The Disciplined Investor Podcast with Andrew Horowitz -- Publish Date 4/20/25

But why not ask our guest? It's gonna be Brian Dress. He's an investment advisor for Left Brain. He also holds a position of director of research. He works with high net worth investors and families on tax efficient investments and planning strategies to help them achieve their financial goals and dreams. And before, uh, when he began his investing career in '05, uh, he joined Left Brain in '18. He earned a bachelor's degree in Georgetown, became a CFA in 2021. Let's get right to him. So Brian, hey man, how you doing?

Doing well, great to be back with you, Andrew.

Thanks. I mean, there is a lot of things that have happened, uh, from the last time that we talked, and, and I think I, I could say that if we didn't talk for 10 years, the last several months was still more things that happened than the last 10 years in terms of just lunacy. So there's a lot of things happening. You have the opportunity to look at all this, do some research, invest in it, etc. One of the things that I think I want to start with you is, you look around and you see what's happening. How does that change what you do from a research perspective?

It doesn't really change a ton about In terms of our research, we're still micro-oriented. We're still looking at what individual businesses are doing, but here we are talking in early, early in 2025, and we're just kind of waiting for the next quarterly earnings. I guess we're getting that soon. And we want to see what the CEOs and the other officers of these companies have to say in terms of how current events are impacting their business. Because, you know, we can sort of guess at, you know, a lot of the macro factors that are out there, but until we hear how it filters down into the individual businesses, it's really difficult to, um, to draw any really strong conclusions.

So what's really kind of fascinating is that I would say I did a show this week with, uh, John T. Dvorak, Diez Unplugged, and we talked about the earnings that came in from Bank of America, Goldman Sachs, Citi, um, BlackRock and all that. Pretty much what I saw, and this is consistent with other companies too, was, you know, we had a good quarter, but damn if we could tell you what's going to happen moving outwardly.

Exactly. That's exactly what we expected to see. And, uh, over the next few weeks, I'm sure we're going to see a lot of pulling of guidance and, uh, You can take that for what it is, but that's challenging from a research perspective and from an investment perspective.

Yeah, because now all of a sudden the opportunity to say, okay, well, they made X and now they think they're gonna make X minus or X plus or come in, you know, the same is a problem 'cause you have nothing to base that on, right?

Yeah, we're sort of guessing and it's all kind of based on, you know, obviously what's going on with tariffs and a lot of other things in Washington, and things are changing not just weekly, daily, but hourly. It's pretty difficult to draw, again, draw conclusions that are gonna make much sense, you know, in a few weeks from now or a few months from now.

So we have a new thing that we do. If you wanna try to do this at your office, it'd be interesting. So during the day now in our office, We have a game, a drinking game, that every time the word tariff is utilized inside of one of our streaming news items, we take a shot.

So have you had anybody carried out on a stretcher yet?

Yeah, we haven't worked for weeks. And then, but we did have somebody actually have to get their stomach pumped when we had the drinking game that was about— that started with Trump did this or Trump did that. That was— we had to get charcoal pumps of a stomach for that one. Yeah, and that's the problem. The news flow right now is such that it's very difficult because even in a midst of calmness, you get some crazy headline bomb that throws everything into a tizzy.

So yeah, so I guess my perspective on that, I guess coming into the year, what I was telling clients was we're gonna try to filter out the noise and just focus on what, what's happening, what actual actions are being taken. Um, but the problem is, is the noise— is the noise becoming signal? So it's difficult again to sort of filter through what really matters.

Yeah, because, because when you have a situation where, you know, during the morning a president says a good time to buy, and then all of a sudden in the afternoon comes out and, and limits and pauses tariffs for 90 days, I mean, was that actually two different unique circumstances and commentaries, or were they both aligned? And is that something that's planned to be utilized similarly in the future? In other words, is there method to the madness?

Is there a plan?

