 Hello and welcome to the latest episode for the Market Maker podcast and I'm joined by Piers Curran, the co-founder of Amplify and head of trading. Piers, how's it going? Good morning. Doing good. What about you? How are you doing? Yeah, doing good. Still feeling quite pumped about coming second in the Eurovision. Yeah, of all the results of the last few years, that's going to be right up there. Is that the power of TikTok? I mean, I didn't follow it that closely, but wasn't our guy, what's his name? I can't even remember. So the fact that I can't even remember his name. Is he big on TikTok? I have no idea. Kind of his validation that I have now crossed over to being officially old. Yeah, he's big on TikTok. I think maybe that's what carried the day, but yeah, quite extraordinary. Yeah, but look, that aside, there has been some other pretty interesting stuff actually going on from a market's perspective. We'll talk about this kind of sell-off that's ensuing at the moment. Obviously, it comes on the coattails yesterday, a 1000-point-plus sell-off in the Dow, but we'll talk about what is causing that to a certain degree. I know you've covered that before, but has this sell-off got further to run and how could we play that from an equity sector point of view? We'll talk about Twitter. Their share is down almost 20% in the past five days. Elon Musk, very busy of course, throwing some punches on Twitter at Twitter. And then we'll talk about Tesla, ESG, and why that's particularly important this week, latest update out Standard and Pause, who does the ratings for a lot of these indices, tracking ESG. And then we'll talk about Michael Burry, the infamous short of the big short, I should say, and he has Apple in his crosshairs, and we'll have a look at why and how he's exercising that view on one of the tech giants. But before I get going, a quick stat check. The Dow, as I said, dropped 1,100 points, as big as the client since 2020, as the Wall Street sell-off has intensified. The S&P 500 traded down 4% yesterday as the worst drop since June of 2020. Not one single headline, I'd say, that is causing this, but from a top-level macro perspective, one thing for sure is that after your man Jay Powell kind of bailed out the market when it was looking a bit fragile last week, when he said, look, there's no 75 at the moment, let's just not get too panicky. We're going to be quite measured. We are going to hike, it's going to happen, but it will be 50 clips. But then he came out just two days ago in a later speech and said the US central bank will keep raising interest rates until there is a, quote, clear and convincing evidence that inflation is in retreat. And he said that we need to see inflation is coming down in a convincing way, and we'll keep pushing until we see that. And really, since that point, the markets rolled over again a little bit, as you'd imagine, some of the tech stocks in particular getting hit to throw into the macro picture, this inflation situation, UK inflation has now risen to 9%, which is pretty much a two percentage point increase, I might add. But again, was that expected? Yes, it was. And actually, in a market reaction sense, market actually came off sterling against the dollar after that number hit. So despite the headlines you might read in the newspaper, inflation is indeed at the highest level in more than 40 years. And sterling dropped because the market was actually positioning perhaps for an even greater figure, which didn't materialize. And of course, why is inflation leaped so spectacularly higher? Well, it's largely because of the wholesale markets that drove up those energy prices that we're all experiencing as consumers at the moment. But yeah, talking about a couple of single stocks first in this sell-off from yesterday, a few stood out. And the kind of brick and mortar retailers, we're talking about retailers in general, let's talk about the targets and the warm-ups of the world. And then maybe we could pivot to the Amazons online. And so target shares fell basically 25% yesterday. I mean, that's a wipeout. And their Q1 earnings were much lower than the street had expected. And it's a recurring theme that these retailers are talking about on the high street, which is higher costs for fuel and compensation. And Walmart, they reported the day before, Walmart shares are down almost nearly 20%. We are talking about Walmart here. So it's one of the largest employers, largest companies in America. But if you thought that was bad, Amazon is now down 40% on the year. And I was just looking at the charts this morning, and I was just recognised that they're pretty much a scratch now of where we were, having reversed the entire pandemic move higher when their shares kind of exploded to the upside. So are there any thoughts at all on the retail stocks? Yeah. Well, just before I go into it, I'm just looking at the Amazon chart. Just $2,000 is a really big level. We're trading at about $2,140. We had another big sell-off yesterday, and just adding to the losses we've seen in recent