Speaker 1: An illegal alien from Guatemala charged with raping a child
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Speaker 3: Let's talk about the market and where the money is
Speaker 3: moving this year. Last year we saw the Nastak take
Speaker 3: a hit thirty three down thirty three percent for the year.
Speaker 3: A lot of the companies we talk about in Love
Speaker 3: come from the nastag obviously is full of tech companies.
Speaker 3: So let's talk about where the money is moving. We've
Speaker 3: seen companies like in Vidio have a great start to
Speaker 3: twenty twenty three. We've seen Microsoft have a pretty good start. Apple,
Speaker 3: same thing. Where's the money going this year?
Speaker 2: Right now?
Speaker 4: Yeah, it's so strange. There's this barbell thing going on.
Speaker 4: It's a little offense defense going on right now. First
Speaker 4: of all, a half a trillion dollars in the money
Speaker 4: market funds in just the past several months. I think
Speaker 4: one hundred billion of that, guys, was last week in
Speaker 4: the middle of the bank freak out. Guess what people
Speaker 4: were doing. I'm taking money out. I'm putting it in
Speaker 4: money market funds. I'm taking money out of the stock
Speaker 4: market if I still had it there, I'm going money
Speaker 4: market funds. Four percent on the money market fund is beautiful.
Speaker 4: Boring is beautiful right now. So that's where a lot
Speaker 4: of defensive money is gone. CDs, money market funds, government bonds.
Speaker 4: You see the yields on bonds moving around a lot.
Speaker 4: That's a lot of people running for safety. Gold actual
Speaker 4: gold gold, gold, gold box that's up like six seven
Speaker 4: or eight percent so far this year. That's a typical
Speaker 4: flight to safety trade that a lot of people do.
Speaker 4: They're freaked out about the stock market, they go to gold,
Speaker 4: they go to bonds, they go to cash. But also
Speaker 4: we mentioned bitcoin. Now, I don't believe that's a lot
Speaker 4: of retail investors, although I buy it every few weeks,
Speaker 4: just a little bit fifty bucks, fifty bucks. We're not
Speaker 4: moving the market on bitcoin. That's big whale money moving
Speaker 4: the money on bitcoin. But where's why is the Nasdaq
Speaker 4: one hundred right? This is the one hundred biggest stocks
Speaker 4: in the Nasdaq. The ticker for that for the UTFS
Speaker 4: is QQQ. Why is that up so much this year?
Speaker 4: I think that's up something like fifteen to sixteen percent, right,
Speaker 4: qqq's up sixteen percent quarter. That is driven by the
Speaker 4: biggest stocks with the biggest market caps on the Nasdaq.
Speaker 2: And what are those?
Speaker 4: Apple and Microsoft the two most widely held stocks on
Speaker 4: the planet, right, and those have become the safety trade
Speaker 4: for a lot of investors, don't you think, Ian A
Speaker 4: lot of people are like, I'm freaking out everything. Let
Speaker 4: me go with these two guys that I know really well,
Speaker 4: because they're really big really well a ton of cash?
Speaker 5: Yeah, I agree thousand percent. Have you heard about Bloggis
Speaker 5: insight on bigcoint and going to a million bucks? What
Speaker 5: do you think about that? And also, if I wanted
Speaker 5: to research creditor false swaps, where could I actually track
Speaker 5: that stat to see if the it's going up or
Speaker 5: going down on the site?
Speaker 2: Right? Great question.
Speaker 4: So there are some research shops and newsletters that track
Speaker 4: credit default swops every single day. But you can check
Speaker 4: on some banks that offer credit default swaps. You can
Speaker 4: look at the pricing and you could put in the
Speaker 4: ticker just like you would for a stock, and you
Speaker 4: can look at the price for what it would cost
Speaker 4: to buy a credit default swop. Individual investors can buy,
Speaker 4: and you need to be a little bit more accredited.
Speaker 4: You need to have a lot of money to actually
Speaker 4: do something, and you actually need to have a lot
Speaker 4: of money to make a lot of money. So this
Speaker 4: is not for retail investors to play with. I would
Speaker 4: say I would recommend, but you can track, just buy
Speaker 4: ticker what the credit default swap price is right now
Speaker 4: now and when it expires, because like insurance contracts, these
Speaker 4: have a term to them, so like an option too, Right,
Speaker 4: it's a derivative, it's an option. There's a term to
Speaker 4: that insurance deal. So you've got to look at the pricing,
Speaker 4: and you got to look at the data of expiration,
Speaker 4: and you could see where the vulnerability is.
Speaker 2: Just Deutsche Bank. I mentioned that last week.
Speaker 4: It's like the fourteenth biggest or no. Twenty first big
Speaker 4: bank in the world. It's a huge bank. It's got
Speaker 4: a million and trillion and a half dollars and it
Speaker 4: is Germany's biggest bank, and that's one of the biggest
Speaker 4: manufacturing economies in the world. That bank is fine, but
Speaker 4: the credit default swaps went up like thirty percent last
Speaker 4: week because people got worried about it because of credit
Speaker 4: squeeze and because of the fact that if we go
Speaker 4: into some global recession, Germany is going to feel it's
Speaker 4: a it's a really big manufacturing economy.
