AI: The AI cycle remains early with massive capex ahead; expect intermittent 10–30% stock corrections but secular spending to persist, making selectivity critical.
Nvidia (NVDA): Delivered strong results and guidance but shares reversed; long-term data center refresh tailwinds (e.g., Blackwell) support revenues, yet technicals warn of near-term volatility.
Energy/Oil & Gas: Launched an oil & gas thematic sleeve to capture AI-driven power demand via natural gas, LNG, pipelines, E&P, tankers, and uranium; dollar-cost averaging emphasized due to near-term price weakness.
Bitcoin: High volatility amplified by ETF-enabled shorting and leverage; a tactical bounce from oversold support is possible, but long-term entries require patience as trapped longs unwind.
Private Credit: Growing risks from opaque lending and BNPL stress could trigger broader repricing in credit/equities; investors should scrutinize exposures in Consumer Finance and private debt vehicles.
Market Outlook: Current pullback (~3–5%) looks routine with support near the 100-day MA; expect a bounce, possible early-December volatility from distributions, and year-end buybacks/seasonality as tailwinds.
Alphabet (GOOGL): Strong momentum on Gemini and dominant search share; likely to monetize AI at scale, though shares are stretched and due for a tactical rebalance before adding on pullbacks.
Macro Risks: AI capex may be masking broader economic weakness (freight/consumer); small/mid-cap earnings expectations for 2025 appear unrealistic, reinforcing disciplined rebalancing and tax strategies.
Transcript
Now, we are starting to see the 50-day flatten out. We're starting to see the 20-day moving average turn down. That's not a great sign. That doesn't we we've seen these wiggles before and then they correct themselves, market takes off running again, everything's fine. But if we begin to see this kind of price action begin to flatten out or deteriorate, I'm going to become a little bit more concerned about the amount of exposure we have in our portfolio and begin to kind of start looking to reduce. But again, I'm going to I'm not going to do that here because markets are decently oversold. I'm going to look to reduce exposure on a bounce and rebalance. Welcome to Thoughtful Money. I'm thoughtful money founder and your host, Adam Tagert, welcoming you back at the end of another week for another weekly market recap with my good friend, the tryptophanic portfolio manager, Lance Roberts. Lance, how you doing? >> Not yet. Not yet because I'm not a big turkey eater to start with. So for Thanksgiving, I have brisket, sausage, chickens, all barbecued, right? I'm in Texas, right? So we're doing a traditional Texas Thanksgiving, which is brisket, sausage, ribs, and chicken. >> So tryptophan is only for you people that live out west that eat turkeys. >> That's not true. I grew up in New England. We had a lot of turkey on Thanksgiving. Let's all have lobster up in New England. >> Well, hey, we started the turkey Thanksgiving right back in Plymouth Rock. Man, >> this is true. This is true. >> Um, well, anyways, first off, happy Thanksgiving in advance, Lance. Um, happy Thanksgiving to all the viewers, too. It's funny because as we hopped on, you mentioned being sleepy, and I said, "Well, wait till you hear the word of the day." So, >> well, it makes complete sense now. Yeah. >> Yeah. Um, I'm going to believe that uh whether there's tryptophan or not in brisket um that you're still slipping into a big food coma after you eat all that. >> Oh, yeah. Of course. Of course. You know, that's that's just tradition. You know, eat a big lunch and then take a nap on the couch. Absolutely. >> All right. Well, you know, um there's a lot of people that are feeling, I think, um not sleepy right now. I think they've actually had a sleepless night uh last night. Uh we're recording this Friday morning. Um markets are still open today as they usually are as we record on Fridays. Um but uh the day before Thursday uh seemed to be a very material day in the markets, Lance. Um big reversal. >> Um I think one of the bigger reversals we've seen in the market all year on a on a you know intraday basis. Um and what was notable about it was the market had been weak as we've been tracking over the past couple of weeks. >> Yep. um you know some some doubts and concerns are starting to creep in about the AI trade. So the world was waiting for baited breath uh for Nvidia's earning release uh to see if Nvidia could kind of respspark this market back into rally mode and Nvidia delivered what the doctor ordered. I mean it it delivered great performance. It delivered uh just stellar guidance. Um the stock popped I think 5% or so in the aftermarket the night afterwards. Um as the markets opened on Thursday. Uh Nvidia was up I think almost 6%. Uh the indices were up in in the green and then all of a sudden it all reversed and Nvidia ended up closing the day down I think a little bit over 3%. Um, another really big sort of riskon asset uh speculation um measure of speculation in the market, Bitcoin just got continue to get clobbered throughout the whole day. So there's a strong question hanging in the air right now, which is has the market now uh really shifted from the risk mode it's been in since May into risk off. Um, probably still a little too early to tell for sure, though I'd love to hear your thoughts. But right now, you know, Wall Street is sort of sitting on the edge of a pin watching the market really closely trying to figure out where things are going to go from here. So, with that context, Lance, uh, enlighten us. What What the heck just happened? >> Nothing. Um, I mean, look, you know, the markets have had a huge run since April, and, you know, they got very far ahead of themselves. I mean, Nvidia is up over $100 a share since since those November lows. So, you know, again, a pullback in the markets is not surprising. And this is why we talk a lot about risk management. You know, when markets really overbought, they're extended. Take profits, reduce your risk, rebalance your portfolio, don't speculate, don't use leverage, because again, you're going to get these corrections from time to time. And, you know, the the reversal yesterday was really a lot related to today, which is the largest November options expiration on record. So there was just a lot of unwinding of contracts yesterday. Uh people that were short tech going into into yesterday's earnings reports had to cover that yesterday. So you're just getting a lot of that action. So just a big pick up in volatility, but again we're getting ready to move into the end of the year. So again, really the tailwind for the markets are still very much in play. You've got buybacks at five to six trillion uh five to six billion dollars a day. You've got a lot of professional managers that are underweight equities that are underperforming for the year. there's going to be pressure for them to start buying into the markets here and and again just from a technical basis right all we've done is had a bit of a pullback and and again this is why you know we always talk about you know risk-taking and you'll remember a few weeks ago we were talking about the risk when all all assets correlate to one you know gold was gold was surging I think I said here on the show I was like it's going to be a great short setup here shortly um you know Bitcoin was surging stocks were surging everything was going up at one time and you know whenever you have those correlations do that that just that's that's not you know people try to apply narratives and say well this assets doing this because of this reason and this asset's doing because of that reason that's just rationalization to try to justify why all the prices are rising together but when that occurs that's the perfect setup for the market to have a correction and again you know the market's down you know the S&P's down three and a half% from the peak I mean it's we're not even in a normal 5% correction ction yet. So, there's still more downside to go. Now, if you were invested in levered assets like Bitcoin and some and levered ETFs, you've taken a pretty tough beating over the last, you know, two weeks in particular, but this is a very normal correction. I wouldn't I wouldn't be stressing out making any major changes to your portfolio. This isn't that type of environment right now. >> Okay. So, um that that's good to hear the common sense of, hey folks, you know, world's not on fire. Um Let me ask you this and we're going to get to the TA in just a second. You can walk us through. Um obviously too early to answer this question. Um but I think one of the concerns that's being raised right now, especially given yesterday's um market activity is a number of the people that I have interviewed on this channel who have been skeptical of the sustainability of what they see as a bubble, a price asset bubble in AI stocks is they've said what you want to watch for is the moment where Nvidia, the darling stock of this sector, delivers yet again just better than fantastic results and yet it's not enough to power the party higher and that that's you know you can say that's what we saw yesterday. Now is that the definitive top of all this? You know who knows? Um we're going to need time to find that out but I think that's the big concern that people are questioning right now. So, Lance, what what would you need to see here to uh to say, "Hey, I think this is actually maybe potentially starting to morph into something more significant than just a garden variety pullback." >> Well, you're going to, you know, you're going to need to see, you know, are we talking about just Nvidia or we talking about the whole AI market or >> No, I think this is the whole AI market, right? >> Okay. Well, what you're going to see is a is, you know, a breakdown of, you know, technical supports across the board, a reversal from the bullish trend to a negative bearish trend. But again, we've seen this before. Um, and again, you know, you you'll remember you interviewed some guy, you know, probably two years ago that was talking about shorting, you know, buying shorts at Nvidia and other types of things. And, you know, that was a horrible idea. And, you know, Nvidia has rallied very sharply since then. And you know the problem is as we go through these periods you'll remember August of 2020 uh June through August of 2024 the markets were down 10%. What was the reason? AI trades over the you know this this is the the bubble's unsustainable. You know this is you know this is the end of it all and markets were down 10% and then in October that was the bottom and then the market took off running again. April we saw the same thing. So we keep seeing the you know every time the market goes through a correction immediately people that are looking to make a headline for themselves run out and say oh this is the top you you know better get out of everything you know we're way early and and even Nvidia talked about this yesterday we are way early in this whole AI development thing. Um it's way too early to be calling this a bubble or a top or anything else. We're just getting started on this and this is not a race. You and I talked about this last week. This is not a race we can choose to lose. So, you know, the amount of money that's going to be spent on these in these markets that are going to benefit these companies is only getting started. It's not ending. So, you know, if you're really worrying about the top of the AI, you know, that's fine. And we may and we're going and look, we're going to have some pretty significant corrections. You know, 10 20 30% corrections in some of these stocks is not going to be surprising. I mean, you know, there and and there look, there's going to be some companies, and I'm not saying that all companies are going to do well. Um, you know, companies like Olo and and Cororeweave and others, they're under a tremendous amount of pressure. These may just be short-term corrections, but those stocks are down 20 30% from their peaks. They may very well find a bottom and then have a a renewed sense of buying if they can really start to establish their place into the markets. But, you know, again, this is why you have to be selective in any type of environment about the companies that you own. And and so you know just being aware of that you know buying we talked about this last week you know buying fundamentals and those type of things are very important and that's why in our core equity models that's what we focus on we focus on fundamentals growth free cash flow those type of things. Now we do have the thematic models which have all kinds of of risk to them and if you if you want to gamble the you know roll the dice and take on a bunch of risk we got a portfolio for you right um but you know those are all based on companies that should you know do very well over the long term. It doesn't mean that every one of those companies will survive, but they're positioned in the right place to participate in the development of the market as it continues to go forward. >> All right. Hey, and speaking of those thematic portfolios, um while you were out last week, um Mike Leoitz mentioned that you guys did indeed launch the oil and gas portfolio. We didn't get a chance to talk about that in depth, so maybe we can reserve some time today, Lance, to have you walk us through it if that's okay. >> Yeah. Yeah, that's fine. >> All right. So, I want to I want to just clarify something you said to make sure I understand it. And look, um, you know, I've a lot of people I've interviewed, you know, lately have said, "Hey, you know, um, sure, I got lots of concerns about, you know, whether the AI sector is in a bubble or not, but I'm not yet willing to stand in front of that train, >> right?" Uh, you just had Mike Green on who basically just, you know, sort of side with resignation and said, "Look, I think this, you know, giant mindless robot is just going to keep winning the day." uh until at such time it doesn't but I'm not seeing any signs that it's starting to crack. So uh you know I I I very much get the like um hey look this thing could could still have a lot longer to run. Um but you know I I think there are equally valid concerns uh that about valuations and and we'll talk in just a moment you know about the integrity of the spending that's going on in this space right now. Um, so I don't disagree with the comment you just made of of hey, the spending in this space over the next decade is highly likely to be tremendous because even if the companies aren't able to do it themselves, the government is likely to step in because as we talked about this is a kind of an existential priority that the US sees it needs to to to win on the world stage. Um this is a national this is this is so the government has two jobs and only two jobs in the world we talked about before national security and infrastructure and this is both of them >> right but but I just want I just want to clarify that does not necessarily equal tons of profits for these companies >> it is it is probably correlated with it and there are times like now where these companies are going to be getting fat at the trough but you know it it doesn't mean that oh well then stock valuations for these this sector is guaranteed to a straight elevator ride higher, you know, forever, right? >> This is why I'm saying you have to be very, very selective about companies that you're buying long term. And again, so we're talking about two different things here. So, one, if you're speculating in the AI trade, that's a very different thing. If you're trading short-term stocks, that's awesome. Like those thematic models, they're fairly short-term in nature. Um, if you're buying long-term, like our core equity models are long-term investment models, right? So we're looking for companies that are going to be here 10 years from now, 20 years from now, 100 years from now, and they're going to participate on that. So, you know, there's going to be, you know, companies like Nvidia, they're in a very good position because you build out a data center as an example and you put in all the new Blackwell chips. Well, eventually there's going to be a better chip that comes along and Nvidia produces it and they're going to have to replace all those chips. So there's a consistent revenue source for Nvidia on that side of the data center. If I'm just building the data center building and I'm charging rent for it, once it's filled up, it's filled up. My my rent stabilizes except for inflation. Right. >> Right. Well, and there's a thousand companies that can compete in that space, too. >> Exactly. And and then there's going to be a lot of companies that provide AI software. Right. And so, you know, I'm I'm I'm a company that provides um AI agents for, you know, agentic, you know, kind of uses, but then somebody else comes along with better AI agents and then my business is out of business because nobody uses them anymore. So, you know, there's going to be company, and again, this we saw this in the dot era. There are going to be companies that survive. Um, and there are going to be companies that profit enormously from what's going to happen with AI. There's going to be a lot of companies that go away. um you know the core weaves, the applied the you know a lot of these other ones maybe you know maybe they survive maybe they're the winners maybe they're not um there's other there's other openings in there for those companies to displaced by somebody else that can do the job better cheaper faster whatever or or just differently than what they do and that's where everybody tends to go. >> Yeah. And so look, there's there's a couple types of risks here. And the one I started asking about, I just want to put a bow on here because I know it's important for a lot of viewers here, which is it's more the overvaluation, the potential overvaluation risk here. And the reason why they care about it is they don't necessarily care about >> Nvidia specifically as a company, but they care about Nvidia's supreme importance right now in terms of of of driving the indices in the general market. And so there's a fear that like, hey, if these things are overpriced and they go through a 30% price correction just because, right, the the world just wakes up and says, hey, you know what? We we pulled too much of tomorrow's value into today. >> Yep. >> I'm worried I'm going to be collateral damage that even if I don't own Nvidia because the S&P is going to tank. All these other ETFs that that because of the giant mindless robot, you know, have huge positions in these things. even though I wouldn't necessarily think whatever general ETF is is loaded up on Mag 7, but they just are because they're such a huge part of the market. I think that's the that's the fear that most folks have. But anyways, what I hear from you saying is is >> valid concern, but not time to panic on it because you're not seeing technical signs that that's risk is in play. >> Yeah. No, no. And that's that's exactly the point. Yes. You're you're going to have 20 30% corrections in the in this market, right, as we go through whatever this is going forward. It doesn't mean hey it's it's happening now and it doesn't mean it's going to happen tomorrow. I mean it could be next year. I have a lot of concerns about next year. Um you know there's there's a lot of displacement between earnings expectation and economic growth next year that I can't quite wrap my head how you know how you're going to justify that. So at some point there's going to have to be some type of of reassessment of those type of issues as we move into next year. But again, this this is this is what separates out the individual which tends to vastly underperform over time versus, you know, a well ststructured, disciplined investor that tends to succeed is that you have to understand that those are things are going to happen. This is why we talk about managing risk, you know, taking profits, rebalancing, those things um that we do so often. And I get a lot of emails like, you know, you know, you're you know, you're rebalancing here and the market's just going up. Yeah, I do that all the time. You know, we're getting ready to go into the end of the year. We'll do tax lost harvesting. We'll do rebalancing going into the year to, you know, be more tax efficient with portfolios. Things that you should absolutely look at doing in your own portfolio. But again, when the technical market starts to, this is why we focus on technicals is that eventually we're going to start getting technical signals that say this market is about to go through the process. And this is why we got out of the markets in in 1999, early 2000s. Well, we got out of the markets in 2007. It's why we got out of the market in February of 2020. Why we got out of the market in in February, not and when I say get out of the market, I'm not talking about we went to 100% cash. We reduced a lot of our exposure. >> Um, same thing in in February of this February, March of this year, we were lightening up on positions because those technical indicators were starting to tell us, hey, we're getting set up here for a bigger correction. We don't really have that just yet. We we have cons there's some short-term concerns here. This could be a three or 5% correction. we might get a little bit of a bounce and then I would expect another correction in the first two weeks of December as mutual funds distribute all their incomes and capital gains for the year and then you'll be set up for kind of a year-end rally. So, you know, again, that whole thesis still kind of plays out and we're about to go into, you know, holiday Thanksgiving week next week, which is where the inmates run in the asylum. All the traders are leave after today's OPEX, all the traders are leaving for the Hamptons. So, they're gone. um you know so next week it's just all the retail traders running around you know buying stuff and so we'll see what they do but but again it's just you know we're just going through a bit of a consolidation a correction phase here after a very very again just people forget just and again we you and I have talked about this before when markets are going up everybody's smarter than they think they are right because market like I can't go wrong I just throw money at the market and I just I just make money it's it's >> it's the other way around they're not as smart as they think they [laughter] are. Yeah. But yes. >> Yeah. Well, that's what the market proves to you pretty quick. And remember, everybody was chasing gold. They were chasing Bitcoin. There was It didn't matter what you bought, it was just going up. And you know, those are those are the things you worry about. You don't worry about these corrections. This is an opportunity to put some capital to work if you were smart enough to take some profits previously and have some cash sitting on hand to put to work here. >> So, a a couple of things. So, f first off, um I'm I'm glad you you just clarified there that um you cited those periods of time in recent past where you guys reduced your exposure to equities because you were seeing technical signs that that things could be degrading here. >> Sounds like you're not at that stage yet. You're not doing that right now. >> Okay. You're shaking your head. Okay. Um so that's really good to know. Um >> to your point there about um yeah, some people being smarter than they think they are. There there's a guy I'm not going to mention his name, but there there's a guy who I don't know a couple months ago I started noticing was just like totally slamming me on X and I had no clue who this guy was. >> Not me. >> It wasn't. Yeah, surprisingly it wasn't you. Um but a guy who headed >> I never slam you on X. That's I don't do that. >> You just slam me live on YouTube. No, I appreciate [laughter] that. Yeah, you like to look me in the eye when you >> only because I love you like a brother. So we have a we have a brother relationship. So yeah, I pick on you a lot. I'm older, so I'm the older brother. I get to pick on you. >> Yeah. Well, I I was the younger brother growing up, so I'm very used to that role. Um, but anyways, uh, this guy, you know, was basically just saying, "Oh, you know, Tiger's one of those doomer perma bears, and he, you know, never had anybody on his channel who had anything positive to say and, you know, all this stuff, whatever. The guy's entitled to his opinion." But he just kept coming after me. And um you know, a lot of a lot of people who were following him were starting to to tweet me and say like, "I don't know what's going on with this guy, but I don't I don't know why he's he's going off like this." And I I went to his Twitter feed and noticed that I wasn't the only one getting his eye and he was going after a bunch of other guys. And to me, it seemed pretty clear that this guy was trying to punch up, like, you know, trying to trash people who had bigger followings on X in order to hopefully kind of, you know, gain notoriety and build his own following. Um, so whatever. You know, I just put him on mute and didn't really think twice about him. Um, I had some people send me uh some of his tweets yesterday because the whole time he kept saying, you know, everybody should be watching me because I've been crushing the market and I know more than Goldman Sachs and Morgan Stanley and I've just had this fantastic thing, right? And then yesterday was sort of a Maya post on him of like, oh gosh, you know, I didn't see this coming, you know, I really got zorched, you know, yesterday and all that stuff. So it just it did seem like a great example of what you were just talking about, Lance, is these these people just get on a high. They they're riding a tailwind that they think is, you know, they begin to interpret as because of their own genius where they're just really riding this force of nature. And as soon as that forge of nature zigs when they thought it was going to zag, you know, they're they're they're left uh for gravity to take over. >> No. And look, and you like, you know, we were talking about earlier, it's like you said, you don't see any signs of the market breaking down, you know, right now. and and no I don't there's there's not you know we don't have big volume spikes we don't have a lot of things you know credit spreads aren't blowing out those type of things so but that doesn't mean it couldn't change tomorrow I mean next week we could get on the show it's like hey we just cut 15% of our equity exposure this week because AB and C happened >> we're never just just to be clear we are never going to buy the bottom and we're never going to sell the exact top we may get lucky right but generally we're early getting out and we're late getting in and that's just, you know, but that's how we navigate markets over time. And, you know, I try to realize that I'm not smarter than the markets and I'm just trying to follow along with what the markets are telling me. But this is but but again, this is the risk. And again, to your point about, you know, the kind of the tweet exchange you were having. I get a lot of that, too. People, >> by the way, I wasn't exchanging tweets with this guy. This is all one-sided. Yeah. >> Yeah. I know. It's always that way with me, too. I never respond either. Um, but you know, I get, you know, people take something out of context that, you know, like I was on Adam and I and and you know, I said, "Hey, yeah, the markets are going to, you know, markets are going to rally until the end of of the year, so it's no worries." That's not what I said. What I said was is like we could have some, you know, some corrections along the way, but the bias to the end of the year is higher because of earnings, because of buybacks, because of these other things. The the the seasonality of where we are over the next few months. It doesn't mean it's going to be a smooth ride higher. there's going to be some bumps and corrections and we're in one of those right now. So, it's always important to keep things kind of in in context of what's going on and just understand that this is why we we do rely on technicals to try to give us some idea because all you know, let's back up. I did a whole I did a whole segment this week on the real investment show talking about technical analysis. Um on Tuesday's show actually was our two dads on money episode. We did a whole thing on technical analysis. So if if you're interested in getting a complete explanation of how we do technicals, just go look up our two deads on Monday this week. Um but you know, we were going through that and explaining that this is technical analysis is a picture into what the whole market is thinking right now, right? This is this is buyers and sellers in the marketplace and they both think, you know, the buyers think they're right, the sellers think they're right, and they're all meeting their minds at a certain price in the markets and and that's what's going on. That's why technicals are so good for you to understand at least have a have at least a modicum of understanding of technical analysis if you're investing your own money because it's telling you what the market's saying. You can have your own narrative all day long, right? Dollar debasement or the world's going to end or the AI bubble's going to blow up or vice versa, right? You know, AI is going to go to the moon and there's no stopping it. Um, that narrative is fine, but is the market agreeing with you, right? And that's why we always go back to the technicals and say what's the market saying. It doesn't matter what my opinion here here is with you. I can I can spout stuff all day long with you. It doesn't matter what's the market saying. And so that's why when we get down to portfolio management and we talk about that, it's always back to, you know, managing risk, managing exposure, those type of things because we're paying attention to what the market's telling us that it's doing. And whether or not we agree with it is irrelevant. It's what the market's doing that's important. >> Right. You're right. when we say look you know you trade the market you have not the market you wish you had >> technical analysis is what tells you sort of defines the market that you have right so >> totally get it all right so speaking of technicals Lance can you pull up the TA here >> um let's let's take a look at where we are in terms of the moving averages the Ballinger bands and all that stuff um >> and uh yeah well let's let's start here with the S&P and and see where we go from there >> so so a couple of important things have happened here over the really over the last two weeks and and again we've talked about two things over the you and I have talked about two things over the last several weeks that have been concerning and one was this negative divergence in relative strength. So uh we've talked about the weak breadth of the markets. You know we've had a lot of stocks not really participating with the markets. It was fairly narrow. That's never a good sign. And you had this negative divergence. Relative strength was declining in the markets even though the market was still rising in price. that always tends to occur before you get a correction in the markets. Now, when we've had this before, you know, we saw this very same type of negative divergence back over here and and this was one of the reasons back in February and March that we were reducing exposure before the market broke down was because we had that same same type of negative divergence and then finally the market gave way