Dave Collum: The Fed Can’t Save Us from a 70% Market Crash!
Summary
Market Outlook: Dave Collum predicts a potential 70% correction in the S&P 500, citing extreme overvaluation and the inability of the Fed to mitigate such a downturn.
Investment Strategy: Collum emphasizes a long-term, contrarian approach, highlighting his past success with gold and his current focus on short-duration T-bills and precious metals like gold and silver.
Valuation Concerns: The discussion highlights the current market's overvaluation, with the K Shiller PE ratio significantly above historical averages, suggesting a regression to the mean is inevitable.
Economic Risks: Collum points out the pervasive nature of the current economic bubble, affecting various asset classes and sectors, and warns of potential systemic risks.
Historical Comparisons: He draws parallels between the current market environment and past bubbles, such as the late 1990s tech bubble, noting the increased concentration in major indices.
Fed Policy Critique: Collum criticizes the Fed's past policies of low interest rates and suggests that their traditional tools may no longer be effective in controlling inflation or preventing market crashes.
Contrarian Insights: Emphasizing a contrarian mindset, Collum discusses the importance of skepticism towards mainstream financial narratives and the potential for significant market corrections.
Platinum Investment: Collum shares his interest in platinum, citing its supply constraints and potential for future demand, especially in hybrid vehicles, as a compelling investment opportunity.
Transcript
The bubble has gotten into every nook and cranny of the entire global economic system. Five. The markets at 200% over historical average valuation, which means regression to the mean is 65 70%. The S&P's got a 70% correction in it. The Fed is going to find that its tools, they're not going to work. I I really believe that that game is over. [Music] Don't forget to sign up for your free portfolio review with one of our investment partners at wealthyon.comfree. With markets at all-time highs, now is a great time to stress test your portfolio and be prepared for what's to come. Dave, thank you very much for joining us today. How are things in upstate New York? Um, they're good. I'm on vacation. You're seeing the trappings of a unheated cabin behind me. So, it's it's not the best studio on the planet, but it's not a bad place to hang out. It looks like an amazing place. Give me a little bit of the history of that place. How long has it been in the family? Well, my wife's family built it in 1901. My wife's a Cornell, so from the the Cornell lineage, Cornell, and uh and so uh they built it to get the kids out of city during collar epidemics and things like that. and um and uh and they've been coming up here ever since. And so um so about 38 years ago when I joined the family um I started coming up. It looks like a great place to go to escape all the craziness in the world. Well, we still have internet. So we don't escape. We just we're just getting it through a different router. So you're still following the markets in great detail. Uh I am. Yeah. Good. because that's where I want to start a conversation and u I have to admit I'm having a tough time making sense of the markets especially this year we've seen so much volatility after peeking out in February we saw a big pullback going into liberation day in April and I have to admit I got sucked into that pullback I sold a lot of my positions I'm sitting on a lot of cash and the markets ripped since then and now we got the S&P and the NASDAQ trading at or near all-time highs and I've missed out on a lot of performance. What are your thoughts on the markets at these levels right now? Well, I'm a low frequency trader. So, I'm I'm the get get the decade right kind of guy. So, so I I was in essentially 100% uh long bonds from 1980 when I started my job to 87 and then the crash occurred and when I was a kid I wanted to go to Wall Street so I should have been paying some attention but I wasn't. And one of my colleagues said talking about the crash, he said, you know, equities are really you really ought to own own them. And and I thought about I looked at I said, "Yeah, he's right." So I went basically into equities post 87 crash became a drooling moronic tech bull by the late 90s and and you know made I I made 700% off WorldCom and got out. How was that one? Um probably 700% on Dell. I had a couple years that were 100% gainers. Um, and I really did think the world had changed. But around um, I started reading about market structure around mid 98, I said, "Something's wrong here." This this is a chapter in a textbook being created here. So, I dumped half my equities and in the beginning of July of 98, the markets then went almost straight down for the the rest of the year. And I'm feeling like half an idiot, half a genius. didn't know which kind of lucky and I said um I said look if they come back I'm getting the rest out because because these markets are nuts and so by mid99 I was pretty much out of the markets by the end of 99 I didn't have a penny of equities not a penny committed equities I was a lot of cash I had a a short position in the prudent bare fund which I don't recommend I made money I made good money I've done it twice made money But I think I think shorting is for fools and pros and the ven diagram of those two has a serious overlap. Um so I will never short the market again. Um not even to neutralize a position and um and and then I start buying gold and and I've had laughs with Chris Martinson where someone will say, "Oh, it was easy to buy gold back then. It was so cheap." And I say, "Yeah, it was cheap because no one wanted it." There were five of us who thought gold was a good idea. So, so you really to be a contrarian um you have to have balls of steel. I mean, you you really have to be able to look in the faces of the experts and say, "I think you're all full of crap." And and it turns out the field of chemistry I studied, um the experts got it wrong. I jumped into a very complicated field and pretty much I spent my whole career showing that they just didn't have it right. So what that developed in me was a superpower to look in the eyes of experts and say, "I think you're full of crap." And that translated over to markets. So I can listen to 12 central bankers saying something's true and I can say, "I don't think so." And and and it doesn't mean I'm right, but most people don't have the capacity to do that, right? They can't they can't defy the system that much. And so so I started buying gold in 99. It went down till 2001. exhaust in the NASDAQ part of that time was going up. But then I ended up being right and to hedge inflation. Um I started buying I bought about six mutual funds at Fidelity uh throughout the knots uh on energy energy and and natural resources and they were phenomenal. So the 80s were good, the 90s were phenomenal. the knots. While most people were getting killed, I compounded 13%. So, I really thought I was a genius at that point, but I was I was just trying to hedge inflation and and so I caught a commodity bowl. The teens were sobering because uh in ' 09 um at what became the market bottom, I thought we had another having left in us. Everything told me we had another having. And what what what didn't get predicted by anybody was a bailout of $30 trillion magnitude. I've talked to people say, "Well, I predict that they do anything." I go, "Doing anything in 30 trillion or in different zip codes." And so I think there was another having. I think there should have been the markets never got cheap in '09. They got a little below fair value for about a month. And that's not what they should have been. They they really should have regressed to and through the mean in a big way and it should have done you could hear teeth breaking and glass shattering, but they somehow saved it with $30 trillion. So I I missed the teens. Um I compounded 4% while everyone compounded probably 10 or 11. Is that a good guess? Um in the S&P. Um, so I've hung on to my gold the whole way, which has been good because I was buying it, um, I was buying gold at Central Fund of Canada when gold was 270, but Central Fund of Canada was trading around 28% below NAV. And so I was buying gold at about 230 bucks or something an ounce. And still I could buy a I could buy silver eagles from the local coin dealer for spot at about four bucks, right? What a what a wild it just seemed like good idea at the time. So in any event, so um over the 25 years from 2000, I I've compounded beat the S&P by about 2%. Um but I think we're now in a catastrophic situation that has not played out. But I think you're you're confounding of by the markets is correct. What I don't do is try to catch the upside, catch the downside. Um, if I, for example, decided to get out of gold, it it I'd be done, right? That's it. I might go back in 20 years, which I won't be around. So, there's that. But I don't get out of gold intending to get back in in in January or anything like that. I just ride right through that. And so, once I'm out, I'm out. As part of our silver interview series this month, we're bringing you quality research in a free silver investment report. To claim your free silver investing report, click the link in the show notes below. And if you're looking for a simple and secure way to invest in physical gold and silver, check out our sister company, Hardass Assets Alliance, at hard assets alliance.com. And speaking of silver, wealthy will be on the ground at the SCP Resource Finance Global Silver Conference this October in Toronto and Eric Sprat will deliver the keynote address. Stay tuned for more details in the coming weeks. couple of points I want to um touch on. So, you were talking about how the fact that you no longer short stocks and it makes me remember Julian Robertson, one of the greatest hedge fund managers of all time, and he was shorting a lot of tech stocks back in the late 90s. He got his face ripped off. He ended up ultimately took uh he had massive redemptions, ended up shutting the fund down. But um the other thing I want to touch on too, seeing how you brought up the late 1990s and early 2000s, and I see a lot of similar similarities to what we're going through right now, but this level of concentration, and I recently read a report that said the S&P has a the seven largest stocks on the S&P, they have a combined value of 20 trillion. Collectively, they represent 37% of the S&P. And it's a little tough to compare this to the 2000s, but if you you look at the tech bubble, the five largest stocks at that time were had a combined value of 20%. And if you look at all the tech stocks within the S&P, it got up to 33%. But when you see these this level of concentration that we're witnessing now, does this bring a lot of concerns? Does it remind you a lot of what you saw in the late 1990s and early 2000s? It does, but I think it undersells the risk because I think um like you know how I think Jesse Felder gets credit, but I'm not quite sure. But the everything bubble, I think the bubble has gotten into every nook and cranny of the entire global economic system and it's gotten into the price of eggs. It's gotten into it's gotten into the the the it's gotten into all stocks. So, so um I filed about 25 metrics of valuation. The first thing I notice is um the average investor doesn't know what valuation means. They think it means price. I don't know. You should pull your money out of the markets because you're not qualified. You don't even have a learner's permit. Um valuation is the price divided by something that it ought to track. And so it shouldn't trend, right? It should over time just keep progressing to and through the mean and going back and forth. So my favorite just because it's easy but again 25 all sort of concur but my favorite because it's easy is the the K Schiller which goes back to 1880. So if you look at K Schiller from 1880 to 1990 it averaged a PE of about uh 1213. That's a pretty good baseline. If you want to say what's historical 110 years strikes me as a pretty good historical average. And then oddly in 1994, and I mentioned 94 because every valuation metric on the planet did this in 94. It left the channel to the upside, never looked back. And so for the last, uh, for the last 30 years, um, recency bias has just been banging our heads like there's no tomorrow. So, so, so the the bull case that created this mess we're in is in a nutshell, um, interest rates went from 16 to essentially zero, right? And Buffett says that's the whole ball of axis. His 1999 article says it very clearly. You want to know where the market's going long term, just look at where interest rates go long term. From 16 to zero, uh, that the boomers joined the workforce, they brought