A Market Rotation Is Underway As Capital Begins To Leave The AI Trade | New Harbor Financial
Summary
AI Leadership Shift: Extensive discussion of the AI trade’s durability with a potential handoff from NVDA to GOOGL as Google’s new chips stoke competition and sentiment rotates within hyperscalers.
Technology Sector: Despite Nvidia’s weakness post-earnings, broad indices bounced and the narrative suggests a possible changing of the guard at the front of the AI sled, reinforcing the Sector Rotation theme.
Healthcare Upswing: New leadership cited in Biotechnology and Pharmaceuticals with breakouts discussed (e.g., IBB) and the spotlight on LLY as the first $1T healthcare company, though near-term entry deemed extended.
Precious Metals: Bullish stance on gold and silver with breakouts forming; miners like GDX showing triangle breakouts as silver outperforms gold within the complex.
Bitcoin Volatility: Despite a sharp drawdown, Bitcoin viewed as a potential opportunity; the discussion referenced the IBIT ETF for price action while cautioning on leveraged proxies like MSTR.
Market Outlook: A year-end rally remains possible with rising odds of near-term Fed rate cuts; breadth improvement and key technical levels are being watched for confirmation.
Opportunities and Risks: Opportunities highlighted in healthcare, biotech, pharma, and precious metals; risks include stretched tech leadership, private credit exposure to AI infrastructure, and elevated overall market valuations.
Positioning Approach: Preference for incremental adds on strength while keeping equity exposure moderate and emphasizing emerging leadership over lagging financials.
Transcript
there is a shifting of some of the sector leadership that we think is not just a a temporary blip here. It seems to be a a durable um kind of rotation that uh is likely going to play out over over several uh weeks and months. Welcome to Thoughtful Money. I'm thoughtful money founder and your host Adam Tagert. welcoming you here for a very special Thanksgiving week edition of the monthly uh macro and markets update from the gentlemen at New Harbor Financial. Uh this is one of the financial advisory firms that Fal Money endorses. You see these folks with me on the channel every week. Uh I'm joined as usual by John Lodra and Mike Preston, the lead partners there. Gentlemen, thanks so much for joining me and happy Thanksgiving. >> Same to you. Thank you. >> Same to you. Glad to be here. Thanks for having us. >> All right, guys. Well, look, um, lot lots going on. So, uh, we don't have a ton of time here given that it's it's a shortened week. Um, both in terms of the recording studio time we have here, but also just the markets are only open for about half the week. Um, so let's dive right into it. Okay, so let's let's pick up where last week ended. Um, we had a pretty notable reversion in the market last week with Nvidia. Um, you know, the markets had been kind of slouching. A lot of doubts were beginning to emerge uh in the the mainstream financial press headlines about the sustainability of the AI trade. And everybody was looking towards Nvidia to kind of save the day as it pretty much always has over the past couple years. And Nvidia did what it always does. It it uh released just gang busters performance. Uh it upped its its uh forecast. Um so really just a you know another one of these sort of fantastically good um earnings results and as Wall Street has want to do it it reacted immediately and and aggressively to that good news. It sent Nvidia up by about 5% I think in the aftermarket. So when the market opened the next day, uh stocks jumped, Nvidia was up five, actually I think it got up to more like 6% in the early trading, but then the momentum quickly wore off and throughout the rest of the day, Nvidia kept sinking and then it actually went negative and it closed down about 3% for the day. And there was a lot of constrnation on Wall Street, a sense of like, oh my goodness, are we do we are we watching the peak of the AI bubble get put in in real time here? uh and a lot of hand ringing going into the this past weekend. This week the markets have recovered a bit a little bit not a ton. Um so love to get your guys' thoughts on that which is hey was last week maybe a seminal turning point in the market. That said I got a note uh here that it it looks like the baton maybe being handed off. Um, while Nvidia is is still a little bit weak here, uh, Google is just on fire. Um, and it's been on fire for a while, but this week it's really gone bananas. And a lot of the large part of the news driving that is Google's new chips. And Google is emerging as a chip competitor here uh, to Nvidia. And one of the things about Nvidia is that it's kind of been like this in this peerless category where just nobody could compete with it. And all of a sudden, it seems like there might be another, you know, we might have a real horse race going on here. So, why don't we start with this guys? How important is this? Which things are you watching most closely? What do you expect to happen next from here? John, you've been nodding a lot as I've been saying this, so why don't we start with you? >> Yeah, great. Uh, thank you, Adam. Yeah, Nvidia has been obviously a bellweather stock for for as long as all of us can probably remember and it has been um raising some some eyebrows of late and you've rightly pointed to the kind of recent uh arms race of sorts between Google and and Nvidia in terms of the chips and you know who's going to steal market share or keep market share and um might as well look at a chart because we always bring it back to the data here. So um this is a daily chart of Nvidia. Uh sorry for the busy chart. I I realize I these dotted lines are a residual from a a working case study that I had with a prospective client that owns a very large concentrated position in Nvidia. They're actually, you know, worried about the the stock position, but they've got large gains. So, what these uh bars are, they they were a hypothetical kind of collar hedge that we were talking about with this prospective client uh to to basically allow them to kind of continue to string out the capital gains, but at the same time uh protect uh the downside and still have some upside potential. So, I apologize for the busy chart, but the daily turnaround you spoke of is right here. This is the bar for last Thursday, which I think was the I forget the date, the 20th maybe of November. And you can see we had a massive reversal. Um popped in the after hours the day before on strong earnings beat and had a you know very notable reversal and it's been weak since then. Here today we're we're down about 4% on the day. stocks at 175 pretty notable intraday reversal here but um this is what happens when you know there's there's been a bit bit of narrative about AI in general but certainly regarding Nvidia and I don't know certainly any better than the next lay person as to truly what Google's chips may or may not do compared to Nvidia's but uh in some ways it doesn't matter because the narrative is starting to to change a little bit and that often times can be all that does that that takes hold of price and and that's why at the end of the day narratives and and you know my chip is better than yours doesn't so matter doesn't matter so much as the price action and we're seeing you know Nvidia actually be quite weak relative to a broader market and I'll just I'll just share a chart of the S&P just to show you what that's done. So Nvidia is you know you know still healthy below its 50-day moving average uh as just one metric whereas we've had a pretty sharp bounce in the S&P. This is SPY, ETF that track tracks the S&P 500. Had a pretty sharp bounce here. We're back above the 50-day, which is this green line, and actually have poked above the 21-day moving average. Uh this is this got a pretty you know this is a pretty notable sell off because not just the indices but the breath and the participation indicators that we follow things like bullish percents the percentage of stocks above certain different moving averages speaks to the narrowness of the market that's turned down pretty notably uh pretty quickly last week enough so that we we called some of the weaker positions in our portfolio. We reduced equity exposure by about 5%. Uh notably we pulled back on financial sector exposure, but so far we've had a pretty reflexive bounce here. I should note that the talking heads of the Fed were out in full force uh this day on Friday and we saw a pretty notable reversal and with that we'll talk about I'm sure later the the market expectations for rate cut in December are back to raging you know almost c almost certain right so we'll talk about that but that we've had a pretty notable reversal here noting though the the volumes been pretty weak here we are in a a notoriously thin holiday trading week so it's hard to get a true read on the markets but so are we have to respect this bounce for what it is. We defending this 50-day will be important. We'll want to see some of our breath indicators start to move higher, which they've started to to inch back up. A little too early to call this, you know, you know, sell off averted, but uh so far the change in tone is to the upside, but needing some confirmation. >> All right, so a few questions here for you, John. Um put that chart back just up for a second here. Um, so what I'm finding interesting about this, and you tell me if you're looking at it the same way, is, you know, we when we look across the history of this chart here, >> um, you the it's been the mag seven or the top 10 stocks that have really been driving the direction of the markets, right? you know, breath has been very narrow at times as we've often talked about, but hasn't mattered so much because these um you know, these these hyperscaler stocks have been doing so well and they make up such a percentage of the index that they kind of push the index around, right? Where they go is sort of where the index goes regardless of what's happening with the other 490 stocks in the S&P. Um and Nvidia was the lead sled dog. In other words, there were times where, you know, the other other top 10 stocks maybe weren't doing so hot, but whatever Nvidia was doing was where the market was going because Nvidia just had that much, you know, influence in the in the index. What's interesting here is we're now seeing the the index get a pretty decent bounce and Nvidia isn't. And I think it's largely due to Google. And maybe you can just put up a enter the Google ticker there for a sec so we can see what's going on with Google. I mean, Google, I don't know what the word for this is. When you're this far off the out of the Ballinger bands and everything like that, you're in a totally different stratosphere, maybe even a different solar system at this point in time. Um, and we can argue whether this is merited or not, but what's interesting is it it it it it's seeming here that maybe there is a changing of the guard at the front of the sled, that maybe Google is going to become the dominant sled dog from here. And look, I know you're you've got an engineering background, John, so you probably understand this better than I. I'm kind of chag grinned a little bit because I didn't really even know that much about what Google was doing in chips. I just reading the headlines, this kind of caught me by surprise because I would have thought that before all of a sudden hearing, you know, Google's becoming dominant in chips. I would have heard more headlines saying, "Oh, Google's beginning to become a challenge to or it's aspiring to to knock Nvidia off its top." Like, I didn't hear any of that. I just sort of woke up, you know, the other day and it's like, "Oh my gosh, I guess Google's got these really cool chips that that everybody wants now. I guess Facebook's placing a big order. That's why it's getting on the radar here. Um, so anyways, I guess two things. One, do you potentially see a changing of the guard at the front of the sled? And and two, is there anything you can tell us about these Google chips in terms of how they might differ from Nvidia's offering is? >> Well, it's been a long time since I studied engineering, Adam. Uh and even at that um my my uh intention to study electrical engineering uh morphed into ultimately studying operations research which is essentially engineering math applied to all kinds of business things. So my grasp of microchips long since you know uh you know is left behind in the textbooks of physics physics class. So I I candidly don't have an informed view there. But I I I guess I too was as a lay person as much as perhaps you and your viewers uh was surprised to hear that Google has these chips that apparently Meta for example has talked about hey we're going to put you know some some uh real force and and purchasing into into Google chips. So, so that was news to me and that really speaks I think to the the narrative that can matter as much as the reality in terms of price behavior and you can see here Google has absolutely been a positive divergence relative to not only uh Nvidia but look at the whole technology sector here's a ETF that follows the technology sector this is a more of a cap weighted one even the equal weight so-called equal weight technology sector ETF you can see this is a sector that has struggled relatively