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Hey, you're welcome back to Two Super Guys with Stock Sound, Dylan. And I'm Vinnie. And man, oh man, of course perfect timing with Michael Burry. We did that recent poll talking about what people think about him. And now he's in the news again on CNBC this past couple days talking about how this feels like the dot-com bubble bursting or about to burst again.
So, you know, the predictions keep on coming whether or not any of the last 20 or 30 or 40 have been fulfilled. Eventually he'll be right about this crash. Yes. You'll have lost enough money in theta decay of your options so that it will not make any sense to continue to pursue it. But, you know. Yeah, I will say in his in his newsletter he says that he rerolls he'll roll his options over all the time for for these short.
I'm like, how much That's a lot. I mean, cuz you're just he's just going he keeps going. Well, he does buy tend to buy longer dated options, too. So, the theta decay is a little bit less impactful on those. But, yeah. True, but I mean 2027 January is soon. Now now now it's really really really soon.
But, this is the headline you saw basically just talking about this whole like feeling like the last few months of the '99 2000 bubble. That's what you're seeing there. So, this is the final results of our our poll here regarding Michael Burry and, you know, what the audience's thoughts are. I don't know if you want to, you know, chime in on what your your opinion is here, but yeah, I think this is kind of interesting.
So, Pretty pretty good stuff, but One, I think it's foolish to say he's not worth listening to. Yes, I a lot of people can have valuable information. And also it is rough. You can be right 20 times and then be wrong two times. People only remember the last wrong. That's just the world that we live in, right?
It's just it is what it is. Um I I do think he is not adapted to the current generation market where retail traders or investors make up a significant portion of the volume traded every day. That's new and it does change things. It threw off his last, you know, big sell tweet in like 4 years ago. So,
Yeah. I do think there's that. Buy the dip, bro. All right. Yeah, I mean, I'm kind of in this like it's worth listening to, but like is it anything that's going to really seriously impact my kind of chances around like what I'm doing portfolio-wise? No. No. I don't think so. Um so, this is like with the continuing of that that that article.
We're going to talk about a couple about a couple other points here that they made. Um so, most famous for the housing crash, you know, stocks are up because of consumers jobs or consumers stocks are not up or down because of the jobs or consumer sentiment, he wrote. Um feeling like the last 2 months of the bubble.
Compare the recent trajectory to the of the semiconductor with the stocks in 2000, March of 2000. Um yeah, the semiconductor index only it goes burr, okay? This is This is a monster move, okay? Uh yeah. Yeah. Uh yeah, this is this depends on your positioning whether this has been the best thing ever or it's been like utterly bloodily awful to watch.
I mean, when when a company like Intel that's been dead as long as they've been dead for all of a sudden starts ticking off and going up 50%. Yeah. I Yeah, to be fair to Intel's support, I trashed Intel for a long time. The new CEO does seem significantly better than the last four. So, there is that.
I'm going to that it might be solid. Eventually, you finally get the resume change that you been thinking but He seems like a smart dude. Yeah, what's what's the saying about you have to kiss a lot of frogs before you find the prince? That's how it is, man. I think they maybe they found it. Yeah. I'll say they want to stop me over.
So, this is the Michigan consumer sentiment index here. Yeah. Yeah. Um people are really really happy out there right now. Just like the happiest they've ever been, you know, it's it's amazing. Uh people are not happy. I'm being uh sarcastic for those of you that lack of sarcasm, either. Uh but that's that's kind of what we're looking at.
Okay. Yeah, that's pretty low. Yeah. That's not good. about, you know, what that can impact here, right? So, you know, this is this is a data point a lot of people realize. Um you know, consumer spending in the US is 68 70% of the the US economy. Um and uh when the consumer sentiment is poor, you know, that's kind of makes you worry about the largest sector of the US economy, which is what we're starting to get headlines a little bit.
Um so, this is this is like the the data point here that I wanted to highlight here. So, there's been a lot of concentration. While consumer spending overall is like that 70% number, 10% of households are like half of all consumer spending. Okay, that's rough. I didn't know that. Yeah, for for those of you that prefer visually inclined here, like this is consumer spending over time.