in April because of of of the whole tariff issue. Um, we don't have the tariffs issue right now hanging over the head. there's no big kind of catalyst to drive a major downturn. So, that's why we're not as concerned as we were then. Um, but it's still important to pay attention to. Now, you know, the markets had this really big run right here in late October going into early November. So, the markets got really overbought on a short-term basis, pushed up in overbought territory, but you just had this really big sharp advance kind of out of nowhere. And markets got very deviated above their means. And and this is what we started talking about a few weeks ago. You and I were saying, "Hey, markets are very deviated here. Take some profits, kind of rebalance risk, those type of things because we're probably going to get some type of consolidation or a pullback." And that's what's happened here. And so, we're currently sitting on the Now, the the important thing was is we broke through the 50-day moving average. That was that's this blue line. So, we were above the 50-day moving average for don't quote me on the number, but I think it was 139 days. It was like one of the longest stretches above the 50-day moving average we've had in quite some time. >> Yeah. I mean, pretty much since the end of April, it looks like. >> Yeah. Yeah. And but I mean, I'm talking about the length of the the stretch. >> No. No. I know. Yeah. >> Yeah. It was just a very long run. And and that's and and there's nothing wrong with that because all a moving average is is it just tells you what the average price was over the last 50 days. But what is unusual is that when it stays above that 50-day moving average for a very extended period of time because an average means the price of the market was both above and below that average over the last 50 days. And that's why moving a that's why we like moving averages a lot because they really kind of tell you where support is and they kind of tell you what the trend of the market is. And so the good news is is that up to this point the 50-day moving average is rising, the 100 day is rising, the 200 day rising. So we're seeing over the last kind of long period of time prices have been trending higher. That's good. But moving averages act like gravity and you're eventually going to have a that that gravitational pull is going to pull prices back to that average or below it. And most and and that's why we talk about mean reverting events. What's a mean reversion? A mean mean is the average and reversion is basically prices are reverting back to that average. That either means from above it to it or below it or from below it back above it. So that's the reversion. You have mean reversions in both directions. So right now we're having a negative mean reversion. Stock prices have come down. Now the good news is today we're we're decently oversold. We're not extremely oversold but we're decently oversold enough here for a bounce and markets are bouncing off the 100 day moving average. This is of of what time is it right now? It's um 10. So it's 10:35 Houston time on Friday. So we're just two hours into the markets. Um so this could and again today's opex day. It's a very it's the largest November opex on record. How this day ends I have no idea. It could be positive, negative, whatever by the end of the day. But right now we're trying to hold on to that 100 day moving average. So that's that's some okay news for right now. That could give us a bounce. In theory, we could see this market bounce from this condition back up to around say 6200, which is the where the or sorry, uh 6,700, which is where the 50-day moving average is. That's a decent little bounce here. If you get that bounce and you've been under a lot of pressure in the markets, I would sell some stuff on that bounce. I wouldn't expect a an immediate retracement back to all-time highs. So if if this decline has really weighed on you, so for instance, this is about a three and a half% decline from the peak. Our portfolio is down about one and a half. So I don't have a lot of pressure right now to do anything because our portfolios are holding up very well. But if your portfolio is down 7, 8, 9% from the peak, then you've got too much risk in your portfolio. So I would use that bounce back up towards 6,700 to maybe reduce some risk, rebalance some exposure. Now, we are starting to see the 50-day flatten out. We're starting to see the 20-day moving average turn down. That's not a great sign. That doesn't we we've seen these wiggles before and then they correct themselves, market takes off running again, everything's fine. But if we begin to see this kind of price action begin to flatten out or deteriorate, I'm going to become a little bit more concerned about the amount of exposure we have in our portfolio and begin to kind of start looking to reduce. But again, I'm going to I'm not going to do that here because markets are decently oversold. I'm going to look to reduce exposure on a balance and rebalance. >> Okay. So, um let me let me ask this question. Um when you were talking about, you know, mean reverting and uh these things act like gravity, which you've mentioned many many times before. >> Is a good way to think of moving averages is they tell you where the puck is headed. >> They just don't tell you when it's going to head there. Um they tell you to Yeah. That >> because mathematically you have to get back to the mean right at some point, right? >> Yeah. It's the timing issue. Yeah. The the answer to your question is yes. What moving averages tell you and and and again it it's when really when you're in extremes is is even more important. So again, >> this this this right here, this spike where you spiked well above this gap between the 50-day moving average and where the price is, that's that's deviation, right? you're deviated from that 50-day moving average. So, think about it like a like a a rubber band. You know, if I stretch rubber band as far as I can in one direction, eventually I've got to relax the rubber band before I can stretch it again. And that's that's what prices tell you. So, the the to your point, when I get really deviated above that moving average, your odds are much higher, you're going to get a reversion fairly soon back to that moving average because gravitational force increases. And if you get very far below it, kind of like you are now, we've got a decent deviation below the 50-day. Now, that rubber band wants to snap back in the other direction. So, so yes, what it doesn't tell you though is timing. It doesn't, you know, we've seen periods where markets can stay above the 50-day moving average, as we just saw, stayed above the 50-day moving average for a very long period before eventually breaking it. So, the timing is always a difficult issue. Does that make you worried when you see a long stretch like that where you're like, "Oh, that means we're going to have to have a prolonged period of time under that average just to continue to make it the average." >> Well, no, no, it's not it's it's it's not time, it's price. So, if I So, what I'm saying is let's say that I'm above the 100 day moving the 50-day moving average for 100 days. >> Yeah. That doesn't mean I have to be below the 100 day the 50-day moving average for 100 days for it to balance out because markets are going to rise over time. So, generally breaks below moving averages are generally fairly short-term events. They don't last for a very long time. A good example is back here in, you know, April, right? We had this very sharp sell-off, crack through all the moving averages, and then a month and a half later, it's over. >> Yeah. Let me let me let me let me just ask this again. >> Sure. It's it's a I'm trying to think of this like almost like a calculus graph. It it's it's the volume, right? In other words, um you could be over the the moving average by 100 for 100 days, but you know, let's say you're you're only 10% over it. Does that mean that that you need to >> make up for that volume when it corrects? And that could either be 100 days at 10% below or it could be 10 days, but you're at 50% below. Right? It's it's it's it's a big correction in the short term, but you're you're you're equating the same volume below that you were above. Is that the way to think about it? >> No, it's not because if you think about it that way, right, your market would trade in a flat horizontal line. >> Well, to your point, the the the moving averages move themselves. I get that. Yeah. >> Yeah. And and so so if if it was spending the same amount of time above and below the line, the 50-day would essentially be flat. So since and here's and look at this chart. This is a good example, right? So, you can see that when markets get really deviated above the 50-day moving average, you get corrections below it, but they're fairly short-term events. They're quick, and that's because the average is rising over time. Now, here you saw April, and this is a good example, right? So, in April, we saw this breakdown of the market. Moving averages turned negative, and we spent more time below the 50-day moving average than we did previously because now we're trending below that moving average. So now we're we're pulling the average 50-day price down. >> Yep. >> So we're going to spend more time below that. But as soon as we can reverse that, then we're going back in the other direction. So it's it's typically historically speaking, the time you spend below a moving average is often much less than you spend above it. But again, you now if you go back to say like the financial crisis, we had a very very deep breakdown below those moving averages. And that that period took you know almost a year right so before we actually resolved all that issue um but you also had a financial event going along with it. So when you don't have really type any any type of big you know economic credit related you know financial event going on breaks below these moving averages are typically better buying opportunities than they are selling opportunities. >> Okay. Okay. Totally get it. All right. And and we're going to talk about private credit in just a little bit. Um, do me a favor. Just bring this chart back to where it was from sort of the start of the year. Yeah. Okay. Nope. Nope. Go back a little bit more. I want I want to capture what happened in April. So, [clears throat] um, uh, as you are saying right now, >> this is looking like a relatively, you know, standard, uh, pullback. Uh, it's it's not that bad. In fact, um, I won't pull it up here. Well, maybe I'll pull it up in a minute. I know you guys have your own greed and fear index. Yeah. Um, >> but just looking at the the standard one that CNN publishes. Um, it goes from zero to 100. It's currently at six. I think it was at 20ome last week with Michael. But but basically, they're acting like the world is is ending. Uh, even though it's what, you said about a 3% correction so far since since the highs, right? So, you everybody just keep everything in perspective for the time being. Um, and this could, you know, we could find support here and and and you know, the stocks could bounce from here. You know, time will tell. We'll track this on a weekly basis. And to your point, Lance, about saying how, you know, your stance at at RAIA >> can change on a dime if if the market situation changes on a dime. Um, that's why we have you here every week. So, folks, you know, that that's just have the confidence that, you know, we're going to have Lance or his partner Michael here holding our hands and telling us what they're seeing in real time every week. But I just want to show um sorry go back to where it was because I know where you're going and I just want to I want to just I want to I want to frontr run you a little bit because of what we're seeing right now. This pullback is very similar to pullbacks that we saw in all of 24 and really or 2023 and 2024. So you you know similar declines to the 100 day moving average. Markets found support rallied off. Um and there were lots of concerns in here. this, you know, this this decline right here, this is that 10% fall in the market in the summer of 24. AI's dead, Nvidia's over, blah blah blah, right? And then the markets took off running again. Same thing over here. This was chat GBT and you know the the end of the world because of you know the sorry not deepseek, right? Deepseek selloff. You know deepseat's you know open AI is dead because of deepseek and then markets took off again. So the current selloff is very akin to what we're seeing previously. doesn't mean it can't become to your point, it doesn't mean it can't become this. It certainly can't. I do not want to discount the risk that this could, you know, we could break down here, crack through the 100 day, run down to the 200 day, which would, by the way, talking about deviations from long-term means. We're extremely deviated still from the long-term 200 day moving average. So, a correction of 200 day, not out of the question at all. And I think you need to be prepared for that. It won't go straight there. You're going to have bounces as you get down that that to that level, but you know, you need to be prepared that this correction could be deeper for a variety of reasons, but we don't really have a catalyst at the moment. Right now, the market's really just struggling with is the Fed going to cut rates in December or not. That seems to be the real catalyst here. Uh kind of repositioning for for maybe not getting a rate cut in in in December. But we don't really have like the whole tariff situation like we had back over here. That's been mostly resolved. It seems like we we've funded the government through January. So we don't have the shutdown issue to deal with right now. So there doesn't seem to be and again something could crop up, but there doesn't really seem to be some type of kind of tail risk event that is starting to weigh on the markets here. This seems to be more very short-term positioning concerns more than an event concern. >> Yeah. And and what I what I get clearly from you is, hey, we're treating this like the previous pullbacks that we saw um where we expect things to, you know, bounce and and and start reversing higher again. Um until unless we see evidence otherwise. The the the thing I just wanted to mention, you did largely predict where I was going, but if someone's looking at the RSI and saying, "Oh, okay. Well, look, that's finally come down. It's now kind of plumbing near the bottom. That means this thing's ready to turn. >> Be careful. >> Quite possibly." Right? But if you look back at what happened in April, you know, we got down to the bottom, we had a little, you know, tiny little bounce and then it stayed down there and the market, you know, dropped another what thousand S&P points or something like that. So, >> and but but great great example. Glad you brought that up. Right. So, here was the here was a similar. So, let's just assume that >> you know we're we're here. Okay. So, this is now let's just assume this is right now. >> Yep. So market was coming down and again negative divergence and RSI like we've been talking about you know nice sell signal on the MACD like we have right now all those things are the same markets oversold so markets are coming down and I'm like hey don't worry about this right now markets are oversold now you know here we had already lightened up on positions because there was a lot of other stuff that was going on but regardless of that so markets are coming down say markets are decently oversold should get a bounce here well you you did but the pro The difference here is that you broke the 200 day moving average, went below it, recovered back up to it, failed at the 200 day moving average. This failure at the 200 day moving average was critical because that told you now you have a trend change in the markets. And then also at that time, you also had moving averages were breaking down, crossing over. You had a lot of all the the previously rising bullish moving averages are now turning negative. So now they're telling you that you have much more substantial risk to the markets. And again, another reason to start cutting exposure. And then you got very, very oversold. And this is where we started buying, you know, back over here. Um, but you know, again, yes, just because we're currently oversold does not mean that we cannot get more oversold, you're likely going to get a bounce. But if we bounce to 6700ish, which is the 50-day, fail there, and then come down and take out the 100 day, we got problems. And that's where we're going to be cutting it. If that happens, that's where we're going to cut a lot of exposure. >> Okay? And folks, again, you know, if that happens, we'll be tracking it here with Lance and his team on a weekly basis. If you want greater frequency than that, follow Lance on his YouTube channel, follow me on Twitter. We'll be talking about this stuff in real time. Um, but again, just underscore Lance's point. Um, he's not seeing evidence yet that any kind of breakdown like that is in process. And so, he's still, you know, largely just as invested this week as he's been the past bunch of weeks. >> All right. One just real quick shameless plug here, but if you go to our website realinvestmentadvice.com and scroll down to where it says market commentary and research, we produce a daily market commentary and I put a trading chart every day. Just click the subscribe button, throw your email address in. Nobody's going to spam you, but every day I send out a a it's a it's about a one and a half, two minute read. It's fairly short. We hit some major topic, but every day we have a market trading update. So, we talk about, you know, we just talked about Bitcoin yesterday. We talked we'll talk about gold. We'll talk about whatever is trading in the markets and we'll lay out technical levels, risk levels, those type of things as well. >> All right. Hey, just because you just mentioned it, so let's talk about Bitcoin for a second. >> Sure. >> Um, so Bitcoin, you know, has seemed to have been the canary in the coal mine for the weakness that we've seen in the market. Um, it it it's been weak for a while and uh it it's continued to really weaken in recent days and the chart there shows exactly that. Um, I've heard a lot of people saying, "Hey, this is this is maybe a sign of liquidity starting to get scarce and Bitcoin is is a kind of a hyper indicator of volatility." Um, you know, I've had other people say, "No, this is, you know, investors turning to risk off and Bitcoin's been a risk-on asset and it's it's leading the way for where the rest of the market's going to follow." >> You guys said you just talked about this at length yesterday. What were sort of the cribnote takeaways from that? Well, this is a lot, you know, what we've seen, you know, recently in a lot of assets is people piling into leverage and what you're seeing and particularly see that people buying assets on leverage with things like Bitcoin because that's where they can make the most money because it's such a volatile asset. You know, you know, the market goes up, you know, half a percent a day or 1% a day. Bitcoin can move five or 10% a day. So, if I'm going to leverage an asset, I'm going to leverage something that can move a lot in a very short-term basis. So, you're you're what you're seeing is kind of a cult >> as long as you you're you're you're correct and hoping it goes up. [laughter] >> Exactly. But but there's actually two things that are going on here that and we this is what we actually talked about earlier this week is that, you know, the the the retail crowd was begging Wall Street to bring ETFs for Bitcoin to the marketplace. And this is why we always warn you about be careful what you ask for from Wall Street because Wall Street will provide you whatever you want. If they can make money on it, they'll provide it to you. Well, what Wall Street was more than happy as soon as they could get it passed through the SEC was more than happy to deliver ETFs to the markets. Why? Well, a you're going to go throw your money into an a Bitcoin ETF or an Ether an Ethereum ETF. That's great. They don't care about that, right? What Wall Street wants, they want the ETFs because they can short those ETFs. So all of a sudden they have a really easy way to arbitrage their portfolios and take advantage of market downturns by shorting those ETFs. So you've got liquidity issues one going up, but you've got Wall Street working against you, taking advantage, you know, everybody that followed those ETFs, Wall Street was like, "Bring it on because I'm going to short the crap out of those." And that's what they did because Wall Street's always going to arbitrage off that risk at some point. >> Yeah. And and sorry just to chime in is you know longstanding gold holders are very aware of this which is >> when when the paper markets get to a point where they are material or in case of you know precious metals many many many multiples the size of the actual physical market. >> Um Wall Street loves that because it can start just pushing around the price in the paper market. Right. And and so that was one of the risks that the the Bitcoiners, you know, were warned they were going to face is once once Wall Street, you know, productizes this thing. Uh it's going to be a lot easier for Bitcoin futures and stuff like that, right? I mean, this there's just there's going to be a lot of ways for Wall Street to push the paper price around to where it wants it to be and you're going to lose a lot of control over organic price discovery. So, you're nodding as I'm saying all this, but yeah. >> No, absolutely. And and what Wall Street loves more than anything else is volatility. And the more volatility an asset has, the more money they can make at it. So Bitcoin is a beautiful asset for Wall Street to basically just arbitrage the crap out of retail trailers. >> Traders well volatility and volatility that it can influence in the short term. Absolutely. Right. So I can push it some way in a given day, right? And I can I can force the market to react to me, right? And and that's Yeah. Exactly. which which is unfortunate because you know the whole idea of Bitcoin originally was and again and again this is you know the the the failure of foresight by retail traders. Bitcoin was great when it first came out because it was truly decentralized. It wasn't tied to anything. But as soon as you start started begging for futures and options and ETFs and all that, all you did was centralize the whole Bitcoin market into the markets. It's now just a Wall Street asset. And eventually, Wall Street will just arbitrage most of this volatility out of the market. So, you know, probably in the future, you won't you won't see the volatility swings. I'm talking about 5 10 years from now. Um, you won't see these type of volatility swings of Bitcoin. It'll become a much more stable asset with kind of normal market returns. >> You know, wi with that um just the Bitcoiners would say, well, that's good. In many ways, it'll be a good thing because then we can start actually getting the currency part of the cryptocurrency back into the equation, right? >> Yeah. because because again you can reduce that volatility risk to a point and and Wall Street will be good for this. they'll arbitrage most of that volatility out of it so that now I can go you know this has been one of the problems like you know we saw title companies try to use Bitcoin for you know settling titles you know Tesla tried to do it for settling cars but it was too volatile so they couldn't do it but if you can arbitrage a lot of that out that actually gives you the stability that you need in price so you can actually start tying real-time transactions to that as a currency hold right >> right okay so in that's potentially many years out here. Um, in the here and now, what's bit what's the the the the future of Bitcoin looking to you? >> Um, you know, you're coming down to a pretty decent support level. Last time we were down this this is around 76 77,000. Um, that's the kind of these previous this kind of previous top back over here. Then you got these bottoms that we put in kind of in in March of this year. um you know this is decent support level here. You're de you're very oversold on a momentum basis. You're you're very oversold on a relative strength basis. So if you're looking to to buy Bitcoin you've I I would be patient here. I would wait for a couple of days. I'd like to see this kind of bottom and maybe turn up again. Don't worry about trying to buy the exact bottom. What you're looking for is a little bit of this thing to turn up here. But you got a decent entry point for a trade. I wouldn't necessarily buy this right now for a major long-term investment because you've got a lot of breakdown here going on the market. So, there's a lot of what's called trap longs in Bitcoin right now. And that's all all these all these kind of traders that were, you know, retail traders, retail investors, all the ones that were buying it back over here on the dollar debasement trade and all that, they're trapped in in this stock right now. So, or in Bitcoin right now. So, you're going to get a rally back and they're going to clip out of this, right? They're going this these trap longs are going to sell out. you get another downturn potentially, you know, in a month or two, maybe three, and then that forms the actual bottom to where you can actually make a longer term investment. But I think there's a reasonable trading opportunity here where you can buy this here and get a nice bounce back up towards 100,000 and then you get another pull back before you actually find a bottom. >> Okay. Yeah. I mean, to our previous discussion, we're now quite far below all of the moving averages and so that that rubber band will start working in the other direction, right? Yeah. >> Yeah. Yeah, but you but again it's this is a really great example of the technicals, right? You extremely deviated above the the long-term moving average. Now you're very far below it. So, you know, again, you're going to get this mean reversion now back in the other direction. >> Okay. All right. Um All right. Let's hop hop out of the chart. I want to >> bang through a couple of uh of other big topics in the news here while we can. Um, I do want to talk a bit more about the concerns that are being raised about the AI cap the AI complex and you've written a piece recently, Lance, about how um, you know, the capex spending is is sort of masking um, other more concerning things that are going on in the economy. So, I I do want to trundle into that, but but real quick, you mentioned something earlier about what what seems to be driving the market in the immediate term here is the will they won't they on uh if the Fed's going to cut in December. Um and so we did get some jobs numbers uh this week. We got the September jobs number. I I think we've been told we're not going to get the October jobs number. the the BLS could not do their um their phone surveys. So they don't have any d household survey data for October. So they will not release an October report. >> Okay. Um so anyways, the the the the data we did just get is the September data which surprised to the upside. I think it was literally like two times the number of jobs created than folks thought. I think it was around 100,000 and folks were expecting around 50,000 or so, >> right? >> Um now at the same time the unemployment rate crept up to 4.4%. Um so uh and people are basically saying hey look you know you got to take the jobs there with a big grain of salt because we know both the government shutdown in October but we we've also heard a lot of layoff announcements you know over the past uh 45 days or so uh that the September numbers don't don't capture. So, um, [clears throat] uh, you know, it's it's you know, people can look at that data and read what they want into it, right? Oh, well, the jobs number was higher than we thought and so therefore Fed has less reason to cut here, right? But then unemployment rates creeping up. Well, the Fed should care about that, right? So, um I I I think the last headline I saw this morning was that there was another Fed some some member of the FOMC who who said, "Well, yeah, maybe we might want to actually think about cutting again." Um so, but but this this you know, will they won't they switches pretty much by the hour here. What are you what are you thinking? The last I looked, which was yesterday, at the CME numbers, uh, CME forecast was that I think it was like twothirds probability that it was going to remain unchanged. Um, that was that was up, uh, I guess from, uh, two weeks ago where it was more like 50/50 that they were going to cut. Um, but anyways, what do you think at this point? Um, well, you know, Wall Street's generally pretty good about kind of predicting stuff, but you know, you know, you know, I think it's kind of a coin toss, honestly, because if you take a look at a lot of the real-time economic data, it's not it's not terrible, but it's not fantastic, right? I mean, you know, we probably, you know, printed 50,000 jobs in October. And and the problem with the September report is and and always that that data is so outdated now. you know, we can look back at it. It was it was 119,000, but you know, how how good was that data collection, you know, based on everything else that was going on at that time? We were going through the whole >> and that's on top of our our skepticism of just the BLS in general. But yeah, >> exactly. So, yeah, you know, but again, you take a look at the other data, you know, and again, one months of data again isn't also is also not important. Numbers are volatile. you know, get the birth death adjustment, which is always BS anyway, but that always inflates the numbers to a degree. So, the trend is more important. What's the trend of the employment data? That's clearly negative. It's clearly heading towards zero at some point. It's just a question of when we get there. >> Yeah. >> So, you know, >> sorry, by the way, I should note too that the payroll data, which was higher than materially higher than expected for September, they also went back and revised the August numbers from a beat to a loss. >> Yep. Exactly. And so again, that's what I'm saying. I don't put a lot of weight on that data um because it's so outdated. The other data I think is more important and that was kind of the point of my article today talking about how a you know this AI data center spending which is boosting economic activity. It's also masking over a lot of the other economic weakness that we see going on across the board because again, you know, if I build out a data center, you know, I'm hiring construction workers, I'm hiring electricians, I'm hiring trade skills, right, to build those data centers, but that doesn't neessally translate all the way over through, you know, people owning restaurants and people working in office jobs and those type of things. So if you take a look kind of the broad swath of the economy, there's a lot the economic strength is not as robust. You're going to take a look at the Atlanta Fed GDP now as an example. They're at 4.2% 2% real growth for the third quarter. That if you take a look at a lot of the other economic data, it doesn't suggest that we're not seeing booming economic growth across the, you know, the broad spectrum of the economy because, you know, you got auto delinquencies rising, you've got default rates, uh, mortgage delinquencies