late. Compare that with sectors like healthcare which have gone parabolic. This is kind of under the under the stealth surface of the markets. You know, um frankly, um we were in healthcare last year. We sold out not too differently from where the price is now. But this has been a powerful move, one that frankly we would want to see pull back in before looking for an entry. But there is a shifting of some of the sector leadership that we think is not just a a temporary blip here. it seems to be a a durable um kind of rotation that uh is likely going to play out over over several uh weeks and months. >> Okay. So, you use that term rotation which um I you and the other adviserss I've had on the show have been saying that's something that you're if I've been taking good notes, you all sort of have been you sort of been awaiting for the fact that that we may start having some sector rotation, you know, outside of just the big tech hyperscalers. Um, we've had this bad breath in the market as I mentioned earlier. It looks like we're starting to see that rotation. It actually looks like maybe we're seeing some of that rotation inside the hyperscalers as well. Again, if Google is is now kind of stepping into the top slot here. Um, so I'm going to I appreciate your candid answer there, John, about the technology. Obviously, I've got some Thanksgiving reading ahead of me and understanding, you know, Google's offering here. I I've read just a little enough to know that their chips sort of operate differently than the Nvidia chips. And I'm not even sure I can explain how um but I think they sort of tackle processing differently. And um without knowing a ton of information, I think maybe you know the Nvidia chips are better for certain um types of calculations and maybe the Google chips are better for some others. I'm just going to ask the techies in the thoughtful money audience here, hey, if you've got any um clarity to contribute in the comments, please do so that we can all as an audience, you know, understand this stuff better going forward. Um, Mike, I'm coming to you in just a second, but um, just to wrap this up, uh, you know, it's interesting to me, John, is is at the end of last week, there were some, you know, some really nervous questions being asked of, hey, is the AI bubble just burst here? I think what I'm hearing this week is no, but maybe it's going to be driven by a different company, you know, primarily going forward. Google maybe more than Nvidia. Now, who knows? We're in the first couple of days here of all this, so this could all change. But to your point about narratives, you know, uh, if you think there's a bubble in this market, bubbles are driven by sentiment. So sentiment becomes really important. And that was so interest, you know, so important about last week is people were starting to lose faith in the AI story. Well, that's going to impact sentiment negatively. Seems like what they're doing this week is not giving up on the AI story. They're just changing the story. Okay. Well, it's not an Nvidia dominant story. Maybe it's a Google dominant story going forward. Again, we'll see what happens here. But it doesn't strike me yet that we're the last week did mortal damage where investor sentiment about the AI trade has been materially injured here. What do you think? >> Yeah, it's I I think there is a bit of that actually Adam and we saw that in the broad technology sector indices start to turn down even while Google for example has picked up some attention. So I think um you know look the the concerns that were raised last week I think were legitimate and not just last week but these are concerns that have been increasingly voiced you know in terms of the um the durability of the spend uh and and kind of you know part of the challenge here is that this this whole financing of this spend has been largely in private markets. They haven't really been subjected to the discipline of public markets. Now there's two ways to look at that. One might say and I'm I'm thinking of like companies like Blue Owl for example was which is a private credit fund that you know we talked about last week as being in the the headlines of being under under some stress uh you know and they did a lot of lend lend private lending specifically to the tech buildout you know the infrastructure for data centers and such like that. Now there's two ways to look at that. You know, on the one hand is, you know, maybe private lenders can be a little bit more, you know, forgiving and fluid in terms of, you know, the discipline that public uh credit markets often times um display. But the other way of looking at, and this is a cynics way of look at looking at it, well, maybe it's really even worse than we we think because that hasn't had that discipline of of public credits, you know, demanding the kinds of protection. So, this story's got to play out a little further to to have a a clear read on that. But the the the fact that the broader tech sector is turning down along with uh Nvidia um has me thinking there's there's more to the story yet to play out. >> Okay. So so more more maybe worry in the picture, but again to my point, this this doesn't seem to be the crack that some people or doesn't seem yet to be the crack that some people were fearing it was at the end of last week. >> Not yet. I think I think we got a a a brief reprieve here that we'll have to see how this plays out. There there's I think there's more news headlines to come that probably won't be of the rosy sort there. >> Okay. And and last question on this before I come to you, Mike. And Mike, feel free to chime in on any of this when I handed the baton to you. Um uh you know, there's been a lot of volatility in the market. Um again, last week the market kind of took its lumps in some important ways we've been talking about here. Does this is this making you think that we're going to slump into the end of the year or do you think you know the the Santa Claus rally the year end you know general rally that we tend to have most years is likely still on and the reason why I asked this question is is um you know the there were some voices last week saying hey this is it and I just might want to give folks a little bit of caution to say hey I'm not I'm not sure we can conude clude yet that a run higher into the end of the year isn't possible at this point. >> Yeah. Well, we uh we've regained the 50-day some really important technical levels in broad indices. Uh if we keep those uh very likely there could be a path of least resistance higher, especially as you got the uh expectations for rate cut uh back firmly on the table. We've done a round trip. I think uh a month ago there was a 90% expectation of of a a quarter point cut in uh in the December meeting. Then it got down as low as 30%. And then the Fed heads came out on Friday including Williams which was you know very powerful speech saying hey you know basically that that rate cut isn't off the table and here we are I think today almost 90% odds again of a rate cut in December. So that that's been a complete um end to end kind of whipssaw in terms of rate cut expectations. >> Yeah, I'm just pulling up the chart here so people can see um so right now it's 85% probability of of a 25 uh basis point rate cut uh next week. But to your point, John, if you look at it a week ago, it was at just 50%. Right. So, you know, all all of that Fed speakers um plus I think just some of the weakness that we talked about um got people a little bit more spooked saying, "Hey, the Fed probably is more likely going to have to act here." >> Yeah. And look, a month ago was it was 92%. And I think it got as low as 30% odds just within the last week or two. So, it's it's pretty much gone both both ends of the field in that in that regard. >> Yeah. And I'm just curious on the why it went so low. I know one of the arguments for it was look, the Fed's flying blind because of the government shutdown. And so out of an abundance of caution, the Fed would was saying or people were thinking the Fed was just going to say, look, we're not going to do anything until we start getting some data, some more recent data that we can trust. And I kind ofish get that argument. Were there any other compelling arguments data wise or otherwise why the Fed wasn't going to cut? >> I think it starts with the last Fed meeting. uh at the last Fed meeting they announced the cessation effective uh December 1st of quantitative tightening. Uh but they also uh basically said uh to paraphrase by no means is a rate cut at the December meeting a foregone conclusion. They they pretty forcefully walk back the markets expectations on that and the c and the and the narrative coming out of the Fed heads. These are just people talking and it's amazing how much influence they have on markets and market expectations but it is what it is. Uh you know on on the hawkish side I would say and then just recently um we we saw kind of a bit of a pendulum swing back in that direction by Williams who's a pretty influential you know voting member. Yeah. >> And I think I think um the market's starting to look at the Fed not as hey what chair Powell says is what the what the forward guidance is but now there's actually dissent. There's there's differing uh opinions. There's different votes. We've we've seen disscent start to emerge in this body that hasn't been present. So now it's it's you know I've heard some people talk about it like hey now it's really about vote counting. It's not about what what Powell says. It's about counting the votes. >> Well is I think increasingly viewed as a lame duck at this point right because his tenure's up in six months or so right. Um, and then also, we'll talk about this in a moment, but um, you know, there's there's some speculation that there's, you know, some jockeying going on on on the FOMC for for Pal's job, right? And they're trying to curry favor with the administration saying, "Look, I'm happy to bring rates lower, but it's this, you know, it's this current share that's getting in my way." >> Candidates for a job will say a lot of things to get the job. Let's put it that way. >> Exactly. All right. Hey, Mike, thanks for being patient. We're going to trendle over to you here. Um, first off, anything you want to add to to what John said there before I change the subject? >> You guys covered a lot of stuff. Um, talking about the Google chips, Google makes chips for their Pixel telephones, right? The the and I think it's called the Tresor, the Tensor chip. And so, yeah, they their chips are in their phones and I really wasn't that familiar with the fact that they were a leader in chips and that they were a competitor to Nvidia. And so there's been some negative news out about some changing to Google chips instead of Nvidia. And that's been weighing on Nvidia. But I just want to go to a Google chart for a moment just to show you how fickle the market is because I followed this company pretty closely at Google um in terms of its technicals. And early in the year we had this selloff. This is a weekly chart, okay? So just bear that in mind. We went from about 200 on Google down to about 140. And the real headline during this time was that AI was going to make Google obsolete. Really and the sell-off was really severe. We went down to the 200E moving average. And then since then we went from about 130 on the stock up to 323. You know, that's 2 1/2x. We go a little higher, it'll be like a 3x. And so the market was wrong there. And everyone was was really kind of nervous about Google for the wrong reasons. And now it's a market leader. So, you know, that's one thing that I wanted to >> Let me just note cuz I did the math yesterday. So, since the April lows, that's that's uh over two trillion in market cap added in like six and a half months. It's incredible. And I'm not an expert on these chips, but I do know this. Guess who makes Google's chips? And guess who makes Nvidia's chips? Taiwan Semiconductor. >> Mhm. >> You know, and so these guy, they design chips, but they don't make the chips. They're manufactured in Taiwan by Taiwan Semiconductor, but there it's it's just a huge huge move. And Nvidia, I wouldn't I wouldn't put a fork in Nvidia yet, to be honest. It is a little weak. It's down four weeks in a row. If I went to the day chart, you see what's going on here. We had that massive swing last Friday, and I can tell you that was really emotional for a lot of market participants. You know, even even me after all these years of experience watching it, it's like, wow, did we really pop like that? And then it was just like not just on Nvidia, but on the S&P or the QQQ, it was down like every five minute bar all day long. And it was like a 7% top to bottom swing in the Q's, 5% top to bottom swing in the S&P. But if I just go to the S&P for a moment here, S&P, take a look at this. We broke the 50-day on Friday. A big big negative thing. But it then it was straight back, you know, one, two, three, three days straight up and now we're at 6750, which is a critical level because it's basically the top of that I guess third u this bar there on 1120. Um, and so if we break through that, that's the big red bar, we could easily, if we have a big update after this on any positive news, we're going to be gunning for the highs. And as much as people were fearful here and you could feel the fear that