their wives. So a demographic push never seen before. Um uh China entered entered the global economic system and brought a million slave laborers. Russia was was was not yet the Soviet Union had not yet collapsed. They needed capital. They were selling resources and we were helping them. Um and so everything was a tailwind that will not be repeated. You can't make a case for any of those repeating. The K shiller PE left the channel which averaged around 12 to 13 and is now sitting around 38 39. So I have the markets at 200% over historical average valuation which means regression to the mean is 65 70%. progression through the mean. Heaven only knows, but it starts to become a historically epic correction if you start thinking through the mean. And during that 30 from the window from 1981 to the present, the valuations which should not trend compounded 4% a year annualized. What happens if the next 40 years we compound negative 4% annualized? And people always say, "Well, that would never happen." I go, "Of course it'll happen." I don't know how. I don't know the path, but but there's never been a market that got way overvalued, that didn't eventually find its way to cheap. It never has happened, never will happen because that's not what markets do. That's like saying some guy's going to live to 200. I go, "No, he's not. Doesn't work that way." Um, and so, so you do a little math. It turns out if we grow our way out, you assume that the GDP grows at 2 and a half% a year, which might be optimistic given what we're looking at in my opinion, but uh 2.2 is kind of the estimate for the 20th century. So two and a half, two and a half is generous. Um and if you assume at some point we regress to the mean, it'll take 45 years, 45 years from now if we grow the GDP at 2 and a half%. and we regress to the mean, which by the way is the center of the bell curve. So it's the most probable position to find yourself in, uh, we will have not gained a penny in 45 years. I guess one of the things too that really stands out to me is is the number of bubbles. You touched on this, but back in the late 1990s, we just had one really big bubble, the tech bubble. But now, if you look at the last five years, we had spaxs, we had ICOs, NFTts, the metaverse. Now it's AI. I'm probably missing a couple too. But it's to your point, it's just bubble after bubble after bubble. It's just like trillions of dollars pumped into the system. And I think the AI, actually, I think Wall Street likes the AI bubble narrative because it kind of ring fences the problem into, okay, here's how you handle the problem. You just avoid the mag seven, right? And otherwise everything's normal. I go, no, you will be selling your children by the end of this, right? This is this is not the mag seven aren't going to correct aren't going to correct by a factor of five and leave everything else untouched. Doesn't work that way. And so if you once again I want to make a comparison to the tech bubble. The S&P pulled back 50%. The NASDAQ I believe it was down 80% from the top to the bottom. Do you see a similar move this time when we get this correction? Well, I think the S&P's got a 70% correction in it and and and and the MAG seven I I don't know how many of those I mean look look at a great example there's Google right look at the company Google two years ago Google looked like it had a moat that was 100 feet wide and 30 feet deep and that no one would ever knock Google out of search right Google and so you could price it wherever you want and it might have been overpriced, but at least they're going to be here. And now they're fighting for their lives, spending hundreds of billions of dollars to not lose the entire search space. And I was on a podcast last night with a bunch of huddlers, and they were they were making this these arguments about Bitcoin. I said, "Look, I'm not making arguments about Bitcoin. I'm making arguments about black swans. are making arguments about um you know if all of a sudden there's a there's a new crypto that just is better or if all of a sudden the global governments get and say okay this has been fun but now we got to step on them and they just crush them and you know they can do it you know they can do it governments can crush you and I was trying to convey to him I said no one knew that Mao was going to kill 80 million people but he still did no one knew Sal would kill 40 million people but he did governments will crush you and And so what if the cryptos become inconvenience they're gone and so I was trying to convey that you know in 1989 if you asked anyone about the Nikkay there people would have said overvalued but would anyone have said 35 years later they'd still be underwater and inflation adjusted they're further underwater so no not a bit I almost get the sense that things have been too good for too long. Mhm. So the Fed kept rates too low for too long, too many times. The too many times is the problem, right? And somehow they kept saying, "Look, if we just juice it." So So the market is basically a crackor at this point, right? And and in the paths of trade, people say, "Well, that's not going to end." I go, "Of course that's going to end. Of course that's going to end." And and the question is why? And and the answer is well retirements recession. But but once you start backing out of that passive trade, it's going to be different to the extent that you know in the previous bubbles if if you're going maybe I should take cover. You'd be sitting there looking at your portfolio and say I better get rid of my Intel or I better get rid of my Sun Micros systemystem right or my Dell or my Worldcom. Most investors are now one keystroke away from selling the entire market and it will be completely inelastic because it's not like Vanguard index fund has cash to cover redemptions without having to sell. I if I if I turn in $10,000 worth of index fund today they got to sell $10,000. And so so the path of trade will turn into a completely inelastic cell. And I don't know what it'll look like because we've never experienced that before. I one time buttonhold Jack Bogle. And I said, "Jack, let me let me present something to you." I said, "P I didn't call passive investing. I said, index funds have taken out the big hedge fund man, the big fund managers." So, it used to be that every company had these big gunslinging money managers and they've been replaced with just indexing. I said, "These were the guys who would walk into General Electric's office, CEO's office, and say, "Here's the deal. We're going to sell if you don't cut this share buyback crap on debt. You're destroying your company." So, there was adult supervision. I said, "But the index funds have removed adult supervision from the markets." And he said, "That's correct. Bogle. Jack Bogle. So Dave, let me push back on this notion a little bit. And what you know, and I'm gonna say it's different this time, Dave. The Fed, the Treasury. Good opening line. Good opening. Yeah. But the Fed and and the federal government, they've realized they know how to finesse the markets now. So we might get these small pullbacks like 10, 15, 20%. Very much like the one we saw in April. But then boom, you throw five trillion, 10 trillion at the market. Next thing you know, it's right back to trading at all-time highs. I mean, if you went into a coma earlier this year and you woke up now, it's like nothing ever happened. But look at the volatility we've had this year. It's been insane. Well, look at look at two 2020. I wrote this. I actually made a paragraph where you woke up from a coma from a COVID infection and and and you've been out for the year and and you you find out that the the the entire global economy has been shut down and and a pandemic, you know, blanketed the globe and and the Chiron across the screen of MSNBC in your in your hospital room says the S&P is up 13%. So, so the markets have ceased to serve as an indicator of anything. That's what's confounding to us all. So, another great example right now that you can find article after article about the German economy being horrifically bad now. The German they shut down their nuclear power. They've got trouble with Ukraine. They've got their their their production's all out of whack. It it is a great depression in Germany. The DAX is parabolic. Why? I don't know why. And any argument someone gives me for why is not going to make sense to me because that market should be selling because it's it's a it's a lousy market. It's a lousy economy, but it it doesn't respond. At some point it will. And what I think has changed is that for years we got to pretend inflation was not a problem. Now they understated it. How much do you think they understated inflation over the last I don't know 15 years? Oh, per year. Anytime I hear the government throw out a number on inflation, I just double it. 4%. If they say it's three, it's six. Okay. So, so it's it's understated by maybe 3%. Some people guess four, five, six, whatever. What it means is if you look at the GDP, which is inflation corrected, we've been in a recession for a very long time. because we've had no GDP if you correct for inflation correctly. And so, so um so, so, so the speedometer is not giving us a good read. Now, here's the deal, though. For the first time in many, many years, inflation got exceedingly real in 2020, right? I think that exceedingly real now is is a is is a is sitting right below the surface. And I think that that that if you were going to build a house for someone, if you're a contractor and you were going to build a house for someone and you said, "Okay, we'll build it in two years." How much would you add for inflation correction to build that house? So, you estimate the cost of building a house. You say, "But we're going to do it two years from now." How much would you add? 5 to 10% a year. Right? That's inflation expectation. If you're a a labor union, you're you're negotiating for payway pay pay raises for your union for the next five years. What are you gonna what are you gonna negotiate for? You going to go for this is inflation expectation. It has now gotten into the DNA and I think the minute the Fed starts doing what they has worked for so many years because of the the credit cycle, right? The 40-year credit cycle was working as a tailwind is no longer there. So, I think the minute they start doing something that looks kind of inflationary, the hits the fan. I think they're boxed in by that. That 2% target is a pipe dream. Well, it's also fake. It should be 0%. Let's let's you actually look at the Fed man, it's a stable it's a stable currency. 2%'s not stable, right? Paul Vulker said that. He said that's the crap you learn at Harvard. and um and so so and and and so I think the Fed is going to find that its tools which there's a lot of tools that the Fed double antandre on purpose um they're not going to work. I I really believe though that that game is over and and I think it's possible the Fed, despite my low opinion of them, um maybe understands this and and realizes that if they start dropping rates and the tenure goes up, not down, they are then not going to know what to do. And so I think they're somewhat um white knuckling monetary policy right now because I they don't they don't have the tailwind of well we can just drop rates some more. I think that game is over. So we have this ongoing battle between Powell and also the president. Uh of course the president wants to cut rates and Powell is staying very firm. He wants to keep rates right where they are until he gets a better read on what's happening with the trade wars and the tariffs and inflation. Do you think Powell is being political or is he really concerned about inflation and do you think I think you just said it but inflation is still very much a threat? I have two layers. I have two answers. One is my extreme answer is what if that whole thing is a kayfave and Powell and Trump are talking and Paul says I'm going to hold rates tough and Trump's gonna say well I'm gonna scream at you and this is the way we're gonna play it. Right. kind of like when um Megan Kelly and Donald Trump got in a fight in the first debate. Her question was stupid. They end up in a fight. They both won, didn't they? They both became Trump got his press. Megan got her fame. It looked like hay fab. The more straightforward answer is that Trump is ripping Powell in public enough where Powell can't move. He can't look like Trump's right? He he can't drop rates with Trump ripping on him and Trump knows that. And so Trump's ripping on him so that when the hits the fan, he can now blame Powell. Whereas Powell can't. I think they had a raise rates. I think they're doing it backwards. I mean, I I'd be happy if they just said take rates to five and just leave them there safe for the rest of eternity. We're not