A Perfect Storm Of Troubles Is Brewing | Cem Karsan

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Supply side economics is efficient. It creates better profits for companies, creates greater technological development, creates uh global expansion and peace, but it creates massive inequalities and halves and has nots. And the second we move back towards that pendulum swinging the other way, which is where we are now, right? This is when you start to see global conflict. is when you start to see uh commodity uh scarcity because if we start splitting up and doing protectionism, inflation through fiscal spending and fiscal dominance end up ends up slowing things the the broad growth and definitely profits down and not to mention higher interest rates leads to multiple contraction and profit margin contraction. >> Welcome to thoughtful money. I'm its founder and your host, Adam Tagert. Today's guest sees the US financial markets entering the final stage of a multi-deade topping process and in the early innings of a 15 to 20year regime shift driven by demographics, populism, deglobalization, and rising structural inflation. He believes that we're on the cusp of a lost decade plus in nominal equity returns and meaningful real losses if investors keep using the same old 40-year buy the dip stayong growth playbook. How can we position ourselves to sidestep the worst of this and perhaps even prosper in the years ahead? Well, let's ask the man himself. We're very fortunate to welcome back to the program Jim Carson, founder, CIO, and managing principal at Kai Volatility Advisors and Kai Wealth. He's widely known as Jim Quissant on X Twitter. Jim, thanks so much for joining us today. >> Always wonderful to be here, Adam. Thanks for having me. >> Hey, you know, it's my pleasure, my friend. And you're one of those guys where once enough time has gone on since your last interview, the the comments start coming in fast and furious. When are you getting jam back? When you get in jam back. So, I think hope hopefully we're going to scratch that. It's for folks today. >> We got to give the people what they want. >> Yeah. Now, f first and foremost, did I accurately describe your general outlook in the intro there? >> Absolutely. That's the the 30,000 foot view for sure. >> Okay. Um, so if we could just for folks that haven't perhaps watched our most recent couple of of interviews together, could you just give a quick recap of the regime shift that you see underway and what key forces are driving it? Yeah, from from 30,000 ft um we've entered a generational time of populism. Uh it's been driven by uh you know 40 years of increasing inequality that's been driven by what we'd call supply side economics. Right? Starting in 1982, the 10-year bond peaked at almost 20% in the US. Um and we have seen a move to zero uh in some places below zero that now is in the process of reverting. We talked about this 5 years ago before that reversion started. >> Why is that supply side economics? I think you throw around words like that people think oh what does he mean supply side economics? When you lower interest rates that is not like fiscal stimulus that is who borrows money. When we create new money and we lower interest rates or do even better QE what are we doing? We're sending that money to people who borrow. The bottom 50% of people do not borrow money. They cannot borrow money. And the overwhelming majority, 99% of money gets borrowed by the top 5%. Um, >> let me just make a mathematical note too, and I don't want to get too wonky, but um those policies not just make it cheaper for those people to borrow, but they they are asset supportive, right? >> 100%. >> 100%. So QE obviously more liquidity comes in it pushes asset prices up but even just reducing the borrowing costs there's when you are doing a discounted cash flow which is the way in theory that most people are supposed to value an asset you you you you project those cash flows out in the future then you have to discount them by some factor and if you reduce the factor by which you're discounting them and and often times the the tenure is a big part of that calculation for the discounter um if you're reducing that you are mathematically increasing uh the value of the asset and so to your point those with assets disproportionately benefit here >> we've seen a 400% multiple expansion some would say 500 the low in 1982 price to earnings ratio the S&P 500 was 4 and a half I don't know why we talk in price toearnings ratios I think it's very confusing we should talk in earnings yield >> right we talk about interest rates, why don't we talk about earnings yield, the amount of actual percent you make on your money. It's just the inverse. The price toearnings ratio was four and a half, which meant you were making about 22 and a half% yield. People think, "Wow, that's crazy. I would have bought that forever." No, you wouldn't have because you could have locked in a 10-year guaranteed bond from the US government for 20%. >> Right? And so, as interest rates go to zero, not surprisingly, that price earnings ratio has gone to what? 27, right? 27. Um, and actually it went to 27 or so when interest rates were zero. Now interest rates have gone up. The 10 years gone up to 4.6%. Right? And yet we're still running an earnings yield. Now there's growth to the S&P assumed growth. So like it makes sense for it to be lower, but how much lower? And we're talking about 3.8% earnings yield. So that 10-year bond drives multiples. it is um this is what people didn't understand in 2122 and I was yelling it from the rafters over time interest rates so the 10-year bond is much more highly correlated with stocks than the alternative um because precisely for that reason if interest rates go to 10 that has you know bonds sell off but the you that means by definition that equities have to also sell off from a contraction. Lastly, historically, profit margins are highly correlated with interest rates over longer periods of time, over 5, 10 year periods. Why? Because why? What drives interest rates higher? Inflation. And what does inflation do? It doesn't just lift revenue. It actually lists lifts costs for most businesses. Now, not all, but about 75% of businesses have profit margins collapse as inflation gets going. And yes, revenue increases, but the actual profit margin decreases. So this combination leads to a dramatically better outcome for stocks as interest rates go lower right but that is not best for people which are a lot of the input costs per se. fiscal spending which is money getting money being sent to people is actually what rebalances over time and we go through cycles again if you look at hundreds and hundreds of years of cycles thousands of years of cycles you will see this balance between free market you know think of it as the right economics supply side economics where money goes to the top in the sense it's almost evolutionary right the uh you know survival of the fittest >> and um and eventually you get to your let them eat cake moment where all the res resources are at the top and the people broadly say this isn't fair. So we have gotten to and or at least toward that let them eat coke cake moment. If you can't see it, if you can't feel it, we've been talking about it for 5 years. It's what's brought not only the rise of the the the far left which is the kind of think of it as the AOCC's and Bernie Sanders, but also importantly the right being dragged left by Donald Trump. Trump is a populist president. tariffs are are are populist. Everything is populist. It's not just in the US, it's global. So once you enter these regimes, >> supply side economics is efficient. It creates better profits for companies, creates greater technological development, creates uh global expansion and peace, but it creates massive inequalities and halves and halves. And the second we move back towards that pendulum swinging the other way, which is where we are now, right? This is when you start to see global conflict. This is when you start to see uh commodity uh scarcity because if we start splitting up and doing protectionism, we have plenty of commodities in this world if we all just trade and share. But when commodities are are sequestered in certain countries and certain places, commodity cost starts to rise as well. and inflation through fiscal spending and fiscal dominance end ups ends up slowing things the the broad growth and definitely profits down and not to mention higher interest rates as you mentioned before I went into this leads to multiple contraction and profit margin contraction. So these are big cycles you can see them throughout history by the way we think now going back to 1982 that the last 40 years represents reality over the long term. The last 40 years has nothing is so far removed from the broader extension of reality. We have had a 10-year period which people thought was this incredible lost decade uh in this 45 year window. Right? If you look at prior to 1982, 60 of the 82 years from 1900 to 1982 in three two decade periods each were 6040 made 0% real terms were 0% for 60 of those 82 years. 