Risk Management: Lance Roberts discusses the importance of reducing risk in portfolios by taking profits and adding defensive names due to concerns about market volatility and negative divergences in market breadth and relative strength.
Market Outlook: Despite recent market dips, the advice is to consider buying these dips as the market is expected to rally towards the year-end, driven by earnings, buybacks, and portfolio positioning.
Credit Market Concerns: There are emerging issues in the private credit market with companies taking on excessive debt, leading to defaults. However, these are not yet seen as systemic risks comparable to the subprime crisis.
Investment Strategy: The focus is on ensuring regional banks in portfolios are not overly exposed to risky debt, and making credit risk adjustments in bond portfolios to mitigate potential impacts from defaults in private credit markets.
Technical Analysis: The market's technical indicators, such as moving averages and volatility indices, are crucial for understanding market trends and potential corrections, with the current market holding above critical support levels.
Commodities Insight: Gold and silver have experienced significant rallies, but caution is advised due to extreme overbought conditions, suggesting potential for a substantial correction.
Economic Factors: The discussion highlights the potential impact of economic policies and AI-driven capital expenditures on future economic growth, which could influence market dynamics and commodity demand, particularly in the energy sector.
Portfolio Adjustments: Recent portfolio adjustments include rebalancing positions in precious metals and reducing exposure to potentially risky regional bank bonds, aligning with market conditions and risk assessments.
Transcript
This is why over the last couple of weeks, you know, we talked about reducing risk in our portfolio. We took profits and stuff. We, you know, we added to some defensive names in the portfolio because we were starting to get concerned about both the length of this advance as well as the very low volatility we were having. And then we talked about the the negative divergence in breadth as well as the negative divergence in relative strength. All signaling that we were about to have a corrective phase. So that's why we had reduced risk and rebalanced some positions. So, we're now in that phase. But overall, despite those little dips, you probably want to be buying dip. You know, and this one included, you probably want to buy these dips going into year end. [Music] Welcome to Thoughtful Money. I'm thoughtful money founder and your host, Adam Tagert, welcoming you back at the end of the week for another weekly market recap featuring my good friend, the enmological portfolio manager, Lance Roberts. Lance, how you doing? I'm doing fine. How are you today? >> I am doing great. It's great to be back on the program. Hope all is well. >> Yes, everything's doing very well. Um, so yeah, good to be here. >> All right. Well, I went with entomological, which uh maybe the scientists in the uh in the audience will know that that stands for of and having to do with insects. And we're hearing a lot of talk about cockroaches right now in the in the economy, in the financial system. So, uh we'll get to that in a bit. Couple quick things, though. So folks, if you're watching this video uh the day it's going live, if you're watching it when it goes live, um we are just starting in parallel to this uh the thoughtful moneyfall online conference. And actually, if you still want to watch, you can still jump in early on in the conference. Just go to thoughtfulmoney.com/conference. Buy your ticket, you'll get immediate access into the live event. It's a 10hour event. I think it's in fact it might be a 10 plus hour event. I got to figure out how to shave some time off. Uh but folks, it is is going to be fantastic. just a tremendous uh faculty. Could not be more timely given what's going on in the world and in the markets right now. Um if you're watching this later than that, um if you go to that same URL, thoughtful.com/conference, you can purchase the full replay of the event after it's done, uh you'll get everything. You'll get all the presentations, all the live Q&A, all the archives from the live chat, and all the resources that were shared by the faculty members. So anyways, that's going on right now in parallel. Uh Lance, I'm going to sleep for like 3 days straight after this. She can probably >> um I I also want to say last week while you were um you were busy with your wife and uh Michael Liowitz sat in for you. We had to record a day early because of my schedule. And uh I made the uh just the huge karmic error of error of saying, "Hey, Mike. Well, we're recording here on Thursday, so folks were going to be missing one day of the week. Hopefully nothing happens in the markets on Friday." And the markets heard that and said, "Hey, buddy. Here, hold my beer." >> Yeah, exactly. We had a 2% down day in the S&P, one of the biggest drops of the year. So, anyways, there's lots to talk about this week. >> Yeah. Yeah, absolutely. So, go ahead. >> Okay. Well, I'm trying to figure out where do we start, right? Do we start with, you know, cockroaches in the credit markets? Do we start with the whole trade war? You know, are we in a trade war? Aren't aren't we in a trade war with China roller coaster uh with China roller coaster that President Trump has had the markets on? uh or do we talk about the quote unquote debasement trade which the uh financial media is talking about like it's this brand new thing which of course has been going on for decades. So where do you want to start? >> You you pick it. Don't care. >> Don't care. Okay. Um well all right. Why don't why don't we talk about the cockroaches? Um so you and I I think you and I I know Michael and I talked about it last week. Um but um we have seen some uh some bodies float to the surface. Folks are probably getting sick of me using this analogy, but I think it's a good one. Um, where we had some companies that had taken out a, you know, obviously more debt than they they could handle through the private credit market. And in the private credit market, as you and I have talked about for a long time, Lance, um, it it's really grown a lot. It's sort of exploded um, in size over the the past bunch of years, you know, 5 years or so. A question we've asked ourselves is, is it ever going to start exploding in terms of bad debts going bad? because we don't really know the quality of the the debt that the loans that are being made in this space, right? It's not regulated the way that the banking system is. We've all sort of been crossing our fingers and saying, "Hey, hopefully these guys are making sane loans that make sense." >> But we won't really know until quote unquote the uh the bodies start floating to the surface. And so we had, we had First Brands. Now those were sort of in the um in the automotive sector. So, you know, maybe folks have been saying, "Well, that's those are kind of one-offs and maybe that's just contained in the automotive sector." But now we're starting to see some regional banks really start to struggle here. And again, Jamie Diamond said, um, you know, sort of referred to these companies as cockroaches. And and when you see a cockroach on the kitchen floor, you know, you don't have just one. So, um, how big of a deal is this at this point, do you think? >> It's not. Um I mean it's important to pay attention to you know just because anytime you have any type of defaults like this that go on you know there's always concern that well there's more out there and there probably is but you know this started with you know the thericolor issue then it went to first signal and you know we saw these you know kind of defaults being done in some of these private credit markets and actually we were just talking about this this morning uh Mark Cuban recently just backed a firm I believe they're in Dallas and what this firm does is they basically loan money to to poor credit borrowers against their auto the equity in their automobile. So, think about that for a moment. I I have very low I have a very low credit score, which means I probably took out a subprime auto loan to buy a car of some sort. I've made payments on it up to this point, but and maybe I've built up a little bit of equity in this. So, now I'm going to take money out of my car, which is a depreciating asset. So, you know, this is just the type of environment that we've worked ourselves into. So, it's not surprising that you're seeing some of these things blow up. But, you know, the immediate concern is like, oh my gosh, this is going to be another Silicon Valley Bank situation. That was very different. Silicon Valley Bank was impacted across their entire collateral all at one time. Um, and became under collolateralized as a bank and that's what caused the default of of Silicon Valley Bank. And that kind of spread through a couple of other regionals. And of course the Federal Reserve stepped in with their uh kind of their their bank bailout fund at that point and you know stabilized that situation. Um this is different in the standpoint that this is not affecting the entire collateral of the bank. Yes, it's hitting pockets of collateral at the bank. So in other words, yes, they are definitely having some, you know, some issues with some of the collateral that they own for sure. No doubt about that. But it's not a con at this point. It's not a a contagion across the entirety of the asset scope. It's also not. And of course, the other side of this is like, oh my gosh, this is the next subprime loan crisis. Not nearly to the magnitude. Um, you know, you were talking hundreds of billions of dollars worth of subprime credit. You're talking just of, you know, several billion of this type of credit, you know, potentially having trouble. So again, the point is, you know, don't want to ext it's it's certainly worth paying attention to. And if you own regional banks is certainly making sure that you know the the bank that you own is not grossly impacted. That in other words, they've got a lot of exposure to this debt. So make sure that the the banks that you own on the regional side are are good banks. Um and and like we went through and did some credit risk adjustments in our bond portfolios. We had some Jeffrey bonds about two weeks ago right when the the um kind of situation came up. we went in and sold all the bonds that we had on regional banks that might be exposed to that area and and so we cleaned all that risk off our table before that accelerated. So again, that's the kind of actions you want to take here. But I wouldn't extrapolate this out into something being a lot bigger is going to bring down the whole credit market at one time. >> Yeah. Um agreed. Although let's just put a caveat in at this point, right? because we we don't know the extent at which there may be a contagion here, but right now it seems hate to use the word contained because that's what they used to run subprime, >> right? >> Um but may maybe the better analogy here to switch insects is it's like a couple of termites, right? You're like, okay, my house has got termites. Doesn't necessarily mean the foundation has been riddled and the house is a tear down. It might mean, hey, you know, early on you can pay a good uh fumigator to come in and and address the problem. We just don't necessarily know yet, but but we're not seeing signs that that the house is in any real mortal danger yet. >> Um >> Okay. Um but Lance, you know, so you talk about Mark Cuban's investment there. Right. >> Um, you know, something similar I saw recently that PayPal has their own buy now pay later service that they built. >> And I read recently that they basically sold the book of the the loans to another company, >> right? Which kind of suggests, you know, that they're like, we know how bad this thing is and we want to get the exposure out of here. So my question is is you know we've railed about buy now pay later and the fact that you know people are literally using it to buy their dinner right >> so that plus Cuban you know lending to a subprime auto uh you know market of people who have this depreciating asset who have already demonstrated you know weak uh credit uh credit integrity. Um, to me those just sound like really late stage, like late late cycle stage uh developments where everybody is trying to come up with the next innovation just to squeeze a little more juice out of the lemon, but when you kind of look at it from a distance, you're like that seems really ridiculously risky. >> Yeah. No, I mean, you know, you have to imagine that buy now pay later and again, you know, there there's companies like a firm and CLA that have that are doing this and and again, you know, in the original concept of it, it it made some sense, right? Because it's like, okay, I want to finance a couch and so I can go buy this on buy now pay later and I can finance this over four payments and I can get the couch for my apartment, right? So that kind of made some sense, but to your point, it has now turned into, hey, I'm going to use this to go to McDonald's or to go to, you know, Walmart, buy groceries, whatever it is. So, you know, we've just created another level of credit accumulation for the least creditw worthy borrowers. And, you know, that that that does certainly raise a risk. And and if you take a look at the buy now pay later kind of scope, there's not nobody knows exactly how much is out there because it's not on balance sheets and a lot of things like that. We don't have a like, you know, when we track federal debt, we know to the penny exactly how much federal debt is outstanding. We don't have that kind of tracking for buy now pay later. At least not right now. >> Yeah. Which is why this feels late stage to me because that's one of the things when it blows up, you're like, "Ah, you know, we probably should have had more visibility." >> Yeah. But but it's estimated to be around 560 billion, right? So it's it's not a a nothing. It's, you know, it's half a trillion bucks. Um again, you know, when you look at the subprime crisis, that was around 1.3 trillion. So again, it's this is about half the size of the subprime crisis. Not saying that a again that ain't nothing, but it's, you know, it's it's certainly there. And it's also not assuming that, you know, you got to also remember the problem with the subprime crisis was really twofold. really wasn't the subprime mortgages that were the problem. The problem was is that we took those subprime mortgages and we spread split off the principal and the interest and we recolateralized those. We repackage those on top of something else and we sold the derivatives on those options. And we're not doing that with the buy now pay later market. >> And the other thing with the financial crisis was is that really that situation would have worked itself out in probably a more normalized bare market. Maybe the markets were down 20 25%. Uh, you know, Bear Sterns gets sold off at $2 a share, $3 a share. Um, maybe, you know, we see Goldman Sachs on the ropes, you know, or something like that and and maybe they need a bit of a bank bailout. But, but what really caused the financial crisis was when they forced Leman into bankruptcy that caused a complete credit freeze, right? And that's what really if you look at the the bare market of 2008 about 40% of it occurred right after the bankruptcy of Lehman because it simply just froze the credit markets. So, you know, that's that's the one bit of context. And when everybody relates everything back to something happens, it's like, oh, you know, the the AI bubble's just like 1999. Big differences. Um, you know, this is happening because this happened before. Big differences this time. You know, and same thing with the subprime crisis. Be careful about just going back and saying, "Oh, this is going to evolve the same way." The environment is very different, and we're not going to shut down a major bank that freezes counterparty risk across the board. So now will will the credit issue cause a problem in the financial markets? Absolutely. Could we lose some regional banks over it? Absolutely. This why it's just going to be really important about where you're allocating your risk in your portfolio. >> Okay. So that's um you know it's a challenge and maybe I'll just ask you the question directly. So so as a capital manager you're like all right you know we see some of these cockroaches don't necessarily think that this is anything like a Leman moment yet but we just don't know what the contagion is here. What do you do? Do you take some initial steps? It sort of sounds like you did where you sold off your exposure to regional banks. Um, >> well, no, no, we reduced our credit exposure to regional banks. Um, so we have we have one position in our portfolio that's a regional as truest financial. Um, balance sheets are great, cash flows are great, stocks been under a little bit of pressure with this. Um, obviously as as as you would expect and probably at some point here, I'll look to accumulate some more into that position. But the rest of our stuff is in the financial side is JP Morgan, Goldman Sachs, Black Rockck, you know, they that that even if you know, you look at the size of a JP Morgan or a Goldman Sachs, you know, a 500 if they if they absorb the entirety of the buy now, I'll pay later at 500 billion. That would be a huge deal, but that's even survivable um for them. But what I don't want to own is the bonds. And so that's why for instance as soon as we saw any risk show up with thericcolor situation we immediately went through our credit our credit book and started reducing any exposure that we had to banks that are related potentially to that area of risk. So we just sold the bonds entirely and you know and again the bonds weren't the bonds were still trading at par so it was no big no no big impact to portfolios but just removing that risk was the step you want to take at that point. >> Okay. Um, forgive me, this is kind of an Eve question, but I think it's it's relevant in case we start seeing more contagion here, which is >> let's say you own a a regional, you know, you you own a security of a regional bank, >> um, and you're a little bit worried. Um, I would think all things being equal, you would want to sell the equity in that bank faster than you'd want to sell the bonds in the bank >> because the bonds are just an existential risk, right? It's just like, hey, I still get paid unless this thing goes belly up. Um, I mean, we could go through a scare period or a period where the the bank gets beat up a bit, but I'm still going to get paid if I hold the bond. >> Equity, you might be like, "All right, I don't want to hold that because that could really get lost." >> No, no. And and if you're if you have a lot of exp again, we have we have a you know out of an entirety of of our portfolios, we have probably a half a percent exposure to one bank, right? So even if the bank goes to zero, it has almost zero impact across the the balance sheet of the of the books. So but but yeah, if you've got a lot of exposure to regional banks, you probably want to reduce some exposure here at least until you get through this period and understand what you're dealing with. >> Okay. All right. Um well so let's move to the next sort of riskmanagement thing that I think has probably made the past week or so challenging for you. So, what what caused the markets to nose dive last Friday was uh you know a Trump uh tweet or what do you call it? A truth uh that he issued on Truth Social. Um basically talking tough to China. And literally since then it's been every day or two kind of a no we're friends again. Oh wait, no we're not. And uh it just keeps going back and forth. Um that's going to be a little bit hard uh to be a capital manager just in the way that it kind of wangs around the markets. Even though I'm guessing, Lance, you're going to say that's pretty much noise we should all pretty much ignore. But um >> yeah, pretty much ignore it. >> Okay. So So you're not you're you're not making any changes to your portfolio based upon the will they won't they get into a worse trade war between US and China? >> No. No. Because again, you know, right now and as we saw today, right, I mean, as soon as the market takes a little bit of a hit, he turned around and reverses his position. So headline this morning, Trump says that, you know, tariffs against China aren't sustainable. So, uh, markets immediately kind of rallied back off that news. You know, at the end of the day, all I care about is what the market's saying. You know, if you will do you will do a better service to your viewers and to if you're managing your own portfolio is to turn the television off. Stop looking at headlines because headlines don't mean anything. At the end of the day, it's great for narratives and again, we have just a ton of narratives running through the markets whether it relates to, you know, a variety of asset classes. or some narrative and and if the if an asset's going up and people are long that asset, they create a narrative or to rationalize why they own that, you know, underlying asset regardless of whether it's a true narrative or not. Correct. >> And in most cases, these narratives aren't even reality. So, if you'll just pay attention to what the market's telling you, in other words, this is why we always look at technical analysis every week. That's all you're really concerned about. The market broke the 20-day moving average this past week, which was not notable. certainly makes you wake up because that's been the running trend line now since the April lows. >> Hey, I'm gonna interrupt you because can you just pull up the the chart while you're saying this? If we're going to talk about the moving averages, let's actually show people. >> Yeah. Um, so yeah. So yeah, here here's the chart right here. So a couple of things going on in the chart. I actually tweeted this out this morning on my ex. So if you every day I post some stuff on X about this at Lance Roberts and I tweeted this chart out this morning. And I don't what do you call an X these days? You can't call it a tweet anymore. So, because it's not Twitter, you got >> they they call it a post. >> X. >> What's it called? >> They call it a post. >> It's just a post. Okay. I posted this this morning. It was so It was better. I look >> I like it better when I can say I tweeted it, right? So, >> I think we should go back. But anyway, that's me. Um anyway, I posted this on X this morning. And so, the red line is the 20-day moving average, the blue line is the 50-day, and the green line is the 100 day moving average. Um the the black line in the back is is the VIX. And um you can just see here that over the last few days volatility has picked up and that's important to pay attention to. Um but what's important is is again is that if you go back to the to really kind of the April lows the market when it rallied back above the 20-day moving average that became the point of support for this entire 30% rally from the lows. So every time the market would rally you get too deviated above the 20-day you get overbought you get a pull back to the 20-day it rallies again. And it was kind of the stair step higher you know. So, you'd rally up, get deviated from the 20-day, correct back to it, or maybe slightly below it, then immediately regain it and then move back higher. So, last Friday, we cracked that 20-day moving average with some significant volume and a big decline. We were down 2.71% on Friday, and we came right to the 50-day moving average. So, again, held support at the next critical level of support. retail buyers stepped in, bought the dip, rallied the market back to the 20-day, failed there, came back down, retested the 50 on Tuesday, bounced off of the 50 on Tuesday morning, and rallied back during the day. And then on Wednesday, got above the the 20-day moving average, failed on Thursday, and now Friday morning, we're kind of now again, Adam and I are recording Friday morning, so it's a bit early, but markets are are positive right now just a little bit. And but we're trading below that 20-day. So, this is the longest span that we have now spent since going back to the April lows below the 20-day moving average. But, so that tells you there's certainly some stress in the markets. That's worth paying attention to. And again, this is why over the last couple of weeks, you know, we talked about reducing risk in our portfolio. We took profits and stuff. We, you know, we added to some defensive names in the portfolio. We went through those previously because we were starting to get concerned about both the length of this advance as well as the very low volatility we were having and then we talked about the the negative divergence in breadth as well as the negative divergence in relative strength all signaling that we were about to have a corrective phase. So that's why we had reduced risk and rebalance some positions. So we're now in that phase. But right now there's despite all these headlines, all the market's done is come down to the 50-day moving average. We're working off that previous overbought condition. Um, you know, markets are still holding a good bullish trend from the lows. So, we haven't really violated anything important here. So, as long as we really hold above the 50 into next week, then, you know, we're we're okay. And and the markets will likely probably flop around here some more. And then this weekend's newsletter, which I'll post tomorrow, um, on at realvestmentadvice.com, is talking about the