changing rates. Free market figured out. Okay, that's an interesting point. So, you think under the right circumstances we could see a significant pullback in the S&P? You actually said 70%. Maybe that's the catalyst. They don't cut rates. Maybe they take rates higher. Nobody's talking about that. Could that be the catalyst then? That would that would be well if people who again investors seem so green to me and I think it's because every every new bubble has a new generation of of people who are who do not know the history of markets and so they don't know what the narrowing you described at the start of this podcast how catastrophic that could be even though it's really a technical indicator which I tend to not pay attention to. Um I I I I think it's quite possible that the rates will go up. Um I think that the 70% correction is not going to be some Vbounce. I think the age of Vbounces were an artifact of of of the the the dropping rate tailwind and and aggressive monetary policy neither of which will exist. So I think the age of Vbounces is over. the best analogy which they never work perfectly but if I had to do it pick a starting point the NK looks like a good model to me. I was on a Twitter spaces with George Noble and and I said I think the markets will become uninvestable. I said just like the Nikkeay they'll be uninvestable. That's not to say there won't be winners but I think it's going to be rotting your brain to death. I think it's just going to be you're gonna buy and then the the way the way you really find a secular bottom is you knock investors on their butts and then they get up and they buy because of you know muscle memory and then they get knocked on their butts again and then they get up and buy and then after a while they go I'm never touching this crap again and that's the bottom right when there's there's no buyers left and uh and and and I think that's what the Nikkay did. Now, shockingly, the Nikk not only spent 35 years going nowhere in the United States, if you own the 29 top, um I think it was in 1984, you were at exactly the same price inflation adjusted. People don't know that. They think that they think the 20th century was just, you know, lower left, upper right. You inflation correct. If you inflation correct, Ron Grace has done this. You inflation correct using M2 money supply. Okay, that sounds like a pretty good inflation correction to me, right? Better than a CPI, which is all screwed up. You correct the capital gains in the S&P since 1925 and the market goes down. You correct total gain, total returns from 1925, the market goes up 3.73%. Now, interestingly, that does not include that does include dividends. It does not include taxes and it does not include fees. And so, your 3.7 something% is now down in the twos. Maybe optimistically, Warren Buffett in his 99 article said, "When you consider all the fees and everything, but not taxes and not valuations, just over eternity, the most you can expect is 4%. The average in there there was a poll done I think Belder quoted this there's a poll done by Naxis or something that said the average investor right now is expecting 11.7% above inflation on their equities from these valuations. When the pros were asked, "What do you think of this poll?" They were pled and said, "This is what the investors say. What do you say?" They they all said, "Oh, no, no, that's too high. Think more like 8%." The pros are just 20somes in cubicles somewhere who have not seen a real bare market. I didn't think 089 was a real bare market. It recovered too quickly. It didn't change attitudes enough. And so I think we're going to get a real come to Jesus moment. I think our attitude has to be changed, which means you can't be just dip buying everything. You've got to be smart. You've got to buy stuff based on cash flow. A story I love to tell is Buffett lamented holding on to Coke after the.com. Very few people know this. He actually publicly lamented holding on to Coca-Cola. And we know he loves it, right? I mean, he adores it. What he what he was saying was, it turns out that Coke reached a PE of 50 in 1998, which for a company like Coke, Coke is a royalty trust, right? You just pump Coke into the marketplace and and and and it already had had, you know, 85% of the beverage market. So, it wasn't going to grow. It was just a revenue stream and it was returning 2%. With a PU of 50 and Buffett in retrospect realized that he was a complete idiot for not recognizing that 6% on a Treasury would have been a lot better bet. took Koke probably without inflation correction took KO probably 15 years to get back to that high and uh might go back to it again. So you do have concerns about the stock market. What about the economy now? When I look at the economy, it looks pretty good. Growing at 2 and a half to 3% unemployment rate is hanging around this 4% level or 4.2%. Things look pretty good. any concerns? Um, well, it depends who you ask. So, if you listen to someone like Stephanie Pomboy, she says the numbers are completely fabricated. And since it is their government numbers, I think that's a pretty good bet. You know, if their lips are moving, they're lying. Um, there's something that doesn't feel good about the economy. It feels recessionary to me. But there's a paradox out there, too. When I walked up to a convenience store, there's always a a help wanted sign. So, I don't think that's because it's burning hot. I think it's because there's something broken about the labor market. And I think it could even be something like guys who get fired working construction are not right now taking jobs at the 7-Eleven. And so, so there's uh they can't hire in certain places yet. If you look at farmer, farmer's been laying off people. You you Silicon Valley has been laying off people. So, so I think I think that the market is broken, not tight. It's like the housing market, right? The buyers and sellers are not meeting. Buyers don't want to buy at these prices. Sellers don't want to sell at lower prices. Someone's got to give. And you and I both know it's probably going to be the sellers because the buyers don't have the money. I would agree totally. It's like we got this bifurcated market, right? It's a real paradox. I take a lot of Ubers and and I always enjoy talking to the Uber drivers because those people, they're out there grinding every day. They got two or three jobs just trying to, you know, put food on the table and provide for their families and I hear these guys and I know they're they're suffering, right? And then you look at the other end of the spectrum and you got these guys flying around the world on private jets, right? Like Jeff Bezos just blew 50 million bucks on his wedding, you know, and uh it's hard to make sense of it all. Well, so if you look at, for example, the COVID lockdown, they said it knocked out 2 million mom and pop businesses. Where did those people go? Right? So, well, people who own Linda's Diner, Linda probably works at Chipotle now. And so you've got this situation where we seem to have moved a tremendous percentage of our economy from sort of street level to Wall Street level. And so now Chipotle might be doing well because they're getting all Linda's business, right? Um private equity is going to be a headlining disaster. So, so the, so my prediction is the next crisis, which I I can't predict when it'll be. I just know there's one coming because there always is, but I think there's going to be a real barn burner. Um, the word private will be everywhere. So, private equity will be shown to have been scams. um the private credit market, the private debt market where when you go to buy a burrito and they let you pay it in four installments, which is insanity. You shouldn't be buy you shouldn't be doing takeout if you can't pay for the whole bill, right? Um and the question I like to ask rhetorically is is is when you are laid off and you got to choose what to pay, are you going to pay your car insurance or you going to pay for the payment on your Bark Lounger? And the answer is you're going to pay the car payment, right? Well, it turns out the private credit market, which is where all this all these the companies don't hold these delayed payments, they sell them off into the credit market. That's this totally secretive credit market. It's estimated to be $4 trillion. You got student loans which is a trillion and a half which by the way started the real problem started around 0708 which I have made the argument and I've heard no one else make the argument that I think the student loan debt crisis which just launched was actually monetary policy in disguise. Remember how Cardman said u we need a we need to create a a housing bubble to get us out of this recession, right? He said it's like take that guy's Nobel Prize win. Let's start with that. But um I think someone said let's pump a lot of liquidity into the system. We can put over a trillion into student debt. They said, "Yeah, sure. We'll pump in some there. We'll pump some over here." I think it was all part of liquification. Um Jerome Powell the other day said that housing is expensive because we haven't built enough houses. So, I'm thinking about this. I go, "Okay, Jerry sounds like Jerry from, you know, Mel Gibson's role of a crazy guy." Um, so the people who can't buy houses are living on the street. The answer is no. They're living in apartments. I said, "So, we are housing everybody. We're housing apartments. We're housing them in in houses. and and if you somehow build a ton more houses, we're going to have a commercial real estate crisis. And so it's not about it's it's not at all about not having enough housing. It's that Black Rockck owns all the houses and they bought it using credit that went for something like 0.15%. If Black Rockck had to pay the real cost of credit, they would not have bought private dwellings. I'll buy I'll leverage something at 0.15% all day long if I knew I'd get to keep that 0.15% that that's stealing money. So all the Barry Stern looks of the world and stuff they they did really well because after 089 and you had this huge inventory hit the marketplace someone said we got to absorb it. How do we do it? And the answer is we give unbelievably loose credit to the rich guys to buy up all the houses. Then they jacked up the rents. We are heading for potentially periods of unrest. History shows that when when the the wealth gap gets big, the guys at the bottom say, "Screw it. Let's elect Mandami, right? Let's elect an idiot to put in power." And that's not a Trump dig. I I think the idiots really coming forward. Um so so I think we're heading for a tough period where people are just going to be so mad that they lose their house again. Do you actually think he has a chance of being elected as the mayor of New York? Oh, I think he will. Yeah. Still quite a few months away, but Yeah, but it's a it's I mean he's the odds on favorite amongst the Democrats. And the idea of New York going Republican doesn't seem very probable. And so, yeah, I think he probably will. And someone said, "Look, if we don't straighten out the system, he's going to be the least of our concerns, right? He's he's really we're going to see a lot worse than that." And someone said, someone the other day bitched at me. I was talking about some about some stupidity done by government. And the guy said, "So, you think the entire I think it was about North Carolina." And he said, "So all the voters in North Carolina are nuts?" And I pulled out Godwin's law and said, "Well, Germany elected Hitler." So, you know, just because a guy got elected doesn't mean that it was sane. Just a follow-up question on what's happening in the economy. And I also want to touch on the Canadian economy, seeing how I live here. But I quite often I look at these bank stocks and I'm going to throw out JP Morgan for example. They reported not too long ago they had stellar numbers and and I think most other banks did too. JP Morgan's trading at or near all-time highs up uh 15 to 20% on the year. And the largest bank in Canada is called the Royal Bank. It's also trading at or near all-time highs. Not up as much, but I think it's up 10% on the year. And when I look at these bank stocks, they're just a reflection of what's happening in the economy overall because they cover so many elements of it. They deal with retail customers. They deal with commercial customers, investors, etc. And yet, none of these banks in the US or in Canada are showing any signs of weakness in terms of their loan portfolio. Which is really surprising because not sure if you're aware of this, but our unemployment rate in Canada right now is 7%. In the province of Ontario where I reside, it's at 8% and in the city of Toronto, it's approaching 10%. So there are people out there hurting and Canadians are are more pissed off