1900 to 1920, 1929 to 1949, 1962 to 82. These are periods and what markets look like when we are not in a supply side model. The question is can we continue to run the supply side model and politics will decide that generational politics will decide that and uh I I'm willing to bet uh it will it will not allow us to continue down this continued supply side path. >> Okay. I've got a bunch of questions for you still, but you opened the door that I think probably everybody cares the most about here. So, I'm just going to walk straight through it. So if the 60/40 portfolio, which is sort of the standard way of investing for most people who are alive and watching this video, if that has been, you know, largely doing well over this period that you think is more historically apparent than historically normal um and and and worked well for supply side economics, but probably not for what we're walking into here, then what is the playbook that you recommend? I mean, I I kind of know from our previous discussions, but for folks, I just want to bring everybody up to speed here. What what type of investing strategy works for this more populist era? >> Yeah, the big thing is actually thinking about risk >> uh optimizing returns to risk adjusted returns. Um we have lived in a period for the last 40 years which has um dramatically outperformed from a riskadjusted basis relative to history. And there are simple straightforward ways to better invest thoughtfully of risk where you don't really give up return. You know in the words of Warren Buffett wearing a swimsuit you know when when the tide goes out you know you find out who's swimming naked. Well, all you have to do is wear a swimsuit and it's not that hard, but most people walk around saying, "Well, that swimsuit looks uncomfortable." >> Um, the reality is it doesn't affect your swimming. You will have a a tremendous just as good a time. The difference is when the tide goes out, you won't have to run for the hills. >> Um, and when the tide goes out, unfortunately, history tells us it goes out for long, long periods of time. So, you might be without a swimsuit for two decades, and you can buy swimsuits. They're they're available very easily. So, so, so what does that look like? Let's be more specific and stop talking in metaphors. There's a you Chicago school uh that that thinks about risk. You know, most people know what a sharp ratio is, the most basic measure. And if you don't, it's just the risk annual expected return over the volatility of assets. Very basic measure of riskadjusted returns. I talk to raas all the time and I always lead with what do you think the sharp ratio is over 125 years of the S&P 500 and what do you think the sharp ratio is of 6040 now you would think that most RAS would know the answer to that question or at least have some sense >> zero zero out of the hundreds and hundreds of RAS I've talked to have ever had any real sense of what the answer that is that should be a warning sign that means they don't think about risk How do the how does the typical RAS think about risk? They think about planning. They think about, well, we don't know how to manage risk. We're not going to think about risk, but what we're going to do is if you're close to retirement and we know we don't know how this is going to turn out, a short period of time, we are going to derisk. We're going to take this down to very very very low risk. Okay? Um, and if you have a longer time horizon, we're going to take more risk. The problem is those cut offs for long time are also generally 10 years or so. And history tells us, longer history says it should be 20, 30, 40, 50 years. >> But put that aside, most RAS don't know what the sharp ratio is. Now, typically a one sharp is generally considered pretty good. Anything above that tends to be great. Anything below that as you get lower is bad. To give people context, the sharp ratio over 125 years, the S&P 500 is.35. Abysmal. What does that mean? That means for a 10% annual return, which is the long-term annual return of the S&P 500, you have a 30% volatility. What does that mean? 2thirds of outcomes are going to fall between -20 and positive 40. And 95% of outcomes on a lognormal distribution are going to fall between -50 and positive 70. That's the risk you're taking to get a 10% annual return. And they cluster, which means over many decades, those numbers are incredibly poor. and over other decades they're incredibly great. Okay, this is an incredible amount of risk to take to make 10% a year. People see that 10% are like, "Yeah, I want 10% a year." Right? >> But they don't think about the risk and adviserss don't either. >> Okay. Do you know what the sharp ratio is of 6040? >> Almost identical 37. >> There is zero diversification benefit over 125 years and over many many decades. it is actually an accelerator to risk than than the opposite as we kind of highlighted before. So this is the reason 6040 is broken. It doesn't work. Now it it didn't exist until 1985 because again in 1982 if you sat in 1982 and you look back 82 years you saw three 20 year periods where 6040 in real terms made zero. This is also why passive investing didn't exist in 1982 8384. Recency bias. Okay, recency bias. Nobody could have imagined that we'd have this kind of a run because at that point you were looking at 1900 1920% returns, 1929, 1949 0% returns, 1962 to 1982 0% returns except for the nine years of the roaring 20s and the 1949 to 1962 period which is post-war boom. It was 0% returns. All of it. And so 6040 didn't exist. It wasn't an investing concept. And passive investing didn't exist. It's not an innovation. It didn't exist because it didn't work. Dow Jones Industrial Average was was created a 100 years ago. But we didn't start passively investing till 40 years ago. What happened those other 60 years that we had indexing? Why didn't anybody passively invest? It didn't work. And so this is the part of the story that doesn't get told. Why? Because this story of invest in businesses for the long run, buy and hold behooves the whole investment community. It's easy. Doesn't take expertise. Risk is the complicated part to the point RAS universally I can tell you from talking to don't know what the risk metrics are or how to manage risk. Meanwhile, there is a whole school of academic research started really at Chicago, not recently, 80, 100 years ago. Much of it that deals with improving returns through very clear academic research. And guess what? It's used and deployed at hedge funds. That's this is that people think hedge funds are geniuses. How are they doing this? Or they're criminal. Like, what's going on here? They diversify. They improve their risk adjusted returns through diversification and a couple of other tools which we can get to here. And by improving that risk adjusted return, they can then leverage those