weeks. But $2,000 was the 2018 high. It's quite a key technical level there. And that was kind of tested, it's pretty much the 2019 high as well, double top. Then we went into COVID and the whole thing just popped through the roof rally to $3,500. And that was kind of, as you said, come all the way back. Have a look at a chart if you can. But yeah, the retail space, well, let's go back. Powell said we're going to be super aggressive and we're going to hike until there's evidence inflation is in retreat. So the key question then, follow-on question is, well, when will we get evidence that inflation is in retreat? When is that actually going to happen? And no one knows. So this is the uncertain element. What happened this week, I think, from the earnings reports from these big retailers, it gave us evidence that actually when is inflation going to be in retreat? Well, actually it's probably going to be longer than we have thought. Because these big retailers target Walmart, they're talking about inflation pressures and they expect these inflation pressures and the supply train constraints to be in place to well into 2023. So I think that's the kind of double whammy this week. Look, we're in a bearish market. We're certainly in a negative sentiment downward trending global equity environment. So this is just another stride to the downside in this ongoing trend. The stride lower this week is because of those two factors in my opinion. I think just looking at companies like Target and Walmart, these are like from a share price volatility point of view. These are like the dullest stocks in the basket normally. They're super dull and drop a 25% just to put that in perspective. That was the biggest one day drop in Target share price since 1987, Black Monday. So this thing, this drop is quite almost unprecedented. And as you said, they're talking about higher freight costs, higher fuel costs, higher wage costs, obviously logistical disruptions because of supply chain issues. And this wiped basically a billion off their first quarter profits. And they're talking about unexpectedly high costs. Now, if you're a retailer, you're right at the cold face of this inflation situation. And we know inflation's high. But if they're coming out and they're saying it's even unexpectedly higher than what we were expecting, you're like, well, okay, it's just reinforcing the panic that's kind of just ripping through markets about this whole general inflation environment. So the quote from Target's CFO was, we don't expect to see any meaningful reduction in global supply chain pressures until 2023 at the earliest. He said that elevated costs that they've been facing will continue to affect our profitability for the remainder of the year. And their operating margin is going to be 6%. They lowered their forecast for this year from 6% to 8%. Very, very similar story coming out of Walmart. And actually feeding it into Amazon and talking about the retail sector generally, I would say relatively speaking, the retail sector has incredibly low margins. Now, if you've got an inflation situation, and you need to pass this through to your customer, and if you're worried that you're going to take a sales revenue here on the back of that, then it's the low margin businesses that are in trouble. Because it doesn't take much drop on the sales front to see that tiny wafer thin profit margin getting wiped out. And so the lower margin businesses are much more vulnerable to swing from profit making to actual loss making. If you take some of the big tech firms, they've got huge profit margins, we'll find if their profit margins get dented as well, which they are doing, at least there's a buffer there and they're still profitable. So that's why these big retailers, especially Target and Walmart. And look, Walmart's the biggest brick and mortar retail group on the entire planet. But of course, they're also battling against this secular long-term trend from away from the high street and onto online. But even Amazon, obviously, which is maximizing that shift even there. And again, because they've got wafer thin margins, you're seeing these share prices come off very sharply. But I'd say that one more interesting point about this. When Target and Walmart were reporting, it was their profits that were much lower. And they re-emphasized and yet again, sounded the alarm bells about inflation. But what was interesting is their revenue top line beat expectation. So what's happening right now is that prices are going up fast, retailers are still out there buying, not retailers, consumers, sorry, are still out there buying stuff. That's because they've got a cushion of cash and savings. It might be a stimmy check from Big Joe or it might be you just saved money because you've been locked away for portions of the last couple of years. So there is a bit of cash buffer there. And people are out on the high street buying stuff, even though it's more expensive. But the issue is if inflation lasts into 2023, that buying stuff, even though it's more expensive because I've