three reasons for a year-end rally and why the market should rally into year- end. And that's primarily because of earnings buybacks and portfolio positioning. And we're just into that time of the year. So, November, December tend to be fairly strong months for the markets. And you're have about 7 billion dollars a day in corporate buybacks starting at the end of this month to help support markets through year end. So I wouldn't really now it doesn't mean you're going to go straight up into year end and we could just be wind up you know marginally higher than we are right now by year end but the the the odds are that the markets will be higher than lower between now and then. So but again doesn't mean you can't have you know we normally have a correction in the first two weeks of December as mutual funds and do their annual distributions of capital gains interest and income. So you typically get a bit of a pullback. Could have a little bit of a pullback in early November heading into the Thanksgiving holidays. Just gets a little bit light trading. Those are kind of seasonal normalities. But overall, despite those little dips, you probably want to be buying dip, you know, and this one included, you probably want to buy these dips going into year end. >> All right. And um I think we talked about this, Lance. Um, again, I can't remember if it was with you or it was last week with with Michael, but um, I interviewed Mark Newton, who is uh, Tom Lee's research partner there at Funstrat. >> Um, and he gave his forecast for the rest of the year and said he thought there was a high probability that there would be some correction um, or want to use the official term correction because what people think like 20%. uh some sort of pullback, you know, 5%, you know, maybe 10% uh in October, first half of November. And then he said, you know, he if it happens, he's going to use it as a buying opportunity, expecting a similar um year- end rally like you just mentioned. So, seems like you and Mark are seeing the same things right now. What is interesting is Sorry, you want to comment on that? >> Uh no, that that's right. I mean, look, you know, as I said, you know, seasonalitywise and, you know, there's some there's some driving factors of the markets between now and the end of the year that you certainly want to pay attention to. Again, just there's a ton of money that comes into the markets in the last two months of the year, which typically tends to drive markets higher. Uh, that again, but that doesn't mean that you can't have a 5 to 7% correction. I was talking about this a couple weeks ago. Um and then of know actually I was talking about on Wednesday of last week and then of course Friday we had that two 2% decline in one day almost 3% in a day. So you know they can come very quick and you know a retracement back to the 100 day moving average as we were talking about earlier that would be about a 7% correction. So again that's not that big of a deal. Um it's going to feel a lot worse because this market's had no volatility and the market just goes up every day. I just throw money at any asset class. It goes up every day. It doesn't matter. Why why worry about risk when I just I I can buy Nvidia, it goes up every day. I buy a Bitcoin, it goes up every day. Blah blah blah. It's great. Um but what that means is that when you do introduce volatility and you do have a pullback of normality, three, five, 7%, it's going to feel like a 20% decline. It's like, oh my god, what's going on here? Is the world coming to an end? Does AI does the AI trade over? Um >> but that that'll be what happened. But that'll happen in every asset class. you're you're going to have fairly substantial draw downs that are perfectly normal just to reset overbought conditions and you know give you a good buying opportunity to add back to that asset class. But again when it occurs what'll happen is and this is today's article that I posted on the website talking about investing in a zerorisk environment. What happens is we just bring in all those psychological biases on the way up we start coming up with all these rationalizations about why a particular asset class is going up. Even though that rationalization has no basis in reality, but that's that's how we justify overpaying for the asset. And then on the decline, we do exactly the opposite is now we rationalize why it'll never go up again. And so we have to sell everything. So, you know, it's just important and that's and that's we go through all the all the rules and and psychology of of how that works in today's article, but that's a but that's what's going to happen in markets. You just need to be aware of that and understand that those opportunities, at least for right now, are going to be more buying opportunities than they are selling opportunities. >> Okay. So, all right. How do you marry those two then? Because I was going to ask you about this new piece. Um, they're buying opportunities, but they're buying opportunities in an environment where investors are assuming there's zero risk. Right. And making up, you know, inventing any rationale for why their assets going higher and they're going to buy more of it. Right. Right. So at what point as a capital manager do you say all right at some point this upward trajectory is going to reverse because people are just buying blindly >> right and and and it's going to and you're going to lose the market you're not going to get out right at the top of the market but that's why we again this is why we go back to paying attention to technicals if you start breaking down uh you know important levels of support you know you break the we broke the 20 um we haven't gotten back above it yet so normally when you break a good moving average like the 20. We did it early this week on on Tuesday. Um and then you know by Friday we haven't gotten back above it yet. So again now there's starting to be you know we didn't immediately reverse that break and and negate it. Right? So we've now spent a week below that moving average and so that's starting to build some significance. We won't pay attention to that. um the 50-day is holding uh for right now, but if we break that and then fail to get back above it, now that's kind of the second warning sign. So, so the thing is is that what technicals will tell you, and this is what we're saying earlier, is like just set aside all these narratives and headlines and everything everybody gets all wrapped up about. Just set all that noise aside because that's all it is. Let the market tell you what it's doing and and and they'll tell you. So, as you break these important levels of support, you know, you you'll have these indicators that say, "Okay, hey, you need to start reducing some risk." And this this time is now different than it was previously because where we were buying the dips previously is now not working now. And where sellers were were showing up before to buy stuff, they're no longer there. And and so, you know, this is, you know, there's an old saying that sellers live higher, buyers live lower. And at some point, buyers are going to go, "Yeah, I'm going to buy that. I'll buy whatever asset it is you want, but I'm gonna buy it 20% lower than where it is right now, >> right? >> And that's where buyers are going to be. And but but again, the market will tell you when that shift in psychology in the markets is happening and gives you plenty of time to start exiting positions, reducing risk, those type of things. Um markets, you know, the big concern, and you know, I've heard this from a lot of people, you know, like, oh, the market's going to crash by 50%. Okay, great. It's going to crash by 50%. You're not going to wake up tomorrow morning and the market's down 50%. Right? It may be down 5% tomorrow and you're going to take a 5% loss, but it won't matter what asset class you're in. A 50% correction is completely normal. It happens. Mean reversions happen particularly in these type of markets. But it's not going to happen overnight, >> right? >> Unless there's a layman moment, but those are such low probability tail risk. >> No, no, no. The 50% correction during the subprime crisis took nine months. Actually took almost a full year. It was it started in March of 2020 uh sorry 2008 and it didn't complete until March of 2009. That was the 50% draw down. >> Yeah, you're you're right. You're right. Yeah. I mean to your point there was a lot that followed layman but it wasn't the whole dip. Yeah. >> Well no and Leman was in the middle the the market so the that's a great example. It's a fantastic example of exactly what we're talking about. If you take if you go back and look at a chart of 2008, it the market peaked in about June and and we were forming a head and shoulders pattern going into the month of June and in June July we broke the neckline of that head and shoulders pattern. Then the market started to decline very normally. We rally we broke the neckline and rallied back up to it and failed. Great opportunity to get out of the market at that point. You're only down maybe 5% from the peak at that juncture. Then the market started declining, you know, in August, uh, really in late July and August, the market started working itself lower. And then on September the 18th, Lehman gets forced into bankruptcy and then the market cracks and you're down like 10% in the function of about a week and a half. So, so that was about 40% of the entire decline of the 2008 crisis occurred right after Lehman was forced in bankruptcy. But the market was telling you there was problems months before that happened. And the market gave you several opportunities to get out of assets, which we did. We had shifted almost entirely into treasuries before Lehman ever occurred. And because we were starting to watch the un the the unwinding of what was going on with subprime, we were watching credit spreads start to blow out. I mean, there was all these signals that told you there was a problem. But but you know, we get as as investors, we get so wrapped up in this idea that, oh my god, the market's going to crash 50%, I'm going to lose all my money. It's not going to happen overnight. So, you know, it's just understand that we have to pay attention to markets. Most of these headlines and narratives are complete rubbish. You shouldn't pay attention to them. The technicals, the indicators like credit spreads, those type of things, those will tell you what the risk is in the markets and what you need to pay attention to in terms of your portfolio. >> Okay. Yep. And this is again your your sort of three month headlights that your technical analysis kind of tells you. It begins to tell you when there's some, you know, traffic cones and cautionary blinking lights on the on the highway. And to be clear, you've maybe seen a a few of them, right? Which is what got you out of the the regional bank there. Made you lighten up, but but nothing that you're saying, okay, this looks like, you know, it's going to crack in the immediate near future. >> Um, I am going to ask you about credit spreads in just a minute. Um, >> so, um, let me ask you, uh, I I hesitate to bring this up because it's g, you're going to go off on a rant about, uh, narratives that don't matter. >> Yeah. No, you're go off a rant about narratives and whatever you say, probably the majority of the people are going to say, "Lance doesn't know what he's talking about on this topic." But what what is what are the technicals telling you right now about gold and silver? Because they have continued their massive run. the morning we are recording this, they're actually having uh a bit of a corrective day in the market. I think silver was down almost 4% the last time I looked at it. Um but uh silver still above 50, gold is still above 42,000 4,200 an ounce. Just phenomenal runs this year, but phenomenal runs over the past couple of weeks. We knew technically they were getting super stretched from their moving averages. Um, so I'm curious to see if if if what you're seeing in the data right now just says, "Hey, they were so above their moving averages or just potentially moving back to them or if it's starting to tell you something even different." >> Well, no. I mean, it's it's not really saying anything different. I mean, gold is going to be a phenomenal short at some point, right? It's just that's just going to be a function of time. You're so deviated from like the 4-year moving average and the 5-year moving average. You have deviations that basically have never appeared before in history. uh relative strength as they function is at the highest level on record going back forever uh going back to the 70s. So at some point it's going to be an absolutely phenomenal short here's and and and here's the important thing about that um gold can have a 50% correction from here and still be in a bull market. >> So you know >> just like the S&P >> just like the S&P right I mean so so having a very substantial correction in gold is going to happen. Um you're going to need some catalyst to make that occur whatever it is. Um, but you know, and when it happens, it'll happen very very rapidly because that's that's how it's historically happened with gold. When you see when you see these big spikes in gold previously, they they they can run for a while, but when they break, they reverse almost the entirety of that spike very quickly. And you know, it's it's very interesting because, you know, I talk to a lot of people every day and and I get all these emails like, you know, AI's in a bubble and you know, this is in a bubble and that's in a bubble, but people that are long gold can't see that they're in a bubble. So, it's, you know, but that's the way it is with all bubbles. If you're invested in it, you don't see bubbles until they're in hindsight. But, you're seeing this kind of dynamic across the board. Take a look at small cap, midcap, emerging markets, international markets, uh technology stocks, mag M mag seven stocks, uh Bitcoin until recently, Bitcoin's been starting to reverse here lately. Um uh and even in in precious metals, you've got this very similar vertical spikes going on in basically all these asset classes. And that's just a function that money is chasing money now. And you're seeing a lot of money just chasing momentum. So it's it's going up. So that drags more people into it. that drives the price up more, which drives more people into it. And it's very reminiscent of what we saw back in 1999. You you'll probably remember this. Uh back in 1999, we opened up all those trading centers. And people would literally wait in line outside these trading centers to go in and trade stocks. And you're actually seeing that now with people lining up to go buy precious metals, you know, outside of coin dealers, etc. you're seeing lines starting to form because now now after >> outside the US but yes >> but but you're now starting to see that same type of mentality now retail investors are starting to pile into ETFs it's they're kind of lining up outside the ETF store to buy the ETF when the market opens >> but you're seeing that same type of psychological dynamic and you know again it's it's completely normal that's what you would expect in momentum chase and and and this this this rally could continue for a while longer just be aware that eventually it's going to reverse. >> Okay. And to the person who would say, "No, Lance, it's different this time, and I know those are dangerous words, but there is truth. The basement trade, this is really the world beginning to wake up to the fact that fiat currency is, you know, getting um uh abused by fiscal deficit spending and all that stuff. And this is a let me just finish the question. This is this is this is price discovery. This is the world waking up and saying gold was undervalued given that and it's now rising more to its true value. What would you say? >> Well, first of all, the debasement trade is not true on any front. So, you know, there was a recent graph that was put out by statistics showing that gold reserves have now caught up with treasuries. And so, central banks are accumulating gold handover fist, which isn't really true. And we actually posted a chart of this on Twitter just this past week. Here, let me share this with you. >> Yeah. But you're you're you're basically saying the rise there is more due to the dramatic increase in price in gold recently than it is them buying a ton more ounces. >> Exactly. So, if you look at this, so what this chart shows you is this is the chart of actual change in net purchases versus the actual change in gold price. So, the change in gold price is orange. Uh the blue is actually the accumulation of gold. Over the last 5 years, central banks have only increased their gold holdings by about 5% in total. So about 1% a year, which is what you would expect because simply they acquire gold to offset reserve currency differences. The US dollar currently is trading at at the same level it was back in 1970. So if you look at a chart of the dollar index as an example, it basically either trades at a premium or a discount to 100. So we're trading at 98ish right now. So we're just slightly below fair value for the dollar going back to to 1970. So in that environment because of that weakness in the dollar you would expect to see them pick up some gold in terms of reserve currency balancing because again the only reason that central banks acquire gold is to balance reserves against other countries their their currency versus other currencies and their holdings versus other holdings. So again they acquire that. You know the second argument is is well you know foreigners are dumping treasuries because they're they're trying to get out of the dollar. They want to own something else. Well that really isn't true either. This is the foreign debt held by foreign and and international investors that just crossed over nine trillion and is rising fairly sharply in the last year. So, you know, all these narratives that have been put out by these people trying to pro, you know, it's interesting the people putting out these narratives are the people that are selling gold. Um, you know, Peter Schiff is is a great example of this. He just posted a tweet the other day. He's like, "Hey, you know, at the rate that gold's going up now, it's going to be 5,000 by the end of December. You should come buy some gold from me as a Christmas gift." Well, if gold's such a valuable asset, why are you selling the gold, right? Why are all the people promoting these narratives are the ones selling the gold to other people? So, again, it's it's going up in price, but the narrative doesn't have any real foundation. Again, you know, we've gone through the whole story about reserve currency balances before. The fact that, you know, foreign central banks have or you know, if you take a look at the US dollar, it's still 58% of all international trade. It's it's nearly 90% of all foreign currency transactions. Nobody's moving away from the dollar. And if you were going to move away from the dollar, where are you going to go, right? You're going to go to the the Chinese yuan. You're going to go to the Euro zone. The euro is going to grow at half a percent to 1% growth next year. You want to have money invested there versus the US that's going to grow at two to three. So, none of those narratives make any sense. But we need those rationalizations to justify paying higher prices for gold. It's the exact same thing that we do with the AI stocks, right? AI stocks are going off to the moon. Well, how do we justify that? Well, they're spending all this capex. So, all these data centers are going to come online next year and they're going to create all this revenue and all this increase in productivity which is going to justify the revenue and capex spend. So, we can overpay for those valuations today because the increase in productivity are going to boost earnings. Well, forget about the fact you're going to lay off half your workforce. And if you lay off half your workforce with AI, where your revenue is going to come from to justify those revenues, right? So, but we have to have those rationalizations to justify the price move. It doesn't, and this is what I said earlier, it doesn't really matter if those rationalizations are true or not. It's just whatever feeds the narrative. And this is why pay attention to gold prices, pay attention to stock prices, pay attention to Bitcoin prices. They will tell you when the run in that asset class is done and when you need to start, you know, reversing your positioning. >> Okay. All right. >> Again, again, and just just be full disclosure, right? We're very long gold in our in our AI model, in our all- weather models. We're very, in fact, you know, what's been a better performer in our precious metals models is uranium, which has kicked the crap out of gold over the last two months, but you know, we don't talk about uranium, right? But gold, >> you know, like that's saying something because I mean, gold has done phenomenally well >> and uranium's kicking its ass. So, and here's another problem with the whole debasement trade, Adam. Let me let me go back to this. Here's the here's the problem with the whole debasement trade. So, you know what this is, right? I think I've seen it before. >> Yeah. You think this is a dollar bill? So, you can't debase fiat currency. This this is the myth that everybody promotes. If if I take this dollar bill and I tear the corner off of it, right? Will that dollar bill still buy me the same amount of goods? >> Uh I I think until you get to enough point where someone's not going to take it, >> right? But the point is is that I can I can So all the basement is is removing the underlying asset that's within this right. So, if I have a a a you know, if I have a 25- cent coin, right, and I take the silver out of it and and it's totally made by just copper, right? Just let's just change all the quarters in the country to copper instead of >> make them plastic. >> Make them plastic, right? As long as we assign if we as long as we say that plastic coin is still worth 25 cents, it'll still buy me 25 cents worth of goods even though I have debased it. Right? If I take a chunk, if I have a a gold coin and I take one one fifth of it out, right? So I have one less of gold in that coin. Will that is that gold coin still worth the same as it was before I reduced the value of the gold in that coin? >> No. >> No, it's not. See, I can debase a gold coin because it's a commodity. I cannot base debase a fiat currency because a fiat currency is simply just a value that we assign to a piece of paper. This is what we call currency, right? And for a currency to have value, we have to assign a value to it and that is guaranteed by the government to have that value. Even though if I reduce the the the if I debaseed this so to speak by reducing the paper content in it, it still buys me a dollars worth of goods and services because this is the value that we have assigned to this dollar bill. >> Now, >> okay, but I mean the viewers the viewers are saying, well, what what if you all of a sudden print up a trillion of those dollar bills tomorrow? the the yes, it'll buy a dollar's worth of goods and services, but but what a dollar's worth of goods and services will get you will be a tiny fraction of what it got you yesterday, >> maybe, but that's called inflation, right? And so, so think about this way. Tomorrow morning, let's say that we print up a trillion dollars worth of these pieces of paper and we give them to every household. And just assume for a moment that everybody says, "Okay, everybody's got more dollars to spend, so I'm going to sell everything for the same price as I was just now everybody's got a lot of money to spend, so I can sell a lot of product." And so we'll just assume for a moment that prices don't change. So the only way that you can affect the purchase, and this is the argument, right? So it's just a mis it's a it's a misunderstanding of the word debasement that's being thrown around. What drives the value of the dollar in terms of its purchasing power parody and that's all we're talking about is is inflation. That's that's all we're talking about. >> Well, it's the classic Milton Friedman, right? It it it's always >> No, no, no, no, no. Because you everybody misquot Milton Friedman, right? And they say, you know, inflation is everywhere blah blah blah and it's only from the function of government printing, which is that's a very true statement, but what he's talking about is what happens over time. Now, this is this is the misnomer of debasement versus inflation. So, again, I have this dollar. If I take this dollar and I stick it in my wallet and I never touch it for 10 years, in 10 years, this dollar bill will buy me less because the economy has grown over time. And because the economy has grown over time, I'm going to have higher prices. So, I'm going to have inflation. We want inflation. We must have inflation to have economic growth. So this is why we want 2% inflation because if we have 2% inflation, we have economic growth of 2%. We want that. We want that inflation. Now what we don't want is 50% inflation, right? We don't want that. But if I just take my dollar and I do nothing with it, then yes, it's going to lose its purchasing power parody. But let's go back to 1970. If I took my dollar in 1970 and I invested it in gold, it's certainly worth more today than it was in 1970. But if I invested it in the S&P 500, it's worth about 10 times more than what I got invested in gold. So both of those assets protected me somewhat from inflation. It took gold 45 years to do that. The S&P outperformed