main theme, if this is the peak for inflation, it's going to peak in Q4. We don't need to raise rates anymore. 3%, this is the top. And if they're right, then fine, inflation drops back down. I think they said 5.6% inflation by the end of 2023, 2.2% by the end of 2024, and it all just slowly kind of comes back down and rates don't have to go above 3%. In that scenario though, they're still predicting 5 quarters of contraction. I mean, that's crazy length of time. Even that is just crazy for how long a recession might last. Normally recessions last like, 9 months max. So even their positive scenario is pretty ugly. But I think one thing also, because of all the mortgage debacle from the mini-budget, obviously from our sort of people out there on the street point of view, freaking out, panicking. There's 2 million mortgages that are up for expiring, or the deals are expiring in the next 12 months. 2 million mortgages. So people are freaking out quite rightly about, wow, I'm going to have to rearrange my mortgage at an interest rate that's way north of what I've been used to, and it's going to cost me, I think, on the— on an average mortgage, £130,000 a year. If you rearrange your mortgage now, you'd be paying £3,000 a year more in interest payments. That's a lot of money. Um, and so people are quite rightly freaking out. So one clear message from the Bank of England, yes, or today was rates aren't going to go above 3%. We're here, we're done. Inflation is going to peak, it's going to come back down. Basically sending a message to the banks, the mortgage rate setters, and the people out on the street that, look, this big spike you've just seen in these mortgage rates, you're not going to have to rearrange your mortgage at this spike. It's all going to come back down. Don't panic. Was that kind of underlying message.

I mean, there's one, there's one key assumption that you're making there, which is that Rishi Sunak is fiscally prudent and that he will have learned from the lesson of what just happened.

All of these forecasts from the Bank of England are from mid-October. This is pre Rishi pivot, as in Rishi's kind of plan is obviously much less inflationary and some might argue deflationary, right, compared to Truss's super uber inflationary thing, right? So when the Bank of England say they think inflation is going to peak in Q4 and then it's going to start to come down, that's even before the Rishi effect, which should make that even more likely to happen.

Yeah, yeah, it was just about the idea of if you're looking to guide certainty, yeah, to the market, and you're releasing economic forecasts without the government actually having decided anything really at this point, right? Well then, what good are these forecasts? Yeah, that's the present moment in time. So That's fair. I just think that they're going to be subject to change is all I'm saying.

But my point still stands. The direction of travel from a fiscal point of view now under Sunak is not— should not contribute to the inflation problem. Right?

Yeah. Okay, well, looking at the pound, I just had up the chart up, talking of, uh, reversals from where we started. Yeah, um, I think the, the Rishi honeymoon's over. Um, we're trading just under 112 handle at the moment for sterling, but well, yeah, this trust low was obviously way lower at 104.

It is. But look, there's a lot of UK political volatility in that sterling-dollar chart in the last month. Step back, then it's been trending lower. I mean, you could— if you want to, you want to go all the way back, it's been trending lower for like 15 years. But, um, I think now the political noise is gone. Then you're still left with this scenario that, a) the Fed are more hawkish than the Bank of England. That has just been absolutely clearly reconfirmed in the last 24 hours. Okay, so the Fed are way more hawkish. That should lead to sterling devaluing against the dollar. Secondly, the UK recession is going to be a lot worse and probably a lot longer than the US recession. So probably the economic divergence should also lead to the currency exchange rate continue to go down. So I think whilst the noise on the political side in the UK has perhaps been put to bed, don't now think, oh, Rishi's here, great, sterling's now going to rally back to 120. No, the big giant macro forces, I believe, are actually still probably suggesting the exchange rate goes lower, back below 110.

Yep, don't disagree.

Yeah.

And then finally, to round things off, just quickly, we'll see if we can keep it to 5 or so minutes. Um, but it's happened, and Elon Musk has taken control of, of Twitter. There's been lots of tweets, as you can imagine. Um, I even passed comment about some of the activities that have been going on as far as since he's come in, which from a top level, announcing plans for a premium $8 a month subscription service.

Now I was going to ask you about this before you, before you go on, because I was going to ask you, you know, are you— how do you feel about paying $8 a month? Just assuming that you were a blue tick guy, but then I went on Twitter and you're not. Where's your blue tick?

Obviously not quite important enough.

How'd you get a blue tick?

So before, there used to be a process where you'd have to submit. It would be the same on Facebook for Instagram as it would really for Twitter. Yeah. You need to be in a category of some influence. So politician, a sportsperson, a music person, and you need supplementary material to suggest of your influence. So, right, an article in a major publication, so on and so forth, or a volume of following on a certain platform, which to authenticate. And this is the key for me of why this model doesn't work.

Yeah.

Is because I know that certain political circles will say, well, freedom of speech everyone can pay, and the problem they have is about who is actually setting out the parameters for who gets selected is their key problem with the way it used to be done, right? My problem is if you give everyone access to having a blue tick, which obviously still equates to a previous anchoring psychologically of someone of relevance that what they're saying has been fact-checked and verified and is authentic. Now any man and his dog can have that ability. And I know this is the opposite view because his thing is about freedom of speech, but I feel like the problem is gonna be exacerbated cuz misinformation will spread far easier through issuing an ability to have a low barrier to getting verified.

Yeah.

And actually, there was a— there was some research I saw about, I think, if you were to convert all of the current verified users of Twitter into an $8 sub. Yeah, I think it equates to something like $50 million.