got a cash buffer, can only last so long. And when will these consumers, when will they run out of that surplus cash buffer? And this is what markets are reacting to this week is saying this inflation thing is going to last longer. Yes, the retail, the consumers holding up for now, but it's likely that's going to turn and say second half of this year, we're going to see especially these low margin businesses really suffer. And that's why you've got target dropping 25% in one day. So looking at the heat map of the sell-off from yesterday is one of those days where kind of everything is red. But just thinking about what you were talking about there about retailers specifically having wafer thin margins that they operate on. So in this environment, if you're looking at equity sectors, I did see that Mike Wilson, who's like the strategist at Morgan Stanley of US equities, very vocal bear in terms of his view, putting the most bearish on the street. And he was again banging the drum because it's going his way at the moment talking about slowing earnings growth and elevated volatility. He was talking about recommendations of defensive positioning. So when he says the word defensive positioning, what's he referring to from a sector's perspective? Yeah, so when you're running a portfolio, you've got your kind of your performance, right, as a portfolio manager is normally measured against a benchmark. And this is a defined benchmark that you've agreed with your client that that's how you're going to be measured against. And risk sort of controls are such that the portfolio manager has license to move away from the benchmark, but only by a certain sort of maximum amount, right? So the point being is, if your benchmark's got a high proportion of equities in it, then your portfolio needs to have a high proportion of equities in it. So it might be you as an individual person, you're going to hang on equities are getting slammed, will obviously just sell all your equities. But that you can't, you're literally not allowed to do that, because that would violate the, you know, the kind of risk constraints, and the kind of investment policy statement you've agreed with your client, right? So it's about right, I've got to stay in equities. But within that asset class, there's then, you know, a different kind of risk spec, there's a whole risk spectrum, right, where we have what we call riskier sort of sectors, like let's say tech, through to then the opposite side, which is what we call more defensive sectors, like utilities and healthcare and so on. So what tends to happen when investors are looking out on the horizon, and they're worried that, you know, a downturn is coming, then they'll shift out of the risky stuff, sell your tech, which is obviously the NASDAQ's been underperforming, right? The NASDAQ's sold off a lot more than the S&P 10% more. I think the NASDAQ's down 30% and the S&P's down just shy 20% this year, right? So that's the riskier stuff getting sold, and then with that cash, they're buying more defenses. But on top of that, Bank of America do a survey where they survey, it's 288 investment professionals, and collectively, they manage $833 billion. So as an investment survey, this is pretty, this is a pretty powerful sort of measure of what conditions are like out there amongst the investment community, and they have the cash balances amongst those 288 investment professionals has increased now to 6.1%. Now that doesn't sound like a lot, especially when markets are dropping sharply, right? But they've only got 6.1% of their portfolios as cash. And that's because cash, people don't like carrying cash. Interest rates are zero. I know they're climbing, but look, they're still super low, right? So cash really generates nothing. But 6.1%, although it might seem low on the one hand, is actually the highest level of cash holding since 2001 when the terrorist attack happened in New York. So this is quite an unusually high amount of cash. And that's because actually bombs are selling off as well as stocks. So this is why you've got this unusually high amount of cash, right? So and then the other kind of stat was that 66% of fund managers in May, so they expected global profits to weaken a low comparable to other, sorry, yeah, a low as in 66% think that that compares to crises in 2008 and in 2000. So we're right up at extreme kind of points in terms of investor sentiment. Now they're shifting into that, yeah. And then finally, sorry, in April, these fund managers on average net 13% of fund managers, sorry, in April, six on average, 6% were overweight equities, and that swung to 13% now being underweight. So you've seen this big shift in the last month, where generally fund managers have gone from overweight, that means they're owning more equities in their portfolio than the benchmark, and they're selling equities to go underweight. But at the same time, rotating out of risk assets into safe havens, and they've got a little bit more cash than they ordinarily would have. So this is all feeding into downsiding