that by massive extremes going back to 1970. So as long as I'm investing my dollars, then those dollars are adjusting for purchasing power parody over time. So I can defeat the deflationary impact of inflation or the debasement of inflation by investing it and not holding it in a jar underneath my bed. Right. >> Right. >> So we you want to invest it in things that will beat inflation. Right. >> Well at least you put up the chart of >> not even beat it just keep up with it. Right. >> Well well a couple things. So I know you've said as as an investor that is your job number one which is at a minimum I got to keep pace with inflation. Right. So I'm I'm at first and foremost don't lose the wealth that I have purchasing power-wise now. If possible, >> do better. >> Right. And you have pulled up the charts of the different asset classes and they've shown how stocks from certain periods have beat gold. Although I think gold is has done pretty well versus stocks actually the past couple days. >> Yeah. No, no, absolutely. And again, so my my point is >> and Bitcoin has done phenomenally well. Let's give a nod there too, right? >> Yeah. Yeah. >> You buy Bitcoin at at 20 bucks, you you've crushed it. >> Absolutely. >> Yeah. No, no, my point is is I'm not knocking any asset class, right? So it's just anything that will outperform the pace of inflation over time. And so this is the misnome. This is where all the arguments fail that or you know these people run around going the basement. The basement's all about the basement. You can't debase a fiat currency. You can have inflation. But as long as you're investing your assets in something that outpaces or at least keeps pace with inflation, you're okay. It's just simply if you're holding cash and it's doing nothing, then you've got a problem of this loss of purchasing power over time. And that's all those charts that people show. It's like, oh, since, you know, 1970, the dollar's lost 80% of its purchasing power. That's a true statement. Only if you have held all your dollars since 1980 in a glass jar underneath your bed, right? As long as you invested it in something, some asset that outperformed inflation over time, then you're fine. And that's that's the whole reason why we invest, >> right? But I just want to be really clear too this separate discussion, but this is why I'm so concerned about the wealth inequality that's going on because there's a bigger and bigger percentage of society that doesn't have extra scratch left over to invest. So all they're getting is the inflation, right? I actually I actually just did a podcast yesterday with Ben Gran talking about the the very very same thing is the problem with you know the problem that 80% of Americans have is very poor financial habits and you we've talked about this before is that you know we don't prioritize investing and saving. We prioritize spending and that's what we've been taught by the media by social media by everything else. We're taught to spend everything we make. We've never really prioritized as a country that saving and investing is a far more important thing within our within our lives and and we wouldn't have this problem today if we had taught that. But we've taught ever since the 19 early 1980s when we deregulated the central bank, sorry, deregulated the financial system, the banks itself. Um, we went to this consumer overdrive. We we created 11 trillion worth of debt between 1980 and 1990 by issuing everybody credit cards. That didn't exist. you know, this this wealth inequality gap and stuff didn't exist prior to 1980. And ever since that deregulation of the financial system, we have just indebted the average consumer to the point that they can't get ahead because we've never taught them financial responsibility. We've taught them to be consumers and good consumers, slave consumers, you know, get on that buy now, pay later thing because you can buy more. You know this I remember I remember you know in in late 1999 I was driving to work one day and Wells Fargo ran this commercial that says hey you need to go to Disneyland this year. It's a magical place but you can't afford it. It's okay. We've got a credit card for you. Put it on credit. Charge it. Take your family to Disney this year and they'll it'll be a magic experience. And that's that's been the whole societal change is that it's okay to have credit. And you know, we we pushed this whole narrative on people that, oh, you've got to have a credit card to have a credit score. Complete hogwash, right? But that was pervy upon the average American is you got to have a credit card. I want a credit score so I can afford to buy more stuff on debt. You don't need a credit card ever in your life. Period. Nothing. But we've taught everybody they need to do that. We taught people to buy houses that they couldn't afford. we talk we we've just done everything we can to destroy the bottom 80% of the of the economy by telling them to buy stuff they can't afford. >> So I agree we're in dangerous almost making this the rant territory. So I got to pull it I got to pull it back. Um I I will say though just to underscore your point um I think this still happens because I've got kids and it's happened to them. But um you know to to your point we started at a very early age and I I just remember going to college and this was what 1990. >> Yeah. um showed up on college, you know, opened my my student mailbox for the first time and it was just jam-packed with what? Credit card offers, right? You know, hey, you're young and dumb and you want to have some fun right now. Great. Don't worry about it. Just put it all in this brand new credit card we're giving you, right? I mean, they they they really try to get you very early on on that whole treadmill. But >> my my dog I had a dog when I was in college. My dog had an American Express card. >> What? Could you gain the system or did it literally arrive in the mail at the restaurant? >> They, you know, back in the day, remember they would send you the credit card? >> Yeah. >> In the mail and all you had to do was use it and as soon as you used it, you were you were approved for credit, right? They sent my dog an American Express card in the mail. >> Well, here's the question. Did he use it? >> No, he didn't use it. >> I would have liked to have seen the collection agent what he would have done when he kept up. You should, you know, I should have and go, "Hey, go collect from me." Meet he's in the back. >> Yeah. Yeah. He's >> He's the snarling. >> You go You go collect whatever. He was a pick dude. So, you go collect whatever you want from me. >> Yeah, he's the snarling Rottweiler. Good luck, buddy. >> Uh, all right. Well, look, um, just just to your your your um your explanation there about the debasement trade, um, I understand your logic, Lance, I'm going to venture that not everybody listening, uh, you know, sees sees it the same way, and that's okay. That's what makes a market. Um, as somebody who is, uh, you know, an owner of precious metals and has, um, been loving the ride, I'm just going to reiterate. >> Absolutely. Us, too. >> You, too. Um, I I'm just going to, you know, say, hey, look, um, even if you disagree with Lance, um, you should ask yourself, uh, well, let me just put it this way. You know, I've been I've been counseling people to think about at least hedging their positions if they don't want to take some gains. And we've already talked about this, but, you know, this has been it has risen so far at this point that this is now a windfall. You know, it might have been the windfall that you expected. I was sure this was going to happen someday, but the windfall you were now at windfall levels. So, you got to ask yourself, all right, look, if it didn't go up any higher, right? And and I I my holdings were as much as they are today. Um my my life has changed in some material way. Um you know, that that's great. But then ask yourself, okay, what would happen if this got pulled away from me, right? if if if Lance is right, even though I don't necessarily agree with him, but technically it's a big pullback or just, hey, Lance was right. This thing turned out to be a big bubble spike just like we saw in 2011, right? Where, you know, uh there was a violent correction and then the precious metals kind of stayed dead for a decade plus. Um so my point is is you've got a windfall right now. As a steward of your wealth, you've got some decisions to make. How do I want to protect that? Right? And some people are going to say, "Adam, don't worry. I think this thing's going much higher." Great. I hope it does. >> It very well could. >> Yeah. Um but I'm just saying what what I want to do is minimize the amount of people who if indeed lower prices manifest from here say, "Oh my god, I had the brass ring for a moment and I let it go or I had the gold ring for a moment and I let it go." So only you can determine what what kind of risk you're willing to take on this. But you you've you've had your prayers answered at this point as a as a precious metals holder. um ask yourself how I want to make sure you know I I protect what I have and still maybe position myself to to participate if things go higher from here. >> And look, I think that's I think that's a I think that's a wonderfully great point, you know, and and this is the thing that you know, just to your point to think about is that a lot of the people that you're that you know have owned gold, they've owned it for a long time and they went through a very long period of just owning dead money essentially. And now you've gotten that money back. You've made a profit. And just realize that that gold does historically going back to 1980. I mean, it went through almost 20 years where it just did nothing for a very long time. And then you had a spike in gold. Then it it crashed and you went through a very long period, it did nothing. That's the normal history for gold. So just understand that at some point this rally will be over and then gold maybe do nothing for five or 10 years before it has its next rally. And but during that time frame, you know, you're going to start losing to inflation again over time. And and again, what we want to do is make sure our assets are always working relative to inflation. So again, it doesn't mean there's anything wrong with gold. There's nothing going wrong with gold right now. Momentum is very strong. Bullish sentiment is strong. You've got all these narratives running around. And again, if you disagree with me on on the facts, which I just showed you the facts about what's really going on, there is no debasement trade happening. If the debasement trade was happening, yields wouldn't be falling right now on bonds. Um, so there there's another problem with that whole argument. But even if you disagree with that and you're convinced that so- and so told you the debasement trade's happening and you absolutely 100% believe that, that's fine. Just understand that there are consequences to that as well. And those will have an impact on future values of money also if that occurs. And so just make sure that you're managing that risk accordingly. Just again, we're long the assets now. We'll eventually take profits, reduce risk. at some point, you know, this will be a fantastic short. All these type of moves are um it's just a function of question of time. It could be next year, could be a year after from now, could be $1,000 higher from here, you know, but just understand that risk is very prevalent. >> All right. And just on that point, you know, you say, "Hey, look, the market hopefully is going to give us warning signs when there's going to be a big turn." You're not seeing enough warning signs around gold and silver right now for you to be lightening up on your positions in your all weather. >> No, no. We've already trim we we actually rebalance gold. What is today? Friday. Wednesday. So, we trim gold a little bit in our portfolio on Wednesday. >> Okay. So, you trim gold a little bit, but you're you're not the like, hey, I'm seeing no signs of >> Oh, no. No, no, not at all. Um, but here, let me share a chart with you real quick. This is the stuff you don't see very often, right? So, th this is a chart of gold prices, and this goes back, this is the 2016. I can make this a little bit further here. Hold on. Let's back up. Um this so you can let me zoom in. I'm gonna zoom in zoom out real quick. Do you see this spike right here >> on both on this righth hand chart and see this RSI up here? This is relative strength up top. >> Yeah. >> So this is now this is a this is a weekly chart actually. Yeah. This is a weekly chart. So this is the 12week moving average. Let me just I'm going to jump this out to monthly just to give you a better picture. Okay. >> Okay. Yeah. But but the needle is pinned to 11 is essentially what you're saying. >> Right. Right. So, so relative strength relative to it 12-month moving average is at 93, right? RSI only goes to 100. This is the highest level of RSI reading ever on record. Now, the reason that's important is if you look at every period previously to where RSI was up these levels, gold either, and these are not minor corrections. This was about 20% right here. This was about a 45% correction here. Whenever gold gets to these extreme overbought conditions, you at least have a pullback. You could have a subsequent rally and then another correction and and this happens over and over and over again. But importantly, we've never had deviations from the four-year moving average. This is the highest level on record right now ever. Uh for the deviation from the 4-year moving average. So again, just reversions to the mean at this point would take gold back to the 4-year moving average, which is the orange line. That's around 2312 on gold right now. So you're talking roughly about a $2,000 drop on gold. And everybody's going to go, "Oh, that's not possible. Well, that can't happen. It happens with regularity with gold going back to and beyond its 4-year moving average. That's that's a normal correction for gold here, back to the four-year moving average. Here, well beyond the four-year average, the four-year average here, well beyond the 4-year average. And this just goes back throughout history. You just continue to see the same thing. So, the the important the important point is is don't you know the technicals right now very bullish, lots of momentum. That's what all those things are telling you. But it's also getting so deviated that the gravitational pull against that price is becoming very strong. And at some point the only thing the only thing that drives gold prices higher along with silver because silver and gold don't have any fundamentals. So what drives the price of gold? It's buyers versus sellers. So you have an overwhelming demand of buyers right now versus those willing to sell. I'm not willing to sell my gold right now. So that's going to require buyers to pay a higher price. So that's dragging sellers into the market because remember got to have a buyer and a seller for every transaction. So every time something happens, it's dragging a seller higher in price to sell it. But at some point, somebody in the commodity exchange on NMAX goes, you know what? This is ridiculous. I'm out. He's out. The next guy goes, "Oh, Jim got out. I'm out, too." And then it's then all comes into trading places where everybody's screaming at one time in the pits to sell. And that's why you get these very sharp corrections in in commodity prices that can happen literally overnight. I mean like one morning you'll wake up, you'll be down four or five percent in gold and that'll be your signal that the reversal has started. >> Yeah. Okay. All right. Well, look, um let's let's move on here. Um there is there's another commodity I want to talk with you about, Lance. Not now, but but in the future. I talked a little bit about it with Michael last week, but is oil. Um oil is is one where the narrative has really been working against it. Mhm. >> Um and yet it's a critical world commodity and demand for oil is likely to continue to rise from here and it's a cyclical uh industry. Uh it's in a bust right now. It's a boom bust industry. It's in the bust right now. Um when does it make sense to start preparing for the boom? Um I want to give you plenty of time to to you said now. >> Now. Yeah. We're actually starting to accumulate positions in in in oil because the again this is also another argument against the debasement trade which is oil prices. >> All right. Give me just a super short answer because I actually want to do a deep dive with you. >> Yeah, we'll do a deep dive in it. But no, there's there's some things that are happening that are going to be very beneficial for oil prices as we go into the next year and year after. And this is particularly relates to this idea that we're going to have uh a rebound in economic activity driven by this a AI capex spending. You know, this trillions of dollars that everybody's supposed to spend. If that occurs, that's going to drive an economic rebound. And that should provide a very good tailwind for oil because of the demand structure for economic growth and oil and and energy demand in general. And a lot of the energy demand is driven will be driven by natural gas which is produced by companies like Exxon Mobile, Lumberj, etc. >> Okay, great. We we'll get into that. Um, you also raised a point too that again we'll get into later in more depth. Um, my opinion, one man's opinion, like them or not, uh, the economic policies of the new administration are intended to spur economic growth, >> deregulation, tax relief, um, you know, pulling foreign capital into the US, uh, all this type of stuff, right? And just like QE, just like checks to households, whether you like those things or not, they stimulate the economy, right? So, um, uh, you know, now that the administration has been able to pass the the OBB and get a lot of this stuff put into policy and whatnot, and that the clock is ticking on this stuff now, we are likely to start to see some tailwinds to the economy from that next year. And again, don't say I'm not saying you have to like them or approve of them or whatever, but to ignore them, I think, is dangerous. Now, there may be some other factors that that might be providing headwinds at the, you know, in parallel in these things, but my point is is that um all things being equal, we should start to see tailwinds to the economy from these policies as we go further into 2026. And again, that'll, you know, a stimulate the economy, but also stimulate demand for things like oil. Correct. >> Yeah, absolutely. And and again, this is this is all kind of hope. Um you know, right now we're certainly seeing, you know, still signs of economic weakness. You know, employment numbers haven't been great. Philly Fed came in, you know, we're lacking a lot of data right now from the government because of the shutdown. But like the Philly Fed came in yesterday 12, much weaker than I expected. Um the employment side of that report was not great. >> So, we're still seeing that economic weakness. And that's still my concern going into next year for the market overall, which is earnings expectations are very elevated relative to what we're seeing in terms of economic activity. So the whole bet is that we're going to see this economic resurgence next year because of all this capex that's getting spin into buildout. And assuming that that capex comes true, we should see a pickup in economic activity next year. But that's there's a lot of ifs in there. >> So, right, it doesn't mean we couldn't see both, right? We couldn't see a really weak half weak half of the first half of the year and then a stronger second half. >> Yeah. So, you know, so for us just managing the portfolio, we're certainly looking for opportunities that are undervalued and out of favor. Energy fits right into that category. Um, you know, and and pay good dividends, great fundamentals in a lot of cases. But, you know, we haven't seen that actual start to turn yet. So you we, you know, we need to be aware of that potential risk going into next year because again, there's such a gap right now in narratives and again you we just kind of went through the narratives with gold and there's a big gap there between the fundamentals and reality. Same thing occurs on the AI side. This there's a huge gap between expectations of what AI is going to generate and the reality of what will probably happen. And you know this is this was a conversation that Ben Gran and I had a conversation about yesterday talking about you know because he came up through the.com bubble as well and you know the during the dotcom bubble really what caused that problem is look the internet made us hugely productive right we use the internet for everything we're using the internet right now right um there was all this buildout remember there was all that capex for building out fiber optic cable we had all this capacity of cable and nobody could use it and then then this little company called Google comes along in 2005 and says Hey, we've got this idea for YouTube that can use this fiber optic cable. Well, the the the the reality of the internet came. It just came five years later. And so all those expectations for revenue growth fell well short. It wasn't that they weren't real. It just took too long to get there. And that's my kind of concern with this whole AI you know kind of space in the markets is that the productivity increases the applications all those type of things may be very real and it just but if there's a gap between expectations and when it occurs so let's just say it takes a year longer to get there all of a sudden those those valuations that we're paying for a lot of these stocks becomes very problematic especially for companies like Ollo which is the nuclear power company >> y >> they have no sales This this company has zero sales. They have no revenue at all. It's all based upon the expectation that at some point they're going to build a power plant. Could be very well the case. But what if that power plant comes a year or two or three later than what's currently expected to happen? What if there's some delay in that? You could see very very big price declines in some of these companies. Again, they won't go bankrupt, but you could lose a lot of money between expectations and reality. And that's the thing I'm really worried about next year. >> Okay. Um well, yeah, I' I've got similar concerns. Um I still am in my camp, and again, one one man's opinion of being short-term more bearish, midterm more bullish, >> and then long-term more bearish again. Um and and with that is, you know, I've got a lot of concerns about the speculation that's been driving asset prices that you and I talk about all the time. That's exactly what you're just talking about there. So, if those assumptions get challenged by reality in some way, I could see a big uh notable correction in asset prices. >> Yeah. And and that's and that's my just from portfolio management side. That's my big concern going into next year. Um next couple of months mo there's too much momentum too much. >> We'll probably party on with Santa Claus rally. >> Exactly. Well, it's just it's just it's hard to break momentum, right? It it's there's so much psychology. Again, it again go back, you know, doesn't matter what asset class you own. If it's doing well, there's a lot of faith in that, right? that, you know, gold's going to go to the moon, stocks going to go to the moon, the small caps are going to go to the moon, you know, who whoever you talk to, whatever asset class they own, it's like, oh, this is never this time's different. It's going up up to the the the yons here because of whatever reason. Well, we know that's not true and that'll never happen. But, you know, it's it's that's a very hard cycle to break. It's hard to stop that momentum train as we talked about, you know, a couple of shows ago, is like, you know, it's just so much there's so many cars pushing the engine right now. It's hard to bring that to a halt. >> You know, eventually that'll happen, >> but again, it's not going to happen in two months. That's why I'm not really worried about between now and the end of the year. My worry is more kind of summer next summerish next year, I think. >> Sure. Yeah. Well, and who knows? But you'll be looking, you know, at the technicals and looking for those warning signs. Um, but if that happens, you know, corrections, I mean, they >> corrections tend to be faster events than than long-term bull rallies. So, we'll have that correction and and then presumably and of course reserve the right to change my opinion as we have more data in the future, but presumably we're going to start getting those tailwinds from the economic policies that are being put in place now. And to your point, we'll we should start seeing to the extent there is any there there in AI, we should start seeing corporate America actually start to see incremental revenue and profits by deploying that. Right. So, >> yeah. And hopefully we can buy those assets at at better prices, you know. >> Well, exactly. I mean that that is the silver lining here, pardon the pun, but to you know if if you're correct and and there is weakness here in the next >> 6 months or whatever if you can manage to keep your capital dry through it um you may be able to get some phenomenal entry points. >> Yeah, absolutely. And that's >> and to this point of next year next uh video um oil may be giving us some great entry points now. >> Right. Exactly. Well, and you know that's the whole point about investing is is that when do you want to buy an asset? When it's, you