day, they're going to be feeling fear of missing out again. That's how crazy this market is. >> The greed fear meter, I went and looked at it. Um it goes from one to or zero to 100. Um it was down at six. >> Yeah. And we were like five >> as miserable as you can get. Yeah. >> Five 5% off the top. That's how compressed this market is. But at the same time, if you can you can read that from a contrarian standpoint that the, you know, the tank was filled again, you know, or the or the barrels were loaded with that fear that got so extreme so fast and now look what's going on. If you shorted the market or if you got out here, you're feeling it right now as we're, you know, hitting this 6750 level. So, I'd say the 6750 level is critical. And then from there, about 100 points higher, um, you'd be right at the highs again. So, if we if we hold here today and in the next couple days, by the time your viewers see this, um, you know, it's going to be it's going to be, you know, right around Thanksgiving time, maybe a little after. I'm not sure exactly when they're going to watch this. We could be literally plumbing new highs again. So, we saw our indicators get negative. We took some action. We we shed 5%. It happened to be in the financials. We're down to 40%. If we had continued lower, we would have started to take more and more stops. and thereby reducing our equity exposure. We have S&P puts down at 6,300 on 15% of our notional exposure. So that would have that would have dropped us further. But the way it's turned out is we're actually reacting to the upside. And if we continue and we run for the highs, we'll start adding fresh equity. We'll probably add that 5% right back. I think as John pointed out earlier there's new leaders emerging like biotech u pharmaceutical um those are those are those are two big sectors other things like metals and and mining we already have some exposure there but there's some really good activity going on there in base metal type companies but the big surprise really is is been pharma and biotech over the last few weeks so we're watching that closely Nvidia is well known to be the first $5 trillion company Right. But guess what? Just the other day, or maybe it was yesterday, Eli Liy was the first $1 trillion healthcare company. And so, um, if I if I could share once more, I guess I'd like to just show you how crazy it's been in that in that space. I'm still on SPX. >> Pull it up because you're excited about those sectors because they are at technical breakouts, right? >> That's right. Well, here's Eli Liy. I mean, honestly, it's run too far to jump in right now, I think. But that's the daily chart. Here's the monthly chart of Eli Liy, the first one trillion dollar company. But the things that we would look at are ETFs to follow the whole group like XLV Healthcare. If I go to the monthly uh weekly chart even, it was a real dog for a couple years, right? We were in it earlier and out before it fell and then just out of nowhere it came back or IBB, you know, which is an eye share for biotech. It looked terrible. And then boom, you know, I wish we had got in on this big base breakout right here. And we were looking at this plus oil service um sector. We happen to add oil service sector. Um but and this one took off. And it doesn't mean it's too late. It just means you're going to want to wait for some kind of pullback here at this point. And pharmaceutical PPH, if we zone in on that on a weekly, look at the pharmaceuticals. Big big base breakout. And so most people aren't even talking about these yet. I'm not saying jump in here, but we always have to be thinking about new leadership. Technology may be slowing down. And by the way, if the S&P goes up to make new highs and continues for the next couple months in some sort of either mini or major blowoff talk, technology will follow, but it won't necessarily be the leader. So sectors are always always shifting. And so we're always looking at different sectors and we're basically trying to pick the strongest relative strength sectors out of all of them. And financials were lagards. We got rid of them and we'll might very well add one of these back very soon, particularly if the S&P makes new highs and our internal measures or our indicators reverse up, which they're close to doing. >> Okay. So you guys are essentially poised to to move capital into these sectors um if they continue to behave the way that you hope. >> Yeah, absolutely. But we don't have to be all in and we don't have to worry about getting it exactly right. We're much more likely to do things incrementally. We'll add 5% on a breakout. We're not afraid to pay higher. We've learned over the years that that's the way to do it. That's how professionals do it. You don't go all in in one thing where you have to be right. You do things incrementally. Like I said, we took off 5% last week. We would have continued to take off another 5 or 10 or 15% if the market worsened. That's because we've got a viewpoint. We're in a hyper overvalued market. That's very dangerous. We don't want to be adding on the way down in this environment. We want to be reducing. And that's the professional thing to do. A lot of people will start layering in more and more in a down market, and that can often work as long as the market keeps coming back. But in this market, we want to be very careful about doing that. But having said that, it looks like the market's wanting to reverse up and uh we're looking for like some kind of follow-through in the next couple maybe in the next week or so. If we have one more big update, maybe 100 S&P points to the upside, we'll be knocking on the door of that new high and we will add back equity. But we're not going to be 80 or 100% equity in this environment because this regime is just too dangerous. We're probably going to top out at 45 or 50% something like that. >> Okay. But is it fair to say Mike that um uh from your perspective in 2026 you know again the AI trade has been so dominant for years now um and and the the market has been on a relative basis very narrow again that that bad breath we're talking about um that you you think a theme of 2026 is going to be capital rotation um doesn't doesn't mean the AI trade might not still be going higher but potenti Eventually, it's getting long in the tooth and capital is starting to say where can I get more upside at a better risk adjusted uh or a better risk management situation and and that that might be what we're starting to see now in some of these other sectors. >> It seems like market participants are demanding better valuations. That's what it seems like so far. We've said a bunch of times though that it's feeling like this market wants to have some kind of event to put a top in at some point. And who knows, we're we're deep into a fourth turning. We talk a lot about fourth earnings. Well, we know that every fourth turning ends with certain things happening. And there's certain stages of the fourth turning that we don't think have happened yet. We agree with Neil How. We think he's right. We probably entered this fourth turning in 2008 or so. And we're probably in the final five to six or seven years. And so the two things that happen in every fourth turning that haven't happened yet is a crisis followed by a climax. The crisis is probably going to be a stock market top and crash and the climax will follow a few years later and who knows what that will entail. It could be a whole lot of different things. But so it's seeming like this market wants to coil and have some kind of blowoff top. If that happens, technology will go up too. I'm sure of it from here, but it may not go up as much percentage-wise as some other things. Maybe biotech will double. Who knows? I'm not making prediction, but maybe it would double over the next 6 months and technology would go up 20%. I'm just making numbers up. >> But you have to take a look at your screens. We have momentum screens. We're always looking at chart patterns for what are the strongest, who are the leaders. And consistently in that leader group right now are still gold miners and silver miners, believe it or not. That's a good sign. We can talk about that in a minute. But it has been technology in the past, but they're starting to fall off that list and more and more medical and biotech and pharma names are coming in. >> All right. Um, hey, let's let's let's move into the gold and silver side of things. And let's if we can let's contrast gold with Bitcoin. There's a little bit of a tale of of two stories going on here. Um, >> so, uh, you just mentioned that you think the precious metals are still well, uh, positioned here, and I will note with that market volatility that we've seen over the past couple weeks, you know, a lot of things sort of sold off, and gold and silver weren't an exception to that, but they did stay above key resistance levels. Gold never really got below 4,000. I think it did maybe really briefly, but but barely. And same thing with silver with 50. it got below just a tiny bit, but they've largely stayed above and now they're they're rising again this week. They've had a pretty good week so far this week. Um, I just interviewed Michael Oliver who is very bullish about the precious metals and he put up a bunch of charts um, uh, these sort of, you know, he's a momentum uh, analyst and and he looks at a lot of different ratios and he was sort of circling on his charts where both where gold is definitely broken above a multi-year trend line. um the miners and silverber are poised to and looking at how they're going to close this week. They might actually be in breakouts as well by the end of this week. Um so he's basically saying, hey, this is a game on moment for the precious metals. Do you feel similarly, Mike? >> I agree with him, Adam. I'd like to talk briefly about gold, silver, and the miners, and then also about Bitcoin, and I'll try to wrap it all up. Let me >> quick the key question there is why is one doing so well while the other's been struggling. >> It doesn't make much sense. I'm a little bit puzzled myself to be honest and we have uh we have admitted that Bitcoin has proven itself from a chart perspective. The blockchain is a magnificent thing and I'm look I'm showing IBIT here. Eyesshar's Bitcoin ETF. It's one of the more popular ones. Let's took it take a look at a weekly chart. So this is essentially a three-year chart and Bitcoin based out in 2024 and had this big breakout here. A lot of people maybe they remember this. This was right around the election time last year. We were around 65 70,000 Bitcoin and then it went right up above 100,000. Came back down to maybe 70,000 and then shot up to this more recent 126,000. So this is not spot Bitcoin price. This is the eyeshares Bitcoin ETF, but the shape of the the shape of the chart is the same. This drop is pretty severe. 72 to 47. I mean, it's like uh basically 1/3. Bitcoin lost a third of its value in 6 weeks. That's not the first time it's ever happened. In fact, it happened late last year uh into early this year, but this was actually a little less severe than the more recent one. And I don't have a chart that goes way back. I mean, Bitcoin has some history of losing 80%, right? And so, a lot of Bitcoin people say, "Well, that's just part of the gig." And maybe it is. But as a technology, currency, a store of value matures, then the volatility should compress to be less and less. That's why this particular drop is a little surprising. If I had to guess, I'd say it's an opportunity. I'm with the Bitcoiners on this one. I think it's probably an opportunity. I've always had trouble completely embracing Bitcoin because it's hard to really understand, right? It's not physical. It's a madeup thing. And there's hundreds of other bitcoins that are just made up as well. So, how do you know what's real here? You can't hold it. Well, to me, it's proven itself to be a store of value just by its persistence and its chart patterns, etc. What I what sometimes concerns me about Bitcoin and crypto is the uh the zealousness, you know, that or the the zeal that that the people in that space believe. It's like allin or nothing. And we don't feel that way about anything. I think you can have Bitcoin. I think we don't really need to have Bitcoin or our clients don't because we recommend that they have 5 to 10% physical gold and silver and that's probably good enough. But if they want to have Bitcoin on top of that, I think it's proven itself. I think this is probably a u an opportunity. But gez, I would be careful. I wouldn't go in big. And there's other things in the space that have just completely fallen apart like Micro Strategy or formerly Micro Strategy, which is now strategy. It's gone from 450 to 150 roughly in just a couple months. So, it's lost 2/ird of its value. And I was just looking at this the other day. It's actually below its net asset value of its Bitcoin holdings now. So, it's probably an opportunity. Who knows? I mean, there's the head of that company is a little bit out there in some of the ways he talks and his predictions. I would if you're going to do anything, I'd probably stay with Bitcoin itself. So, that's what's going on. And part of me wonders how much of this meltdown was connected to this sell off in AI in tech that we saw. It's I don't have any evidence to back that up, but it really seems like