Speaker 1: Hey, everyone, welcome to another episode of the Market Disruptors Show. Today,
Speaker 1: I am sitting down with someone I'm super excited to
Speaker 1: talk to. We are sitting down with David Hunter. He
Speaker 1: is a or i should say, the contrarian macro strategist
Speaker 1: forty years on forty years plus on Wall Street. UH.
Speaker 1: He's really been known for making really bold and accurate predictions,
Speaker 1: and that's one reason why I'm excited to talk to
Speaker 1: him today. Um. But anyway, David, thank you so much
Speaker 1: for joining us. Yeah, thanks Mark, thanks for having me on. Yeah. So, um,
Speaker 1: I've been following you. I've been following a lot of
Speaker 1: your commentary, interacting with you a little bit, um, and
Speaker 1: that's why I'm excited to talk to you today. But
Speaker 1: for those that don't know who you are, they're not
Speaker 1: kind of familiar. Why do you just give us a
Speaker 1: little bit of that that background, that forty years on
Speaker 1: Wall Street and kind of what you're doing now? Okay sure, um, yeah,
Speaker 1: But my career is kind of split in half. I
Speaker 1: spent the first half of my career UM on the
Speaker 1: buy side. UH started in banks and then moved to
Speaker 1: UH tech Strong, where I ran their equity pension funds.
Speaker 1: UM had top percentile numbers there for five years running
Speaker 1: back in the early the mid eighties. UM got recruited
Speaker 1: out of there and went to Fidelity, not on the
Speaker 1: mutual fund side, but on the pension side and ran
Speaker 1: US money within global portfolios for a lot of foreign
Speaker 1: accounts for them Rolls Royce and a lot of UK
Speaker 1: accounts and UH some Australian and Japanese accounts. So UM
Speaker 1: spent a few years there and then was recruited by
Speaker 1: UM I T. T. Hartford to come in and and
Speaker 1: begin an active equity effort. They had gotten out of
Speaker 1: equities several years before and realized that they needed to
Speaker 1: get back in. So I was brought in there to
Speaker 1: kind of rebuild an equity department. UH and did that
Speaker 1: for a few years UM and that was in the
Speaker 1: late eighties to early nineties UM and then was a
Speaker 1: chief investment officer on of a billion dollars firm on
Speaker 1: Medicine Avenue, New York back in the mid nineties. UH.
Speaker 1: Second half of my career was really as a sell
Speaker 1: side strategist and that's still what I do today. Okay, great,
Speaker 1: so lots of experience, lots of big, big experience, pension
Speaker 1: pension fund institutional type experience. I love that. Now, Um,
Speaker 1: as I kind of said, as I kind of introduced
Speaker 1: you as the contrarian, I think, uh, a lot of
Speaker 1: people who are kind of paying attention, they kind of
Speaker 1: you know, they understand the old bye when there's blood
Speaker 1: in the streets and whatnot. It's a lot harder to
Speaker 1: do in theory than it is than just to recite
Speaker 1: some cliche or some some quote. But um, you really
Speaker 1: seem to be the contrarian. Um, and and you seem
Speaker 1: to hold that against whatever the mainstream is is telling us.
Speaker 1: Give me a reason why that is or how you
Speaker 1: look at the market like that. Sure, Um, yeah, there's
Speaker 1: I mean, it's it's popular today. Everybody loves to claim
Speaker 1: their contrarian But as you say, um, you know, for
Speaker 1: most people, uh, they aren't really committed to a contrary
Speaker 1: and strategy. If it goes against them, they quickly shift gears. Um.
Speaker 1: I started this business in seventy three, and you know,
Speaker 1: I think probably within the first couple of years really
Speaker 1: start seeing how um, you know, a crowd can be
Speaker 1: very wrong. Obviously in Theft fifty was kind of the
Speaker 1: extreme of crowds. Back in the nine event four. So
Speaker 1: I learned very early on my career, um that uh,
Speaker 1: you know, being contrary could pay dividends. Um. I read
Speaker 1: David Dreaman's book at that time that was um countrary investment. Uh.
Speaker 1: I can't remember the psychologist market, I think of what
Speaker 1: it was. He did many reiterations after that that changed
Speaker 1: the naime to countrary investment strategies and things like that.
Speaker 1: But um, he was kind of a well known contrarian
Speaker 1: and and his book was great. It really taught me
Speaker 1: how important psychology was to the stock market. And I
Speaker 1: was already there, but this kind of reinforced it. Uh,
Speaker 1: great read. People should go on Amazon. He's passed away
Speaker 1: by these his books are still out there. Uh. When
Speaker 1: people ask me what what books did you read? I
Speaker 1: go a lot. I'll see if they etcetera. So you
Speaker 1: know a lot of readings over the years. Um, but
Speaker 1: I usually either feature his book or a book by
Speaker 1: Charles Ellis called um uh what is it called The
Speaker 1: Loser's Game and talks about how the market is a
Speaker 1: loser's game for most people. And it's again another contrarian
Speaker 1: type approach to things. So so those kind of um
Speaker 1: set me up uh, and we're at big influences early
Speaker 1: in my career. UM. And I think by nature I'm
Speaker 1: one of those that doesn't have to be with the crowd.
Speaker 1: I've observed over my forty seven years on Wall Street
Speaker 1: that the vast majority of people really don't like being
Speaker 1: away from the crowd. They can try, but but it's
Speaker 1: hard when things really go against you, uh to stick
Speaker 1: with that. And as I say, I'm not a nat
Speaker 1: Jurek countrarian, there are times when I think it pays
Speaker 1: to be with the consensus, kind of in that middle
Speaker 1: meat part of the move. A lot of times I
Speaker 1: sound just like everybody else, but it's at the extremes,
Speaker 1: both the bullish extreme and the barrish extreme, where um,
Speaker 1: you know, if you're with the crowd, you're you're gonna
Speaker 1: get slaughtered at some point. Yeah, definitely now for everybody listening. UM.
Speaker 1: As I said in the intro, um, David is not
Speaker 1: shy about putting out kind of what he sees, kind
Speaker 1: of what he predicts, even giving levels um and so UM.
Speaker 1: At the end, I definitely want to have him go
Speaker 1: over what these levels are for the SMP index, is gold, etcetera.
Speaker 1: Gonna go over those numbers, but before we get so
Speaker 1: make sure you stick around to the end because that's
Speaker 1: what we're gonna get to you. But I want to
Speaker 1: kind of dig into what your thought processes so we
Speaker 1: can learn how you're looking at the market and maybe
Speaker 1: what we can take from that. So I'm just curious. Um,
Speaker 1: you know the difference of being the contrarian um or
Speaker 1: investing with the trend. Right, so people are told, you know,
Speaker 1: don't catch a falling knife, wait til a trend gets developed,
Speaker 1: things like that. So is it different like trend investing
Speaker 1: versus contrarian investing? Oh for sure. I am very much
Speaker 1: kind of a hybrid um. And I don't you know,
Speaker 1: there's nobody out there probably that doesn't like I do,
Speaker 1: or quite like I do. I've just developed over the
Speaker 1: years of style. Um And as I tell people, because
Speaker 1: people on Twitter, as you see, will say, how you know,
Speaker 1: I want to learn from you. I want to learn
Speaker 1: how do you do it? I go, there's no real
Speaker 1: methodology to what do I do? So I'm gont those feels.
