Transcript:
Caroline Woods:
Joining me now Ross Gerber, CEO of Gerber Kawasaki. Ross welcome back. Great to have you.
Ross Gerber:
Thanks for having me again.
Caroline Woods:
So, Ross, it’s been a little while, but in late May you said this market was fun, but you also said when you’re having too much fun, that’s when you start getting cautious. So let’s get a vibe check to kick things off. Are you still having fun or are you getting nervous? Yeah.
Ross Gerber:
Not as much fun. Not as much fun. And much more nervous here. And taking a more defensive, position going into the new year. You know, there’s a lot of uncertainty to deal with over the next several months. And because of the election, a lot of the issues we have, I don’t see resolving until after the election.
Ross Gerber:
So I become much more cautious. And as I’ve been saying, if I can just take the returns I have now and say that’s the end of the year, I would be happy with that.
Caroline Woods:
Okay, so what’s making you most nervous? What’s the biggest risk to stocks heading into the fall?
Ross Gerber:
I think the biggest risk to stocks is inflation. And inflation is always the biggest risk to markets. Not only stocks but bonds as well. And it’s kind of like a a roller coaster. As inflation goes higher bond yields go higher and stock multiples go lower. And that means stock prices go down. And if we don’t address inflation at some point we’re going to have to accept much higher yields which then puts pressure on stocks multiple expansion.
Ross Gerber:
So fortunately earnings are very good. And that’s been you know supporting stocks for now. But if God forbid you know the I gold mine bonanza cracks we could see much lower markets. But I don’t see the the I gold mine bonanza stopping. So I think that supports markets. So I think it’s going to be a choppy period through the end of the year.
Caroline Woods:
Where we have rates and oil both moving higher. And we also have the market pricing in the chance of a fed rate hike next week. So what could a ten year yield. You know, it’s at 4.8% right now. Say hitting 5% or oil is at $96 a barrel hitting 100 at a fed hike. What could that all mean for this market?
Ross Gerber:
Yeah, those are all bad things, right? I mean, so you just named three really bad things happening. If the fed raises rates, you know, maybe the ten year bond likes that move. So it maybe doesn’t force the ten year higher. But if the fed raises rates that’s a bad signal for stocks because it does mean that the Fed’s capitulated that inflation is higher.
Ross Gerber:
And now they have to act to try to do something. But unfortunately the fed doesn’t have any ammunition. Raising rates will not change. What inflation is right now because inflation is being caused by the war and by Trump’s policies, not actually just economic activity that’s too hot. And so the fact that the real estate market has already rolled over and is in serious like decline, basically, you know, raising rates doesn’t do anything to help anybody.
Ross Gerber:
So the fed is kind of in a pickle because they need to be perceived as that. They’re going to fight inflation. But yet if they do anything to try to do that, they’re really actually just hurting the economy more and they won’t actually affect inflation at all. So I, I think higher rates for the fed movement or higher oil, these are all bad things for stocks.
Caroline Woods:
So how close are we to a breaking point for stocks and what will that look like.
Ross Gerber:
Well we have the offset of just one of the most profitable periods of time I’ve ever seen for corporate America. I mean, we’re seeing it here at my firm to record profits, record revenues. I mean, there’s so much money. I mean, if you look at how much off the analysts were for earnings for this year from what they actually will be, there is a lot of upside still in earnings for U.S. companies.
Ross Gerber:
So we’ve never seen such rapid growth in earnings, such high margins from S&P companies. And so if we actually had some decent policies markets could be substantially higher. So that’s really what I’m saying. Markets could be way higher if Trump wasn’t insane. You know like it’s just crazy how many self imposed or self-inflicted wounds we’ve been giving ourselves.
Caroline Woods:
But politics aside, I mean, we obviously will have President Trump for a few more years. So I guess you talk about being more defensive and kind of sitting tight ahead of the elections. What does that actually look like?
Ross Gerber:
What that really looks like is, is looking at your portfolio and your balance. And that’s what we do at my firm for our clients is it was what allocation makes the most sense for you. And moving into bonds is not a place of safety. So it’s really about building up your short term cash balances like, you know, 0 to 5 year treasuries or 0 to 5 year corporate bonds, which are more attractive to me.