than normal too. Yeah. Yeah. For good reason, right? Like the trucker rally was not a good moment for for Canada, right? Um well, I would have to say that um in ' 07 when we were at the scenic vistas, right, the the views are always best from the top. Not that it'd be too tright. Um, no one predicted that Goldman would have to be turned into a bank to be bailed out. No one No one predicted that the government would illegally take over AIG. No, none of that was No one knew Beer Sterns was going to go down. I remember when their internal hedge funds went south and the original headlines were, you know, $600 million. I go, that that's nothing. That's not relevant. But somehow that was the spark. That was the that was the f the snowflake that hit the slope that that started the avalanche that and and and so uh I do not believe in a complex system. Complex being different than complicated. Complicated is predictable. It's just got a lot of moving parts. Complex is not predictable. In a complex system, I do not believe you can predict. It's by definition. But I I don't think you can see the stuff coming and I don't think it's just lack of wisdom. I think it literally what was what triggered long-term capital management's problem? I think it was a bond default in Russia, right? Who would have thought that a bond default in Russia would have any effect whatsoever on the global markets? But there's leverage under there, right? there's leverage that and and when and when the the credit default swaps and all that crap went to hell in 0809 the banks didn't even understand their own exposure right they're going wait a minute we own this crap really but I remember watching and reading and having you know cubes and squares and CPDOS's and stuff and going this is crazy time and all had to do is have someone write a blog and explain how crazy it is. You go, I got it. This is nuts. Linda Green, remember Linda Green? She signed there was Linda Green, thousands of Linda Green signatures on mortgages. They weren't they were synthetic mortgages. They were, you know, we've how many trillion dollars of crypto do we have right now? Couple, right? And and you know, if if I asked you 20 years from now, is Bitcoin going to dominate the globe or is it going to be zero? And you get to choose one, I think you'd have to say zero. I've been so wrong on it. I just stopped guessing. Well, but that's that that's right. And Dr. Miller finally gave up guessing and and lost a billion five, you know, within about a week of of the top, you know, when he was working for Soros. And as you mentioned, you know, um Julian Robertson bailed, he defined the top essentially, right? Um h how many short sellers are there? Here's the asymmetry in the markets, by the way. So when there's something bad, like someone says, "Oh, the tariffs are going to be bad." Forget about whether it's true or not. There's about three guys left in the world who are willing to short something to bet on that, right? Because the rest are all dead. The rest are all in shallow unmarked graves, right? Jim Chanos is a shadow of what he used to be. Now he's just a pundit on Twitter, right? When the event passes by without a disaster, millions jump in to catch the dip. And so there's this asymmetry in the sellers, the the you know, you know, sell the you know, the buy the news, buy buy the rumor, sell the news, right? in in a downswing at sell sell sell the rumor buy the news right um the sellers of the rumor are almost non-existent now and the buyers of the news that tariffs didn't destroy the world yet are are everybody else on the planet and so that asymmetry is causing real trouble because it's the the I think there's people who know the markets are screwed up but they still think they're invincible I've never seen a bubble that didn't have a great narrative. Roaring 20s, things were roaring. Boy, did the world feel like it was changing. Nikke, we were sending management teams to Japan to understand how the Japanese were so good at managing companies, not realizing it was a real estate bubble, right? And and this narrative is the Fed won't let it drop. That's not it's not a good narrative. So, as an investor, how are you preparing for what's happening right now? I mean, the S&P was up 25% last year. I think it's up 8% year to date. Are you all in on bonds? Are you long gold? How are you positioning yourself during these unusual times? Well, my two biggest positions are T bills, short duration. I'll go up to two years. two years doesn't fase me because because it's it's like uh it's like freezing your credit card in a block of ice and putting it in your freezer so that you can't use it. Um I don't believe that I will have to jump on anything within two years once these markets start selling. So having two-year treasuries and I've got other more liquid stuff anyways, but um my biggest position of speculative asset is gold and silver. Um, I have jumped on, this is a tricky one, platinum. Been watching platinum for years. I own a tiny amount of PPLT. So tiny that it could go to zero and it I wouldn't even notice. And um but I've been talking to technicians for the last 6 months or so like Peter Bryant guys like that saying what price would the platinum chart which is a flatline for 10 years would it catch your attention? What what what would you consider to be a break? I'm not a TA guy at all. I just eyeball it. And um and I got some opinions. So I formulated an opinion said look when platinum gets to X I can't remember what the price was. I'm gonna buy platinum. I don't buy it because of breakouts, as I said, once every 10 years. The platinum story is fascinatingly bullish. Now, do your own due diligence. I could be wrong, but I know guys like uh Peter Bookfire is on it. I I know there's some smart people on it. At the present rate of consumption, the total above ground supply of platinum because we're in deficit production will run out in about three years. I know nothing that's that tight. It is the total above ground supply of platinum at current prices is something like $3 billion. It's a ridiculously small amount of platinum. It's 50 times more precious, more hard to get than gold. Um, Einhorn once said, and I can't remember if it was TUMI or in a podcast, but he said, "If you're going to invest, invest directly. So, if you think platinum's a good bet, don't buy the miners. Buy the platinum." Would be a take-home lesson. The platinum miners are almost all in South Africa. I think it's a 90% South African origin for platinum. And South Africa is starting to look like a failed state, right? It it's you got white farmers getting slaughtered and you know you got the potential for confiscation of of the wealth creators by the by the the the the country and so 90% of the platinum production could be handed over to a bunch of Marxists very quickly and then the backup supplier is Russia. We haven't exactly catered to Russia so we're not their preferred customer. And so the bottom line is that trying to get platinum could get real hard. And already we're in this three years and done deficit production for four years. I I just don't have the numbers um committed to memory, but it's a small number. And and and so I I I think it's and and then the question is, well, who uses platinum? Well, it turns out I'm not a big EV fan. I I think the idea of having a car that could uncharge and then there's no way to get it anywhere, right? It's not like you go walk down the street and grab a tank of gas and pour it in the tank and drive to the gas station, right? So, imagine a hurricane escape and all the EVs start stalling out on the highway. How long would it take to clear? So, I think EV is not the optimum technology. It's it'll be a specialty item. I think I think the hybrids look phenomenal. Hybrids use more platinum than internal combustion engines because they burn cooler. So, they need more in the catalytic converter. So, it's a very bullish case for platinum. And so, here's the problem I face. Um, fortunately, as a boomer and having done really well, um, I can just not screw up from here. If I don't screw up, I'm fine. Period. Um, I look at how much platinum I to own for it to be significant. It's got to be at least 5%. Right? If if you own 2% of something and if it goes to zero, you might not even close in the red that day, right? That's not a big enough position to make a difference. You got to get a little drunk in Miller in you. So, let's say I want a 5% position. And then I do the math on how much I have to spend to get a 5% position. I go, that's too much money. So, I've got this paradox where it feels like a 5% position in dollar terms is too big. And the other thing is, and I said I'm, you know, patient buy and hold kind of guy, but the markets aren't waiting. So, once platinum started to move, I said once it starts moving, it's not going to wait for me. I averaged into gold from 99 to 2002 or three or something like that. The platinum's not going to do that. They're not going to let me do that. And so uh so when platinum started to show a pulse, I started hitting the buy button and I had kind of a mental formula which I was following and I think I bought six slugs. Um the position's still not even close to the right size, but I've done well in that tiny little investment and and my formula is still there. So I'll keep hitting the buy button. I like to buy tops, not bottoms. So I like to chase it. Buy the momentum. Yeah, buy the momentum. And guys like Felder talk about momentum being really an important parameter. So um and I bought gold all the way up to around 457 bucks was the and then I bought some at 1,200 after the 1900 peak. But um and so so I'm going to keep hitting the buy button on platinum and and at some point I will have a position that will be significant enough that I can say okay you did that one well but I tend not to size well I have to admit that's not a metal I follow and uh I will definitely check it out and I want to thank you very much for being with us today Dave and sharing your insights and your views on what's happening in the markets and the economy etc. If somebody would like to follow you on online and see more of your thoughts, where can they go? Well, first I should warn them, don't forget I'm an organic chemist, so everything should do your own due diligence. Um, you can find me um some people email me. I try to keep up with my emails and if if if you know that I work at Cornell and you know my name, if you can't find my email, I don't want to talk to you because you're not smart enough. Um, I I'm on Twitter at David B. column and I write a year in review at peak prosperity. That's my pin tweet and and that and then you can hit YouTube and that's a crowded space now. I'm I'm doing podcasts. Um the most recent one was less than 24 hours ago. So at some point people wake up and realize that that that that I'm not worth listening to, but so far I've been able to keep a following. YouTube is an amazing platform. There's over two billion subscribers. Do you know how many channels are on YouTube now? I I can't fathom. Over 110 million. And I remember when I was growing up with cable, we had two or 300 channels. And now there's 110 million channels on YouTube. Well, we had three channels when I was a kid. We we in our cabin up here, we had a TV with antennas. Not too many years ago, actually. And before internet, which we now got, but um there was only one station and what was stunning is it was kind of enjoyable. You go, "Oh, I can watch this, I guess." You know, and you you you you realize you didn't need more than one station. And uh and then um at midnight, the ads at precisely midnight, the Canadian station would come on and and advertise Club Super Sex. you Canadians are loons. Oh my god. So that's where you can find me. It's not where you want to find me. And and I should mention um uh I did an interview with Tucker that just uploaded about an hour ago. And I was going to mention that that you just did the interview with Tucker Carlson and I would suggest to our viewers check it out. And um I'm I'm also going to check it out later on. I like listening to Tucker sometimes, but I will definitely listen to your interview. And once again, I want to thank you. Well, thanks for inviting me. It's very enjoyable. Enjoy the rest of your summer. I will. If you want to learn more about investing in silver, check out our free silver investing report. You'll find the link below in the show notes. And don't forget to sign up for your free portfolio review with one of our investment partners at wealthon.com/free. With markets trading at all-time highs, now is a great time to stress test your strategy and be prepared for what's to come. Thanks for watching and we'll see you again soon. [Music]
Dave Collum: The Fed Can’t Save Us from a 70% Market Crash!