know, like for instance, if you have if you had 100% cash today, what would you buy today? Would you buy gold, AI stocks, or energy stocks that have been beat to right? I mean, you know, there's there's, you know, the whole purpose of investing is to buy something that really kind of nobody else wants but has value, >> right? And and and just to be clear, a lot of gold owners right now felt like they did exactly that five, 10 years ago. take this thing out of favor. I see the long-term potential. I'm buying it at a discount. Right. >> And they have done fantastic. Now, just don't forget to execute the other side of the trade, which is to take the profits, >> right? Uh but again, yeah, you know, as in as investors, we want to try to we don't do this as investors, right? As investors, we just buy whatever's going up at the time. And this is why we this is why investors always buy high and sell low. Um but yeah our our job is to try and this is why you know through simplevisor we you know I've talked about before in Simpliser we go through look at the you know look at the distribution of sectors or factors and you know if they're overbought or oversold >> and with regularity we'll say hey look you know health care is really out of favor right now and then healthcare has has a boomer run and that's because money is going to rotate within the market you know money as we talked about before money never leaves the market it just changes form so you know right now it's going into some assets. It's that's where it's going eventually to leave that asset and it'll go into another asset. But money doesn't get destroyed. You know, even in the Bitcoin wipeout uh last Friday, everybody's like, "Oh, you know, $28 billion or whatever it was got liquidated out of the markets." Well, it didn't liquidate out of the market. It went from the people that were long Bitcoin to the people that were short Bitcoin >> and money changed hands. So, you know, but that's how markets work. And so, I mean, just money is like energy. It doesn't it doesn't get destroyed. It just changes form. >> So I agree with money and sorry I might be getting a little too stuck in the weeds here but there is something called what I call money heaven. Maybe we want to call it market value heaven which is >> talking about heaven. Yes. >> Yeah. Yeah. So you know everything changed at the margin right. So if Bitcoin was trading for 120 and then the next transaction it trades at at 100 you actually had a lot of market value that literally went to market value heaven. It wasn't money that all went into somebody's account, right? So, >> no, it did. It did. It went from the guy that sold it to the guy that shorted it. So, because whoever was short that that same value increased the same amount of value as the market value dropped >> in the asset, right? >> No. Is there always a one to one? I I I don't necessarily think so. I get it, but >> there was there was a lot of short positions out of there. But yes, and when you're talking spec No, again, we're talking about two different things, right? We're talking about money and we're talking about >> that's why I said maybe it's more accurate to say market value heaven but >> which is right which is you know yeah you lost a lot of market value but the money itself simply moved from those hands to somebody else's hands >> y >> so somebody owns it somewhere >> okay all right um uh I got to wrap it up here gota I got to prepare for the conference um uh which I'm super excited for folks but yeah a lot of wood to chop um real quick you mentioned this super briefly But the 10ear has been coming down. Um the day we're talking I think it's right at four and I did see it actually slightly below four. >> Yeah, we were three 375 yesterday. >> Yesterday. Okay. Yeah. So are you seeing this as the start of perhaps of a breakout to the downside where we start to get a three handle on the Treasury? >> Yeah, it's it's looking a lot better. I was actually uh posted a chart today in our daily market commentary. Let me see if I can find it here real quick. Bear with me one sec. Okay. While you're looking to pull it up, one thing I'd love for you to talk to in the context of what your every year answer is going to be is so we we may who knows but we may have um US 10ear yields finally starting to come down. Um at the same time we are seeing credit spreads start to finally increase. So if you can just take your perspective you share your perspective on both sides of that with us. >> Yeah. Yeah no problem. So uh so this is today's daily market commentary. We talked a little bit about the uh the sofur issue, right? This this goes back to that liquidity warning. This is a really good read. Mike wrote this first part about liquidity warnings. Uh he ran a a piece on overnight liquidity um looking at that data. So you're certainly seeing some stress in the credit market, but um you know this was the chart of the 10-year Treasury. So we we so this is the interest rate, right? So this is the yield on 10-year treasuries. This is not um the bond price. Um the the upper band up here is basically overbought and oversold. So when interest rates get really overbought or or ver conversely very oversold and remember interest rates are the inverse of bonds. So if interest rates overbought, bonds are oversold. Um that type of thing. Uh the bottom is basically your buy sell signal for for bonds. And and you can see how deviated that this signal got from kind of previous extremes because of this runup. But we formed a very nice wedge pattern technically um in the 10-year Treasury and we're just now starting to break to the bottom side of that wedge. So this has been a very nice consolidation pattern after this big run up in yields and this suggests a lower yield. So if we break here um which again this is a monthly chart so it's a little bit slow to move but we're still very overbought technically. We're still very overbought on a on a on a MACD basis. So, a break lower here, just a return to normality, would put us back into probably the the 3% range, maybe the 275 range on the 10-year Treasury before that reversal is complete. >> Okay. Wow. So, maybe even a two handle at some point here. >> But, but now to have that, you're going to need slower economic growth, decline in inflation, which we'll see that. Um, but, you know, economic growth getting closer to 2% than 3%. So, you know, there's some there's some things that are going to kind of dovetail with that accordingly. But again, just technically, that's kind of what it's telling you. And again, kind of going back historically, you can see that when interest rates have peaked and turned lower from these signals, you have decent downturns in yield. So, technically, we're lining up with what has historically been a fairly decent opportunity to be long yields. >> Okay. All right. Well, we'll keep our eye on that. And then credit spreads. >> Let me ask about credit spreads real quick. Um, so yeah, credit spreads, you know, yeah, they've ticked up a smidge, but this is double B junk relative to treasuries. They have ticked up a little bit, but not dramatically yet. So, you are starting to see some a little bit of stress in the credit markets, but it's not going bonkers just yet. We're not seeing these type of activities. This was back in, you know, early 2020. This was during the credit shutdown. Over here was a Silicon Valley bank crisis. So you're not seeing those type of those type of moves in credit yet, but you are starting to see little upticks. >> Okay. So right now I guess it's just something you're kind of keeping half an eye on, but AB. >> Absolutely. Um and you're seeing it more if you get more into distress like you know C credit, you're seeing a little bit bigger uptick, but again they're still very minor. >> Okay. Yeah. I mean I was looking at I think high yield when I when I last looked at this and it was it was definitely >> you could finally notice a difference. >> Yeah, you can. And I mean, if you zoom in on this, um, you can you can definitely see a little bit more of an uptick, but you know, got to keep it to perspective. Just having an uptick is one thing, but you need to see a sustained kind of increase in yields to start saying, hey, there's something really starting to impact the credit markets. >> Yeah. Well, okay, we'll keep our eye on this, but I think what's notable about it is the trajectory for a good long time has been down to flat, >> right? So, the fact >> be good for markets. >> Yeah. >> Right. >> Right. Meaning if this starts picking up again, that might be yet another near-term headwind for markets. But we'll we'll keep we'll keep our eye on it. >> Um, all right. >> And real quick, just just to finish that in thought, I told you before that the only thing that matters is credit spreads. And and that's that still remains a very true statement. That's why we watch credit that's why we track credit spreads on Simper. That's why we talk about it so much in our own work that if you want to know if there's a risk event coming to the markets, credit spreads will tell you. Everything else doesn't really matter. >> Yeah. They're kind of the barometer of of people's ner the big money's nervousness. >> Exactly. >> Yeah. Okay. Um I I I wanted to talk a little bit about what's going on with Bitcoin. We'll save that for next time. Um so as we wrap up here, trades, you guys made many trades over the past week. >> Not not in the last few days because we did them previously this week. Um you know, we as we talked about previously, we were kind of getting worried about this extension in the market. So, we went through and rebalanced all of our accounts, the thematic models as well as our uh primary accounts. Um, we actually had to rebalance the small and midcap model three times in the course of about two weeks because certain positions and those were going up like 50% a day. So, it was just, you know, kind of bonkers what was happening in the small cap side. Um but yeah, we went through and just in in like the all weather model, like I said earlier, we rebalanced our precious metal positions there just to bring them back down to more reasonable target weights. Um we're still about long and and those portfolios were still long about 17 to 18% precious metals in those accounts. So there there's a lot of exposure there. Um in the crypto model and AI models, we've had to rebalance those a couple of times. Those have been there's certain positions in there that have just gone up dramatically in a very short period of time. That's just all that speculative push. >> Yep. >> Seeing through those models. So, so again, we've had to do a lot of work previous to the end of the month and all worked out well because we rebalanced that before we took that big hit in the market. So, it it all the timing of it worked out really well for us to kind of be, you know, realizing that we were getting extended and saying, "Hey, we should probably pull some risk off the table." And that timing just happened to work out well. >> Okay. So, so better better to be lucky than smart, right? >> Better to be lucky than smart. Um, all right. So, um, we'll uh we'll we'll start landing the plane here. Um, I I I'm not going to do a big rant this week. Um, but Lance, I I did a little bit of discussion with Stephanie Pomboy this week about um, you know, my move to to Nevada and um, you know, some of the initial um, my initial reactions to having been here now for a bit, a while. Um, and uh, it's been great. I got a little story I'm going to tell you in just a second, but um, you know, I I moved here for the primarily for the um, state income tax savings. Um, because California is the highest in the country at 14.4% the high end. Uh, Nevada is 0% which is I'm hoping going to be wonderful. Uh, you know, I I I haven't had to pay my taxes yet. I'm not going to do that until the spring, but I'm hoping to really enjoy it. And Lance, you're a fellow 0% uh state income tax guy. So, I want to hear um you know, if that's really worked out uh as well for you as I'm hoping it's going to work out for me. But I've really enjoyed the transition and and uh at some point I'll I'll I'll wax uh more lengthy about exactly what I'm really liking here. But again, I moved really for kind of a a pedestrian or or you know, just a an empirical reason around taxes and cost of living. Um, but I've really enjoyed what what Reno, which is where we live, has to offer. And um, and even more than that, I'm realizing um, ju just kind of having a new life adventure, right? Just mixing things up in life, changing things. I lived in California now when I think about it, like over 25 years. It's a long time to be in any one particular region. And there's a lot of things about California that are phenomenal, especially in terms of the natural beauty and what you can do there. Um, and and let me tell you, as it's getting colder here, there are certain things that I miss there. But there's a there's an old um there's an old speech, and I think it's apocryphily um attributed to Kurt Vonagget, but I don't think that's true. Uh, but in it, he says, you know, everybody should should live for a couple years in New York, but leave it before it makes you too hard. and everybody should live a few years in California, but leave it before it makes you too soft. Right. And again, I just spent two and a half decades in California. And I'm just finding um that yeah, you know, just kind of the change of life, change of scenery, mixing it all up. Uh there's a lot of just goodness that comes from that. You kind of look at the world with a fresh pair of eyes. Uh you get exposed to new things that when you were in your routine, where you were before, you just missed or you had tunnel vision on because you you were in your routine. Um, so anyways, I'm not I'm not advocating everybody just, you know, ditch where they live and move somewhere else real quick, but kind of breaking out of your routine, putting yourselves into kind of, you know, new environments. Um, even if it's not necessarily something you were you feel like you're craving right now, uh, there's a lot of benefits you get from it that I I I I just wasn't accounting for. And so I'm really enjoying that part. Now, fun little anecdote. Um and and and maybe Lance, there's a um there's a signal in here for the markets, but my wife took the dogs for a walk yesterday and she was walking by a house that was under construction and um right by the house was a pickup truck that the workers there had parked and she's walking by with the dogs and she looks and she all of a sudden realizes, "Oh my god, there's a bear in there." and the bear was eating the lunch of one of the workers and the workers hadn't noticed it yet. So, you know, her thing was trying to get the dogs away before the dog saw the bear and started freaking out and maybe the bear decided the dogs would be a better lunch, right? >> Um but uh uh you know I I shared that story on X and uh you know, one of it was I was just sort of tongue and cheek. Hey, this is the adventures of living in a new place where you're not quite used to what goes on there. But a lot of people were saying, "Well, hey, maybe that's a sign that the bears are finally coming back out, right? U so anyways, uh I've I've uh we're having all sorts of of of new experiences and and uh adventures like that one here. But in wrapping up, Lance, um like I said, I haven't had to pay taxes yet, but I I am looking forward to the savings that will come along with with moving here." You've been in Texas for a long time. >> You're So, you're renting now, though, right? You're not You haven't bought yet? We haven't bought yet because we wanted to make sure that the move was a good one and and we don't know Nevada enough yet to know if if indeed this is where we want to go. >> No, I get that. I get that. So, so in Texas, we have zero pro we have zero income tax in Texas like you do now. >> Um but they get us on property taxes. So >> that that's sort of what I hear. >> So, you know, that's that's about eight and a half%ish. So, you know, depending on where you live, but so I guess you you have to really kind of check. I don't know what property taxes are in California in Nevada, but you know that's that's you know my theory is is that no matter what state you live in, they're going to get you somewhere. So, you know, you know, but um you know, it's definitely going to be better regardless of what the property taxes are in Nevada, it'll still be better than your tax rate in California. So, you're you're going to be you're you're going to be in a you're going to be in a surplus however you turn out. >> Yeah, it's interesting. And maybe maybe native Neadans can comment here if they're watching. Um, I just did a quick search and it says, um, W Nevada doesn't have a single statewide property tax rate. Its average effective property tax rate is one of the lowest in the country. >> There you go. >> So, um, hopefully that'll be great. >> Is there Is there a house next to you that I can move into? >> Yeah. Well, we'll see. I love I love our friendship, Lance. I'm not sure if the house next door is electric, >> but you know what? You know, look, >> actually, actually, it would completely work, Adam, because I'm a hermit, so I never leave my house. I hate leaving my house. I hate people. So, you know, I would never see you anyway. I could live right next to you. I'd never see you except on >> I met your wife and she's wonderful. And also, too, like if we're worried about things getting, you know, really bad in the future, you're the guy I want to live next to who's got all the guns and the training and and and the martial arts capabilities. So, all right. May maybe we will do that. Um but uh but anyways, yeah. So, we'll we'll we'll we'll we'll we'll see where all this ends. But I got to say just high level, um, it was sort of it's sort of an accidental adventure, right? We we we made this decision purely around the money side of things. Um, and we're actually finding, hey, you know, there's there's a lot of fun and just kind of learning about a new place. >> Dude, I I think a a I love Nevada. I've spent a lot of time there, so it's a great state and it's beautiful country. So I, you know, I I'm I am thrilled for you. I I think you're going to enjoy it. I think you're going to find out that you probably even like it more than California at the end of the day just for a whole variety of reasons. >> We we we very well may. And again, you know, there's some there's some parts of California that are just, you know, absolutely um uncontestable. Um whether it's Yusede, whether it's the Pacific Coast. I mean, there's just so many beautiful areas. But the thing is is I can still drive them. They're in driving distance from here, right? Um and if I get sick of the snow, yeah, I can I can drive to 75 degree weather, you know, whenever I want. My wife's family is still back there. So, >> yeah. We'll see. And again, I'm not trying to make this about me, although I have told folks that I I will do kind of a deeper dive video on kind of the, you know, the the math behind the move, the reasons behind it, and then what I had to do to cut sever all the ties to California so that California will stop considering me a resident and wanting to tax me. It's not that easy. >> Um, which for the folks who have asked, I I'll go through all that, but again, not trying to make >> Yeah, I'd be interested in hearing about that. Like, okay, I've decided to leave the state. Yeah, but we're going to keep taxing you anyway. Yeah. I mean it I I I that's amazing to me. >> So it's funny. I walk around here and especially in the area I live in. I mean five out of every six people I I've met so far are California refugees, you know, who just wised up earlier than I did. Um but a number of them have war stories of like, oh yeah, God, no. It took took way longer than I had, you know, thought imagined to be able to cut those ties and I ended up sort of settling with the state for X or whatever. I I I think it's harder if you have um property still in the state, >> right? Um and I think it's also harder too if you're employer is a California employer, but you're working for them, you know, in a different state. Interesting. >> Right. The fortunate thing for my wife and I is we're self-employed. Um and we don't own any property there. So, a little bit cleaner. >> Awesome. But but you got to do all sorts of things in terms of, you know, registering to vote and changing your bank accounts and signing up for civic organizations to just show that you're committing to the location and not planning on going back. It It's just crazy. But anyways, all right. Well, luck Lance, um, great week. Um, you're you're going to be off next week because that's another chemo week for your wife. >> Um, hope things continue to go very well for her. And actually, for the folks asking, how's she doing? >> She's doing she's doing great. I mean, we're going, you know, just going through the process. Uh so next Friday is week number three. So it'll be her third treatment or sorry treatment number three. So we're halfway home. Um so kind of actually kind of getting to see the other side of the cliff here. But you know overall she's she's you know she's honestly she's doing really well. You know the first few days after chemo are pretty rough but she recovers gets her energy back. She's traveling this week on business. Um so you know again it's it's she's doing she's doing amazingly well. We got a blood test back. It's called the CA125. And when she was first diagnosed, that blood test was registering around 130. Um, which is that suggests you have cancer if you're above 30 is that number. And we got that blood test back last week. It was at 15. So, it it's had a huge drop. So, that was really good news. That means the the chemo is working like it's supposed to. So, very optimistic. Fingers crossed. Lot. And listen, I can't tell y'all how much that she and I both appreciate all the prayers, the warm wishes, the the advice that I've, you know, everybody sends me. You know, I heard this doctor and I heard that doctor. We we take it all in and and we appreciate it very much and, you know, it just it's it's been, you know, overwhelming how much support that she's had and and it's been great for her and really helping keep her, you know, kind of it's it's very easy to slip to the kind of the dark side. um when you're dealing with cancer. Um but the all the support has been really helping cure her keep remain optimistic. So, thank you'all for that. >> All right. Well, that that that's wonderful. Um especially the test results there and um yeah, the goodwill, the prayers, uh and I'm sure even all the articles of the next breakthrough, you know, medical thing around cancer. Those are all going to continue, Lance. So, >> Oh, I know. I know. And and again, you know, I we take them all to our doctor and we say, "We got this. What do you think?" and she says, you know, she gives us her opinion and then we we work with it from there. So, you know, it's it's great though, but I I I you know, I don't I don't discourage. I try to answer all the emails. If you've sent me an email and I didn't respond to you, I'm sorry. Um but there's been a lot, but I try to answer every one of them. >> I think folks understand. Um I I'll just also say too, Lance, um I was um I was actually in Texas briefly last weekend and um reunited with my buddy who had had uh brain cancer. I told you about sort of riddled with with cancer. U that's probably about 5 years ago and went to MD Anderson and uh he is going strong now. Um you know, he's been in remission for a couple years now. Um, but just hopefully that's one more data point that gives a little bit of hope that hey, you know, that that that guy's come through real well and and certainly hope your wife does the same or better. Um, all right folks. Well, look, in wrapping up, um, as usual, please, uh, show your support for Lance. Uh, do that today by hitting the like button and then clicking on the subscribe button below as well as that little bell icon right next to it. Um, a reminder if you want to watch the replay of the conference which has been going on uh in parallel this with this as Lance and I uh or as this video has premiered um then just go to thoughtfulmoney.com/conference and you can uh buy the replay videos there. And if you're a subscriber, premium subscriber to our Substack, you can still use that code I've been sending you to get 50 bucks off the price of the replay videos. And then last, u if you'd like to get some help in managing your portfolio for the road ahead, especially if it, you know, potentially takes the the the trajectory that Lance thinks it might take from here. Um, highly recommend that you get that guidance from a good professional financial adviser who takes into account all the issues that Lance and I have talked about here and that many of the guests and I talk about on this channel. Um, if you've got a good one, well, don't mess with success. But if you don't or you'd like a second opinion from when it does meet those criteria, maybe even Lance and his team there at RAA, then fill out the very short form at thoughtfulmoney.com to have a discussion with them. Uh, as soon as you fill out the form, the firms will be in touch with you right away to set up that discussion. Um, all right, Lance. Um, wish you all the best. Next week, we'll have Michael here sitting in yourstead and then we'll see you back two weeks after that and we'll do our deep dive on oil. >> Sounds good. Looking forward to it. >> All right, everybody else, thanks so much for watching.