markets, more downside for tech than the broader based S&P 500, for example. But you know, is there still to come, I guess, is the question people are talking about? And I guess we kind of, we speculate on that very question, I think we've speculated on that exact question every week for the last, well, feels like for the whole year, actually. And I think every week we've been like, yep, probably more to come. And I don't think my answer really has changed yet. But I would say, I don't know, it's like, when you do look at, you said to me just before we came on to record that Amazon's down 40%, to be honest, I haven't been looking too much at the Amazon share price recently. And when you said 40%, I was like, wow, that's a hell of a lot. And I don't know, it's like, when you get these massive, massive firms, the big bellwether tech firms, when they start getting absolutely hammered, then perhaps that's the signal we're maybe approaching, slowly approaching something that might be a peak uncertainty, where you normally find the bottom. But yeah, I don't think that's yet. You're picking bottoms again. I've got my gloves on. I can't remember who the bank was. There was a bank talking about a once in a generational opportunity, basically, to get long companies. Yeah. There's always two sides in that respect. But talking of, okay, talking of portfolio managers, the construction of that investment that they have and benchmarking, the other thing then that I was reading yesterday was talking about Tesla. And I was reading that Tesla has lost its spot, basically on the ESG version of the S&P 500 index. One of the things that they said was that Tesla's score on environmental, social and governance standards have remained fairly stable over the past year, that it slipped down the rankings against some of its global peers. So can you explain a little bit about that? And what are the implications? So firstly, why has Tesla been moved out of that ESG index? And then what are the implications for Tesla themselves? Yeah, so ESG, I guess that's just sort of a bit more generally. There's been a hugely very popular sort of trend from an investment point of view in the last couple of years, particularly. So, well, for those that aren't aware, ESG, I mean, I think most probably are, but environmental, social and governance. So it's looking at companies that are particularly strong in those areas, obviously investors and a little bit more sort of, I guess, morally conscious these days about how they're deploying their capital and investing their money. And they want to invest in companies that are seen to be doing the right things and are behaving in the right way and that are looking after our planet, right? Basically, the asset management industry got hold of this idea a few years back and decided this will be a great way for us to increase assets under management and make more money. Let's come up with this idea of having an ESG portfolio and we'll kind of create these products. Come and invest in our ESG portfolio, which is packed full of the companies we think are top of the list on environment, social and governance. And it's proved to be an amazing strategy from the asset management industry, you would have to say, I mean, don't get me wrong, it's a good thing as well. I'd obviously rather more investor money going into supporting the growth of businesses that are ESG mindful. But to give you an idea, in the last two years, ESG funds have attracted $340 billion. That's almost twice as much as the rest of the stock fund universe combined. In 2019, I don't know, there was maybe about $50 billion in ESG funds. In 2019, two years later, it's now $400 billion. So this thing is kind of exponential, right? So that's the kind of backdrop. Now with all these different funds, obviously someone somewhere, each fund, you've got to decide who's in it, right? And so there's people doing analysis behind the scenes and perhaps the biggest, one of the most well-known funds is the S&P 500 ESG index, which is basically a fund that's looking to, the thing about this fund is it's trying to mimic the underlying bigger S&P 500 in terms of its sector weightings. So it's not like, right, take the 500 companies and just forget about what sector they're in. Just purely on ESG should they be in my top 10, right? Or should they be in my index? It's not like that. They've got to take the sector weightings into account. So for example, the tech sector is the biggest proportion of the S&P 500 index. It's like, I don't even know what it is these days, 25% plus, right? So that means in this ESG index, tech is the biggest component. And so you've got Apple and Microsoft and Amazon and Alphabet and Nvidia, they're all in this ESG thing, right? But then you've got an automotive sector, okay? And so within the automotive sector, they pick the best ESG ones and put it in the index, right? And what's happened is Tesla have been booted out. And they've been booted out. And obviously it grabs headlines and Elon gets on Twitter and starts raging. And look, on the