Ross Gerber:
But really staying at the short end of the curve or even staying in cash and gold, instead of just rolling, you know, stock profits into bonds, which I think is a mistake. So if you look at, 2022 as an example, with higher inflation, higher rates and lower stock prices, you can get a double whammy of much lower bond prices, much lower stock prices, and nowhere to hide.
Ross Gerber:
So I think this is, you know, where you add to your cash balances. And that makes the most sense.
Caroline Woods:
So what areas of the market would you be taking profits from to add to your cash balances?
Ross Gerber:
Well, the way I do it is without emotion mostly. So I look at valuations of my positions and if my positions have extremely high p ratios like some of my positions, then I’m probably trimming those or eliminating them, you know? So I have a handful of stocks that have pretty high P’s, higher P’s than their growth rates. And and on the other side of the coin, the the companies like Nvidia, for example, with really high growth rates and really low PS, I’m going to hold on to those stocks or maybe even add to them if the market moves lower.
Ross Gerber:
So I want to have capital to put to work if the market moves lower, because that’s really how, you know, we make our money and and get outsized returns. So so I have capital on the side ready to put to work. And I want to put it to work in high growth, lower PE names. But we own some high PE names too.
Ross Gerber:
And so I think that’s where you want to look to trim.
Caroline Woods:
Okay. So I want to break all of that down. But first tell me what are some of those names that have high PE ratios that you might trim at these levels.
Ross Gerber:
Well like I own a stock like TKO, which is, you know, wrestling and UFC and it, it’s doing really well, but it trades at a 5060 times multiple. And and you know, I think a lot of the good stuff has been out there for them for some time. So I’ve trimmed that position. Position we own and defense which has been weak.
Ross Gerber:
Company Kaman that, you know, I’ve been trimming and selling because it just hasn’t performed well for us, you know, as well, you know, pretty good numbers and everything, but a very high PE. And so you see this compression on these stocks are acts on is another stock we own in the defense and and police area that has a very high PE and as well doing really well.
Ross Gerber:
But they’re just like those stocks have just not performed well compared to like an Nvidia or a micron which have incredible growth rates and actually very low PE. So so you know well you can see in our portfolios, you know, we’re much heavily weighted or weighted in lower PE stocks than we are in higher PE stocks. And I think that’s pretty.
Caroline Woods:
So Nvidia was a pick in late May. And it’s basically at the same levels as when you were last on. It went lower and has moved higher. What gets it to the next like higher though. And how high do you think it can go.
Ross Gerber:
Right. So the PE of of Nvidia has moved, you know, substantially lower in those months because we’ve had very high earnings. And so we’re now looking at less than a 30 PE on Nvidia. And so we’re still wildly bullish on this company is one of my top holdings. And and I’ve owned it for over a decade. And I love the company I love management I love the investments they’re making.
Ross Gerber:
It’s the king of AI. So this is an opportune time to invest in a stock like Nvidia or Micron. And I tweeted about this last few days. I it’s just insane to me that people are in denial or having a hard time to accepting how big of a thing this AI build out really is and and that it’s not going to end next year.
Ross Gerber:
You know, it’s going to keep going for some time. And we don’t know how long, but the amount of money being spent on AI is already paying off for everybody using AI. So, you know, there’s huge opportunities for investors because the market just doesn’t seem to want to, you know, give these companies the multiples they deserve.
Caroline Woods:
Micron was also a pick in late May. That one has actually moved quite a bit higher stock price since then. If someone missed that move would you tell them to buy micron today or would you wait for a pullback on that one.
Ross Gerber:
We are still active buyers on micron. I mean I like it under a thousand more than over a thousand. And it’s been under a thousand up until recently. But now we’ve broken through this thousand dollar you know and I value micron at 1500. And so that then gives you some considerable upside for a stock that’s trading at a ridiculously low multiple.
Ross Gerber:
Now they report earnings this month. And what I expect is some pretty big numbers again. And maybe the market will start to accept the reality that they’re looking at something like, you know, $80 a share this year and $150 a share next year. So, you know, assigning a ten times multiple to next year’s earnings seems a conservative valuation.