Summary
Transcript
The bubble has gotten into every nook and cranny of the entire global economic system. Five. The markets at 200% over historical average valuation, which means regression to the mean is 65 70%. The S&P's got a 70% correction in it. The Fed is going to find that its tools, they're not going to work. I I really believe that that game is over. [Music] Don't forget to sign up for your free portfolio review with one of our investment partners at wealthyon.comfree. With markets at all-time highs, now is a great time to stress test your portfolio and be prepared for what's to come. Dave, thank you very much for joining us today. How are things in upstate New York? Um, they're good. I'm on vacation. You're seeing the trappings of a unheated cabin behind me. So, it's it's not the best studio on the planet, but it's not a bad place to hang out. It looks like an amazing place. Give me a little bit of the history of that place. How long has it been in the family? Well, my wife's family built it in 1901. My wife's a Cornell, so from the the Cornell lineage, Cornell, and uh and so uh they built it to get the kids out of city during collar epidemics and things like that. and um and uh and they've been coming up here ever since. And so um so about 38 years ago when I joined the family um I started coming up. It looks like a great place to go to escape all the craziness in the world. Well, we still have internet. So we don't escape. We just we're just getting it through a different router. So you're still following the markets in great detail. Uh I am. Yeah. Good. because that's where I want to start a conversation and u I have to admit I'm having a tough time making sense of the markets especially this year we've seen so much volatility after peeking out in February we saw a big pullback going into liberation day in April and I have to admit I got sucked into that pullback I sold a lot of my positions I'm sitting on a lot of cash and the markets ripped since then and now we got the S&P and the NASDAQ trading at or near all-time highs and I've missed out on a lot of performance. What are your thoughts on the markets at these levels right now? Well, I'm a low frequency trader. So, I'm I'm the get get the decade right kind of guy. So, so I I was in essentially 100% uh long bonds from 1980 when I started my job to 87 and then the crash occurred and when I was a kid I wanted to go to Wall Street so I should have been paying some attention but I wasn't. And one of my colleagues said talking about the crash, he said, you know, equities are really you really ought to own own them. And and I thought about I looked at I said, "Yeah, he's right." So I went basically into equities post 87 crash became a drooling moronic tech bull by the late 90s and and you know made I I made 700% off WorldCom and got out. How was that one? Um probably 700% on Dell. I had a couple years that were 100% gainers. Um, and I really did think the world had changed. But around um, I started reading about market structure around mid 98, I said, "Something's wrong here." This this is a chapter in a textbook being created here. So, I dumped half my equities and in the beginning of July of 98, the markets then went almost straight down for the the rest of the year. And I'm feeling like half an idiot, half a genius. didn't know which kind of lucky and I said um I said look if they come back I'm getting the rest out because because these markets are nuts and so by mid99 I was pretty much out of the markets by the end of 99 I didn't have a penny of equities not a penny committed equities I was a lot of cash I had a a short position in the prudent bare fund which I don't recommend I made money I made good money I've done it twice made money But I think I think shorting is for fools and pros and the ven diagram of those two has a serious overlap. Um so I will never short the market again. Um not even to neutralize a position and um and and then I start buying gold and and I've had laughs with Chris Martinson where someone will say, "Oh, it was easy to buy gold back then. It was so cheap." And I say, "Yeah, it was cheap because no one wanted it." There were five of us who thought gold was a good idea. So, so you really to be a contrarian um you have to have balls of steel. I mean, you you really have to be able to look in the faces of the experts and say, "I think you're all full of crap." And and it turns out the field of chemistry I studied, um the experts got it wrong. I jumped into a very complicated field and pretty much I spent my whole career showing that they just didn't have it right. So what that developed in me was a superpower to look in the eyes of experts and say, "I think you're full of crap." And that translated over to markets. So I can listen to 12 central bankers saying something's true and I can say, "I don't think so." And and and it doesn't mean I'm right, but most people don't have the capacity to do that, right? They can't they can't defy the system that much. And so so I started buying gold in 99. It went down till 2001. exhaust in the NASDAQ part of that time was going up. But then I ended up being right and to hedge inflation. Um I started buying I bought about six mutual funds at Fidelity uh throughout the knots uh on energy energy and and natural resources and they were phenomenal. So the 80s were good, the 90s were phenomenal. the knots. While most people were getting killed, I compounded 13%. So, I really thought I was a genius at that point, but I was I was just trying to hedge inflation and and so I caught a commodity bowl. The teens were sobering because uh in ' 09 um at what became the market bottom, I thought we had another having left in us. Everything told me we had another having. And what what what didn't get predicted by anybody was a bailout of $30 trillion magnitude. I've talked to people say, "Well, I predict that they do anything." I go, "Doing anything in 30 trillion or in different zip codes." And so I think there was another having. I think there should have been the markets never got cheap in '09. They got a little below fair value for about a month. And that's not what they should have been. They they really should have regressed to and through the mean in a big way and it should have done you could hear teeth breaking and glass shattering, but they somehow saved it with $30 trillion. So I I missed the teens. Um I compounded 4% while everyone compounded probably 10 or 11. Is that a good guess? Um in the S&P. Um, so I've hung on to my gold the whole way, which has been good because I was buying it, um, I was buying gold at Central Fund of Canada when gold was 270, but Central Fund of Canada was trading around 28% below NAV. And so I was buying gold at about 230 bucks or something an ounce. And still I could buy a I could buy silver eagles from the local coin dealer for spot at about four bucks, right? What a what a wild it just seemed like good idea at the time. So in any event, so um over the 25 years from 2000, I I've compounded beat the S&P by about 2%. Um but I think we're now in a catastrophic situation that has not played out. But I think you're you're confounding of by the markets is correct. What I don't do is try to catch the upside, catch the downside. Um, if I, for example, decided to get out of gold, it it I'd be done, right? That's it. I might go back in 20 years, which I won't be around. So, there's that. But I don't get out of gold intending to get back in in in January or anything like that. I just ride right through that. And so, once I'm out, I'm out. As part of our silver interview series this month, we're bringing you quality research in a free silver investment report. To claim your free silver investing report, click the link in the show notes below. And if you're looking for a simple and secure way to invest in physical gold and silver, check out our sister company, Hardass Assets Alliance, at hard assets alliance.com. And speaking of silver, wealthy will be on the ground at the SCP Resource Finance Global Silver Conference this October in Toronto and Eric Sprat will deliver the keynote address. Stay tuned for more details in the coming weeks. couple of points I want to um touch on. So, you were talking about how the fact that you no longer short stocks and it makes me remember Julian Robertson, one of the greatest hedge fund managers of all time, and he was shorting a lot of tech stocks back in the late 90s. He got his face ripped off. He ended up ultimately took uh he had massive redemptions, ended up shutting the fund down. But um the other thing I want to touch on too, seeing how you brought up the late 1990s and early 2000s, and I see a lot of similar similarities to what we're going through right now, but this level of concentration, and I recently read a report that said the S&P has a the seven largest stocks on the S&P, they have a combined value of 20 trillion. Collectively, they represent 37% of the S&P. And it's a little tough to compare this to the 2000s, but if you you look at the tech bubble, the five largest stocks at that time were had a combined value of 20%. And if you look at all the tech stocks within the S&P, it got up to 33%. But when you see these this level of concentration that we're witnessing now, does this bring a lot of concerns? Does it remind you a lot of what you saw in the late 1990s and early 2000s? It does, but I think it undersells the risk because I think um like you know how I think Jesse Felder gets credit, but I'm not quite sure. But the everything bubble, I think the bubble has gotten into every nook and cranny of the entire global economic system and it's gotten into the price of eggs. It's gotten into it's gotten into the the the it's gotten into all stocks. So, so um I filed about 25 metrics of valuation. The first thing I notice is um the average investor doesn't know what valuation means. They think it means price. I don't know. You should pull your money out of the markets because you're not qualified. You don't even have a learner's permit. Um valuation is the price divided by something that it ought to track. And so it shouldn't trend, right? It should over time just keep progressing to and through the mean and going back and forth. So my favorite just because it's easy but again 25 all sort of concur but my favorite because it's easy is the the K Schiller which goes back to 1880. So if you look at K Schiller from 1880 to 1990 it averaged a PE of about uh 1213. That's a pretty good baseline. If you want to say what's historical 110 years strikes me as a pretty good historical average. And then oddly in 1994, and I mentioned 94 because every valuation metric on the planet did this in 94. It left the channel to the upside, never looked back. And so for the last, uh, for the last 30 years, um, recency bias has just been banging our heads like there's no tomorrow. So, so, so the the bull case that created this mess we're in is in a nutshell, um, interest rates went from 16 to essentially zero, right? And Buffett says that's the whole ball of axis. His 1999 article says it very clearly. You want to know where the market's going long term, just look at where interest rates go long term. From 16 to zero, uh, that the boomers joined the workforce, they brought their wives. So a demographic push never seen before. Um uh China entered entered the global economic system and brought a million slave laborers. Russia was was was not yet the Soviet Union had not yet collapsed. They needed capital. They were selling resources and we were helping them. Um and so everything was a tailwind that will not be repeated. You can't make a case for any of those repeating. The K shiller PE left the channel which averaged around 12 to 13 and is now sitting around 38 39. So I have the markets at 200% over historical average valuation which means regression to the mean is 65 70%. progression through the mean. Heaven only knows, but it starts to become a historically epic correction if you start thinking through the mean. And during that 30 from the window from 1981 to the present, the valuations which should not trend compounded 4% a year annualized. What happens if the next 40 years we compound negative 4% annualized? And people always say, "Well, that would never happen." I go, "Of course it'll happen." I don't know how. I don't know the path, but but there's never been a market that got way overvalued, that didn't eventually find its