Speaker 1: Some of it is, as I say, kind of my
Speaker 1: shorthand as I look at fundamentals, I look at technicals. Um,
Speaker 1: I do macro analysis and rely a lot on forty
Speaker 1: seven years of macro background. Um, and look at sentiment, uh,
Speaker 1: and then put it all together and you know, come
Speaker 1: up with my conclusions and um. There are times when
Speaker 1: I'm out of favor, and you know I was, you know,
Speaker 1: I was bullish on gold. Um, you know, three or
Speaker 1: four or five years ago because we had come down
Speaker 1: from twenty eleven and I thought, you know, in seen,
Speaker 1: you were beginning to start the next leg. Well, it's
Speaker 1: had a nice run sixteen, and then it spent the
Speaker 1: next few years consolidating that run. So I, you know,
Speaker 1: there are times when I'm out of favor and out
Speaker 1: of favor for a while, and you know you hear it.
Speaker 1: But but generally I try not to get stuck in. Ah.
Speaker 1: I was a value manager as a money manager, and
Speaker 1: I learned the hard way over time. You know, buying
Speaker 1: deep value and saying well, you know it will pay
Speaker 1: off eventually eventually can can really hurt a career. So yeah,
Speaker 1: so I try hard to look at trends and um,
Speaker 1: not get stuck in just because of it's cheap, it
Speaker 1: it looks good. Yeah. You know they say that being
Speaker 1: early is the same as being wrong in a lot
Speaker 1: of cases, right right, Yeah, it's kind of a cliche,
Speaker 1: and there are time when I, certainly, as a contrary,
Speaker 1: will argue against that. I mean, I'm not somebody really
Speaker 1: worries about market timing per se. But obviously the closure
Speaker 1: you can get the turning points, um, the better and
Speaker 1: the more you're you're going to be seen as as accurate.
Speaker 1: So yeah, now you've you you're you're definitely a macro guy.
Speaker 1: You look at the big picture, um, as you've already said,
Speaker 1: trends and fundamentals and things like that. So do you
Speaker 1: I'm guessing you do. But do you look at like
Speaker 1: do you think that the big picture, the macro picture.
Speaker 1: I guess the long term picture is a lot easier
Speaker 1: and a lot more accurate than the short term picture. Yeah,
Speaker 1: that's a good question because so many people think the
Speaker 1: shorter the time frame, the closer you can be to
Speaker 1: being accurate. And all my career because I was a
Speaker 1: value manager, uh and through them all my macro as
Speaker 1: a bye side and cell side person. Um, I find
Speaker 1: you stretch it out and I can be pretty accurate.
Speaker 1: You know, it doesn't mean I'm going to be accurate
Speaker 1: timing wise, but I can give you, you know, and
Speaker 1: I get I get pushed back, or I get people
Speaker 1: kind of jumping wanting to jump over one cycle to
Speaker 1: the next, and I'm you know, I've created the monster
Speaker 1: because I'll talk about things that might be out seven
Speaker 1: or eight years and I have to kind of bring
Speaker 1: them back in and say, let's get through this cycle.
Speaker 1: People were worry about the next one. But but yeah,
Speaker 1: I think longer term is is it's an easier call
Speaker 1: from a big perspective standpoint. Sure, So, um, a lot
Speaker 1: of people don't know what that means. What is short term,
Speaker 1: what's medium term, what's long term? And I guess everybody
Speaker 1: probably has different definitions. So, um, running your funds, the
Speaker 1: pension funds, etcetera that you're in before and now probably
Speaker 1: your own investments, Um, what is your typical investment time
Speaker 1: frame or horizon that you're really looking at now? I mean,
Speaker 1: do you look at it as you're looking a couple
Speaker 1: of years? Yeah? I have my core portfolios tend to
Speaker 1: be somewhere between a year and five years. So depending
Speaker 1: on the situation, sometimes it will be shorter or will
Speaker 1: be on the short end of that one to five year.
Speaker 1: But I'm not afraid to tell people. You know, in
Speaker 1: certain cycles, buy it and you may be holding this
Speaker 1: thing for the next five seventy eight years. And that's
Speaker 1: kind of what I see coming in the next cycle.
Speaker 1: I have, as you know, one of the more bearished
Speaker 1: scenarios out there for one, but I probably think most bearished.
Speaker 1: But but I tell people the difference between me and
Speaker 1: the super bear, you know, the woman Doomers is I
Speaker 1: do believe there's a recovery cycle that follows this bust,
Speaker 1: and in that recovery cycle that will be the balance
Speaker 1: of the decade. Um. I think, Yeah, I don't want
Speaker 1: to get ahead of myself, but I think the medals
Speaker 1: will probably be what the dot com stocks were to
Speaker 1: the nineties. So, you know, getting in in two and
Speaker 1: holding ton or eight maybe maybe the way to go
Speaker 1: the trade of the decade maybe. Um. Yeah, So I
Speaker 1: definitely want to get into that. But like I said,
Speaker 1: we'll kind of get into that at the end. We'll
Speaker 1: make sure people stick around for that. But really when so,
Speaker 1: so you're looking at like one year, I mean, obviously
Speaker 1: now we're talking six eight months or whatever, but a year, um,
Speaker 1: But I like that. But so that gives me a
Speaker 1: good idea on the timeframe. But what type of indicators
Speaker 1: are you looking at? Um? What are the main things
Speaker 1: that you're watching. I mean you're a macro guy, so
Speaker 1: like FED policy, interest rates, I mean what are you
Speaker 1: looking at? Yeah, I think uh, FED policy certainly is
Speaker 1: a big one for me. Um, And again I do
Speaker 1: it a little differently than most. Um. Something that served
Speaker 1: me well over the many decades is I am more
Speaker 1: of a money guy than an interest rate guy. I
Speaker 1: think the vast majority of the street thinks it's interest
Speaker 1: rates that drives the economy. And in you know, in
Speaker 1: a micro from a micro standpoint, that's true, lower rates,
Speaker 1: you know, encourages increases, lending, etcetera. But it's really from
Speaker 1: a from a FED standpoint, it's a quantity of money,
Speaker 1: not the price of money that I pay most attention to.
Speaker 1: And so um, you know that that certainly in March
Speaker 1: got me to be much more bullish than anybody else
Speaker 1: and saying, you know, I've been probably the most critical
Speaker 1: person of J Powell for the last year, but he's
Speaker 1: finally getting up to speed, and you know, since then
Speaker 1: has been so so quantity of money is a big
Speaker 1: one for me. Um. I you know, a big picture
Speaker 1: charts will What I always say is, you know, if
Speaker 1: the macro and the technicals and the fundamentals all jive,
Speaker 1: it's like the three legged stool. I feel, you know,
Speaker 1: I feel my convictions go and can go up. If
Speaker 1: I only have two of three of those, then my
Speaker 1: conviction is going to be a little less. And if
Speaker 1: I only have one of the three, I'm probably not
Speaker 1: gonna be there yet. And what were those three again? Um,
Speaker 1: typically fundamentals, which can be macro fundamentals, um, the technicals, um,
Speaker 1: and then um uh. FED policy now, Um, it's interesting
Speaker 1: the FED policy. You talk about the money? Quantity of money?
Speaker 1: Is that kind of like Stanley Druckon Miller. I think
Speaker 1: he talks about that quite a bit. Um, kind of
Speaker 1: like a little somewhat in line with his school of thought. Um, yeah,
Speaker 1: I don't follow stand that much, so I'm not sure.
Speaker 1: I think I was way ahead of him, way earlier
Speaker 1: than him, in terms of looking the money and how
Speaker 1: I read FED policy. I've been doing that since something three,
Speaker 1: So yeah, so I'm curious about that specifically because yeah,
Speaker 1: seventy three is a long time and uh, really that's
Speaker 1: that's seventy one s seventy three was really the change
Speaker 1: of the whole you know, money cycle, the whole world really, right,
Speaker 1: we got off the gold standard, and all of a
Speaker 1: sudden we've exploded with this uh, money creation, debt creation,
Speaker 1: whatever you want to call it. So since seventy three
Speaker 1: was really that turning point, and you've been in this
Speaker 1: since then, So I'm curious. I mean, I guess you've
Speaker 1: been using that this whole time. Um, have you really
Speaker 1: changed the way that you look at it because the
Speaker 1: FED has changed it drastically? Or what is? What? What? What?