returns. If I get from a 0.35 sharp to a two sharp through diversification, which they can do relatively easily with non-correlated assets, even if I'm just making 5% a year on that, then I can leverage it. >> Mhm. >> To make 20% a year through gross leverage, and it's okay because the amount of it's you're not putting all your eggs in one basket. You're diversified to all kinds of different strategies. This is the first principle and the easiest, most well-known. It's alchemy. It's the alchemy of risk. You can take you can go to the the investment store and go find the 20 investments on the shelf that are all highly correlated stocks and put them in your basket and they may have a 0.5 sharp, right? And they may have a 10% annual return and a 15% annual draw down peak to trough. And by putting them all together just because they're slightly non-correlated, if you do 500 of them like the S&P 500, guess what? You go to a 6 sharp and you go to a draw down from 15 to maybe 11. >> Mhm. Right. But your return and your return is still 10%. But if you go to the non-correlated part, that international good, you know, uh, you know, aisle where everybody's like, "That's kind of weird stuff. I don't know if I'm going to go eat over there." I don't know what it is. But if you go take 20 of them, what happens? 10% return, by the way. 0.5 sharp each of them. 15% annual draw down. They're all the same risk return. You look at them like, "This is the same. Why would I buy this?" The other thing simpler because they're non-correlated, something magical happens. They still return 10%. But when one zigs, the other zags and you put 5% in each and all of a sudden the volatility collapses of the total portfolio >> and you go to a one and a half too sharp >> and your draw down goes down to three or four. >> It is the alchemy of risk and it's well understood, well written in academic research, yet we all put our eggs in the long market basket and the bond market basket that's highly correlated with the long market basket, >> right? And so this is the first of many. You know, they now have hedge funds that do this and all kinds of other non-correlated strategies. Uh liquid alternatives that do all kinds of things that look like this. We also have now options and the ability to hedge and rebalance improve our geometric returns through convexity and rebalancing. Another academic principle that's well understood to dramatically improve riskadjusted return outcomes. We could go on on. There's several other things that that you can do, but these are well documented if you cut the left tail, which is relatively easy to do, which is much easier to do than trying to find the new innovative thing that's going to change the world. >> If you can just, you know, this is Howard Marks, Warren Buffett, never terrible. If you don't know it, don't invest in it. If you do good risk management, the risk adjusted returns go up and then you can take more risk. And very few people think this way. It's very very clear in academic research this is by far by not 20% better not 40% better hundreds of percents better on a riskadjusted basis on a sharp ratio and a sortino ratio on these things. So, so this approach is available. It has not been adoptive because for 40 years there it was easy enough to get really good returns in the market if you just closed your eyes and didn't work at it. >> Right >> now and bought the dip even better right now. That works and recency bias tells everybody to do that. Continue to do that because it's what's worked 40 years forever. Who looks at 125 years? But when the pendulum swings and what we see in history is when the pendulum swings the other way like we're seeing risk management matters. And guess what? We're lucky we live in the for the first time where the pendulum is swinging this way and we actually have tremendous tools to do these things. The academic research has improved the tools and availability of these things. The last time it happened up until, you know, 68 to 82, let's say, we didn't have all these tools. Recent retail definitely didn't. So, we're in the midst of the beginning of of a boom in people adopting and learning about these tools and starting to adopt them at a broader investment level. And there are early adopters. We are seeing it in the last four years. This is what's leading to the boom in uh precious metals and and and crypto but also those are assets but also to the growth of hedge fund assets structured product options trading. All of these things have an AUM tripled or quadrupled in four years in AUM and are still a tiny fraction of the broader investment universe. uh these are these are early adopters again four or five years ago when I was talking about this this growth hadn't yet begun and it's happening the adoption is being across the universe these are what I call network effects the more demand there is from the macro realities and rising interest rates started with 22 why because the bond stopped working people said holy cow now I just have stocks how do I diversify >> but that as people begin to adopt this more and more you're going to see more infrastructure more product more all the things of the financial market kind of universe that's built up in the last 40 years. >> We are now seeing this conduit this bridge coming from Chicago this Chicago school to New York and the rest of the world. Um and it is it is um the adoption is is exponential but still very very early innings and again any usually things that are 20% better uh take over market share very quickly. This is hundreds of percent better on a riskadjusted basis. That's math. Yeah. Um and it just hasn't been the demand hasn't been there because it hasn't been as necessary. The tide hasn't go gone up. >> Yeah. >> 22 was the first sign of the tide. >> It it sounds I mean the logic sounds compelling and I think anybody listening to this um most of my viewers are DIY investors. Uh Jim, so I'm sure their ears are perking up of hey I can get similar returns with um you know huge reduction in risk. Yeah, sign me up for that tomorrow. Right. Um, so if somebody is this the kind of thing that that somebody can educate themselves on and and deploy pretty easily as an individual investor or is this the kind of thing where you're you're really better off hitching your wagon to an expert who really gets this? >> The answer is uh never black or white, right? You can get 70 80% of the way way there through education. And there are now great, you know, a great array of products and things that are accessible for your average investor. But this is the thing. I think what happened along the way in the last 40 years, you know, I think the RAIA, not to speak, you know, poorly about RAS in general, but the reality is that expertise, people think investing is easy. that that you just buy stuff, you go to the store, you buy stuff you like, and then you you go home and you forget about it and it goes up over the long run. >> Y >> um I don't know what other parts of uh your life where expertise doesn't matter. And I'm guessing you're not going to go defend yourself in court and I'm guessing you're not going to operate on yourself. You're not going to go design your own building unless you're an engineer. We could go through all the important, you know, expertise matters and markets are complicated. There's there's real expertise here. the stuff I'm talking about, you learn in school and and a lot of academic research kind of leads to these better outcomes. But there's a better way and if you know how to do it, you get better outcomes. So yes, you can educate yourself and much like you can become a doctor and you can become a lawyer and you can become uh or an armchair version of one, right? But you know, expertise matters and people who spend 27, 30 years doing this, studying these things, implementing them learn and they become better. Um, investing is no no different. We just have moved through a period where people have been unfortunately