face of it, it does say, well, hang on, well, that's ridiculous, given that this is an electric vehicle maker who has pioneered, and absolutely that is the right word, pioneered the shift to electrical vehicles globally, right? So from the environmental point of view, it's like the golden child, okay? But what people forget about is the S and the G always. When people talk about it, it really irritates me, actually. When people go ESG, ESG, all they think about is the environment. And so then you've got people complaining, well, hang on, how can you kick Tesla out when ExxonMobil is one of the stocks in the ESG index, the giant energy company. And that's because it's not just about E, it's about S and G. And actually Tesla, what's happened in the last, I don't know, let's say couple of years, particularly, is that the other automotive firms have radically pivoted to electrical. So relatively, the other automotive ESG score has gone up because of their pivot. Tesla's ESG score is about flat. Their ESG score is not going down here. They've just been overtaken by others. Now, when you focus on the S and the G, well, this is where perhaps Tesla are a bit vulnerable. And there's been claims of racial discrimination and poor working conditions in Tesla's Fremont factory. So that's not very good on the social side. There's also an investigation after multiple deaths and injuries linked to its autopilot vehicles. So that's definitely not helping on its score. And then on the governance side, well, isn't it a dictatorship? You know, isn't it the Elon show? And he does whatever he wants. So from a governance point of view, that's particularly bad. So is it right that Tesla comes out of this index? I mean, personally, I think it's fair enough. I know on a headline that it's sensational and you're like, hang on, electric vehicle and exon, what the hell does that work? But actually, when you step back and understand how the index is comprised, then actually, I think it makes sense. What do you think? Well, the first thing I was thinking when you said when you say ESG, and then when you say environmental, social and governance, the two things trigger different ideas in your head. You're exactly right. I never really thought about that. When you say ESG, I think environment just default. When you say the full name, then you go, oh, Tesla, yeah, definitely doesn't fit in the latitude. The thing I was thinking was I find it hard to believe that Elon Musk, as much as I do think he's got a huge ego, I find it hard to think that that's what drives a lot of his Twitter action. I always think there's more method to the madness than that. So he takes some pop shots, some severe ones. I mean, he said that S&P, the maker of these indices you do the ratings is tantamount to the devil in reincarnation, he called them. He literally tweeted that as much as many other things as well. Like, he must know that this is not a sensible thing to do because it's almost like inflating how much, how off-piece you are on the G at the moment. But so what's he trying, what I'm trying to figure out as you're explaining that. So what's his, what's his game plan here? I mean, he's, it definitely generates a lot of attraction towards him. His Twitter following, by the way, before Twitter in the last couple of weeks, he's gone from about sub 80 to about 92 million followers. I mean, he is rapidly increasing his base at the moment. And he's already, he was already the, wasn't he already one of the biggest followers or are there people who have got more? And, but he's getting a pretty substantial following. And I just wonder whether a lot of this is somehow engineering just more followers to his core base, if you like. And he's definitely now being quite, I think explicit with his political leanings as well. And so, and we've got midterms coming up at the end of the year. I just think a lot of this is perhaps it's playing into, and with the whole Trump thing, what's been going on him coming back. I just think there's no one in their right mind in his position running a company like that of a trillion dollar, well, not now, but valuation should be behaving in that way, unless there is good reason to do so for another gender that that's not so obvious. Saying Elon's looking to run, make a run for the White House. Well, team up, team up with although actually, I actually think he wouldn't be allowed actually with you have to be a native. Don't you have to be American? He's not American. Well, since when did the rules apply appears from from birth? He's South African, isn't he? But I don't know, I'm pretty sure I might not write and say you're not allowed to be president unless you were one in America or I don't know what rules are. But anyway, to follow through with what I was saying is the S&P 500 ESG index is tracked by about at least 16 ETF exchange trade funds. There were about just shy of 12 billion in assets indexed to the S&P ESG gauges. By the end of 2020, so things might have changed a little bit on the numbers. That doesn't sound like a lot of