way to cheap. It never has happened, never will happen because that's not what markets do. That's like saying some guy's going to live to 200. I go, "No, he's not. Doesn't work that way." Um, and so, so you do a little math. It turns out if we grow our way out, you assume that the GDP grows at 2 and a half% a year, which might be optimistic given what we're looking at in my opinion, but uh 2.2 is kind of the estimate for the 20th century. So two and a half, two and a half is generous. Um and if you assume at some point we regress to the mean, it'll take 45 years, 45 years from now if we grow the GDP at 2 and a half%. and we regress to the mean, which by the way is the center of the bell curve. So it's the most probable position to find yourself in, uh, we will have not gained a penny in 45 years. I guess one of the things too that really stands out to me is is the number of bubbles. You touched on this, but back in the late 1990s, we just had one really big bubble, the tech bubble. But now, if you look at the last five years, we had spaxs, we had ICOs, NFTts, the metaverse. Now it's AI. I'm probably missing a couple too. But it's to your point, it's just bubble after bubble after bubble. It's just like trillions of dollars pumped into the system. And I think the AI, actually, I think Wall Street likes the AI bubble narrative because it kind of ring fences the problem into, okay, here's how you handle the problem. You just avoid the mag seven, right? And otherwise everything's normal. I go, no, you will be selling your children by the end of this, right? This is this is not the mag seven aren't going to correct aren't going to correct by a factor of five and leave everything else untouched. Doesn't work that way. And so if you once again I want to make a comparison to the tech bubble. The S&P pulled back 50%. The NASDAQ I believe it was down 80% from the top to the bottom. Do you see a similar move this time when we get this correction? Well, I think the S&P's got a 70% correction in it and and and and the MAG seven I I don't know how many of those I mean look look at a great example there's Google right look at the company Google two years ago Google looked like it had a moat that was 100 feet wide and 30 feet deep and that no one would ever knock Google out of search right Google and so you could price it wherever you want and it might have been overpriced, but at least they're going to be here. And now they're fighting for their lives, spending hundreds of billions of dollars to not lose the entire search space. And I was on a podcast last night with a bunch of huddlers, and they were they were making this these arguments about Bitcoin. I said, "Look, I'm not making arguments about Bitcoin. I'm making arguments about black swans. are making arguments about um you know if all of a sudden there's a there's a new crypto that just is better or if all of a sudden the global governments get and say okay this has been fun but now we got to step on them and they just crush them and you know they can do it you know they can do it governments can crush you and I was trying to convey to him I said no one knew that Mao was going to kill 80 million people but he still did no one knew Sal would kill 40 million people but he did governments will crush you and And so what if the cryptos become inconvenience they're gone and so I was trying to convey that you know in 1989 if you asked anyone about the Nikkay there people would have said overvalued but would anyone have said 35 years later they'd still be underwater and inflation adjusted they're further underwater so no not a bit I almost get the sense that things have been too good for too long. Mhm. So the Fed kept rates too low for too long, too many times. The too many times is the problem, right? And somehow they kept saying, "Look, if we just juice it." So So the market is basically a crackor at this point, right? And and in the paths of trade, people say, "Well, that's not going to end." I go, "Of course that's going to end. Of course that's going to end." And and the question is why? And and the answer is well retirements recession. But but once you start backing out of that passive trade, it's going to be different to the extent that you know in the previous bubbles if if you're going maybe I should take cover. You'd be sitting there looking at your portfolio and say I better get rid of my Intel or I better get rid of my Sun Micros systemystem right or my Dell or my Worldcom. Most investors are now one keystroke away from selling the entire market and it will be completely inelastic because it's not like Vanguard index fund has cash to cover redemptions without having to sell. I if I if I turn in $10,000 worth of index fund today they got to sell $10,000. And so so the path of trade will turn into a completely inelastic cell. And I don't know what it'll look like because we've never experienced that before. I one time buttonhold Jack Bogle. And I said, "Jack, let me let me present something to you." I said, "P I didn't call passive investing. I said, index funds have taken out the big hedge fund man, the big fund managers." So, it used to be that every company had these big gunslinging money managers and they've been replaced with just indexing. I said, "These were the guys who would walk into General Electric's office, CEO's office, and say, "Here's the deal. We're going to sell if you don't cut this share buyback crap on debt. You're destroying your company." So, there was adult supervision. I said, "But the index funds have removed adult supervision from the markets." And he said, "That's correct. Bogle. Jack Bogle. So Dave, let me push back on this notion a little bit. And what you know, and I'm gonna say it's different this time, Dave. The Fed, the Treasury. Good opening line. Good opening. Yeah. But the Fed and and the federal government, they've realized they know how to finesse the markets now. So we might get these small pullbacks like 10, 15, 20%. Very much like the one we saw in April. But then boom, you throw five trillion, 10 trillion at the market. Next thing you know, it's right back to trading at all-time highs. I mean, if you went into a coma earlier this year and you woke up now, it's like nothing ever happened. But look at the volatility we've had this year. It's been insane. Well, look at look at two 2020. I wrote this. I actually made a paragraph where you woke up from a coma from a COVID infection and and and you've been out for the year and and you you find out that the the the entire global economy has been shut down and and a pandemic, you know, blanketed the globe and and the Chiron across the screen of MSNBC in your in your hospital room says the S&P is up 13%. So, so the markets have ceased to serve as an indicator of anything. That's what's confounding to us all. So, another great example right now that you can find article after article about the German economy being horrifically bad now. The German they shut down their nuclear power. They've got trouble with Ukraine. They've got their their their production's all out of whack. It it is a great depression in Germany. The DAX is parabolic. Why? I don't know why. And any argument someone gives me for why is not going to make sense to me because that market should be selling because it's it's a it's a lousy market. It's a lousy economy, but it it doesn't respond. At some point it will. And what I think has changed is that for years we got to pretend inflation was not a problem. Now they understated it. How much do you think they understated inflation over the last I don't know 15 years? Oh, per year. Anytime I hear the government throw out a number on inflation, I just double it. 4%. If they say it's three, it's six. Okay. So, so it's it's understated by maybe 3%. Some people guess four, five, six, whatever. What it means is if you look at the GDP, which is inflation corrected, we've been in a recession for a very long time. because we've had no GDP if you correct for inflation correctly. And so, so um so, so, so the speedometer is not giving us a good read. Now, here's the deal, though. For the first time in many, many years, inflation got exceedingly real in 2020, right? I think that exceedingly real now is is a is is a is sitting right below the surface. And I think that that that if you were going to build a house for someone, if you're a contractor and you were going to build a house for someone and you said, "Okay, we'll build it in two years." How much would you add for inflation correction to build that house? So, you estimate the cost of building a house. You say, "But we're going to do it two years from now." How much would you add? 5 to 10% a year. Right? That's inflation expectation. If you're a a labor union, you're you're negotiating for payway pay pay raises for your union for the next five years. What are you gonna what are you gonna negotiate for? You going to go for this is inflation expectation. It has now gotten into the DNA and I think the minute the Fed starts doing what they has worked for so many years because of the the credit cycle, right? The 40-year credit cycle was working as a tailwind is no longer there. So, I think the minute they start doing something that looks kind of inflationary, the hits the fan. I think they're boxed in by that. That 2% target is a pipe dream. Well, it's also fake. It should be 0%. Let's let's you actually look at the Fed man, it's a stable it's a stable currency. 2%'s not stable, right? Paul Vulker said that. He said that's the crap you learn at Harvard. and um and so so and and and so I think the Fed is going to find that its tools which there's a lot of tools that the Fed double antandre on purpose um they're not going to work. I I really believe though that that game is over and and I think it's possible the Fed, despite my low opinion of them, um maybe understands this and and realizes that if they start dropping rates and the tenure goes up, not down, they are then not going to know what to do. And so I think they're somewhat um white knuckling monetary policy right now because I they don't they don't have the tailwind of well we can just drop rates some more. I think that game is over. So we have this ongoing battle between Powell and also the president. Uh of course the president wants to cut rates and Powell is staying very firm. He wants to keep rates right where they are until he gets a better read on what's happening with the trade wars and the tariffs and inflation. Do you think Powell is being political or is he really concerned about inflation and do you think I think you just said it but inflation is still very much a threat? I have two layers. I have two answers. One is my extreme answer is what if that whole thing is a kayfave and Powell and Trump are talking and Paul says I'm going to hold rates tough and Trump's gonna say well I'm gonna scream at you and this is the way we're gonna play it. Right. kind of like when um Megan Kelly and Donald Trump got in a fight in the first debate. Her question was stupid. They end up in a fight. They both won, didn't they? They both became Trump got his press. Megan got her fame. It looked like hay fab. The more straightforward answer is that Trump is ripping Powell in public enough where Powell can't move. He can't look like Trump's right? He he can't drop rates with Trump ripping on him and Trump knows that. And so Trump's ripping on him so that when the hits the fan, he can now blame Powell. Whereas Powell can't. I think they had a raise rates. I think they're doing it backwards. I mean, I I'd be happy if they just said take rates to five and just leave them there safe for the rest of eternity. We're not changing rates. Free market figured out. Okay, that's an interesting point. So, you think under the right circumstances we could see a significant pullback in the S&P? You actually said 70%. Maybe that's the catalyst. They don't cut rates. Maybe they take rates higher. Nobody's talking about that. Could that be the catalyst then? That would that would be well if people who again investors seem so green to me and I think it's because every every new bubble has a new generation of of people who are who do not know the history of markets and so they don't know what the narrowing you described at the start of this podcast how catastrophic that could be even though it's really a technical indicator which I tend to not pay attention to. Um I I I I think it's