taught that it's it's easy and expertise doesn't matter. And when the tide goes out is where the expertise is. >> Yeah. And that's what I worry about. That's what I worry about for the average investor is um recency bias. It's working for me. I'm going to ask you in a question in a minute about, you know, the stock market's still at alltime highs, so when does this matter? But for most people, not even just around investing, they just don't change their behavior until the pain of continuing their existing behavior starts to outweigh the pain of change. Right? So, I do fear a ton of people are just going to sort of sleepwalk into this like, yeah, whatever, Jim. I'm I just looked at my, you know, statement. It's up this month. So, what you're saying, >> that's why it's important to be an early adopter. And that's why it's important to learn and educate yourself. And that's why we're here, Adam. I mean, that's literally what we're talking about. >> Oh, yeah. and that's why people are wa watch this channel and are watching you specifically here. So um so it's good to know that that there are steps people can take right now at the immediate level just begin to educate themselves on this approach um but also begin to position themselves here. I am curious though are there um in addition to you know maybe the benefits of of learning from a master before going off and doing this all on your own. uh e are there benefits to um of access. In other words, especially in this world of non-correlated assets, if these are things like structured notes or private deals or things like that, you know, sometimes can can the expert get access that just a regular individual has a harder time finding on their own? >> It's not absolute, right? uh you know uh I would say the following that that the principles at baseline you can do some pretty big improvements to what you're doing through some simple steps you know one be more non-correlated your mom always told you don't put all your eggs in one basket why is everybody putting their egg eggs eggs eggs eggs eggs eggs eggs eggs eggs eggs eggs eggs eggs eggs eggs eggs eggs eggs eggs eggs eggs eggs eggs eggs eggs eggs eggs eggs eggs eggs eggs eggs eggs eggs eggs eggs eggs eggs eggs eggs eggs in the same basket in investing um you know I think that diversification but true diversification not putting it in the same baskets that are going to degrade at the same time with the same material in the same way. Right. >> And sorry to interrupt, but I mean the problem is is most investors are not educated or sophisticated enough at your level to really understand that. They think, "No, no, I own a whole bunch of different sectors and different ETFs and yeah, I've got a lot of bonds in there. I'm 6040. It's supposed to balance out." They're not realizing that they're they're still exposed to the same type of risk. >> Yeah. Market goes down, they all have beta. Interest rates go up, they all have exposure to that. Commodity costs go up, they all all are exposed. Businesses are the same type of investment. They're not the only show in town. That's the big part that everybody needs to know. There are a whole bunch, hundreds, if not thousands of other things that are ways to invest that are not betting on market up, market down. Now, I can go through I can name 15 right here. merger arbitrage, convertible arbitrage, life settlements, legal settlements, long short equity, long short credit, tren trend following, global macro. Uh again, I can keep going here. There's there's a gazillion of them, right? Event driven uh strategies. Um every uh every hedge fund strategy ever uh created, and I hate that word hedge fund because it's like uh it's not about hedge funds. any strategy that doesn't directly make money just on being long the equity market or even specifically a stock, right? Um there is an edge in across the markets in all kinds of relative value all times of event- driven opportunistic uh structural trades and those trades when collected again you don't have to do all hundred you could do five 10 find these non-cor there's lots of them they're all over the place um that that portion you don't have to do that with all of your portfolio by the way I'm not saying never invest in long assets that'd be you know that's that's a great investment as well And for those long-end assets, there's there's also the ability to hedge and work through a relative kind of rebalancing logic. So, one, diversify. Two, use convexity opportunistically to and and don't not buy and hold long, but hold a longvall hedge um at a small level. And again, you can outsource this to others who know that part or invest in an ETF or a fund that does it. But at the end of the day, have some convexity in the portfolio that when something goes bad, much like insurance, you can monetize it and rebuild the home. Most people drive a race car around the track with just gas. That's what's happening in this world. And you can be a good driver and you're not going to win that race if you're only going around the track with gas. You have no control. If you're a good driver, what do you do? You go slow because you know you're going to fly off the track when you come around that turn if you don't slow down. But it takes a while to slow down. It means you got to and some people, heaven forbid, once they crash into the wall, next time they're they're going slow around the whole track forever, >> right? >> The key here is to have breaks. And people, most people look at the brakes say, "These damn things make me go slow. I don't want breaks. They get 0% returns from these things. Maybe negative -2 a year. Why would I invest in these things?" Because people have been trained that you just buy and hold everything because it's easy. Just buy and hold. The breaks in a portfolio long vault. What they do is they when they pay off, you're going around the turn. You have all this extra funds that you can now take your 30 40% profits and push back to work. Exactly. When everything's on sale, so you can accelerate around the turn. You create control in a portfolio. That's what risk is. >> Yeah. That analogy is such a great analogy, by the way. >> It's the best because it's very few people think about you need the tools. You need to create a race car to win over the long run and to have control out of your of your outcomes. the optionality value alone when things go bad to be sitting there in a situation where you're risk managing all the opportunities that are coming in you could be like I'll buy that one because it's not like you're just buying the index at that point at that point you have all the cards >> and that that risk management allows for dramatically better outcomes of the whole even though maybe that little long ball small piece returns 0% over the long run it's not the point it pays off exactly and you can monetize it exact exactly when you need it to so that you can put the money back to work. That part is completely lost on people because people have taught buy and hold. That's all all that matters. You invest for the long run. You buy that thing and if it doesn't make money over the long run, why are you not going to buy it? It misses the whole point. Um so so these concepts diversification uh uh using longva for rebalancing and improving geometric returns uh also a value of vesting approach not very popular but there's a whis warren buffet uh you know um you know all of the greats that you go back 67 years who have been through the many business cycles the guys who win over the long run just cut the left tail by not investing in what they don't know >> I I sat down for lunch with Howard Marks A couple months ago, I was fortunate enough to have a a wonderful lunch with him. And I love this this story. You guys will love this. This is a great Howard Mark story. He said, he said, "You know, Jim, I love that you think about risk management. That's how I I went over a long run. I I go to the same place. I've been going for 50 years around