that are rising. You know, you're seeing a lot of pressure on a big bulk of the economy that's not being really fairly represented by what's going on with just construction spending. >> Yeah. So, Lance, I don't know if you saw it, but I did had a really interesting interview this week with Craig Fuller, who's the CEO of Freight Waves. >> Y >> they're like the leading provider of data to the um supply chain industry about things just get shipped, whether it's a truck or a train or a ship or whatever. Right. >> Um and uh he is is very emphatic that that the real economy, you know, the economy of moving real tangible things from point A to point B is in recession. Um and uh and it's just not the prospects are not he's not seeing any light at the end of the tunnel, you know, right now. Um and uh what was interesting is stat he pulled out there was you know and he totally says yeah like you hey you know the the all the capex spending is is pulling the averages up and he said sadly everybody in a position of of decision-m in Washington you know running the country is looking at the averages and looking at the stock market and saying well everything must be great right and he's like they're they're ignoring this real weakness in in you know the the the larger swath of the economy that that still depends on atoms versus bits. Um, and he's like, and the problem is those are the guys that could actually do something about it. Um, but they're they're not because they're telling themselves that everything's great right now because they're looking at these averages that are getting pulled up by all the hyperscalers. Um, but he mentioned a stat. They said if you if you look in kind of the the the mag 7 10 whatever you know those companies employ about 2 million people which isn't insignificant but it it pales in comparison to the roughly 35 million that he puts in the sectors that he monitors. Um and he's just like you know we are we're you know it's almost kind of like a pmpkin economy right where it's got this facade that everything looks great and and and again things are amazingly well for those hyperscalers right so I'm not I'm not denying that there's not a lot of ton of revenues being made there >> but um uh when you >> it's not everybody >> yeah it's it's not everybody and I and I think it's not the majority lance which I think is the really you know key key part of this right so anyway Anyways, um I got one more thing to say about that interview, but but real quick, you know, what's your reaction to that? I guess the question is is what are the perils of ignoring that? >> Well, can we just shrug our shoulders and say, well, hey, those people don't really matter anymore. That part of the economy doesn't really matter anymore. >> No, absolutely it matters. And that's that's my point. But this is also my big concern about next year, right? Um just talking about uh you know, earnings expectations next year are exceedingly high. we're going to, you know, Fax's predicting like $320 a share by the end of next year for the S&P 500. And but if you take a look at the breakdown, they're saying, well, the big cap tech companies, they're they're their earnings growth, you know, you're talking about Nvidia, Microsoft, Tesla, those guys, their earnings growth is going to slow down. But the Russell 2000, the small and midcap companies, their earnings are going to explode next year, right? They're going to be up 60 59% next year. just massive, you know, earnings growth for the S&P 500 or for the >> What's the rationale for that? >> Sorry. >> What's the rationale for that? >> Well, that's my question. So, where does the earnings come from for small and midcap companies? Now, we're talking about companies that, you know, are retailers, they're, you know, your smaller manufacturing companies, th those type of companies. So, where does the bulk of their revenue come from? It comes from consumption from consumers. And if you're if you're looking at the economic data and we're talking about, hey, this slowdown in the economy is very real. Take a look at the the employment data. Take a look at the the the ISM services index is slowing down. There's not a lot of growth there. So here, how are you going to generate that? But here's more important to that. So this shows 24, 25, and 26. So light blue, dark blue, and this kind of I don't know what color that is, another blue. Um, but in 2024, we had booming economic growth. The economy was going gang busters in 2024 because of all the stimulus that we had going on. They had negative earnings growth. >> In 2025, the economy is doing great. They're they grew at 1%. So now all of a sudden they're going to go 60% as the economy is slowing down. That makes no sense whatsoever. But that's the expectation from Wall Street on the markets. That's my big concern going into next year is this this this idea that the economic growth we're seeing, you know, from AI spending, which is a very small segment of the overall economy, is somehow going to create this massive economic expansion. We may see that in the actual GDP numbers. This was a chart that I published in this uh in the article I just posted. So, this is nominal GDP with and without capex spending. And there's just a big gap. A lot of this lift that's going on right now is because of this a this AI capex spending and but the actual economic growth rate in the underlying economy is slowing down. And as we get more into again, this goes back to my concerns for 2026 and 2027. I think we're going to see slower economic growth below the surface. We may get some good GDP prints because of AI, but I think below the surface, we're going to continue to see this this degradation in the vast majority of the economy. This this downward pressure, job losses. You know, we just talked about on the radio this past week. We're seeing energy companies, the big the big major energy companies laying off workers because of AI and they're able to to start doing that. So that whole job loss issue that you and I have talked about before because of the product productivity increases from AI is going to weigh on the economy which is going to weigh specifically on the small midcap stocks. So you know that's that's one of the bigger concerns I have for the next two years. >> Okay. So I totally get that concern. [clears throat] I share it and that concern right now you have assumes that AI capex spending continues you know at the rate it is and that these companies continue to feed these hyperscalers continue to really get fat on the trough right so let's just talk for a second about what if there is a hiccup there right so we've seen um concerns about the circular funding that's going on in the AI ecosystem Michael Bur, you know, has has gone ballistic on this of late. Just this morning, he he put up this massive chart [clears throat] um showing all the different, you know, flows from from company A to company B back to company A, >> right? >> Um he's also talked about what he believes are, if not fraudulent, highly deceptive uh accounting that's going on in that space. Um, so and we've seen, you know, like uh what was Oracle's debt that got downgraded by Barkclays because they were just like Oracle has has put out these capex projections. They're going to run out of money. There's no way they're going to be able to actually buy all that. They're going to run out of money before they do that. Um, so you know, to some people this is starting to smell like 2000. And you you don't have to necessarily agree with that or not, Lance, >> but just if there's some compromise in that AI freight train of spending, that just makes this a whole lot worse, right? >> Yeah. Uh, you know, it's, you know, first of all, just expecting all these companies to pay forward out of cash flow is a little bit ridiculous anyway. Um, so yeah, these companies are going to issue debt. I can issue debt fairly cheaply in the financial markets. Why wouldn't I do that? Because I have a whole lot of advantages. when I build with debt, I have a lot of tax advantages with that as well. So, why wouldn't I do it? But, and again, I I have to make sure I have enough cash for my buybacks because you don't you haven't seen one company come out and say, "Hey, we're going to cut back on our buybacks because we need more cash flow for buildouts." Right. Right. >> We haven't seen any of that yet. So, don't >> that squeeze might be coming, right? >> Well, they're going to protect their they're going to protect their buybacks. Trust me, that's how >> Well, then if they do, then that then limits the spending, right? I mean, so >> but that's why they'll eventually turn to debt. But, you know, so, but we're going to see debt picked up across the board. I mean, you're you're you know, there's there's a lot of and I've seen a lot of the the headlines you're talking about lately. And what they're missing is is they're assuming that these companies are only going to go to the public debt market. Public debt market is a cheap way to finance and it's an easy way. So, companies like Oracle can go to the debt market very quickly. They can raise debt. You know, their default risk right now is like 1.6%. >> You know, with their debt issuance. So there there's no real risk there. So people will loan them money. Um but for companies say I'm I'm I'm not making any specific examples. I'm just picking one up, right? Just as just for example purpose only. I'm not making any statements so don't go off on me. But say a company like Cororeweave and they want to raise debt. So they've got a couple of choices. They could go to the public market as well. Um their rates might be higher than say Oracle because they're a much smaller company. Financials aren't as strong. they don't have the the the fundamental backing that Oracle does or the history. Um so maybe their financing debt is higher in the public markets. But let's say they can go to the public markets. The public market's like, "Yeah, we don't really want to do it." Don't forget there is a massive private credit market out there that is sitting on a trillion or two worth of capital that are looking for deals. So there is plenty of capital on the debt side and not to mention government side that is going to be funding some of these some of these buildouts that need to get done through debt. So I think it's and again yes there are some similarities back to 2000 not denying that at all but again as I said earlier it's probably a bit early to be going okay now we're about to have the do prices we're very early into this phase it can go it's this can potentially run for two three more years before it gets to be a real issue. >> Sure. Sure. And all I was just saying is that if there's something that a either compromises that capex spend out that makes your concerns for 2026 a lot worse. And also even if a capex continues but if there's a price correction in the AI sector and we get a negative wealth effect coming out of that that also makes things a lot worse again. >> Yeah. Absolutely. >> Have no idea if that's going to happen. I'm just saying it is an additional risk factor out there to the one you mentioned. >> Abs. Absolutely. Absolutely. >> Yeah. Okay. Um uh okay. I do want to talk to you about private equity. Um, real quick though, just back to um, Craig Fuller for a second. I was thinking about making this a rant, but I think enough people have watched the video with Craig. And folks, if you haven't, you really should, both for what Lance and I already talked about, but for this point as well, especially if you're going to be traveling anywhere on the highways over Thanksgiving. So >> [clears throat] >> um we got on to talking about how in COVID um there was a tremendous amount of demand for shipping, right? U we we had these you know compromised supply chains but everybody was ordering stuff from home right and so um you [clears throat] there was a big demand for for additional drivers and so this was uh I think a component of the the prior administration's you know hey well let's get these illegals to come in and fill these jobs right u we can put them to use or put them to work >> so um by Craig's estimate there was about 600,000 uh drivers that have been hired who um should say had no business being hired in terms of their their um proficiency in driving a truck. >> Yeah. They weren't qualified CDL drivers. >> Exactly. And and so there also was this proliferation of these CDL licensing schools uh that emerged that basically you know kind of give rubber stamps commercial driver's licenses to [clears throat] people who can basically you know fog a mirror and that's it right so these were people coming in from other countries in large cases illegally who um have never driven a truck before um in many cases don't understand English um they're from countries with, you know, different traffic laws, in some cases non-existent traffic laws. Um and they [clears throat] come in, they get a they get a license or they they pay someone to take the test and get a license or they just pay for the license without even taking a test. I mean, there's so many ways to get a commercial driver's license, it sounds um and [clears throat] they're they're able to get behind a wheel of these big rig trucks, really never having driven a truck before. Um, [clears throat] and then they are they're doing two things that are really scary. One is they're working for um, you know, lower wages because they're they're they're happy to get them. They're way more than these folks were going to get in their home country. Um, and so a and they're willing to drive um, a lot more hours than the average American trucker is is allowed to drive. So, I think you know if if you're a legal trucker here in the US, you can't drive more than like 10 or 11 hours a day. Um, it's an industry regulation. These guys, they don't care, right? They're going to get paid more the more they drive, right? So, they're driving upwards of like 20 hours a day, right? So, the two things they're doing are um they're undercutting the legal operators here in the US. So, you've had now kind of an over capacity in the system and it's the guys who are playing by the rules who are starting to go out of business here, right? So, that's bad from an economic standpoint, but of course, it's way worse from a public safety standpoint where you've got hundreds of thousands of these people on the road, again, who don't understand the traffic laws, uh, who in some cases don't speak English, can't read the the the street signs, stuff like that. Um, who may be on their 19th hour of the day driving, um, so, you know, sleepd deprived, and a lot of them are on some sort of chemical substance to try to stay awake, right? So, it just petrifies you in terms of, you know, the road safety risks that that that this presents. And then the other thing Craig was talking about is that the trucks that they're driving aren't that well-maintained. I I told this story of my move to to Nevada when I drove a the largest U-Haul that I could rent and how petrified I was about how unqualified I was to drive that thing. And of course, that's that's small. Uh it still drives more or less like a van, not like a big truck, right? So, a regular person can kind of drive it, right? And Craig was telling me, "Hey, in that U-Haul," which probably wasn't super well-maintained, he's like, "That's substantially better maintained than a lot of these rigs that are out there on the road right now." So just a a super eyeopening uh perspective in terms of both what's happening economically in the in the economy of the of real things but also just you know as we're all going to be traveling you know most folks watching this are going to be traveling uh for Thanksgiving just be really mindful on the highway of the big rigs around you and maybe give yourself a little bit of extra cushion than you otherwise would have um just in case you happen to be driving next to uh somebody who who maybe really shouldn't be behind a wheel of of of equipment that large. >> Yeah. >> All right. So, um I thought you were gonna have a lot more to react to that, but okay. >> No, no, no. I mean, it's like it's, you know, Yeah. I mean, as I was just looking up some stats while you were talking and and um you know, you have about 5,000 people annually killed in the US by, you know, 18 wheel trucks. And that's just in that's in total, right? And >> Right. And sorry to interrupt, but I think it has doubled since 2019 was because of this factor. Yeah. >> Yeah. know it's it's gone up a lot, but it it says the majority of these accidents are the occupants of the other vehicles. You're just not going to win the fight with an 18-wheel truck driver. You know, that's you know, that's >> there. There was one an accident that happened about a month ago that was in the news down in Southern California and and it was a guy who it turned out he was >> I think he was drunk. He was but under the influence. Um but but exactly one of these guys and and they showed the dash cam from his truck when he plowed into stop traffic ahead of him and the cars that he hit they just vaporized. >> Yeah. >> I mean the kinetic energy of this thing slamming into you know a regular sedan is just mindboggling. >> Yeah. And and know and that's and that's the real issue is that you know you you know the average and and this has always kind of been one of my about like for instance I live in Houston right? So, we have this main highway through Houston that's Interstate 10. It runs all the way from Florida to California. Um, but you know, you've got these 18 wheelers that are just barreling along, you know, this, you know, freeway and then you've got idiots that are cutting in front of them, trying to get around them, all this other stuff. I'm like, you're going to lose that fight with that truck. I've always kind of been the proponent of like, you should have a dedicated lane for 18-wheelers. They should be in the right hand lane. That's them. that's where they are and let the rest of traffic flow around. you know it it's you know they're you know the responsibility of those drivers is is so much more important but again you have to you know the other drivers on the road have to be responsible too and you know I've I don't I like for instance I was reading the the article about the October event that you were just talking about but you know what I see on the on the freeway is I see people you know they they are trying to get around an 18-wheeler well they cut directly in front of it and you know we talked talked about a train, you know, trying to slow a train previously about the like relating it to the market. >> You can't stop an 18-wheeler, you know, on a dime because they have so much weight behind that truck and these people are just jumping in front of them and thinking this 18-wheeler is going to stop. And if they jump in front of them and have to slam on their brakes, they're done. That 18 wheeler is just going to just going to vaporize them as soon as they get hit. So, you know, it's you've got to be People take for granted how dangerous 18-wheel trucks are when they're on the freeway and they're just cutting around them doing all those type of things. Hey, I get it. But it's a good way to die. >> Yeah. All right. So, thoughtful many public safety announcement folks this Thanksgiving. Just be extra careful on your drive if you're on the freeway here. Um All right. So, private credit real quick, Lance. Yes. >> Um so, now you mentioned how big of an ecosystem it has become. We've talked a bit about, you know, some of the um recent defaults that we've seen going on there. Um whether it's um what First Brands um there's another one that came out around the same time and >> then there's what Renovo I think that's another company that that basically you know kind of went to zero. Um, so, uh, what's your level of concern right now about this? Because because that's where the, you know, the credit markets are where all the marbles are, right? And, um, we we don't really know so much the quality of lending that's been done in the private credit market because it's not regulated like the private credit space is. We've been hoping these guys have been making good loans, but we don't know, right? we're starting to see some evidence that hey, they they probably weren't um and you know, as some of these other potential stresses um crop up, you know, then those might put additional pressure on on lenders that borrowed in the private credit space and as they weaken, you know, other stuff starts to happen here. So, you've seen things like um like uh the stocks of the um private lending companies have have really performed pretty poorly over the past two months or so. And it seems to be that the market is sniffing out that okay, you know, these guys maybe some percentage of their loan book isn't great, right? Um, is this just sort of, you know, regular sort of business as usual and the market will cleanse the bad debt and then they'll make better loans going forward or is this, you know, is there a risk here of this being bigger that hey, there's been a lot of bad stuff and we just won't know until the bodies start floating to the surface and yeah, we've seen a couple yet, but maybe there's a lot more to come. Well, so, so a couple things are is that a, you know, what we've seen so far is is a very small amount, right? Like auto loan, the subprime auto loans, you know, immediately our first reaction is like, oh my god, this is like 2008, right? It's a subprime crisis all over again. Much different because of the magnitude of what went on with subprime mortgages. Yep. >> This so there I'm just want to state there's a big difference on on just the magnitude of what we're talking about. But, you know, what's going on with companies like a firm and CLA and a lot of these buy now pay later firms and what we're seeing going on with a lot of of you know some of these other private credit lenders is certainly concerning and again this goes back to what we're saying earlier is that and again you take a look at CLA or a firm in particular certainly clear evidence that you know and we don't have a lot of data by the way uh readily available on all those buy now pay later loans. We really don't h we we think there's a you know several billion of that out there but we really don't know for sure because we don't have any good data on it but we know [clears throat] it's out there. Well, no, there's there's billions and billions out there and and I just know because Blue um uh sorry, Blue bought PayPal's buy now pay later book in the US and then uh I just realized they b KR bought um PayPal's buy now pay later book in Europe and I think collectively they're somewhere around like 80 80 billion and that's just PayPal's version of B. It's not even a firm or CLA, >> right? And and so again, there's but again we don't we that's again we don't have like I can't go to you know if I if I want to know how much treasury debt's outstanding or corporate debt I've got a data feed for that. >> Yeah. But this is the problem with the private credit market is it's unregulated. We don't have these pieces transparency. Yeah. >> Yeah. Exactly. That and that's kind of my point. So it's it's >> I was just saying it's bigger than just a couple billion. We [laughter] know that. >> We do know that. Yes. This is true. But you know my point is is that what I think we are seeing though is again you take a look at the you know some of these companies that are in that space they're they're under a lot of pressure because the consumer is slowing down. This goes back to saying earlier is is like you look at the bottom of the economy that bottom 50 60 70% of the economy they're not doing great. The top 20% of income earners are floating 50% of consumer spending right now. >> Right. And sorry to interject but we we've just heard from companies like Walmart which had pretty good earnings. But but a big part of that is because of downshifting. They're getting more affluent customers starting to to to say, "I can't spend on my big brands anymore, so I guess I'm going to start shopping at Walmart." Right. So, I mean, we're seeing even that top half is starting to show some signs of weakness. >> Exactly. And so, so again, so there I think there is risk, and this is why if you're investing in the private credit market, you need to be very careful about what you're investing in. There's not a lot of clarity um in private credit. there's not a lot of clarity in private equity. Um, you know, and particularly in those funds, they don't have to mark to market. They kind of market what they think the asset value is. And so there can be a super big difference between what they're telling you the value of your holding is versus what the real value is if they have to go fireell it in the markets. So you need, if you're investing in the space, it may look all fine and dandy because they're going to present to you these best rosy returns like, oh, you're going to make 18% a year on this. you need to really understand what you're investing in because there's a lot of risk there that I don't think has floated there's a lot of bodies that haven't floated up to the surface yet that I think we'll see over the next year or two >> and that's where I was going. So let me just ask you and I'm just asking you to guess here at this point because we don't have the data but like what is your worry factor about this >> in in terms of people invested in private curren what what do you mean? >> Yeah. Yeah. in in terms of um six months, a year from now, you know, we're talking about um a market freakout because people are realizing that there's a lot more losses in the private credit space and you start getting a contagion. I mean, for for me, the unknown about private credit is is, you know, different from 2008. Subprime is different, but but what what it did is it started counterparty risk concerns. It got people saying, "Wait a minute, now I don't know where all the bad loans are, so now I'm going to stop lending for a while." Right? And that's that's that's when things really get wonky, right? And so what's what's the potent or in your gut? What's the potential of private credit to potentially spark a counterparty risk freeze? >> I don't know if there's, you know, because counterparties are between banks and private credit is kind of sitting outside of that. Sorry, sorry, but but just in your answer address this. I've heard that hey actually banks do lend to the private credit industry. So they're not like totally separate, >> right? No, no, that I was about to say is that there is leverage that's going on that the banks provide. >> Yeah. >> So again, this is the this is the whole reserve, you know, issue that we've talked about recently about how the Fed creates reserves for the banks. The banks then loan that money to hedge funds, private credit funds, you know, etc. So you know that money gets created you know money gets created through loans and it gets created out of those reserves. So absolutely there's leverage from the banks provided to these to these private credit funds. So yeah there's certainly risk. It it's hard to assess how much risk because again I don't want to paint all private credit as bad credit. That's not the case. >> All private equity is not is not bad. >> Right. >> Um >> metal high yield junks are or high yield bonds are junk. >> Exactly. Some some of them are, but [laughter] >> some some are. >> But yeah, but again, you do have to be careful about what you're invested in. But I think there is a risk if you start seeing private credit fail and starting to see more and more this is certainly going to post concerns up for the rest of the market then and you're going to get a repricing of both credit and equity at that point because that's going to be a reflection of what's happening in the underlying economy. I think you're going to see the Fed stepping in to bail stuff out. You know, cutting rates, restarting QE, you know, the typical playbook. Um, you know, again, at that point, you're not going to want to be heavily invested in equities if we get there. >> Okay. Well, one man's opinion, but uh if if I were to bet on, you know, one of the areas of private credit that I think is is going to blow up at some point, I I'm putting my money on buy now pay later. >> Oh, yeah. You and me both. We You have been there forever. I I think that's the most stupid thing ever invented, but you know, we'll see. Okay, >> maybe I'm wrong. We'll see what happens. >> All right. Um, can we take a few minutes and have you walk us through your new oil and gas uh portfolio sleeve there in Simplevisor? >> Yeah. So, so we had um you know, so for a while um we've been kind of looking at this whole power gen kind of issue that's going on with the markets and the demand for power that's going to be needed by AI companies as well. And we we're starting to see kind of now, you know, we had this whole kind of, you know, move over the last several years about more wind, more solar, we need more renewable energies. The problem with those are is that they're not reliable enough and they're they're not efficient enough to provide the power needs for these AI data centers. So now there's this concerted effort to move back towards coal and oil which is going to be the major pro major uh energy sources for these AI data centers as they occur because they're so >> well well gas you didn't mention gas but that's a huge part of that right >> gas and coal it's all when I say oil it includes >> you said oil I I knew you really meant gas yeah >> but anyway but yes all three of those and of course nuclear is going to be is going to be very important in that equation as well. And but the problem with nuclear is it just takes so long to get there, right? To to you know, we're just starting to try to get, you know, fasttrack plants to get going, etc. And that's going to be three, four, five years before we actually get a plant up and running and built and those type of things. So that's going to be a very nuclear is going to be a very important source, but it's pretty far out there. Yeah. >> So again, what we're seeing companies do right now is is they're trying to locate next to to gas pipelines. They're trying to build as close as they can to a gas pipeline so they can do what's called behind the meter and they can tap into that pipeline for natural gas to power these data centers and and but that even takes a year or two just to do that. So even in front of that they're going to LNG to provide power near-term for the data center so they get the data center up and running until they can tap into the natural gas pipeline because they run the pipeline close to the building tap into it those type of things. That's a year or two. So there's there's a time issue for all of this and this is all going to provide a lot more uh demand on the oil and gas sector. And so one of the things that we've been thinking about is and again this is a very early stage deal. This is not something you don't go buy a bunch of oil and gas companies today because they're not performing well right now because oil prices are fairly low. And I think oil prices can potentially go lower here before we get to a to a bottom uh in oil prices. I think we get closer to maybe, you know, $40 a barrel once we get there. But, you know, there's going to be some time getting there. But, you know, we started building out this portfolio structure and, you know, with this idea of something that we can build into over time. So, we launched this thematic