Get Out Or Buy The Dip? | Lance Roberts
Summary
Transcript
This is why over the last couple of weeks, you know, we talked about reducing risk in our portfolio. We took profits and stuff. We, you know, we added to some defensive names in the portfolio because we were starting to get concerned about both the length of this advance as well as the very low volatility we were having. And then we talked about the the negative divergence in breadth as well as the negative divergence in relative strength. All signaling that we were about to have a corrective phase. So that's why we had reduced risk and rebalanced some positions. So, we're now in that phase. But overall, despite those little dips, you probably want to be buying dip. You know, and this one included, you probably want to buy these dips going into year end. [Music] Welcome to Thoughtful Money. I'm thoughtful money founder and your host, Adam Tagert, welcoming you back at the end of the week for another weekly market recap featuring my good friend, the enmological portfolio manager, Lance Roberts. Lance, how you doing? I'm doing fine. How are you today? >> I am doing great. It's great to be back on the program. Hope all is well. >> Yes, everything's doing very well. Um, so yeah, good to be here. >> All right. Well, I went with entomological, which uh maybe the scientists in the uh in the audience will know that that stands for of and having to do with insects. And we're hearing a lot of talk about cockroaches right now in the in the economy, in the financial system. So, uh we'll get to that in a bit. Couple quick things, though. So folks, if you're watching this video uh the day it's going live, if you're watching it when it goes live, um we are just starting in parallel to this uh the thoughtful moneyfall online conference. And actually, if you still want to watch, you can still jump in early on in the conference. Just go to thoughtfulmoney.com/conference. Buy your ticket, you'll get immediate access into the live event. It's a 10hour event. I think it's in fact it might be a 10 plus hour event. I got to figure out how to shave some time off. Uh but folks, it is is going to be fantastic. just a tremendous uh faculty. Could not be more timely given what's going on in the world and in the markets right now. Um if you're watching this later than that, um if you go to that same URL, thoughtful.com/conference, you can purchase the full replay of the event after it's done, uh you'll get everything. You'll get all the presentations, all the live Q&A, all the archives from the live chat, and all the resources that were shared by the faculty members. So anyways, that's going on right now in parallel. Uh Lance, I'm going to sleep for like 3 days straight after this. She can probably >> um I I also want to say last week while you were um you were busy with your wife and uh Michael Liowitz sat in for you. We had to record a day early because of my schedule. And uh I made the uh just the huge karmic error of error of saying, "Hey, Mike. Well, we're recording here on Thursday, so folks were going to be missing one day of the week. Hopefully nothing happens in the markets on Friday." And the markets heard that and said, "Hey, buddy. Here, hold my beer." >> Yeah, exactly. We had a 2% down day in the S&P, one of the biggest drops of the year. So, anyways, there's lots to talk about this week. >> Yeah. Yeah, absolutely. So, go ahead. >> Okay. Well, I'm trying to figure out where do we start, right? Do we start with, you know, cockroaches in the credit markets? Do we start with the whole trade war? You know, are we in a trade war? Aren't aren't we in a trade war with China roller coaster uh with China roller coaster that President Trump has had the markets on? uh or do we talk about the quote unquote debasement trade which the uh financial media is talking about like it's this brand new thing which of course has been going on for decades. So where do you want to start? >> You you pick it. Don't care. >> Don't care. Okay. Um well all right. Why don't why don't we talk about the cockroaches? Um so you and I I think you and I I know Michael and I talked about it last week. Um but um we have seen some uh some bodies float to the surface. Folks are probably getting sick of me using this analogy, but I think it's a good one. Um, where we had some companies that had taken out a, you know, obviously more debt than they they could handle through the private credit market. And in the private credit market, as you and I have talked about for a long time, Lance, um, it it's really grown a lot. It's sort of exploded um, in size over the the past bunch of years, you know, 5 years or so. A question we've asked ourselves is, is it ever going to start exploding in terms of bad debts going bad? because we don't really know the quality of the the debt that the loans that are being made in this space, right? It's not regulated the way that the banking system is. We've all sort of been crossing our fingers and saying, "Hey, hopefully these guys are making sane loans that make sense." >> But we won't really know until quote unquote the uh the bodies start floating to the surface. And so we had, we had First Brands. Now those were sort of in the um in the automotive sector. So, you know, maybe folks have been saying, "Well, that's those are kind of one-offs and maybe that's just contained in the automotive sector." But now we're starting to see some regional banks really start to struggle here. And again, Jamie Diamond said, um, you know, sort of referred to these companies as cockroaches. And and when you see a cockroach on the kitchen floor, you know, you don't have just one. So, um, how big of a deal is this at this point, do you think? >> It's not. Um I mean it's important to pay attention to you know just because anytime you have any type of defaults like this that go on you know there's always concern that well there's more out there and there probably is but you know this started with you know the thericolor issue then it went to first signal and you know we saw these you know kind of defaults being done in some of these private credit markets and actually we were just talking about this this morning uh Mark Cuban recently just backed a firm I believe they're in Dallas and what this firm does is they basically loan money to to poor credit borrowers against their auto the equity in their automobile. So, think about that for a moment. I I have very low I have a very low credit score, which means I probably took out a subprime auto loan to buy a car of some sort. I've made payments on it up to this point, but and maybe I've built up a little bit of equity in this. So, now I'm going to take money out of my car, which is a depreciating asset. So, you know, this is just the type of environment that we've worked ourselves into. So, it's not surprising that you're seeing some of these things blow up. But, you know, the immediate concern is like, oh my gosh, this is going to be another Silicon Valley Bank situation. That was very different. Silicon Valley Bank was impacted across their entire collateral all at one time. Um, and became under collolateralized as a bank and that's what caused the default of of Silicon Valley Bank. And that kind of spread through a couple of other regionals. And of course the Federal Reserve stepped in with their uh kind of their their bank bailout fund at that point and you know stabilized that situation. Um this is different in the standpoint that this is not affecting the entire collateral of the bank. Yes, it's hitting pockets of collateral at the bank. So in other words, yes, they are definitely having some, you know, some issues with some of the collateral that they own for sure. No doubt about that. But it's not a con at this point. It's not a a contagion across the entirety of the asset scope. It's also not. And of course, the other side of this is like, oh my gosh, this is the next subprime loan crisis. Not nearly to the magnitude. Um, you know, you were talking hundreds of billions of dollars worth of subprime credit. You're talking just of, you know, several billion of this type of credit, you know, potentially having trouble. So again, the point is, you know, don't want to ext it's it's certainly worth paying attention to. And if you own regional banks is certainly making sure that you know the the bank that you own is not grossly impacted. That in other words, they've got a lot of exposure to this debt. So make sure that the the banks that you own on the regional side are are good banks. Um and and like we went through and did some credit risk adjustments in our bond portfolios. We had some Jeffrey bonds about two weeks ago right when the the um kind of situation came up. we went in and sold all the bonds that we had on regional banks that might be exposed to that area and and so we cleaned all that risk off our table before that accelerated. So again, that's the kind of actions you want to take here. But I wouldn't extrapolate this out into something being a lot bigger is going to bring down the whole credit market at one time. >> Yeah. Um agreed. Although let's just put a caveat in at this point, right? because we we don't know the extent at which there may be a contagion here, but right now it seems hate to use the word contained because that's what they used to run subprime, >> right? >> Um but may maybe the better analogy here to switch insects is it's like a couple of termites, right? You're like, okay, my house has got termites. Doesn't necessarily mean the foundation has been riddled and the house is a tear down. It might mean, hey, you know, early on you can pay a good uh fumigator to come in and and address the problem. We just don't necessarily know yet, but but we're not seeing signs that that the house is in any real mortal danger yet. >> Um >> Okay. Um but Lance, you know, so you talk about Mark Cuban's investment there. Right. >> Um, you know, something similar I saw recently that PayPal has their own buy now pay later service that they built. >> And I read recently that they basically sold the book of the the loans to another company, >> right? Which kind of suggests, you know, that they're like, we know how bad this thing is and we want to get the exposure out of here. So my question is is you know we've railed about buy now pay later and the fact that you know people are literally using it to buy their dinner right >> so that plus Cuban you know lending to a subprime auto uh you know market of people who have this depreciating asset who have already demonstrated you know weak uh credit uh credit integrity. Um, to me those just sound like really late stage, like late late cycle stage uh developments where everybody is trying to come up with the next innovation just to squeeze a little more juice out of the lemon, but when you kind of look at it from a distance, you're like that seems really ridiculously risky. >> Yeah. No, I mean, you know, you have to imagine that buy now pay later and again, you know, there there's companies like a firm and CLA that have that are doing this and and again, you know, in the original concept of it, it it made some sense, right? Because it's like, okay, I want to finance a couch and so I can go buy this on buy now pay later and I can finance this over four payments and I can get the couch for my apartment, right? So that kind of made some sense, but to your point, it has now turned into, hey, I'm going to use this to go to McDonald's or to go to, you know, Walmart, buy groceries, whatever it is. So, you know, we've just created another level of credit accumulation for the least creditw worthy borrowers. And, you know, that that that does certainly raise a risk. And and if you take a look at the buy now pay later kind of scope, there's not nobody knows exactly how much is out there because it's not on balance sheets and a lot of things like that. We don't have a like, you know, when we track federal debt, we know to the penny exactly how much federal debt is outstanding. We don't have that kind of tracking for buy now pay later. At least not right now. >> Yeah. Which is why this feels late stage to me because that's one of the things when it blows up, you're like, "Ah, you know, we probably should have had more visibility." >> Yeah. But but it's estimated to be around 560 billion, right? So it's it's not a a nothing. It's, you know, it's half a trillion bucks. Um again, you know, when you look at the subprime crisis, that was around 1.3 trillion. So again, it's this is about half the size of the subprime crisis. Not saying that a again that ain't nothing, but it's, you know, it's it's certainly there. And it's also not assuming that, you know, you got to also remember the problem with the subprime crisis was really twofold. really wasn't the subprime mortgages that were the problem. The problem was is that we took those subprime mortgages and we spread split off the principal and the interest and we recolateralized those. We repackage those on top of something else and we sold the derivatives on those options. And we're not doing that with the buy now pay later market. >> And the other thing with the financial crisis was is that really that situation would have worked itself out in probably a more normalized bare market. Maybe the markets were down 20 25%. Uh, you know, Bear Sterns gets sold off at $2 a share, $3 a share. Um, maybe, you know, we see Goldman Sachs on the ropes, you know, or something like that and and maybe they need a bit of a bank bailout. But, but what really caused the financial crisis was when they forced Leman into bankruptcy that caused a complete credit freeze, right? And that's what really if you look at the the bare market of 2008 about 40% of it occurred right after the bankruptcy of Lehman because it simply just froze the credit markets. So, you know, that's that's the one bit of context. And when everybody relates everything back to something happens, it's like, oh, you know, the the AI bubble's just like 1999. Big differences. Um, you know, this is happening because this happened before. Big differences this time. You know, and same thing with the subprime crisis. Be careful about just going back and saying, "Oh, this is going to evolve the same way." The environment is very different, and we're not going to shut down a major bank that freezes counterparty risk across the board. So now will will the credit issue cause a problem in the financial markets? Absolutely. Could we lose some regional banks over it? Absolutely. This why it's just going to be really important about where you're allocating your risk in your portfolio. >> Okay. So that's um you know it's a challenge and maybe I'll just ask you the question directly. So so as a capital manager you're like all right you know we see some of these cockroaches don't necessarily think that this is anything like a Leman moment yet but we just don't know what the contagion is here. What do you do? Do you take some initial steps? It sort of sounds like you did where you sold off your exposure to regional banks. Um, >> well, no, no, we reduced our credit exposure to regional banks. Um, so we have we have one position in our portfolio that's a regional as truest financial. Um, balance sheets are great, cash flows are great, stocks been under a little bit of pressure with this. Um, obviously as as as you would expect and probably at some point here, I'll look to accumulate some more into that position. But the rest of our stuff is in the financial side is JP Morgan, Goldman Sachs, Black Rockck, you know, they that that even if you know, you look at the size of a JP Morgan or a Goldman Sachs, you know, a 500 if they if they absorb the entirety of the buy now, I'll pay later at 500 billion. That would be a huge deal, but that's even survivable um for them. But what I don't want to own is the bonds. And so that's why for instance as soon as we saw any risk show up with thericcolor situation we immediately went through our credit our credit book and started reducing any exposure that we had to banks that are related potentially to that area of risk. So we just sold the bonds entirely and you know and again the bonds weren't the bonds were still trading at par so it was no big no no big impact to portfolios but just removing that risk was the step you want to take at that point. >> Okay. Um, forgive me, this is kind of an Eve question, but I think it's it's relevant in case we start seeing more contagion here, which is >> let's say you own a a regional, you know, you you own a security of a regional bank, >> um, and you're a little bit worried. Um, I would think all things being equal, you would want to sell the equity in that bank faster than you'd want to sell the bonds in the bank >> because the bonds are just an existential risk, right? It's just like, hey, I still get paid unless this thing goes belly up. Um, I mean, we could go through a scare period or a period where the the bank gets beat up a bit, but I'm still going to get paid if I hold the bond. >> Equity, you might be like, "All right, I don't want to hold that because that could really get lost." >> No, no. And and if you're if you have a lot of exp again, we have we have a you know out of an entirety of of our portfolios, we have probably a half a percent exposure to one bank, right? So even if the bank goes to zero, it has almost zero impact across the the balance sheet of the of the books. So but but yeah, if you've got a lot of exposure to regional banks, you probably want to reduce some exposure here at least until you get through this period and understand what you're dealing with. >> Okay. All right. Um well so let's move to the next sort of riskmanagement thing that I think has probably made the past week or so challenging for you. So, what what caused the markets to nose dive last Friday was uh you know a Trump uh tweet or what do you call it? A truth uh that he issued on Truth Social. Um basically talking tough to China. And literally since then it's been every day or two kind of a no we're friends again. Oh wait, no we're not. And uh it just keeps going back and forth. Um that's going to be a little bit hard uh to be a capital manager just in the way that it kind of wangs around the markets. Even though I'm guessing, Lance, you're going to say that's pretty much noise we should all pretty much ignore. But um >> yeah, pretty much ignore it. >> Okay. So So you're not you're you're not making any changes to your portfolio based upon the will they won't they get into a worse trade war between US and China? >> No. No. Because again, you know, right now and as we saw today, right, I mean, as soon as the market takes a little bit of a hit, he turned around and reverses his position. So headline this morning, Trump says that, you know, tariffs against China aren't sustainable. So, uh, markets immediately kind of rallied back off that news. You know, at the end of the day, all I care about is what the market's saying. You know, if you will do you will do a better service to your viewers and to if you're managing your own portfolio is to turn the television off. Stop looking at headlines because headlines don't mean anything. At the end of the day, it's great for narratives and again, we have just a ton of narratives running through the markets whether it relates to, you know, a variety of asset classes. or some narrative and and if the if an asset's going up and people are long that asset, they create a narrative or to rationalize why they own that, you know, underlying asset regardless of whether it's a true narrative or not. Correct. >> And in most cases, these narratives aren't even reality. So, if you'll just pay attention to what the market's telling you, in other words, this is why we always look at technical analysis every week. That's all you're really concerned about. The market broke the 20-day moving average this past week, which was not notable. certainly makes you wake up because that's been the running trend line now since the April lows. >> Hey, I'm gonna interrupt you because can you just pull up the the chart while you're saying this? If we're going to talk about the moving averages, let's actually show people. >> Yeah. Um, so yeah. So yeah, here here's the chart right here. So a couple of things going on in the chart. I actually tweeted this out this morning on my ex. So if you every day I post some stuff on X about this at Lance Roberts and I tweeted this chart out this morning. And I don't what do you call an X these days? You can't call it a tweet anymore. So, because it's not Twitter, you got >> they they call it a post. >> X. >> What's it called? >> They call it a post. >> It's just a post. Okay. I posted this this morning. It was so It was better. I look >> I like it better when I can say I tweeted it, right? So, >> I think we should go back. But anyway, that's me. Um anyway, I posted this on X this morning. And so, the red line is the 20-day moving average, the blue line is the 50-day, and the green line is the 100 day moving average. Um the the black line in the back is is the VIX. And um you can just see here that over the last few days volatility has picked up and that's important to pay attention to. Um but what's important is is again is that if you go back to the to really kind of the April lows the market when it rallied back above the 20-day moving average that became the point of support for this entire 30% rally from the lows. So every time the market would rally you get too deviated above the 20-day you get overbought you get a pull back to the 20-day it rallies again. And it was kind of the stair step higher you know. So, you'd rally up, get deviated from the 20-day, correct back to it, or maybe slightly below it, then immediately regain it and then move back higher. So, last Friday, we cracked that 20-day moving average with some significant volume and a big decline. We were down 2.71% on Friday, and we came right to the 50-day moving average. So, again, held support at the next critical level of support. retail buyers stepped in, bought the dip, rallied the market back to the 20-day, failed there, came back down, retested the 50 on Tuesday, bounced off of the 50 on Tuesday morning, and rallied back during the day. And then on Wednesday, got above the the 20-day moving average, failed on Thursday, and now Friday morning, we're kind of now again, Adam and I are recording Friday morning, so it's a bit early, but markets are are positive right now just a little bit. And but we're trading below that 20-day. So, this is the longest span that we have now spent since going back to the April lows below the 20-day moving average. But, so that tells you there's certainly some stress in the markets. That's worth paying attention to. And again, this is why over the last couple of weeks, you know, we talked about reducing risk in our portfolio. We took profits and stuff. We, you know, we added to some defensive names in the portfolio. We went through those previously because we were starting to get concerned about both the length of this advance as well as the very low volatility we were having and then we talked about the the negative divergence in breadth as well as the negative divergence in relative strength all signaling that we were about to have a corrective phase. So that's why we had reduced risk and rebalance some positions. So we're now in that phase. But right now there's despite all these headlines, all the market's done is come down to the 50-day moving average. We're working off that previous overbought condition. Um, you know, markets are still holding a good bullish trend from the lows. So, we haven't really violated anything important here. So, as long as we really hold above the 50 into next week, then, you know, we're we're okay. And and the markets will likely probably flop around here some more. And then this weekend's newsletter, which I'll post tomorrow, um, on at realvestmentadvice.com, is talking about the three reasons for a year-end rally and why the market should rally into year- end. And that's primarily because of earnings buybacks and portfolio positioning. And we're just into that time of the year. So, November, December tend to be fairly strong months for the markets. And you're have about 7 billion dollars a day in corporate buybacks starting at the end of this month to help support markets through year end. So I wouldn't really now it doesn't mean you're going to go straight up into year end and we could just be wind up you know marginally higher than we are right now by year end but the the the odds are that the markets will be higher than lower between now and then. So but again doesn't mean you can't have you know we normally have a correction in the first two weeks of December as mutual funds and do their annual distributions of capital gains interest and income. So you typically get a bit of a pullback. Could have a little bit of a pullback in early November heading into the Thanksgiving holidays. Just gets a little bit light trading. Those are kind of seasonal normalities. But overall, despite those little dips, you probably want to be buying dip, you know, and this one included, you probably want to buy these dips going into year end. >> All right. And um I think we talked