the corner from my my office." Said, he's like, "I somebody asked me the other day, why do you still go to that place?" And he's like, "I realize it's the same way I invest. It's usually good, never terrible." He's like, "If you do usually good and that can control, never terrible, right? Sometimes it's going to be great. The appetizer is going to be something new that they came up with, the the staff will be uh, you know, on point that day. If you stick around, co will happen. You'll be in healthcare and the healthcare stuff will go to the moon." You stick around, that right tail happens to you. You don't reach for it. If you reach for it, that's how the left tail happens. But everybody wants the home run. Nobody's thinking about hitting making sure they hit singles. That's not very sexy. And everybody when there other people are hitting the home run want to chase. But you can control never Terrible. You can't control the other tail. And never Terrible gets you in the 0.1% over the long run. That's what Warren Buffett did. That's what Howard Marx did. That's what all the greats do. >> Yeah. That that reminds me um of the Warren Buffett science of hitting analogy, right? where he talked about, you know, Ted Williams knew his own batting zone, zone strike zone really well and he would he would just say, "Look, my job is just to not swing at pitches to wait to a great pitch." >> But Warren Buffett said, "The problem with Ted is he could u he could strike out. You know, he's got two strikes. He's he's got to start swinging." He's like, "I don't have a strike count." So, I can just sit and let time bring me the opportunities. >> Maybe it's taking longer than I want. Sometimes it's shorter, sometimes it's longer. But if I just sit and wait for the perfect pitch. Yeah. You know, it it's it's never terrible and sometimes it's awesome. >> Yep. 100%. And so that's kind of the third thing most people don't realize. Value and growth of vesting as a general principle have similar returns over a hundred years. The difference is one booms and busts and the other one just keeps ticking along and you get over twice the risk adjusted returns from a value approach. People say, "Well, you're going to eat the same amount." Well, the difference is you your risk adjusted returns are dramatically better. So, you can take more risk. >> Yeah. >> And and if you can just get that ratio right, which most people don't think about, you will you can then go seek risk, you can go, you know, if you're at 4x the risk adjusted returns, well, if you're willing to take that other risk, fine. Quadruple your leverage and don't make 10%, make 40% if that's the world you want to live in. But in no world should you be taking you know less risk to return you know less return uh for your risk um because you can always increase the leverage and that's what hedge funds do. People don't realize the hedge fund thing is just alchemy of risk. It's not better uh like strategies or better returns. Again that alternative part of the store has similar risk return. The difference is just when you put them together, the portfolio has dramatically better riskadjusted returns and then you can deploy leverage. That's the that's the cheat code. You got to get the riskadjusted return back. But most investors and most wealth adviserss don't even have the risk conversation. They don't even know what the sharp ratio is of what they're investing in. >> So, all right. I'm I'm guessing there's a lot of people here that are saying, "Okay, I get it now. I've been it's taking me a little bit, but I'm really getting what what Jim is saying. Um, if they want to educate themselves about this, are there good resources out there that you can recommend to them? >> There are a tremendous number. Uh, we can put I can give you some and we'll put them in the links after, but there's no lack of I just said a bunch of great uh great names, right? Go read Howard Marx's newsletters. Go read uh you know everything written by Mer and Buffett since the beginning of time. Go read about options and why they are more efficient and precise and help you manage risk. Go uh take a Chicago. We live in a time of wonderful opportunities education. Go to UDI. Go to uh you Chicago has free online courses. Go take finance 101 and learn about the benefits of diversification. It's all there. Um in a world of AI, just just write some of the words I put in here and it'll teach you. So >> Okay. >> Yeah. So, but I do think important to note we mentioned Buffett and this is a great transition, Adam. >> Warren Buffett's sitting out right now, >> right? >> And a lot of people are sitting there kind of doing one of these. Oh, he missed out 40%. Do you think he's thinking about the short term, >> right? Or, hey, he's lost it. He's lost his touch. He's Yeah. >> Yeah. By the way, he had lost quote unquote lost his touch for, you know, the the tech bubble. Well, look at the long-term returns and risk. it speaks for itself. Um, yeah, the the big problem is people is is time frames. Honestly, a is lack of education, but it's also if you don't have education and then you're watching the world around, you see people getting rich and see everybody doing the same thing. The fear of missing out is tremendous >> and really long. Let me interject something so that you can you can fully go on this because this is the question I was I was about to ask you next which is um stock market all-time highs >> right so um you know people are saying it might be saying look Jee I this all sounds great in theory um but I mean I've listened to a couple of your past interviews and here we are still market's still at all-time highs um I think I know what it is but but what is your response to that and I actually starting with Buffett is a pretty good one which is hey here's a real smart guy who's not participating in the party at this late time right um and I guess in your answer too if you could also include you know I mentioned in the intro that in our previous discussions you've talked about a lost decade or decades ahead for the market so what is the what is the cost of getting this wrong by not ad adopting a greater focus on risk >> in my opinion the cost is zero because you can make 10 to 15 call it 10 to 12% a year without leverage through this broad approach. >> Okay. And I'm sorry my my question and finish that but my my question was more the person that doesn't listen to you right now >> and and and they're just continuing the status quo 6040 by the dips. >> What what do you see as the cost of that approach heading into this new world? Well, well, the cost of it is making no money and potentially even losing money uh over 10 to 20 years. Just in 1962 to 82, sorry, 68 to 82, which is the most recent one, right? 14 years, you know what the S&P 500 did from 1968 to 82? This blows most people's minds. >> It went no went nowhere in nominal terms, but nominal is not the important part, >> right? It's real. Yeah. the in real returns it lost 40% of its value. 