model um that's based on energy and you know, so today it's up like 42 bits since we launched a couple of days. We launched this last Thursday. Uh, no. Yeah, last last Thursday we actually launched this. So it's down about 2% over the because it's going to travel with the market anyway. But this is this is all related back to just energy exectors uh energy specific companies. And so we've got everything from drillers uh like Kico Phillips to natural gas pipeline companies like Williams which is one of the bigger pipeline companies out there Exon Mobile Chevron you know they're the ones that actually drilling oil and gas producing it etc. um you know straight drillers like Diamondback Energy uh EOG Resources and then even into the transportation side of this looking at like Scorpio tankers um in terms of actual transports and of course Kamiko Corporation for the uranium for you know nuclear power companies. So it's looking at kind of the entire energy space and picking companies that we think will participate the best uh longer term. But again this is not something that's going to be like you're going to invest in this today and it's going to make you money today. This is a this is an outlook, a thematic model that will be something that we just slowly build into over the course of the next 18 to 24 months. >> Okay. Um >> but this is but this would be a great portfolio if you want to that you start out with like a thousand bucks and you just start dollar cost averaging into it over time. That's a great portfolio for that type of thing. >> Yeah. And and that's where I was going. So, we've had, you know, a number of of I would call micro discussions on this channel recently about um how the energy sector has been really beaten up in recent years and um there's both, you know, the hey, we're going to need all this new power to to power the AI era. So, when is that going to start adding a tailwind to the energy sector? And then we've had kind of the Rick Rules of the world who have just said, "Hey, look, you know, like we we've underinvested in capex and in, you know, especially a lot of these fossil fuels. And even if demand, global demand for oil and gas just sort of stays where it is, we're going to have some shortages at some point." And of course, the lower that the oil price go, you think it could maybe get down into the 40s. >> These companies don't go out and explore and develop at those prices. They just they just sit, right? And so that then eventually leads to scarcity, right? So the question has been or a lot of people have been raising is okay well look is this a good time to start getting into this space so that when it gets out of bust and goes back into boom you can really ride that. Um sounds like that this exactly why you guys created this portfolio. >> Yeah, we do. But but again that's exactly my point. So if you went to Simplevisor right now and said, "Oh, I'm I'm going to get in this portfolio." And you go, you know, stick all your money in this portfolio. You could be disappointed for a long time. I mean, this may do nothing. I mean, it's going to it it has a really good dividend yield to it. It's it yields close to 4% because of the companies that are in it. But, you know, you're going to be just kind of sitting on potential losses for, you know, 12 18 months before potentially. I don't I don't know when this thing is going to turn. It's going to take time, but when this eventually turns, it'll make money. So, this is why like even with our accumulator model, if you're just trying to get started out investing, these are great models that you know, hey, I I like this thesis long-term. I'm willing to suffer the slings and arrows over the course of the next 12 months. If it goes down 10%, I'm not going to freak out and sell everything, right? I'm just going to keep dollar cost averaging into this because over time, the thesis should work out. There's just a supply demand imbalance that's going to have to get met at some point in the future with the energy and with the energy grid in particular. But again, it's going to take a couple of years potentially to get there. It could it could come a lot sooner. Maybe this whole thing catches on, everybody starts buying them next month. Maybe it works out great, but just from the fundamental basis behind it, it's going to take time. So, it's something that you dollar cost average. It's a small part of your portfolio. It's 3 5% of your total net worth and it's something you just dollar cost average into over time. >> Okay. So, a couple things you mentioned there. So, um uh we because we don't know like this could catch fire tomorrow, right? >> Yeah. not not your default assumption but could right which is why you want to start building a position right because if it starts taking off you want to have at least some skin in that game now I think you're doing the right thing and saying hey look we don't know and there's a lot of you know still headwinds the industry is facing so set yourself up for expectations that the price could go down from here right and so that is a nice dollar cost averaging opportunity right if you think the long-term uh potential is there but you don't know when it's going to turn well start nibbling in. Let let cost averaging let you lower your entry price over time and then when the turn comes you'll have a nice you know entry position that should ride that wave. Right. >> Um >> absolutely >> now presumably I think Lance and I don't want to put words in your mouth which is why I'm asking you this. Um, you know, at RAA, your intent is to try to capture 80% of the upside while only getting exposed to 20% of the downside, which means you're not going to go all in on the energy space at the exact bottom because you don't know where it is. But you're going to be looking for technical and other indicators that will eventually let you say, "Oh, we see now that the we think, you know, high degree of certainty the bottom is in our rearview mirror. We think this thing has turned. Now it's time to start increasing your exposure." So presumably at some point you would come on this channel if you saw that and say hey I might switch from just dribbling in dollar cost averaging to start increasing more in this space if I really believe in this thesis. Correct. and and and but you know for instance in in our kind of our broader macro core models um we already own companies that are in the space so like we own GE Vernova we own Kinder Morgan Energy um and others and so you know even in our core models we're already making those energy bets there and that and they're fairly small positions but we'll start you know grossly increasing those as well but yeah at some point if we begin to see you know oil prices turn up on sustainable basis and we're starting to see those type of drivers and starting to see that real impact coming in. Yeah, this is, you know, we're going to be a like in our core equity models, we're going to be adding more energy. We'll be increasing the overall energy sector waiting, but that'll also be the time to start aggressively, you know, adding money into an energy specific portfolio. >> Okay. All right. All right. Well, look, we're um we're starting to wrap up here. Um I I'll do a quick see if we can do a quick rant and then we'll we'll wrap things up. Actually, real quick before we do, trades. What trades, if any, have you guys made at RA in the past week? >> None this week. We came into this uh kind of in a pretty good position. Like I said earlier on the show, our our portfolio is down about one one and a half% versus the market three and a half. So, you know, really not a lot to do. We we we carried a really good balanced portfolio up to this point. So, days where MAG 7 hasn't worked, um like for instance, good day, good example is yesterday. Um Nvidia was down 2% at the end of the day. Walmart was up like four and a half. So, you know, that we have these different positions in the portfolio that tend to offset each other. So, if I have a bad day in one one position, I've got another offsetting position. You know, we talked a couple of months ago about healthc care being very out of favor and that we were adding the healthcare stocks. Those have been doing very very well and have helped really kind of balance the portfolio. So, this week we haven't had to do anything. But again, over the next couple of weeks, we're going to be doing tax loss selling. Um, you know, rebalancing the portfolio for the kind of the end of the year and just kind of doing some maintenance and cleanup. So, you know, kind of looking for a bounce here in the markets that might last two, three days and then maybe next week we'll start doing some of that work. >> Okay. Um, but but good to hear that the portfolio is performing as intended. Meaning that even when you know some of your high-f flyers are getting knocked down here, a lot of the sort of stodgy steady readier guys are providing the ballots that you expected them to. >> Yeah, exactly. Yeah. Never count out Warren Buffett. >> Okay. Um I just want to note here um because again markets are still open. Um market has been picking itself up today. Um just looking here, it's up about um you know 1.3% or so on the S&P right now. Um, Bitcoin has started recovering a bit. I think it hit a low of 81,000 overnight. Um, it's now at about 85,000. Uh, and Nvidia is green for the day. Not by a lot. Um, so, uh, >> Google, by the way, Google has absolutely been scorching it over the course of the last couple weeks. That's that's an area we're that's one of the stocks we're going to take profits in. Uh, rebalance that one back to Target. But, um, >> okay. And how much of that is is Google's general outperformance versus the fact that Berkshire Hathaway just bought some >> that that's a little bit of it but but you know and that certainly helped lift it for a day but the reality is is that their AI their their their platform Gemini >> is doing very well um and you know Google makes up 75% of the search market >> and one of our bets is that eventually Google's going to win the a open AI I don't think I don't think chat GPT open AI wins this race. I think Google does and that eventually Google will have 75% of the of the AI space as well. >> So, let me ask you this. Um, so that's not known at this point in time, right? >> Right. Nobody knows that. That's a it's a it's a bad >> So, you you've got two big things going on right now. You've got AI kind, you know, totally eating into search queries, right? >> Right. Um, so it's a lot easier just to say, "Hey, chat GPT, just give me the answer versus putting your query into Google and having to click on all the blue links." Right. Right. >> So that to me seems like a really big a massive threat uh to their core revenue model. >> Right. Um, secondly, >> there's a bunch of hyperscalers trying to win the AI race. Google being one of them. No guarantee Google's going to win that. So my brain says, "Well, you got to put some pretty hefty discounts on Google right now because of that uncertainty." Clearly, the market disagrees with me. >> Yeah. >> What's wrong about what I'm thinking >> because >> and then there's another third thing which is even if Google wins and gets 75 maintains its search share with AI, >> can it make money off AI the way that it can off of uh as profitably as the way it's been able to off of its search business? I don't know because you're getting the answer right away. You're not clicking on a whole bunch of advertiser links. And Adam, you you should know this better than anybody because you used to work for Yahoo. Google Google went to Yahoo and said, "Hey, we'll sell you our search engine for like $5 million." And Yahoo said, "Nah, we don't want it. We're we've got our own search engine." And so they launched >> Yahoo actually used to use Google for a while, but um yeah, it was by a search engine. I think it was by us. And yeah, Yahoo Yahoo passed. >> Yeah, exactly. And so then um Google went back to them at one point said, "Hey, we've got this uh you know this thing going on and and actually Yahoo approached them at that point about buying them and offered them like two billion or a billion. I can't remember what the number was. It was a lot." And Google said, "Nope." And they turned around and launched AdWords right after that and basically destroyed Yahoo on the advertising front. So my point about this is is that the one thing you don't discount about Google is them figuring out a way to dominate the market. They did it with YouTube. They did it with Adwords. They and they did it with search and >> although they bought YouTube. They didn't they didn't create it. But yeah. >> Yeah. But then they then they turned it to the monster it is today. Um but at the end of the day, you know, my bet is that they they'll figure out how to monetize AI efficiently like I've done with with it may not be direct. It may be through another version of like their Adwords or whatever, but this is a this is a company that knows how to monetize a business. And so I that's why we own them and we will probably continue to own them for a long time. >> Okay? And look, you know, kudos to Google. They continue to outperform over the years. But this I'll just be transparent. This is something I'm having trouble with on them, which is I just see layer after layer of uncertainty. And a as the uncertainty gets removed, great, fine. Give them a big premium. But until then, I'm just like, wow. Well, see here here's the here's the problem with that though. And so this is what what as as being the host of thoughtful money that you need to be really careful because people look at you as a really smart guy and they go, "Oh, Adam knows what he's talking about, so I'm going to listen to him." So when you say, "Well, there's all these uncertainties." Your listeners then go, "Well, Adam's saying I shouldn't invest into this and so I'm not gonna invest in Google right now because of Adam's concerns." and then the stock goes up another 30 40 50 60% and they lose that opportunity. It's okay to have I have concerns about this as well. But I know how to invest around those concerns. I can hold a stock that is grossly overvalued, grossly fundamentally disconnected from the market, but as long as the price is trending in the right direction, I can participate and make money on that, which is our job as portfolio managers and your job as the host of this show is saying, "Look, I may have these concerns, but that doesn't mean this stock can't go material higher because this company has proven itself over and over and over again to dispel those dis those those concerns and prove that they are dominantly in the market and that's the thing I would bet on. >> Well, so I I appreciate you bringing this up um because um I mean just >> categorically I don't tell people what to buy or sell now. I understand that somebody can I I understand somebody can make the mental leap that you're talking about there. Um and so I'm I a I'm glad you're giving me the chance to clarify. I'm not saying don't own Google and I said earlier there's something I don't understand but the market clearly doesn't agree with me and that's what matters at the end of the day is what the market thinks but this is again kind of the emphasizing the prime the the uh what is it the the foundational part of what thoughtful money you does here is it brings on professional financial advisors like yourself because I'm saying look I don't have all the answers and what you want to do if you don't feel like you have them all yourselves and I think most people don't feel like they have all the answers themselves is you want to work with an experienced adviser who can deploy all the active management tools that you and your team do, Lance. And so I'm glad you're giving us a chance to really uh to really underline that here. >> Yeah. And let me clarify my point. So I don't want anybody to infer that I'm saying go out and buy Google today. >> Yeah. Because you're telling everybody to buy Google calls handover fist now. >> Exactly. This is this is a weekly chart of Google and this advance. Why why Warren Buffett actually bought Google here, I'm not quite sure, but he's his own he's his own man, right? So, >> well, I'm pretty sure it wasn't Warren who bought it at this point. I think it's the new guys, but yeah, >> it could be. But, you know, this thing is three standard deviations above its long-term moving average. Historically, when it gets to these levels, you remember I did this same chart on gold a while back and I said, "Look, you know, when you have these big type of deviations, you're going to get corrections. It doesn't mean the end of the world. It doesn't mean don't own it. But to buy it here, the the real reality is, and this is why we're going to take profits in it, rebalance it back to portfolio weights, maybe even underweighted a tad because a pull back to 200 or 220 on this stock is not outside the realm of possibility. That would just be a pullback to the longerterm moving average, still being a bull market trend. Extremely overbought on a relative strength basis. Momentum is extremely overbought. Every measure says this stock is going to correct at some point and it always has. Um, and you need to be aware of that. But on a pullback, if you got the correction back to these levels, I would certainly be a buyer. >> Okay. All right. Um, so it's so funny because now you were you were disparaging me saying, "Oh, I'm not Google." No, I I I know. But but but actually give me a chance to say this, which is >> I'm going to continue to do this though, which is because of thoughtful money, right? is is my job is to say, "Hey, here are things. >> I'm trying to understand this market just like everybody else is and we're sort of collectively trying to understand this together. So, when I see things that don't make sense to me, I'm going to raise them to you because you may have a piece of the puzzle that I don't have." Right. >> No, no. And and and look, and that's that's that was the only reason I pointed this out. I'm not disparaging you at all. And I and and nobody should take our conversation right now away as me like, "Oh, Lance was beating up on Adam." That's not at all because like I said, you're a very very smart guy. You've been you talk to a lot of very smart people. You're a very smart guy and people look up to you and that's the risk you have as a public person as you are. And you know, we have this this moniker of thoughtful money, right? We want to be thoughtful about our money. We don't have a view one way or the other. It's not bullish. It's not bearish. We're trying to tell you what's the right thing to do with your money for your personal situation. And again, this is why you need to go have financial counsel with somebody. Don't just take our word for it, right? Go do your own research. Go do your own work. We're just giving you ideas and things to be thoughtful about. And and so my point is, Adam, is that we just need to be careful that people don't take something that you say and just infer it to mean something else and then go make decisions that hurt them financially because that's the one thing we're trying to avoid. We want to make sure everybody does the right thing with their money long term. >> Yeah, I completely agree. And and just to expand Lance's point there, yes, don't take anything I say as gospel and don't think don't take anything that Lance says as gospel or any other experts on >> I don't know what the hell I'm doing over here. [laughter] >> Yeah. And again, folks, again, this is why uh I I I think um hopefully the value of this program is is um we do try to kind of scratch through everything and to try to get a sense of of a truer sense of what reality might be. But then of course it's all about okay, well then what do you do about that, right? And the answers to that are very specific to you and your personal situation. And that's why I think for the vast majority of people who aren't excellent uh you know DIY investors with a with a a long track record of of outperforming on their own, that's where you should seek professional counsel and say, "Hey, this let me educate you about the specifics of me. Now you help me think through what makes the most sense for me given these insights that that we're learning, but but mapping them to my particular needs and wants and goals. So anyways, >> all right, don't need to beat that horse anymore. I think folks got it, but good. It's always good to remind people of this. >> That was a good rant. We're done for the day. Thanks for coming. >> Yeah. Yeah. Well, here we'll do we'll do a micro rant and then we'll we'll wrap it up. Um so uh Elon Musk was just interviewed and he said that he thinks in 10 to 20 years that work will be optional and that money may not even really be relevant anymore uh because of AI, right? That we're going to have robots that do everything for us. They they you know grow our food. They give us healthcare, you know, they delight us with all sorts of forms of entertainment and stuff like that. So, it's going to be sort of the Star Trek future of just like, hey, technology will do everything for us and we can kind of be our best selves. Um, and and to be honest, folks, I didn't watch the full interview. I've just seen the headlines that have come out around this. Um, so I don't know exactly what M said, but uh, you know, obviously this is a guy who's sitting in the epicenter of technology and he's looking at, you know, where he sees things going. Here here's here's two big questions I have for that assuming he's right for a second. Um one is is that a net boon for humanity, right? Like like people my opinion you've heard me everyone's heard me talk about the three big pillars of true wealth, right? Which is quality relationships, health and purpose, right? And if you remove purpose, right? because work our our purpose is is not 100% but but heavily tied to kind of what we do for a living, right? And if we if we remove people's need to be purposeful, um what does that do for society? And yes, we could say, oh, well, it frees us up to learn everything and build these new skills and whatever. We know what happens when we give people advanced technology. They generally use it for our basist desires, right? We watch porn and cat videos and all that stuff. Um, so, so >> at the same time, >> there's that question. And then the second question I have for you, Lance, is >> if he's, if this is true, right? Um, we are changing the human experience. I mean, since the first, you know, uh, homo sapien crawled out of the cave and had to go get food to be able to eat, you know, at the end of the day, humans have had to do work to survive, to exist, to thrive. If we are removing that, it will be the first time in our human experience where we wouldn't need to do that. Is is that something that maybe we should just like have a vote on or something like like we're just we're barreling to this future with the presumption that it's it's the right thing to do. But if we're going to change something that is so core to humanity, shouldn't there at least be a national dialogue around this? >> Yeah. You know, the problem is that yeah, the answer to your question is yes. Sure. Right. But then ultimately at the end of the day, you you really can't stop what's coming, right? The the innovation is coming. It's here and it's just a function of how how how it turns out. And you know, you know, George Jetson had to still go to work every day, right? So even though they had robots in the house and everything else, he still had to go to a job every day. So I don't know if if >> in that fictional cartoon future. >> And I know I'm just saying I'm just saying we we this is all a fictional future. We have no idea what the future's going to look like. U but my point is is is that you know I agree with you 100%. People need purpose. If you if if I don't have a reason to get up in the morning, there's no reason to get up in the morning, right? And and I don't think that's a good outcome because if if you know there's an old saying about idols idol hands or the devil's war or devil's playground >> and we've and to your point, we've proven it with social media, right? We've have done the most negative things to society that we can possibly imagine because of social media. You know, I've said this before is like if Albert Einstein ever came back and said, you know, what was the greatest invention since I died, everybody goes, "Oh, look, it's right here. We have all the we have all the knowledge of the universe in the palm of our hand." And he's like, "Well, great. Everybody's very smart now." Right? It's like, "No, we just sit around and tweet mean things to people we don't even know. That's on the toilet, right? That's >> I I'm pretty sure the two things that he would realize when he comes here is he would say, "I'm amazed at at your technological innov." Exactly. And so so no I don't this is like UBI you know universal basic basic income that has never worked out well. They've run live experiments on this. It did not work out well. People did not become more productive. They did they did not go out and pursue higher education or other hobbies or anything like that. They just took the income and just lived their same lifestyle and and it deteriorated. Well, they became dep become dep I mean we we've seen that subsidization of lifestyle leads to dependency not to elevation. Yeah. >> Yeah. And so so the outcome of this is not good. Um you know the and again what we're going to wind up with in society is a very bifurcated society. There's going to be those that can harness the power of AI. They're going to be able to make money with it. They're going to have the wealth. And then there's going to be everybody else. >> This is my lower eyeshaped society. Lowercase eye shaped society. It is. It is absolutely gonna be the case. I just interviewed Peter Atwater. We've got his inter we're gonna run his interview next week. I just interviewed him. Talk about the K-shaped economy. But, you know, this is going to be a K with a very long lower limb going out of it. And it's not going to be good. And eventually, you know, I I think people have to rebel to some point. I think a really good picture of the future is if you've never seen the g the the movie Ready Player One, you should watch the movie. Um, I think it is a really good prediction about where we wind up with the future based on what we're doing today. >> Right. And a fair adjective for that is dystopian. I don't think it's a future any of us aspire to get to. >> Every everybody's super poor except for the people that own the corporations. >> Okay. Well, um, again, like many things uh happening at the macro level, we don't have to like it. Um, and it it it might be something that we can't control in terms of what happens, you know, to the average of society. But of course on the individual level just like in you know with investing um you know we can take charge of our own destiny. Um and you know my advice here for folks is learn enough about AI to make it work for you versus against you but also um you know um focus yourself on you know what can I be motivated to do when I wake up in the morning and you know raise your children in such a way that they understand the value of work and I don't mean work as toil I mean work as purpose and meaning in your life. >> Exactly. Yeah. >> Yeah. All right my friend. Well, look, um, you know, thanks. Another great week. Um, happy Thanksgiving again to you and everybody watching. Folks, if if you think, uh, the best way to inject more purpose in your life is to continue to watch Lance Roberts on this channel week in and week out, please let them know that 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, I'm about to tell folks to go fill out the form to go talk to you, Lance. uh you know if they want to get some guidance. Real quick though um because Thanksgiving is is just a few days away, we are getting really close to those year-end deadlines, right? For things like tax loss harvesting and taking your required minimum distributions, charitable giving, stuff like that, right? So this it's actually a important time of year to sit down and and make sure you're doing all those steps. And if you aren't clear on what you should be doing, then obviously that's something your firm can help people think through, right? >> Yeah. Yeah. And look and and please don't wait till the last minute. You know, every year people like try to come in the last week of the year and do their RMDs, do their distributions, do those type of things. Don't wait. You, you know, some of these things have to be done before the year closes out. Otherwise, you suffer potential penalties. And if you get really close to the deadline, you know, these big firms like Fidelity and Schwab, if they get backed up and you run the risk of of that not getting completed on time, if there's a paperwork snafu or you forget to sign a dotted line somewhere and those things happen, give yourself some time. I, you know, if you got to, if you're, you know, over the age of 72 and you need to do your RMDs, I would start working on that now if you haven't done it. um you know doing your tax lost harvesting, your charitable giving if you need to set up things like a um you know a donor advised fund uh those type of things those can be done. They can be very tax efficient be very friendly for you tax- wise but it takes time to set up. So again, give yourself a little bit of time. Start thinking about that now if you don't know what a donor adise fund or if you don't know how to do charitable giving those type of things and and the most tax because you can donate. You don't have to sell stock and go donate cash. You can actually give stock as part of your charitable donation for the year, but give yourself some time to do it. Don't wait till the last minute so that you get behind the the behind the deadline. >> All right. All right. So, folks, if you'd like help with any of those year-end activities or just positioning for some of the more macro, you know, trends that that Lance and I were talking about, uh, if you don't already have a good financial adviser who's um, advising you on that, then feel free to talk to one of the ones that thoughtful money endorses. These are the firms you see with me on this channel week in and week out. Perhaps you'd like to talk to even Lance himself there at RAA. To do that, just fill out the very short form at thoughtfulmoney.com. only takes you a couple seconds and the firms will be in touch with you right away after you do that. Uh, Lance, my friend, it's always great. Uh, I'll give you the last word as usual. >> Um, happy Thanksgiving and um, we'll talk to you. I guess we're doing a show next Friday. >> If you're a game, I'd love to do it. I'm sure folks love to watch it. >> I I may be fat, dumb, and happy, but yeah, I'll be here on Friday. >> All right. I will, too. I'll be on the road, but we'll do it. It might be a little bit shorter just to let us uh, spend some time with our families, but I appreciate you being open to that, Lance. >> Yeah. No, we can do that. We just do a little short, you know, 30 minute one or something and just catch up. You know, it's gonna be a light trading week anyway. Markets are closed Thursday and half day Friday. So, yeah, we just do something to just kind of catch up where we are. >> All right. Well, thanks, buddy. I'll see you next Friday. And folks, you'll see us next week. Everyone else, thanks so much for watching.