about this, Lance. Um, again, I can't remember if it was with you or it was last week with with Michael, but um, I interviewed Mark Newton, who is uh, Tom Lee's research partner there at Funstrat. >> Um, and he gave his forecast for the rest of the year and said he thought there was a high probability that there would be some correction um, or want to use the official term correction because what people think like 20%. uh some sort of pullback, you know, 5%, you know, maybe 10% uh in October, first half of November. And then he said, you know, he if it happens, he's going to use it as a buying opportunity, expecting a similar um year- end rally like you just mentioned. So, seems like you and Mark are seeing the same things right now. What is interesting is Sorry, you want to comment on that? >> Uh no, that that's right. I mean, look, you know, as I said, you know, seasonalitywise and, you know, there's some there's some driving factors of the markets between now and the end of the year that you certainly want to pay attention to. Again, just there's a ton of money that comes into the markets in the last two months of the year, which typically tends to drive markets higher. Uh, that again, but that doesn't mean that you can't have a 5 to 7% correction. I was talking about this a couple weeks ago. Um and then of know actually I was talking about on Wednesday of last week and then of course Friday we had that two 2% decline in one day almost 3% in a day. So you know they can come very quick and you know a retracement back to the 100 day moving average as we were talking about earlier that would be about a 7% correction. So again that's not that big of a deal. Um it's going to feel a lot worse because this market's had no volatility and the market just goes up every day. I just throw money at any asset class. It goes up every day. It doesn't matter. Why why worry about risk when I just I I can buy Nvidia, it goes up every day. I buy a Bitcoin, it goes up every day. Blah blah blah. It's great. Um but what that means is that when you do introduce volatility and you do have a pullback of normality, three, five, 7%, it's going to feel like a 20% decline. It's like, oh my god, what's going on here? Is the world coming to an end? Does AI does the AI trade over? Um >> but that that'll be what happened. But that'll happen in every asset class. you're you're going to have fairly substantial draw downs that are perfectly normal just to reset overbought conditions and you know give you a good buying opportunity to add back to that asset class. But again when it occurs what'll happen is and this is today's article that I posted on the website talking about investing in a zerorisk environment. What happens is we just bring in all those psychological biases on the way up we start coming up with all these rationalizations about why a particular asset class is going up. Even though that rationalization has no basis in reality, but that's that's how we justify overpaying for the asset. And then on the decline, we do exactly the opposite is now we rationalize why it'll never go up again. And so we have to sell everything. So, you know, it's just important and that's and that's we go through all the all the rules and and psychology of of how that works in today's article, but that's a but that's what's going to happen in markets. You just need to be aware of that and understand that those opportunities, at least for right now, are going to be more buying opportunities than they are selling opportunities. >> Okay. So, all right. How do you marry those two then? Because I was going to ask you about this new piece. Um, they're buying opportunities, but they're buying opportunities in an environment where investors are assuming there's zero risk. Right. And making up, you know, inventing any rationale for why their assets going higher and they're going to buy more of it. Right. Right. So at what point as a capital manager do you say all right at some point this upward trajectory is going to reverse because people are just buying blindly >> right and and and it's going to and you're going to lose the market you're not going to get out right at the top of the market but that's why we again this is why we go back to paying attention to technicals if you start breaking down uh you know important levels of support you know you break the we broke the 20 um we haven't gotten back above it yet so normally when you break a good moving average like the 20. We did it early this week on on Tuesday. Um and then you know by Friday we haven't gotten back above it yet. So again now there's starting to be you know we didn't immediately reverse that break and and negate it. Right? So we've now spent a week below that moving average and so that's starting to build some significance. We won't pay attention to that. um the 50-day is holding uh for right now, but if we break that and then fail to get back above it, now that's kind of the second warning sign. So, so the thing is is that what technicals will tell you, and this is what we're saying earlier, is like just set aside all these narratives and headlines and everything everybody gets all wrapped up about. Just set all that noise aside because that's all it is. Let the market tell you what it's doing and and and they'll tell you. So, as you break these important levels of support, you know, you you'll have these indicators that say, "Okay, hey, you need to start reducing some risk." And this this time is now different than it was previously because where we were buying the dips previously is now not working now. And where sellers were were showing up before to buy stuff, they're no longer there. And and so, you know, this is, you know, there's an old saying that sellers live higher, buyers live lower. And at some point, buyers are going to go, "Yeah, I'm going to buy that. I'll buy whatever asset it is you want, but I'm gonna buy it 20% lower than where it is right now, >> right? >> And that's where buyers are going to be. And but but again, the market will tell you when that shift in psychology in the markets is happening and gives you plenty of time to start exiting positions, reducing risk, those type of things. Um markets, you know, the big concern, and you know, I've heard this from a lot of people, you know, like, oh, the market's going to crash by 50%. Okay, great. It's going to crash by 50%. You're not going to wake up tomorrow morning and the market's down 50%. Right? It may be down 5% tomorrow and you're going to take a 5% loss, but it won't matter what asset class you're in. A 50% correction is completely normal. It happens. Mean reversions happen particularly in these type of markets. But it's not going to happen overnight, >> right? >> Unless there's a layman moment, but those are such low probability tail risk. >> No, no, no. The 50% correction during the subprime crisis took nine months. Actually took almost a full year. It was it started in March of 2020 uh sorry 2008 and it didn't complete until March of 2009. That was the 50% draw down. >> Yeah, you're you're right. You're right. Yeah. I mean to your point there was a lot that followed layman but it wasn't the whole dip. Yeah. >> Well no and Leman was in the middle the the market so the that's a great example. It's a fantastic example of exactly what we're talking about. If you take if you go back and look at a chart of 2008, it the market peaked in about June and and we were forming a head and shoulders pattern going into the month of June and in June July we broke the neckline of that head and shoulders pattern. Then the market started to decline very normally. We rally we broke the neckline and rallied back up to it and failed. Great opportunity to get out of the market at that point. You're only down maybe 5% from the peak at that juncture. Then the market started declining, you know, in August, uh, really in late July and August, the market started working itself lower. And then on September the 18th, Lehman gets forced into bankruptcy and then the market cracks and you're down like 10% in the function of about a week and a half. So, so that was about 40% of the entire decline of the 2008 crisis occurred right after Lehman was forced in bankruptcy. But the market was telling you there was problems months before that happened. And the market gave you several opportunities to get out of assets, which we did. We had shifted almost entirely into treasuries before Lehman ever occurred. And because we were starting to watch the un the the unwinding of what was going on with subprime, we were watching credit spreads start to blow out. I mean, there was all these signals that told you there was a problem. But but you know, we get as as investors, we get so wrapped up in this idea that, oh my god, the market's going to crash 50%, I'm going to lose all my money. It's not going to happen overnight. So, you know, it's just understand that we have to pay attention to markets. Most of these headlines and narratives are complete rubbish. You shouldn't pay attention to them. The technicals, the indicators like credit spreads, those type of things, those will tell you what the risk is in the markets and what you need to pay attention to in terms of your portfolio. >> Okay. Yep. And this is again your your sort of three month headlights that your technical analysis kind of tells you. It begins to tell you when there's some, you know, traffic cones and cautionary blinking lights on the on the highway. And to be clear, you've maybe seen a a few of them, right? Which is what got you out of the the regional bank there. Made you lighten up, but but nothing that you're saying, okay, this looks like, you know, it's going to crack in the immediate near future. >> Um, I am going to ask you about credit spreads in just a minute. Um, >> so, um, let me ask you, uh, I I hesitate to bring this up because it's g, you're going to go off on a rant about, uh, narratives that don't matter. >> Yeah. No, you're go off a rant about narratives and whatever you say, probably the majority of the people are going to say, "Lance doesn't know what he's talking about on this topic." But what what is what are the technicals telling you right now about gold and silver? Because they have continued their massive run. the morning we are recording this, they're actually having uh a bit of a corrective day in the market. I think silver was down almost 4% the last time I looked at it. Um but uh silver still above 50, gold is still above 42,000 4,200 an ounce. Just phenomenal runs this year, but phenomenal runs over the past couple of weeks. We knew technically they were getting super stretched from their moving averages. Um, so I'm curious to see if if if what you're seeing in the data right now just says, "Hey, they were so above their moving averages or just potentially moving back to them or if it's starting to tell you something even different." >> Well, no. I mean, it's it's not really saying anything different. I mean, gold is going to be a phenomenal short at some point, right? It's just that's just going to be a function of time. You're so deviated from like the 4-year moving average and the 5-year moving average. You have deviations that basically have never appeared before in history. uh relative strength as they function is at the highest level on record going back forever uh going back to the 70s. So at some point it's going to be an absolutely phenomenal short here's and and and here's the important thing about that um gold can have a 50% correction from here and still be in a bull market. >> So you know >> just like the S&P >> just like the S&P right I mean so so having a very substantial correction in gold is going to happen. Um you're going to need some catalyst to make that occur whatever it is. Um, but you know, and when it happens, it'll happen very very rapidly because that's that's how it's historically happened with gold. When you see when you see these big spikes in gold previously, they they they can run for a while, but when they break, they reverse almost the entirety of that spike very quickly. And you know, it's it's very interesting because, you know, I talk to a lot of people every day and and I get all these emails like, you know, AI's in a bubble and you know, this is in a bubble and that's in a bubble, but people that are long gold can't see that they're in a bubble. So, it's, you know, but that's the way it is with all bubbles. If you're invested in it, you don't see bubbles until they're in hindsight. But, you're seeing this kind of dynamic across the board. Take a look at small cap, midcap, emerging markets, international markets, uh technology stocks, mag M mag seven stocks, uh Bitcoin until recently, Bitcoin's been starting to reverse here lately. Um uh and even in in precious metals, you've got this very similar vertical spikes going on in basically all these asset classes. And that's just a function that money is chasing money now. And you're seeing a lot of money just chasing momentum. So it's it's going up. So that drags more people into it. that drives the price up more, which drives more people into it. And it's very reminiscent of what we saw back in 1999. You you'll probably remember this. Uh back in 1999, we opened up all those trading centers. And people would literally wait in line outside these trading centers to go in and trade stocks. And you're actually seeing that now with people lining up to go buy precious metals, you know, outside of coin dealers, etc. you're seeing lines starting to form because now now after >> outside the US but yes >> but but you're now starting to see that same type of mentality now retail investors are starting to pile into ETFs it's they're kind of lining up outside the ETF store to buy the ETF when the market opens >> but you're seeing that same type of psychological dynamic and you know again it's it's completely normal that's what you would expect in momentum chase and and and this this this rally could continue for a while longer just be aware that eventually it's going to reverse. >> Okay. And to the person who would say, "No, Lance, it's different this time, and I know those are dangerous words, but there is truth. The basement trade, this is really the world beginning to wake up to the fact that fiat currency is, you know, getting um uh abused by fiscal deficit spending and all that stuff. And this is a let me just finish the question. This is this is this is price discovery. This is the world waking up and saying gold was undervalued given that and it's now rising more to its true value. What would you say? >> Well, first of all, the debasement trade is not true on any front. So, you know, there was a recent graph that was put out by statistics showing that gold reserves have now caught up with treasuries. And so, central banks are accumulating gold handover fist, which isn't really true. And we actually posted a chart of this on Twitter just this past week. Here, let me share this with you. >> Yeah. But you're you're you're basically saying the rise there is more due to the dramatic increase in price in gold recently than it is them buying a ton more ounces. >> Exactly. So, if you look at this, so what this chart shows you is this is the chart of actual change in net purchases versus the actual change in gold price. So, the change in gold price is orange. Uh the blue is actually the accumulation of gold. Over the last 5 years, central banks have only increased their gold holdings by about 5% in total. So about 1% a year, which is what you would expect because simply they acquire gold to offset reserve currency differences. The US dollar currently is trading at at the same level it was back in 1970. So if you look at a chart of the dollar index as an example, it basically either trades at a premium or a discount to 100. So we're trading at 98ish right now. So we're just slightly below fair value for the dollar going back to to 1970. So in that environment because of that weakness in the dollar you would expect to see them pick up some gold in terms of reserve currency balancing because again the only reason that central banks acquire gold is to balance reserves against other countries their their currency versus other currencies and their holdings versus other holdings. So again they acquire that. You know the second argument is is well you know foreigners are dumping treasuries because they're they're trying to get out of the dollar. They want to own something else. Well that really isn't true either. This is the foreign debt held by foreign and and international investors that just crossed over nine trillion and is rising fairly sharply in the last year. So, you know, all these narratives that have been put out by these people trying to pro, you know, it's interesting the people putting out these narratives are the people that are selling gold. Um, you know, Peter Schiff is is a great example of this. He just posted a tweet the other day. He's like, "Hey, you know, at the rate that gold's going up now, it's going to be 5,000 by the end of December. You should come buy some gold from me as a Christmas gift." Well, if gold's such a valuable asset, why are you selling the gold, right? Why are all the people promoting these narratives are the ones selling the gold to other people? So, again, it's it's going up in price, but the narrative doesn't have any real foundation. Again, you know, we've gone through the whole story about reserve currency balances before. The fact that, you know, foreign central banks have or you know, if you take a look at the US dollar, it's still 58% of all international trade. It's it's nearly 90% of all foreign currency transactions. Nobody's moving away from the dollar. And if you were going to move away from the dollar, where are you going to go, right? You're going to go to the the Chinese yuan. You're going to go to the Euro zone. The euro is going to grow at half a percent to 1% growth next year. You want to have money invested there versus the US that's going to grow at two to three. So, none of those narratives make any sense. But we need those rationalizations to justify paying higher prices for gold. It's the exact same thing that we do with the AI stocks, right? AI stocks are going off to the moon. Well, how do we justify that? Well, they're spending all this capex. So, all these data centers are going to come online next year and they're going to create all this revenue and all this increase in productivity which is going to justify the revenue and capex spend. So, we can overpay for those valuations today because the increase in productivity are going to boost earnings. Well, forget about the fact you're going to lay off half your workforce. And if you lay off half your workforce with AI, where your revenue is going to come from to justify those revenues, right? So, but we have to have those rationalizations to justify the price move. It doesn't, and this is what I said earlier, it doesn't really matter if those rationalizations are true or not. It's just whatever feeds the narrative. And this is why pay attention to gold prices, pay attention to stock prices, pay attention to Bitcoin prices. They will tell you when the run in that asset class is done and when you need to start, you know, reversing your positioning. >> Okay. All right. >> Again, again, and just just be full disclosure, right? We're very long gold in our in our AI model, in our all- weather models. We're very, in fact, you know, what's been a better performer in our precious metals models is uranium, which has kicked the crap out of gold over the last two months, but you know, we don't talk about uranium, right? But gold, >> you know, like that's saying something because I mean, gold has done phenomenally well >> and uranium's kicking its ass. So, and here's another problem with the whole debasement trade, Adam. Let me let me go back to this. Here's the here's the problem with the whole debasement trade. So, you know what this is, right? I think I've seen it before. >> Yeah. You think this is a dollar bill? So, you can't debase fiat currency. This this is the myth that everybody promotes. If if I take this dollar bill and I tear the corner off of it, right? Will that dollar bill still buy me the same amount of goods? >> Uh I I think until you get to enough point where someone's not going to take it, >> right? But the point is is that I can I can So all the basement is is removing the underlying asset that's within this right. So, if I have a a a you know, if I have a 25- cent coin, right, and I take the silver out of it and and it's totally made by just copper, right? Just let's just change all the quarters in the country to copper instead of >> make them plastic. >> Make them plastic, right? As long as we assign if we as long as we say that plastic coin is still worth 25 cents, it'll still buy me 25 cents worth of goods even though I have debased it. Right? If I take a chunk, if I have a a gold coin and I take one one fifth of it out, right? So I have one less of gold in that coin. Will that is that gold coin still worth the same as it was before I reduced the value of the gold in that coin? >> No. >> No, it's not. See, I can debase a gold coin because it's a commodity. I cannot base debase a fiat currency because a fiat currency is simply just a value that we assign to a piece of paper. This is what we call currency, right? And for a currency to have value, we have to assign a value to it and that is guaranteed by the government to have that value. Even though if I reduce the the the if I debaseed this so to speak by reducing the paper content in it, it still buys me a dollars worth of goods and services because this is the value that we have assigned to this dollar bill. >> Now, >> okay, but I mean the viewers the viewers are saying, well, what what if you all of a sudden print up a trillion of those dollar bills tomorrow? the the yes, it'll buy a dollar's worth of goods and services, but but what a dollar's worth of goods and services will get you will be a tiny fraction of what it got you yesterday, >> maybe, but that's called inflation, right? And so, so think about this way. Tomorrow morning, let's say that we print up a trillion dollars worth of these pieces of paper and we give them to every household. And just assume for a moment that everybody says, "Okay, everybody's got more dollars to spend, so I'm going to sell everything for the same price as I was just now everybody's got a lot of money to spend, so I can sell a lot of product." And so we'll just assume for a moment that prices don't change. So the only way that you can affect the purchase, and this is the argument, right? So it's just a mis it's a it's a misunderstanding of the word debasement that's being thrown around. What drives the value of the dollar in terms of its purchasing power parody and that's all we're talking about is is inflation. That's that's all we're talking about. >> Well, it's the classic Milton Friedman, right? It it it's always >> No, no, no, no, no. Because you everybody misquot Milton Friedman, right? And they say, you know, inflation is everywhere blah blah blah and it's only from the function of government printing, which is that's a very true statement, but what he's talking about is what happens over time. Now, this is this is the misnomer of debasement versus inflation. So, again, I have this dollar. If I take this dollar and I stick it in my wallet and I never touch it for 10 years, in 10 years, this dollar bill will buy me less because the economy has grown over time. And because the economy has grown over time, I'm going to have higher prices. So, I'm going to have inflation. We want inflation. We must have inflation to have economic growth. So this is why we want 2% inflation because if we have 2% inflation, we have economic growth of 2%. We want that. We want that inflation. Now what we don't want is 50% inflation, right? We don't want that. But if I just take my dollar and I do nothing with it, then yes, it's going to lose its purchasing power parody. But let's go back to 1970. If I took my dollar in 1970 and I invested it in gold, it's certainly worth more today than it was in 1970. But if I invested it in the S&P 500, it's worth about 10 times more than what I got invested in gold. So both of those assets protected me somewhat from inflation. It took gold 45 years to do that. The S&P outperformed that by massive extremes going back to 1970. So as long as I'm investing my dollars, then those dollars are adjusting for purchasing power parody over time. So I can defeat the deflationary impact of inflation or the debasement of inflation by investing it and not holding it in a jar underneath my bed. Right. >> Right. >> So we you want to invest it in things that will beat inflation. Right. >> Well at least you put up the chart of >> not even beat it just keep up with it. Right. >> Well well a couple things. So I know you've said as as an investor that is your job number one which is at a minimum I got to keep pace with inflation. Right. So I'm I'm at first and foremost don't lose the wealth that I have purchasing power-wise now. If possible, >> do better. >> Right. And you have pulled up the charts of the different asset classes and they've shown how stocks