I'm not asking you to answer this. It's more— it's more rhetorical, you know. It's, it's, it's something that's, I think, difficult for all of us. Now, yes, one of the other things we've seen, aside from the volatility, the uncertainty, the mess that's being caused right now, which by the way I think you would agree with is where the problems come in with guidance, right? Because people, CEOs, CFOs, they don't know what they're going to be spending money on or what income they'll be receiving, revenue they'll be receiving. They don't know what their margins are going to be from a profitability standpoint, and they really have very low vision. It's almost like, you know, driving down a road. You could do 90 or 100 if it's a pure beautiful day out there. And even if it's raining out there, you know, you know, okay, it's raining, it'll stop eventually, I'll use the windshield wipers, etc. But you know, when you get into a situation where it's pea soup and you can't see right in front of you, very difficult to make any kind of forward progress.

Yeah, I can't disagree with any of that.

And that's kind of how I see it right now. We're mired in a, in a fog bank.

Yeah, it's— there's a, um, There's some similarities to COVID, but there's some differences, obviously. So, uh, in COVID we had tons of uncertainty, um, but the Fed was more in play in terms of helping. And also, um, that wasn't real— well, I guess some people think it was, but it wasn't really a man-made situation. And so, uh, I can't— I was trying to go back through economic history and try to discern, are there any, uh, times that there were these sort of, uh, was there really a man-made recession at any point in time? And the only, the only thing that I could come up with was, uh, kind of early '80s when they were trying to tamp down inflation. So there was a reason to it. But, um, yeah, this one's— you've heard the— probably heard the word unprecedented. That's another drinking game you could play. Um, I think it really— we are in in sort of unprecedented times here.

Yeah. So one of the things that I've noticed over the last several weeks is that obviously we know that stocks are being affected dramatically. In 2002, if we hearken back to that, in 2002 there were some problems. One of the big problems was that zero, nothing, nada, nothing worked unless you owned energy shares, if you remember that whole thing.

Sure.

Um, but basically an asset allocation process was just obliterated. Um, you know, bonds got just trounced. You could not even play the VIX because the VIX was relatively low because volatility, it wasn't there. It was just this, this, this constant and, and regular slide, and just things got worse and worse. Right now, bonds got kicked in the teeth over the last few weeks. It went from 3.7% on the, on the 10-year to 4.5. The dollar is hitting multi-year lows against a lot of currencies out there. Tell me about your thoughts on that and where do we go with this? Because, you know, just earlier this week the Fed and Powell were talking about how they kind of also don't have any visibility and they're not exactly sure what they could be doing, but they're thinking that they don't have as much scope as they thought they would have because of all this tariff nonsense. So Um, let me take a drink again. There we go. Uh, and, but, but fixed income, let's talk about fixed income. Then I want to talk about— I know there's a lot there, uh, then I want to talk about, okay, well, what do we do maybe to give us kind of like a fixed income style without being in fixed income? So first, fixed income, what, what's going on?

Okay, so interest rates, forecasting interest rates. Well, if Jerome Powell doesn't have a good sense of where it's going, then I'm going to just tell you I don't. Um, yeah, yeah, because he's the one in charge of the, of that rudder. Uh, so we're gonna, we're out of the forecasting interest rate business. We're always out of the forecasting interest rate business, but this is, um, definitely a time when we have to remind ourselves that's, that's not what we do. But, um, what I do notice, um, you know, we do a lot in high yield. For those of you who've, who've listened to me on, on this show before, or Nolan Langford, We do pick through the high yield bond space, picking individual bonds, and we're starting to see some things that are becoming interesting. So for the last, like you said, in 2022, we saw some really interesting opportunities and rates started to come down over the last 2 years, I guess 2 and some years since. We weren't as excited about those opportunities, but some of the bonds that we followed over many years are starting to creep into that 7% and 8% range again. And that's interesting to us again. So individual bonds are looking interesting. What's going to happen with the 10-year, I couldn't tell you, Andrew.

[Speaker:ANDREW_HART] So what's interesting about that? Because now we're starting to see that credits are starting to to widen again. And are you concerned about if we do in fact get into a recessionary period that some of these corporates are going to be problematic?

Yes and no, I guess I would say. Um, so a lot of these companies are really well capitalized coming out of COVID So, you know, a lot of these companies, if you remember back to COVID when we went back down to the zero interest rate bound, a lot of companies went out and took advantage of that and issued quite a bit of debt at that time. So that was what, 5 years ago? Some of those were 7, 10, 15, or 20-year bonds. And so capitalization remains reasonably good in, even in high-yield land. Um, obviously if there are companies that have maturities, maturities coming up, meaning if they have bonds that are maturing soon, that may be more of an issue. And that's why we select individual bonds. We don't buy a whole, you know, we don't buy bond funds. Um, but there are individual situations where companies remain well-capitalized, maybe they pay a dividend. So there's an option where they could stop paying the dividend and, um, you know, continue servicing the debt, things along those lines. That's the way we kind of look at things. Are there levers to pull? Um, we do think there are definitely opportunities in household names out there. That are interesting.