40% losing your money. People don't even like oh well that sounds awful for the 14 years part is the important part. >> You lost the opportunity cost over compounding for 14 years. Take that period and now imagine compounding closer to 15% per year for 14 years. again nominal >> positive real 15% you're saying >> yeah I'm not the real is probably was probably closer to 10 okay >> nominal 15 but imagine in real compounding at 10% a year >> the the that's the cost um and >> so tremendous >> tremendous >> tremendous cost of getting this wrong yeah >> tremendous and I guess we let's answer that question the other one I thought you were asking which is what the co what's the cost of doing this versus missing out. >> Yeah. It's the cost of not put What's the cost of putting on a beta suit? Nothing. >> Nothing. It's very small. I mean, you could there's always an an outcome. I want to be clear where markets perform 20% a year for the next I mean this is probabilities right for the next decade or 20 years. I think that probabilities are that is is towards the lowest ever given valuations given a lot of other you know things that we can get into right but never put that aside let's just assume we're at a random place in time and like that can happen okay the odds of that are very low but meanwhile you can make 10 to 15% a year doing this so the relative and and I'm not even talking about the the expected return over 125 years of the S&P 500 is 10% a That's the long term. Okay. The 6040 is eight. And these are nominal, not real. >> Yeah. >> Right. >> I'm talking about getting that level higher, doing this with a fraction of the risk. So regardless, long-term now, over periods of time, you can underperform. I'm not This is the goal of this strategy is not to track the S&P 500. Things can boom and things can bust. >> And the goal here is on a relative value. This is 400% three, four, 500 depending on how you implement it. Dramatically better on a riskadjusted basis. And again, if you want to get higher returns than that, you can leverage it a little bit. Um, given the amount of of So, so the the the question is, is it worth the risk of doing this or is it the risk worth the risk of the other side? And and the reality is it's not even close. It's not even close. And and that's not even accounting for the part we haven't even talked about yet, which is the macro environment and where we stand and the risks and probabilities that lie in front of us from the structural populist, you know, pendulum piece we've talked about from valuation perspective. And I'm not the only one saying that. >> Warren Buffett's saying it. >> Trump Miller saying it. Soros is saying it. Go through all of the big names that have made money over long, long periods of time. >> They're all saying the same thing. Yeah, which is pretty much that the current environment is one that does not seem well positioned for um good future returns over the next decade. >> Statistically, the returns just from a valuation perspective, never mind the whole fourth turning generational turns, the populace of all that. Put all that stuff aside. From a simple valuation metric, if you look at 150 years of data, the 10-year forward returns in nominal terms, not real, always at this level, always have fallen between minus2 and positive2. Nominal, real, way worse forward. >> So, I do want to get any thoughts you have that you want to share about the current macro environment. Um, and and one tactical question to you that I just thought I needed to ask you is is the impact of the Iran war having any any impact on your your specific thoughts here in general? I'm sure it's not. I'm sure it's just noise in the long run. Um, but I I feel it's important just to underscore, Jim, that the majority of people who are watching this video are over 50 and a lot of them are close to retirement or retired. These are people who can't afford a lost decade or two in their portfolios. They certainly can't afford to to have a a disastrous decade or two in their portfolio. They just don't have time to recover from it. So, I got to think those people the advice is they should be listening especially hard to what you're saying here because their risk exposure is just it's too high for the time in which we might be finding ourselves in. >> Absolutely. That's even more important for those people. Now, first of all, they should be happy. You know, they've gotten to probably participate on one of the most incredible runs in history, >> right? Um, and part of the reason they are where they are. Uh, you know, again, the the top 10% uh is now 50% of all consumption dramatically up. The wealth divide between the wealthy and poor wider than ever because a lot of people have gotten to benefit. So, first of all, let's be thankful for where we are. This is a wonderful time to be having this conversation as opposed to in 1982 when a lot of other people were having this conversation in past generations. But yes, for that group, this is the perfect time to be educating yourself and thinking about risk. And again, I want to be clear, most people hear risk management and they get scared. They think fear. They think we got to hide. We we manage risk by hiding in a cave, by batting down the hatches. But that psychology is a function of an education of investing being just buying long investments. I'm here to tell you there is another way that you don't have to not take risk. If you manage risk properly, if you build a resilient portfolio, you can go out in the world when there is opportunity and continue to make tremendous returns. So, so yes, 100% for those people, it's it's critical right now. Um because even and by the way for everybody because even if you're 20 and you're starting out and you have 20 you miss that on 20 years I already talked about that divergence it's have dramatic effects for your your whole life right you might have time to recover but do we really want to be talking about recovering from 20 years >> right >> um so this applies to everybody and again I think that whole idea of the planning part and the risk management part is how we manage risk on a 6040 portfolio is just manage the time frame from that itself has incredible assumptions. If you go look at e-oney or any of these other planning software, you know what the time period that that they look back to determine the forward expectations are last 20 years. >> Nothing looks past 40. Do the expectations themselves have an embedded dramatic bias on that planning software? >> That's a great point. >> Yeah. So, um, and again, I'm not a sky is falling guy. I really am not. I don't >> I don't think you are. But but I just want to make sure those people are really perking up their ears. If you're over 50, you've got to be start if if you don't decide to lean into the type of approach that you're talking about here, Jim. You better have a really good reason that you know if things don't go your way, you can console yourself that you said, "Well, I I I thought I was making the right decision." But don't just stumble into this. >> And this is obviously not financial advice, but I really want to be clear. that I'm not telling people to sell all their stocks and go into cash from 1968 to 1982 that 14 years as I highlighted I highlighted you lost 40% of your money not only the market went nowhere you would have lost 40% of your money being in cash so there is a you need to to to invest you need to go out there and and and take risk but just be smart about the risk and there are these incredible tools so so education is key >> and and I really liked your comment about the alchemy of risk because as you talk what I the analogy in my mind is how you make um material stronger by adding other elements to it. >> Yep. >> Right. So you're not saying get rid of your iron. You're saying keep the iron but let's add some elements to it and let's create steel out of it. Right. So you still you get the same thing. It's just a lot more durable. Now, >> at the end of the day, if I take put all my money, go to the g the casino, I put all my not my bets on one thing, right? If it doesn't go well, I lose everything, >> right? >> If it goes well, I make a tremendous amount. Fine. But if I instead put my bets in all kinds of different incredible completely uncorrelated bets, all by the way that have an edge. I hate the casino analogy because you net lose money. But bets that over the long run make all make money but completely non-correlated. Your riskadjusted returns are just going to be dramatically better. The volatility of your outcome is just going to be lower. If they're good bets and you make a lot of them, you're just going to start compounding at some point. If you have tens of thousands of bets and all of them are good bets but not related to one another, that's how we get to the best best position. >> All right. Yeah. And again, back to my earlier point, like this is just this is thinking that most people aren't exposed to. And