Speaker 1: I look a lot of economic and market cycles which
Speaker 1: tend to go together. So um, so you know, basically
Speaker 1: you've had five cycles since since I came into the business.
Speaker 1: You know, the seventies were one, the eighties were another,
Speaker 1: more or less, um, the nineties another one, uh, the
Speaker 1: two thousand's and then the two thousand tens, and and
Speaker 1: in each one the FED helped kind of prime the
Speaker 1: pump and provide the liquidity that helped drive the cycle.
Speaker 1: And then things got overheated. The FED took the punch
Speaker 1: bowl away, and that was a signal where you were
Speaker 1: starting to pay attention to whether you know, the markets
Speaker 1: were topping out. UM. What's changed is obviously the degree
Speaker 1: to which the FED is involved and the magnitude of
Speaker 1: the change in the money supply. So UM. And I
Speaker 1: think that is because and one other thing I kind
Speaker 1: of overlay on my macro is that I believe UM
Speaker 1: supercycles exists that are basically I defined it as the
Speaker 1: period between one depression and the next nine thirties was
Speaker 1: last depression. I think we've been in a supercycle ever since. UM.
Speaker 1: And you know, as you go through the supercycle, everything
Speaker 1: kind of was two higher highs and and so debt
Speaker 1: particularly took off in the last three decades, but it
Speaker 1: was building before that, and now we're at the kind
Speaker 1: of the end of that game. I think there's one
Speaker 1: more leg beyond this one. UM. That's another thing where
Speaker 1: I different. Most people kind of think we're at the
Speaker 1: peak in debt. I said, no, you're probably gonna see
Speaker 1: where we're at twur and fifty trilling globally. Now, I
Speaker 1: wouldn't be surprised c. Three before the end of this decade.
Speaker 1: Most of that will come in response to the next
Speaker 1: year's bust, but they will probably expand beyond that. So UM.
Speaker 1: So it's you know, I just think we're you move
Speaker 1: in these cycles, whether supercycle or or the smaller cycles,
Speaker 1: you move from the bottom left to the top right,
Speaker 1: and as you get uh you know, closer to the
Speaker 1: top right, things go parabolic or certainly get steeper in
Speaker 1: the slope. Yeah. Um, Harry Dent talks a lot about cycles.
Speaker 1: He's somebody that we've had on the show. Um, and
Speaker 1: I'll follow it for a long time as well. I
Speaker 1: think he's calling it like a ninety year cycle that
Speaker 1: we're in right now. Um. Yeah, I'm not people want
Speaker 1: you know, they hear me talk cycles, and most of
Speaker 1: mine are really talking about the economic cycle and the
Speaker 1: market cycle that goes along with that. Uh, supercycles a
Speaker 1: little bit bigger stories than that. But I'm not in
Speaker 1: the time cycles. I'm not one of those guys that
Speaker 1: we're in your cycle or we're in the you know,
Speaker 1: the cycle is going to kick in over this cycle.
Speaker 1: I don't mean those kind of time cycles. Okay, good,
Speaker 1: thanks for clarifying that. Um, I was gonna just say, uh,
Speaker 1: he is you said that. Your your call, which we'll
Speaker 1: get into at the end of the drop, is maybe
Speaker 1: one of the most bearish and Harry Harry might also
Speaker 1: join you in that very very various camp. But, UM,
Speaker 1: I'm curious. So you're looking at the money supply, obviously,
Speaker 1: the FED policy things like that. Um, you said the fundamentals,
Speaker 1: So when you're talking about the fundamentals, are you talking
Speaker 1: about the economy, Because it seems like today, more than ever,
Speaker 1: especially obviously since the pandemic happened, the economy is completely
Speaker 1: irrelevant anymore at this point. Yeah, I would probably disagree
Speaker 1: with that in that very much disagree, But but I
Speaker 1: get the confusion right now. Well, I'm asking a question. Yeah, yeah, okay, sure, Um, well,
Speaker 1: I certainly disagree with the concept the I think I
Speaker 1: understand the confusion of people looking and you know, the
Speaker 1: market seems totally separated from what's going on on the ground.
Speaker 1: You know, the economy is really in trouble, and and
Speaker 1: yet we're at all time highs in the stock market.
Speaker 1: Part of that is, and again this is kind of
Speaker 1: my looking at at cycles, but there's a six to
Speaker 1: nine month lag to when the Fed um puts the
Speaker 1: money in the system to when you get your results.
Speaker 1: I think the street over and over and over cycle
Speaker 1: to cycle. You know, the generations of investors since I
Speaker 1: joined expects that to be almost media and it's partly
Speaker 1: because of their focus on interest rates. They think, okay,
Speaker 1: they lowered rates, they cut rates. Therefore, in the next
Speaker 1: quarter we're going to see the results. Most of the
Speaker 1: results are six and nine months out, so you know,
Speaker 1: we we saw the big infusion of money in March
Speaker 1: and April and June. Um, I think most of the
Speaker 1: expansion is really six months from them. So you're talking
Speaker 1: about we're just entering that period where the market, where
Speaker 1: the economy gets start getting stronger. So I mean, it's
Speaker 1: not all that so it is fairly immediate, but there's
Speaker 1: an other things, other factors like we shut down the economy,
Speaker 1: that we opened up the economy, so so there are
Speaker 1: other factors that can shorten some of that. But I
Speaker 1: do think people don't understand that part of what the
Speaker 1: market is doing is looking past the trought and understanding
Speaker 1: that all this money that's being created, which is beyond
Speaker 1: anything we've ever seen in history, is going to lead
Speaker 1: to stronger expect stronger results that we expect. Yeah, so, um,
Speaker 1: it does seem that they're looking at the money side
Speaker 1: more because on the economy side, you know, I don't
Speaker 1: actually know what the latest numbers are. I haven't looked,
Speaker 1: but whatever, tens of millions of people are still unemployed. Uh.
Speaker 1: You know, some reports say of those jobs might never
Speaker 1: come back. Obviously with the stimulus programs that we have,
Speaker 1: a lot of people may choose to never come back
Speaker 1: because because of the stimulus and whatnot. Um. And so
Speaker 1: you know, from an economy standpoint, I mean my stores
Speaker 1: in my area are still operating at capacity, right, so, uh,
Speaker 1: travel is never coming back or whatever, so uh the
Speaker 1: account and and then then we have obviously the real
Speaker 1: estate thing with the pent up foreclosures forbearances, etcetera. So
Speaker 1: I don't know just from the economy standpoint. Um, yeah,
Speaker 1: it is very difficult to get back to that or
Speaker 1: why I were at that all time high. I get
Speaker 1: what you're saying. Where it's like the market's like a
Speaker 1: discounting mechanism, so it's it's basically projecting where we'll be
Speaker 1: in the future. The marketing economy work on different time frames, right, Um,
Speaker 1: But it seems like everybody's really looking at the FED
Speaker 1: is going to backstop the market, right the FED has
Speaker 1: committed to do whatever infinity uh by bonds, probably buying
Speaker 1: equities et cetera. And it seems so do you give
Speaker 1: more weight to that now, like you kind of understand
Speaker 1: this balance or you still think the economy is doing
Speaker 1: good or going to do good in the future that
Speaker 1: you know, the broad picture that I painted about, you know,
Speaker 1: when the money gets infused and when it results, that's
Speaker 1: you know, the world isn't perfect and that's not how
Speaker 1: it always works exactly. And then you add in the
Speaker 1: complications time of we actually shut down the economy and
Speaker 1: we are impacting a lot of small businesses and as
Speaker 1: you say, you know a lot of restaurants, a lot
Speaker 1: of um, consumer oriented businesses may not make it and
Speaker 1: are still shut down. So so you've got to kind
Speaker 1: of balance what is going on in the real world
Speaker 1: with what normally happened with you know, FED policy versus
Speaker 1: when it kicks in. UM. And I think so they
Speaker 1: kind of, um, you know, influence each other or overlay
Speaker 1: with each other. Um. What I would say is that's why, um,
Speaker 1: it's it's a difficult thing. I talked about a global
Speaker 1: deflationary bust in and people start questioning me on the
Speaker 1: bus or refer to my call of the bust, and
Speaker 1: I'll go, um, yeah, but we really the bus started
Speaker 1: in March. Um, so it's yes, we're gonna have a
Speaker 1: rebound in between, but it's all one bust. It's not
Speaker 1: two bus. It's not like we have a bust in
Speaker 1: you know, the second quarter, and then we're you know,
Speaker 1: we're gonna have this short recovery and then we're gonna
Speaker 1: have another bus. I said, it's all one bust because
Speaker 1: a lot of the things leading to that bust are
Speaker 1: those shutting businesses aren't going to come back right now.