Did The Market Just Break? | Lance Roberts
Summary
Transcript
Now, we are starting to see the 50-day flatten out. We're starting to see the 20-day moving average turn down. That's not a great sign. That doesn't we we've seen these wiggles before and then they correct themselves, market takes off running again, everything's fine. But if we begin to see this kind of price action begin to flatten out or deteriorate, I'm going to become a little bit more concerned about the amount of exposure we have in our portfolio and begin to kind of start looking to reduce. But again, I'm going to I'm not going to do that here because markets are decently oversold. I'm going to look to reduce exposure on a bounce and rebalance. Welcome to Thoughtful Money. I'm thoughtful money founder and your host, Adam Tagert, welcoming you back at the end of another week for another weekly market recap with my good friend, the tryptophanic portfolio manager, Lance Roberts. Lance, how you doing? >> Not yet. Not yet because I'm not a big turkey eater to start with. So for Thanksgiving, I have brisket, sausage, chickens, all barbecued, right? I'm in Texas, right? So we're doing a traditional Texas Thanksgiving, which is brisket, sausage, ribs, and chicken. >> So tryptophan is only for you people that live out west that eat turkeys. >> That's not true. I grew up in New England. We had a lot of turkey on Thanksgiving. Let's all have lobster up in New England. >> Well, hey, we started the turkey Thanksgiving right back in Plymouth Rock. Man, >> this is true. This is true. >> Um, well, anyways, first off, happy Thanksgiving in advance, Lance. Um, happy Thanksgiving to all the viewers, too. It's funny because as we hopped on, you mentioned being sleepy, and I said, "Well, wait till you hear the word of the day." So, >> well, it makes complete sense now. Yeah. >> Yeah. Um, I'm going to believe that uh whether there's tryptophan or not in brisket um that you're still slipping into a big food coma after you eat all that. >> Oh, yeah. Of course. Of course. You know, that's that's just tradition. You know, eat a big lunch and then take a nap on the couch. Absolutely. >> All right. Well, you know, um there's a lot of people that are feeling, I think, um not sleepy right now. I think they've actually had a sleepless night uh last night. Uh we're recording this Friday morning. Um markets are still open today as they usually are as we record on Fridays. Um but uh the day before Thursday uh seemed to be a very material day in the markets, Lance. Um big reversal. >> Um I think one of the bigger reversals we've seen in the market all year on a on a you know intraday basis. Um and what was notable about it was the market had been weak as we've been tracking over the past couple of weeks. >> Yep. um you know some some doubts and concerns are starting to creep in about the AI trade. So the world was waiting for baited breath uh for Nvidia's earning release uh to see if Nvidia could kind of respspark this market back into rally mode and Nvidia delivered what the doctor ordered. I mean it it delivered great performance. It delivered uh just stellar guidance. Um the stock popped I think 5% or so in the aftermarket the night afterwards. Um as the markets opened on Thursday. Uh Nvidia was up I think almost 6%. Uh the indices were up in in the green and then all of a sudden it all reversed and Nvidia ended up closing the day down I think a little bit over 3%. Um, another really big sort of riskon asset uh speculation um measure of speculation in the market, Bitcoin just got continue to get clobbered throughout the whole day. So there's a strong question hanging in the air right now, which is has the market now uh really shifted from the risk mode it's been in since May into risk off. Um, probably still a little too early to tell for sure, though I'd love to hear your thoughts. But right now, you know, Wall Street is sort of sitting on the edge of a pin watching the market really closely trying to figure out where things are going to go from here. So, with that context, Lance, uh, enlighten us. What What the heck just happened? >> Nothing. Um, I mean, look, you know, the markets have had a huge run since April, and, you know, they got very far ahead of themselves. I mean, Nvidia is up over $100 a share since since those November lows. So, you know, again, a pullback in the markets is not surprising. And this is why we talk a lot about risk management. You know, when markets really overbought, they're extended. Take profits, reduce your risk, rebalance your portfolio, don't speculate, don't use leverage, because again, you're going to get these corrections from time to time. And, you know, the the reversal yesterday was really a lot related to today, which is the largest November options expiration on record. So there was just a lot of unwinding of contracts yesterday. Uh people that were short tech going into into yesterday's earnings reports had to cover that yesterday. So you're just getting a lot of that action. So just a big pick up in volatility, but again we're getting ready to move into the end of the year. So again, really the tailwind for the markets are still very much in play. You've got buybacks at five to six trillion uh five to six billion dollars a day. You've got a lot of professional managers that are underweight equities that are underperforming for the year. there's going to be pressure for them to start buying into the markets here and and again just from a technical basis right all we've done is had a bit of a pullback and and again this is why you know we always talk about you know risk-taking and you'll remember a few weeks ago we were talking about the risk when all all assets correlate to one you know gold was gold was surging I think I said here on the show I was like it's going to be a great short setup here shortly um you know Bitcoin was surging stocks were surging everything was going up at one time and you know whenever you have those correlations do that that just that's that's not you know people try to apply narratives and say well this assets doing this because of this reason and this asset's doing because of that reason that's just rationalization to try to justify why all the prices are rising together but when that occurs that's the perfect setup for the market to have a correction and again you know the market's down you know the S&P's down three and a half% from the peak I mean it's we're not even in a normal 5% correction ction yet. So, there's still more downside to go. Now, if you were invested in levered assets like Bitcoin and some and levered ETFs, you've taken a pretty tough beating over the last, you know, two weeks in particular, but this is a very normal correction. I wouldn't I wouldn't be stressing out making any major changes to your portfolio. This isn't that type of environment right now. >> Okay. So, um that that's good to hear the common sense of, hey folks, you know, world's not on fire. Um Let me ask you this and we're going to get to the TA in just a second. You can walk us through. Um obviously too early to answer this question. Um but I think one of the concerns that's being raised right now, especially given yesterday's um market activity is a number of the people that I have interviewed on this channel who have been skeptical of the sustainability of what they see as a bubble, a price asset bubble in AI stocks is they've said what you want to watch for is the moment where Nvidia, the darling stock of this sector, delivers yet again just better than fantastic results and yet it's not enough to power the party higher and that that's you know you can say that's what we saw yesterday. Now is that the definitive top of all this? You know who knows? Um we're going to need time to find that out but I think that's the big concern that people are questioning right now. So, Lance, what what would you need to see here to uh to say, "Hey, I think this is actually maybe potentially starting to morph into something more significant than just a garden variety pullback." >> Well, you're going to, you know, you're going to need to see, you know, are we talking about just Nvidia or we talking about the whole AI market or >> No, I think this is the whole AI market, right? >> Okay. Well, what you're going to see is a is, you know, a breakdown of, you know, technical supports across the board, a reversal from the bullish trend to a negative bearish trend. But again, we've seen this before. Um, and again, you know, you you'll remember you interviewed some guy, you know, probably two years ago that was talking about shorting, you know, buying shorts at Nvidia and other types of things. And, you know, that was a horrible idea. And, you know, Nvidia has rallied very sharply since then. And you know the problem is as we go through these periods you'll remember August of 2020 uh June through August of 2024 the markets were down 10%. What was the reason? AI trades over the you know this this is the the bubble's unsustainable. You know this is you know this is the end of it all and markets were down 10% and then in October that was the bottom and then the market took off running again. April we saw the same thing. So we keep seeing the you know every time the market goes through a correction immediately people that are looking to make a headline for themselves run out and say oh this is the top you you know better get out of everything you know we're way early and and even Nvidia talked about this yesterday we are way early in this whole AI development thing. Um it's way too early to be calling this a bubble or a top or anything else. We're just getting started on this and this is not a race. You and I talked about this last week. This is not a race we can choose to lose. So, you know, the amount of money that's going to be spent on these in these markets that are going to benefit these companies is only getting started. It's not ending. So, you know, if you're really worrying about the top of the AI, you know, that's fine. And we may and we're going and look, we're going to have some pretty significant corrections. You know, 10 20 30% corrections in some of these stocks is not going to be surprising. I mean, you know, there and and there look, there's going to be some companies, and I'm not saying that all companies are going to do well. Um, you know, companies like Olo and and Cororeweave and others, they're under a tremendous amount of pressure. These may just be short-term corrections, but those stocks are down 20 30% from their peaks. They may very well find a bottom and then have a a renewed sense of buying if they can really start to establish their place into the markets. But, you know, again, this is why you have to be selective in any type of environment about the companies that you own. And and so you know just being aware of that you know buying we talked about this last week you know buying fundamentals and those type of things are very important and that's why in our core equity models that's what we focus on we focus on fundamentals growth free cash flow those type of things. Now we do have the thematic models which have all kinds of of risk to them and if you if you want to gamble the you know roll the dice and take on a bunch of risk we got a portfolio for you right um but you know those are all based on companies that should you know do very well over the long term. It doesn't mean that every one of those companies will survive, but they're positioned in the right place to participate in the development of the market as it continues to go forward. >> All right. Hey, and speaking of those thematic portfolios, um while you were out last week, um Mike Leoitz mentioned that you guys did indeed launch the oil and gas portfolio. We didn't get a chance to talk about that in depth, so maybe we can reserve some time today, Lance, to have you walk us through it if that's okay. >> Yeah. Yeah, that's fine. >> All right. So, I want to I want to just clarify something you said to make sure I understand it. And look, um, you know, I've a lot of people I've interviewed, you know, lately have said, "Hey, you know, um, sure, I got lots of concerns about, you know, whether the AI sector is in a bubble or not, but I'm not yet willing to stand in front of that train, >> right?" Uh, you just had Mike Green on who basically just, you know, sort of side with resignation and said, "Look, I think this, you know, giant mindless robot is just going to keep winning the day." uh until at such time it doesn't but I'm not seeing any signs that it's starting to crack. So uh you know I I I very much get the like um hey look this thing could could still have a lot longer to run. Um but you know I I think there are equally valid concerns uh that about valuations and and we'll talk in just a moment you know about the integrity of the spending that's going on in this space right now. Um, so I don't disagree with the comment you just made of of hey, the spending in this space over the next decade is highly likely to be tremendous because even if the companies aren't able to do it themselves, the government is likely to step in because as we talked about this is a kind of an existential priority that the US sees it needs to to to win on the world stage. Um this is a national this is this is so the government has two jobs and only two jobs in the world we talked about before national security and infrastructure and this is both of them >> right but but I just want I just want to clarify that does not necessarily equal tons of profits for these companies >> it is it is probably correlated with it and there are times like now where these companies are going to be getting fat at the trough but you know it it doesn't mean that oh well then stock valuations for these this sector is guaranteed to a straight elevator ride higher, you know, forever, right? >> This is why I'm saying you have to be very, very selective about companies that you're buying long term. And again, so we're talking about two different things here. So, one, if you're speculating in the AI trade, that's a very different thing. If you're trading short-term stocks, that's awesome. Like those thematic models, they're fairly short-term in nature. Um, if you're buying long-term, like our core equity models are long-term investment models, right? So we're looking for companies that are going to be here 10 years from now, 20 years from now, 100 years from now, and they're going to participate on that. So, you know, there's going to be, you know, companies like Nvidia, they're in a very good position because you build out a data center as an example and you put in all the new Blackwell chips. Well, eventually there's going to be a better chip that comes along and Nvidia produces it and they're going to have to replace all those chips. So there's a consistent revenue source for Nvidia on that side of the data center. If I'm just building the data center building and I'm charging rent for it, once it's filled up, it's filled up. My my rent stabilizes except for inflation. Right. >> Right. Well, and there's a thousand companies that can compete in that space, too. >> Exactly. And and then there's going to be a lot of companies that provide AI software. Right. And so, you know, I'm I'm I'm a company that provides um AI agents for, you know, agentic, you know, kind of uses, but then somebody else comes along with better AI agents and then my business is out of business because nobody uses them anymore. So, you know, there's going to be company, and again, this we saw this in the dot era. There are going to be companies that survive. Um, and there are going to be companies that profit enormously from what's going to happen with AI. There's going to be a lot of companies that go away. um you know the core weaves, the applied the you know a lot of these other ones maybe you know maybe they survive maybe they're the winners maybe they're not um there's other there's other openings in there for those companies to displaced by somebody else that can do the job better cheaper faster whatever or or just differently than what they do and that's where everybody tends to go. >> Yeah. And so look, there's there's a couple types of risks here. And the one I started asking about, I just want to put a bow on here because I know it's important for a lot of viewers here, which is it's more the overvaluation, the potential overvaluation risk here. And the reason why they care about it is they don't necessarily care about >> Nvidia specifically as a company, but they care about Nvidia's supreme importance right now in terms of of of driving the indices in the general market. And so there's a fear that like, hey, if these things are overpriced and they go through a 30% price correction just because, right, the the world just wakes up and says, hey, you know what? We we pulled too much of tomorrow's value into today. >> Yep. >> I'm worried I'm going to be collateral damage that even if I don't own Nvidia because the S&P is going to tank. All these other ETFs that that because of the giant mindless robot, you know, have huge positions in these things. even though I wouldn't necessarily think whatever general ETF is is loaded up on Mag 7, but they just are because they're such a huge part of the market. I think that's the that's the fear that most folks have. But anyways, what I hear from you saying is is >> valid concern, but not time to panic on it because you're not seeing technical signs that that's risk is in play. >> Yeah. No, no. And that's that's exactly the point. Yes. You're you're going to have 20 30% corrections in the in this market, right, as we go through whatever this is going forward. It doesn't mean hey it's it's happening now and it doesn't mean it's going to happen tomorrow. I mean it could be next year. I have a lot of concerns about next year. Um you know there's there's a lot of displacement between earnings expectation and economic growth next year that I can't quite wrap my head how you know how you're going to justify that. So at some point there's going to have to be some type of of reassessment of those type of issues as we move into next year. But again, this this is this is what separates out the individual which tends to vastly underperform over time versus, you know, a well ststructured, disciplined investor that tends to succeed is that you have to understand that those are things are going to happen. This is why we talk about managing risk, you know, taking profits, rebalancing, those things um that we do so often. And I get a lot of emails like, you know, you know, you're you know, you're rebalancing here and the market's just going up. Yeah, I do that all the time. You know, we're getting ready to go into the end of the year. We'll do tax lost harvesting. We'll do rebalancing going into the year to, you know, be more tax efficient with portfolios. Things that you should absolutely look at doing in your own portfolio. But again, when the technical market starts to, this is why we focus on technicals is that eventually we're going to start getting technical signals that say this market is about to go through the process. And this is why we got out of the markets in in 1999, early 2000s. Well, we got out of the markets in 2007. It's why we got out of the market in February of 2020. Why we got out of the market in in February, not and when I say get out of the market, I'm not talking about we went to 100% cash. We reduced a lot of our exposure. >> Um, same thing in in February of this February, March of this year, we were lightening up on positions because those technical indicators were starting to tell us, hey, we're getting set up here for a bigger correction. We don't really have that just yet. We we have cons there's some short-term concerns here. This could be a three or 5% correction. we might get a little bit of a bounce and then I would expect another correction in the first two weeks of December as mutual funds distribute all their incomes and capital gains for the year and then you'll be set up for kind of a year-end rally. So, you know, again, that whole thesis still kind of plays out and we're about to go into, you know, holiday Thanksgiving week next week, which is where the inmates run in the asylum. All the traders are leave after today's OPEX, all the traders are leaving for the Hamptons. So, they're gone. um you know so next week it's just all the retail traders running around you know buying stuff and so we'll see what they do but but again it's just you know we're just going through a bit of a consolidation a correction phase here after a very very again just people forget just and again we you and I have talked about this before when markets are going up everybody's smarter than they think they are right because market like I can't go wrong I just throw money at the market and I just I just make money it's it's >> it's the other way around they're not as smart as they think they [laughter] are. Yeah. But yes. >> Yeah. Well, that's what the market proves to you pretty quick. And remember, everybody was chasing gold. They were chasing Bitcoin. There was It didn't matter what you bought, it was just going up. And you know, those are those are the things you worry about. You don't worry about these corrections. This is an opportunity to put some capital to work if you were smart enough to take some profits previously and have some cash sitting on hand to put to work here. >> So, a a couple of things. So, f first off, um I'm I'm glad you you just clarified there that um you cited those periods of time in recent past where you guys reduced your exposure to equities because you were seeing technical signs that that things could be degrading here. >> Sounds like you're not at that stage yet. You're not doing that right now. >> Okay. You're shaking your head. Okay. Um so that's really good to know. Um >> to your point there about um yeah, some people being smarter than they think they are. There there's a guy I'm not going to mention his name, but there there's a guy who I don't know a couple months ago I started noticing was just like totally slamming me on X and I had no clue who this guy was. >> Not me. >> It wasn't. Yeah, surprisingly it wasn't you. Um but a guy who headed >> I never slam you on X. That's I don't do that. >> You just slam me live on YouTube. No, I appreciate [laughter] that. Yeah, you like to look me in the eye when you >> only because I love you like a brother. So we have a we have a brother relationship. So yeah, I pick on you a lot. I'm older, so I'm the older brother. I get to pick on you. >> Yeah. Well, I I was the younger brother growing up, so I'm very used to that role. Um, but anyways, uh, this guy, you know, was basically just saying, "Oh, you know, Tiger's one of those doomer perma bears, and he, you know, never had anybody on his channel who had anything positive to say and, you know, all this stuff, whatever. The guy's entitled to his opinion." But he just kept coming after me. And um you know, a lot of a lot of people who were following him were starting to to tweet me and say like, "I don't know what's going on with this guy, but I don't I don't know why he's he's going off like this." And I I went to his Twitter feed and noticed that I wasn't the only one getting his eye and he was going after a bunch of other guys. And to me, it seemed pretty clear that this guy was trying to punch up, like, you know, trying to trash people who had bigger followings on X in order to hopefully kind of, you know, gain notoriety and build his own following. Um, so whatever. You know, I just put him on mute and didn't really think twice about him. Um, I had some people send me uh some of his tweets yesterday because the whole time he kept saying, you know, everybody should be watching me because I've been crushing the market and I know more than Goldman Sachs and Morgan Stanley and I've just had this fantastic thing, right? And then yesterday was sort of a Maya post on him of like, oh gosh, you know, I didn't see this coming, you know, I really got zorched, you know, yesterday and all that stuff. So it just it did seem like a great example of what you were just talking about, Lance, is these these people just get on a high. They they're riding a tailwind that they think is, you know, they begin to interpret as because of their own genius where they're just really riding this force of nature. And as soon as that forge of nature zigs when they thought it was going to zag, you know, they're they're they're left uh for gravity to take over. >> No. And look, and you like, you know, we were talking about earlier, it's like you said, you don't see any signs of the market breaking down, you know, right now. and and no I don't there's there's not you know we don't have big volume spikes we don't have a lot of things you know credit spreads aren't blowing out those type of things so but that doesn't mean it couldn't change tomorrow I mean next week we could get on the show it's like hey we just cut 15% of our equity exposure this week because AB and C happened >> we're never just just to be clear we are never going to buy the bottom and we're never going to sell the exact top we may get lucky right but generally we're early getting out and we're late getting in and that's just, you know, but that's how we navigate markets over time. And, you know, I try to realize that I'm not smarter than the markets and I'm just trying to follow along with what the markets are telling me. But this is but but again, this is the risk. And again, to your point about, you know, the kind of the tweet exchange you were having. I get a lot of that, too. People, >> by the way, I wasn't exchanging tweets with this guy. This is all one-sided. Yeah. >> Yeah. I know. It's always that way with me, too. I never respond either. Um, but you know, I get, you know, people take something out of context that, you know, like I was on Adam and I and and you know, I said, "Hey, yeah, the markets are going to, you know, markets are going to rally until the end of of the year, so it's no worries." That's not what I said. What I said was is like we could have some, you know, some corrections along the way, but the bias to the end of the year is higher because of earnings, because of buybacks, because of these other things. The the the seasonality of where we are over the next few months. It doesn't mean it's going to be a smooth ride higher. there's going to be some bumps and corrections and we're in one of those right now. So, it's always important to keep things kind of in in context of what's going on and just understand that this is why we we do rely on technicals to try to give us some idea because all you know, let's back up. I did a whole I did a whole segment this week on the real investment show talking about technical analysis. Um on Tuesday's show actually was our two dads on money episode. We did a whole thing on technical analysis. So if if you're interested in getting a complete explanation of how we do technicals, just go look up our two deads on Monday this week. Um but you know, we were going through that and explaining that this is technical analysis is a picture into what the whole market is thinking right now, right? This is this is buyers and sellers in the marketplace and they both think, you know, the buyers think they're right, the sellers think they're right, and they're all meeting their minds at a certain price in the markets and and that's what's going on. That's why technicals are so good for you to understand at least have a have at least a modicum of understanding of technical analysis if you're investing your own money because it's telling you what the market's saying. You can have your own narrative all day long, right? Dollar debasement or the world's going to end or the AI bubble's going to blow up or vice versa, right? You know, AI is going to go to the moon and there's no stopping it. Um, that narrative is fine, but is the market agreeing with you, right? And that's why we always go back to the technicals and say what's the market saying. It doesn't matter what my opinion here here is with you. I can I can spout stuff all day long with you. It doesn't matter what's the market saying. And so that's why when we get down to portfolio management and we talk about that, it's always back to, you know, managing risk, managing exposure, those type of things because we're paying attention to what the market's telling us that it's doing. And whether or not we agree with it is irrelevant. It's what the market's doing that's important. >> Right. You're right. when we say look you know you trade the market you have not the market you wish you had >> technical analysis is what tells you sort of defines the market that you have right so >> totally get it all right so speaking of technicals Lance can you pull up the TA here >> um let's let's take a look at where we are in terms of the moving averages the Ballinger bands and all that stuff um >> and uh yeah well let's let's start here with the S&P and and see where we go from there >> so so a couple of important things have happened here over the really over the last two weeks and and again we've talked about two things over the you and I have talked about two things over the last several weeks that have been concerning and one was this negative divergence in relative strength. So uh we've talked about the weak breadth of the markets. You know we've had a lot of stocks not really participating with the markets. It was fairly narrow. That's never a good sign. And you had this negative divergence. Relative strength was declining in the markets even though the market was still rising in price. that always tends to occur before you get a correction in the markets. Now, when we've had this before, you know, we saw this very same type of negative divergence back over here and and this was one of the reasons back in February and March that we were reducing exposure before the market broke down was because we had that same same type of negative divergence and then finally the market gave way in April because of of of the whole tariff issue. Um, we don't have the tariffs issue right now hanging over the head. there's no big kind of catalyst to drive a major downturn. So, that's why we're not as concerned as we were then. Um, but it's still important to pay attention to. Now, you know, the markets had this really big run right here in late October going into early November. So, the markets got really overbought on a short-term basis, pushed up in overbought territory, but you just had this really big sharp advance kind of out of nowhere. And markets got very deviated above their means. And and this is what we started talking about a few weeks ago. You and I were saying, "Hey, markets are very deviated here. Take some profits, kind of rebalance risk, those type of things because we're probably going to get some type of consolidation or a pullback." And that's what's happened here. And so, we're currently sitting on the Now, the the important thing was is we broke through the 50-day moving average. That was that's this blue line. So, we were above the 50-day moving average for don't quote me on the number, but I think