Ross Gerber:
And and so I think there’s still opportunity for investors. And we’re just talking on the short term here. We need a lot more memory to make AI work. I mean I’m building stuff on AI all the time now. And I just got to work and work and work. You know, the other day I built something, it took 20 minutes for AI to build it, and it built this amazing, you know, dashboard for me for monitoring stocks and news and things, you know, basically like a Bloomberg light.
Ross Gerber:
And and I’m just thinking how much compute am I just like use it, you know, like so I upgraded my plan. I’m paying $100 a month, you know, and when you think about paying $100 a month for something as valuable as AI, but yet I’m paying $100 a month for internet. I’m paying $100 a month for all these streamers.
Ross Gerber:
You know, like I everybody’s going to be paying $100 a month for AI soon.
Caroline Woods:
Yeah, you’re cautious on the market. And I really been what’s been leading this market to an extent you know, higher. So I guess how much of that is priced in at these levels and what other names still look attractive to you that maybe have already, you know, run somewhat.
Ross Gerber:
Tennis. Right. So like you have the macro really holding back the micro, which are the companies. Right. So you macro economics and politics holding back the opportunity for the US stock market. So whether people realize or not many of these companies could go substantially higher if we had better policy. So when you get through AI and you look at where are there other opportunities?
Ross Gerber:
One area that we’re extremely bullish on is health care. Okay? I mean, our aging population hasn’t changed. And we have this amazing breakthrough with GLP one drugs. And Lilly is one of our top picks. And Lilly is such a good company I can’t even tell you. And so it’s like when you look at the way they’re making a huge difference in people’s lives through, obesity, drugs that are changing people’s lives for the better, changing people’s health for the better.
Ross Gerber:
And then on top of it, where they’re reinvesting all these profits into new, businesses and new research and, and other therapies and cures for different diseases, Lilly is like a juggernaut. And then you add in a whole layer of, how is I going to shape health care, not only from an expense perspective and and cutting costs and testing and things like that, but also from an innovation perspective.
Ross Gerber:
And Lilly is investing heavily with Nvidia and an AI program as well. So I love Lilly. I think it’s a phenomenally well-run company. I like health care a lot.
Caroline Woods:
So I was taking a look at your notes. You also just added take Two ahead of the Grand Theft Auto six at launch. That’s a new one because that’s one you haven’t talked to us about before. Tell us why. You know, how much of the success from Grand Theft Auto six is already priced into the stock?
Ross Gerber:
Right? So, you know, I, I we one of our verticals in investment verticals is streaming sports and entertainment. So take two falls into that. I’ve been a video game investor. You know actually how I got into Nvidia like 15 years ago was from the gaming side of it. And, and you know, we owned stock in Activision. It was purchased by Microsoft.
Ross Gerber:
And then we owned Stockton. Yeah. And it was purchased by the Saudis. And take two is the last great American, you know, video game company. And so most of us who play video games like myself, you know, we play with these franchises and we play them for years. And we and we keep spending money on these franchises because the games are so great that you usually kind of just get obsessed with one game.
Ross Gerber:
And so most of us are playing like Call of Duty or Battlefield six. You know, a lot of people play Fortnite, for example, and then you have Grand Theft Auto, which has been sort of a part of the gaming world for a long time. And for, I don’t know, I think it’s 12 years. They haven’t come out with a new version of the game, but the new version of the game that’s coming out in two months is is just phenomenal.
Ross Gerber:
It looks incredible. And they’ve incorporated so much new technology and and it’s almost like this eye for the different characters in the game and, and the way everything interacts with each other. I mean, if you eat bad food, your character gets fatter, you know, like things like this. It’s like crazy how cool this is. But they’ve already sold, you know, let’s say 5 million games.
Ross Gerber:
And I think by the time they’re done, they’ll probably sell, you know, maybe up to 7 to 10 times that amount plus all the reoccurring revenue in game. So this is just the beginning of rebuilding this franchise into this massive revenue stream from take two. And I think it makes it very attractive to companies like Netflix that are looking to get into gaming, looking for new IP and, you know, $40 billion.
Ross Gerber:
Take-Two is not actually that expensive relative to the revenue it can produce the franchise and the IP it owns, and how few people can even do what they do. So these franchises have become extremely valuable to these companies and and produce billions in revenue over long amounts of time.