Speaker 1: Are are the fact that airline traffic is not going
Speaker 1: to be there. Even even if the economy gets stronger
Speaker 1: in the next few months, you're not getting anywhere near
Speaker 1: back to what is a normal I his period. So
Speaker 1: so it is you know, there are kind of various
Speaker 1: forces in this that aren't all in sync. Yeah, yeah,
Speaker 1: you know, I know kind of what you were saying.
Speaker 1: People ask you what books you read, and you're like, well,
Speaker 1: I've read a lot of books. But really a lot
Speaker 1: of this is just doing it over a long period
Speaker 1: of time. And the brain is so amazing, right, it
Speaker 1: gets so much information and it just starts putting pictures
Speaker 1: together for you. So, uh, there's a lot of information
Speaker 1: to digest and and you've been doing a long time,
Speaker 1: and so it just paint paints a perfect picture in here.
Speaker 1: Well that's exactly right. People think they can if I
Speaker 1: give them the few books that were the big influencers,
Speaker 1: that they'll be able to do what I do. And
Speaker 1: I go, I'm not saying this from an ego standpoint,
Speaker 1: but you know, fourty seven years of cumulative knowledge isn't
Speaker 1: something you find in a book. And I you know,
Speaker 1: there's certainly people that entered the business when I did
Speaker 1: that weren't successful or you know, don't have the same
Speaker 1: views I have, uh, successful or otherwise. Um, it's everybody different.
Speaker 1: And I one the one thing I tell people is,
Speaker 1: you know, younger people that say, well, how did you
Speaker 1: get to where you're at? Or you know your knowledge
Speaker 1: base and stuff? I said, well, one big thing it's
Speaker 1: important is learned from your mistakes. We all made will
Speaker 1: make mistakes in this business. It's a humbling business. And
Speaker 1: the difference between good investors and bad is the bad
Speaker 1: investors will repeat those mistakes cycle to cycle, or you know,
Speaker 1: over and over, whereas good investors make that mistake once
Speaker 1: and say fool me. Once you're not can fool me again. Yeah.
Speaker 1: My dad always told me when I was a kid
Speaker 1: growing up, He said, once is an accident, twice as stupid.
Speaker 1: Don't do this anything overly. So so let's uh we'll
Speaker 1: transition to start looking at some of your kind of
Speaker 1: forecasts and uh and calls for the future. Um, the
Speaker 1: big debate that everybody started, we'll start with the big
Speaker 1: stuff and then we'll kind of work our way down
Speaker 1: into more granular. But the big debate is inflation or deflation.
Speaker 1: And uh, I think you know, we talked about the
Speaker 1: FED since seventy three printing this giant uh money bubble,
Speaker 1: right whatever, three trillion dollars of debt and it seems
Speaker 1: like you know, we've seen, you know, through each correction
Speaker 1: it's trying to de leverage and then the FED pumps
Speaker 1: it back up and then de leverage and pump back up. Um.
Speaker 1: So I guess the the inflation deflation is is the
Speaker 1: debt going to implode and deflate faster than the Fed
Speaker 1: can pump it back up? Uh? What do you see
Speaker 1: or I'm guessing maybe you kind of see it doing
Speaker 1: something like this. Yeah, it's uh, you know, there's there
Speaker 1: are people out there as you know, as Peter Schiff
Speaker 1: or some of the others that I called true that field.
Speaker 1: We're at the end of the cycle, the supercycle, or
Speaker 1: whatever they want to call it, the debt cycle. And
Speaker 1: you know they're they're thinking, we're imploding now or in
Speaker 1: the process of imploding now, and who knows where we
Speaker 1: are after this, and it's gonna be a long time
Speaker 1: before we come out of it. Um. I believe there's
Speaker 1: another cycle before we get to that. So I think
Speaker 1: we've been in disinflation since, um, the early eighties. You know,
Speaker 1: we peeked out in inflation in the early eighties and
Speaker 1: it's been a ratching down of inflation over many cycles. UM.
Speaker 1: And what happens is the FED then ten FED and
Speaker 1: and policymakers tend to overshoot, so they are so worried
Speaker 1: about what they're in now that they can go too far.
Speaker 1: So amazingly, and I've said this for many years. Um.
Speaker 1: You know, inflation reached obviously twenty nine, amazingly, that was
Speaker 1: forty years ago, and we're still were about inflation, even
Speaker 1: though inflation has come down from twenty to almost zero,
Speaker 1: so that that was a very traumatic period. And you know,
Speaker 1: you weren't there. Obviously you're younger than I am, but
Speaker 1: a lot of people in the business today never you know,
Speaker 1: unless you were there. It's really hard to understand how
Speaker 1: um traumatic that was. We went from you know, middling
Speaker 1: inflation five inflation in five years. But is a is
Speaker 1: a lot of that because of the way CPI has changed.
Speaker 1: I mean obviously home prices, gasoline prices, milk and steak prices, education,
Speaker 1: healthcare for sure have all skyro and the money supply
Speaker 1: is all skyrocketed since the eighties. So even though the
Speaker 1: CPI with the FED looks at his inflation is down,
Speaker 1: the reality as most people see inflation or no, yeah,
Speaker 1: I would say no. I mean yes, for sure, there's
Speaker 1: you know, there's elements of the economy that see inflation
Speaker 1: go a lot here, so that you get that argument.
Speaker 1: A lot of yes, the indexes say we're disinflating or
Speaker 1: we're moving towards zero inflation, but people's real pocketbooks to
Speaker 1: know that that's not the case. Um. But overall, I
Speaker 1: don't think it's so much manipulation of indexes or anything
Speaker 1: like the inflation index or anything like that. I really
Speaker 1: do think it's global. Um. We we got such access
Speaker 1: capacity in a response to don't forget, we'd be just
Speaker 1: a little history. In the late seventies or early eighties,
Speaker 1: we went through a huge boom of expanding heavy industry capacity.
Speaker 1: I mean, you know, steal steel, autos, paper mills, etcetera.
Speaker 1: All everybody got caught up in that inflation cycle and
Speaker 1: commodities were going crazy, energy was going crazy, and you
Speaker 1: had this huge build up of capacity and then all
Speaker 1: of a sudden um because inflation was running away and
Speaker 1: economy was very overheated. It took a you know, Paul
Speaker 1: Volker to come in and say and frankly, it was
Speaker 1: that problem of most people are Keynesians and look at
Speaker 1: interest rates, not money. G William Miller was FED chairman,
Speaker 1: and he's sitting there going, I'm in the late seventies
Speaker 1: and he's going, I'm taking I'm raising rates, so I'm tightening.