this kind of meltdown started and then it spread through AI and then we had, you know, a pretty rapid tech selloff and it's now trying to find a ball. >> Technically, Bitcoin's price action is pretty correlated with the NASDAQ. >> Yeah, absolutely. Yeah, I don't have the charts prepared to show that, but I think that's probably true. Now, let me now compare that to gold and silver, which if you remember back, you know, I don't know, six, eight years ago, Bitcoin was going up all the time and gold and silver were lagging. It was really frustrating. And now it's the opposite. Right now, it's the opposite, which is strange. Here's silver. Here's a silver weekly chart. Uh, these are all ETFs, by the way, versus the the spot prices, but you get the picture. On a weekly chart, silver is putting in this high triangle. It had this triangle back here on this triple top breakout at 35 on spot that we were talking about every week and it went right up to 50. And if you compare what happened here, let me just go to the monthly chart back to 2011. Back in 2011, silver sold off from like 50 to 30 in a month. This time it's persisted at least into the second month. We touched 50. It's still up here. If we base out some more and break higher, it's going to be decidedly different than what happened back in 2011. And I know you've got to adjust for inflation, but and I can't go back this far in the chart, but silver hit 50 in 1980 with the Hunt brothers. It hit 50 in 2011, and it hit 50 now. Silver seems to be if and again, if it breaks out higher, let me go to the daily. Here's this triangle I was talking about. It's forming this big triangle versus collapsing. I think that's really important. And if it comes out of this triangle to the upside, it's going to go even further and the miners should finally wake up and say, you know what, we are completely undervalued. So take that's silver. Let me look at gold. Same thing. Gold went up to 4,400, pulled back to 4,000. It's been dancing around 4,100. It's up around 4,200. And it looks like it wants to break out. Hasn't yet. But then look at the miners. I'll go through each of the minors here. GDX, for instance. Boom. There's the triangle. We just broke out today. >> Now, it's not decidedly. I'd like to see it go above 80 on GDX to really be, you know, more obvious, but it's trying to break out of that triangle. >> GDXJ on the juniors. It really is kind of a sloppy triangle. It's not as obvious, but still it's firming up. Take a look at the junior silver juniors. They had a big sell-off 27 to 20. That's uh 20 what? 22% in just two weeks. I mean, that's almost as big as the Bitcoin drop, I guess, of 30%. But, um, yeah, it's it's firming up here. It's having a nice up day. Take a look at the silver majors. SIL. It's forming its triangle. Hasn't broken out yet. So, watch for these triangle breakouts. Our work says that in general, miners still are performing better than metals. And within the metals, silver is performing better than gold. So if you're going to buy bullion and you want to have, you know, the best performing asset, you'd be buying silver. There's caveats to all of this, of course, and the miners are are should do better. And we're we're watching for an imminent breakout. It' be nice to see it. Just we need a little more confirmation. >> All right. Well, look, we'll have you tracking this for us every week, Mike, so you'll keep us uh you know, updated here in real time. Um, but a lot of folks watching here, uh, I'm sure are eagerly hoping that you're correct here and that these things may be breaking out to the upside from here. Um, all right, we only have a couple minutes left. Um, John, let me come back to you real quick. Uh, just a quick quick gut answer to this. Um, so suddenly and and hopefully uh we're seeing some headlines in the news that a Ukraine peace deal may actually be in the works here. Um I think too early to to say with any certainty. Um but you know there's been a 28 25 or 28 point plan that's been circulating over the past couple of days. And uh it's funny you know it shows why you shouldn't rely on headlines. Yesterday there were a whole bunch of headlines saying that uh uh this looked like it was a Russian list and not even a US list and Ukraine had said absolutely no way are we going to agree to this. Then all of a sudden, past 12 hours or so, it looks like it, you know, Ukraine has agreed to a lot of what's on the table. So, let's all cross our fingers and hope for global stability and world peace and saving people's lives that uh there is a peace deal in the offing here. Um market hasn't really seem to react to it much. Would this be a market moving event or um or not? Um, I've asked just of a couple of other of of thoughtful money's uh financial advisors and and they've largely said no, it's it's not really something markets historically have traded much on, but do you have a strong opinion one way or the other? >> Not a strong opinion, but my my feeling or my gut check is it probably won't be much of a a durable market moving event. Uh, I don't know, even though it's fresh headlines, I don't know the the outcome or the details are are that relevant to what the market's been pricing in and hasn't been. So, my gut is that no, it's not likely to be a meaningful event in the markets. >> Okay. Um, doesn't mean we can't all hope for it, though. >> Oh, absolutely. >> Life is not markets. Uh, we we know that uh we should know that and remind ourselves every day. >> Yeah. Very well said. Um, all right. And then um just in wrapping up here uh I you guys uh you know we past couple weeks when I've had you on as we've concluded the conversations you have reminded the audience that uh the end of the year is coming up fast and there are a number of year-end uh steps that um are wise to take and in some cases people really need to take them like maybe your required minimum distributions if you're >> above whatever it is 72 or 70 and a half whatever it is these Um, and you know, time's running out fast. Um, and the reason why, folks, is because yes, we have less days left in the calendar. Uh, and they're going fast, but also the closer you get to the end of the year, the the harder it is to actually get these steps effected. So, um, obviously financial adviserss, they're getting crushed with everything they need to do with the end of the year and everybody calling them in a panic who procrastinated saying, "Please help me get this done." But John, you were saying, I think last week that like um uh that uh um uh you know, Schwab and Fidelity, they get bogged down. So even if you as the adviser have some capacity to help the person who calls you if it's too late in the year, Schwab might actually not be able to process everything by the end of the year deadline. Correct. >> Yeah. You Yeah. You you don't want to wait till the last the week between Christmas and New Year's if you can all help it. uh it just doesn't leave a lot of runway for the inevitable once in a while hiccup on the operational side. But the great thing is you don't need to wait that you know most folks should start to have a handle on where they stand on the year and uh the things that need to be done before the end of the year. We got plenty of runway still yet. Um you know these are always the things we talk about. Um, you know, the ones that really are kind of on tops of our our clients mind of late are things like Roth conversions, which have to be done uh before the end of the year. They can't be put off until like tax filing deadline of next year, like like a regular IRA contributions can be. Um, there's some new little wrinkles here. you know, we won't get into all the details, but um you know, for example, as a result of the Secure Act, I think it was called 2022, there are what are called super catch-up uh contributions that people ages 60 to 63 can make. You know, so most people above 50 can make uh you know, the tra, you know, the Roth IRA or IRA contributions or retirement plan contributions. And then there's uh these um but this actually really relates only to corporate retirement plans like 401ks, 457s, 403bs. For folks between 60 and 63, they can make a super catch-up where it's a uh I think it's 11,250 versus 7500. So folks that really are needing and wanting to play catch-up um you know, think about that super catch-up contribution in their their employer sponsored retirement plan. And then another little wrinkle, some for people that are above a certain income level, uh that super catch-up has to be made as a Roth contribution, not a it can't be done as a pre-tax. And these are all just nuances that you if you spend a little time and dig in, they they're pretty pretty straightforward. But point is get your get your attention on it now. Don't wait for the end of the year and la last minute. >> All right. And I'm going to say for most people, um there's nuance here, right? So rather than trying to figure it all out yourself in a panic at the end here, reach out to your financial adviser. If you don't have one, talk to one of the ones that Thoughtful Money endorses. Um, and just say, "Hey, look, this is my situation. What are the things that apply to me? What do I need to know?" Right? Um, and so I want to commend you guys because you put together I thought what I thought was a really helpful summation of these year-end steps. Um, and uh, you let me kindly share it with the thoughtful money audience. Um, I did that by putting it in the thoughtful money substack. So, folks, if you haven't read that yet and would like to get your hands on it, uh, you can just go to thoughtfulmoney.com/newsletter. You can sign up for the free Substack. It's one of the most recent posts that there that's there. So, you can go and, um, uh, get it that way or obviously you could talk to the guys at New Harbor yourself directly. Um, and to do that, uh, you can just fill out the very short form at thoughtfulmoney.com and, uh, schedule a con a conversation with them. And of course, you can do that around these end ofear last steps, but you can do that around just anything related to managing your your wealth for you. Um, and end of the year is always a great time uh to try to set yourself up for success in the coming year uh rather than delay and have to scramble uh once the new year's here. So anyways, uh John and Mike, thanks so much for another great week. Folks, please show your appreciation for them making time to do this on their busy Thanksgiving weeks uh while they're still helping clients and trying to make some time to have some turkey with their families. So, please help me thank them by hitting the like button and then clicking on the subscribe button below as well as that little bell icon right next to it. We've only got like a minute left, guys, but just real quick, I'll go to both of you. Um what are you guys especially grateful for this year? Mike, why don't we start with you? I'm grateful to have this platform, you know, and that's thanks to you, Adam, and you know, maybe thanks to all of our hard work together throughout the years to >> absolutely accumulate effort >> absolutely accumulate the wisdom and the experience that will that actually allows us to help people through this time and the time that's coming. It's not easy. It's all psychological. The Fed designed it that way. We're really good at helping people through that. I feel like we're at the right place at the right time, thanks to all of our hard work and thanks to you. So, thank you very much. >> My pleasure. John, how about you, buddy? >> Couldn't have said it better than Mike just did. Uh, I'll add the thanks to our our great team here. You know, we've been fortunate to have surrounded ourselves with great colleagues that are caring and and professional all all the same. And I I'm just really looking forward to the market being closed for a day and a half day on on Friday. And uh you know, I'm really looking forward to spending some time with family and friends and just enjoying what we are all here to do. just uh be good to each other and and be thankful for what we're blessed with. >> All right. Well, very well said, gentlemen. Um I'm very grateful for your partnership and your friendship. And as Mike said, we we've had this going on now for what, a decade and a half or more. Hope we've got several decades still ahead of us here. Um but I wish you guys a great Thanksgiving with your family. Same to everybody watching. And I just want to reiterate something I think I said in in this past weekend's video, which is um you always talk about how the the key forms of wealth are are relationships, purpose, and health. Um we got a real chance here at Thanksgiving to work on our relationships with the people that we care about most. Um care about the most because we're spending, you know, our our sacred and and limited holiday time with them. So, um, might be a good idea while you're gorging on the the wonderful food at your Thanksgiving feast that maybe you go on a fast on your digital devices for the day. Maybe we make Thanksgiving this year a day without a device. Um, so that being said, gentlemen, thanks so much. Great week. Um, like I said, hope you guys have a great holiday and we'll see you next week. >> Goodbye, Adam. Enjoy. Thanks. >> You, too, Adam. Thank you. >> All right. And everybody else, happy Thanksgiving. Thanks so much for watching.
