Why Chris Camillo DISAGREES With “The Big Short” Investor

What do you think about Steve Eisman who recently went all cash? He's from the big short and his argument was that he believes that AI is binary right now in the market. It either succeeds in the market climbs or it doesn't and there's a big correction. He sees that over half the equities in a 60/40 portfolio. Plus, most new bond issuance is AI related, so no one's actually diversified. And he also says the latest Nvidia deal is so convoluted that you don't know if there's any real profitability outside of Nvidia. I'm going to answer that question not just to Steve Iceman, but I'm going to answer it to Michael Bur. I'm going to answer it to every single person that has this strong high conviction take on how this is going to play out. I don't think any of us know exactly how it's going to play out. And I'm so sick of listening to these old guys that have so much conviction that this is going to happen or this is going to happen. We just don't know. And these guys are so afraid to admit that they don't know. I don't know. Okay. Like I I have like I kind of feel like I know what's going to happen in the next 30 to 60 days and I know this is going to be really big. Okay. But I am spending time every day to assess how quickly it's moving and in what direction it's moving in and new risk factors and the probabilities in my head are shifting every single day. And all the scenarios that I'm running in my head that are good and bad for the AI sector are changing every day. And I think it's really dangerous to follow one of these guys just because they had success at one point in the past to think that they are the guru and they can see the freaking future because history has proven that it's impossible to see how these big gamechanging things are going to play out that when we've never experienced anything that big before. Right? If we were just experiencing another big development in software, right? or another like kind of just another step up in technology. I think it would be reasonable to say, "Hey, this is how it's likely to play out." But clearly AI is not that. So, I'm going to say that they don't know what the hell they're talking about. And then I'm not going to try to make pretend that I do either. Like, the best approach right now is to realize that no one knows what the hell they're talking about when they're trying to confidently say that this is going to happen. And by the way, if any of those scenarios happens to play out, that's survivorship survivorship bias. We've seen it a million times. You predict the market crash 38 times and it eventually happens or whatever. We cannot predict anomalies like AI is the biggest anomaly. It's an unknown. It's a new frontier. We have having a clue how there there are so many factors that are going to play in to how what the road map looks like for AI and how it kind of merges into our economy and our world and changes us over the next few years. I don't think Sam Alman knows. I don't think Elon knows. We can see a few months ahead of us. Barely. Barely. >> What do you think's going to happen the next 30 to 60 days? I think we're coming around to realizing the realness of AI in the next 30 to 60 days. We've just come off of a cycle where everyone again the last 30 to 60 days >> we were in this FUD cycle and we came up with every reason why AI was going to blow up. We're still even the last couple weeks were like oh AI is going to blow up. Anthropic is going to blow up because of open source. I think everyone's going to chill out a little bit the next 30 to 60 days and I think we're going to realize that like okay nothing catastrophic is likely to happen here as quickly as we think it is and hopefully people will take more measured takes on you know the ai cycle is at least somewhat more real than people believe compute's not going away tomorrow >> like like you know the Kimmy thing came out and it was like okay we don't any compute anymore. Like we we've gone through this guys so many times. Inference compute is barely changing at all. Right? Due to the open source models, we still need massive amounts of inference. And even if someone has a massive breakthrough on compute where we only need a tenth of it, we're going to come up with new use cases for compute like instantly evolving entertainment that's personalized to you based on your emotions, right? or uh like I said, the video games that just make themselves as we're going along. Like there's going to be a million things that we can do like let's solve cancer tomorrow. Like let's just as soon as compute gets cheaper, we're as humans, we're going to figure out a way to leverage it in new ways where we'll, you know, goes down by 10x, we'll figure out we'll need 20x more. I believe that's going to be the cycle. I don't know how quickly that cycle happens, but it's going to like eb and flow eb and flow between open- source China breakthroughs. Is AI still an economic model that we can count on? I think people are going to slowly start to to educate themselves. Like right now, no one knows anything. I think every few months people are going to get a little bit smarter on and they have been by the way to some extent. Right? If you look at the fears we had nine months ago, they were completely obscene. So, I think people get smarter every couple months, but it doesn't mean that we still won't have these frightening moments when people freak out and they're like, I got to sell my AI stocks. >> One thing I'm curious about is that on Twitter, you have been