Opening

• The MOUSE!
• College world tour
• Golf Players Championship. TPC Sawgrass.  All tree talk.  Most seem to be using 3 wood.  Morikawa hit Driver. Tree is ~90-100 yds in front and 10 ft clearance? 
• Diddy. May 5th sex trafficking and prostitution. Racketeering. 

Markets

• Hang on tight. Its gonna be a bumpy ride. Big bounce today.  
• We are in “Correction” territory. Down 10%. Every 2 years. 
  • Bear Market is down 20%. 
    • Remember. ~25 times in last 100 years. So once every 4 years. 
    • Last “Bear” market was in 2022. 

• Could be a rocky next 6 months; until fed policy (including tariffs, like you mention) are better defined, solidified, etc... (Markets hate uncertainty).  
• Lot's of talks of recession; which would drive markets lower. Thoughts are Fed would/will lower rates if data starts to indicate unemployment increasing. Fed/Powell does not want to ruin their legacy. 
• This "correction" while painful, really needs to be taken in context:
  • S&P500 down ~9-10% from all time high. Nasdaq 100 down ~12-13% from all time high.  
  • BUT…
    • Both indices are still up about 10% over last year (i.e. 365 days). 
    • S&P 500 and Nasdaq100 over the last 3 years have annualized returns of 11.5% and 15%, respectively. 
• US Economy and US company fundamentals remain strong. I think its going to be a great next 3+ years, but bumpy 12 months.

Finance Education

• Rule of 10 best days
  • 2024 up 24%. Excluding 10 best days. Only up 4%
• DOLLAR COST AVERAGE.  if you're in a 401(k) or something right now and still just plowing a percentage of your paycheck in the markets, you're doing just fine.

Actively managed vs. Benchmark. 

According to the SPIVA U.S. Year-End 2023 Scorecard:

• Over a 15-year period (ending December 31, 2023), 87% of actively managed U.S. large-cap equity funds underperformed the S&P 500.
• For all U.S. domestic equity funds (including large-cap, mid-cap, and small-cap), the underperformance rate over 15 years was approximately 88% compared to their respective benchmarks (e.g., S&P 500 for large-cap, S&P MidCap 400 for mid-cap, S&P SmallCap 600 for small-cap).

Diversify your RSUs. 

Now let’s chat Apple.  

Apple

• Trading around $210. Was $260. Down 20%. 
  • Still has high PE 28-30 (depending on current or forward)
• Apple subtle announcement; made huge waves! 
  • “Apple provided a statement to media outlets like Reuters and CNBC, confirming the delay of these features until 2026. The statement read: "We've been working on a more personalized Siri, giving it more awareness of your personal context, as well as the ability to take action for you within and across your apps. It's going to take us longer than we thought to deliver on these features and we anticipate rolling them out in the coming year."
• Daring Fireball by Jon Gruber.  Something is rotten in the state of cupertino. 
• Two Analysts: 
  • Bear Case
  • Bull case

• I’ve been on the inside of companies and know that what news reports is often, if not most the time erroneous or off the mark. 
  • I think Apple will figure it out. 
  • Remember Apple maps…took a few years, but now Great!

RSU’s 

This is also a good reminder to Diversify RSU’s. 

Tesla

• Monday this week.  $260-$220 in 1 day. 15% down!
• Largest single day drops in history.
  • Largest single-day drops in $TSLA history (adjusted for splits):
  • 9/8/2020 21.1%, to $110.07
  • 1/13/2012 19.1%, to $1.52
  • 3/16/2020 18.6%, to $29.67
  • 2/5/2020 17.2%, to $48.98
  • 7/6/2010 16.4%, $1.07
  • 3/18/2020 16.0%, to $24.08
  • 3/10/2025 15.4%, to $222.15
  • 12/27/2010 15.4%, to $1.70 
• Ron Baron: 
  • Ron Baron on Tesla sales down because they’re not building…they’re in “refresh” mode for Model Y. 
  • Ron on Robotaxi future
    • Instead of $7-8k 
    • $$3-$40k in profit per car per year.  
    • So adding $30-50b per year in profit! 
• Morgan Stanley says could go to $800 in next 12 months. 
• NEWS: Tesla is reportedly working with Chinese tech giant Baidu to improve FSD performance in China. 
• Trump accepting car. Elon says Tesla will double manufacturing output in US over next 2 years. That’s a lot. And all with FSD approved and operational.  

My Take:

1. Most Dems won’t sell their Tesla’s or Boycott the best car in world. 
2. Now Republicans are Buying! 
3. 1 year from now, this will all be forgotten. 

• Munroe clip on Tesla. Engineering dominance. 

AI

• Anthropic CEO Dario Amodei on AI executing 90% of coding and 100% in next 12 months. Claude 3.7 Sonnet.
  • Full interview here. 
• Chamath commented on All In that he uses Anthropic for coding and Grok for personal.
• Embrace AI!!!

DOGE:

• Is this really Obama talking about the Fiddling Farmers. 
• Chuck Schumer 2010: we have to eliminate the waste, fraud and abuse from Medicare.
• https://www.doge.gov/savings
  • $115b in savings. 
  • Payments:
    • Consistent with President Trump's Cost Efficiency Initiative, DOGE will begin posting payments to show the public how taxpayer funds are actually being distributed on a daily basis.
    • DOGE is starting by posting all of the grant payments issued from the Program Support Center, which disperses ~$215B in grant payments per year. This will be expanded to all payment systems over time. This is in beta and we will quickly fix any mistakes made.
    • Previously, payments were often made without descriptions, receipts, or invoices; starting soon, a now-mandatory "brief, written justification ... submitted by the agency employee who approved the payment" will be posted here.
    • The payments listed here have been approved by the applicable agency and funds have been disbursed; DOGE has not approved nor disapproved any of these payments.

Recommendations:

• Rambo Last Blood. 
• Back in Action: Movie on Netflix with Cameron Diaz and Jaime Fox
• American Primeval. Peter Berg
• Dictators Podcast. Pinochet