Yeah, household names as in staples in the household, names or household names as in things we just know about?

Things you know about, right?

But the problem is that things we know about, we find that things change. Look at what happened last Wednesday, Tuesday night as a matter of fact, last week, where our household name of NVIDIA was starting to get better and there was exclusions and exemptions. Then all of a sudden they come out, Jensen Huang comes out with a bombshell of, you know, the H2O, the H20 or H2O chip, whatever they call it. Um, is going to be kind of strapped down, and they're going to take a— for whatever reason, they're taking a $5.5 billion charge, which I thought was really weird, which is why probably the market punished him that day. But, you know, you have things like that because this is not just a— this is not a CEO coming out and saying, hey, you know, uh, you know, we see what's going on and we see a little bit of slowdown in the buying of this. That's not what's happening. This is all policy being imposed on these companies, and it's either policy that was historic and renewed and revived or not changed, or something brand new out of absolutely nowhere that they get slammed with. So, so, so how do we deal with that? I mean, I honestly— I know we keep coming back to the same point here. How is investors and investment advisor— advisors, listeners out there deal with this kind of inability to understand what the rules are.

It's hard, obviously, um, but we're looking at situations like Nvidia. We still love Nvidia, um, we, we did some trimming of Nvidia because we had gained so much on it. So in terms of being prudent in the situation that we find ourselves in Um, I think it did make sense to pare back a little bit of that exposure, but at the same time, we're looking down the road, 3, 5, 10, and 20 years down the road, and what's going on from sort of the artificial intelligence, AI perspective is a train that's not going to be stopped by anything. And so those are the type of businesses that we want to continue to own. It doesn't really— I mean, I know tariffs in the short term are probably going to have some impact on earnings from quarter to quarter, but at the same time, you know, we have a lot of trust in what they're doing at Nvidia and what's going on in a broader context with AI. And we'll just— we're going to have to stay the course there. That's just the way it's going to be. Will we have to take some heat on it?

Maybe.

But we have to be comfortable in owning things that we think have a chance to continue to perform despite the tariffs. You know, we think companies that have superstar CEOs like Jensen Huang are gonna find a way, um, to make chicken salad out of chicken you-know-what.

Yeah, so this is like what, what Apple did last, last week or so. They, they airlifted like two was it $2 billion worth of iPhones? Yeah, out of India and brought to the US, right?

I mean, capitalists is intelligent, um, CEOs are smart, you know, capital is going to move where it needs to move to get the best return. And, um, yeah, I think there are some reasons to be pessimistic, but also You know, things always do move forward, and, uh, we're gonna get through this one way or the other.

So let's talk a little bit about all the alternatives to things like fixed income. I use the word alternatives— that's going to be used a lot here on this discussion, I think, because— sure, um, there are all these, these, these other investments that are outside the genre of stocks, bonds, real estate, commodities, cash. There's other things these days, right? Talk me through some of the things that you've been looking at and utilizing.

Well, for us, we don't play the game of alternatives. I mean, you go to any place where advisors are gathered or asset managers are gathered, it's certainly on the tip of everyone's tongue about doing something with alternatives. Well, maybe that made sense, you know, 15 years ago, but now it's become extremely crowded trade in my mind. Um, Private credit is one of these things that we've heard a ton about the last few years. Like I said, Andrew, we like to pick individual bonds, and there are a number of reasons for that. One of them is transparency. So companies that have private ownership aren't compelled to release their financials to investors. Or maybe there are some ways to do it, but it's not publicly available data. And so it's difficult to assess whether a company's creditworthy when you don't have that transparency. And so that's why we like the public markets. But the other problem with private credit is, you know, a lot of these portfolio companies that are in private credit are smaller. Most of the stuff that we do, Andrew, is companies that have enterprise value of at a minimum $5 billion, but usually over $20 billion. For the market historians out there, companies that are small, so if we look at say Russell companies even, so that's like $2 billion and smaller, they tend to be really economically sensitive. If we're moving into sort of a downturn economically, these could— these companies could be adversely affected by a downturn. Now, these are the companies that are portfolio companies for private credit, may even be smaller than what you see in the Russell 2000. And so I think it's really a huge risk to be holding a lot of this private credit because of that reason alone. And then you add into, uh, add into that mix Also, the fact that you have illiquidity, um, you know, you should be getting a premium for liquidity for not having liquidity, and we're worried that that's going to be actually the opposite, uh, going forward.