I'm going to imagine for most viewers here, it's sort of like a it's going to feel a little bit like trying to learn a new language. And maybe it might be a little bit, but it's not that complicated. Like you said, you don't have to add 500 things to your portfolio. You can add five, you know, and and make a big difference. So, just just start the educating process and obviously go work with somebody like Jim if you don't want to do it on your own. Um, all right. So, back to the macro for a moment. Um, valuations. I mean, I don't know how much we need to talk about that because my audience has heard me, you know, the experts in this channel almost every every time they come on, they start with, "Oh my god, we're at, you know, crazy high valuation levels." What are the other elements here that that just make you say, "Okay, yeah, we are we are beginning to enter the new era." So when you go look I like again we can talk about longer periods but I like to go look at that 62 to 82 period because it's more psychologically recent for people can relate to a little bit more. >> A lot of our viewers lived in that period. So >> exactly that's exactly right. And when you go look at that period why did we have a poor outcome there? Because interest rates started to work their way higher and inflation worked its way higher. Why? Why did that happen? Well, because starting in ' 62, right, with uh with John F. Kennedy, there is a move towards a bit of populism. There was a generational many these people probably listening were in this generation belief that the system um need to be a little bit more fair. It led to a a when he passed away to LBJ passing the Great Society program. >> Yeah. >> This was about fairness. Now, a system that is not fair, that all the resources go to the top does lead to greater technological development, greater profits for corporations, and equity markets do better, not to mention multiples go up because interest rates. >> But when you reach a point when people demand some level of fairness and equality and justice, right, principles that, by the way, life is not fair. Your mom probably told you that, right? But principles that are truly human that are that come from from this social empathetic, you know, we believe America was founded on these principles of fairness, justice and equality, right? Some level of it at least, right? Pursuit of happiness, right? At the very least. And so when we start to to to say these things are also important that naturally slows things down, right? It's like less oxygen going to corporations. Slows down. By the way, it doesn't slow down the economy. I want to be clear. >> This is a very important I want to make this point here. >> It actually accelerates the economy, but it's demand side economics. We send people money to the bottom, people buy more. They spend it right away. Yeah. >> And they spend it right away. And that econ economists call that money having a velocity of one. >> Supply side economics has essentially a velocity of zero. Some people claim it's negative actually, right? But it has a people we say the word stimulus like as if they're interchangeable. But it could not be more different. We send money to corporations. You get a short-term stimulus to the to everything. There's some buying from corporations. But the at the end of the day, those companies do what? They seek profits. And those profits lead to new technologies, new more globalization, money flowing to the cheapest place, right? >> And all of these things which ultimately take money out of the hands of labor, right? And so labor and capital have been battling since the beginning of time. In 1962, we had a chance at labor unions became more powerful. We started talking about what? Equality. This is when the race uh you know, right started and equality movement began, right? um that generation believed more importantly because of some of the things that had happened prior uh in in in focusing a little bit more not exclusively but a little bit more on fairness and equality. As that starts to happen, people get money, they spend the money on the bottom and you get more inflation. Interest rates go up, multiples come down, money starts to flow from capital and borders go up. So we start to get into more protections. How do you protect your people? It's about our people. Corporations are not about our corporations, about all corporations. It's about profit. But when we start to go towards populism, that means we have to put up orders. The the the cousin, I would say, or brother of populism is protectionism. You can't have it. It's about our people. So what happens when it's about our people versus your people. What happened in China when we were in a a globalist capital-driven supply side economic? Well, we built sent money over to China, sent all of the labor over to China and India, global, right? What happens when all of a sudden the people of the country say, "Wait a second. What happened to us? I've fallen behind for two generations." Well, opulism leads to protection. Does it sound familiar? >> And that protectionism does what? Now those people you were trading with for 40 years say, "Wait, wait, wait, wait, wait, wait, wait. I don't like this anymore. I thought we were friends. I thought you were sending us all these this money and all this business. You can't just start to pull it back." And by the way, we talked about this in 2020 2021. You can go check the notes. We were very vocal that you should expect increasing global conflict. This is before Russia invaded Ukraine. This is the first proxy war before uh we had issues in Israel and Gaza and you know um Iran and now we see you know and then we had Venezuela and now Iran like these are this is not a coincidence. You know we are starting to draw a divide between protecting the people of America. America first sound familiar? Make America great again. When this stuff happens, much like it did in the in the 60s and 70s, you start to see global conflict. If you go check the notes, if you just type what caused the inflation of the 60s and 70s, AI or it'll say three things. Increase fiscal spending, fiscal dominance. Sound familiar? Two, increase global conflict and like the Vietnam War, which was incredible spending tied to that and increase war. >> Just about to say that. Yeah. >> The Vietnam War. And then two, and then three, sorry, increase commodity costs, OPEC crisis. >> Mhm. Any this sound familiar to anyone? It >> Yeah. Yeah. >> And the reason commodities become more powerful maybe uncomfortably familiar >> and I was talking about it five six years ago to be clear very vocally. I want but this is the thing why does it why is the commodity part matter? I kind of I hinted at before because the more you have global conflict and people are competing we go from a time of cooperation to competition. Right. Yeah. >> This goes back to animal >> times right. >> Sure. >> The more we get into this part what happens? Well, if you have resources now, you start to use those resources as leverage. >> Mhm. >> And resources are plenty of resources to go around the world. So, if we're trading in a time of peace, no problems. But if commodities now begin to get sequestered in different places, all the nuclear is in Kazakhstan, all the oil is in Iran, and Venezuela. Guess what? Now there begins to become scarcity and it becomes supply and demand. and everybody's now bidding competitively over those assets. The war in Iran, I don't know why people cannot see this, is not about nuclear weapons. It's about oil. It's the same reason we went into Venezuela. The straight of hormuz I said this well before we the straight of horm closed well before we went into Iran, well before we went into Venezuela. This controlling the straight of hormuz is critically important in the power dynamics between US >> and China. China. This is a proxy war, much like Venezuela is a proxy war, much like Ukraine is a proxy war. It's between the two great powers of the world trying to determine who and how they will rule the next hundred years. And we are in a time of competition. Not because not just we've been in a in a softly competitive but cooperative mood for decades. But it's because generationally we're moving to a political environment where populism matters. the generation that was born in 1982 and that all they've seen is increasing inequality, increasing uh technological development, increasing globalization and sit there as the ones that have been hurt the most because they were coming out of high school and college as labor. >> So this system is broken and it's unfair. Uh they're at 40% the wealth creation, household formation of baby boomers at this time of the generation. And meanwhile, the boomers are sitting around saying, "What are you talking about? This is great. This is great. This system is amazing. What are these grumpy little kids talking about? 