quite possible that the rates will go up. Um I think that the 70% correction is not going to be some Vbounce. I think the age of Vbounces were an artifact of of of the the the dropping rate tailwind and and aggressive monetary policy neither of which will exist. So I think the age of Vbounces is over. the best analogy which they never work perfectly but if I had to do it pick a starting point the NK looks like a good model to me. I was on a Twitter spaces with George Noble and and I said I think the markets will become uninvestable. I said just like the Nikkeay they'll be uninvestable. That's not to say there won't be winners but I think it's going to be rotting your brain to death. I think it's just going to be you're gonna buy and then the the way the way you really find a secular bottom is you knock investors on their butts and then they get up and they buy because of you know muscle memory and then they get knocked on their butts again and then they get up and buy and then after a while they go I'm never touching this crap again and that's the bottom right when there's there's no buyers left and uh and and and I think that's what the Nikkay did. Now, shockingly, the Nikk not only spent 35 years going nowhere in the United States, if you own the 29 top, um I think it was in 1984, you were at exactly the same price inflation adjusted. People don't know that. They think that they think the 20th century was just, you know, lower left, upper right. You inflation correct. If you inflation correct, Ron Grace has done this. You inflation correct using M2 money supply. Okay, that sounds like a pretty good inflation correction to me, right? Better than a CPI, which is all screwed up. You correct the capital gains in the S&P since 1925 and the market goes down. You correct total gain, total returns from 1925, the market goes up 3.73%. Now, interestingly, that does not include that does include dividends. It does not include taxes and it does not include fees. And so, your 3.7 something% is now down in the twos. Maybe optimistically, Warren Buffett in his 99 article said, "When you consider all the fees and everything, but not taxes and not valuations, just over eternity, the most you can expect is 4%. The average in there there was a poll done I think Belder quoted this there's a poll done by Naxis or something that said the average investor right now is expecting 11.7% above inflation on their equities from these valuations. When the pros were asked, "What do you think of this poll?" They were pled and said, "This is what the investors say. What do you say?" They they all said, "Oh, no, no, that's too high. Think more like 8%." The pros are just 20somes in cubicles somewhere who have not seen a real bare market. I didn't think 089 was a real bare market. It recovered too quickly. It didn't change attitudes enough. And so I think we're going to get a real come to Jesus moment. I think our attitude has to be changed, which means you can't be just dip buying everything. You've got to be smart. You've got to buy stuff based on cash flow. A story I love to tell is Buffett lamented holding on to Coke after the.com. Very few people know this. He actually publicly lamented holding on to Coca-Cola. And we know he loves it, right? I mean, he adores it. What he what he was saying was, it turns out that Coke reached a PE of 50 in 1998, which for a company like Coke, Coke is a royalty trust, right? You just pump Coke into the marketplace and and and and it already had had, you know, 85% of the beverage market. So, it wasn't going to grow. It was just a revenue stream and it was returning 2%. With a PU of 50 and Buffett in retrospect realized that he was a complete idiot for not recognizing that 6% on a Treasury would have been a lot better bet. took Koke probably without inflation correction took KO probably 15 years to get back to that high and uh might go back to it again. So you do have concerns about the stock market. What about the economy now? When I look at the economy, it looks pretty good. Growing at 2 and a half to 3% unemployment rate is hanging around this 4% level or 4.2%. Things look pretty good. any concerns? Um, well, it depends who you ask. So, if you listen to someone like Stephanie Pomboy, she says the numbers are completely fabricated. And since it is their government numbers, I think that's a pretty good bet. You know, if their lips are moving, they're lying. Um, there's something that doesn't feel good about the economy. It feels recessionary to me. But there's a paradox out there, too. When I walked up to a convenience store, there's always a a help wanted sign. So, I don't think that's because it's burning hot. I think it's because there's something broken about the labor market. And I think it could even be something like guys who get fired working construction are not right now taking jobs at the 7-Eleven. And so, so there's uh they can't hire in certain places yet. If you look at farmer, farmer's been laying off people. You you Silicon Valley has been laying off people. So, so I think I think that the market is broken, not tight. It's like the housing market, right? The buyers and sellers are not meeting. Buyers don't want to buy at these prices. Sellers don't want to sell at lower prices. Someone's got to give. And you and I both know it's probably going to be the sellers because the buyers don't have the money. I would agree totally. It's like we got this bifurcated market, right? It's a real paradox. I take a lot of Ubers and and I always enjoy talking to the Uber drivers because those people, they're out there grinding every day. They got two or three jobs just trying to, you know, put food on the table and provide for their families and I hear these guys and I know they're they're suffering, right? And then you look at the other end of the spectrum and you got these guys flying around the world on private jets, right? Like Jeff Bezos just blew 50 million bucks on his wedding, you know, and uh it's hard to make sense of it all. Well, so if you look at, for example, the COVID lockdown, they said it knocked out 2 million mom and pop businesses. Where did those people go? Right? So, well, people who own Linda's Diner, Linda probably works at Chipotle now. And so you've got this situation where we seem to have moved a tremendous percentage of our economy from sort of street level to Wall Street level. And so now Chipotle might be doing well because they're getting all Linda's business, right? Um private equity is going to be a headlining disaster. So, so the, so my prediction is the next crisis, which I I can't predict when it'll be. I just know there's one coming because there always is, but I think there's going to be a real barn burner. Um, the word private will be everywhere. So, private equity will be shown to have been scams. um the private credit market, the private debt market where when you go to buy a burrito and they let you pay it in four installments, which is insanity. You shouldn't be buy you shouldn't be doing takeout if you can't pay for the whole bill, right? Um and the question I like to ask rhetorically is is is when you are laid off and you got to choose what to pay, are you going to pay your car insurance or you going to pay for the payment on your Bark Lounger? And the answer is you're going to pay the car payment, right? Well, it turns out the private credit market, which is where all this all these the companies don't hold these delayed payments, they sell them off into the credit market. That's this totally secretive credit market. It's estimated to be $4 trillion. You got student loans which is a trillion and a half which by the way started the real problem started around 0708 which I have made the argument and I've heard no one else make the argument that I think the student loan debt crisis which just launched was actually monetary policy in disguise. Remember how Cardman said u we need a we need to create a a housing bubble to get us out of this recession, right? He said it's like take that guy's Nobel Prize win. Let's start with that. But um I think someone said let's pump a lot of liquidity into the system. We can put over a trillion into student debt. They said, "Yeah, sure. We'll pump in some there. We'll pump some over here." I think it was all part of liquification. Um Jerome Powell the other day said that housing is expensive because we haven't built enough houses. So, I'm thinking about this. I go, "Okay, Jerry sounds like Jerry from, you know, Mel Gibson's role of a crazy guy." Um, so the people who can't buy houses are living on the street. The answer is no. They're living in apartments. I said, "So, we are housing everybody. We're housing apartments. We're housing them in in houses. and and if you somehow build a ton more houses, we're going to have a commercial real estate crisis. And so it's not about it's it's not at all about not having enough housing. It's that Black Rockck owns all the houses and they bought it using credit that went for something like 0.15%. If Black Rockck had to pay the real cost of credit, they would not have bought private dwellings. I'll buy I'll leverage something at 0.15% all day long if I knew I'd get to keep that 0.15% that that's stealing money. So all the Barry Stern looks of the world and stuff they they did really well because after 089 and you had this huge inventory hit the marketplace someone said we got to absorb it. How do we do it? And the answer is we give unbelievably loose credit to the rich guys to buy up all the houses. Then they jacked up the rents. We are heading for potentially periods of unrest. History shows that when when the the wealth gap gets big, the guys at the bottom say, "Screw it. Let's elect Mandami, right? Let's elect an idiot to put in power." And that's not a Trump dig. I I think the idiots really coming forward. Um so so I think we're heading for a tough period where people are just going to be so mad that they lose their house again. Do you actually think he has a chance of being elected as the mayor of New York? Oh, I think he will. Yeah. Still quite a few months away, but Yeah, but it's a it's I mean he's the odds on favorite amongst the Democrats. And the idea of New York going Republican doesn't seem very probable. And so, yeah, I think he probably will. And someone said, "Look, if we don't straighten out the system, he's going to be the least of our concerns, right? He's he's really we're going to see a lot worse than that." And someone said, someone the other day bitched at me. I was talking about some about some stupidity done by government. And the guy said, "So, you think the entire I think it was about North Carolina." And he said, "So all the voters in North Carolina are nuts?" And I pulled out Godwin's law and said, "Well, Germany elected Hitler." So, you know, just because a guy got elected doesn't mean that it was sane. Just a follow-up question on what's happening in the economy. And I also want to touch on the Canadian economy, seeing how I live here. But I quite often I look at these bank stocks and I'm going to throw out JP Morgan for example. They reported not too long ago they had stellar numbers and and I think most other banks did too. JP Morgan's trading at or near all-time highs up uh 15 to 20% on the year. And the largest bank in Canada is called the Royal Bank. It's also trading at or near all-time highs. Not up as much, but I think it's up 10% on the year. And when I look at these bank stocks, they're just a reflection of what's happening in the economy overall because they cover so many elements of it. They deal with retail customers. They deal with commercial customers, investors, etc. And yet, none of these banks in the US or in Canada are showing any signs of weakness in terms of their loan portfolio. Which is really surprising because not sure if you're aware of this, but our unemployment rate in Canada right now is 7%. In the province of Ontario where I reside, it's at 8% and in the city of Toronto, it's approaching 10%. So there are people out there hurting and Canadians are are more pissed off than normal too. Yeah. Yeah. For good reason, right? Like the trucker rally was not a good moment for for Canada, right? Um well, I would have to say that um in ' 07 when we were at the scenic vistas, right, the the views are always best from the top. Not that it'd be too tright. Um, no one predicted that Goldman would have to be turned into a bank