Yeah, hang on a second, I want to, uh, take a quick break, but I want to continue on with this discussion with Brian Dress on private credit for a second because I have a few examples I'd like to bring forward of things that I'm seeing and some things I'm seeing, right? Some examples and things I'm hearing and seeing in that world. Hang on a second. So let's talk about Interactive Brokers because you should know this by now, but if you don't, did you know that at Interactive Brokers you don't have to wait for markets to open? With around-the-clock trading, you could trade over 10,000 US stocks and ETFs, US equity index futures and options, US Treasury bonds, and more. IBKR's overnight trading help you stay ahead by allowing you to react instantly to market-moving news and economic events whenever they happen. Capture more market opportunities and trade on your timetable whenever it's convenient for you. Enjoy bond trading with no markups, no built-in spreads, and low transparent commissions. Open an IBKR Brokers account today. Go do it. And I want you to discover more trading opportunities at ibkr.com/trading. Aroundtheclock. So we left off on the discussion of private credit, and let me give you a couple of anecdotal items. I got a call from somebody who works for a very large, very, very large private equity firm, we'll call it, and telling me that they're doing markdowns about 25% of the real estate positions in their portfolio. It's a very difficult time, and this is a very well-known, very well-known, very large, very big big company. This is not slouchy. Matter of fact, if I told you the name, you'd know it. Um, and they're taking big markdowns on that. You know, you look at the private credit side of things, and you mentioned earlier about the size issue. You know, some of these things are dealing with $5 and $10 billion, and those companies, by the way, may have billions and billions of dollars worth of debt, um, that is laddered at all sorts of ranges, right? You know, 2-year, 1-year, 30-day overnight lending, whatever, etc. Uh, The small guys, the private credit, they're going after companies that are like, hey, it could be, it could be, it doesn't have to be this small, but it could be someone who's looking for, you know, $500,000, that, you know, is looking for a million dollars, $5 million. Now that may seem like a lot of money to some, but it's really not. And the problem is they're looking probably to only one place. They're, they're getting it at a higher level than, than, than usual. So maybe if current rate is 5%, you know, they're paying maybe 7% as a number. Okay, the thing is, the private credit equity companies will maybe also take a piece of their company for something like that, right? But more so, that amount of money is not liquid. And you mentioned this before, but let me explain how, how not liquid it is, and you could help me after I mention this.

Sure.

It's probably their main piece of, of, of debt that's outstanding, and now they have this inability to pay it back, because when things slow down, this is probably a large component of their overall expenses. The debt service becomes a big part of their, of their expenses, and they don't have many levers to pull in order to pay that off, right? And then they give a piece of equity away, and now the private credit turns into a vampire monster, by the way, looking to seize control and do all sorts of other things. And it becomes this not only illiquid situation but a very difficult situation for the actual investor that has no say in anything that's going on, just sitting there twiddling their thumbs. Moreover, last point, you're probably not going to know the valuation change forever because they're not really required to do a true mark-to-market because this private credit— how are you marking to market an $800,000 loan to mom and pop on the corner? Now, not all private credit has to be that small. It could be gigantic also, right?

Sure.

But tell me where I'm missing something there.