money to me. And so for Elon, when I think about the leverage, the benefit of the risk factor of like, OK, the exclusion to what I can get through just making this a drama, I actually think you get a bigger payoff coming on the on the latter than you do being included and just keeping stum on the matter. So yeah, I mean, I think I'm looking at his tweet now. And so he said, Exxon is rated top 10 best in the world for environment, social and governance by S&P 500 while Tesla didn't make the list. ESG is a scam that has been weaponized by phony social justice warriors. That's not he thought. I think yeah, obviously it's his platform and it's a huge one. I wonder whether this is also his, well, we'll talk about Twitter in a minute, perhaps, and his attempted takeover. But is this also him using Twitter in a in the way that he's kind of been guiding us, you know, this whole thing around the freedom of speech, and it, you know, you know, anybody should be able to express their views no matter what. And, you know, is this just him showing how Twitter should be used? Maybe, maybe there's something like that. Or it's just him just trying to stay in the headlines, you know, any presses, good press kind of thing. But yeah, you would say, look, Tesla's supply sold off like everything did, by the way, but I was reading one analyst was saying that the 8% sell off yesterday, one analyst was saying that 3% of that sell off was because ETF funds were forced to sell Tesla now that they're no longer in the index. I don't know how that analyst calculated that three of the 8%, I don't know how they came up with that figure. But yeah, for sure, obviously, it's created a bit of a short term flip lower because these funds are forced to sell. But it's just, it's a minor incident. It's not much money we're talking about here. And they move on. And one of the other people, you know, Musk has had an ongoing Twitter feud with is Michael Burry of the Big Short, because Michael Burry was quite clear. He thinks Tesla's a scam, just like Elon thinks S&P's rating of his company is a scam. And it's a fair world, I guess. Michael Burry can say what he pleases on Twitter. But that again, saw quite a feminine response from the Tesla chief, who I think at the time, when that happened, he called Michael Burry a broken clock in reference to his call on the subprime crisis. But it came to light that Michael Burry has come out. And there's something called a 13F filing. So perhaps we could start there just to give people listening a little bit of an idea about what is the 13F filing and what do traders or market participants look for within those filings? Well, it's an end of course, like a quarterly filing, where these funds have to just file right what's their holdings at the end of the quarter. And every now and then, and especially when you're going through a period of big shift, right, where you're getting big sector rotation, you're getting a big risk off in this case, people are looking for let's call them the celebrity investors and having a look at how they're particularly, you know, specifically positioning themselves. And Burry is often quite one of the ones that people would follow because, yeah, I mean, his track record, as people will know, if you have watched The Big Short, well, if you haven't, then what have you been doing? One of the absolutely great movies. But obviously documents Michael Burry's prediction of the, you know, the debt crisis and he bet against collateralized debt obligations, CDOs and to Elon's point, Burry almost bankrupted him that trade. I mean, like he was a whisker off going entirely bankrupt because of his very stubborn position. He basically went, well, in hindsight, went too early with the trade. I mean, he was starting to short this stuff. I think it was 2005. The whole thing didn't unravel until 2008. But the system got manipulated by the big banks and whatever. But yeah, so at the end of the quarter one, he filed his 13F and there was some really interesting details about how he's changed up his positioning. So in December, he actually, in the filing he did at the end of December, it showed he only owned six stocks. That's long, right? It was only long six stocks by the end of last year. And what he'd done in the second half of 2021 was start to sell out of pretty much everything. And here we are now and you're thinking, oh, yeah, well, I know what he's doing. And he was very vocally and actively short things like Tesla. A lot of the stocks that Kathy Wood is carrying in her funds, he's very vocal anti-Kathy Wood and saying, look, you guys, this is one of the biggest bubbles in the history of mankind and are very vocal. And obviously Elon didn't like it and was kind of criticizing him back and so on. But you'd say right now here, middle of May, Michael Burrys had a fantastic, well, 12 month period, right? But at the end of December, he'd narrowed it down to six stocks. By the end of March, he's now only long one company. Really? I don't even know who that is. It's Bristol Myers Squibb. I'm not quite