to be bailed out. No one No one predicted that the government would illegally take over AIG. No, none of that was No one knew Beer Sterns was going to go down. I remember when their internal hedge funds went south and the original headlines were, you know, $600 million. I go, that that's nothing. That's not relevant. But somehow that was the spark. That was the that was the f the snowflake that hit the slope that that started the avalanche that and and and so uh I do not believe in a complex system. Complex being different than complicated. Complicated is predictable. It's just got a lot of moving parts. Complex is not predictable. In a complex system, I do not believe you can predict. It's by definition. But I I don't think you can see the stuff coming and I don't think it's just lack of wisdom. I think it literally what was what triggered long-term capital management's problem? I think it was a bond default in Russia, right? Who would have thought that a bond default in Russia would have any effect whatsoever on the global markets? But there's leverage under there, right? there's leverage that and and when and when the the credit default swaps and all that crap went to hell in 0809 the banks didn't even understand their own exposure right they're going wait a minute we own this crap really but I remember watching and reading and having you know cubes and squares and CPDOS's and stuff and going this is crazy time and all had to do is have someone write a blog and explain how crazy it is. You go, I got it. This is nuts. Linda Green, remember Linda Green? She signed there was Linda Green, thousands of Linda Green signatures on mortgages. They weren't they were synthetic mortgages. They were, you know, we've how many trillion dollars of crypto do we have right now? Couple, right? And and you know, if if I asked you 20 years from now, is Bitcoin going to dominate the globe or is it going to be zero? And you get to choose one, I think you'd have to say zero. I've been so wrong on it. I just stopped guessing. Well, but that's that that's right. And Dr. Miller finally gave up guessing and and lost a billion five, you know, within about a week of of the top, you know, when he was working for Soros. And as you mentioned, you know, um Julian Robertson bailed, he defined the top essentially, right? Um h how many short sellers are there? Here's the asymmetry in the markets, by the way. So when there's something bad, like someone says, "Oh, the tariffs are going to be bad." Forget about whether it's true or not. There's about three guys left in the world who are willing to short something to bet on that, right? Because the rest are all dead. The rest are all in shallow unmarked graves, right? Jim Chanos is a shadow of what he used to be. Now he's just a pundit on Twitter, right? When the event passes by without a disaster, millions jump in to catch the dip. And so there's this asymmetry in the sellers, the the you know, you know, sell the you know, the buy the news, buy buy the rumor, sell the news, right? in in a downswing at sell sell sell the rumor buy the news right um the sellers of the rumor are almost non-existent now and the buyers of the news that tariffs didn't destroy the world yet are are everybody else on the planet and so that asymmetry is causing real trouble because it's the the I think there's people who know the markets are screwed up but they still think they're invincible I've never seen a bubble that didn't have a great narrative. Roaring 20s, things were roaring. Boy, did the world feel like it was changing. Nikke, we were sending management teams to Japan to understand how the Japanese were so good at managing companies, not realizing it was a real estate bubble, right? And and this narrative is the Fed won't let it drop. That's not it's not a good narrative. So, as an investor, how are you preparing for what's happening right now? I mean, the S&P was up 25% last year. I think it's up 8% year to date. Are you all in on bonds? Are you long gold? How are you positioning yourself during these unusual times? Well, my two biggest positions are T bills, short duration. I'll go up to two years. two years doesn't fase me because because it's it's like uh it's like freezing your credit card in a block of ice and putting it in your freezer so that you can't use it. Um I don't believe that I will have to jump on anything within two years once these markets start selling. So having two-year treasuries and I've got other more liquid stuff anyways, but um my biggest position of speculative asset is gold and silver. Um, I have jumped on, this is a tricky one, platinum. Been watching platinum for years. I own a tiny amount of PPLT. So tiny that it could go to zero and it I wouldn't even notice. And um but I've been talking to technicians for the last 6 months or so like Peter Bryant guys like that saying what price would the platinum chart which is a flatline for 10 years would it catch your attention? What what what would you consider to be a break? I'm not a TA guy at all. I just eyeball it. And um and I got some opinions. So I formulated an opinion said look when platinum gets to X I can't remember what the price was. I'm gonna buy platinum. I don't buy it because of breakouts, as I said, once every 10 years. The platinum story is fascinatingly bullish. Now, do your own due diligence. I could be wrong, but I know guys like uh Peter Bookfire is on it. I I know there's some smart people on it. At the present rate of consumption, the total above ground supply of platinum because we're in deficit production will run out in about three years. I know nothing that's that tight. It is the total above ground supply of platinum at current prices is something like $3 billion. It's a ridiculously small amount of platinum. It's 50 times more precious, more hard to get than gold. Um, Einhorn once said, and I can't remember if it was TUMI or in a podcast, but he said, "If you're going to invest, invest directly. So, if you think platinum's a good bet, don't buy the miners. Buy the platinum." Would be a take-home lesson. The platinum miners are almost all in South Africa. I think it's a 90% South African origin for platinum. And South Africa is starting to look like a failed state, right? It it's you got white farmers getting slaughtered and you know you got the potential for confiscation of of the wealth creators by the by the the the the country and so 90% of the platinum production could be handed over to a bunch of Marxists very quickly and then the backup supplier is Russia. We haven't exactly catered to Russia so we're not their preferred customer. And so the bottom line is that trying to get platinum could get real hard. And already we're in this three years and done deficit production for four years. I I just don't have the numbers um committed to memory, but it's a small number. And and and so I I I think it's and and then the question is, well, who uses platinum? Well, it turns out I'm not a big EV fan. I I think the idea of having a car that could uncharge and then there's no way to get it anywhere, right? It's not like you go walk down the street and grab a tank of gas and pour it in the tank and drive to the gas station, right? So, imagine a hurricane escape and all the EVs start stalling out on the highway. How long would it take to clear? So, I think EV is not the optimum technology. It's it'll be a specialty item. I think I think the hybrids look phenomenal. Hybrids use more platinum than internal combustion engines because they burn cooler. So, they need more in the catalytic converter. So, it's a very bullish case for platinum. And so, here's the problem I face. Um, fortunately, as a boomer and having done really well, um, I can just not screw up from here. If I don't screw up, I'm fine. Period. Um, I look at how much platinum I to own for it to be significant. It's got to be at least 5%. Right? If if you own 2% of something and if it goes to zero, you might not even close in the red that day, right? That's not a big enough position to make a difference. You got to get a little drunk in Miller in you. So, let's say I want a 5% position. And then I do the math on how much I have to spend to get a 5% position. I go, that's too much money. So, I've got this paradox where it feels like a 5% position in dollar terms is too big. And the other thing is, and I said I'm, you know, patient buy and hold kind of guy, but the markets aren't waiting. So, once platinum started to move, I said once it starts moving, it's not going to wait for me. I averaged into gold from 99 to 2002 or three or something like that. The platinum's not going to do that. They're not going to let me do that. And so uh so when platinum started to show a pulse, I started hitting the buy button and I had kind of a mental formula which I was following and I think I bought six slugs. Um the position's still not even close to the right size, but I've done well in that tiny little investment and and my formula is still there. So I'll keep hitting the buy button. I like to buy tops, not bottoms. So I like to chase it. Buy the momentum. Yeah, buy the momentum. And guys like Felder talk about momentum being really an important parameter. So um and I bought gold all the way up to around 457 bucks was the and then I bought some at 1,200 after the 1900 peak. But um and so so I'm going to keep hitting the buy button on platinum and and at some point I will have a position that will be significant enough that I can say okay you did that one well but I tend not to size well I have to admit that's not a metal I follow and uh I will definitely check it out and I want to thank you very much for being with us today Dave and sharing your insights and your views on what's happening in the markets and the economy etc. If somebody would like to follow you on online and see more of your thoughts, where can they go? Well, first I should warn them, don't forget I'm an organic chemist, so everything should do your own due diligence. Um, you can find me um some people email me. I try to keep up with my emails and if if if you know that I work at Cornell and you know my name, if you can't find my email, I don't want to talk to you because you're not smart enough. Um, I I'm on Twitter at David B. column and I write a year in review at peak prosperity. That's my pin tweet and and that and then you can hit YouTube and that's a crowded space now. I'm I'm doing podcasts. Um the most recent one was less than 24 hours ago. So at some point people wake up and realize that that that that I'm not worth listening to, but so far I've been able to keep a following. YouTube is an amazing platform. There's over two billion subscribers. Do you know how many channels are on YouTube now? I I can't fathom. Over 110 million. And I remember when I was growing up with cable, we had two or 300 channels. And now there's 110 million channels on YouTube. Well, we had three channels when I was a kid. We we in our cabin up here, we had a TV with antennas. Not too many years ago, actually. And before internet, which we now got, but um there was only one station and what was stunning is it was kind of enjoyable. You go, "Oh, I can watch this, I guess." You know, and you you you you realize you didn't need more than one station. And uh and then um at midnight, the ads at precisely midnight, the Canadian station would come on and and advertise Club Super Sex. you Canadians are loons. Oh my god. So that's where you can find me. It's not where you want to find me. And and I should mention um uh I did an interview with Tucker that just uploaded about an hour ago. And I was going to mention that that you just did the interview with Tucker Carlson and I would suggest to our viewers check it out. And um I'm I'm also going to check it out later on. I like listening to Tucker sometimes, but I will definitely listen to your interview. And once again, I want to thank you. Well, thanks for inviting me. It's very enjoyable. Enjoy the rest of your summer. I will. If you want to learn more about investing in silver, check out our free silver investing report. You'll find the link below in the show notes. And don't forget to sign up for your free portfolio review with one of our investment partners at wealthon.com/free. With markets trading at all-time highs, now is a great time to stress test your strategy and be prepared for what's to come. Thanks for watching and we'll see you again soon. [Music]