I don't think you're missing anything. I'm always reminded of— I don't know if you've heard this, but Warren Buffett used to say about the stock market, you know, his frustration about the stock market was, you know, that there's a price called every day on any given stock, and it doesn't really have any impact on the business. And what his analogy was, he said, imagine if your house was— if there was a price called on your house every day, how that would really impact things. This is kind of the reverse of that, right? So there's no transparency on the pricing in private equity or private credit. And so you don't know what you don't know until maybe it's too late. In terms of, you know, what's going on in the business, in the portfolio companies, and the marks to market. Um, there's no transparency there. So that's, that's why we kind of shy away from all that. And again, um, like the example that you kind of mentioned about companies that are smaller and maybe have less access to capital, That's kind of why, why we like to be in the public markets where we can look and see what's the history. When was the last time they did a debt transaction or some sort of exchange, you know, and paid it off successfully? Yeah. So if I can go back and say, um, this company issued debt 2 years ago at 7%, um, that gives me some information in terms of what banks and other underwriters think in terms of their creditworthiness. Whereas again, in the public markets, if I can go, if I look at a company that had to do a senior, uh, senior debt transaction at 11 or 12%, that again tells me and gives me information. Well, they're not really that creditworthy and we're probably going to steer clear from that. So the transparency is really important from us, from our perspective. Um, And you add in the liquidity as well, I really think it makes a lot more sense to be invested in public markets. Now, understanding we may be a little bit of a unicorn in terms of choosing our own individual securities, but I do think it's— I do think it's a better mousetrap.

Well, and it gives you a lot more flexibility, it gives you a lot more ability to, um, understand the underlying and not just follow around, you know. Listen, it could be, it could be a it could be a positive and a negative, right? Because something happens in one of the securities you picked versus a full diversification in just the index, there may be more exposure and more downside.

That's right. But if we can find a way to, on, on balance, you know, get a little bit more yield on our overall portfolio, then we can, uh, we can withstand one or two of those every 5 years. And not only that, we're watching these situations. So, um, usually when you see a bankruptcy in a public, uh, in a public company, it's a slow-motion car crash. So, um, like for instance, Bed Bath Beyond, uh, went bankrupt. I don't know exactly if it was 2022 or 2023, but you could tell that company was distressed for 4 or 5 years before that. So What we like about these situations is that, again, you have transparency and information and financials, so you can see if something's deteriorating and then maybe sell at a loss but not at zero.

Yeah, yeah. So when it comes to, um, private markets and it comes to private markets then maturing and going public. What is the story with the IPO market, and why has it been so blah over the last couple of years?

You know, it's been interesting because, you know, of course people are probably talking their book, but we've been waiting for years now for the IPO market to unfreeze. I can't Man, it's been many years since, you know, we've seen a number of IPOs coming in one after the other. And for private equity, that's crucial. They need an exit. So they, private equity, just to give you a little background, they buy companies that are maybe distressed or undervalued and they do whatever their magic is. And then out the end, they find an exit, whether it be selling the business or, or taking them to the public markets. Um, so if we have a situation where the IPO market is more or less frozen, or, you know, one or two trickles out every few months, it makes it really hard for these companies to, to find exits for their portfolio companies. Now, I did, I did a little research today, and I guess the private equity market was about $600 billion in 2000, and in 2024 it's about $8 trillion.

Wow.

So what happened? A lot of people really sold the idea of private equity to a lot of, to a lot of, uh, asset allocators, which is fine. But what my point would be is, is that it's a pretty crowded trade. And so there are a lot of really affluent people out there who are involved with private equity and a lot of endowment funds and pension funds and what have you. Um, I think there's a lot of risk in that. And in terms of if you have new money to deploy, I think it's really risky, um, to, to put it a little bit more on this huge pile of this $8 trillion pile that's out there where there's no clear exit strategy for, uh, for recognizing a profit.

And then, and then the other problem you have with private, uh, equity/private credit is that the structure of it is usually 2 and 20 expensive as an investor, and, uh, capital calls.

Yeah, so capital calls. I mean, so this is— I think this is something that probably people— I mean, I'm sure there are professional allocators who think about this, but there are also run-of-the-mill affluent, high net worth, and ultra high net worth people who buy into these private equity funds. And they don't realize that they may get a call at some point saying, uh, we're going to need you to send in another $500K here, uh, pretty quickly. Um, because we have whatever reason, whatever issue we've got inside the fund, we need more capital. Um, that's— that can't be very, um, can't be a very pleasant call to receive as an investor.