sure why. The thing about these filings is all it gives you is the holdings. There aren't little subnotes why I've done this or why I've done that. So we're not quite sure but Bristol Myers is a healthcare stock. So it's a defensive stock, right? So I guess makes sense from what we were talking about earlier about rotating into defensive sectors going into a downturn. But it's interesting. He's just got rid of everything, right? He's not like a portfolio manager like we were talking about earlier. He's like a hedge fund where, and a hedge fund has way more license to do pretty much in certain cases, pretty much whatever they want, right? And people are prepared to give Michael Burry their money because of his track record, knowing very well that it's super high risk because you're allowing him to essentially do what he wants. But he's got way more license to swing his money around more aggressively. So he's long only one stock. The other massive news in this filing was that he started to build up a huge put option position in Apple. Now put options, these are options to sell, right? It's basically you profit if the price drops. So if you buy a put option with an exercise price of let's just simplify $100, let's say something's trading at $110, right? If you buy a put option to sell at 100 at some point in the future, then this is a good trade if you think the share price is going to drop below $100 in the future. And let's say it does, let's say it drops to 80, then you can exercise your option to sell at 100 when the stock is trading at 80. So then you profit that $20 difference, right? So Michael Burry is basically calling the top on Apple. And he's not messing about here. 11, I don't know, what is 18? Hang on, I've got the stat somewhere. It was 18% of his fund. So his short position in Apple now makes up 18% of his entire fund. Surely that's outrageous proportion of any hedge fund to have that strategy. Well, this, remember back in 2005, 2007, by the start of 2008, 100% of his fund was on this short CDO trade. When he gets an idea, he's all in. He doesn't mess about, which is why it's so high risk. Because it's just got no diversification hardly at all. So these bets have got to be right. Otherwise, he could lose everything kind of thing. But yeah, it's just interesting. And then in the same quarter, so this is a great battle and the press are kind of, it's like the giants battling off because Michael Burry's short. And what did Warren Buffett do in quarter one? He added to his long position in Apple. And when I say added, bought another $600 million worth of the stuff. And actually Apple is now Berkshire Hathaway's largest holding by market cap in its portfolio. So you've got Michael Burry now aggressive short, you've got Buffett already long and now getting even longer. And this is a battle. It'd be interesting to see who wins. It's so funny just how black and white is from personality type investment style, right? It just couldn't be a better case study of two different philosophies of how to invest in markets, right? Yeah. And I guess the point is who's going to win? Well, actually, they could both win. It could be Burry wins in the short term. We're not quite sure how long he's had these. I'm not sure what the exercise price on his put options are actually. So he might already be in the money because Apple has sold off from $180 down to $140. So yeah, we topped out at $180. I guess Apple kind of putting it into context pre-COVID, Apple was trading at about $80. And it went up to $180. And actually, over the last four years, if you go back a bit further, Apple's share price has quadrupled. And so this is Michael Burry going, well, all right, Apple's a great company. Look, don't get me wrong. And it's share buyback and dividend program, you know, and it's free cash flow, make this business bulletproof when we were talking the other week about how Apple's a bit of a safe haven almost these days. But Burry's going, well, hang on, quadrupling in four years, now a major inflation crisis, he's calling the top. I mean, from a valuation point of view, its price to sales ratio is eight times compared to Amazon, which is four. So it is kind of double the value of Amazon from a price to sales ratio. Price to book ratio is 40 times versus Amazon at 14. I know maybe it's unfair to compare Apple to Amazon in terms of their businesses, we're talking about profit margins earlier, right? And so Amazon's much more vulnerable with a kind of tighter profit margin, but from a probably the best known sort of valuation, the price to earnings ratio, from that perspective, Apple's not particularly wildly overpriced, it's trading at around 30 times earnings, which is about the average for the S&P 500. So I don't know what his angle is. I don't know whether it's just purely a macro play and look, it's quadrupled, we're in a bit of a bubble and look, it's come off and maybe he's already in the money. I don't know how long he's looking to hold this for. It may be a slightly longer term thing, which is maybe directly going