Speaker 1: But he was raising rates at much lower rates, at
Speaker 1: much lower levels than they would have been if he
Speaker 1: had left them alone. But he was pouring money and
Speaker 1: to keep rates from going too far up or too fast.
Speaker 1: As a result, he was pouring fuel on the fire,
Speaker 1: the inflation fire, and we went from five percent inflation
Speaker 1: to twenty percent inflation in a few years UM. And
Speaker 1: that was all part of the commodity boom, etcetera. When
Speaker 1: Volker came in and said, Okay, I'm no longer worrying
Speaker 1: about targeting rates. I'm gonna let rates go where they
Speaker 1: have to. We're take tightening the money spy down. That was,
Speaker 1: you know, the first step towards a monitorist approach, saying
Speaker 1: money is important, money is what's causing this. And they
Speaker 1: really have off and on with Vulca and then Greenspan
Speaker 1: uh and and some extent bernanke Um. That continued to
Speaker 1: be the process. And so wheneverything's got out of hand,
Speaker 1: they brought you know, they kind of brought it back
Speaker 1: in again. So I think it was a ratcheting down
Speaker 1: of inflation because they did understand money creates inflation. UM.
Speaker 1: Now now they've gone so far that I think next
Speaker 1: year is deflation. And and when we get that again,
Speaker 1: the gloom and dumers think it's, you know, we're down
Speaker 1: for the count. I argue, and I've been arguing this
Speaker 1: for five years because I've been talking about about coming
Speaker 1: um that and probably longer than that. But um that
Speaker 1: in a bus we will see money, and I've been
Speaker 1: saying for a few years it will probably you'll see
Speaker 1: the FED balance you grow the twenty trillion, maybe even
Speaker 1: thirty trillion. And it's because in that global bus, the
Speaker 1: FED has unlimited ability to print because they don't have
Speaker 1: to worry about inflation. There's you know, there's a six
Speaker 1: or nine month lag to the economy. There's a two
Speaker 1: or three year lag to inflation. So that's where I
Speaker 1: disagree with a lot of people on the street today, economis, etcetera.
Speaker 1: Who are we're in about inflation nowity? You know the
Speaker 1: money that the money that we're creating now is going
Speaker 1: to lead to hyper inflation down the road, but you're
Speaker 1: two or three years away from them, maybe longer because
Speaker 1: next year is deflationary bus. Um okay, so so um
Speaker 1: yeah that that makes sense. So then if I'm following
Speaker 1: that line of thought, or I should say to recap basically,
Speaker 1: what you're saying is, um, we're going to see a
Speaker 1: where we've been in deflation. We're going to see a
Speaker 1: big deflationary move because of the bus coming sometime next year.
Speaker 1: But the reaction of the FED, which is then to
Speaker 1: just jump in and print unlimited as you said trillion. Then,
Speaker 1: so we have a deep continue deflation is sharp drop
Speaker 1: in deflation. But then the reaction till printing then pushes
Speaker 1: us into inflation or hyperinflation. Just to just to correct
Speaker 1: a little bit. Um, we're in disinflation still until you
Speaker 1: get into negative inflation. Um, it's disinflation. Is it's inflation
Speaker 1: growing at ever lower rate. So we're still above zero,
Speaker 1: so it's disinflation. Um. We go into deflation next year
Speaker 1: because the economy goes into a double dip. You know
Speaker 1: that we had the first um dip March through June
Speaker 1: or whenever, March through May. UM. And I think next
Speaker 1: year is a much bigger step down in the economy.
Speaker 1: And we're so close to zero on inflation even if
Speaker 1: we get an uptick in the next six months that um,
Speaker 1: you're gonna easily go through zero. And I I actually
Speaker 1: think you could see three to five deflation. That's a
Speaker 1: big number everything. I would say the vast majority of
Speaker 1: people that I think they understand deflation today think of
Speaker 1: deflation in terms of what Japan experienced. You know, several
Speaker 1: years ago, you know, their economy still was close to
Speaker 1: zero or above UM. You know, deflation was maybe slightly
Speaker 1: below zero. I'm talking about something we haven't seen since
Speaker 1: the thirties, you know, three to five negative inflation, an
Speaker 1: economy where you're gonna have, you know, down double digits
Speaker 1: in GDP. So we saw you know, the kind of
Speaker 1: the precursor of that March or March to eight March
Speaker 1: and April. But I think we'll see it for much
Speaker 1: of the next year. And and people go, what if, well,
Speaker 1: the fence printing money, why would you know your you
Speaker 1: believe money is going to keep you afloat. I think
Speaker 1: two things. One, as has been said a lot by others, Um,
Speaker 1: the Fed can take care of liquidity in the short run.
Speaker 1: Insolvency is a different story. And I think by the
Speaker 1: time we get to next year, there's a lot of
Speaker 1: companies that just can't hold on um. And there's you
Speaker 1: see me on Twitter say this a lot um. Markets
Speaker 1: and economies don't. It's not a linear relationship. Things don't
Speaker 1: go in a straight line. So you're gonna have a
Speaker 1: period where policy is not gonna be linear either. I
Speaker 1: think if we if we're looking at a blow off
Speaker 1: in this stock market, you get some uptick inflation and
Speaker 1: next three months, three or four months, oil goes from
Speaker 1: forty to fifty UM. Grain prices go you know, sharply,
Speaker 1: sharply higher as they are. Um, I think you're gonna
Speaker 1: see the FED pause. They've already paused basically in the
Speaker 1: last several weeks. I think you'll see them pause. And
Speaker 1: I think that pause in a period when we're so fragile,
Speaker 1: it doesn't take much to send this thing or straight down.
Speaker 1: And so I think every every time they've paused in
Speaker 1: the past, we've seen what's happened. So I'm not talking
Speaker 1: about it, and I'm not talking about market. I mean
Speaker 1: the economy. The economy just deeds needs that liquidity just
Speaker 1: to stay afloat. The problem is that liquidity. It's it's uh,
Speaker 1: it's more like giving heroin to a junkie, right, So
Speaker 1: it's like they just need more and more and more.
Speaker 1: It doesn't solve the problem. It just keeps them going.
Speaker 1: I mean, companies that are already struggling with too much debt,
Speaker 1: giving them more debt isn't necessarily going to help. It's
Speaker 1: very tough one. As I say a lot, or I
Speaker 1: say once in a while, UM, I'm you know, I
Speaker 1: certainly talk about um. Whether I think should be done.
Speaker 1: But most of the time I'm focused on what's going
Speaker 1: to happen, whether I agree with what they're doing or not.
Speaker 1: So I'd like to say I'm forecasting and not moralizing.
Speaker 1: You know. I think in particularly in today's world, the
Speaker 1: Austrians have become a cult almost on the street or
Speaker 1: on Twitter, and you know, they want to spend all
Speaker 1: their time attacking, you know, the FED or the central banks,
Speaker 1: or criticizing everything being done. And I go, if you
Speaker 1: want to follow, you know, if you want to go
Speaker 1: back on the gold standard today, start right now. Um.
Speaker 1: And if you want to, you know, ratchet money down
Speaker 1: to what you think it should be, which is close
Speaker 1: to zero, we'll all be living in cage of unemployment.
Speaker 1: The Fed and the Treasury are doing what they have
Speaker 1: to do. It doesn't mean it's going to end well.
Speaker 1: I have the most dire forecast for the thirties and
Speaker 1: forties or certainly theties. You know, I think we're gonna
Speaker 1: see a depression many fold bigger than the Great Depression,
Speaker 1: many many We could have eight percent unemployment, we could
Speaker 1: have a totalitarian system replace what we have. But that's
Speaker 1: one cycle from now, not now. And uh. And if
Speaker 1: they want. If they did what the Austrians proposed today,
Speaker 1: we'd have it now. Well, I am, I'm both So
Speaker 1: I'm definitely in the Austrian coult as you call it.