A Market Rotation Is Underway As Capital Begins To Leave The AI Trade | New Harbor Financial
Summary
Transcript
there is a shifting of some of the sector leadership that we think is not just a a temporary blip here. It seems to be a a durable um kind of rotation that uh is likely going to play out over over several uh weeks and months. Welcome to Thoughtful Money. I'm thoughtful money founder and your host Adam Tagert. welcoming you here for a very special Thanksgiving week edition of the monthly uh macro and markets update from the gentlemen at New Harbor Financial. Uh this is one of the financial advisory firms that Fal Money endorses. You see these folks with me on the channel every week. Uh I'm joined as usual by John Lodra and Mike Preston, the lead partners there. Gentlemen, thanks so much for joining me and happy Thanksgiving. >> Same to you. Thank you. >> Same to you. Glad to be here. Thanks for having us. >> All right, guys. Well, look, um, lot lots going on. So, uh, we don't have a ton of time here given that it's it's a shortened week. Um, both in terms of the recording studio time we have here, but also just the markets are only open for about half the week. Um, so let's dive right into it. Okay, so let's let's pick up where last week ended. Um, we had a pretty notable reversion in the market last week with Nvidia. Um, you know, the markets had been kind of slouching. A lot of doubts were beginning to emerge uh in the the mainstream financial press headlines about the sustainability of the AI trade. And everybody was looking towards Nvidia to kind of save the day as it pretty much always has over the past couple years. And Nvidia did what it always does. It it uh released just gang busters performance. Uh it upped its its uh forecast. Um so really just a you know another one of these sort of fantastically good um earnings results and as Wall Street has want to do it it reacted immediately and and aggressively to that good news. It sent Nvidia up by about 5% I think in the aftermarket. So when the market opened the next day, uh stocks jumped, Nvidia was up five, actually I think it got up to more like 6% in the early trading, but then the momentum quickly wore off and throughout the rest of the day, Nvidia kept sinking and then it actually went negative and it closed down about 3% for the day. And there was a lot of constrnation on Wall Street, a sense of like, oh my goodness, are we do we are we watching the peak of the AI bubble get put in in real time here? uh and a lot of hand ringing going into the this past weekend. This week the markets have recovered a bit a little bit not a ton. Um so love to get your guys' thoughts on that which is hey was last week maybe a seminal turning point in the market. That said I got a note uh here that it it looks like the baton maybe being handed off. Um, while Nvidia is is still a little bit weak here, uh, Google is just on fire. Um, and it's been on fire for a while, but this week it's really gone bananas. And a lot of the large part of the news driving that is Google's new chips. And Google is emerging as a chip competitor here uh, to Nvidia. And one of the things about Nvidia is that it's kind of been like this in this peerless category where just nobody could compete with it. And all of a sudden, it seems like there might be another, you know, we might have a real horse race going on here. So, why don't we start with this guys? How important is this? Which things are you watching most closely? What do you expect to happen next from here? John, you've been nodding a lot as I've been saying this, so why don't we start with you? >> Yeah, great. Uh, thank you, Adam. Yeah, Nvidia has been obviously a bellweather stock for for as long as all of us can probably remember and it has been um raising some some eyebrows of late and you've rightly pointed to the kind of recent uh arms race of sorts between Google and and Nvidia in terms of the chips and you know who's going to steal market share or keep market share and um might as well look at a chart because we always bring it back to the data here. So um this is a daily chart of Nvidia. Uh sorry for the busy chart. I I realize I these dotted lines are a residual from a a working case study that I had with a prospective client that owns a very large concentrated position in Nvidia. They're actually, you know, worried about the the stock position, but they've got large gains. So, what these uh bars are, they they were a hypothetical kind of collar hedge that we were talking about with this prospective client uh to to basically allow them to kind of continue to string out the capital gains, but at the same time uh protect uh the downside and still have some upside potential. So, I apologize for the busy chart, but the daily turnaround you spoke of is right here. This is the bar for last Thursday, which I think was the I forget the date, the 20th maybe of November. And you can see we had a massive reversal. Um popped in the after hours the day before on strong earnings beat and had a you know very notable reversal and it's been weak since then. Here today we're we're down about 4% on the day. stocks at 175 pretty notable intraday reversal here but um this is what happens when you know there's there's been a bit bit of narrative about AI in general but certainly regarding Nvidia and I don't know certainly any better than the next lay person as to truly what Google's chips may or may not do compared to Nvidia's but uh in some ways it doesn't matter because the narrative is starting to to change a little bit and that often times can be all that does that that takes hold of price and and that's why at the end of the day narratives and and you know my chip is better than yours doesn't so matter doesn't matter so much as the price action and we're seeing you know Nvidia actually be quite weak relative to a broader market and I'll just I'll just share a chart of the S&P just to show you what that's done. So Nvidia is you know you know still healthy below its 50-day moving average uh as just one metric whereas we've had a pretty sharp bounce in the S&P. This is SPY, ETF that track tracks the S&P 500. Had a pretty sharp bounce here. We're back above the 50-day, which is this green line, and actually have poked above the 21-day moving average. Uh this is this got a pretty you know this is a pretty notable sell off because not just the indices but the breath and the participation indicators that we follow things like bullish percents the percentage of stocks above certain different moving averages speaks to the narrowness of the market that's turned down pretty notably uh pretty quickly last week enough so that we we called some of the weaker positions in our portfolio. We reduced equity exposure by about 5%. Uh notably we pulled back on financial sector exposure, but so far we've had a pretty reflexive bounce here. I should note that the talking heads of the Fed were out in full force uh this day on Friday and we saw a pretty notable reversal and with that we'll talk about I'm sure later the the market expectations for rate cut in December are back to raging you know almost c almost certain right so we'll talk about that but that we've had a pretty notable reversal here noting though the the volumes been pretty weak here we are in a a notoriously thin holiday trading week so it's hard to get a true read on the markets but so are we have to respect this bounce for what it is. We defending this 50-day will be important. We'll want to see some of our breath indicators start to move higher, which they've started to to inch back up. A little too early to call this, you know, you know, sell off averted, but uh so far the change in tone is to the upside, but needing some confirmation. >> All right, so a few questions here for you, John. Um put that chart back just up for a second here. Um, so what I'm finding interesting about this, and you tell me if you're looking at it the same way, is, you know, we when we look across the history of this chart here, >> um, you the it's been the mag seven or the top 10 stocks that have really been driving the direction of the markets, right? you know, breath has been very narrow at times as we've often talked about, but hasn't mattered so much because these um you know, these these hyperscaler stocks have been doing so well and they make up such a percentage of the index that they kind of push the index around, right? Where they go is sort of where the index goes regardless of what's happening with the other 490 stocks in the S&P. Um and Nvidia was the lead sled dog. In other words, there were times where, you know, the other other top 10 stocks maybe weren't doing so hot, but whatever Nvidia was doing was where the market was going because Nvidia just had that much, you know, influence in the in the index. What's interesting here is we're now seeing the the index get a pretty decent bounce and Nvidia isn't. And I think it's largely due to Google. And maybe you can just put up a enter the Google ticker there for a sec so we can see what's going on with Google. I mean, Google, I don't know what the word for this is. When you're this far off the out of the Ballinger bands and everything like that, you're in a totally different stratosphere, maybe even a different solar system at this point in time. Um, and we can argue whether this is merited or not, but what's interesting is it it it it it's seeming here that maybe there is a changing of the guard at the front of the sled, that maybe Google is going to become the dominant sled dog from here. And look, I know you're you've got an engineering background, John, so you probably understand this better than I. I'm kind of chag grinned a little bit because I didn't really even know that much about what Google was doing in chips. I just reading the headlines, this kind of caught me by surprise because I would have thought that before all of a sudden hearing, you know, Google's becoming dominant in chips. I would have heard more headlines saying, "Oh, Google's beginning to become a challenge to or it's aspiring to to knock Nvidia off its top." Like, I didn't hear any of that. I just sort of woke up, you know, the other day and it's like, "Oh my gosh, I guess Google's got these really cool chips that that everybody wants now. I guess Facebook's placing a big order. That's why it's getting on the radar here. Um, so anyways, I guess two things. One, do you potentially see a changing of the guard at the front of the sled? And and two, is there anything you can tell us about these Google chips in terms of how they might differ from Nvidia's offering is? >> Well, it's been a long time since I studied engineering, Adam. Uh and even at that um my my uh intention to study electrical engineering uh morphed into ultimately studying operations research which is essentially engineering math applied to all kinds of business things. So my grasp of microchips long since you know uh you know is left behind in the textbooks of physics physics class. So I I candidly don't have an informed view there. But I I I guess I too was as a lay person as much as perhaps you and your viewers uh was surprised to hear that Google has these chips that apparently Meta for example has talked about hey we're going to put you know some some uh real force and and purchasing into into Google chips. So, so that was news to me and that really speaks I think to the the narrative that can matter as much as the reality in terms of price behavior and you can see here Google has absolutely been a positive divergence relative to not only uh Nvidia but look at the whole technology sector here's a ETF that follows the technology sector this is a more of a cap weighted one even the equal weight so-called equal weight technology sector ETF you can see this is a sector that has struggled relatively late. Compare that with sectors like healthcare which have gone parabolic. This is kind of under the under the stealth surface of the markets. You know, um frankly, um we were in healthcare last year. We sold out not too differently from where the price is now. But this has been a powerful move, one that frankly we would want to see pull back in before looking for an entry. But there is a shifting of some of the sector leadership that we think is not just a a temporary blip here. it seems to be a a durable um kind of rotation that uh is likely going to play out over over several uh weeks and months. >> Okay. So, you use that term rotation which um I you and the other adviserss I've had on the show have been saying that's something that you're if I've been taking good notes, you all sort of have been you sort of been awaiting for the fact that that we may start having some sector rotation, you know, outside of just the big tech hyperscalers. Um, we've had this bad breath in the market as I mentioned earlier. It looks like we're starting to see that rotation. It actually looks like maybe we're seeing some of that rotation inside the hyperscalers as well. Again, if