Caroline Woods:
And take two and Netflix are both down about 18% year to date. If you could only buy one, would it be Netflix or take two?
Ross Gerber:
Oh, it would be Netflix. I mean, no question. You know, Netflix is the king of entertainment and it’s one of our top holdings. We’ve been adding to it down here. I think it’s a huge opportunity to buy Netflix at 24 times earnings. They dominate the industry and we see them obviously that we have a big NFL game.
Ross Gerber:
We see them moving more into sports. We see them moving more into gaming and more into experiences and and continuing to build out their business. And they’re a wildly profitable, very quantifiable business because of their reoccurring revenue and, and a subscription model. And and I think it’s a must own for investors.
Caroline Woods:
Ross, give us a few names that you want to buy, but you’d wait for a pullback.
Ross Gerber:
Well, I like x x. What is it, sky high jinx or whatever the, Hynek Ryan index. That’s the Korean memory company, and it’s a very good company like micron. It’s very well run as well. It’s just in Korea. So it doesn’t have the same dynamics as being an American company, which I think is an advantage with the Trump administration.
Ross Gerber:
But that’s a very good company, right in the sweet spot of memory, which I don’t own right now. If it pulled back, I want to buy space X. You know, I own space personally because I got in, you know, through Twitter a long time ago. But I think space is a really interesting business long term. And and I would buy it if it went below 100.
Ross Gerber:
But I do think space is originally value company is all Elon things are and I so I just haven’t done anything with it for clients.
Caroline Woods:
You okay. Talk to me just about the strategy though as you think about potentially some volatility or weakness between now and year end, what would have to happen for you to go from sort of sitting tight and only adding to names like Nvidia and Micron to actually aggressively buying again? Is there a level on the ten year? Is it a level with oil or the S&P where you’d say, okay, now I’m I’m going all out.
Ross Gerber:
You know, I, I would say this the stair I’m about to describe has a low probability, but I would this is the scenario that would make stocks move much higher, which is that number one, we we have an election which changes the balance of power to being more equal and limits the damage that Trump can continue to do to our economy.
Ross Gerber:
Number one. Number two, the war in Iran has to have a conclusion. This game of blowing up, you know, tankers to try not to shoot our boats or whatever the hell they’re doing. It’s got to end. Oil at 100 is great if you’re selling electric vehicles and all that, but it’s not good if you don’t like inflation.
Ross Gerber:
And markets hate inflation. People hate inflation. Inflation is bad. It’s a destroyer of wealth. And so we need the war to end, because that’s the only key to getting oil back down to 60, $70 a barrel. And that would take all the pressure off this whole situation. So, so that the war ending, a switching government, which would limit bad policy decisions like tariffs on Canada, for example.
Ross Gerber:
And, and I think rates would then follow lower and that would create a backdrop, let’s say going into the stronger part of the market, part of the year, which is the, you know, November through, May. And then we get into the new year and then we have a pretty decent Christmas season. And I think, you know, the fed stays out of this.
Ross Gerber:
Then when you get markets higher, I think markets can go 10% higher in the next six months. If those scenarios happen, which would be very good for tech investors because they probably make more like 20%. But I just don’t see that happening. So I, you know, I’d love it to happen, but I have no control over these things.
Ross Gerber:
And and so as an investor, we just have to wait and see sort of how these, you know, things happen, you know, Iran’s economy and its economy.
Caroline Woods:
If it doesn’t, though, Ross, what happens if it doesn’t happen? Is it just that we won’t see more upside? I think.
Ross Gerber:
We tread.
Caroline Woods:
Water. We’ll see a lot more downside.
Ross Gerber:
I think we tread water because earnings are too good, you know. So like when are the bad earnings reports going to start. You know. So in a bad economy you get bad earnings reports. And so you know if you look out next quarter and you say okay in October we’re going to start getting earnings from Nvidia and all these people again are they bad numbers.
Ross Gerber:
Are they good numbers. They’re going to be good numbers. And so it supports the stock market the market. If they perceive that numbers are going to go bad then the market moves before the numbers get bad. But you know we’re really just kind of we have this great earnings environment which is record numbers. And then we have this like horrible macro environment that’s doing everything possible to destroy this rally.
Ross Gerber:
So we’re still in a bull market. We still have favorable, you know, things. And we just need, you know, the elephant to get out of his own way, you know?