Well, some of them are planned. Some of them we know that— sure, you buy into a half a million dollars into private equity that does, uh, you know, llama farms in New Mexico, and you know that you're going to give them $10,000 with a commitment over a number of years for $400,000, you're going to get calls. You're going to get, hey, you know what, we're, we're we found something we want to do. And, you know, so you have to have the cash flow to keep that going. There's some interesting thoughts behind that, um, but you also have to have the ability to withstand a very long time without getting your money back. That, that's where the liquidity problem comes in. I'm a big fan of liquidity, big fan. Uh, as a matter of fact, detest illiquidity. And I do understand that things like your home and your other private equity deals and Obviously, you know, you want to be in the market for a long period of time, but doesn't mean you have to be illiquid. Doesn't— hating illiquidity doesn't mean I have to trade out of something every day.

Not at all. And, and, you know, I, I'm glad you mentioned what you did, but, uh, because, you know, we deal— our clientele, a lot of people have owned a lot of real estate, and so like you mentioned, there's a lot of illiquidity in that. So why add, add more fuel to the fire from an illiquidity perspective, right?

It's like having a lot of really great stuff in the refrigerator, but you got it locked and you can't open it. How do you eat?

Uh, all right, um, in terms of, um, llama farming sounds pretty good actually now that— yeah, times like this.

Yeah. Um, let's kind of segue into a thing that you've been talking about for a while, things that we've, we've talked about together, um, and that you've written about And that is, um, the continuation of AI and cybersecurity. And, you know, we saw a crazy move. I don't think there's anything else that can be said about it but a crazy move. And, you know, with the whole cyber— with the whole AI, uh, move, and everybody was all ecstatic and freaked out, and all the money spent. I saw some— and originally, back in the beginning, I saw some problems with it, that companies like Microsoft was you know, giving money out to all these different AI companies or companies that were on the brink of something or somewhat, but also saying to them, hey, by the way, we're going to give you $3 million, but you got to commit to a $2 million contract to use our Azure. And that was pushing money back at Microsoft. Microsoft taking money off of their balance sheets, putting into their income statement essentially by routing it through a third party. Makes sense.

I, I don't have an opinion on that particularly, but Um, but if that happened, it was a brilliant little charade. Sure, sure.

And there was a lot of that going on. Yes.

Um, I, I think again, we try to look for further down the horizon, so 5, 10 years, and, um, it's pretty hard to argue the idea that artificial intelligence is going to disrupt not just tech but any number of businesses because Obviously understanding the capitalist system, what we're trying to do is increase margins any way we can. And especially in the US, labor costs are really expensive. Um, and also there are a lot of tasks that, you know, machines are going to do better than humans, and we can empower humans to do what they're good at, which is, you know, relationship building, creativity, and things like that, that AI hasn't really found a way to disrupt yet.

Um, what they say is the potential for bringing a lot of manufacturing back to the United States is probably going to end up being done by a machine to begin with.

Yeah, I mean, that's been said explicitly by, uh, some people in the administration, so I, I guess I'm going to take them at their word on that. Um, I think it sort of defeats kind of the purpose of what they're trying to do.

That's the point I'm making. That's exactly the point I'm making.

But that being said, leaving, you know, leaving the political discussion aside, I do think AI, it's inevitable that AI is going to find its way into a number of different, a number of different verticals, number of different industries and sectors. And we're just kind of getting started. We're still in the early innings of it. And so whatever's happening with you know, tariffs, macroeconomy in the, in the short term, I don't think is going to disrupt what's, what's happening, um, you know, in the long term for, for this.

Where do you see the greatest opportunities? Is it in the actual AI companies? Is it in the hyperscalers? Is it in the alternative energies? What, what, what are some thoughts?

I still think it's, I still think it's a lot in the semiconductors. Um, so Nvidia, of course, uh, Broadcom, and then TSM is going to get a piece of whomever is the winner in in terms of semiconductor, uh, design. So, uh, that's Taiwan Semiconductor. Uh, we like those three the most. Um, I think it still remains to be seen who's going to be the winners beyond that. I think software has been sort of beaten down over the last few years, and, uh, I don't have a name for you, but I do think that's an area, uh, where we could see, you know, a lot of development and a lot of, uh, additional margin based on AI getting into the coding space. So it remains to be seen who the winners will be of that. But I think you've got to keep your eye on and listen to what these CEOs are saying in all manner of businesses and see who's got the most penetration of AI. And whoever does is going to be a winner because we're pretty sure AI spend is going to result in margins.