Google is is now kind of stepping into the top slot here. Um, so I'm going to I appreciate your candid answer there, John, about the technology. Obviously, I've got some Thanksgiving reading ahead of me and understanding, you know, Google's offering here. I I've read just a little enough to know that their chips sort of operate differently than the Nvidia chips. And I'm not even sure I can explain how um but I think they sort of tackle processing differently. And um without knowing a ton of information, I think maybe you know the Nvidia chips are better for certain um types of calculations and maybe the Google chips are better for some others. I'm just going to ask the techies in the thoughtful money audience here, hey, if you've got any um clarity to contribute in the comments, please do so that we can all as an audience, you know, understand this stuff better going forward. Um, Mike, I'm coming to you in just a second, but um, just to wrap this up, uh, you know, it's interesting to me, John, is is at the end of last week, there were some, you know, some really nervous questions being asked of, hey, is the AI bubble just burst here? I think what I'm hearing this week is no, but maybe it's going to be driven by a different company, you know, primarily going forward. Google maybe more than Nvidia. Now, who knows? We're in the first couple of days here of all this, so this could all change. But to your point about narratives, you know, uh, if you think there's a bubble in this market, bubbles are driven by sentiment. So sentiment becomes really important. And that was so interest, you know, so important about last week is people were starting to lose faith in the AI story. Well, that's going to impact sentiment negatively. Seems like what they're doing this week is not giving up on the AI story. They're just changing the story. Okay. Well, it's not an Nvidia dominant story. Maybe it's a Google dominant story going forward. Again, we'll see what happens here. But it doesn't strike me yet that we're the last week did mortal damage where investor sentiment about the AI trade has been materially injured here. What do you think? >> Yeah, it's I I think there is a bit of that actually Adam and we saw that in the broad technology sector indices start to turn down even while Google for example has picked up some attention. So I think um you know look the the concerns that were raised last week I think were legitimate and not just last week but these are concerns that have been increasingly voiced you know in terms of the um the durability of the spend uh and and kind of you know part of the challenge here is that this this whole financing of this spend has been largely in private markets. They haven't really been subjected to the discipline of public markets. Now there's two ways to look at that. One might say and I'm I'm thinking of like companies like Blue Owl for example was which is a private credit fund that you know we talked about last week as being in the the headlines of being under under some stress uh you know and they did a lot of lend lend private lending specifically to the tech buildout you know the infrastructure for data centers and such like that. Now there's two ways to look at that. You know, on the one hand is, you know, maybe private lenders can be a little bit more, you know, forgiving and fluid in terms of, you know, the discipline that public uh credit markets often times um display. But the other way of looking at, and this is a cynics way of look at looking at it, well, maybe it's really even worse than we we think because that hasn't had that discipline of of public credits, you know, demanding the kinds of protection. So, this story's got to play out a little further to to have a a clear read on that. But the the the fact that the broader tech sector is turning down along with uh Nvidia um has me thinking there's there's more to the story yet to play out. >> Okay. So so more more maybe worry in the picture, but again to my point, this this doesn't seem to be the crack that some people or doesn't seem yet to be the crack that some people were fearing it was at the end of last week. >> Not yet. I think I think we got a a a brief reprieve here that we'll have to see how this plays out. There there's I think there's more news headlines to come that probably won't be of the rosy sort there. >> Okay. And and last question on this before I come to you, Mike. And Mike, feel free to chime in on any of this when I handed the baton to you. Um uh you know, there's been a lot of volatility in the market. Um again, last week the market kind of took its lumps in some important ways we've been talking about here. Does this is this making you think that we're going to slump into the end of the year or do you think you know the the Santa Claus rally the year end you know general rally that we tend to have most years is likely still on and the reason why I asked this question is is um you know the there were some voices last week saying hey this is it and I just might want to give folks a little bit of caution to say hey I'm not I'm not sure we can conude clude yet that a run higher into the end of the year isn't possible at this point. >> Yeah. Well, we uh we've regained the 50-day some really important technical levels in broad indices. Uh if we keep those uh very likely there could be a path of least resistance higher, especially as you got the uh expectations for rate cut uh back firmly on the table. We've done a round trip. I think uh a month ago there was a 90% expectation of of a a quarter point cut in uh in the December meeting. Then it got down as low as 30%. And then the Fed heads came out on Friday including Williams which was you know very powerful speech saying hey you know basically that that rate cut isn't off the table and here we are I think today almost 90% odds again of a rate cut in December. So that that's been a complete um end to end kind of whipssaw in terms of rate cut expectations. >> Yeah, I'm just pulling up the chart here so people can see um so right now it's 85% probability of of a 25 uh basis point rate cut uh next week. But to your point, John, if you look at it a week ago, it was at just 50%. Right. So, you know, all all of that Fed speakers um plus I think just some of the weakness that we talked about um got people a little bit more spooked saying, "Hey, the Fed probably is more likely going to have to act here." >> Yeah. And look, a month ago was it was 92%. And I think it got as low as 30% odds just within the last week or two. So, it's it's pretty much gone both both ends of the field in that in that regard. >> Yeah. And I'm just curious on the why it went so low. I know one of the arguments for it was look, the Fed's flying blind because of the government shutdown. And so out of an abundance of caution, the Fed would was saying or people were thinking the Fed was just going to say, look, we're not going to do anything until we start getting some data, some more recent data that we can trust. And I kind ofish get that argument. Were there any other compelling arguments data wise or otherwise why the Fed wasn't going to cut? >> I think it starts with the last Fed meeting. uh at the last Fed meeting they announced the cessation effective uh December 1st of quantitative tightening. Uh but they also uh basically said uh to paraphrase by no means is a rate cut at the December meeting a foregone conclusion. They they pretty forcefully walk back the markets expectations on that and the c and the and the narrative coming out of the Fed heads. These are just people talking and it's amazing how much influence they have on markets and market expectations but it is what it is. Uh you know on on the hawkish side I would say and then just recently um we we saw kind of a bit of a pendulum swing back in that direction by Williams who's a pretty influential you know voting member. Yeah. >> And I think I think um the market's starting to look at the Fed not as hey what chair Powell says is what the what the forward guidance is but now there's actually dissent. There's there's differing uh opinions. There's different votes. We've we've seen disscent start to emerge in this body that hasn't been present. So now it's it's you know I've heard some people talk about it like hey now it's really about vote counting. It's not about what what Powell says. It's about counting the votes. >> Well is I think increasingly viewed as a lame duck at this point right because his tenure's up in six months or so right. Um, and then also, we'll talk about this in a moment, but um, you know, there's there's some speculation that there's, you know, some jockeying going on on on the FOMC for for Pal's job, right? And they're trying to curry favor with the administration saying, "Look, I'm happy to bring rates lower, but it's this, you know, it's this current share that's getting in my way." >> Candidates for a job will say a lot of things to get the job. Let's put it that way. >> Exactly. All right. Hey, Mike, thanks for being patient. We're going to trendle over to you here. Um, first off, anything you want to add to to what John said there before I change the subject? >> You guys covered a lot of stuff. Um, talking about the Google chips, Google makes chips for their Pixel telephones, right? The the and I think it's called the Tresor, the Tensor chip. And so, yeah, they their chips are in their phones and I really wasn't that familiar with the fact that they were a leader in chips and that they were a competitor to Nvidia. And so there's been some negative news out about some changing to Google chips instead of Nvidia. And that's been weighing on Nvidia. But I just want to go to a Google chart for a moment just to show you how fickle the market is because I followed this company pretty closely at Google um in terms of its technicals. And early in the year we had this selloff. This is a weekly chart, okay? So just bear that in mind. We went from about 200 on Google down to about 140. And the real headline during this time was that AI was going to make Google obsolete. Really and the sell-off was really severe. We went down to the 200E moving average. And then since then we went from about 130 on the stock up to 323. You know, that's 2 1/2x. We go a little higher, it'll be like a 3x. And so the market was wrong there. And everyone was was really kind of nervous about Google for the wrong reasons. And now it's a market leader. So, you know, that's one thing that I wanted to >> Let me just note cuz I did the math yesterday. So, since the April lows, that's that's uh over two trillion in market cap added in like six and a half months. It's incredible. And I'm not an expert on these chips, but I do know this. Guess who makes Google's chips? And guess who makes Nvidia's chips? Taiwan Semiconductor. >> Mhm. >> You know, and so these guy, they design chips, but they don't make the chips. They're manufactured in Taiwan by Taiwan Semiconductor, but there it's it's just a huge huge move. And Nvidia, I wouldn't I wouldn't put a fork in Nvidia yet, to be honest. It is a little weak. It's down four weeks in a row. If I went to the day chart, you see what's going on here. We had that massive swing last Friday, and I can tell you that was really emotional for a lot of market participants. You know, even even me after all these years of experience watching it, it's like, wow, did we really pop like that? And then it was just like not just on Nvidia, but on the S&P or the QQQ, it was down like every five minute bar all day long. And it was like a 7% top to bottom swing in the Q's, 5% top to bottom swing in the S&P. But if I just go to the S&P for a moment here, S&P, take a look at this. We broke the 50-day on Friday. A big big negative thing. But it then it was straight back, you know, one, two, three, three days straight up and now we're at 6750, which is a critical level because it's basically the top of that I guess third u this bar there on 1120. Um, and so if we break through that, that's the big red bar, we could easily, if we have a big update after this on any positive news, we're going to be gunning for the highs. And as much as people were fearful here and you could feel the fear that day, they're going to be feeling fear of missing out again. That's how crazy this market is. >> The greed fear meter, I went and looked at it. Um it goes from one to or zero to 100. Um it was down at six. >> Yeah. And we were like five >> as miserable as you can get. Yeah. >> Five 5% off the top. That's how compressed this market is. But at the same time, if you can you can read that from a contrarian standpoint that the, you know, the tank was filled again, you know, or the or the barrels were loaded with that fear that got so extreme so fast and now look what's going on. If you shorted the market or if you got out here, you're feeling it right now as we're, you know, hitting this 6750 level. So, I'd say the 6750 level is critical. And then from there, about 100 points