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Micron has momentum. Nvidia's report a blow-out today and will lift Micron higher. 

It's all about scarce resources, and this company has resources (power).

Over 8 quarters, it's fallen 6 times on earnings. So, they need a blow-out quarter. Q3 guidance is critical. NVDA has telegraphed they will raise prices 15% to meet expectations.

He was early in utilities and they're now up a lot. This is an opportunity. The bottleneck is energy within the data centre build-out. There's still a lot of room to grow.

The US-Canada trade war doesn't change his positioning. He's long term, 5-20 years, so he accepts all manner of macro events. So, he finds businesses that withstand all macro backdrops. The investing greats generally hold a concentrated portfolio and hold them through ups and down. The average holding period for a stock was 5 years in the 1970s, and today it's 10 months. So, it's a competitive edge to hold long. His two main criteria for a stock: the executives and board must be strongly aligned with minority shareholders (meaning they own a big stake in the business); and boast over 20% return on invested capital, which often have moats or other competitive edges.

Market Call was pre-empted for Mark Carney's presentation on the trade situation between the US and Canada. The show beqan with Rick's Past Picks.

It wants to innovate and bring out the best semis, even if it costs a lot. He likes this strategy. It's up 210% the fourth-biggest gainer on the S&P.

US Government Debt of $40T
Jackson Hole is this week. The market didn't like Warsh's laissez-faire approach to interest rates at the last FOMC meeting. Bonds have been selling off, but not just in the US. It's a story of total debt to growth that probably ends badly.

Larry brought along a chart that shows revenues/expenses of the government as a percentage of GDP. Post WW2, for many decades, revenues and expenses were pretty aligned. Overall debt to GDP came down after financing WW2. Then partisan politics started kicking in over in Washington, DC, with parties wanting to outdo each other. So deficits and debts got crazy.

Today, the amount of debt to GDP is 121%. Debt is $40T, on a $32T economy. Question is:  How do we finance all of this?

One of the mandates of the US government is to lower the cost of debt. As long yields got higher, Scott Bessent said a few weeks ago that they were going to buy back some of their long bonds, issue a few more treasury bills, and twist how they raise $$ for the government. There's a hope and expectation that stablecoins will be backed by US treasury bills.

His next chart shows the total cost of US treasury bills, bonds, and the current yield. Of all treasuries outstanding right now, current yield to maturity is 4.55%. The old ones are in the range of 3.6%. So new debt is coming in around 90 bps more than the debt that's maturing. That'll just put upward cost on the debt, and add hundreds of billions to the deficit.

Catastrophic in terms of what it means for future spending and budgets. It limits governments' ability to help when things get bad. Times have been good, and the government's still spending massively. We've been fiscally mismanaged by the lot of them around the world -- Republicans, Democrats, Liberals, Conservatives. 

There's a universal hate on right now for long bonds. There's a trade here, but not for the faint of heart (as yields could keep rising). Speculators are bearish on long bonds. Hasn't been like this since the last time yields were over 5%. Price of these bonds is really low. You can use some options to protect yourself. On risk/reward, long treasuries are one of his favourite asset classes right now. See his YouTube channel for more.