The Compound and Friends
Memory Is a Bubble, Nvidia’s Blow-Out Quarter, SpaceX Is Coming With Jan Van Eck
22 May 2026
Transcript generated automatically by AI and may contain errors.
Chapter 1: What is the significance of the AI infrastructure boom?
Here's our annual tie.
I love it. Wait, what's the theme this year?
See if you can figure it out.
It's got to be Warsh, no? No. Hamilton? Hold on, hold on. Look at the eagle. What's CCL? Carnival Cruise lines?
Carnival Cruise lines is a good one. Oh, I love pink. No, who is this? What is CCL? Is that? Dude, I'm walking out of here. You have it back up? Is that... What's the C in Latin? What does the C stand for? Cerebrus. 100.
Cerebrus.
Oh, my God.
Is that George Washington? Cerebus? Cerebrus. Who's the other guy? Celebrex. Who is it? Is it Celebrex?
Three most important things in financial history. Hamilton, the founding of the system. FDR, bailed out the banks. Stablecoin. First time that financial company can compete against banks. Is this Kissinger? Who is it? It looks like him.
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Chapter 2: How is Nvidia impacting the semiconductor trade?
Tema has nine institutional quality funds tracking these themes and more. Learn more about their lineup, read their insights, and stay up to date at temaetfs.com. That's T-E-M-A-E-T-F-S dot com.
Welcome to The Compound and Friends. All opinions expressed by Josh Brown, Michael Batnick, and their castmates are solely their own opinions and do not reflect the opinion of Ritholtz Wealth Management. This podcast is for informational purposes only and should not be relied upon for any investment decisions.
Clients of Ritholtz Wealth Management may maintain positions in the securities discussed in this podcast.
Really? Compound and Friends? You guys in?
Woo!
Oh, man. What a treat. What an absolute treat we have for everybody listening. I have to tell you guys, this is an amazing time in the markets. It's an incredible time in certain sectors of the markets. You may be witnessing something that we've never seen before. I have to say. And that could turn out really good or really bad. We're all going to find out together.
We have a fan-favorite returning champion with us today, Mr. Jan Van Eck. Give him a round of applause. There was a 0% chance. 99.9. 99.9. With me, as always, my co-host, Michael Batnick. Yeah, hi. My name is downtown Josh Brown. First-time listeners, last-time listeners, we appreciate you.
Jan is the president and CEO of VanEck, a global investment management firm he has led since 2010, having joined the family-founded firm in 1991. VanEck currently manages $199 billion as of 3-31, including the legendary SMH ETF, which has annualized at 29% a year since inception in 2011. Holy cow. Before we get into the show, can I ask you an SMH question? I know the answer for the audience.
The origin story of that product is a little bit wild. It was a Merrill Lynch product. vehicle and you guys acquired it. Why did they sell it? They got out of the ETF business wholesale.
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Chapter 3: What are the risks associated with U.S. deficits and long-term rates?
It's like, oh, the biggest companies, they always fail. You always look back and go to the top 10 in the 70s. They never make it to the 80s and 90s.
I do think that era is, it's a structural permanent shift in my opinion, because the amount of money that it takes to compete these days, Not just with AI and the computer and all that stuff, although that's a big part of it. The moats are more durable, I think, than they have been in the past. Obviously, not with everything. Intuit is down 23% today. Obviously, things change and stuff.
But the moats with capital are different than I think they were in the 50s.
I think there's two other things. We've never had network effects businesses on the scale that we have them now. That's it. So that's number one.
It's the internet.
So that's the internet. Number two, we stopped enforcing antitrust 25 years ago. Both parties are guilty to some extent. We just allowed companies to not only dominate one industry, but to spread out horizontally and dominate 12 industries. I don't see any real political momentum to reverse that.
And so in that environment where you have network effects businesses, where the bigger they are, the more profitable they become and no wherewithal whatsoever to trust bust. Why would you think that there's going to be any sort of durable advantage to small caps? It's like, what is the story? But the only thing I can come up with is a bear market.
And the small caps have less to fall because they were already at a lower multiple. I can't come up with why that would be a durable advantage to be smaller in the year 2026. So, I mean, I could be wrong.
It's today's market structure. I agree. It's all about earnings. And if you look at earnings, right, the tech giants are just – They're lapping everyone else on earnings growth. If you could have small companies that used to grow faster earnings-wise, that's a great story. But Michael and I don't have a response.
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Chapter 4: What is the debate between equal weight versus cap weight in investing?
I think there's another industry besides AI, and you talk about this. It's the wealth industry. It's the industry that we're in. We're part of this AI boom, though. Right. Okay, so we're definitely related. We're at the hip, but I'm just saying our businesses are booming. But AI is driving the stock market.