Caroline Woods:
Okay, okay. I think this is a great time to pivot to a new game that I’d like to try out with you. It’s called risk rapid fire. I’m going to give you a scenario, a risk. You quickly tell me what your first move as an investor would be. You ready?
Ross Gerber:
Okay.
Caroline Woods:
All right. Here we go. Yeah. Oil stays around $100.
Ross Gerber:
Oh, I would be excited to be owner of an EV company. So maybe that’s a time you start looking at stocks like Tesla or Rivian.
Caroline Woods:
The ten year hits 5%.
Ross Gerber:
I’m a seller.
Caroline Woods:
Seller, stock seller of all stocks.
Ross Gerber:
You know like I don’t want a ten year over 5%. That’s bad news. So you know you got to sit tight. And then I probably be a buyer of those ten year bonds at 5%.
Caroline Woods:
The fed hikes.
Ross Gerber:
I’m a seller. That’s another seller scenario. The you know I’m going to lower my risk if the fed starts hiking. I have never ever not done poorly when the fed starts hiking. I know this, I’ve had it beaten into my head in 22. I got beat over the bat trying to play that wrong. And and so if the fed starts raising rates, I’m not playing that game.
Caroline Woods:
So you’re out completely of stock so you’re just taking profit.
Ross Gerber:
Oh I mean I’m never out completely of stocks because I’m a long term investor. That’s not the way I’m not making those wholesale moves. I’m saying from the speculative part of my book, it’s gone, you know, like it will be the purely most conservative allocation for each client that I would take, you know, depending on that.
Caroline Woods:
So just, just quickly give us one thing you wouldn’t sell if the fed hikes and one thing you definitely would sell.
Ross Gerber:
Well, I’m definitely not telling my stocks, you know, you have to take that Nvidia out of my dead hand. You know what I mean. So you know that I’m not selling. But I certainly would get rid of a lot of my sort of speculative positions that I have for sure. So that’s easy. Like like I have a speculative position, for example, in some cannabis companies, I think they’re going to legalize, you know, this great company called Glasshouse Farms.
Ross Gerber:
And, you know, it’s a small cap and speculative. It’s a personal investment of mine. I love the business and the operators. But, you know, it’s real hard with rates going higher when you’re a growth business, you know. And so, you know, and we think the reschedule isn’t going to happen any day. You know, like but with Trump we’re just sitting here on our hands.
Ross Gerber:
You know policy is a mess. So it’s been tough to make money on these guys okay.
Caroline Woods:
So first move if the consumer cracks.
Ross Gerber:
Well you give me all cell signs. You know if the consumer stops spending money in America, we got a real problem. I have not seen that from consumer behavior though in my checks even just recently, consumers even though inflation’s higher are still spending money.
Caroline Woods:
First move. If I spending starts to slow.
Ross Gerber:
Well then then you’ve got a whole nother set of problems there, right? So we are just discussing this. I don’t know when that happens, but at some point it does. Right. We’re not going to spend $1 trillion a year forever. And and I don’t think that that’s necessarily bad. I think it’s it’s just accepting that the Hypergrowth days are behind us.
Ross Gerber:
And then we’ve got to start looking at who will be the winners from I that aren’t the infrastructure builders. And that’s where companies like mine, in the financial service industry or health care, there will be another set of Amazons and Google’s created on this AI platform. Who are those companies going to be? So I think it actually gets interesting once there actually is real AI infrastructure that we can all use that works really great.
Ross Gerber:
Who wins from that? And that’s going to be a lot of potential companies and business. And so AI is a huge profit driver for entrepreneurs. And it will create a lot of new winners over the next decade.
Caroline Woods:
First move if the S&P 500 drops 10%.
Ross Gerber:
I’m a buyer. I’m a buyer. So that’s why I have cash.
Caroline Woods:
First thing you’d buy.
Ross Gerber:
Nvidia micron. You know I mean shock right now I don’t think you you I don’t think you’d do anything without an Nvidia micron going forward. So it’s kind of like when you’re when the market’s down and it’s hard to buy because you’re kind of a little bit like worried you’re going to lose money. You got to go with the ones that are just winners no matter what.
Ross Gerber:
And that’s your blue chip stock. So you know.