Speaker 6: So somebody put in a chat, what is the fall
Speaker 6: on case safe.
Speaker 4: Up to two hundred and fifty thousand dollars it is
Speaker 4: that's insured again. That is if you're a broker goes down,
Speaker 4: if your broker gets taken over or goes into.
Speaker 2: Receivership with the s I p C. Right, but not
Speaker 2: if you make a bad decision within your four one
Speaker 2: K that's your problem.
Speaker 4: But your money that you have in there right now
Speaker 4: is in shured up to two hudred and fifty thousand
Speaker 4: dollars should your broker fail.
Speaker 6: Is there a historical precedent set for a brokerage account
Speaker 6: a brokerage going out of business and people losing money
Speaker 6: like that? Has that ever happened?
Speaker 2: Yeah? You heard about Celsius. Have you heard about FTX? Well,
Speaker 2: I mean like.
Speaker 4: Like a real broker, no real broker, like a chop
Speaker 4: shop shops all day long, chop shops out on Long
Speaker 4: Island all day long, like.
Speaker 2: The Wolf of Wall Street. Yeah, Wolf of Wall Street
Speaker 2: type chop chops, but not a not like squab that
Speaker 2: they usually get acquired. They usually don't write people want
Speaker 2: those accounts.
Speaker 4: And a bear Stearns is different, right, That was a
Speaker 4: you know, global bank that was having super liquidity problems
Speaker 4: and a huge run on the stock and the Fed
Speaker 4: did not let it go under.
Speaker 2: They were a broker too, but they're really an investment bank.
Speaker 4: So nobody, nobody of that scale. Oh, chop shops go
Speaker 4: out of business every single day.
Speaker 3: God, you brought up gold and so it makes me, wonder,
Speaker 3: are there other commodities that we should keep our eye on?
Speaker 3: In twenty twenty three?
Speaker 2: Are are the ones that we should keep on our watchless? Absolutely? Chocolate, guys.
Speaker 4: I was looking at stocks at fifty two week highs
Speaker 4: just before we got on because I like to see,
Speaker 4: as Ian knows, trends in motion. Sometimes stay in motion
Speaker 4: until something breaks. There are two chocolate companies.
Speaker 2: That are at all time highs fifty two week highs, Hershey,
Speaker 2: and what's the other Monoliuese? Maybe that makes chocolate as well.
Speaker 2: I was blown away by that. So chocolate.
Speaker 4: Keep an eye on that. Keep an eye on sugar,
Speaker 4: Keep an eye on copper. Everybody makes a big deal
Speaker 4: about gold because it's the shiny object in the room.
Speaker 2: We call copper doctor copper erners. What's up?
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Speaker 4: For for a reason, copper is a great leading indicator
Speaker 4: of where the economy is going and often where the
Speaker 4: market will follow, because we use copper in all kinds
Speaker 4: of things, right We use have been phones we's been manufacturing,
Speaker 4: use them in our dental equipment. We use copper all
Speaker 4: the time. So that's a great leading indicator to watch.
Speaker 4: And I would keep an eye on lumber prices as well.
Speaker 4: You guys, remember we were talking back in twenty twenty
Speaker 4: one or twenty twenty under prices were.
Speaker 2: Sky high and then they crashed.
Speaker 4: Watch lumber prices to see if we're going to get
Speaker 4: some sort of a rebound in the housing life.
Speaker 5: That hershon's at ninety three dollars and twenty eighteen it's
Speaker 5: aid two fifty ninety.
Speaker 2: Right now, go figure. I don't even know.
Speaker 3: No, I was saying, Lemon prices are great for people
Speaker 3: who you know in construction or building.
Speaker 2: Go they they know the price of a board right now.
Speaker 4: They can tell you right now to the penny.
Speaker 5: If I'm watching the show that I'm terrified, I'm seeing
Speaker 5: all the bank of news, I'm seeing FTX blow up
Speaker 5: and seeing SCV blow up. What three pieces of advice
Speaker 5: which you give to someone who's watching that wants to
Speaker 5: invest but it feels like it's the most terrifying time
Speaker 5: to do.
Speaker 2: So that's a great question. And I get scared.
Speaker 4: I've been in this a long time, and I get
Speaker 4: scared sometimes too. So I have a couple of rules,
Speaker 4: and I think I've heard in say this too. What's
Speaker 4: your threshold? What's your threshold for losses?
Speaker 2: For me? That threshold and.
Speaker 4: I'm fifty two, right, I've got about thirty four and
Speaker 4: hopefully thirty years of investing left in front of me,
Speaker 4: and that's a long time. My threshold probably for losses
Speaker 4: is around fifty percent until I'm just like, I can't.
Speaker 4: So I you know what my pain point is, right?
Speaker 4: What can I recover from? What do I have the
Speaker 4: time to recover from? So you got to determine that right.
