Hayes: "Sell the News" on U.S.-Iran Resolution, Call Buying Akin to Meme Stock Craze

10/9/2025 3:00:14 AM	short term cautious up	5 days later	+2.16%	+1.08%

Asks about Tom Hayes' warning of a violent flip in money flows and what it means.

Speaker1

Speaker2

For the last four weeks, due to Iran and yields, the only trade that has worked is semiconductors and tech, which has gone parabolic. Nothing else has moved; cyclicals with debt have underperformed. Expects a sell-the-news event on Nvidia when Iran is resolved, leading to a rotation out of tech/semis into everything else.

James Carville quote about bond market intimidating politicians. Yields rising, inflation expectations too high, resolution needed. When that happens, sell tech/semis, buy everything else.

Questions the strength of mega-cap tech balance sheets, noting Nvidia, Alphabet, Google have strong balance sheets.

Speaker1

Speaker2

Alphabet, Amazon, Google, Tesla, Microsoft combined market cap $10.9 trillion, but only generated $6.6 billion in free cash flow last quarter, near zero and declining. Buybacks down 71% YoY. They have almost $1 trillion in CapEx commitments and are issuing debt, which becomes impossible if yields blow up. Expects hyperscalers to cut CapEx expectations next quarter, triggering money flow rotation.

Global Fund Manager survey shows managers most overweight tech and underweight staples since 2000 tech peak. Record margin debt and call buying from retail. Most crowded trade is long semiconductors.

Asks about positioning into midterms and whether he is worried about volatility.

Speaker1

Speaker2

Historically 17% correction in midterm election year, but expects only 8-10% correction weighted towards tech. Opportunity to move into defensive stocks like staples. If Iran resolved, rates go down, dividend payers go up.

Dividend payers are defensive stocks. That's where the next trade will be.

Asks what matters most given massive call buying, geopolitical tensions, Fed uncertainty with Warsh, and markets near record highs.

Speaker1

Speaker2

Three of last four Fed chairs tested with major correction in first few months. Potential jet fuel/diesel oil shock even if Iran resolved. Sets stage for positioning change. Not bearish, mostly invested but hedged in overbought areas. Likes staples, defensives, dividend yield. If yields drop like a rock, dividend payers, staples, defensives, healthcare come in demand. Healthcare and staples relative performance lowest since 2000 tech peak.

Buy them, collect dividend, wait for time arbitrage until they come back into favor.

Asks about Estee Lauder, which has been a big underperformer, why he likes it.

Speaker1

Speaker2

Estee Lauder is a turnaround story, dropped 80% since COVID highs. Mac now in Sephora, selling well. Strategy shifted from department stores to online, margins better. First year of margin expansion and organic growth in four years, revenues up 5% YoY. China and global travel starting to turn.

Lipstick indicator.

Asks about Crown Castle, another defensive name on his list.

Speaker1

Speaker2

Crown Castle sold off its CapEx-heavy small cell business, using proceeds to pay down debt. Now has 40,000 cell towers, mobile data demand growing 15% CAGR through 2030. Premier pure play public way to play that, with 5% dividend yield. Legacy business requires little CapEx, generates cash.

One of his markers is liking the dividend yield.

SignalTube