I can't remember what year this actually comes up to. This is from Moody's. Um but look at the rising tide here of the high earners in terms of their percent of consumer spending. And, you know, the lowest 20% of earners being like barely registered on this graph. They're basically flat. Um there's another one that shows you kind of like the spread here in this like K-shaped economy um to show you what that means a little bit here.
So, yeah, here's your K. Yeah. K's a stretch, but okay. Yeah, well, it's it's pretty wild, right? Yeah. Um so, you're looking at here the split between the top 20% and the bottom 80%, okay? In terms of spending here. And this is consumer sentiment where it comes to matter. Um so, the top 20% are now account for 59% of consumer spending.
The bottom 80% account for 41. This is that K-shaped economy that only accelerated even more so in terms of the spread after the pandemic. It's it's it's bananas, just like how different it is. That's why you're seeing consumer sentiment being horrendous, but somehow the economy is still chugging because of that that top 50% or 20% of of earners are counting for now 59% of consumer spending.
So, the households that have it are continuing to spend more, uh but there're becoming fewer and fewer of the households overall that are in that position. Okay. Yeah, that's not good. It's frowned upon. Yeah. This is what matters. Well, yeah, yeah, all right. Uh you're getting a little peek into it here from a couple of uh the fast food companies that reported this week.
So, um McDonald's basically saying that like they did well on their numbers, but they're they're starting to get a little bit worried about consumer uh you know, strength here. Um and that they're really trying to pivot more into the value. If you saw if you know, if you're you're a fat guy like me, uh you see a lot of companies bringing back like, you know, uh biggie bag deals and value-oriented things as far as these like fast food companies cuz that's what they're having to do to appeal to consumers cuz particularly, you know, that bottom 80% is really really hurting right now.
Right. These are actually decently solid, decently in quotes, solid um predictions of recessions. It's like it always went fast food companies are like, "Hey, we're seeing some issues." That's usually a problem. No, man. I mean I'm not saying it's it's perfect. I'm just saying like this is the balance, right?
Like on one hand you can have like a guy like Barry telling you that things are going to fall apart like tomorrow, but I'm also telling you like there is legitimate worry here. Um Yeah. So, it's it's he's not entirely off base, but he's just in another voice that's just kind of you know, in the in the ether of everything else that's going on here.
Um so, this is talking about uh how consumers are having to basically pivot towards buying more food at home uh because restaurant restaurant prices were up 3.8% um compared to food prices overall at 2.7% in March. Um and they're changing the way they spend money in rapid inflation economic concerns.
28% of Americans expect their financial situation to get worse in 2026. Not not great. Um and among those in that category, 66% intend to cut back in eating or drinking outside of the home to cope with that pressure. So, you know, this is going to be a an area where you're going to really see the battle for those consumer dollars in that bottom 80% rung in particular.
Um So, consumer shift toward meals at home processor sword. This is basically reiterating the same thing here. Um Steeply in March according to Deloitte, while spending levels picked up a bit in April, they're below January's levels. This is because of the the spike in gas prices. I don't know about you, but like I feel that.
I went fill up my car the other day. It was $85. Not that long ago it would have been like 50 bucks. Bro, yeah, I'm at 4.99 a gallon here. Wow. Yeah, uh we're just over like 420, 425 in my area. I'm relatively coastal compared to you, so but uh we typically are a little bit lower. Dude, it's ridiculous.
Yeah. Yeah, it's nothing hurting. Um so, McDonald's restaurant chain, um strong and unexpected first quarter earnings, uh sales rose 3.8% annual basis. Uh comparable store sales 3.9. So, they they actually did relatively well. Um but they did say that this becoming a challenging business environment.
Um and you know, like consumer sentiment and spending are certainly not improving and may get a little bit worse. So, um that's that's that's their comments on the consumer health. Um another company, this is actually interesting. I got to do like a deeper dive here because Yeah. this this entertaining.
Like, this is Domino's. Yeah. Look at what the stock price has done. Yeah. Now, granted, if you go back 5 years, I mean, this stock has rocketed. It's done incredible, but yeah. Okay. Yeah, we we did that one video comparing Google stock Domino's and Domino's actually outperformed Google over like the they IPO'd the same day.