Speaker 4: Then realize that these things happen a lot, right, These
Speaker 4: cycles happen. They may feel like they're happening a lot
Speaker 4: quicker these days, time is compressed. Social media is giving
Speaker 4: us the echo chamber. It feels like it's all coming
Speaker 4: at us at once. Last week felt like six months.
Speaker 4: You know, I was talking about this NonStop. So if
Speaker 4: these things happen, and they're happening faster, but eventually they resolve.
Speaker 2: We go through cycles.
Speaker 4: This is a pure product of massive inflation coming out
Speaker 4: of the pandemic, a huge rise in interest rates to
Speaker 4: tamp down inflation, and all the broken pieces that we're
Speaker 4: going to discover, or as Warren Buffett likes to say,
Speaker 4: when the tide goes out, we're going to see who's
Speaker 4: swim and naked. There's a lot of bank swimming naked.
Speaker 4: There's a lot of tech companies swim and naked right now.
Speaker 4: Right there's a lot of companies that binged on cheap money.
Speaker 4: Right But this cycle is going to end at some point,
Speaker 4: and you can actually see it in the FEDS dot
Speaker 4: lot and in their summary of Economic projections. Road's going
Speaker 4: to slow this year a lot, it's going to pick
Speaker 4: up a little next years, are going to come down
Speaker 4: to around three percent by the year twenty twenty five.
Speaker 4: That is a much more normalized oper environment for investing.
Speaker 4: And by the way, while we're all worried about a
Speaker 4: bear market, we're not in one anymore. And the Nasdaq
Speaker 4: gets on its way to a bull market, so there's
Speaker 4: always a place to invest.
Speaker 2: Cycles happen.
Speaker 4: You got to stay with it and you got a
Speaker 4: dollar cost average because if you were smart and I
Speaker 4: heard you in saying this, I heard you guys saying
Speaker 4: in the last couple of shows, you've been dollar cost
Speaker 4: averaging into your favorite stocks for the past eight to
Speaker 4: ten months. You're smart, and you've been getting great deals,
Speaker 4: and your average price is low, and you're probably sitting
Speaker 4: on games right now.
Speaker 2: So that's what I would say.
Speaker 4: These things pass and then we resume, we normalize, and
Speaker 4: then something else happens. But long term investors, right the tortoises,
Speaker 4: they're the ones that usually win the race.
Speaker 6: You said a Nastac is headed towards a bull market. Yeah, well,
Speaker 6: elaborate on that as far as the long term. So
Speaker 6: it's high was fourteen, six hundred and forty six. It's
Speaker 6: currently at eleven thousand, seven hundred and sixty eight backhand math,
Speaker 6: that's probably still thirty percent off of his peak.
Speaker 2: Right, But you want to look at where it is
Speaker 2: off of it's low.
Speaker 6: No, No, I'm just saying so, So what I'm saying is that,
Speaker 6: what's the outlook for it? What's the outlook for the
Speaker 6: nasdack next year and a half?
Speaker 4: Well, Because the Nasdaq is a market weighted index, right,
Speaker 4: market cap weighted index. In other words, it's moved by
Speaker 4: the size of the biggest stocks in the index. It's
Speaker 4: going to move wherever Microsoft and Apple and a Nvidia
Speaker 4: want to take it. Right, So as investors are thinking
Speaker 4: the Fed's going to eventually pause, that's.
Speaker 2: One of the reasons we've seen this rally. One.
Speaker 4: Apple and Microsoft feel like safe stocks. They pay dividends,
Speaker 4: they're massive, they have a lot of cash. But also
Speaker 4: as interest rates cool start to cool a little bit,
Speaker 4: maybe after May, after June, they're going to either stay
Speaker 4: kind of at these levels or they're going to come down.
Speaker 4: Over the next two years, these tech companies are going
Speaker 4: to benefit. So the Nasdaq's going to do well because
Speaker 4: it's market weighted and the biggest stocks drag it around.
Speaker 4: And as long as investors are piling into the safety
Speaker 4: of big tech stocks right now like they are, the
Speaker 4: nazak's going to keep rising. Now we get another shock
Speaker 4: to the system that could change everything. But right now
Speaker 4: you're seeing this bifurcation right of what was hot is
Speaker 4: no longer hot, but also the twenty twenty stocks, those
Speaker 4: are long gone, but the leadership is back in the big,
Speaker 4: the big strong tech stocks, so that NAZAC should continue
Speaker 4: to do pretty well. It's already separated from the SMP
Speaker 4: five hundred aut I don't know sixteen percent or so,
Speaker 4: so that I would I would probably think that that's
Speaker 4: going to continue unless we get another shock in the
Speaker 4: FED goes for raisin rates a full percentage point, which
Speaker 4: they won't do because that'll break everything. So I like
Speaker 4: the trend of the NAZAK right now, and I buy
Speaker 4: the qqq ETF and I buy it all the time, up, down,
Speaker 4: all time highs, you know, fifty two weeks low. I
Speaker 4: keep buying it because I believe in that, like you guys,
Speaker 4: growth long term.
Speaker 6: My graduates from my school being forced bad drops rop
Speaker 6: rock back drop, back drop,