Caroline Woods:
That’s what I did. Which of those scenarios that I mentioned Ross worries you the most?
Ross Gerber:
Yeah, I think the scenario that worries me the most is another endless war with Iran. One where our troops might even become engaged in combat in a foreign country like Iran, I think is really bad for America and bad for the world, and bad for the economies of the world and bad for the stock market. I, I think that.
Ross Gerber:
It’s an extremely difficult thing to get policy to be the way you want it to do through violence. And unfortunately, countries like Russia and Iran only know violence as a way to get policy. But if you’re not willing to be as ruthless and violent as the people you’re trying to stop, it is very hard to stop them. And Trump is clearly not capable of being the person to be Putin and, you know, the Iranian Revolutionary Guard.
Ross Gerber:
And so it’s best off that we find a resolution to these conflicts that is beneficial for everybody. And I don’t know if there is one. So that’s this is sort of not good news.
Caroline Woods:
Okay. We’re going to bring it back to the rapid fire and we’re going to do this or that. You know how to play this one Ross quick questions quick answers. No hedging. Are you ready.
Ross Gerber:
Yeah. Let’s do it.
Caroline Woods:
Here we go. S&P valuations justified by earnings are too expensive.
Ross Gerber:
They’re totally reasonable.
Caroline Woods:
New money today. Put it to work or wait for a pullback.
Ross Gerber:
I mean we put money to work. You know you can’t time the market. So you just put it to work. Dollar cost average. Don’t put it all in at once.
Caroline Woods:
Stocks by year end higher or lower.
Ross Gerber:
I’m going to say higher.
Caroline Woods:
Next 10% move in the S&P up or down.
Ross Gerber:
I think it’s more likely down than up. But you know that’s just flipping coins.
Caroline Woods:
Election market catalyst or market risk.
Ross Gerber:
Oh I think it’s a market catalyst more than risk I think you know change is good. And we need that now in the government. And a divided government usually has the best markets.
Caroline Woods:
I trade early middle or late innings.
Ross Gerber:
I still think we’re early in the I trade. You know, I is still a brand new thing we’re all discovering and we’re all starting to use. But what it will be in five years is like, you can’t even imagine.
Caroline Woods:
Chips or software.
Ross Gerber:
Chips. I love chips.
Caroline Woods:
Mag seven.
Ross Gerber:
Do anything without what.
Caroline Woods:
Makes Meg seven still the place to be or look elsewhere.
Ross Gerber:
Well, it’s hard not to like the Mac seven. You know there there’s a reason why they are the Mac seven. They’re real good at all this stuff. And and it seems like our government is fine with monopolies. And so these companies have built, you know, bigger and bigger moats. There are more and more profitable. They control more and more of our economy ecosystem.
Ross Gerber:
And so you kind of just have to own them because, you know, they’re the best and biggest players in town.
Caroline Woods:
All right. Keeping it quick alphabet buy here or wait for a pullback.
Ross Gerber:
Oh I’m a bot I be a buyer here I think Alphabet’s very reasonably priced here for how great of a business it is and how well-run this company is also.
Caroline Woods:
Yeah or micron.
Ross Gerber:
Over the long term I would take Nvidia. You know I’ve owned it for 15 years. And and I know the company and Jensen very very well and their innovation and their investments. And micron is sort of just this lucky beneficiary. You know, they were making this boring memory stuff. And then all of a sudden we need like 100 times more of the same thing.
Ross Gerber:
So they’re just getting a benefit of being in the right place at the right time, making the right thing and having shortages of these things and nobody else to really make them. You know, there’s only like 3 or 4 companies that make memory in the first place. And so micron I like over the next five years, but I don’t know what they’re going to do with all this money and how that will look, let’s say in ten years, where Nvidia I think continues to just lead forever right now.
Caroline Woods:
Nvidia or Alphabet.
Ross Gerber:
Well, in my portfolio, I got them, I think, a equal weighting about 8% in the GCC ETF. And and so it’s Nvidia is a pure I play where alphabet has YouTube. So you have streaming and entertainment and they dominate that business. And they have Waymo which is transportation which they’re starting to dominate that business as well. So if you’re looking for a diversified investment I would argue Google is a better investment.