from certain periods have beat gold. Although I think gold is has done pretty well versus stocks actually the past couple days. >> Yeah. No, no, absolutely. And again, so my my point is >> and Bitcoin has done phenomenally well. Let's give a nod there too, right? >> Yeah. Yeah. >> You buy Bitcoin at at 20 bucks, you you've crushed it. >> Absolutely. >> Yeah. No, no, my point is is I'm not knocking any asset class, right? So it's just anything that will outperform the pace of inflation over time. And so this is the misnome. This is where all the arguments fail that or you know these people run around going the basement. The basement's all about the basement. You can't debase a fiat currency. You can have inflation. But as long as you're investing your assets in something that outpaces or at least keeps pace with inflation, you're okay. It's just simply if you're holding cash and it's doing nothing, then you've got a problem of this loss of purchasing power over time. And that's all those charts that people show. It's like, oh, since, you know, 1970, the dollar's lost 80% of its purchasing power. That's a true statement. Only if you have held all your dollars since 1980 in a glass jar underneath your bed, right? As long as you invested it in something, some asset that outperformed inflation over time, then you're fine. And that's that's the whole reason why we invest, >> right? But I just want to be really clear too this separate discussion, but this is why I'm so concerned about the wealth inequality that's going on because there's a bigger and bigger percentage of society that doesn't have extra scratch left over to invest. So all they're getting is the inflation, right? I actually I actually just did a podcast yesterday with Ben Gran talking about the the very very same thing is the problem with you know the problem that 80% of Americans have is very poor financial habits and you we've talked about this before is that you know we don't prioritize investing and saving. We prioritize spending and that's what we've been taught by the media by social media by everything else. We're taught to spend everything we make. We've never really prioritized as a country that saving and investing is a far more important thing within our within our lives and and we wouldn't have this problem today if we had taught that. But we've taught ever since the 19 early 1980s when we deregulated the central bank, sorry, deregulated the financial system, the banks itself. Um, we went to this consumer overdrive. We we created 11 trillion worth of debt between 1980 and 1990 by issuing everybody credit cards. That didn't exist. you know, this this wealth inequality gap and stuff didn't exist prior to 1980. And ever since that deregulation of the financial system, we have just indebted the average consumer to the point that they can't get ahead because we've never taught them financial responsibility. We've taught them to be consumers and good consumers, slave consumers, you know, get on that buy now, pay later thing because you can buy more. You know this I remember I remember you know in in late 1999 I was driving to work one day and Wells Fargo ran this commercial that says hey you need to go to Disneyland this year. It's a magical place but you can't afford it. It's okay. We've got a credit card for you. Put it on credit. Charge it. Take your family to Disney this year and they'll it'll be a magic experience. And that's that's been the whole societal change is that it's okay to have credit. And you know, we we pushed this whole narrative on people that, oh, you've got to have a credit card to have a credit score. Complete hogwash, right? But that was pervy upon the average American is you got to have a credit card. I want a credit score so I can afford to buy more stuff on debt. You don't need a credit card ever in your life. Period. Nothing. But we've taught everybody they need to do that. We taught people to buy houses that they couldn't afford. we talk we we've just done everything we can to destroy the bottom 80% of the of the economy by telling them to buy stuff they can't afford. >> So I agree we're in dangerous almost making this the rant territory. So I got to pull it I got to pull it back. Um I I will say though just to underscore your point um I think this still happens because I've got kids and it's happened to them. But um you know to to your point we started at a very early age and I I just remember going to college and this was what 1990. >> Yeah. um showed up on college, you know, opened my my student mailbox for the first time and it was just jam-packed with what? Credit card offers, right? You know, hey, you're young and dumb and you want to have some fun right now. Great. Don't worry about it. Just put it all in this brand new credit card we're giving you, right? I mean, they they they really try to get you very early on on that whole treadmill. But >> my my dog I had a dog when I was in college. My dog had an American Express card. >> What? Could you gain the system or did it literally arrive in the mail at the restaurant? >> They, you know, back in the day, remember they would send you the credit card? >> Yeah. >> In the mail and all you had to do was use it and as soon as you used it, you were you were approved for credit, right? They sent my dog an American Express card in the mail. >> Well, here's the question. Did he use it? >> No, he didn't use it. >> I would have liked to have seen the collection agent what he would have done when he kept up. You should, you know, I should have and go, "Hey, go collect from me." Meet he's in the back. >> Yeah. Yeah. He's >> He's the snarling. >> You go You go collect whatever. He was a pick dude. So, you go collect whatever you want from me. >> Yeah, he's the snarling Rottweiler. Good luck, buddy. >> Uh, all right. Well, look, um, just just to your your your um your explanation there about the debasement trade, um, I understand your logic, Lance, I'm going to venture that not everybody listening, uh, you know, sees sees it the same way, and that's okay. That's what makes a market. Um, as somebody who is, uh, you know, an owner of precious metals and has, um, been loving the ride, I'm just going to reiterate. >> Absolutely. Us, too. >> You, too. Um, I I'm just going to, you know, say, hey, look, um, even if you disagree with Lance, um, you should ask yourself, uh, well, let me just put it this way. You know, I've been I've been counseling people to think about at least hedging their positions if they don't want to take some gains. And we've already talked about this, but, you know, this has been it has risen so far at this point that this is now a windfall. You know, it might have been the windfall that you expected. I was sure this was going to happen someday, but the windfall you were now at windfall levels. So, you got to ask yourself, all right, look, if it didn't go up any higher, right? And and I I my holdings were as much as they are today. Um my my life has changed in some material way. Um you know, that that's great. But then ask yourself, okay, what would happen if this got pulled away from me, right? if if if Lance is right, even though I don't necessarily agree with him, but technically it's a big pullback or just, hey, Lance was right. This thing turned out to be a big bubble spike just like we saw in 2011, right? Where, you know, uh there was a violent correction and then the precious metals kind of stayed dead for a decade plus. Um so my point is is you've got a windfall right now. As a steward of your wealth, you've got some decisions to make. How do I want to protect that? Right? And some people are going to say, "Adam, don't worry. I think this thing's going much higher." Great. I hope it does. >> It very well could. >> Yeah. Um but I'm just saying what what I want to do is minimize the amount of people who if indeed lower prices manifest from here say, "Oh my god, I had the brass ring for a moment and I let it go or I had the gold ring for a moment and I let it go." So only you can determine what what kind of risk you're willing to take on this. But you you've you've had your prayers answered at this point as a as a precious metals holder. um ask yourself how I want to make sure you know I I protect what I have and still maybe position myself to to participate if things go higher from here. >> And look, I think that's I think that's a I think that's a wonderfully great point, you know, and and this is the thing that you know, just to your point to think about is that a lot of the people that you're that you know have owned gold, they've owned it for a long time and they went through a very long period of just owning dead money essentially. And now you've gotten that money back. You've made a profit. And just realize that that gold does historically going back to 1980. I mean, it went through almost 20 years where it just did nothing for a very long time. And then you had a spike in gold. Then it it crashed and you went through a very long period, it did nothing. That's the normal history for gold. So just understand that at some point this rally will be over and then gold maybe do nothing for five or 10 years before it has its next rally. And but during that time frame, you know, you're going to start losing to inflation again over time. And and again, what we want to do is make sure our assets are always working relative to inflation. So again, it doesn't mean there's anything wrong with gold. There's nothing going wrong with gold right now. Momentum is very strong. Bullish sentiment is strong. You've got all these narratives running around. And again, if you disagree with me on on the facts, which I just showed you the facts about what's really going on, there is no debasement trade happening. If the debasement trade was happening, yields wouldn't be falling right now on bonds. Um, so there there's another problem with that whole argument. But even if you disagree with that and you're convinced that so- and so told you the debasement trade's happening and you absolutely 100% believe that, that's fine. Just understand that there are consequences to that as well. And those will have an impact on future values of money also if that occurs. And so just make sure that you're managing that risk accordingly. Just again, we're long the assets now. We'll eventually take profits, reduce risk. at some point, you know, this will be a fantastic short. All these type of moves are um it's just a function of question of time. It could be next year, could be a year after from now, could be $1,000 higher from here, you know, but just understand that risk is very prevalent. >> All right. And just on that point, you know, you say, "Hey, look, the market hopefully is going to give us warning signs when there's going to be a big turn." You're not seeing enough warning signs around gold and silver right now for you to be lightening up on your positions in your all weather. >> No, no. We've already trim we we actually rebalance gold. What is today? Friday. Wednesday. So, we trim gold a little bit in our portfolio on Wednesday. >> Okay. So, you trim gold a little bit, but you're you're not the like, hey, I'm seeing no signs of >> Oh, no. No, no, not at all. Um, but here, let me share a chart with you real quick. This is the stuff you don't see very often, right? So, th this is a chart of gold prices, and this goes back, this is the 2016. I can make this a little bit further here. Hold on. Let's back up. Um this so you can let me zoom in. I'm gonna zoom in zoom out real quick. Do you see this spike right here >> on both on this righth hand chart and see this RSI up here? This is relative strength up top. >> Yeah. >> So this is now this is a this is a weekly chart actually. Yeah. This is a weekly chart. So this is the 12week moving average. Let me just I'm going to jump this out to monthly just to give you a better picture. Okay. >> Okay. Yeah. But but the needle is pinned to 11 is essentially what you're saying. >> Right. Right. So, so relative strength relative to it 12-month moving average is at 93, right? RSI only goes to 100. This is the highest level of RSI reading ever on record. Now, the reason that's important is if you look at every period previously to where RSI was up these levels, gold either, and these are not minor corrections. This was about 20% right here. This was about a 45% correction here. Whenever gold gets to these extreme overbought conditions, you at least have a pullback. You could have a subsequent rally and then another correction and and this happens over and over and over again. But importantly, we've never had deviations from the four-year moving average. This is the highest level on record right now ever. Uh for the deviation from the 4-year moving average. So again, just reversions to the mean at this point would take gold back to the 4-year moving average, which is the orange line. That's around 2312 on gold right now. So you're talking roughly about a $2,000 drop on gold. And everybody's going to go, "Oh, that's not possible. Well, that can't happen. It happens with regularity with gold going back to and beyond its 4-year moving average. That's that's a normal correction for gold here, back to the four-year moving average. Here, well beyond the four-year average, the four-year average here, well beyond the 4-year average. And this just goes back throughout history. You just continue to see the same thing. So, the the important the important point is is don't you know the technicals right now very bullish, lots of momentum. That's what all those things are telling you. But it's also getting so deviated that the gravitational pull against that price is becoming very strong. And at some point the only thing the only thing that drives gold prices higher along with silver because silver and gold don't have any fundamentals. So what drives the price of gold? It's buyers versus sellers. So you have an overwhelming demand of buyers right now versus those willing to sell. I'm not willing to sell my gold right now. So that's going to require buyers to pay a higher price. So that's dragging sellers into the market because remember got to have a buyer and a seller for every transaction. So every time something happens, it's dragging a seller higher in price to sell it. But at some point, somebody in the commodity exchange on NMAX goes, you know what? This is ridiculous. I'm out. He's out. The next guy goes, "Oh, Jim got out. I'm out, too." And then it's then all comes into trading places where everybody's screaming at one time in the pits to sell. And that's why you get these very sharp corrections in in commodity prices that can happen literally overnight. I mean like one morning you'll wake up, you'll be down four or five percent in gold and that'll be your signal that the reversal has started. >> Yeah. Okay. All right. Well, look, um let's let's move on here. Um there is there's another commodity I want to talk with you about, Lance. Not now, but but in the future. I talked a little bit about it with Michael last week, but is oil. Um oil is is one where the narrative has really been working against it. Mhm. >> Um and yet it's a critical world commodity and demand for oil is likely to continue to rise from here and it's a cyclical uh industry. Uh it's in a bust right now. It's a boom bust industry. It's in the bust right now. Um when does it make sense to start preparing for the boom? Um I want to give you plenty of time to to you said now. >> Now. Yeah. We're actually starting to accumulate positions in in in oil because the again this is also another argument against the debasement trade which is oil prices. >> All right. Give me just a super short answer because I actually want to do a deep dive with you. >> Yeah, we'll do a deep dive in it. But no, there's there's some things that are happening that are going to be very beneficial for oil prices as we go into the next year and year after. And this is particularly relates to this idea that we're going to have uh a rebound in economic activity driven by this a AI capex spending. You know, this trillions of dollars that everybody's supposed to spend. If that occurs, that's going to drive an economic rebound. And that should provide a very good tailwind for oil because of the demand structure for economic growth and oil and and energy demand in general. And a lot of the energy demand is driven will be driven by natural gas which is produced by companies like Exxon Mobile, Lumberj, etc. >> Okay, great. We we'll get into that. Um, you also raised a point too that again we'll get into later in more depth. Um, my opinion, one man's opinion, like them or not, uh, the economic policies of the new administration are intended to spur economic growth, >> deregulation, tax relief, um, you know, pulling foreign capital into the US, uh, all this type of stuff, right? And just like QE, just like checks to households, whether you like those things or not, they stimulate the economy, right? So, um, uh, you know, now that the administration has been able to pass the the OBB and get a lot of this stuff put into policy and whatnot, and that the clock is ticking on this stuff now, we are likely to start to see some tailwinds to the economy from that next year. And again, don't say I'm not saying you have to like them or approve of them or whatever, but to ignore them, I think, is dangerous. Now, there may be some other factors that that might be providing headwinds at the, you know, in parallel in these things, but my point is is that um all things being equal, we should start to see tailwinds to the economy from these policies as we go further into 2026. And again, that'll, you know, a stimulate the economy, but also stimulate demand for things like oil. Correct. >> Yeah, absolutely. And and again, this is this is all kind of hope. Um you know, right now we're certainly seeing, you know, still signs of economic weakness. You know, employment numbers haven't been great. Philly Fed came in, you know, we're lacking a lot of data right now from the government because of the shutdown. But like the Philly Fed came in yesterday 12, much weaker than I expected. Um the employment side of that report was not great. >> So, we're still seeing that economic weakness. And that's still my concern going into next year for the market overall, which is earnings expectations are very elevated relative to what we're seeing in terms of economic activity. So the whole bet is that we're going to see this economic resurgence next year because of all this capex that's getting spin into buildout. And assuming that that capex comes true, we should see a pickup in economic activity next year. But that's there's a lot of ifs in there. >> So, right, it doesn't mean we couldn't see both, right? We couldn't see a really weak half weak half of the first half of the year and then a stronger second half. >> Yeah. So, you know, so for us just managing the portfolio, we're certainly looking for opportunities that are undervalued and out of favor. Energy fits right into that category. Um, you know, and and pay good dividends, great fundamentals in a lot of cases. But, you know, we haven't seen that actual start to turn yet. So you we, you know, we need to be aware of that potential risk going into next year because again, there's such a gap right now in narratives and again you we just kind of went through the narratives with gold and there's a big gap there between the fundamentals and reality. Same thing occurs on the AI side. This there's a huge gap between expectations of what AI is going to generate and the reality of what will probably happen. And you know this is this was a conversation that Ben Gran and I had a conversation about yesterday talking about you know because he came up through the.com bubble as well and you know the during the dotcom bubble really what caused that problem is look the internet made us hugely productive right we use the internet for everything we're using the internet right now right um there was all this buildout remember there was all that capex for building out fiber optic cable we had all this capacity of cable and nobody could use it and then then this little company called Google comes along in 2005 and says Hey, we've got this idea for YouTube that can use this fiber optic cable. Well, the the the the reality of the internet came. It just came five years later. And so all those expectations for revenue growth fell well short. It wasn't that they weren't real. It just took too long to get there. And that's my kind of concern with this whole AI you know kind of space in the markets is that the productivity increases the applications all those type of things may be very real and it just but if there's a gap between expectations and when it occurs so let's just say it takes a year longer to get there all of a sudden those those valuations that we're paying for a lot of these stocks becomes very problematic especially for companies like Ollo which is the nuclear power company >> y >> they have no sales This this company has zero sales. They have no revenue at all. It's all based upon the expectation that at some point they're going to build a power plant. Could be very well the case. But what if that power plant comes a year or two or three later than what's currently expected to happen? What if there's some delay in that? You could see very very big price declines in some of these companies. Again, they won't go bankrupt, but you could lose a lot of money between expectations and reality. And that's the thing I'm really worried about next year. >> Okay. Um well, yeah, I' I've got similar concerns. Um I still am in my camp, and again, one one man's opinion of being short-term more bearish, midterm more bullish, >> and then long-term more bearish again. Um and and with that is, you know, I've got a lot of concerns about the speculation that's been driving asset prices that you and I talk about all the time. That's exactly what you're just talking about there. So, if those assumptions get challenged by reality in some way, I could see a big uh notable correction in asset prices. >> Yeah. And and that's and that's my just from portfolio management side. That's my big concern going into next year. Um next couple of months mo there's too much momentum too much. >> We'll probably party on with Santa Claus rally. >> Exactly. Well, it's just it's just it's hard to break momentum, right? It it's there's so much psychology. Again, it again go back, you know, doesn't matter what asset class you own. If it's doing well, there's a lot of faith in that, right? that, you know, gold's going to go to the moon, stocks going to go to the moon, the small caps are going to go to the moon, you know, who whoever you talk to, whatever asset class they own, it's like, oh, this is never this time's different. It's going up up to the the the yons here because of whatever reason. Well, we know that's not true and that'll never happen. But, you know, it's it's that's a very hard cycle to break. It's hard to stop that momentum train as we talked about, you know, a couple of shows ago, is like, you know, it's just so much there's so many cars pushing the engine right now. It's hard to bring that to a halt. >> You know, eventually that'll happen, >> but again, it's not going to happen in two months. That's why I'm not really worried about between now and the end of the year. My worry is more kind of summer next summerish next year, I think. >> Sure. Yeah. Well, and who knows? But you'll be looking, you know, at the technicals and looking for those warning signs. Um, but if that happens, you know, corrections, I mean, they >> corrections tend to be faster events than than long-term bull rallies. So, we'll have that correction and and then presumably and of course reserve the right to change my opinion as we have more data in the future, but presumably we're going to start getting those tailwinds from the economic policies that are being put in place now. And to your point, we'll we should start seeing to the extent there is any there there in AI, we should start seeing corporate America actually start to see incremental revenue and profits by deploying that. Right. So, >> yeah. And hopefully we can buy those assets at at better prices, you know. >> Well, exactly. I mean that that is the silver lining here, pardon the pun, but to you know if if you're correct and and there is weakness here in the next >> 6 months or whatever if you can manage to keep your capital dry through it um you may be able to get some phenomenal entry points. >> Yeah, absolutely. And that's >> and to this point of next year next uh video um oil may be giving us some great entry points now. >> Right. Exactly. Well, and you know that's the whole point about investing is is that when do you want to buy an asset? When it's, you know, like for instance, if you have if you had 100% cash today, what would you buy today? Would you buy gold, AI stocks, or energy stocks that have been beat to right? I mean, you know, there's there's, you know, the whole purpose of investing is to buy something that really kind of nobody else wants but has value, >> right? And and and just to be clear, a lot of gold owners right now felt like they did exactly that five, 10 years