Speaker 1: I wouldn't call it that, but I do believe in
Speaker 1: Austrian colt and I do. But I do agree with
Speaker 1: what you're saying. I mean, obviously to go back to
Speaker 1: that strict system today would cause massive problems. I think
Speaker 1: the bigger argument is if we would have stuck with
Speaker 1: that system all along, we never would have created the
Speaker 1: problem in the first place. That I'm not moralizing, right,
Speaker 1: That's a whole another conversation. I always say, we don't
Speaker 1: invest in the market as we want it to be,
Speaker 1: or as we think it should be, but rather as
Speaker 1: it is, which which is exactly what you're saying, right exactly.
Speaker 1: Um so, um, let's get back into this kind of forecast. So, um,
Speaker 1: this bounce as you're conn and so if we look
Speaker 1: at you know, the Great Depression crash or even the
Speaker 1: two you know, the dot com crash, you typically see
Speaker 1: this whatever drop retrace and then it's kind of like
Speaker 1: a technical a t a kind of bounce. Um, is
Speaker 1: that kind of what you're seeing this bounce and then
Speaker 1: the second wave down kind of like what we've seen
Speaker 1: in other market cycles and the economy. Uh, in terms
Speaker 1: of the market, I mean you're saying early next year
Speaker 1: a potential drop. Yeah obviously, Yeah. I think my view
Speaker 1: is um And you know, I could have easily because
Speaker 1: I had I was calling for a global bust um
Speaker 1: prior to the virus and UM, so I could have
Speaker 1: easily in March. I have looked at what happened, and
Speaker 1: I called for a ten percent direction market when it
Speaker 1: was thirty on the SMP. And so when we got
Speaker 1: down under three thousand, I'm going, I got my ten percent.
Speaker 1: I'm I'm bullish again. We're going, We're going when I
Speaker 1: had a melt up call then so so that last drop,
Speaker 1: you know, the thirty four percent dropped, the last of
Speaker 1: that dropped. I was wrong. I I didn't missed it too. Um.
Speaker 1: You know, I pulled away when I realized that I
Speaker 1: was wrong. But but um, but I could have easily
Speaker 1: when we were down thirty four percent said this is
Speaker 1: the beginning of the bust or the beginning of the
Speaker 1: bear market, and where you know we're heading for a
Speaker 1: thousand on SMP. UM I didn't for whatever reason. I
Speaker 1: stepped back, looked at all my work, and I said,
Speaker 1: sentiment in particular was so negative at that time. It
Speaker 1: was basically back to where we were, um in you know,
Speaker 1: the bottom of two thousand nine. And I just said,
Speaker 1: now this is it's a little bit of an overshoot
Speaker 1: from the trend. You know that you can't draw out
Speaker 1: the trend line and overshot it. But I think it
Speaker 1: overshot it for just a few days. And I said, no,
Speaker 1: I think this is a fake out. I still believe
Speaker 1: we're going to see the melt up, and so so
Speaker 1: I think we're in that, you know, in spite of march,
Speaker 1: and the march was obviously driven by a virus. Um
Speaker 1: in spite of all that, I think we're in what
Speaker 1: I call melt up for blow off stage that will
Speaker 1: take us into a parabolic I have used two as
Speaker 1: the secular market bottom. Uh and I you know, I
Speaker 1: said I couldn't go back to seventy four, but UM
Speaker 1: use a T two because I think that was the
Speaker 1: beginning of the disinflation, the peak inflation in the beginning
Speaker 1: of disinflation cycle, and most of what's driven the secular
Speaker 1: bowl market has been interest rates going from f to zero,
Speaker 1: so you know, inflation going from to zero. So um so,
Speaker 1: I really think two is kind of the beginning of
Speaker 1: this market, and we're in the last spinning of of
Speaker 1: that secular bowl market, and in that last stenning, I
Speaker 1: expect this to see a parabolic un like any we've seen.
Speaker 1: So that gets and that that parabolic is after the
Speaker 1: bust of next year. No, no, no, the parabolic is
Speaker 1: now so then uh so now so then some sometimes
Speaker 1: and I for everybody listening, timing is the most the
Speaker 1: most difficult thing, and really trying to time it, I
Speaker 1: think is a fool's Errand um so I like to
Speaker 1: look at probabilities and we look at levels, and we
Speaker 1: just watched the market unfold. So I'm not trying to
Speaker 1: stick you to any of this, but kind of what
Speaker 1: you're seeing is a continued rise this uh meltop I
Speaker 1: call blow off top whatever um where maybe we see
Speaker 1: equities rally um another leading up maybe sometime in the
Speaker 1: next six eight months and then the next big drop down.
Speaker 1: Is that kind of what you're seeing. Yeah, my numbers
Speaker 1: um are SMP forty two. And I'll be the first
Speaker 1: one to say good overshoot that. I'm pretty comfortable. Usually
Speaker 1: when I give targets, those targets are minimum targets. There
Speaker 1: there what I think the target will be. But they're
Speaker 1: also kind of I'm saying, if anything, it will overshoot them.
Speaker 1: So sp I think we could be there. UM. It's
Speaker 1: funny because I had way back in March that use
Speaker 1: those numbers and said you couldn't even see it by
Speaker 1: labor day. So then I get people three months four
Speaker 1: months later going well, you predicted labor day. I said, no,
Speaker 1: you're missing a keyword. I say, could, which is really
Speaker 1: what I really mean is, um, it's possible we could
Speaker 1: see it as early as labor day. UM. But you know,
Speaker 1: whether it's the end of this quarter, whether it's in October,
Speaker 1: I think it will be pre election. Um that we
Speaker 1: see the top are pretty close to the top. So
Speaker 1: I'm expecting those numbers to be seen in the next
Speaker 1: month or two UM. And as that, I think you
Speaker 1: can get the fifteen thousand uh, DAL thirty six thousand UM.
Speaker 1: So those and those all fall pretty much in that type.
Speaker 1: Move from here um and and I think that will
Speaker 1: be parabolic obviously if we do that in the next
Speaker 1: two months. You can envision it's basically straight up UM.
Speaker 1: And and then I expect whether it begins before the election,
Speaker 1: probably after the election, uh you know, whether it's late
Speaker 1: this year or early next. I expect the role over.
Speaker 1: As you know, tops can can full around at the
Speaker 1: top for a little while, so it doesn't mean you
Speaker 1: get a top tick and then the next step is
Speaker 1: a big step down. It might full around for weeks.
Speaker 1: But either way, I have no idea. Either way, I
Speaker 1: expect most of the first half of next year to
Speaker 1: be a bear market UM, and I'm calling for again.
Speaker 1: Potentially it could be sixty percent. It could be, but
Speaker 1: I think there's a real possibility of an eighty percent
Speaker 1: bear market in the smp UM, and obviously that that
Speaker 1: will look seed the I think we had a sixty
Speaker 1: plus percent bear market in two thousand eight nine UM.
Speaker 1: But that makes sense where I think we're the secular peak. UM.
Speaker 1: What gets confusing is, as I you know I mentioned
Speaker 1: to you earlier, I'm not in that camp that says
Speaker 1: this is the end. There's another recovery cycle. But this is,
Speaker 1: in my opinion, the secular top in the stock market.
Speaker 1: So you can have a cyclical bull market from say
Speaker 1: twenty late through six or seven or eight UM and
Speaker 1: not get anywhere near the highs that we reached this year.