Who's your favorite company besides Nvidia in this, in, in the genre of technology?

In technology, um, I always, I've always loved CrowdStrike. Really?

Even with all the problems, huh?

I love the way they handled the problems. Yeah.

Are there still lawsuits pending though?

Yes, but so my understanding and what I've heard and read is that CrowdStrike had its issues last summer, uh, in 2024, um, especially with the airlines having issues with, uh, the system. But it wasn't a breach, it was, um, some issues that had to do with an update of the software, and they weren't technical blooper. Yes. So my understanding is that CrowdStrike, George Kurtz the CEO, and the sales team went out aggressively to all their customers and told them what exactly they were going to do to solve the problem and how they're going to handle the crisis and how they're going to make everyone, uh, I don't know, I can't say whole, but, um, try to solve things for people and how they're not— how it's not going to happen again. Um, and then you also look at how the stock performed. Obviously the stock was hammered, I don't know, about 40% right away after the situation, but then made a new high after that. So I kind of looked at it in a different way than a lot of people did on Level One, which was obviously Level One says, uh, this is a real huge problem for CrowdStrike. I— my takeaway was how ubiquitous and important CrowdStrike is in so many different businesses. Um, that was my takeaway from the situation. And again, the way that they responded to it, I thought was really top-notch. So, and then beyond that, cybersecurity is, is a crucial spend. Um, it's crucial that you spend on cybersecurity if you're in the enterprise. You can't choose not to. And then let's weave AI into this situation. AI means that the threats are going to get more sophisticated and more, um, more acute. So from a total addressable market standpoint, we expect that to continue to increase for, for for CrowdStrike. So we like CrowdStrike. And I'll throw you one more name in cybersecurity, that's Zscaler, um, with Zero Trust is the architecture behind that. Zscaler is a company that helps people log into, um, connecting users directly to applications and not networks, so it reduces the threats, um, to networks directly. So Um, we think there's a place for a number of different winners in cybersecurity, but we think cybersecurity is going to continue to grow in terms of a total addressable market. And that's what we want to see when we're looking for investments.

Good stuff. Good stuff. Brian Dress, Left Brain Research. Uh, we'll have all the information on how to find you, how to click you, got to get information about you over on the show notes for episode number 917 over on thedisciplinedinvestor.com. Thanks for joining me. As always, uh, great, uh, having opportunity to speak with you and flush through this. You're, you're, you're very calm and cool and collected. I like it.

I don't know if I feel so calm inside, but, uh, I'm glad that it's coming out that way. And I would, uh, definitely encourage everyone to go and see our YouTube channel. We are up every few weeks with, uh, our thoughts not only on the markets, um, but also on, uh, on some personal finance topics as well.

Good stuff. We'll make sure to get you there. Thanks so much, buddy.

Thanks, Andrew. Great to be with you again.

Thanks. And that is a wrap of show episode number 917, on our way to 1,000 episodes, all the way from 2007 to 2025. So I got to figure out exactly when we're going to target 85 more shows— 83 more shows. So that would be about, what, a year and a half? So that would be somewhere in the neighborhood of about Summertime-ish, 2000— what, '27? That'll be a 20-year anniversary. We gotta do something special for that. We have some great guests coming up, by the way. Pat O'Hare is going to be coming up. Um, I'm very excited about this. He's with Briefing. We got a tax dude, uh, Dan Pila coming up. We have, uh, Dan Fagella coming up, which is great. He's awesome at Easterling. Uh, who else do we have? Um, let me see, just a second here, because I want to see what's happening to me. If I could find it. I guess I can't find it. Um, May, we have Tom Nelson, Barry Ritholtz, and we have, uh, oh, Frank Curzio in June, and just a whole host of great people that will be on the show coming up. So make sure to stay tuned. Also stay subscribed. Go over to Apple or Amazon or YouTube, or— we just started YouTube. We don't have many people watching or listening to us on YouTube because it's just audio. Spotify, a Spotify, that's a big one. Yeah, I love Spotify. Go over there also and make sure to subscribe, say some good things about us. And of course, if you want to get in touch, go over to thedisciplinedinvestor.com. Thanks for joining me this week. I'll see you again next week. We got lots to talk about.

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