It's driving the wealth. But wait, right. IPOs. Wealth creation on a massive scale and stock prices which drive AUM fees. That's what's going on.
They're the same trade. It's very reflexive, and it's all based on one thing. And the wealth that's going to happen from these SpaceX and Anthropic IPOs. I was at dinner with someone who bought a house in Noe Valley in San Francisco. A week later, someone bid another million dollars for the same house.
The amount of cash that's going to be hitting Northern California for the people who haven't left Tsunami of cash. It's insane. The amount of wealth in this country is beyond my experience.
So you said it's reflexive. But I think it's recursive. I think it's a circle. It's around and around we go. Because, like, hear me out. The person that's a SpaceX early shareholder, maybe they're an employee, maybe they're an investor. So the first window to sell for this deal, I think, is five weeks. Like it's very different. No, it's a six month lockup. No, it's not. You're wrong.
They're changing the way they do this specifically for SpaceX. They're having a rolling lockup period. And I think like within a few weeks, the first sales can be made. You can't dump your whole position. But I think the liquidity coming from these wealth creation events will be very different than prior IPOs where they made you wait six months, nine months. You're talking about a $2 trillion IPO.
Even if you allow 10% of shares to be sold, think about how much new cash that is. What does that cash do? It finances the construction of new McMansion, probably Ferrari, more Rolexes, tons of stock market activity, tons of wealth management activity, fee-related stuff. maybe starting new companies with that money. Like it's just, so it's recursive. And I don't know what breaks the cycle.
Obviously a stock market crash would do it. Barring that, I just don't know where it ends.
But this could break the cycle. So Tom Lee was talking about this. He said the amount of, same thing, the amount of wealth that's going to be created is going to be staggering. Guess what? The amount of wealth has to also come from somewhere. Because who is going to finance these purchases of SpaceX and OpenAI and Anthropic on the open market? Where does the $80 billion in cash come from?
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Chapter 5: What insights does Jan Van Eck provide about the SpaceX IPO?
Do you just get in and let your body get used to whatever it is? Or are you twiddling the cold, twiddling the hot, like trying to find the perfect temperature? I'm the first thing. Like whatever the shower is within reason, it's enough for me. It's fine. I'm here to take a shower and get out.
I feel like the Powell Fed is characterized by this idea that they have to constantly be turning the knobs left and right. And I hate it. And I don't think it helped in the end. There were times to do things, times not to. It's very hard to know. We all get that. But the constant talking about it. And mind-changing. Like, I hope we get an era where we almost never hear from Washington.
I like that bet. I like that about the Greenspan era. Came out twice a year, like Santa Claus, and it was enough.
But also, in Powell's defense, look at where the Fed funds rates were during his tenure. It's a lot easier to sort of do nothing when we're at a more normal neutral rate or close to a neutral rate than when we're at 1%.
Don't give me a story. I mean, he blew up Silicon Valley Bank, right? And, you know, he raised rates so quickly, and that was his jurisdiction. That could have been so much worse.
He's a regulator.
It could have been way worse, but, like, he shouldn't have blown them up in the first place. We agree. That was so obvious that it was coming. Quarter after quarter, they were having to write down a portfolio.
Remember Bank of America had $120 billion in mortgage bonds they were upside down in or something on their portfolio? Yeah, right around the corner.
But should somebody be aware of that before we jack interest rates up 13 times? All right, let's talk NVIDIA and semis. So they reported last night, business as usual.
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Chapter 6: How do mega-cap stocks influence market dynamics?
But I do think, I think history supports that. If you look at, and if you look at charts of how automation has affected different jobs, sure, secretarial jobs are down 75% in two decades. but it took two decades for that change to happen. Maybe AI accelerates things, but people are slow to change in general. 40 million women entered the job force after World War II.
If you look at an employment chart, you can't see a blip. Right? Because that's not how employment works. They were absorbed and new jobs were created. And I see, you know, the IT guys at VanEck who literally last year thought, oh my God, my job is in danger because AI is going to take my job. They are now 5x more productive and they're more needed, not more needed, but as needed as they were.
So I just, but I do think it's a huge concern for a lot of people because they're technophobic. People are concerned about their jobs. Like that is completely...
Somebody at UBS put out sort of like their own model of what this looks like, and they compared SaaS software companies to newspapers in the 90s. Do you think it could be that dire for a lot of software businesses? Like we basically ended up with two newspaper companies probably left?
I think there's no AI without data. So if you can add value by organizing data, and that's where a lot of this AI activity right now is, it's better organizing data because you realize you've got this great tool, but if you don't have data to process internally, that's valuable. And some things are obvious, but some things aren't. That's really where the value is.