Speaker 1: So let's say we hit SMP you know you can,
Speaker 1: and then you go eight percent down. You can have
Speaker 1: a run from a thousand on SMP or on the
Speaker 1: SMP back to three thousand or thirty four hundred, and
Speaker 1: you're still way short of where you got this this time.
Speaker 1: So so there'll be a cyclical bull market to follow this.
Speaker 1: But secular, I think is peaking the cycle, got it
Speaker 1: UM now that and and that secular peak after this
Speaker 1: UM after is at like another six eight year cycle. Yeah,
Speaker 1: I think, because it's probably gonna be uh you know.
Speaker 1: And and one thing that I've learned over many years,
Speaker 1: as I could write the book on this UM is
Speaker 1: that leadership and I'm not unique to other people understand this,
Speaker 1: but but I feel strongly about this. Leadership changes each cycle,
Speaker 1: or different leadership each cycle. So, you know, seventies were
Speaker 1: energy and commodities, the eighties were the consumer growth stocks,
Speaker 1: the you know, the food and beverage and drugs, etcetera. UM.
Speaker 1: The nineties was obviously teching couple goods. Two thousand's was
Speaker 1: finance and housing. Um, two thousand tens has been the
Speaker 1: social media and other tech you know area. Um, I
Speaker 1: think the next cycle is going to be very much
Speaker 1: mirroring the seventies. It's gonna be commodities and industrial stocks again.
Speaker 1: So so it will be What happens is those leaders
Speaker 1: of the previous cycle face all kinds of distribution. So
Speaker 1: every time they lift their head after that eight percent drop,
Speaker 1: you know there's a different Another level of people would
Speaker 1: say I'm taking my money out. You know, I got
Speaker 1: my costs back, or I'm I'm you know I waited
Speaker 1: to get this far. I'm gonna take it and run.
Speaker 1: So you know, so you have distribution all the way
Speaker 1: through the next cycle and maybe two cycles sometimes. Yeah. So, UM,
Speaker 1: I want to jump into the confident and saying there's
Speaker 1: not gonna be a winner, right, So um jumping into
Speaker 1: the UH. As you said, we had the different cycles
Speaker 1: of different types of assets that cycled back in the
Speaker 1: seventies and now again you think the commodity, the commodities,
Speaker 1: the medals and hard assets things like that. Um. So
Speaker 1: I know you've put out several signals on gold and silver.
Speaker 1: I think you're calling forty five dollar silver UM. Is
Speaker 1: that leading up into this uh in in in with
Speaker 1: this market parabolic run and then also crashing or do
Speaker 1: you think there's a way that gold UM continues to
Speaker 1: do well even through a crash. Yeah. Up until UM
Speaker 1: probably the last several months, I was in the camp
Speaker 1: that felt that UM, gold and silver would would get
Speaker 1: hit pretty much. Gold probably less than the market, but
Speaker 1: silver could be hit as hard as the market. So
Speaker 1: I had calls of you know, UM gold falling well
Speaker 1: below a thousand and silver falling to single digits again. UM.
Speaker 1: I now am of the opinion that UM silver probably
Speaker 1: gets the thirty five and then corrects back to the
Speaker 1: mid twenties UM, so far less than the market gold
Speaker 1: gets to, whether it's hundreds of minimum, UM probably corrects
Speaker 1: back to, say eighteen hundred. So I don't think you'll
Speaker 1: see anywhere near the damage in those that you'll see
Speaker 1: in the broader market, and actually they'll be defensive areas UM.
Speaker 1: You can maybe even before I would say you know,
Speaker 1: we're heading for a deflationary bust. Everything going down except
Speaker 1: maybe treasuries and the dollar. UM. Now i'd say, you know,
Speaker 1: the pressure medals probably they're going down, but they're not
Speaker 1: going to go down nearly what the market is, so
Speaker 1: they've become a defensive holding. Yeah, and and my my view,
Speaker 1: the next cycle, what you know about is is a
Speaker 1: big one. So um, you know, I think gold can
Speaker 1: get to ten thousand plus and silver three hundred dollars
Speaker 1: plus um. So so you know, do you really want
Speaker 1: to get cute with these? You know, if you're a trader,
Speaker 1: certainly you can. If you're an investor, you can hold
Speaker 1: these through the through the bus I think, yeah, I
Speaker 1: love that, you know, um in two in two thousand eight,
Speaker 1: as you said that equities fell about six, gold only
Speaker 1: fell about so it fell, but it was a much
Speaker 1: better place to be losing. Of course, the response to
Speaker 1: the crash, which was massive money printing, caused gold to
Speaker 1: shoot right up. And of course you're saying the exact
Speaker 1: same thing and this cycle that the response will be
Speaker 1: instead of what was in two thousand and eight it
Speaker 1: was about a trillion. Now you're talking twenty to thirty trillion.
Speaker 1: So look at the magnitude of what that can do,
Speaker 1: which is obviously I'm guessing why you're getting too that
Speaker 1: ten absolute and it's a you know, it's a global bus. Um,
Speaker 1: we're gonna get hard, but other other parts of the world,
Speaker 1: like Europe, probably get even harder. Every central bank is
Speaker 1: gonna be putting money out there as fast as they can. So,
Speaker 1: so gold on worldwide basis gonna cut a bit. Now
Speaker 1: be me being in that Austrian coult or really you know,
Speaker 1: believing in in in sound money, gold bitcoin as well. Um.
Speaker 1: I think that on top of that, we also see
Speaker 1: the sentiment changing, so I think we have less and
Speaker 1: less confidence in the fiat currencies, and so that will
Speaker 1: only add extra fuel to the fire of what gold
Speaker 1: is doing. I think I agree with that. I think
Speaker 1: you you're gonna here for many years. Um, the does
Speaker 1: or to go back on a gold standard, and probably
Speaker 1: we're we're closer to that today in terms of a
Speaker 1: mindset than ever before or certainly in the last many decades. Um.
Speaker 1: The only problem is it just it's not it's not practical.
Speaker 1: It can't happen because the minute we stop the pring press,
Speaker 1: we've got you know, hundreds of trillions dollars of debt
Speaker 1: you know, coming right back at us. So so I
Speaker 1: don't see how that happens until after a total collapse,
Speaker 1: and then I think it could happen. Yeah, I mean
Speaker 1: a total collapse where all the currencies collapse, people lose
Speaker 1: complete trust and currencies and the only way to restore trust,
Speaker 1: because everything has to be revolving around trust, So the
Speaker 1: only way to restore trust would be to go back
Speaker 1: to at least some sort of a fractional reserve or
Speaker 1: gold system or something like that. Um, all right, UM,
Speaker 1: I'm curious what are your thoughts on bitcoin. I do
Speaker 1: not follow bitcoin, and I I I'm skeptical. Uh, and
Speaker 1: I fully admit that it could be a huge, huge winner. UM,
Speaker 1: I just don't. I don't think we know enough yet
Speaker 1: to know how it haven't been battle tested. Isn't that?
Speaker 1: It isn't that what gives you the asymmetric upside, because
Speaker 1: it doesn't you know, information is not not not out there,
Speaker 1: it's not. But but right now you've got so many
Speaker 1: particularly fast players in it, a lot of retail but
Speaker 1: certainly a lot of um guys that didn't necessarily do
Speaker 1: a great job as hedge fund managers. You know, guys
Speaker 1: that I had big followings but then blew up. And
Speaker 1: then you're talking about but we don't have to name
Speaker 1: any names, and and so I just think it's easy
Speaker 1: to kind of and and certainly it fits a narrative
Speaker 1: that UM people are very distrustful of the central banks
Speaker 1: and the governments, and so it fits a narrative that
Speaker 1: this goes out side of that. And UM, I just
Speaker 1: I really want to see how it comes through the
Speaker 1: bus before I'm gonna UM say yeah, this is a long,
Speaker 1: long lived UM alternative to gold. For example, what about
Speaker 1: what about people like Paul Tutor Jones, you know, one
Speaker 1: percent portfolio allocation wishing now he would put two percent
Speaker 1: allocation towards it, But I mean one percent portfolio allocation
Speaker 1: just to UM sort of kind of set that portfolio better. Yeah.