going pretty viral. You've been spending a lot of time answering comments, responding to people. Some of it has been a little divisive. I'm wondering, do you think the additional social media exposure is going to diminish or reduce your critical thinking putting on some of these trades? Like, do you worry that's going to take away from like your focus and shift it away from looking at these stocks to responding to comments? >> Yeah, to some extent I need to I I need to refocus, right? But I I've been responding to comments the last few days because I can't go through these cycle when I spend 100 plus hours researching a company. I need a break, right? So like I'm taking time off right now. Like I'm not doing heavy research right now. I had a big win. I'm taking a break. You know, I'm not 20. I value balance in my life and I really enjoy the community aspect of it. I actually authentically enjoy talking to other investors. It's one of my favorite things in the world. So, even if I miss a couple trades because I'm distracted hanging out on Twitter and talking to other investors and coaching people through things and I'll get re-engaged with my own community. That's what I need to get revved up for the next big high conviction trade where you don't hear from me for a month because literally I'm not sleeping and I'm up till 4:00 a.m. every night doing deep research and then I just announce what it is. And by the way, like I'll always make the high commission trades. And what I what I what have I been saying about Amazon all year? I said if Amazon is a thing that takes me down, so be it. Like I have an 18-year track record. I have this reputation. and I have this community and it'd be really easy for me just to chill out and not take big risk that could implode my account and like that's how you'll remember me. But that's I'm not I don't care. Like this isn't like football, guys. Like I don't have to worry about my joints. You know what I'm saying? Like I can still do this and I'm going to still do this. I'm just going to do it at a pace that makes sense for me. And when I really believe in something, I'm going to talk about it even if I fall flat on my face. And by the way, you saw what I did last week. I put it out there. Everyone knew what I was doing, right? Like if that trade didn't work out, everyone was going to know that I blew up. Okay, everyone. That's not an easy thing to do. >> Speaking of that, what did you get wrong about Sweet Green? Now, most people think forming an LLC is just about filling out one form and calling it a day. But there's a lot more to it than that. 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Thank you Northwest registered agent for sponsoring this episode. What did you get wrong about sweet green? >> Well, first of all, the big sweet green move down has to do with the stomach virus and lettuce. You're probably aware of that, right? So, like if you're trading one piece of information in the case of Sweet Green, I was trading the new rap. Then we had this cycllo virus. What is it called? Like what you know the virus? >> It's called the the Jack Selby virus, >> right? that that quickly became the driver for not just sweet green but for you know Taco Bell and any so listen sweet green their entire business is lettuce and no one's eating lettuce for the last what five or six weeks so I always talk about the known unknowns and the unknown unknowns like that wasn't on my radar uh but even before that I start I ate at Sweet Green a few times and I loved the rap but Then I went to Cabba and I had cuz I had never been to Cabba actually and Cabba's was you know doing really well again before this whole lettuce thing. >> Mhm. >> And what I noticed at Cabba cuz I'm eating really like uh clean right now and I love sweet green cuz sweet green was clean. Like you can tell like there was no sauces on that stuff. I went to Cava and I tried to order something really clean and I couldn't. like the chicken, like the protein was like mixed with sauce and stuff, but it had a lot more taste than sweet green. And then I started researching a lot of the comment analysis and I realized that was a little bit of a theme. Cava is more positioned for the masses where Sweet Green is more positioned for the clean eating demo. Okay. And I I think Cava is making for a really tough competitor against Sweet Grain. So that's kind of like a little bit of a headwind for that company. >> But again, you got to remember something. >> I placed a very tiny bet on Sweet Green because it was I had only partially done my research, right? Remember that? So I was like, this is speculative. I think there's a potential here for this to be a big hit for Sweet Green, but we'll just have to see how it plays out. Now, I ended up getting pulled into some other bigger trades, you know, all this stuff. >> And I've been telling people since then, I'm like, they asked, I'm like, I don't have time for sweet green, guys. Like, the trade was tiny. >> Like, I really don't care. Like, I have bigger trades I'm focused on. I think Sweet Green earnings like this week people can ask me. I'm like, not only do I not have time for sweet green, but my little rap thesis has become irrelevant with this virus. Completely irrelevant. So there's no reason for me to be even looking at sweet green because the only sweet green trade right now is to what extent will this virus destroy their sales more or less than the market thinks it will. >> That's all that matters for sweet green. My thesis on the wrap has become irrelevant until this virus passes.