higher, um, you'd be right at the highs again. So, if we if we hold here today and in the next couple days, by the time your viewers see this, um, you know, it's going to be it's going to be, you know, right around Thanksgiving time, maybe a little after. I'm not sure exactly when they're going to watch this. We could be literally plumbing new highs again. So, we saw our indicators get negative. We took some action. We we shed 5%. It happened to be in the financials. We're down to 40%. If we had continued lower, we would have started to take more and more stops. and thereby reducing our equity exposure. We have S&P puts down at 6,300 on 15% of our notional exposure. So that would have that would have dropped us further. But the way it's turned out is we're actually reacting to the upside. And if we continue and we run for the highs, we'll start adding fresh equity. We'll probably add that 5% right back. I think as John pointed out earlier there's new leaders emerging like biotech u pharmaceutical um those are those are those are two big sectors other things like metals and and mining we already have some exposure there but there's some really good activity going on there in base metal type companies but the big surprise really is is been pharma and biotech over the last few weeks so we're watching that closely Nvidia is well known to be the first $5 trillion company Right. But guess what? Just the other day, or maybe it was yesterday, Eli Liy was the first $1 trillion healthcare company. And so, um, if I if I could share once more, I guess I'd like to just show you how crazy it's been in that in that space. I'm still on SPX. >> Pull it up because you're excited about those sectors because they are at technical breakouts, right? >> That's right. Well, here's Eli Liy. I mean, honestly, it's run too far to jump in right now, I think. But that's the daily chart. Here's the monthly chart of Eli Liy, the first one trillion dollar company. But the things that we would look at are ETFs to follow the whole group like XLV Healthcare. If I go to the monthly uh weekly chart even, it was a real dog for a couple years, right? We were in it earlier and out before it fell and then just out of nowhere it came back or IBB, you know, which is an eye share for biotech. It looked terrible. And then boom, you know, I wish we had got in on this big base breakout right here. And we were looking at this plus oil service um sector. We happen to add oil service sector. Um but and this one took off. And it doesn't mean it's too late. It just means you're going to want to wait for some kind of pullback here at this point. And pharmaceutical PPH, if we zone in on that on a weekly, look at the pharmaceuticals. Big big base breakout. And so most people aren't even talking about these yet. I'm not saying jump in here, but we always have to be thinking about new leadership. Technology may be slowing down. And by the way, if the S&P goes up to make new highs and continues for the next couple months in some sort of either mini or major blowoff talk, technology will follow, but it won't necessarily be the leader. So sectors are always always shifting. And so we're always looking at different sectors and we're basically trying to pick the strongest relative strength sectors out of all of them. And financials were lagards. We got rid of them and we'll might very well add one of these back very soon, particularly if the S&P makes new highs and our internal measures or our indicators reverse up, which they're close to doing. >> Okay. So you guys are essentially poised to to move capital into these sectors um if they continue to behave the way that you hope. >> Yeah, absolutely. But we don't have to be all in and we don't have to worry about getting it exactly right. We're much more likely to do things incrementally. We'll add 5% on a breakout. We're not afraid to pay higher. We've learned over the years that that's the way to do it. That's how professionals do it. You don't go all in in one thing where you have to be right. You do things incrementally. Like I said, we took off 5% last week. We would have continued to take off another 5 or 10 or 15% if the market worsened. That's because we've got a viewpoint. We're in a hyper overvalued market. That's very dangerous. We don't want to be adding on the way down in this environment. We want to be reducing. And that's the professional thing to do. A lot of people will start layering in more and more in a down market, and that can often work as long as the market keeps coming back. But in this market, we want to be very careful about doing that. But having said that, it looks like the market's wanting to reverse up and uh we're looking for like some kind of follow-through in the next couple maybe in the next week or so. If we have one more big update, maybe 100 S&P points to the upside, we'll be knocking on the door of that new high and we will add back equity. But we're not going to be 80 or 100% equity in this environment because this regime is just too dangerous. We're probably going to top out at 45 or 50% something like that. >> Okay. But is it fair to say Mike that um uh from your perspective in 2026 you know again the AI trade has been so dominant for years now um and and the the market has been on a relative basis very narrow again that that bad breath we're talking about um that you you think a theme of 2026 is going to be capital rotation um doesn't doesn't mean the AI trade might not still be going higher but potenti Eventually, it's getting long in the tooth and capital is starting to say where can I get more upside at a better risk adjusted uh or a better risk management situation and and that that might be what we're starting to see now in some of these other sectors. >> It seems like market participants are demanding better valuations. That's what it seems like so far. We've said a bunch of times though that it's feeling like this market wants to have some kind of event to put a top in at some point. And who knows, we're we're deep into a fourth turning. We talk a lot about fourth earnings. Well, we know that every fourth turning ends with certain things happening. And there's certain stages of the fourth turning that we don't think have happened yet. We agree with Neil How. We think he's right. We probably entered this fourth turning in 2008 or so. And we're probably in the final five to six or seven years. And so the two things that happen in every fourth turning that haven't happened yet is a crisis followed by a climax. The crisis is probably going to be a stock market top and crash and the climax will follow a few years later and who knows what that will entail. It could be a whole lot of different things. But so it's seeming like this market wants to coil and have some kind of blowoff top. If that happens, technology will go up too. I'm sure of it from here, but it may not go up as much percentage-wise as some other things. Maybe biotech will double. Who knows? I'm not making prediction, but maybe it would double over the next 6 months and technology would go up 20%. I'm just making numbers up. >> But you have to take a look at your screens. We have momentum screens. We're always looking at chart patterns for what are the strongest, who are the leaders. And consistently in that leader group right now are still gold miners and silver miners, believe it or not. That's a good sign. We can talk about that in a minute. But it has been technology in the past, but they're starting to fall off that list and more and more medical and biotech and pharma names are coming in. >> All right. Um, hey, let's let's let's move into the gold and silver side of things. And let's if we can let's contrast gold with Bitcoin. There's a little bit of a tale of of two stories going on here. Um, >> so, uh, you just mentioned that you think the precious metals are still well, uh, positioned here, and I will note with that market volatility that we've seen over the past couple weeks, you know, a lot of things sort of sold off, and gold and silver weren't an exception to that, but they did stay above key resistance levels. Gold never really got below 4,000. I think it did maybe really briefly, but but barely. And same thing with silver with 50. it got below just a tiny bit, but they've largely stayed above and now they're they're rising again this week. They've had a pretty good week so far this week. Um, I just interviewed Michael Oliver who is very bullish about the precious metals and he put up a bunch of charts um, uh, these sort of, you know, he's a momentum uh, analyst and and he looks at a lot of different ratios and he was sort of circling on his charts where both where gold is definitely broken above a multi-year trend line. um the miners and silverber are poised to and looking at how they're going to close this week. They might actually be in breakouts as well by the end of this week. Um so he's basically saying, hey, this is a game on moment for the precious metals. Do you feel similarly, Mike? >> I agree with him, Adam. I'd like to talk briefly about gold, silver, and the miners, and then also about Bitcoin, and I'll try to wrap it all up. Let me >> quick the key question there is why is one doing so well while the other's been struggling. >> It doesn't make much sense. I'm a little bit puzzled myself to be honest and we have uh we have admitted that Bitcoin has proven itself from a chart perspective. The blockchain is a magnificent thing and I'm look I'm showing IBIT here. Eyesshar's Bitcoin ETF. It's one of the more popular ones. Let's took it take a look at a weekly chart. So this is essentially a three-year chart and Bitcoin based out in 2024 and had this big breakout here. A lot of people maybe they remember this. This was right around the election time last year. We were around 65 70,000 Bitcoin and then it went right up above 100,000. Came back down to maybe 70,000 and then shot up to this more recent 126,000. So this is not spot Bitcoin price. This is the eyeshares Bitcoin ETF, but the shape of the the shape of the chart is the same. This drop is pretty severe. 72 to 47. I mean, it's like uh basically 1/3. Bitcoin lost a third of its value in 6 weeks. That's not the first time it's ever happened. In fact, it happened late last year uh into early this year, but this was actually a little less severe than the more recent one. And I don't have a chart that goes way back. I mean, Bitcoin has some history of losing 80%, right? And so, a lot of Bitcoin people say, "Well, that's just part of the gig." And maybe it is. But as a technology, currency, a store of value matures, then the volatility should compress to be less and less. That's why this particular drop is a little surprising. If I had to guess, I'd say it's an opportunity. I'm with the Bitcoiners on this one. I think it's probably an opportunity. I've always had trouble completely embracing Bitcoin because it's hard to really understand, right? It's not physical. It's a madeup thing. And there's hundreds of other bitcoins that are just made up as well. So, how do you know what's real here? You can't hold it. Well, to me, it's proven itself to be a store of value just by its persistence and its chart patterns, etc. What I what sometimes concerns me about Bitcoin and crypto is the uh the zealousness, you know, that or the the zeal that that the people in that space believe. It's like allin or nothing. And we don't feel that way about anything. I think you can have Bitcoin. I think we don't really need to have Bitcoin or our clients don't because we recommend that they have 5 to 10% physical gold and silver and that's probably good enough. But if they want to have Bitcoin on top of that, I think it's proven itself. I think this is probably a u an opportunity. But gez, I would be careful. I wouldn't go in big. And there's other things in the space that have just completely fallen apart like Micro Strategy or formerly Micro Strategy, which is now strategy. It's gone from 450 to 150 roughly in just a couple months. So, it's lost 2/ird of its value. And I was just looking at this the other day. It's actually below its net asset value of its Bitcoin holdings now. So, it's probably an opportunity. Who knows? I mean, there's the head of that company is a little bit out there in some of the ways he talks and his predictions. I would if you're going to do anything, I'd probably stay with Bitcoin itself. So, that's what's going on. And part of me wonders how much of this meltdown was connected to this sell off in AI in tech that we saw. It's I don't have any evidence to back that up, but it really seems like this kind of meltdown started and then it spread through AI and then we had, you know, a pretty rapid tech selloff and it's now trying to find a ball. >> Technically, Bitcoin's price action is pretty correlated with the NASDAQ. >> Yeah, absolutely. Yeah, I don't have the charts prepared to show that, but I think that's probably true. Now, let me now compare that to gold and silver, which