it was 139 days. It was like one of the longest stretches above the 50-day moving average we've had in quite some time. >> Yeah. I mean, pretty much since the end of April, it looks like. >> Yeah. Yeah. And but I mean, I'm talking about the length of the the stretch. >> No. No. I know. Yeah. >> Yeah. It was just a very long run. And and that's and and there's nothing wrong with that because all a moving average is is it just tells you what the average price was over the last 50 days. But what is unusual is that when it stays above that 50-day moving average for a very extended period of time because an average means the price of the market was both above and below that average over the last 50 days. And that's why moving a that's why we like moving averages a lot because they really kind of tell you where support is and they kind of tell you what the trend of the market is. And so the good news is is that up to this point the 50-day moving average is rising, the 100 day is rising, the 200 day rising. So we're seeing over the last kind of long period of time prices have been trending higher. That's good. But moving averages act like gravity and you're eventually going to have a that that gravitational pull is going to pull prices back to that average or below it. And most and and that's why we talk about mean reverting events. What's a mean reversion? A mean mean is the average and reversion is basically prices are reverting back to that average. That either means from above it to it or below it or from below it back above it. So that's the reversion. You have mean reversions in both directions. So right now we're having a negative mean reversion. Stock prices have come down. Now the good news is today we're we're decently oversold. We're not extremely oversold but we're decently oversold enough here for a bounce and markets are bouncing off the 100 day moving average. This is of of what time is it right now? It's um 10. So it's 10:35 Houston time on Friday. So we're just two hours into the markets. Um so this could and again today's opex day. It's a very it's the largest November opex on record. How this day ends I have no idea. It could be positive, negative, whatever by the end of the day. But right now we're trying to hold on to that 100 day moving average. So that's that's some okay news for right now. That could give us a bounce. In theory, we could see this market bounce from this condition back up to around say 6200, which is the where the or sorry, uh 6,700, which is where the 50-day moving average is. That's a decent little bounce here. If you get that bounce and you've been under a lot of pressure in the markets, I would sell some stuff on that bounce. I wouldn't expect a an immediate retracement back to all-time highs. So if if this decline has really weighed on you, so for instance, this is about a three and a half% decline from the peak. Our portfolio is down about one and a half. So I don't have a lot of pressure right now to do anything because our portfolios are holding up very well. But if your portfolio is down 7, 8, 9% from the peak, then you've got too much risk in your portfolio. So I would use that bounce back up towards 6,700 to maybe reduce some risk, rebalance some exposure. Now, we are starting to see the 50-day flatten out. We're starting to see the 20-day moving average turn down. That's not a great sign. That doesn't we we've seen these wiggles before and then they correct themselves, market takes off running again, everything's fine. But if we begin to see this kind of price action begin to flatten out or deteriorate, I'm going to become a little bit more concerned about the amount of exposure we have in our portfolio and begin to kind of start looking to reduce. But again, I'm going to I'm not going to do that here because markets are decently oversold. I'm going to look to reduce exposure on a balance and rebalance. >> Okay. So, um let me let me ask this question. Um when you were talking about, you know, mean reverting and uh these things act like gravity, which you've mentioned many many times before. >> Is a good way to think of moving averages is they tell you where the puck is headed. >> They just don't tell you when it's going to head there. Um they tell you to Yeah. That >> because mathematically you have to get back to the mean right at some point, right? >> Yeah. It's the timing issue. Yeah. The the answer to your question is yes. What moving averages tell you and and and again it it's when really when you're in extremes is is even more important. So again, >> this this this right here, this spike where you spiked well above this gap between the 50-day moving average and where the price is, that's that's deviation, right? you're deviated from that 50-day moving average. So, think about it like a like a a rubber band. You know, if I stretch rubber band as far as I can in one direction, eventually I've got to relax the rubber band before I can stretch it again. And that's that's what prices tell you. So, the the to your point, when I get really deviated above that moving average, your odds are much higher, you're going to get a reversion fairly soon back to that moving average because gravitational force increases. And if you get very far below it, kind of like you are now, we've got a decent deviation below the 50-day. Now, that rubber band wants to snap back in the other direction. So, so yes, what it doesn't tell you though is timing. It doesn't, you know, we've seen periods where markets can stay above the 50-day moving average, as we just saw, stayed above the 50-day moving average for a very long period before eventually breaking it. So, the timing is always a difficult issue. Does that make you worried when you see a long stretch like that where you're like, "Oh, that means we're going to have to have a prolonged period of time under that average just to continue to make it the average." >> Well, no, no, it's not it's it's it's not time, it's price. So, if I So, what I'm saying is let's say that I'm above the 100 day moving the 50-day moving average for 100 days. >> Yeah. That doesn't mean I have to be below the 100 day the 50-day moving average for 100 days for it to balance out because markets are going to rise over time. So, generally breaks below moving averages are generally fairly short-term events. They don't last for a very long time. A good example is back here in, you know, April, right? We had this very sharp sell-off, crack through all the moving averages, and then a month and a half later, it's over. >> Yeah. Let me let me let me let me just ask this again. >> Sure. It's it's a I'm trying to think of this like almost like a calculus graph. It it's it's the volume, right? In other words, um you could be over the the moving average by 100 for 100 days, but you know, let's say you're you're only 10% over it. Does that mean that that you need to >> make up for that volume when it corrects? And that could either be 100 days at 10% below or it could be 10 days, but you're at 50% below. Right? It's it's it's it's a big correction in the short term, but you're you're you're equating the same volume below that you were above. Is that the way to think about it? >> No, it's not because if you think about it that way, right, your market would trade in a flat horizontal line. >> Well, to your point, the the the moving averages move themselves. I get that. Yeah. >> Yeah. And and so so if if it was spending the same amount of time above and below the line, the 50-day would essentially be flat. So since and here's and look at this chart. This is a good example, right? So, you can see that when markets get really deviated above the 50-day moving average, you get corrections below it, but they're fairly short-term events. They're quick, and that's because the average is rising over time. Now, here you saw April, and this is a good example, right? So, in April, we saw this breakdown of the market. Moving averages turned negative, and we spent more time below the 50-day moving average than we did previously because now we're trending below that moving average. So now we're we're pulling the average 50-day price down. >> Yep. >> So we're going to spend more time below that. But as soon as we can reverse that, then we're going back in the other direction. So it's it's typically historically speaking, the time you spend below a moving average is often much less than you spend above it. But again, you now if you go back to say like the financial crisis, we had a very very deep breakdown below those moving averages. And that that period took you know almost a year right so before we actually resolved all that issue um but you also had a financial event going along with it. So when you don't have really type any any type of big you know economic credit related you know financial event going on breaks below these moving averages are typically better buying opportunities than they are selling opportunities. >> Okay. Okay. Totally get it. All right. And and we're going to talk about private credit in just a little bit. Um, do me a favor. Just bring this chart back to where it was from sort of the start of the year. Yeah. Okay. Nope. Nope. Go back a little bit more. I want I want to capture what happened in April. So, [clears throat] um, uh, as you are saying right now, >> this is looking like a relatively, you know, standard, uh, pullback. Uh, it's it's not that bad. In fact, um, I won't pull it up here. Well, maybe I'll pull it up in a minute. I know you guys have your own greed and fear index. Yeah. Um, >> but just looking at the the standard one that CNN publishes. Um, it goes from zero to 100. It's currently at six. I think it was at 20ome last week with Michael. But but basically, they're acting like the world is is ending. Uh, even though it's what, you said about a 3% correction so far since since the highs, right? So, you everybody just keep everything in perspective for the time being. Um, and this could, you know, we could find support here and and and you know, the stocks could bounce from here. You know, time will tell. We'll track this on a weekly basis. And to your point, Lance, about saying how, you know, your stance at at RAIA >> can change on a dime if if the market situation changes on a dime. Um, that's why we have you here every week. So, folks, you know, that that's just have the confidence that, you know, we're going to have Lance or his partner Michael here holding our hands and telling us what they're seeing in real time every week. But I just want to show um sorry go back to where it was because I know where you're going and I just want to I want to just I want to I want to frontr run you a little bit because of what we're seeing right now. This pullback is very similar to pullbacks that we saw in all of 24 and really or 2023 and 2024. So you you know similar declines to the 100 day moving average. Markets found support rallied off. Um and there were lots of concerns in here. this, you know, this this decline right here, this is that 10% fall in the market in the summer of 24. AI's dead, Nvidia's over, blah blah blah, right? And then the markets took off running again. Same thing over here. This was chat GBT and you know the the end of the world because of you know the sorry not deepseek, right? Deepseek selloff. You know deepseat's you know open AI is dead because of deepseek and then markets took off again. So the current selloff is very akin to what we're seeing previously. doesn't mean it can't become to your point, it doesn't mean it can't become this. It certainly can't. I do not want to discount the risk that this could, you know, we could break down here, crack through the 100 day, run down to the 200 day, which would, by the way, talking about deviations from long-term means. We're extremely deviated still from the long-term 200 day moving average. So, a correction of 200 day, not out of the question at all. And I think you need to be prepared for that. It won't go straight there. You're going to have bounces as you get down that that to that level, but you know, you need to be prepared that this correction could be deeper for a variety of reasons, but we don't really have a catalyst at the moment. Right now, the market's really just struggling with is the Fed going to cut rates in December or not. That seems to be the real catalyst here. Uh kind of repositioning for for maybe not getting a rate cut in in in December. But we don't really have like the whole tariff situation like we had back over here. That's been mostly resolved. It seems like we we've funded the government through January. So we don't have the shutdown issue to deal with right now. So there doesn't seem to be and again something could crop up, but there doesn't really seem to be some type of kind of tail risk event that is starting to weigh on the markets here. This seems to be more very short-term positioning concerns more than an event concern. >> Yeah. And and what I what I get clearly from you is, hey, we're treating this like the previous pullbacks that we saw um where we expect things to, you know, bounce and and and start reversing higher again. Um until unless we see evidence otherwise. The the the thing I just wanted to mention, you did largely predict where I was going, but if someone's looking at the RSI and saying, "Oh, okay. Well, look, that's finally come down. It's now kind of plumbing near the bottom. That means this thing's ready to turn. >> Be careful. >> Quite possibly." Right? But if you look back at what happened in April, you know, we got down to the bottom, we had a little, you know, tiny little bounce and then it stayed down there and the market, you know, dropped another what thousand S&P points or something like that. So, >> and but but great great example. Glad you brought that up. Right. So, here was the here was a similar. So, let's just assume that >> you know we're we're here. Okay. So, this is now let's just assume this is right now. >> Yep. So market was coming down and again negative divergence and RSI like we've been talking about you know nice sell signal on the MACD like we have right now all those things are the same markets oversold so markets are coming down and I'm like hey don't worry about this right now markets are oversold now you know here we had already lightened up on positions because there was a lot of other stuff that was going on but regardless of that so markets are coming down say markets are decently oversold should get a bounce here well you you did but the pro The difference here is that you broke the 200 day moving average, went below it, recovered back up to it, failed at the 200 day moving average. This failure at the 200 day moving average was critical because that told you now you have a trend change in the markets. And then also at that time, you also had moving averages were breaking down, crossing over. You had a lot of all the the previously rising bullish moving averages are now turning negative. So now they're telling you that you have much more substantial risk to the markets. And again, another reason to start cutting exposure. And then you got very, very oversold. And this is where we started buying, you know, back over here. Um, but you know, again, yes, just because we're currently oversold does not mean that we cannot get more oversold, you're likely going to get a bounce. But if we bounce to 6700ish, which is the 50-day, fail there, and then come down and take out the 100 day, we got problems. And that's where we're going to be cutting it. If that happens, that's where we're going to cut a lot of exposure. >> Okay? And folks, again, you know, if that happens, we'll be tracking it here with Lance and his team on a weekly basis. If you want greater frequency than that, follow Lance on his YouTube channel, follow me on Twitter. We'll be talking about this stuff in real time. Um, but again, just underscore Lance's point. Um, he's not seeing evidence yet that any kind of breakdown like that is in process. And so, he's still, you know, largely just as invested this week as he's been the past bunch of weeks. >> All right. One just real quick shameless plug here, but if you go to our website realinvestmentadvice.com and scroll down to where it says market commentary and research, we produce a daily market commentary and I put a trading chart every day. Just click the subscribe button, throw your email address in. Nobody's going to spam you, but every day I send out a a it's a it's about a one and a half, two minute read. It's fairly short. We hit some major topic, but every day we have a market trading update. So, we talk about, you know, we just talked about Bitcoin yesterday. We talked we'll talk about gold. We'll talk about whatever is trading in the markets and we'll lay out technical levels, risk levels, those type of things as well. >> All right. Hey, just because you just mentioned it, so let's talk about Bitcoin for a second. >> Sure. >> Um, so Bitcoin, you know, has seemed to have been the canary in the coal mine for the weakness that we've seen in the market. Um, it it it's been weak for a while and uh it it's continued to really weaken in recent days and the chart there shows exactly that. Um, I've heard a lot of people saying, "Hey, this is this is maybe a sign of liquidity starting to get scarce and Bitcoin is is a kind of a hyper indicator of volatility." Um, you know, I've had other people say, "No, this is, you know, investors turning to risk off and Bitcoin's been a risk-on asset and it's it's leading the way for where the rest of the market's going to follow." >> You guys said you just talked about this at length yesterday. What were sort of the cribnote takeaways from that? Well, this is a lot, you know, what we've seen, you know, recently in a lot of assets is people piling into leverage and what you're seeing and particularly see that people buying assets on leverage with things like Bitcoin because that's where they can make the most money because it's such a volatile asset. You know, you know, the market goes up, you know, half a percent a day or 1% a day. Bitcoin can move five or 10% a day. So, if I'm going to leverage an asset, I'm going to leverage something that can move a lot in a very short-term basis. So, you're you're what you're seeing is kind of a cult >> as long as you you're you're you're correct and hoping it goes up. [laughter] >> Exactly. But but there's actually two things that are going on here that and we this is what we actually talked about earlier this week is that, you know, the the the retail crowd was begging Wall Street to bring ETFs for Bitcoin to the marketplace. And this is why we always warn you about be careful what you ask for from Wall Street because Wall Street will provide you whatever you want. If they can make money on it, they'll provide it to you. Well, what Wall Street was more than happy as soon as they could get it passed through the SEC was more than happy to deliver ETFs to the markets. Why? Well, a you're going to go throw your money into an a Bitcoin ETF or an Ether an Ethereum ETF. That's great. They don't care about that, right? What Wall Street wants, they want the ETFs because they can short those ETFs. So all of a sudden they have a really easy way to arbitrage their portfolios and take advantage of market downturns by shorting those ETFs. So you've got liquidity issues one going up, but you've got Wall Street working against you, taking advantage, you know, everybody that followed those ETFs, Wall Street was like, "Bring it on because I'm going to short the crap out of those." And that's what they did because Wall Street's always going to arbitrage off that risk at some point. >> Yeah. And and sorry just to chime in is you know longstanding gold holders are very aware of this which is >> when when the paper markets get to a point where they are material or in case of you know precious metals many many many multiples the size of the actual physical market. >> Um Wall Street loves that because it can start just pushing around the price in the paper market. Right. And and so that was one of the risks that the the Bitcoiners, you know, were warned they were going to face is once once Wall Street, you know, productizes this thing. Uh it's going to be a lot easier for Bitcoin futures and stuff like that, right? I mean, this there's just there's going to be a lot of ways for Wall Street to push the paper price around to where it wants it to be and you're going to lose a lot of control over organic price discovery. So, you're nodding as I'm saying all this, but yeah. >> No, absolutely. And and what Wall Street loves more than anything else is volatility. And the more volatility an asset has, the more money they can make at it. So Bitcoin is a beautiful asset for Wall Street to basically just arbitrage the crap out of retail trailers. >> Traders well volatility and volatility that it can influence in the short term. Absolutely. Right. So I can push it some way in a given day, right? And I can I can force the market to react to me, right? And and that's Yeah. Exactly. which which is unfortunate because you know the whole idea of Bitcoin originally was and again and again this is you know the the the failure of foresight by retail traders. Bitcoin was great when it first came out because it was truly decentralized. It wasn't tied to anything. But as soon as you start started begging for futures and options and ETFs and all that, all you did was centralize the whole Bitcoin market into the markets. It's now just a Wall Street asset. And eventually, Wall Street will just arbitrage most of this volatility out of the market. So, you know, probably in the future, you won't you won't see the volatility swings. I'm talking about 5 10 years from now. Um, you won't see these type of volatility swings of Bitcoin. It'll become a much more stable asset with kind of normal market returns. >> You know, wi with that um just the Bitcoiners would say, well, that's good. In many ways, it'll be a good thing because then we can start actually getting the currency part of the cryptocurrency back into the equation, right? >> Yeah. because because again you can reduce that volatility risk to a point and and Wall Street will be good for this. they'll arbitrage most of that volatility out of it so that now I can go you know this has been one of the problems like you know we saw title companies try to use Bitcoin for you know settling titles you know Tesla tried to do it for settling cars but it was too volatile so they couldn't do it but if you can arbitrage a lot of that out that actually gives you the stability that you need in price so you can actually start tying real-time transactions to that as a currency hold right >> right okay so in that's potentially many years out here. Um, in the here and now, what's bit what's the the the the future of Bitcoin looking to you? >> Um, you know, you're coming down to a pretty decent support level. Last time we were down this this is around 76 77,000. Um, that's the kind of these previous this kind of previous top back over here. Then you got these bottoms that we put in kind of in in March of this year. um you know this is decent support level here. You're de you're very oversold on a momentum basis. You're you're very oversold on a relative strength basis. So if you're looking to to buy Bitcoin you've I I would be patient here. I would wait for a couple of days. I'd like to see this kind of bottom and maybe turn up again. Don't worry about trying to buy the exact bottom. What you're looking for is a little bit of this thing to turn up here. But you got a decent entry point for a trade. I wouldn't necessarily buy this right now for a major long-term investment because you've got a lot of breakdown here going on the market. So, there's a lot of what's called trap longs in Bitcoin right now. And that's all all these all these kind of traders that were, you know, retail traders, retail investors, all the ones that were buying it back over here on the dollar debasement trade and all that, they're trapped in in this stock right now. So, or in Bitcoin right now. So, you're going to get a rally back and they're going to clip out of this, right? They're going this these trap longs are going to sell out. you get another downturn potentially, you know, in a month or two, maybe three, and then that forms the actual bottom to where you can actually make a longer term investment. But I think there's a reasonable trading opportunity here where you can buy this here and get a nice bounce back up towards 100,000 and then you get another pull back before you actually find a bottom. >> Okay. Yeah. I mean, to our previous discussion, we're now quite far below all of the moving averages and so that that rubber band will start working in the other direction, right? Yeah. >> Yeah. Yeah, but you but again it's this is a really great example of the technicals, right? You extremely deviated above the the long-term moving average. Now you're very far below it. So, you know, again, you're going to get this mean reversion now back in the other direction. >> Okay. All right. Um All right. Let's hop hop out of the chart. I want to >> bang through a couple of uh of other big topics in the news here while we can. Um, I do want to talk a bit more about the concerns that are being raised about the AI cap the AI complex and you've written a piece recently, Lance, about how um, you know, the capex spending is is sort of masking um, other more concerning things that are going on in the economy. So, I I do want to trundle into that, but but real quick, you mentioned something earlier about what what seems to be driving the market in the immediate term here is the will they won't they on uh if the Fed's going to cut in December. Um and so we did get some jobs numbers uh this week. We got the September jobs number. I I think we've been told we're not going to get the October jobs number. the the BLS could not do their um their phone surveys. So they don't have any d household survey data for October. So they will not release an October report. >> Okay. Um so anyways, the the the the data we did just get is the September data which surprised to the upside. I think it was literally like two times the number of jobs created than folks thought. I think it was around 100,000 and folks were expecting around 50,000 or so, >> right? >> Um now at the same time the unemployment rate crept up to 4.4%. Um so uh and people are basically saying hey look you know you got to take the jobs there with a big grain of salt because we know both the government shutdown in October but we we've also heard a lot of layoff announcements you know over the past uh 45 days or so uh that the September numbers don't don't capture. So, um, [clears throat] uh, you know, it's it's you know, people can look at that data and read what they want into it, right? Oh, well, the jobs number was higher than we thought and so therefore Fed has less reason to cut here, right? But then unemployment rates creeping up. Well, the Fed should care about that, right? So, um I I I think the last headline I saw this morning was that there was another Fed some some member of the FOMC who who said, "Well, yeah, maybe we might want to actually think about cutting again." Um so, but but this this you know, will they won't they switches pretty much by the hour here. What are you what are you thinking? The last I looked, which was yesterday, at the CME numbers, uh, CME forecast was that I think it was like twothirds probability that it was going to remain unchanged. Um, that was that was up, uh, I guess from, uh, two weeks ago where it was more like 50/50 that they were going to cut. Um, but anyways, what do you think at this point? Um, well, you know, Wall Street's generally pretty good about kind of predicting stuff, but you know, you know, you know, I think it's kind of a coin toss, honestly, because if you take a look at a lot of the real-time economic data, it's not it's not terrible, but it's not fantastic, right? I mean, you know, we probably, you know, printed 50,000 jobs in October. And and the problem with the September report is and and always that that data is so outdated now. you know, we can look back at it. It was it was 119,000, but you know, how how good was that data collection, you know, based on everything else that was going on at that time? We were going through the whole >> and that's on top of our our skepticism of just the BLS in general. But yeah, >> exactly. So, yeah, you know, but again, you take a look at the other data, you know, and again, one months of data again isn't also is also not important. Numbers are volatile. you know, get the birth death adjustment, which is always BS anyway, but that always inflates the numbers to a degree. So, the trend is more important. What's the trend of the employment data? That's clearly negative. It's clearly heading towards zero at some point. It's just a question of when we get there. >> Yeah. >> So, you know, >> sorry, by the way, I should note too that the payroll data, which was higher than materially higher than expected for September, they also went back and revised the August numbers from a beat to a loss. >> Yep. Exactly. And so again, that's what I'm saying. I don't put a lot of weight on that data um because it's so outdated. The other data I think is more important and that was kind of the point of my article today talking about how a you know this AI data center spending which is boosting economic activity. It's also masking over a lot of the other economic weakness that we see going on across the board because again, you know, if I build out a data center, you know, I'm hiring construction workers, I'm hiring electricians, I'm hiring trade skills, right, to build those data centers, but that doesn't neessally translate all the way over through, you know, people owning restaurants and people working in office jobs and those type of things. So if you take a look kind of the broad swath of the economy, there's a lot the economic strength is not as robust. You're going to take a look at the Atlanta Fed GDP now as an example. They're at 4.2% 2% real growth for the third quarter. That if you take a look at a lot of the other economic data, it doesn't suggest that we're not seeing booming economic growth across the, you know, the broad spectrum of the economy because, you know, you got auto delinquencies rising, you've got default rates, uh, mortgage delinquencies that are rising. You know, you're seeing a lot of pressure on a big bulk of the economy that's not being really fairly represented by what's going on with just construction spending. >> Yeah. So, Lance, I don't know if you saw it, but I did had a really interesting interview this week with Craig Fuller, who's the CEO of Freight Waves. >> Y >> they're like the leading provider of data to the um supply chain industry about things just get shipped, whether it's a truck or a train or a ship or whatever. Right. >> Um and uh he is is very emphatic that that the real economy, you know, the economy of moving real tangible things from point A to point B is in recession. Um and uh and it's just not the prospects are not he's not seeing any light at the end of