Well, I think it's— well, I, I heard, I heard that there's hundreds of thousands of Twitter users that have been verified. So we're only hundreds of thousands. So I just plucked a number, let's assume that's 500,000. That's $4 million a month, so $48 million a year, which for a company the size of Twitter strikes me as not moving the needle particularly.

So I've got, I've got the numbers here. So if every single currently verified users signed up to pay, but no others. Yeah, that would be worth $40 million a year, right?

Yeah, right. So it's less than $500,000.

If the company successfully convinced 10% of its 229 million active users to pay the proposed $8 a month charge, they would generate circa $2 billion, right? Dollars. In revenue. Um, that's a substantial sum, obviously, but it's still less than half of what they make in just standard ad advertising. But that's contingent— they've got to flip 10%— yeah, of their active users.

There was a big poll done by Jason Kalkanis. Um, he did a poll on his Twitter handle, and that— he had 1.2 million respondents. So very insightful. The sample size is huge and the results— and he asked what, you know, would you pay— he actually said, would you pay $5 a month? Um, uh, and 80%, uh, said they would not. 80. So then 11%— sorry, hang on, 80% said they wouldn't pay anything, they're not prepared to pay anything. 11% said they'd pay 5 bucks. 5.5% said they pay $15. So yeah, look, obviously, obviously Elon's going to try a whole bunch of stuff here to kind of try and turn this thing around. And, uh, obviously on the cost-cutting side of things as well, but from a kind of, you know, more further revenue streams. Yeah, this, this first one he's going at pretty hard by the sounds of it. He's getting the developers working Yeah, through the night.

It's pulled engineers from Tesla. From Tesla. I don't know how that makes me feel if I were a Tesla shareholder.

Well, this is it, isn't it? You got such a weird scenario, isn't it, that you've got two companies that are not related in any way whatsoever in terms of the businesses that they are, and yet You've got this weird scenario where you've got a dictator sat at the top of the tree and can pluck people from one to the other. And yeah, now from a shareholder point of view holding Tesla shares, you're like, hang on a minute, I don't— you know, I didn't sign up for this. Um, and so it will be very interesting to see what happens to that Tesla stock in the weeks to come as Elon messes about with his new toy.

Yeah, it's interesting because, I mean, Tesla hasn't really moved a great deal. Yeah, it does make me, um, one thing is I passed judgment of what I thought about Elon's latest moves, and, uh, my LinkedIn got attacked by the Elonistas who've come out in force to put me in my place. Yeah, it's such an interesting, um, situation because the, the common theme in their posts is similar to the atmosphere that surrounded the GameStop situation, whereby a lot of people are saying, what's so different between what a private equity firm does as to what Elon is doing, other than he's a public figure and talks about it. It's always— it seems to cut at the core at this philosophy of there's us, the people, of which Elon represents, and then there's the suits who've been robbing people since the beginning of time. And it makes people very angry. And that— when I look at Tesla share price and it hasn't moved, yeah, when to me, from a governance from a general—

that's the word, governance. That's why it's different.

From that perspective, I, I do find it incredibly hard to see how you can manage multiple, one being a trillion-dollar business, in a leadership style which is very much dependent on a singular individual. Because, I mean, he has sacked the entire management team pretty much. Yeah, of Twitter, straight off the bat, and the whole board. Um, so yeah, I wonder how in the long term— I, I think short term, I think it's remiss to think that Tesla would have a negative impact, but I think as he goes on— and one of my concerns about him as a, as a business owner or operator is that I feel he's very ambitious, so he's not going to stop and go reverse and think, actually, I better just see to it and improve and make sure what I have is firing. He's going to accumulate more and more Twitter's the current fascination. He'll move on to the next thing. Well, and then at some point, literally metaphorically, the wheels will come off.

Here's a counterargument. Could be good for Tesla because look, there's 4 companies now, right, that he's got: Tesla, SpaceX, The Boring, which is his tunnel boring company, which isn't obviously anywhere near as big as the others, and then, and then Twitter, right? But it could be Look, these are massive companies. We've argued on this podcast in the past that Elon should step away from Tesla. It's too big now, it's too mature. Let's get a proper team in to, you know, got experience in running a multinational, you know, publicly listed business and do it properly. And so maybe this is Elon now stepping away from Tesla and now concentrating on this new toy, which is Twitter. So who knows, maybe, maybe governance can now improve.

Well, so if you're— the problem you have there, I think, as another counter argument, is that he walks away, but that current stock price— the reason why I'm saying it's not moving at the moment because of what's happening is because of the type of shareholder who buys a Tesla stock.

Yeah, yeah.

Now the rest of the EV pack will surpass Tesla. It's not, I don't think, question of if, but when.

Yeah.

Then it comes down to the pure fundamentals of that company, which are not sufficient. And so at that point, then the kind of pump around that as a brand that helps keep it elevated, when you then start comparing it to a company that is no longer market leading, I think then, and that's a medium-term play, it comes home to roost.

Your, um, your LinkedIn's going to blow up again.

Yeah, that, I mean, it's brilliant as well because, you know, I put forward my, um, my point of view and then people say I'm, I'm anti-free speech, but I thought giving my point of view I thought was free speech.

Oh, that's funny.

But obviously I can't criticize the guy because that wouldn't be fair in free speech. But, um, there we have it. Anyhow, we'll wrap it up there. Um, thanks Piers, and good to have you back. And yeah, as always, if you enjoyed the episode, feel free to give it a rating and pass judgment in the review. We'd really appreciate it. Helps get this out to as many people as possible. But enjoy your weekend and see you for next week's episode.

Yep, catch you later.