Yeah. Over over the course of like 20 years. We should add this to our list of deep dives. This is actually an interesting one cuz it was at it was at 500 about oh my gosh June 2025 we're at 323. Yeah. Yeah. Okay. The forward PE is like I think 15 or 16 right now. Yeah, let's add to the list. Yeah. Let's let's do some research man.
I got to look more at this yeah. And I'll write. All right. So their CEO when they reported earnings had even more negative things to say than the McDonald's CEO cuz their numbers came in weaker right which is definitely a sign of economic worries when you can't afford the 699 like you know pizza. I think it's one of the best deals in the market here right.
Domino's stock fell CEO thinks more chance of follow. They were one of the first of the fast food chains to report. Um they did have let me see here winter weather weak consumer sentiment hurt their quarterly sales. Stiffer competition they got a couple rivals coming after them. Um stock tanked 8% all right.
So this is same store sales rose just 0.9 lower than the 2.3% bump expected. So their same store sales came in at like a little under 1%. McDonald's was almost 4% okay. Just to show you how different it was from Domino's to McDonald's. It's kind of interesting. I'm not sure if they have like you know [clears throat] data on different consumer mix there but they drastically underperformed what some of their other fast food peers were able to put up right.
Um and even to the point where they actually lowered their full year guidance all right to low single digit growth down from the prior projection the US same store sales were both only increased 3%. So they're saying it's weak it's going to get you know stay weak and keep being weak throughout the rest of this year is is Domino's kind of take.
Okay. Yeah. Yeah definitely a problem. They do say it's not just the consumer spending at all it's obviously like a little bit of infighting amongst the major pizza chains. Papa John's coming after them and Pizza Hut but both of those are in less than ideal places as far as like the chains being potentially sold off.
Um And also uh Domino's themselves have, you know, larger uh budget advertising budget than two competitors combined, which is kind of interesting. I'm not sure how much the return on spend they're getting out of that. Like if it's really effective ads or if it's just more of them. I've literally never seen a Domino's ad.
Ever. Interesting. I've I don't know I don't Yeah, that's crazy to me. I don't I don't eat I don't ever eat at these fast food pizzas. I do like I always do like local pizzas, so I don't Yeah. Well, the problem with uh here is all my local pizza places are like that Greek style, which is okay, but it it's not not my favorite.
Uh on occasion, you just need Domino's. It's actually the Pizza Hut near me went out of business. Papa John's near me went out of business. So, unfortunately, like if I'm going to get chain pizza, it's going to be Domino's. Okay. Gino's is a local one we have up here in the Northeast, which is pretty good.
Okay. All right, fair enough. Yeah. But yeah, I don't know, man. Yeah, what what are your thoughts on like this kind of consumer spending shift in that K-shape? I mean, that's that's like a very dramatic image there that uh the split between the different like segments of households. It's pretty crazy.
I the situation in Iran is so tenuous. There was just a tweet this morning that looks like we might go I mean, it's it's really all dependent on tweets and not hard data, in my opinion. I don't agree with that, logically, but I would have to look at the performance of the last year and all the things happening and just kind of realize hard data doesn't matter as much as a single tweet now.
So, if we're having hard data that's saying, "Hey, this is actually a little bit of a rough spot. We're not doing well." And also tweets that "Hey, we're going to do something that's hurt the economy." then yes, I think you have fuel in the fire, you're ready to go. But I think if there's a tweet that says the economy's great, don't look at it.
Uh They'll be fine. I think it'll just push the crash later. But, The tweet would probably be something about like uh McDonald's is more American than Domino's Pizza. Something. your attention to this matter. Yeah, in which case I will be buying Domino's cuz they would they would go down like 50% on the one tweet.
So, that would be solid. Yeah. All right, let us know what you guys think. Um I I I everything I've been reading is saying that this summer is supposed to be rough, but I that you know, I fell into the negativity cycle of reading this stuff and it cost me a lot of money on that AMD trade. So, I I I have to not look at news and just kind of look at stuff, but let us know what you guys think.
Well, yeah, especially let me know what you think about Domino's Pizza cuz that's starting to get a little bit juicy to me. We're doing a deep dive on that, for sure. Yes, sir.
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