And so I look at if Salesforce, we're a big Salesforce user, if they can efficiently organize our data, okay, maybe there's some value, but I would pay less for it. We shortened our Salesforce contract, you know, to only two years. And- So what you see happening in the multiples of those stocks- Our data lake is separate. And, you know, it's competitive. It deserves a re-rating.
Okay. So you think that's a- Well, you got it. It's appropriate. Can we talk about chips a little bit? Sure. Okay. How outrageous is this on the scale of 1 to 10, what we've seen go on? I'm not saying, like, talk down the SMH, but, like, some of the moves. I think Intel's up 100% this year. Daniel, chart 11. Or more.
Some of the moves, not for you to comment individually on the stocks, but like this seems sort of unsustainable.
Yeah, and you think, we're looking at Micron and SanDisk. The EPS went from $9 in March, 2025 to 85 bucks. For Micron, SanDisk went from $2 to $99. This is the forward EPS. You think that this is a bubble or what exactly do you think?
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Chapter 7: What are the implications of the current economic conditions on investment strategies?
But we want to say this is the top before the robots are even here?
It's not only that. Again, compute demand is here and supply is here. That's the big one. So until they get to an efficient market, like what are we talking about? We're going to look back and go like, what were… You know, what was the… Who was missing the big trend? I don't think we're missing the big trend. You guys are all over it. I'm just saying…
Now, having said that, Josh, within the ecosystem, there are corrections. Like Oracle was down 50%, right? That's a crash. OpenAI looked like it was being lapped by Anthropic, right? And so there are pieces of this ecosystem that will go up and down. Do you guys have a robotics ETF? You must. Yeah.
What is it? I could ask you. I'm asking you. Tell me. iBot. iBot. Okay. I'm not that shy.
No, it's crazy though. Like the rules for talking about ETFs. We're learning this because we have ETFs now. No, I can't say what they're called. What's your ETF called? I think the rule is you have to say Candyman three times.
You can put it in a bottle and throw it into the ocean if somebody finds it. Here's why. Here's why. Here's the anti-bubble. I can give you a riddle. And if you solve it, I could tell you. We could do a wordle for our ETF. So Daniel chart 18. All right. S&P 500 margins going through the roof. This is from Peter Bereson. We're looking at the S&P 500 profit margin forward trailing.
This is remarkable. I mean, and this is almost kind of scary because there are political ramifications coming. I mean, they're here today, but they're definitely coming when we see more layoffs and you see S&P 500 prices and margins at all-time highs. That is, for society, that is a dangerous cocktail.
He's not as worried about it.
Listen, let's just articulate exactly what we're talking about. We got the midterm elections. Let's say that the Republicans lose the House. Are we going to change monetary policy? No. Are we going to change fiscal policy? No. So they'll impeach Trump a couple more times. Nothing will happen. That'll just be performance. Are we going to solve inequality in America in the next 12 months? No.
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Chapter 8: What future trends should investors be aware of in the AI and tech sectors?
I got this back from the people who built Palantir and Tesla. And like, what do you think about that idea? Because all they brag about now is I create jobs. But, like, if you don't work for the company, I don't give a f*** that you create jobs.
Yeah.
It's sort of Gates versus Musk. Look at this shithole city I live in. I don't care that you created jobs for people that I don't know. Like, look at this massive wealth you've accumulated. Why aren't you reinvesting in the places that people live? Yeah.
It's Bill Gates, right, who made a lot of money and then very thoughtfully invested in a lot of different technologies and philanthropies. Yeah.
versus Elon Musk, who's like, I'm going to make as much money and create as much wealth, and then... Well, he thinks he's saving humanity by enabling us to get to the moon, and he might be right, but none of us who are alive today will experience the benefit of that.
But, Jan, don't you think that's part of the problem with doing what Josh is suggesting is that the cities and the governments that run the cities are so shitty at distributing and executing and there's so much corruption. Like, Amazon searched for a new headquarters or one of the projects that they tried to come here and we villainized them and we drove them out.
Like, I think a lot of these people... And... They are doing, there's a lot of people that are incredibly philanthropic. That's like sort of quiet. I mean, that's more your world than ours, of course. But there's people that are doing that. But at the public institutional level, it's hard.
Yeah. I think it's a great question. I think we don't really know because a lot of the wealth has been created in the last decade or two. And so we don't know what they're really going to do with it. I want to give them a break. And also, I'm not sure what's so obvious to give money to. I give it to educational institutions primarily.
That's kind of Michael, Michael Dell. I forget the number. Is it 50 billion, $10 billion or $2 billion to all of the Trump accounts? Right. Just like I'm adding to your accounts personally. So it's not a museum with columns. I understand. And maybe most of the recipients don't even know where it came from. I understand that too.
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