if you remember back, you know, I don't know, six, eight years ago, Bitcoin was going up all the time and gold and silver were lagging. It was really frustrating. And now it's the opposite. Right now, it's the opposite, which is strange. Here's silver. Here's a silver weekly chart. Uh, these are all ETFs, by the way, versus the the spot prices, but you get the picture. On a weekly chart, silver is putting in this high triangle. It had this triangle back here on this triple top breakout at 35 on spot that we were talking about every week and it went right up to 50. And if you compare what happened here, let me just go to the monthly chart back to 2011. Back in 2011, silver sold off from like 50 to 30 in a month. This time it's persisted at least into the second month. We touched 50. It's still up here. If we base out some more and break higher, it's going to be decidedly different than what happened back in 2011. And I know you've got to adjust for inflation, but and I can't go back this far in the chart, but silver hit 50 in 1980 with the Hunt brothers. It hit 50 in 2011, and it hit 50 now. Silver seems to be if and again, if it breaks out higher, let me go to the daily. Here's this triangle I was talking about. It's forming this big triangle versus collapsing. I think that's really important. And if it comes out of this triangle to the upside, it's going to go even further and the miners should finally wake up and say, you know what, we are completely undervalued. So take that's silver. Let me look at gold. Same thing. Gold went up to 4,400, pulled back to 4,000. It's been dancing around 4,100. It's up around 4,200. And it looks like it wants to break out. Hasn't yet. But then look at the miners. I'll go through each of the minors here. GDX, for instance. Boom. There's the triangle. We just broke out today. >> Now, it's not decidedly. I'd like to see it go above 80 on GDX to really be, you know, more obvious, but it's trying to break out of that triangle. >> GDXJ on the juniors. It really is kind of a sloppy triangle. It's not as obvious, but still it's firming up. Take a look at the junior silver juniors. They had a big sell-off 27 to 20. That's uh 20 what? 22% in just two weeks. I mean, that's almost as big as the Bitcoin drop, I guess, of 30%. But, um, yeah, it's it's firming up here. It's having a nice up day. Take a look at the silver majors. SIL. It's forming its triangle. Hasn't broken out yet. So, watch for these triangle breakouts. Our work says that in general, miners still are performing better than metals. And within the metals, silver is performing better than gold. So if you're going to buy bullion and you want to have, you know, the best performing asset, you'd be buying silver. There's caveats to all of this, of course, and the miners are are should do better. And we're we're watching for an imminent breakout. It' be nice to see it. Just we need a little more confirmation. >> All right. Well, look, we'll have you tracking this for us every week, Mike, so you'll keep us uh you know, updated here in real time. Um, but a lot of folks watching here, uh, I'm sure are eagerly hoping that you're correct here and that these things may be breaking out to the upside from here. Um, all right, we only have a couple minutes left. Um, John, let me come back to you real quick. Uh, just a quick quick gut answer to this. Um, so suddenly and and hopefully uh we're seeing some headlines in the news that a Ukraine peace deal may actually be in the works here. Um I think too early to to say with any certainty. Um but you know there's been a 28 25 or 28 point plan that's been circulating over the past couple of days. And uh it's funny you know it shows why you shouldn't rely on headlines. Yesterday there were a whole bunch of headlines saying that uh uh this looked like it was a Russian list and not even a US list and Ukraine had said absolutely no way are we going to agree to this. Then all of a sudden, past 12 hours or so, it looks like it, you know, Ukraine has agreed to a lot of what's on the table. So, let's all cross our fingers and hope for global stability and world peace and saving people's lives that uh there is a peace deal in the offing here. Um market hasn't really seem to react to it much. Would this be a market moving event or um or not? Um, I've asked just of a couple of other of of thoughtful money's uh financial advisors and and they've largely said no, it's it's not really something markets historically have traded much on, but do you have a strong opinion one way or the other? >> Not a strong opinion, but my my feeling or my gut check is it probably won't be much of a a durable market moving event. Uh, I don't know, even though it's fresh headlines, I don't know the the outcome or the details are are that relevant to what the market's been pricing in and hasn't been. So, my gut is that no, it's not likely to be a meaningful event in the markets. >> Okay. Um, doesn't mean we can't all hope for it, though. >> Oh, absolutely. >> Life is not markets. Uh, we we know that uh we should know that and remind ourselves every day. >> Yeah. Very well said. Um, all right. And then um just in wrapping up here uh I you guys uh you know we past couple weeks when I've had you on as we've concluded the conversations you have reminded the audience that uh the end of the year is coming up fast and there are a number of year-end uh steps that um are wise to take and in some cases people really need to take them like maybe your required minimum distributions if you're >> above whatever it is 72 or 70 and a half whatever it is these Um, and you know, time's running out fast. Um, and the reason why, folks, is because yes, we have less days left in the calendar. Uh, and they're going fast, but also the closer you get to the end of the year, the the harder it is to actually get these steps effected. So, um, obviously financial adviserss, they're getting crushed with everything they need to do with the end of the year and everybody calling them in a panic who procrastinated saying, "Please help me get this done." But John, you were saying, I think last week that like um uh that uh um uh you know, Schwab and Fidelity, they get bogged down. So even if you as the adviser have some capacity to help the person who calls you if it's too late in the year, Schwab might actually not be able to process everything by the end of the year deadline. Correct. >> Yeah. You Yeah. You you don't want to wait till the last the week between Christmas and New Year's if you can all help it. uh it just doesn't leave a lot of runway for the inevitable once in a while hiccup on the operational side. But the great thing is you don't need to wait that you know most folks should start to have a handle on where they stand on the year and uh the things that need to be done before the end of the year. We got plenty of runway still yet. Um you know these are always the things we talk about. Um, you know, the ones that really are kind of on tops of our our clients mind of late are things like Roth conversions, which have to be done uh before the end of the year. They can't be put off until like tax filing deadline of next year, like like a regular IRA contributions can be. Um, there's some new little wrinkles here. you know, we won't get into all the details, but um you know, for example, as a result of the Secure Act, I think it was called 2022, there are what are called super catch-up uh contributions that people ages 60 to 63 can make. You know, so most people above 50 can make uh you know, the tra, you know, the Roth IRA or IRA contributions or retirement plan contributions. And then there's uh these um but this actually really relates only to corporate retirement plans like 401ks, 457s, 403bs. For folks between 60 and 63, they can make a super catch-up where it's a uh I think it's 11,250 versus 7500. So folks that really are needing and wanting to play catch-up um you know, think about that super catch-up contribution in their their employer sponsored retirement plan. And then another little wrinkle, some for people that are above a certain income level, uh that super catch-up has to be made as a Roth contribution, not a it can't be done as a pre-tax. And these are all just nuances that you if you spend a little time and dig in, they they're pretty pretty straightforward. But point is get your get your attention on it now. Don't wait for the end of the year and la last minute. >> All right. And I'm going to say for most people, um there's nuance here, right? So rather than trying to figure it all out yourself in a panic at the end here, reach out to your financial adviser. If you don't have one, talk to one of the ones that Thoughtful Money endorses. Um, and just say, "Hey, look, this is my situation. What are the things that apply to me? What do I need to know?" Right? Um, and so I want to commend you guys because you put together I thought what I thought was a really helpful summation of these year-end steps. Um, and uh, you let me kindly share it with the thoughtful money audience. Um, I did that by putting it in the thoughtful money substack. So, folks, if you haven't read that yet and would like to get your hands on it, uh, you can just go to thoughtfulmoney.com/newsletter. You can sign up for the free Substack. It's one of the most recent posts that there that's there. So, you can go and, um, uh, get it that way or obviously you could talk to the guys at New Harbor yourself directly. Um, and to do that, uh, you can just fill out the very short form at thoughtfulmoney.com and, uh, schedule a con a conversation with them. And of course, you can do that around these end ofear last steps, but you can do that around just anything related to managing your your wealth for you. Um, and end of the year is always a great time uh to try to set yourself up for success in the coming year uh rather than delay and have to scramble uh once the new year's here. So anyways, uh John and Mike, thanks so much for another great week. Folks, please show your appreciation for them making time to do this on their busy Thanksgiving weeks uh while they're still helping clients and trying to make some time to have some turkey with their families. So, please help me thank them by hitting the like button and then clicking on the subscribe button below as well as that little bell icon right next to it. We've only got like a minute left, guys, but just real quick, I'll go to both of you. Um what are you guys especially grateful for this year? Mike, why don't we start with you? I'm grateful to have this platform, you know, and that's thanks to you, Adam, and you know, maybe thanks to all of our hard work together throughout the years to >> absolutely accumulate effort >> absolutely accumulate the wisdom and the experience that will that actually allows us to help people through this time and the time that's coming. It's not easy. It's all psychological. The Fed designed it that way. We're really good at helping people through that. I feel like we're at the right place at the right time, thanks to all of our hard work and thanks to you. So, thank you very much. >> My pleasure. John, how about you, buddy? >> Couldn't have said it better than Mike just did. Uh, I'll add the thanks to our our great team here. You know, we've been fortunate to have surrounded ourselves with great colleagues that are caring and and professional all all the same. And I I'm just really looking forward to the market being closed for a day and a half day on on Friday. And uh you know, I'm really looking forward to spending some time with family and friends and just enjoying what we are all here to do. just uh be good to each other and and be thankful for what we're blessed with. >> All right. Well, very well said, gentlemen. Um I'm very grateful for your partnership and your friendship. And as Mike said, we we've had this going on now for what, a decade and a half or more. Hope we've got several decades still ahead of us here. Um but I wish you guys a great Thanksgiving with your family. Same to everybody watching. And I just want to reiterate something I think I said in in this past weekend's video, which is um you always talk about how the the key forms of wealth are are relationships, purpose, and health. Um we got a real chance here at Thanksgiving to work on our relationships with the people that we care about most. Um care about the most because we're spending, you know, our our sacred and and limited holiday time with them. So, um, might be a good idea while you're gorging on the the wonderful food at your Thanksgiving feast that maybe you go on a fast on your digital devices for the day. Maybe we make Thanksgiving this year a day without a device. Um, so that being said, gentlemen, thanks so much. Great week. Um, like I said, hope you guys have a great holiday and we'll see you next week. >> Goodbye, Adam. Enjoy. Thanks. >> You, too, Adam. Thank you. >> All right. And everybody else, happy Thanksgiving. Thanks so much for watching.