Speaker 1: I I operate on you know, the reason as you
Speaker 1: see me on Twitter, some people think is ego or
Speaker 1: you know, stubbornness or whatever. I'm a conviction guy. If
Speaker 1: if I have you know, fourty seven years of stuff
Speaker 1: that can help me have conviction, I'll stand by something
Speaker 1: that I say, and where everyone else is folding, I
Speaker 1: can't have conviction bitcoin, So it just doesn't. I'd much
Speaker 1: rather be in gold and silver because I have complete
Speaker 1: conviction that you know, I commit shit on short term moves,
Speaker 1: but I know where it's going, got it? Got it? Okay,
Speaker 1: makes sense and I agree with that. Um, I always
Speaker 1: tell people the same thing. It's all about the conviction.
Speaker 1: Like I can't tell you the exact allocation or percentage
Speaker 1: or whatever, like you need to know how you feel
Speaker 1: about it. So you got your just gotta fit your
Speaker 1: you know your risk um parameters. You know, if if
Speaker 1: you're a guy that you knows gets nervous and can't
Speaker 1: sleep on on something, don't go there. Yeah exactly. Now
Speaker 1: I know we've gone long. I want to wrap it
Speaker 1: up here. I'd just like to ask kind of maybe
Speaker 1: one more question that we'll kind of wrap it up with.
Speaker 1: But um, obviously you've given us, uh some pretty uh
Speaker 1: you know, pretty good calls and when we have levels here,
Speaker 1: you've kind of given us time frames, etcetera. So how
Speaker 1: do you how how are you personally or how would
Speaker 1: how would how do you see playing this out? So? Um,
Speaker 1: do you stay long in the market to ride, let
Speaker 1: the winners run long and then you just set trailing
Speaker 1: stops to capture profit when the market draw? Are you
Speaker 1: trying to time the market? Like? How how do you
Speaker 1: play this? And well, yeah, I really stay away from
Speaker 1: any kind of UM trading talk because for two reasons, One,
Speaker 1: I'm not a trader, but two I have to walk
Speaker 1: a really careful line as a strategist. I'm not a
Speaker 1: registered investment advisor. UM, and people get mixed up between
Speaker 1: what's advice and what's you know, As long as I
Speaker 1: stay talking my macro, I'm fine. Uh. And And also, UM,
Speaker 1: you know, you really have so many different people out
Speaker 1: there with different risks UM. You know, some a risk
Speaker 1: of ourse something or not. People have different financial situations.
Speaker 1: So I really hesitate even if I could providing any
Speaker 1: kind of blanket advice. What I will say is I
Speaker 1: do think um that next year is a year where
Speaker 1: kepital preservation is going to be supreme. Uh. And as
Speaker 1: I said before, I think the dollar and you know,
Speaker 1: I'm a bear on the dollar short term. I'm looking
Speaker 1: for five on the dollar here on d X y UM.
Speaker 1: But I think the dollar will will be one of
Speaker 1: only two things. The US treasuries and the dollar will
Speaker 1: be two things that will buck the downside in the bust. UM.
Speaker 1: I think we'll see the ten year down to zero
Speaker 1: uh next year early next year. UM. And I think
Speaker 1: the dollar could go as high as one forty so UM,
Speaker 1: so the you know, those are places where you can hide, um,
Speaker 1: when you deem it time to preserve capital. You just
Speaker 1: I would also say one last thing, and that is
Speaker 1: that And I could be wrong, but I suspect if anything, um,
Speaker 1: this this bear market is going to be faster than
Speaker 1: two thousand eight nine, um, just because of all the
Speaker 1: derivative exposure and leverage in the system. Those things speed
Speaker 1: things up and make them exacerbate them. So so I'm
Speaker 1: thinking this thing you could see three or four or
Speaker 1: five thousand point down down, do you know? I don't know.
Speaker 1: I just think, um, it's gonna happen very fast when
Speaker 1: it happens. Yeah, I can appreciate that answer, and uh yeah,
Speaker 1: you definitely definitely can be giving advice to people. It's
Speaker 1: such a big broad subject. But um, for those listening,
Speaker 1: let me try and decipher that just a little bit. Um.
Speaker 1: You know he talked you You talked about a very
Speaker 1: sharp and severe drop, but then of course another huge
Speaker 1: cycle up. So for those that have a very long
Speaker 1: time preference, UM, you could just hold through that as
Speaker 1: you talked about with the gold cycle, probably might be
Speaker 1: a good way to do that, for sure. In the medals, right,
Speaker 1: but you know, nobody wants to sit through draw down
Speaker 1: or draw down or whatever that is. So follow the trends,
Speaker 1: look at your levels. I like to manage risk, so locations,
Speaker 1: position sizes, and of course stop losses. Um. I'd recommend
Speaker 1: that for anybody. Of course, everybody has to figure out
Speaker 1: what their own risk management is. Um. But but look
Speaker 1: to those tools, because yeah, nobody wants to sit through
Speaker 1: an apercent draw down. And as as David is saying,
Speaker 1: the dollar is going to be strong, so it might
Speaker 1: not be a bad place to hide out. UM. Okay
Speaker 1: did I did I side for that? Okay, yeah, that
Speaker 1: was fine, And yeah, I think most people know. But
Speaker 1: you know, you drop, you have to double to get
Speaker 1: your money back, so that's right. That really become costly,
Speaker 1: and especially if this is a secular top um for
Speaker 1: those that are in indexes, you may never see the
Speaker 1: levels again that you see in the next month or two. Yeah,
Speaker 1: I think we'll see a change in the investing market
Speaker 1: and index the way index funds are used. So that's
Speaker 1: a good point. Um. Great, well, that is so much
Speaker 1: good information, David. I know we went long. I really
Speaker 1: appreciate you sticking around and given us so much good information.
Speaker 1: Anything else that you need to add or want to add, UM,
Speaker 1: I will just echo what you just said. I think
Speaker 1: indexes have You know, in a disinflationary environment, indexes thrive
Speaker 1: because it's all about POSI P multiple expansion in an
Speaker 1: environment where I'm describing wen talk bunds. But in an
Speaker 1: environment where I'm describing and its going from zero to
Speaker 1: fifteen or twenty again, I think it could reverse the
Speaker 1: entire disinflation cycle. UM. Over the next decade. UM, you're
Speaker 1: gonna have the reverse, which means multiple contraction. That is
Speaker 1: not an environment for index funds. So you know, we've
Speaker 1: been lucky in this cycle because people could just throw
Speaker 1: their money in index fund and probably I'll perform most
Speaker 1: active managers in the environment I see coming after this bus,
Speaker 1: I think it's gonna be quite the opposite. Great. What
Speaker 1: a great note to end on, UM, David. I appreciate
Speaker 1: you so much for taking this time with us, UM,
Speaker 1: for everybody listening. I am going to make sure to
Speaker 1: link in the show notes. UM. You do a quarterly newsletter, UM,
Speaker 1: so if anybody wants to get more information from you,
Speaker 1: I'll have a link to that as well. Of course,
Speaker 1: as you've already said, we've talked about, you're very active
Speaker 1: on twitter UM. I would highly recommend to follow David again.
Speaker 1: I'll link to his twitter um down below in the
Speaker 1: description as well anywhere else that they should follow. No,
Speaker 1: that's good, that's perfect. Okay, So that's it. So again, David,
Speaker 1: thank you so much. Okay, thanks Mark, really enjoying