the tunnel, you know, right now. Um and uh what was interesting is stat he pulled out there was you know and he totally says yeah like you hey you know the the all the capex spending is is pulling the averages up and he said sadly everybody in a position of of decision-m in Washington you know running the country is looking at the averages and looking at the stock market and saying well everything must be great right and he's like they're they're ignoring this real weakness in in you know the the the larger swath of the economy that that still depends on atoms versus bits. Um, and he's like, and the problem is those are the guys that could actually do something about it. Um, but they're they're not because they're telling themselves that everything's great right now because they're looking at these averages that are getting pulled up by all the hyperscalers. Um, but he mentioned a stat. They said if you if you look in kind of the the the mag 7 10 whatever you know those companies employ about 2 million people which isn't insignificant but it it pales in comparison to the roughly 35 million that he puts in the sectors that he monitors. Um and he's just like you know we are we're you know it's almost kind of like a pmpkin economy right where it's got this facade that everything looks great and and and again things are amazingly well for those hyperscalers right so I'm not I'm not denying that there's not a lot of ton of revenues being made there >> but um uh when you >> it's not everybody >> yeah it's it's not everybody and I and I think it's not the majority lance which I think is the really you know key key part of this right so anyway Anyways, um I got one more thing to say about that interview, but but real quick, you know, what's your reaction to that? I guess the question is is what are the perils of ignoring that? >> Well, can we just shrug our shoulders and say, well, hey, those people don't really matter anymore. That part of the economy doesn't really matter anymore. >> No, absolutely it matters. And that's that's my point. But this is also my big concern about next year, right? Um just talking about uh you know, earnings expectations next year are exceedingly high. we're going to, you know, Fax's predicting like $320 a share by the end of next year for the S&P 500. And but if you take a look at the breakdown, they're saying, well, the big cap tech companies, they're they're their earnings growth, you know, you're talking about Nvidia, Microsoft, Tesla, those guys, their earnings growth is going to slow down. But the Russell 2000, the small and midcap companies, their earnings are going to explode next year, right? They're going to be up 60 59% next year. just massive, you know, earnings growth for the S&P 500 or for the >> What's the rationale for that? >> Sorry. >> What's the rationale for that? >> Well, that's my question. So, where does the earnings come from for small and midcap companies? Now, we're talking about companies that, you know, are retailers, they're, you know, your smaller manufacturing companies, th those type of companies. So, where does the bulk of their revenue come from? It comes from consumption from consumers. And if you're if you're looking at the economic data and we're talking about, hey, this slowdown in the economy is very real. Take a look at the the employment data. Take a look at the the the ISM services index is slowing down. There's not a lot of growth there. So here, how are you going to generate that? But here's more important to that. So this shows 24, 25, and 26. So light blue, dark blue, and this kind of I don't know what color that is, another blue. Um, but in 2024, we had booming economic growth. The economy was going gang busters in 2024 because of all the stimulus that we had going on. They had negative earnings growth. >> In 2025, the economy is doing great. They're they grew at 1%. So now all of a sudden they're going to go 60% as the economy is slowing down. That makes no sense whatsoever. But that's the expectation from Wall Street on the markets. That's my big concern going into next year is this this this idea that the economic growth we're seeing, you know, from AI spending, which is a very small segment of the overall economy, is somehow going to create this massive economic expansion. We may see that in the actual GDP numbers. This was a chart that I published in this uh in the article I just posted. So, this is nominal GDP with and without capex spending. And there's just a big gap. A lot of this lift that's going on right now is because of this a this AI capex spending and but the actual economic growth rate in the underlying economy is slowing down. And as we get more into again, this goes back to my concerns for 2026 and 2027. I think we're going to see slower economic growth below the surface. We may get some good GDP prints because of AI, but I think below the surface, we're going to continue to see this this degradation in the vast majority of the economy. This this downward pressure, job losses. You know, we just talked about on the radio this past week. We're seeing energy companies, the big the big major energy companies laying off workers because of AI and they're able to to start doing that. So that whole job loss issue that you and I have talked about before because of the product productivity increases from AI is going to weigh on the economy which is going to weigh specifically on the small midcap stocks. So you know that's that's one of the bigger concerns I have for the next two years. >> Okay. So I totally get that concern. [clears throat] I share it and that concern right now you have assumes that AI capex spending continues you know at the rate it is and that these companies continue to feed these hyperscalers continue to really get fat on the trough right so let's just talk for a second about what if there is a hiccup there right so we've seen um concerns about the circular funding that's going on in the AI ecosystem Michael Bur, you know, has has gone ballistic on this of late. Just this morning, he he put up this massive chart [clears throat] um showing all the different, you know, flows from from company A to company B back to company A, >> right? >> Um he's also talked about what he believes are, if not fraudulent, highly deceptive uh accounting that's going on in that space. Um, so and we've seen, you know, like uh what was Oracle's debt that got downgraded by Barkclays because they were just like Oracle has has put out these capex projections. They're going to run out of money. There's no way they're going to be able to actually buy all that. They're going to run out of money before they do that. Um, so you know, to some people this is starting to smell like 2000. And you you don't have to necessarily agree with that or not, Lance, >> but just if there's some compromise in that AI freight train of spending, that just makes this a whole lot worse, right? >> Yeah. Uh, you know, it's, you know, first of all, just expecting all these companies to pay forward out of cash flow is a little bit ridiculous anyway. Um, so yeah, these companies are going to issue debt. I can issue debt fairly cheaply in the financial markets. Why wouldn't I do that? Because I have a whole lot of advantages. when I build with debt, I have a lot of tax advantages with that as well. So, why wouldn't I do it? But, and again, I I have to make sure I have enough cash for my buybacks because you don't you haven't seen one company come out and say, "Hey, we're going to cut back on our buybacks because we need more cash flow for buildouts." Right. Right. >> We haven't seen any of that yet. So, don't >> that squeeze might be coming, right? >> Well, they're going to protect their they're going to protect their buybacks. Trust me, that's how >> Well, then if they do, then that then limits the spending, right? I mean, so >> but that's why they'll eventually turn to debt. But, you know, so, but we're going to see debt picked up across the board. I mean, you're you're you know, there's there's a lot of and I've seen a lot of the the headlines you're talking about lately. And what they're missing is is they're assuming that these companies are only going to go to the public debt market. Public debt market is a cheap way to finance and it's an easy way. So, companies like Oracle can go to the debt market very quickly. They can raise debt. You know, their default risk right now is like 1.6%. >> You know, with their debt issuance. So there there's no real risk there. So people will loan them money. Um but for companies say I'm I'm I'm not making any specific examples. I'm just picking one up, right? Just as just for example purpose only. I'm not making any statements so don't go off on me. But say a company like Cororeweave and they want to raise debt. So they've got a couple of choices. They could go to the public market as well. Um their rates might be higher than say Oracle because they're a much smaller company. Financials aren't as strong. they don't have the the the fundamental backing that Oracle does or the history. Um so maybe their financing debt is higher in the public markets. But let's say they can go to the public markets. The public market's like, "Yeah, we don't really want to do it." Don't forget there is a massive private credit market out there that is sitting on a trillion or two worth of capital that are looking for deals. So there is plenty of capital on the debt side and not to mention government side that is going to be funding some of these some of these buildouts that need to get done through debt. So I think it's and again yes there are some similarities back to 2000 not denying that at all but again as I said earlier it's probably a bit early to be going okay now we're about to have the do prices we're very early into this phase it can go it's this can potentially run for two three more years before it gets to be a real issue. >> Sure. Sure. And all I was just saying is that if there's something that a either compromises that capex spend out that makes your concerns for 2026 a lot worse. And also even if a capex continues but if there's a price correction in the AI sector and we get a negative wealth effect coming out of that that also makes things a lot worse again. >> Yeah. Absolutely. >> Have no idea if that's going to happen. I'm just saying it is an additional risk factor out there to the one you mentioned. >> Abs. Absolutely. Absolutely. >> Yeah. Okay. Um uh okay. I do want to talk to you about private equity. Um, real quick though, just back to um, Craig Fuller for a second. I was thinking about making this a rant, but I think enough people have watched the video with Craig. And folks, if you haven't, you really should, both for what Lance and I already talked about, but for this point as well, especially if you're going to be traveling anywhere on the highways over Thanksgiving. So >> [clears throat] >> um we got on to talking about how in COVID um there was a tremendous amount of demand for shipping, right? U we we had these you know compromised supply chains but everybody was ordering stuff from home right and so um you [clears throat] there was a big demand for for additional drivers and so this was uh I think a component of the the prior administration's you know hey well let's get these illegals to come in and fill these jobs right u we can put them to use or put them to work >> so um by Craig's estimate there was about 600,000 uh drivers that have been hired who um should say had no business being hired in terms of their their um proficiency in driving a truck. >> Yeah. They weren't qualified CDL drivers. >> Exactly. And and so there also was this proliferation of these CDL licensing schools uh that emerged that basically you know kind of give rubber stamps commercial driver's licenses to [clears throat] people who can basically you know fog a mirror and that's it right so these were people coming in from other countries in large cases illegally who um have never driven a truck before um in many cases don't understand English um they're from countries with, you know, different traffic laws, in some cases non-existent traffic laws. Um and they [clears throat] come in, they get a they get a license or they they pay someone to take the test and get a license or they just pay for the license without even taking a test. I mean, there's so many ways to get a commercial driver's license, it sounds um and [clears throat] they're they're able to get behind a wheel of these big rig trucks, really never having driven a truck before. Um, [clears throat] and then they are they're doing two things that are really scary. One is they're working for um, you know, lower wages because they're they're they're happy to get them. They're way more than these folks were going to get in their home country. Um, and so a and they're willing to drive um, a lot more hours than the average American trucker is is allowed to drive. So, I think you know if if you're a legal trucker here in the US, you can't drive more than like 10 or 11 hours a day. Um, it's an industry regulation. These guys, they don't care, right? They're going to get paid more the more they drive, right? So, they're driving upwards of like 20 hours a day, right? So, the two things they're doing are um they're undercutting the legal operators here in the US. So, you've had now kind of an over capacity in the system and it's the guys who are playing by the rules who are starting to go out of business here, right? So, that's bad from an economic standpoint, but of course, it's way worse from a public safety standpoint where you've got hundreds of thousands of these people on the road, again, who don't understand the traffic laws, uh, who in some cases don't speak English, can't read the the the street signs, stuff like that. Um, who may be on their 19th hour of the day driving, um, so, you know, sleepd deprived, and a lot of them are on some sort of chemical substance to try to stay awake, right? So, it just petrifies you in terms of, you know, the road safety risks that that that this presents. And then the other thing Craig was talking about is that the trucks that they're driving aren't that well-maintained. I I told this story of my move to to Nevada when I drove a the largest U-Haul that I could rent and how petrified I was about how unqualified I was to drive that thing. And of course, that's that's small. Uh it still drives more or less like a van, not like a big truck, right? So, a regular person can kind of drive it, right? And Craig was telling me, "Hey, in that U-Haul," which probably wasn't super well-maintained, he's like, "That's substantially better maintained than a lot of these rigs that are out there on the road right now." So just a a super eyeopening uh perspective in terms of both what's happening economically in the in the economy of the of real things but also just you know as we're all going to be traveling you know most folks watching this are going to be traveling uh for Thanksgiving just be really mindful on the highway of the big rigs around you and maybe give yourself a little bit of extra cushion than you otherwise would have um just in case you happen to be driving next to uh somebody who who maybe really shouldn't be behind a wheel of of of equipment that large. >> Yeah. >> All right. So, um I thought you were gonna have a lot more to react to that, but okay. >> No, no, no. I mean, it's like it's, you know, Yeah. I mean, as I was just looking up some stats while you were talking and and um you know, you have about 5,000 people annually killed in the US by, you know, 18 wheel trucks. And that's just in that's in total, right? And >> Right. And sorry to interrupt, but I think it has doubled since 2019 was because of this factor. Yeah. >> Yeah. know it's it's gone up a lot, but it it says the majority of these accidents are the occupants of the other vehicles. You're just not going to win the fight with an 18-wheel truck driver. You know, that's you know, that's >> there. There was one an accident that happened about a month ago that was in the news down in Southern California and and it was a guy who it turned out he was >> I think he was drunk. He was but under the influence. Um but but exactly one of these guys and and they showed the dash cam from his truck when he plowed into stop traffic ahead of him and the cars that he hit they just vaporized. >> Yeah. >> I mean the kinetic energy of this thing slamming into you know a regular sedan is just mindboggling. >> Yeah. And and know and that's and that's the real issue is that you know you you know the average and and this has always kind of been one of my about like for instance I live in Houston right? So, we have this main highway through Houston that's Interstate 10. It runs all the way from Florida to California. Um, but you know, you've got these 18 wheelers that are just barreling along, you know, this, you know, freeway and then you've got idiots that are cutting in front of them, trying to get around them, all this other stuff. I'm like, you're going to lose that fight with that truck. I've always kind of been the proponent of like, you should have a dedicated lane for 18-wheelers. They should be in the right hand lane. That's them. that's where they are and let the rest of traffic flow around. you know it it's you know they're you know the responsibility of those drivers is is so much more important but again you have to you know the other drivers on the road have to be responsible too and you know I've I don't I like for instance I was reading the the article about the October event that you were just talking about but you know what I see on the on the freeway is I see people you know they they are trying to get around an 18-wheeler well they cut directly in front of it and you know we talked talked about a train, you know, trying to slow a train previously about the like relating it to the market. >> You can't stop an 18-wheeler, you know, on a dime because they have so much weight behind that truck and these people are just jumping in front of them and thinking this 18-wheeler is going to stop. And if they jump in front of them and have to slam on their brakes, they're done. That 18 wheeler is just going to just going to vaporize them as soon as they get hit. So, you know, it's you've got to be People take for granted how dangerous 18-wheel trucks are when they're on the freeway and they're just cutting around them doing all those type of things. Hey, I get it. But it's a good way to die. >> Yeah. All right. So, thoughtful many public safety announcement folks this Thanksgiving. Just be extra careful on your drive if you're on the freeway here. Um All right. So, private credit real quick, Lance. Yes. >> Um so, now you mentioned how big of an ecosystem it has become. We've talked a bit about, you know, some of the um recent defaults that we've seen going on there. Um whether it's um what First Brands um there's another one that came out around the same time and >> then there's what Renovo I think that's another company that that basically you know kind of went to zero. Um, so, uh, what's your level of concern right now about this? Because because that's where the, you know, the credit markets are where all the marbles are, right? And, um, we we don't really know so much the quality of lending that's been done in the private credit market because it's not regulated like the private credit space is. We've been hoping these guys have been making good loans, but we don't know, right? we're starting to see some evidence that hey, they they probably weren't um and you know, as some of these other potential stresses um crop up, you know, then those might put additional pressure on on lenders that borrowed in the private credit space and as they weaken, you know, other stuff starts to happen here. So, you've seen things like um like uh the stocks of the um private lending companies have have really performed pretty poorly over the past two months or so. And it seems to be that the market is sniffing out that okay, you know, these guys maybe some percentage of their loan book isn't great, right? Um, is this just sort of, you know, regular sort of business as usual and the market will cleanse the bad debt and then they'll make better loans going forward or is this, you know, is there a risk here of this being bigger that hey, there's been a lot of bad stuff and we just won't know until the bodies start floating to the surface and yeah, we've seen a couple yet, but maybe there's a lot more to come. Well, so, so a couple things are is that a, you know, what we've seen so far is is a very small amount, right? Like auto loan, the subprime auto loans, you know, immediately our first reaction is like, oh my god, this is like 2008, right? It's a subprime crisis all over again. Much different because of the magnitude of what went on with subprime mortgages. Yep. >> This so there I'm just want to state there's a big difference on on just the magnitude of what we're talking about. But, you know, what's going on with companies like a firm and CLA and a lot of these buy now pay later firms and what we're seeing going on with a lot of of you know some of these other private credit lenders is certainly concerning and again this goes back to what we're saying earlier is that and again you take a look at CLA or a firm in particular certainly clear evidence that you know and we don't have a lot of data by the way uh readily available on all those buy now pay later loans. We really don't h we we think there's a you know several billion of that out there but we really don't know for sure because we don't have any good data on it but we know [clears throat] it's out there. Well, no, there's there's billions and billions out there and and I just know because Blue um uh sorry, Blue bought PayPal's buy now pay later book in the US and then uh I just realized they b KR bought um PayPal's buy now pay later book in Europe and I think collectively they're somewhere around like 80 80 billion and that's just PayPal's version of B. It's not even a firm or CLA, >> right? And and so again, there's but again we don't we that's again we don't have like I can't go to you know if I if I want to know how much treasury debt's outstanding or corporate debt I've got a data feed for that. >> Yeah. But this is the problem with the private credit market is it's unregulated. We don't have these pieces transparency. Yeah. >> Yeah. Exactly. That and that's kind of my point. So it's it's >> I was just saying it's bigger than just a couple billion. We [laughter] know that. >> We do know that. Yes. This is true. But you know my point is is that what I think we are seeing though is again you take a look at the you know some of these companies that are in that space they're they're under a lot of pressure because the consumer is slowing down. This goes back to saying earlier is is like you look at the bottom of the economy that bottom 50 60 70% of the economy they're not doing great. The top 20% of income earners are floating 50% of consumer spending right now. >> Right. And sorry to interject but we we've just heard from companies like Walmart which had pretty good earnings. But but a big part of that is because of downshifting. They're getting more affluent customers starting to to to say, "I can't spend on my big brands anymore, so I guess I'm going to start shopping at Walmart." Right. So, I mean, we're seeing even that top half is starting to show some signs of weakness. >> Exactly. And so, so again, so there I think there is risk, and this is why if you're investing in the private credit market, you need to be very careful about what you're investing in. There's not a lot of clarity um in private credit. there's not a lot of clarity in private equity. Um, you know, and particularly in those funds, they don't have to mark to market. They kind of market what they think the asset value is. And so there can be a super big difference between what they're telling you the value of your holding is versus what the real value is if they have to go fireell it in the markets. So you need, if you're investing in the space, it may look all fine and dandy because they're going to present to you these best rosy returns like, oh, you're going to make 18% a year on this. you need to really understand what you're investing in because there's a lot of risk there that I don't think has floated there's a lot of bodies that haven't floated up to the surface yet that I think we'll see over the next year or two >> and that's where I was going. So let me just ask you and I'm just asking you to guess here at this point because we don't have the data but like what is your worry factor about this >> in in terms of people invested in private curren what what do you mean? >> Yeah. Yeah. in in terms of um six months, a year from now, you know, we're talking about um a market freakout because people are realizing that there's a lot more losses in the private credit space and you start getting a contagion. I mean, for for me, the unknown about private credit is is, you know, different from 2008. Subprime is different, but but what what it did is it started counterparty risk concerns. It got people saying, "Wait a minute, now I don't know where all the bad loans are, so now I'm going to stop lending for a while." Right? And that's that's that's when things really get wonky, right? And so what's what's the potent or in your gut? What's the potential of private credit to potentially spark a counterparty risk freeze? >> I don't know if there's, you know, because counterparties are between banks and private credit is kind of sitting outside of that. Sorry, sorry, but but just in your answer address this. I've heard that hey actually banks do lend to the private credit industry. So they're not like totally separate, >> right? No, no, that I was about to say is that there is leverage that's going on that the banks provide. >> Yeah. >> So again, this is the this is the whole reserve, you know, issue that we've talked about recently about how the Fed creates reserves for the banks. The banks then loan that money to hedge funds, private credit funds, you know, etc. So you know that money gets created you know money gets created through loans and it gets created out of those reserves. So absolutely there's leverage from the banks provided to these to these private credit funds. So yeah there's certainly risk. It it's hard to assess how much risk because again I don't want to paint all private credit as bad credit. That's not the case. >> All private equity is not is not bad. >> Right. >> Um >> metal high yield junks are or high yield bonds are junk. >> Exactly. Some some of them are, but [laughter] >> some some are. >> But yeah, but again, you do have to be careful about what you're invested in. But I think there is a risk if you start seeing private credit fail and starting to see more and more this is certainly going to post concerns up for the rest of the market then and you're going to get a repricing of both credit and equity at that point because that's going to be a reflection of what's happening in the underlying economy. I think you're going to see the Fed stepping in to bail stuff out. You know, cutting rates, restarting QE, you know, the typical playbook. Um, you know, again, at that point, you're not going to want to be heavily invested in equities if we get there. >> Okay. Well, one man's opinion, but uh if if I were to bet on, you know, one of the areas of private credit that I think is is going to blow up at some point, I I'm putting my money on buy now pay later. >> Oh, yeah. You and me both. We You have been there forever. I I think that's the most stupid thing ever invented, but you know, we'll see. Okay, >> maybe I'm wrong. We'll see what happens. >> All right. Um, can we take a few minutes and have you walk us through your new oil and gas uh portfolio sleeve there in Simplevisor? >> Yeah. So, so we had um you know, so for a while um we've been kind of looking at this whole power gen kind of issue that's going on with the markets and the demand for power that's going to be needed by AI companies as well. And we we're starting to see kind of now, you know, we had this whole kind of, you know, move over the last several years about more wind, more solar, we need more renewable energies. The problem with those are is that they're not reliable enough and they're they're not efficient enough to provide the power needs for these AI data centers. So now there's this concerted effort to move back towards coal and oil which is going to be the major pro major uh energy sources for these AI data centers as they occur because they're so >> well well gas you didn't mention gas but that's a huge part of that right >> gas and coal it's all when I say oil it includes >> you said oil I I knew you really meant gas yeah >> but anyway but yes all three of those and of course nuclear is going to be is going to be very important in that equation as well. And but the problem with nuclear is it just takes so long to get there, right? To to you know, we're just starting to try to get, you know, fasttrack plants to get going, etc. And that's going to be three, four, five years before we actually get a plant up and running and built and those type of things. So that's going to be a very nuclear is going to be a very important source, but it's pretty far out there. Yeah. >> So again, what we're seeing companies do right now is is they're trying to locate next to to gas pipelines. They're trying to build as close as they can to a gas pipeline so they can do what's called behind the meter and they can tap into that pipeline for natural gas to power these data centers and and but that even takes a year or two just to do that. So even in front of that they're going to LNG to provide power near-term for the data center so they get the data center up and running until they can tap into the natural gas pipeline because they run the pipeline close to the building tap into it those type of things. That's a year or two. So there's there's a time issue for all of this and this is all going to provide a lot more uh demand on the oil and gas sector. And so one of the things that we've been thinking about is and again this is a very early stage deal. This is not something you don't go buy a bunch of oil and gas companies today because they're not performing well right now because oil prices are fairly low. And I think oil prices can potentially go lower here before we get to a to a bottom uh in oil prices. I think we get closer to maybe, you know, $40 a barrel once we get there. But, you know, there's going to be some time getting there. But, you know, we started building out this portfolio structure and, you know, with this idea of something that we can build into over time. So, we launched this thematic model um that's based on energy and you know, so today it's up like 42 bits since we launched a couple of days. We launched this last Thursday. Uh, no. Yeah, last last Thursday we actually launched this. So it's down about 2% over the because it's going to travel with the market anyway. But this is this is all related back to just energy exectors uh energy specific companies. And