head to head with Buffett if he thinks that the whole shift to the metaverse, I don't know, maybe he thinks Apple isn't going to win that battle. I mean, I don't know, we don't have any details as to his rationale, but certainly makes for a good story. Yeah, I'm almost thinking if I was Barry, I'd pick up the phone. Hey, Warren, how about we work this out? We can both be winners in this. And talking of market manipulation, let's finish with Twitter and Elon Musk. Just to cut the guy some slack. Past five days, Twitter, as I said earlier, is down almost 20%. And it's come as Elon has threatened to pull the plug on Twitter. And the main thing that he's kind of gearing that or centering it around is the idea that he's calling out the current CEO saying he needs proof that less than 5% of Twitter accounts are bots. He tweeted, of course, Elon, that he reckons 20% of fake spam accounts, while four times what Twitter claims, it could be much higher. And so any thoughts on this? I actually, I actually think he's got a point here. And half of me thinks, well, hang on, why wasn't this raised earlier in the process? Why has he gone ahead and literally not only kind of put a bid on the table, but arranged all the financing and gone and sold a huge chunk of his Tesla shares to raise cash, apparently, to funds this Twitter trade. He's done all of that. And only now he's like, well, hang on a minute, what about these bots? Before you defend him, the company did make this 5% apparent a while ago, so it was already common knowledge. So yeah. And that's right. And actually, so that's quite an important point because this is in their filings, the Twitter filings, this information, which kind of makes it, that's like their legal situation. And so when investors are looking to invest in companies and they're doing research and doing their due diligence, they're looking through all their filings and all the information that's been made public. And that's absolutely a key metric that invests because the point is right. I mean, from an advertising point of view, if you've got a platform that generates revenue through advertising, then it's about, well, it's about eyeballs on the ad. Okay, especially if you're running ads that's more kind of brand awareness ads rather than necessarily an ad to try and sell a specific product. If it's like more brand awareness on the Twitter and the social media platforms, this is good for that brand awareness exercise for companies. So it's about eyeballs on the advert. Now, if bots are not 5% but 20%, well, then that's a hell of a lot less. And we were talking like 220 million accounts, right? And if there's 5% of those bots, well, all right, that's 11 million. Okay, so we've still got what's the maths there, 209 million people, right? I can advertise too. But hang on, if bots are 20%, well, then, that's an additional 33 million people that I thought I would be able to advertise to, but now I can't. That makes a very material difference to the potential advertising revenue that this platform can generate. And by the way, I think Musk was saying that he thinks it could be a minimum. He thinks 20% could be the lower bound. And he's even gone and said, you know, who knows what it is? It could be 90% bots. The point I guess he's making is that Twitter can't tell him. Even though they can't show the analysis and the rationale and the evidence for the 5% measurement. They either are unwilling to tell him or maybe they haven't measured it correctly and they've just realized they're like, what are we going to do now? Or who knows, right? But Musk is right to pull back and say, I'm waiting. I need evidence because this could carry a huge material impact on the platform's ability to generate revenue. And one of the good memes I saw this week, which I'll share in the weekend newsletter, was one of a slightly scared-looking monkey thinking about Facebook when Elon's asking these questions to Twitter, looking panicked. Please don't come knocking on our door asking us how many of these users are bots at their old meta platforms. I thought that was quite a timely one. But we'll wrap it up there. Yeah, as per usual, just to conclude, I hope there are some good things that you picked up on there from the ESG, the benchmarking, portfolio construction to lots of other things in between. But of course, any questions at all, feel free to join the newsletter. I'll drop the link in the description of the podcast and you can reply directly to me if you ever have any questions about the podcast material or any of the daily stuff that I put out. And then, yeah, if you're listening to this on Spotify, Apple, don't forget to leave us a rating. I'd be super appreciated. Really helps us with the rankings in the podcast tables, which helps get this out to as many people as possible. But with that, thanks very much. Yeah, a little bit earlier this week on the Thursday because Piers and I otherwise engaged on Friday. But yeah, normal proceedings as of next week. And have a great weekend, everyone. Have a good one. See ya.