Fed Hesitates on Tariffs, The New Mag 7, Death of VC, Google's Value in a Post-Search World

Yeah, it's retail investors and sovereign wealth funds outside the US seem to be the answer to that question.

these interval funds are really interesting because I think the minimum investment is like $50,000 or something like that. And the conditions to qualify for such a fund are much smaller. So there's many more investors that can come. And I look at it a little bit of like, this is the democratization of tech investing.

The optimal basket of the companies you'd want to own for the future, because of these rules and regulatory burdens, are partially public, partially private, and so you need a vehicle that can straddle both if you want to own it.

At the end of the day, it is what it is, and you're going to see a reduction in venture dollars. And that's just the market normalizing.

at current course and speed, with the lack of IPOs and with the lack of M&A, you can't justify that asset class on its own, in my opinion, unless you think about it as like something that you're doing almost philanthropically

I think that instead of waiting for data, I think that you have to assume that you're gonna go from 99% share to 75% in the next two years, as an example.

is this the next IBM? You're going to stick around for a really, really long time, but you're just not going to be like a company growing as fast as you used to.

So you're on to something that the total volume, the total pie could be five, ten times bigger per person.

if the old paradigm is like measuring search queries and quote market share as a function of search queries, I don't know if I care about having 99% of that or if I'm actually better off having 80% of something that's now three times bigger.

And now we have venture capital constricting in terms of new funds being done. And people are making larger funds to do later and later stage investments

ever since, you know, the 20 and 21, which were very high, if you look at 22, 23, 24, and now the 25, I'm like, how is this that it's worse than 0.4, 0.5, 0.6 that were normal years? How is this worse than 13 and 14 and 15?

there is now maybe a pretty sizable long-term revenue stream for the federal government that didn't exist before, which means that there's room to cut taxes

That retailer told us that they think only about 50% of the tariff gets passed in pricing. So I sort of agree with you. There is going to be a net net positive, and that retailers have way to work things around and stuff like that.

I've talked to M&A people, Philippe, and they have said it's not even worth bringing it to the board.

He gave us two anecdotes of how he personally has used some of these tools to make management decisions, and his observation was managers are the first to go.

when you look back historically around these subprime lenders, whenever these guys start to see price to books, just start to escalate and get to pies, it tends to portend a liquidity crisis. It tends to show that things are about to roll over.

To me, it's a little bit like the end of the Max 7 And what we should do is almost think like, hey, what is the next? Remember when the Max 7 used to be Fang and then Fang++, and nobody talks about Fang anymore.

The MAG-7 was this set of correlated seven companies that sucked up all the attention, all the money, they moved in unison dollar for dollar. Now that that correlation has broken down, it allows you to ask this question, which is, what is the real MAG-X companies?

I mean, if we're in a sustained period of four to five percent rates, I mean, we should talk about that at some point, but there's huge implications to the economy if this thing stays where it is, huge.

I was just looking at the mortgage delinquency rates. They're pretty flat right now. And that's, I think, because so many people did refinance when rates were low and there's a tremendous amount of mortgage balance with a low rate outstanding.

If I can compound capital at 12.5% incentive fee for a very long time, it's better than 20% for a short period of time.

what we're seeing is that for one of our friendliest allies, for one of our best trade partners, we are keeping in place a 10 percent tariff rate. So if that holds with other trade deals, and that becomes kind of a standard across the board as they get more of these trade deals done

I feel now there's a chance when you look at the next year or two, at some point tariffs goes away. Trump makes this big deal with deregulation, the tax breaks sort of cancel out the tariffs.

Microsoft said that in their Q1, they processed 100 trillion tokens, 50 trillion alone in March. And so the tokens are really going basically vertical, which is probably because of these reasoning engines, which are much more sophisticated and require more compute power.

They have such a data advantage and such a deep integration into people's lives because they use three or four services.

CapEx is going up and everybody has a gigantic shortage of chips right now. That I know for sure from all of our private companies, public companies, there's a shortage of chip, a shortage of compute power.

on the hard data, the part that's most surprising is that consumers have very weak sentiment, but in the meantime, consumer spending is remarkably resilient.

when the market did go down a lot, the government did budge and said, hey, we need to step in here.

the Fed did something that I thought was very clever. They basically said, we're not going to cut just to bail out the equity market. But if the market's liquidity is no longer functioning, emphasis on liquidity, then we'll step in to restore liquidity.

What I'm saying very directly is that the Fed is acting in a manner that is as much politically motivated as financially metric motivated, because the financial metrics, some of the most critical leading indicators, particularly around liquidity and the credit health of the American consumer, are blinking yellow. So right now, they are choosing to ignore these historically useful leading indicators. And the only reason that I can come up with to ignore it are political reasons.

one of these robotic companies that has zero revenue and wanted a $40 billion valuation, and there's all these civilians, retail investors who are investing in your fund, but also have direct access to these secondary markets, you also have to buy at the right price. These, I know firsthand, for those top companies are massively inflated.

Listen, humanoids is a pretty exciting area. I don't know what companies are, but there is going, like, let me, in my top 25, I don't think, I think it's a bit early. I would have a humanoid company.

They have the users. They have the models. They already have the product. So it's going to be a slow process of finding the optimal course for them to make the transition would be my guess on what they're doing.

I think Google is going to figure this out. If they cut their team size down, earnings are going to go massively up and they're spending $75 billion on infrastructure.

All I'm saying is that the market will now start to price this decay in.

there's such a view that like large companies are bad and we got to bust them and we're not going to let them do any M&A. And as a result of that, small companies no longer get bought by big ones. And for me, it's a disaster

since the wrath of Lina Khan the last four years under Biden, you know, you had this 2021 spike of IPOs, peak ZERP, a lot of inventory, a lot of risk capital have been put to work for 10 years. And after that 2021 spike, things have been flatlined and companies are preferring to stay private.

part of the reason is because of this strangulation of illiquidity that's caused artificially by administrations, by regulations, and by agencies like the FTC.