so we've got everything from drillers uh like Kico Phillips to natural gas pipeline companies like Williams which is one of the bigger pipeline companies out there Exon Mobile Chevron you know they're the ones that actually drilling oil and gas producing it etc. um you know straight drillers like Diamondback Energy uh EOG Resources and then even into the transportation side of this looking at like Scorpio tankers um in terms of actual transports and of course Kamiko Corporation for the uranium for you know nuclear power companies. So it's looking at kind of the entire energy space and picking companies that we think will participate the best uh longer term. But again this is not something that's going to be like you're going to invest in this today and it's going to make you money today. This is a this is an outlook, a thematic model that will be something that we just slowly build into over the course of the next 18 to 24 months. >> Okay. Um >> but this is but this would be a great portfolio if you want to that you start out with like a thousand bucks and you just start dollar cost averaging into it over time. That's a great portfolio for that type of thing. >> Yeah. And and that's where I was going. So, we've had, you know, a number of of I would call micro discussions on this channel recently about um how the energy sector has been really beaten up in recent years and um there's both, you know, the hey, we're going to need all this new power to to power the AI era. So, when is that going to start adding a tailwind to the energy sector? And then we've had kind of the Rick Rules of the world who have just said, "Hey, look, you know, like we we've underinvested in capex and in, you know, especially a lot of these fossil fuels. And even if demand, global demand for oil and gas just sort of stays where it is, we're going to have some shortages at some point." And of course, the lower that the oil price go, you think it could maybe get down into the 40s. >> These companies don't go out and explore and develop at those prices. They just they just sit, right? And so that then eventually leads to scarcity, right? So the question has been or a lot of people have been raising is okay well look is this a good time to start getting into this space so that when it gets out of bust and goes back into boom you can really ride that. Um sounds like that this exactly why you guys created this portfolio. >> Yeah, we do. But but again that's exactly my point. So if you went to Simplevisor right now and said, "Oh, I'm I'm going to get in this portfolio." And you go, you know, stick all your money in this portfolio. You could be disappointed for a long time. I mean, this may do nothing. I mean, it's going to it it has a really good dividend yield to it. It's it yields close to 4% because of the companies that are in it. But, you know, you're going to be just kind of sitting on potential losses for, you know, 12 18 months before potentially. I don't I don't know when this thing is going to turn. It's going to take time, but when this eventually turns, it'll make money. So, this is why like even with our accumulator model, if you're just trying to get started out investing, these are great models that you know, hey, I I like this thesis long-term. I'm willing to suffer the slings and arrows over the course of the next 12 months. If it goes down 10%, I'm not going to freak out and sell everything, right? I'm just going to keep dollar cost averaging into this because over time, the thesis should work out. There's just a supply demand imbalance that's going to have to get met at some point in the future with the energy and with the energy grid in particular. But again, it's going to take a couple of years potentially to get there. It could it could come a lot sooner. Maybe this whole thing catches on, everybody starts buying them next month. Maybe it works out great, but just from the fundamental basis behind it, it's going to take time. So, it's something that you dollar cost average. It's a small part of your portfolio. It's 3 5% of your total net worth and it's something you just dollar cost average into over time. >> Okay. So, a couple things you mentioned there. So, um uh we because we don't know like this could catch fire tomorrow, right? >> Yeah. not not your default assumption but could right which is why you want to start building a position right because if it starts taking off you want to have at least some skin in that game now I think you're doing the right thing and saying hey look we don't know and there's a lot of you know still headwinds the industry is facing so set yourself up for expectations that the price could go down from here right and so that is a nice dollar cost averaging opportunity right if you think the long-term uh potential is there but you don't know when it's going to turn well start nibbling in. Let let cost averaging let you lower your entry price over time and then when the turn comes you'll have a nice you know entry position that should ride that wave. Right. >> Um >> absolutely >> now presumably I think Lance and I don't want to put words in your mouth which is why I'm asking you this. Um, you know, at RAA, your intent is to try to capture 80% of the upside while only getting exposed to 20% of the downside, which means you're not going to go all in on the energy space at the exact bottom because you don't know where it is. But you're going to be looking for technical and other indicators that will eventually let you say, "Oh, we see now that the we think, you know, high degree of certainty the bottom is in our rearview mirror. We think this thing has turned. Now it's time to start increasing your exposure." So presumably at some point you would come on this channel if you saw that and say hey I might switch from just dribbling in dollar cost averaging to start increasing more in this space if I really believe in this thesis. Correct. and and and but you know for instance in in our kind of our broader macro core models um we already own companies that are in the space so like we own GE Vernova we own Kinder Morgan Energy um and others and so you know even in our core models we're already making those energy bets there and that and they're fairly small positions but we'll start you know grossly increasing those as well but yeah at some point if we begin to see you know oil prices turn up on sustainable basis and we're starting to see those type of drivers and starting to see that real impact coming in. Yeah, this is, you know, we're going to be a like in our core equity models, we're going to be adding more energy. We'll be increasing the overall energy sector waiting, but that'll also be the time to start aggressively, you know, adding money into an energy specific portfolio. >> Okay. All right. All right. Well, look, we're um we're starting to wrap up here. Um I I'll do a quick see if we can do a quick rant and then we'll we'll wrap things up. Actually, real quick before we do, trades. What trades, if any, have you guys made at RA in the past week? >> None this week. We came into this uh kind of in a pretty good position. Like I said earlier on the show, our our portfolio is down about one one and a half% versus the market three and a half. So, you know, really not a lot to do. We we we carried a really good balanced portfolio up to this point. So, days where MAG 7 hasn't worked, um like for instance, good day, good example is yesterday. Um Nvidia was down 2% at the end of the day. Walmart was up like four and a half. So, you know, that we have these different positions in the portfolio that tend to offset each other. So, if I have a bad day in one one position, I've got another offsetting position. You know, we talked a couple of months ago about healthc care being very out of favor and that we were adding the healthcare stocks. Those have been doing very very well and have helped really kind of balance the portfolio. So, this week we haven't had to do anything. But again, over the next couple of weeks, we're going to be doing tax loss selling. Um, you know, rebalancing the portfolio for the kind of the end of the year and just kind of doing some maintenance and cleanup. So, you know, kind of looking for a bounce here in the markets that might last two, three days and then maybe next week we'll start doing some of that work. >> Okay. Um, but but good to hear that the portfolio is performing as intended. Meaning that even when you know some of your high-f flyers are getting knocked down here, a lot of the sort of stodgy steady readier guys are providing the ballots that you expected them to. >> Yeah, exactly. Yeah. Never count out Warren Buffett. >> Okay. Um I just want to note here um because again markets are still open. Um market has been picking itself up today. Um just looking here, it's up about um you know 1.3% or so on the S&P right now. Um, Bitcoin has started recovering a bit. I think it hit a low of 81,000 overnight. Um, it's now at about 85,000. Uh, and Nvidia is green for the day. Not by a lot. Um, so, uh, >> Google, by the way, Google has absolutely been scorching it over the course of the last couple weeks. That's that's an area we're that's one of the stocks we're going to take profits in. Uh, rebalance that one back to Target. But, um, >> okay. And how much of that is is Google's general outperformance versus the fact that Berkshire Hathaway just bought some >> that that's a little bit of it but but you know and that certainly helped lift it for a day but the reality is is that their AI their their their platform Gemini >> is doing very well um and you know Google makes up 75% of the search market >> and one of our bets is that eventually Google's going to win the a open AI I don't think I don't think chat GPT open AI wins this race. I think Google does and that eventually Google will have 75% of the of the AI space as well. >> So, let me ask you this. Um, so that's not known at this point in time, right? >> Right. Nobody knows that. That's a it's a it's a bad >> So, you you've got two big things going on right now. You've got AI kind, you know, totally eating into search queries, right? >> Right. Um, so it's a lot easier just to say, "Hey, chat GPT, just give me the answer versus putting your query into Google and having to click on all the blue links." Right. Right. >> So that to me seems like a really big a massive threat uh to their core revenue model. >> Right. Um, secondly, >> there's a bunch of hyperscalers trying to win the AI race. Google being one of them. No guarantee Google's going to win that. So my brain says, "Well, you got to put some pretty hefty discounts on Google right now because of that uncertainty." Clearly, the market disagrees with me. >> Yeah. >> What's wrong about what I'm thinking >> because >> and then there's another third thing which is even if Google wins and gets 75 maintains its search share with AI, >> can it make money off AI the way that it can off of uh as profitably as the way it's been able to off of its search business? I don't know because you're getting the answer right away. You're not clicking on a whole bunch of advertiser links. And Adam, you you should know this better than anybody because you used to work for Yahoo. Google Google went to Yahoo and said, "Hey, we'll sell you our search engine for like $5 million." And Yahoo said, "Nah, we don't want it. We're we've got our own search engine." And so they launched >> Yahoo actually used to use Google for a while, but um yeah, it was by a search engine. I think it was by us. And yeah, Yahoo Yahoo passed. >> Yeah, exactly. And so then um Google went back to them at one point said, "Hey, we've got this uh you know this thing going on and and actually Yahoo approached them at that point about buying them and offered them like two billion or a billion. I can't remember what the number was. It was a lot." And Google said, "Nope." And they turned around and launched AdWords right after that and basically destroyed Yahoo on the advertising front. So my point about this is is that the one thing you don't discount about Google is them figuring out a way to dominate the market. They did it with YouTube. They did it with Adwords. They and they did it with search and >> although they bought YouTube. They didn't they didn't create it. But yeah. >> Yeah. But then they then they turned it to the monster it is today. Um but at the end of the day, you know, my bet is that they they'll figure out how to monetize AI efficiently like I've done with with it may not be direct. It may be through another version of like their Adwords or whatever, but this is a this is a company that knows how to monetize a business. And so I that's why we own them and we will probably continue to own them for a long time. >> Okay? And look, you know, kudos to Google. They continue to outperform over the years. But this I'll just be transparent. This is something I'm having trouble with on them, which is I just see layer after layer of uncertainty. And a as the uncertainty gets removed, great, fine. Give them a big premium. But until then, I'm just like, wow. Well, see here here's the here's the problem with that though. And so this is what what as as being the host of thoughtful money that you need to be really careful because people look at you as a really smart guy and they go, "Oh, Adam knows what he's talking about, so I'm going to listen to him." So when you say, "Well, there's all these uncertainties." Your listeners then go, "Well, Adam's saying I shouldn't invest into this and so I'm not gonna invest in Google right now because of Adam's concerns." and then the stock goes up another 30 40 50 60% and they lose that opportunity. It's okay to have I have concerns about this as well. But I know how to invest around those concerns. I can hold a stock that is grossly overvalued, grossly fundamentally disconnected from the market, but as long as the price is trending in the right direction, I can participate and make money on that, which is our job as portfolio managers and your job as the host of this show is saying, "Look, I may have these concerns, but that doesn't mean this stock can't go material higher because this company has proven itself over and over and over again to dispel those dis those those concerns and prove that they are dominantly in the market and that's the thing I would bet on. >> Well, so I I appreciate you bringing this up um because um I mean just >> categorically I don't tell people what to buy or sell now. I understand that somebody can I I understand somebody can make the mental leap that you're talking about there. Um and so I'm I a I'm glad you're giving me the chance to clarify. I'm not saying don't own Google and I said earlier there's something I don't understand but the market clearly doesn't agree with me and that's what matters at the end of the day is what the market thinks but this is again kind of the emphasizing the prime the the uh what is it the the foundational part of what thoughtful money you does here is it brings on professional financial advisors like yourself because I'm saying look I don't have all the answers and what you want to do if you don't feel like you have them all yourselves and I think most people don't feel like they have all the answers themselves is you want to work with an experienced adviser who can deploy all the active management tools that you and your team do, Lance. And so I'm glad you're giving us a chance to really uh to really underline that here. >> Yeah. And let me clarify my point. So I don't want anybody to infer that I'm saying go out and buy Google today. >> Yeah. Because you're telling everybody to buy Google calls handover fist now. >> Exactly. This is this is a weekly chart of Google and this advance. Why why Warren Buffett actually bought Google here, I'm not quite sure, but he's his own he's his own man, right? So, >> well, I'm pretty sure it wasn't Warren who bought it at this point. I think it's the new guys, but yeah, >> it could be. But, you know, this thing is three standard deviations above its long-term moving average. Historically, when it gets to these levels, you remember I did this same chart on gold a while back and I said, "Look, you know, when you have these big type of deviations, you're going to get corrections. It doesn't mean the end of the world. It doesn't mean don't own it. But to buy it here, the the real reality is, and this is why we're going to take profits in it, rebalance it back to portfolio weights, maybe even underweighted a tad because a pull back to 200 or 220 on this stock is not outside the realm of possibility. That would just be a pullback to the longerterm moving average, still being a bull market trend. Extremely overbought on a relative strength basis. Momentum is extremely overbought. Every measure says this stock is going to correct at some point and it always has. Um, and you need to be aware of that. But on a pullback, if you got the correction back to these levels, I would certainly be a buyer. >> Okay. All right. Um, so it's so funny because now you were you were disparaging me saying, "Oh, I'm not Google." No, I I I know. But but but actually give me a chance to say this, which is >> I'm going to continue to do this though, which is because of thoughtful money, right? is is my job is to say, "Hey, here are things. >> I'm trying to understand this market just like everybody else is and we're sort of collectively trying to understand this together. So, when I see things that don't make sense to me, I'm going to raise them to you because you may have a piece of the puzzle that I don't have." Right. >> No, no. And and and look, and that's that's that was the only reason I pointed this out. I'm not disparaging you at all. And I and and nobody should take our conversation right now away as me like, "Oh, Lance was beating up on Adam." That's not at all because like I said, you're a very very smart guy. You've been you talk to a lot of very smart people. You're a very smart guy and people look up to you and that's the risk you have as a public person as you are. And you know, we have this this moniker of thoughtful money, right? We want to be thoughtful about our money. We don't have a view one way or the other. It's not bullish. It's not bearish. We're trying to tell you what's the right thing to do with your money for your personal situation. And again, this is why you need to go have financial counsel with somebody. Don't just take our word for it, right? Go do your own research. Go do your own work. We're just giving you ideas and things to be thoughtful about. And and so my point is, Adam, is that we just need to be careful that people don't take something that you say and just infer it to mean something else and then go make decisions that hurt them financially because that's the one thing we're trying to avoid. We want to make sure everybody does the right thing with their money long term. >> Yeah, I completely agree. And and just to expand Lance's point there, yes, don't take anything I say as gospel and don't think don't take anything that Lance says as gospel or any other experts on >> I don't know what the hell I'm doing over here. [laughter] >> Yeah. And again, folks, again, this is why uh I I I think um hopefully the value of this program is is um we do try to kind of scratch through everything and to try to get a sense of of a truer sense of what reality might be. But then of course it's all about okay, well then what do you do about that, right? And the answers to that are very specific to you and your personal situation. And that's why I think for the vast majority of people who aren't excellent uh you know DIY investors with a with a a long track record of of outperforming on their own, that's where you should seek professional counsel and say, "Hey, this let me educate you about the specifics of me. Now you help me think through what makes the most sense for me given these insights that that we're learning, but but mapping them to my particular needs and wants and goals. So anyways, >> all right, don't need to beat that horse anymore. I think folks got it, but good. It's always good to remind people of this. >> That was a good rant. We're done for the day. Thanks for coming. >> Yeah. Yeah. Well, here we'll do we'll do a micro rant and then we'll we'll wrap it up. Um so uh Elon Musk was just interviewed and he said that he thinks in 10 to 20 years that work will be optional and that money may not even really be relevant anymore uh because of AI, right? That we're going to have robots that do everything for us. They they you know grow our food. They give us healthcare, you know, they delight us with all sorts of forms of entertainment and stuff like that. So, it's going to be sort of the Star Trek future of just like, hey, technology will do everything for us and we can kind of be our best selves. Um, and and to be honest, folks, I didn't watch the full interview. I've just seen the headlines that have come out around this. Um, so I don't know exactly what M said, but uh, you know, obviously this is a guy who's sitting in the epicenter of technology and he's looking at, you know, where he sees things going. Here here's here's two big questions I have for that assuming he's right for a second. Um one is is that a net boon for humanity, right? Like like people my opinion you've heard me everyone's heard me talk about the three big pillars of true wealth, right? Which is quality relationships, health and purpose, right? And if you remove purpose, right? because work our our purpose is is not 100% but but heavily tied to kind of what we do for a living, right? And if we if we remove people's need to be purposeful, um what does that do for society? And yes, we could say, oh, well, it frees us up to learn everything and build these new skills and whatever. We know what happens when we give people advanced technology. They generally use it for our basist desires, right? We watch porn and cat videos and all that stuff. Um, so, so >> at the same time, >> there's that question. And then the second question I have for you, Lance, is >> if he's, if this is true, right? Um, we are changing the human experience. I mean, since the first, you know, uh, homo sapien crawled out of the cave and had to go get food to be able to eat, you know, at the end of the day, humans have had to do work to survive, to exist, to thrive. If we are removing that, it will be the first time in our human experience where we wouldn't need to do that. Is is that something that maybe we should just like have a vote on or something like like we're just we're barreling to this future with the presumption that it's it's the right thing to do. But if we're going to change something that is so core to humanity, shouldn't there at least be a national dialogue around this? >> Yeah. You know, the problem is that yeah, the answer to your question is yes. Sure. Right. But then ultimately at the end of the day, you you really can't stop what's coming, right? The the innovation is coming. It's here and it's just a function of how how how it turns out. And you know, you know, George Jetson had to still go to work every day, right? So even though they had robots in the house and everything else, he still had to go to a job every day. So I don't know if if >> in that fictional cartoon future. >> And I know I'm just saying I'm just saying we we this is all a fictional future. We have no idea what the future's going to look like. U but my point is is is that you know I agree with you 100%. People need purpose. If you if if I don't have a reason to get up in the morning, there's no reason to get up in the morning, right? And and I don't think that's a good outcome because if if you know there's an old saying about idols idol hands or the devil's war or devil's playground >> and we've and to your point, we've proven it with social media, right? We've have done the most negative things to society that we can possibly imagine because of social media. You know, I've said this before is like if Albert Einstein ever came back and said, you know, what was the greatest invention since I died, everybody goes, "Oh, look, it's right here. We have all the we have all the knowledge of the universe in the palm of our hand." And he's like, "Well, great. Everybody's very smart now." Right? It's like, "No, we just sit around and tweet mean things to people we don't even know. That's on the toilet, right? That's >> I I'm pretty sure the two things that he would realize when he comes here is he would say, "I'm amazed at at your technological innov." Exactly. And so so no I don't this is like UBI you know universal basic basic income that has never worked out well. They've run live experiments on this. It did not work out well. People did not become more productive. They did they did not go out and pursue higher education or other hobbies or anything like that. They just took the income and just lived their same lifestyle and and it deteriorated. Well, they became dep become dep I mean we we've seen that subsidization of lifestyle leads to dependency not to elevation. Yeah. >> Yeah. And so so the outcome of this is not good. Um you know the and again what we're going to wind up with in society is a very bifurcated society. There's going to be those that can harness the power of AI. They're going to be able to make money with it. They're going to have the wealth. And then there's going to be everybody else. >> This is my lower eyeshaped society. Lowercase eye shaped society. It is. It is absolutely gonna be the case. I just interviewed Peter Atwater. We've got his inter we're gonna run his interview next week. I just interviewed him. Talk about the K-shaped economy. But, you know, this is going to be a K with a very long lower limb going out of it. And it's not going to be good. And eventually, you know, I I think people have to rebel to some point. I think a really good picture of the future is if you've never seen the g the the movie Ready Player One, you should watch the movie. Um, I think it is a really good prediction about where we wind up with the future based on what we're doing today. >> Right. And a fair adjective for that is dystopian. I don't think it's a future any of us aspire to get to. >> Every everybody's super poor except for the people that own the corporations. >> Okay. Well, um, again, like many things uh happening at the macro level, we don't have to like it. Um, and it it it might be something that we can't control in terms of what happens, you know, to the average of society. But of course on the individual level just like in you know with investing um you know we can take charge of our own destiny. Um and you know my advice here for folks is learn enough about AI to make it work for you versus against you but also um you know um focus yourself on you know what can I be motivated to do when I wake up in the morning and you know raise your children in such a way that they understand the value of work and I don't mean work as toil I mean work as purpose and meaning in your life. >> Exactly. Yeah. >> Yeah. All right my friend. Well, look, um, you know, thanks. Another great week. Um, happy Thanksgiving again to you and everybody watching. Folks, if if you think, uh, the best way to inject more purpose in your life is to continue to watch Lance Roberts on this channel week in and week out, please let them know that 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, I'm about to tell folks to go fill out the form to go talk to you, Lance. uh you know if they want to get some guidance. Real quick though um because Thanksgiving is is just a few days away, we are getting really close to those year-end deadlines, right? For things like tax loss harvesting and taking your required minimum distributions, charitable giving, stuff like that, right? So this it's actually a important time of year to sit down and and make sure you're doing all those steps. And if you aren't clear on what you should be doing, then obviously that's something your firm can help people think through, right? >> Yeah. Yeah. And look and and please don't wait till the last minute. You know, every year people like try to come in the last week of the year and do their RMDs, do their distributions, do those type of things. Don't wait. You, you know, some of these things have to be done before the year closes out. Otherwise, you suffer potential penalties. And if you get really close to the deadline, you know, these big firms like Fidelity and Schwab, if they get backed up and you run the risk of of that not getting completed on time, if there's a paperwork snafu or you forget to sign a dotted line somewhere and those things happen, give yourself some time. I, you know, if you got to, if you're, you know, over the age of 72 and you need to do your RMDs, I would start working on that now if you haven't done it. um you know doing your tax lost harvesting, your charitable giving if you need to set up things like a um you know a donor advised fund uh those type of things those can be done. They can be very tax efficient be very friendly for you tax- wise but it takes time to set up. So again, give yourself a little bit of time. Start thinking about that now if you don't know what a donor adise fund or if you don't know how to do charitable giving those type of things and and the most tax because you can donate. You don't have to sell stock and go donate cash. You can actually give stock as part of your charitable donation for the year, but give yourself some time to do it. Don't wait till the last minute so that you get behind the the behind the deadline. >> All right. All right. So, folks, if you'd like help with any of those year-end activities or just positioning for some of the more macro, you know, trends that that Lance and I were talking about, uh, if you don't already have a good financial adviser who's um, advising you on that, then feel free to talk to one of the ones that thoughtful money endorses. These are the firms you see with me on this channel week in and week out. Perhaps you'd like to talk to even Lance himself there at RAA. To do that, just fill out the very short form at thoughtfulmoney.com. only takes you a couple seconds and the firms will be in touch with you right away after you do that. Uh, Lance, my friend, it's always great. Uh, I'll give you the last word as usual. >> Um, happy Thanksgiving and um, we'll talk to you. I guess we're doing a show next Friday. >> If you're a game, I'd love to do it. I'm sure folks love to watch it. >> I I may be fat, dumb, and happy, but yeah, I'll be here on Friday. >> All right. I will, too. I'll be on the road, but we'll do it. It might be a little bit shorter just to let us uh, spend some time with our families, but I appreciate you being open to that, Lance. >> Yeah. No, we can do that. We just do a little short, you know, 30 minute one or something and just catch up. You know, it's gonna be a light trading week anyway. Markets are closed Thursday and half day Friday. So, yeah, we just do something to just kind of catch up where we are. >> All right. Well, thanks, buddy. I'll see you next Friday. And folks, you'll see us next week. Everyone else, thanks so much for watching.