Ross Gerber:
But if you’re looking for a pure play, Nvidia is a better version. You know. So that’s a that’s a tough one. But I own both. And they’re equal weighted in their top. You know I think they’re two and three in my portfolio.
Caroline Woods:
With Oracle or Adobe ahead of earnings.
Ross Gerber:
Know I like Adobe more than Oracle. You know I think Adobe is adapting to AI decently. Oracle has to spend a ton of money to keep up with the hyperscalers and invest, invest, and fast. And the market isn’t that thrilled with the amount of money that Oracle has to spend to keep up. And I, and Oracle, I don’t know, it just I bet they’re just not executing as well as a company, let’s say like Dell, you know.
Ross Gerber Gerber:
And so so I don’t know I think Adobe’s doing okay. And and I think they’re adapting to the change in the world decently okay.
Caroline Woods:
So just quickly Dell opportunity or trap.
Ross Gerber:
Oh no I like tell you no I’m sad I sold my Dell. I had Dell and I kind of moved on from the hardware side with Oracle and Dell because I was just like, oh, these companies got to invest so much and, and, and I’d rather be the ones getting that money, you know, like Nvidia. And so, but Dell is executed beautifully, you know, over the last year.
Ross Gerber:
And Michael Dell is very close with the administration and, and he’s very good at his job and super engaged and been doing this for as long as I’ve been investing. You know, like I invested in Dell, like in the 90s in the 90s. So if you don’t believe in Michael Dell, you’re probably making a mistake. And probably one of my bigger mistakes was selling my Dell stock.
Ross Gerber:
I said.
Caroline Woods:
Yeah, Dell’s 2% away from the highs right now. Space at 146. Good entry point or wait for lower.
Ross Gerber:
Wait for lower way for lower. You know, as much as I love the business, you’re paying such a huge premium for what the business was worth just a year and a half ago, I think. I think that that’s a little excessive.
Caroline Woods:
Okay. And then just give me names here. One stock you’d buy today with no hesitation. That’s not Nvidia or Micron Lily. One stock you love but wouldn’t touch it.
Ross Gerber:
Today’s price that I love that I wouldn’t touch.
Ross Gerber:
I own all my loves I don’t know you know if if I love it that much, I own it. Right. You know, so like, we don’t have the kind of valuations that are so crazy that I wouldn’t buy something that I love. I think it’s harder to fall in love. I am having a hard time falling in love.
Ross Gerber:
But. But I can’t think of anything that’s too overvalued for me right now. Oh, I can just Cloudflare. Cloudflare. Okay, my guys have been pushing me on Cloudflare for a while. You know, we have a team here, and I got a bunch of smart guys on my team and gals and and, you know, they’ve been pushing me on Cloudflare.
Ross Gerber:
I say that like to 90. You know, I can’t touch this going into higher rates. You know and the stock is just crushing it, you know and I still haven’t touched.
Caroline Woods:
So there’s my all right. Yeah. Up almost 60% year to date. And finally finish this sentence. Yeah. You have.
Ross Gerber:
A pretty nice.
Caroline Woods:
Mistake. Finish this sentence. The biggest mistake investors can make right now is.
Ross Gerber:
Betting their money on sports. Okay. Don’t let Robinhood and predictive markets and calcium LeBron James and all the money that they’re throwing around the ad you’re going to see just playing on you every minute since the NFL starts today okay. Do not bet your money on sports. Save and invest your money for the long term. Think about how wealthy you’re going to be in ten years.
Ross Gerber:
If you take all this gambling money and just put it into the stock market and invest your money. I am so sick of these gambling apps now. I’ve been in the gambling business my entire career, and it was always a regulated industry for a reason. But letting all these kids lose their money when you have your whole future in front of you to compound and grow during the AI era is a crime.
Ross Gerber:
Do not bet your money.
Caroline Woods:
All right, we will leave it there with a PSA and clearly a hot button issue for you. Ross Gerber CEO, Gerber Kawasaki I always appreciate you joining us. Thanks so much for playing along.
Ross Gerber:
Thanks for having me.
Caroline Woods:
If you enjoyed this street talk, check out our full interview with Peter Schiff. He explains why he’s looking outside the US for opportunities. And yes, he’s still bullish on gold.