ago. take this thing out of favor. I see the long-term potential. I'm buying it at a discount. Right. >> And they have done fantastic. Now, just don't forget to execute the other side of the trade, which is to take the profits, >> right? Uh but again, yeah, you know, as in as investors, we want to try to we don't do this as investors, right? As investors, we just buy whatever's going up at the time. And this is why we this is why investors always buy high and sell low. Um but yeah our our job is to try and this is why you know through simplevisor we you know I've talked about before in Simpliser we go through look at the you know look at the distribution of sectors or factors and you know if they're overbought or oversold >> and with regularity we'll say hey look you know health care is really out of favor right now and then healthcare has has a boomer run and that's because money is going to rotate within the market you know money as we talked about before money never leaves the market it just changes form so you know right now it's going into some assets. It's that's where it's going eventually to leave that asset and it'll go into another asset. But money doesn't get destroyed. You know, even in the Bitcoin wipeout uh last Friday, everybody's like, "Oh, you know, $28 billion or whatever it was got liquidated out of the markets." Well, it didn't liquidate out of the market. It went from the people that were long Bitcoin to the people that were short Bitcoin >> and money changed hands. So, you know, but that's how markets work. And so, I mean, just money is like energy. It doesn't it doesn't get destroyed. It just changes form. >> So I agree with money and sorry I might be getting a little too stuck in the weeds here but there is something called what I call money heaven. Maybe we want to call it market value heaven which is >> talking about heaven. Yes. >> Yeah. Yeah. So you know everything changed at the margin right. So if Bitcoin was trading for 120 and then the next transaction it trades at at 100 you actually had a lot of market value that literally went to market value heaven. It wasn't money that all went into somebody's account, right? So, >> no, it did. It did. It went from the guy that sold it to the guy that shorted it. So, because whoever was short that that same value increased the same amount of value as the market value dropped >> in the asset, right? >> No. Is there always a one to one? I I I don't necessarily think so. I get it, but >> there was there was a lot of short positions out of there. But yes, and when you're talking spec No, again, we're talking about two different things, right? We're talking about money and we're talking about >> that's why I said maybe it's more accurate to say market value heaven but >> which is right which is you know yeah you lost a lot of market value but the money itself simply moved from those hands to somebody else's hands >> y >> so somebody owns it somewhere >> okay all right um uh I got to wrap it up here gota I got to prepare for the conference um uh which I'm super excited for folks but yeah a lot of wood to chop um real quick you mentioned this super briefly But the 10ear has been coming down. Um the day we're talking I think it's right at four and I did see it actually slightly below four. >> Yeah, we were three 375 yesterday. >> Yesterday. Okay. Yeah. So are you seeing this as the start of perhaps of a breakout to the downside where we start to get a three handle on the Treasury? >> Yeah, it's it's looking a lot better. I was actually uh posted a chart today in our daily market commentary. Let me see if I can find it here real quick. Bear with me one sec. Okay. While you're looking to pull it up, one thing I'd love for you to talk to in the context of what your every year answer is going to be is so we we may who knows but we may have um US 10ear yields finally starting to come down. Um at the same time we are seeing credit spreads start to finally increase. So if you can just take your perspective you share your perspective on both sides of that with us. >> Yeah. Yeah no problem. So uh so this is today's daily market commentary. We talked a little bit about the uh the sofur issue, right? This this goes back to that liquidity warning. This is a really good read. Mike wrote this first part about liquidity warnings. Uh he ran a a piece on overnight liquidity um looking at that data. So you're certainly seeing some stress in the credit market, but um you know this was the chart of the 10-year Treasury. So we we so this is the interest rate, right? So this is the yield on 10-year treasuries. This is not um the bond price. Um the the upper band up here is basically overbought and oversold. So when interest rates get really overbought or or ver conversely very oversold and remember interest rates are the inverse of bonds. So if interest rates overbought, bonds are oversold. Um that type of thing. Uh the bottom is basically your buy sell signal for for bonds. And and you can see how deviated that this signal got from kind of previous extremes because of this runup. But we formed a very nice wedge pattern technically um in the 10-year Treasury and we're just now starting to break to the bottom side of that wedge. So this has been a very nice consolidation pattern after this big run up in yields and this suggests a lower yield. So if we break here um which again this is a monthly chart so it's a little bit slow to move but we're still very overbought technically. We're still very overbought on a on a on a MACD basis. So, a break lower here, just a return to normality, would put us back into probably the the 3% range, maybe the 275 range on the 10-year Treasury before that reversal is complete. >> Okay. Wow. So, maybe even a two handle at some point here. >> But, but now to have that, you're going to need slower economic growth, decline in inflation, which we'll see that. Um, but, you know, economic growth getting closer to 2% than 3%. So, you know, there's some there's some things that are going to kind of dovetail with that accordingly. But again, just technically, that's kind of what it's telling you. And again, kind of going back historically, you can see that when interest rates have peaked and turned lower from these signals, you have decent downturns in yield. So, technically, we're lining up with what has historically been a fairly decent opportunity to be long yields. >> Okay. All right. Well, we'll keep our eye on that. And then credit spreads. >> Let me ask about credit spreads real quick. Um, so yeah, credit spreads, you know, yeah, they've ticked up a smidge, but this is double B junk relative to treasuries. They have ticked up a little bit, but not dramatically yet. So, you are starting to see some a little bit of stress in the credit markets, but it's not going bonkers just yet. We're not seeing these type of activities. This was back in, you know, early 2020. This was during the credit shutdown. Over here was a Silicon Valley bank crisis. So you're not seeing those type of those type of moves in credit yet, but you are starting to see little upticks. >> Okay. So right now I guess it's just something you're kind of keeping half an eye on, but AB. >> Absolutely. Um and you're seeing it more if you get more into distress like you know C credit, you're seeing a little bit bigger uptick, but again they're still very minor. >> Okay. Yeah. I mean I was looking at I think high yield when I when I last looked at this and it was it was definitely >> you could finally notice a difference. >> Yeah, you can. And I mean, if you zoom in on this, um, you can you can definitely see a little bit more of an uptick, but you know, got to keep it to perspective. Just having an uptick is one thing, but you need to see a sustained kind of increase in yields to start saying, hey, there's something really starting to impact the credit markets. >> Yeah. Well, okay, we'll keep our eye on this, but I think what's notable about it is the trajectory for a good long time has been down to flat, >> right? So, the fact >> be good for markets. >> Yeah. >> Right. >> Right. Meaning if this starts picking up again, that might be yet another near-term headwind for markets. But we'll we'll keep we'll keep our eye on it. >> Um, all right. >> And real quick, just just to finish that in thought, I told you before that the only thing that matters is credit spreads. And and that's that still remains a very true statement. That's why we watch credit that's why we track credit spreads on Simper. That's why we talk about it so much in our own work that if you want to know if there's a risk event coming to the markets, credit spreads will tell you. Everything else doesn't really matter. >> Yeah. They're kind of the barometer of of people's ner the big money's nervousness. >> Exactly. >> Yeah. Okay. Um I I I wanted to talk a little bit about what's going on with Bitcoin. We'll save that for next time. Um so as we wrap up here, trades, you guys made many trades over the past week. >> Not not in the last few days because we did them previously this week. Um you know, we as we talked about previously, we were kind of getting worried about this extension in the market. So, we went through and rebalanced all of our accounts, the thematic models as well as our uh primary accounts. Um, we actually had to rebalance the small and midcap model three times in the course of about two weeks because certain positions and those were going up like 50% a day. So, it was just, you know, kind of bonkers what was happening in the small cap side. Um but yeah, we went through and just in in like the all weather model, like I said earlier, we rebalanced our precious metal positions there just to bring them back down to more reasonable target weights. Um we're still about long and and those portfolios were still long about 17 to 18% precious metals in those accounts. So there there's a lot of exposure there. Um in the crypto model and AI models, we've had to rebalance those a couple of times. Those have been there's certain positions in there that have just gone up dramatically in a very short period of time. That's just all that speculative push. >> Yep. >> Seeing through those models. So, so again, we've had to do a lot of work previous to the end of the month and all worked out well because we rebalanced that before we took that big hit in the market. So, it it all the timing of it worked out really well for us to kind of be, you know, realizing that we were getting extended and saying, "Hey, we should probably pull some risk off the table." And that timing just happened to work out well. >> Okay. So, so better better to be lucky than smart, right? >> Better to be lucky than smart. Um, all right. So, um, we'll uh we'll we'll start landing the plane here. Um, I I I'm not going to do a big rant this week. Um, but Lance, I I did a little bit of discussion with Stephanie Pomboy this week about um, you know, my move to to Nevada and um, you know, some of the initial um, my initial reactions to having been here now for a bit, a while. Um, and uh, it's been great. I got a little story I'm going to tell you in just a second, but um, you know, I I moved here for the primarily for the um, state income tax savings. Um, because California is the highest in the country at 14.4% the high end. Uh, Nevada is 0% which is I'm hoping going to be wonderful. Uh, you know, I I I haven't had to pay my taxes yet. I'm not going to do that until the spring, but I'm hoping to really enjoy it. And Lance, you're a fellow 0% uh state income tax guy. So, I want to hear um you know, if that's really worked out uh as well for you as I'm hoping it's going to work out for me. But I've really enjoyed the transition and and uh at some point I'll I'll I'll wax uh more lengthy about exactly what I'm really liking here. But again, I moved really for kind of a a pedestrian or or you know, just a an empirical reason around taxes and cost of living. Um, but I've really enjoyed what what Reno, which is where we live, has to offer. And um, and even more than that, I'm realizing um, ju just kind of having a new life adventure, right? Just mixing things up in life, changing things. I lived in California now when I think about it, like over 25 years. It's a long time to be in any one particular region. And there's a lot of things about California that are phenomenal, especially in terms of the natural beauty and what you can do there. Um, and and let me tell you, as it's getting colder here, there are certain things that I miss there. But there's a there's an old um there's an old speech, and I think it's apocryphily um attributed to Kurt Vonagget, but I don't think that's true. Uh, but in it, he says, you know, everybody should should live for a couple years in New York, but leave it before it makes you too hard. and everybody should live a few years in California, but leave it before it makes you too soft. Right. And again, I just spent two and a half decades in California. And I'm just finding um that yeah, you know, just kind of the change of life, change of scenery, mixing it all up. Uh there's a lot of just goodness that comes from that. You kind of look at the world with a fresh pair of eyes. Uh you get exposed to new things that when you were in your routine, where you were before, you just missed or you had tunnel vision on because you you were in your routine. Um, so anyways, I'm not I'm not advocating everybody just, you know, ditch where they live and move somewhere else real quick, but kind of breaking out of your routine, putting yourselves into kind of, you know, new environments. Um, even if it's not necessarily something you were you feel like you're craving right now, uh, there's a lot of benefits you get from it that I I I I just wasn't accounting for. And so I'm really enjoying that part. Now, fun little anecdote. Um and and and maybe Lance, there's a um there's a signal in here for the markets, but my wife took the dogs for a walk yesterday and she was walking by a house that was under construction and um right by the house was a pickup truck that the workers there had parked and she's walking by with the dogs and she looks and she all of a sudden realizes, "Oh my god, there's a bear in there." and the bear was eating the lunch of one of the workers and the workers hadn't noticed it yet. So, you know, her thing was trying to get the dogs away before the dog saw the bear and started freaking out and maybe the bear decided the dogs would be a better lunch, right? >> Um but uh uh you know I I shared that story on X and uh you know, one of it was I was just sort of tongue and cheek. Hey, this is the adventures of living in a new place where you're not quite used to what goes on there. But a lot of people were saying, "Well, hey, maybe that's a sign that the bears are finally coming back out, right? U so anyways, uh I've I've uh we're having all sorts of of of new experiences and and uh adventures like that one here. But in wrapping up, Lance, um like I said, I haven't had to pay taxes yet, but I I am looking forward to the savings that will come along with with moving here." You've been in Texas for a long time. >> You're So, you're renting now, though, right? You're not You haven't bought yet? We haven't bought yet because we wanted to make sure that the move was a good one and and we don't know Nevada enough yet to know if if indeed this is where we want to go. >> No, I get that. I get that. So, so in Texas, we have zero pro we have zero income tax in Texas like you do now. >> Um but they get us on property taxes. So >> that that's sort of what I hear. >> So, you know, that's that's about eight and a half%ish. So, you know, depending on where you live, but so I guess you you have to really kind of check. I don't know what property taxes are in California in Nevada, but you know that's that's you know my theory is is that no matter what state you live in, they're going to get you somewhere. So, you know, you know, but um you know, it's definitely going to be better regardless of what the property taxes are in Nevada, it'll still be better than your tax rate in California. So, you're you're going to be you're you're going to be in a you're going to be in a surplus however you turn out. >> Yeah, it's interesting. And maybe maybe native Neadans can comment here if they're watching. Um, I just did a quick search and it says, um, W Nevada doesn't have a single statewide property tax rate. Its average effective property tax rate is one of the lowest in the country. >> There you go. >> So, um, hopefully that'll be great. >> Is there Is there a house next to you that I can move into? >> Yeah. Well, we'll see. I love I love our friendship, Lance. I'm not sure if the house next door is electric, >> but you know what? You know, look, >> actually, actually, it would completely work, Adam, because I'm a hermit, so I never leave my house. I hate leaving my house. I hate people. So, you know, I would never see you anyway. I could live right next to you. I'd never see you except on >> I met your wife and she's wonderful. And also, too, like if we're worried about things getting, you know, really bad in the future, you're the guy I want to live next to who's got all the guns and the training and and and the martial arts capabilities. So, all right. May maybe we will do that. Um but uh but anyways, yeah. So, we'll we'll we'll we'll we'll we'll see where all this ends. But I got to say just high level, um, it was sort of it's sort of an accidental adventure, right? We we we made this decision purely around the money side of things. Um, and we're actually finding, hey, you know, there's there's a lot of fun and just kind of learning about a new place. >> Dude, I I think a a I love Nevada. I've spent a lot of time there, so it's a great state and it's beautiful country. So I, you know, I I'm I am thrilled for you. I I think you're going to enjoy it. I think you're going to find out that you probably even like it more than California at the end of the day just for a whole variety of reasons. >> We we we very well may. And again, you know, there's some there's some parts of California that are just, you know, absolutely um uncontestable. Um whether it's Yusede, whether it's the Pacific Coast. I mean, there's just so many beautiful areas. But the thing is is I can still drive them. They're in driving distance from here, right? Um and if I get sick of the snow, yeah, I can I can drive to 75 degree weather, you know, whenever I want. My wife's family is still back there. So, >> yeah. We'll see. And again, I'm not trying to make this about me, although I have told folks that I I will do kind of a deeper dive video on kind of the, you know, the the math behind the move, the reasons behind it, and then what I had to do to cut sever all the ties to California so that California will stop considering me a resident and wanting to tax me. It's not that easy. >> Um, which for the folks who have asked, I I'll go through all that, but again, not trying to make >> Yeah, I'd be interested in hearing about that. Like, okay, I've decided to leave the state. Yeah, but we're going to keep taxing you anyway. Yeah. I mean it I I I that's amazing to me. >> So it's funny. I walk around here and especially in the area I live in. I mean five out of every six people I I've met so far are California refugees, you know, who just wised up earlier than I did. Um but a number of them have war stories of like, oh yeah, God, no. It took took way longer than I had, you know, thought imagined to be able to cut those ties and I ended up sort of settling with the state for X or whatever. I I I think it's harder if you have um property still in the state, >> right? Um and I think it's also harder too if you're employer is a California employer, but you're working for them, you know, in a different state. Interesting. >> Right. The fortunate thing for my wife and I is we're self-employed. Um and we don't own any property there. So, a little bit cleaner. >> Awesome. But but you got to do all sorts of things in terms of, you know, registering to vote and changing your bank accounts and signing up for civic organizations to just show that you're committing to the location and not planning on going back. It It's just crazy. But anyways, all right. Well, luck Lance, um, great week. Um, you're you're going to be off next week because that's another chemo week for your wife. >> Um, hope things continue to go very well for her. And actually, for the folks asking, how's she doing? >> She's doing she's doing great. I mean, we're going, you know, just going through the process. Uh so next Friday is week number three. So it'll be her third treatment or sorry treatment number three. So we're halfway home. Um so kind of actually kind of getting to see the other side of the cliff here. But you know overall she's she's you know she's honestly she's doing really well. You know the first few days after chemo are pretty rough but she recovers gets her energy back. She's traveling this week on business. Um so you know again it's it's she's doing she's doing amazingly well. We got a blood test back. It's called the CA125. And when she was first diagnosed, that blood test was registering around 130. Um, which is that suggests you have cancer if you're above 30 is that number. And we got that blood test back last week. It was at 15. So, it it's had a huge drop. So, that was really good news. That means the the chemo is working like it's supposed to. So, very optimistic. Fingers crossed. Lot. And listen, I can't tell y'all how much that she and I both appreciate all the prayers, the warm wishes, the the advice that I've, you know, everybody sends me. You know, I heard this doctor and I heard that doctor. We we take it all in and and we appreciate it very much and, you know, it just it's it's been, you know, overwhelming how much support that she's had and and it's been great for her and really helping keep her, you know, kind of it's it's very easy to slip to the kind of the dark side. um when you're dealing with cancer. Um but the all the support has been really helping cure her keep remain optimistic. So, thank you'all for that. >> All right. Well, that that that's wonderful. Um especially the test results there and um yeah, the goodwill, the prayers, uh and I'm sure even all the articles of the next breakthrough, you know, medical thing around cancer. Those are all going to continue, Lance. So, >> Oh, I know. I know. And and again, you know, I we take them all to our doctor and we say, "We got this. What do you think?" and she says, you know, she gives us her opinion and then we we work with it from there. So, you know, it's it's great though, but I I I you know, I don't I don't discourage. I try to answer all the emails. If you've sent me an email and I didn't respond to you, I'm sorry. Um but there's been a lot, but I try to answer every one of them. >> I think folks understand. Um I I'll just also say too, Lance, um I was um I was actually in Texas briefly last weekend and um reunited with my buddy who had had uh brain cancer. I told you about sort of riddled with with cancer. U that's probably about 5 years ago and went to MD Anderson and uh he is going strong now. Um you know, he's been in remission for a couple years now. Um, but just hopefully that's one more data point that gives a little bit of hope that hey, you know, that that that guy's come through real well and and certainly hope your wife does the same or better. Um, all right folks. Well, look, in wrapping up, um, as usual, please, uh, show your support for Lance. Uh, do that today by hitting the like button and then clicking on the subscribe button below as well as that little bell icon right next to it. Um, a reminder if you want to watch the replay of the conference which has been going on uh in parallel this with this as Lance and I uh or as this video has premiered um then just go to thoughtfulmoney.com/conference and you can uh buy the replay videos there. And if you're a subscriber, premium subscriber to our Substack, you can still use that code I've been sending you to get 50 bucks off the price of the replay videos. And then last, u if you'd like to get some help in managing your portfolio for the road ahead, especially if it, you know, potentially takes the the the trajectory that Lance thinks it might take from here. Um, highly recommend that you get that guidance from a good professional financial adviser who takes into account all the issues that Lance and I have talked about here and that many of the guests and I talk about on this channel. Um, if you've got a good one, well, don't mess with success. But if you don't or you'd like a second opinion from when it does meet those criteria, maybe even Lance and his team there at RAA, then fill out the very short form at thoughtfulmoney.com to have a discussion with them. Uh, as soon as you fill out the form, the firms will be in touch with you right away to set up that discussion. Um, all right, Lance. Um, wish you all the best. Next week, we'll have Michael here sitting in yourstead and then we'll see you back two weeks after that and we'll do our deep dive on oil. >> Sounds good. Looking forward to it. >> All right, everybody else, thanks so much for watching.