36% of kids between the ages kids adults between the ages of 18 and 38 live at home with mom and dad. >> Yeah, that's mind-blowing. >> They can't afford the debt from college and they can't afford a home and they can't start families. Mhm. >> So as baby boomers die, which is demographics is destiny, and as this generation begins to take over political dominance, every four years that's changing dramatically quickly, we are heading to populist outcomes, whether we like it or not. And those populist outcomes are the demographic swinging of the pendulum back. And this is what leads to the fourth turnings and all these other things that you hear about. And like you know so I interview um every six months or so Neil how co-developer of the fourth turning um and Neil you know sees himself as a pretty optimistic guy even though he talks about a lot of scary things and I put you in the same boat where to a certain extent this is just sort of the the rhythm the heartbeat of um the social experiment, right? And so, uh, you run it until too much advantage piles up in too few hands and then it kind of swings back the other way, right? And look, I mean, people like me, I'm a big fan of free markets. I'm a big fan of capitalism, etc. Same. >> And I would I would rather have us just continue that. >> But I also understand, and I talk a lot about it on this program. >> You know, there are real costs the more that advantage concentrates. And it's it's pretty I mean I'll say it it's pretty terrible what we we've done to the how we've we've diminished the prospects of the younger generation on average right now. Now there's still opportunity for real bright shiny people to excel and that's part of what's wonderful about America. But we have given this generation I think younger generation a a um harder incline to climb certainly than the previous couple ones had. Um, and yeah, I if if you don't address those, well, then eventually you get to your, you know, your French Revolution moment. I don't think anybody wants to the pendulum to get that far out of whack. So, I don't necessarily think you think this is terrible that we might be going through this this new era where we're going to have lower stock prices and stuff like that only because it will maybe in some ways rightsize things to let the experiment continue. At the end of the day, the worst thing that can happen is that we don't rebalance. That the pendulum is held at the far end, which is kind of what's being attempted because we're unwilling to deal with the crisis and the and what needs to happen to rebalance because if you don't clear the underbrush, you have a forest fire, >> right? >> And the ent and entropy is the way of the world. I want to be clear, the US system of checks and balances is increasingly in disrepair because we have not allowed crisis to happen. Introducing the Federal Reserve, if our founding fathers in the United States knew that we would do that, they would be rolling in their graves. Because this simple idea of hey we want to create something to smooth the business cycle. So we obiate crisis by definition means the American system will never have a a crisis big enough to reinvigorate and change and reform and to improve itself is which is what was always intended. They made it hard to pass laws for a reason because they did not want corruption and problems to enter the system without unonymity. But what how do we get unonyimity? You need a real crisis. We had dramatic when when did all the uh amendments come and all the bill like all these things came in the civil war and after you know when we go into into World War I and World War II and when we go through 60s and 70s this is where the changes and the improvements and the reinvigoration of this comes from. If we smooth the business cycle and are never willing to have a crisis again, we get Citizens United, we get Jerry meandering, we get all of the things where power corrupts absolutely. It's the way of the world. What do you think? Look at you. Can you not see the corruption that where we lie relative to 40 years ago? We need a crisis. The most optimistic thing that I can tell people is that a crisis will actually from the ashes lead to bringing people together and realizing how important reinvigorating this whole system is. And the longer we go without it, we risk something much more dramatic. What you see in the last 40 years and the dramatic outcomes of markets and the dramatic lean towards supply side economics and the financialization and the unwillingness of the wealthy and the inequality to let things rebalance or to share in the in the benefit of this is a dramatic risk now for the sta stability and long-term outcomes of democracy at large. >> All right. Well, another big risk here is I could risk turning this into like a 4hour interview on this, Jim, but I've I've got to start to wrap up here because we're over the hour. Thank you for being so generous, by the way. So, um I guess just wrapping it up here. So, for folks that have found this a really enlightening discussion, got to look through your eyes for an hour and said, "I like that. I I want to do more of that." um if they want to follow you and your work um maybe even potentially enlist some of your services where should they go? You can find us on kai volatility.com or kaiwealth.com um for you know wealth advisory uh products tamp services for raas even um and uh you can always find us uh on uh on Twitter x at jam_quissant you can also sign up for our newsletter on our website as well. All right. Fantastic. And um on your website, is it one of the two you mentioned kaiwealth.com or kai volatility.com? >> On on Kai volatility or Kaiwealth, you can you can sign up. Yeah. >> Fantastic. All right. Well, as I usually do, Jim, when I edit this, I will put up the links on the screen so folks know exactly where to go. Folks, the links will also be in the description below this video. Um Jim, it's always such a pleasure, my friend. Thank you so much. Continue doing um all the great education that you're doing. um as well as I know you're you're getting pretty successful at uh uh all the capital that you're managing through your firms and it's nice to see that people are really waking up to the wisdom of what you're talking about. >> Adam, it's always a pleasure. Fields Mutual and and look forward to coming back. Take care. >> All right. All right. Well, now is the time in the program where we bring in the lead partners from New Harbor Financial, one of the endorsed financial advisory firms, excuse me, by thoughtful money to both share their real-time reaction to Jim's wisdom here, um, but also we'll talk a little bit about what the markets have been up to in the past week as well. John, why don't we start with you, my friend? Um, I'm sure this conversation was near and dear to both your and Mike's hearts there at New Harbor. um because you guys have such a priority focus on risk tolerance as well. But what were some of the your key takeaways? >> Yeah, Adam, great to be with you and always a pleasure to listen to Jam. He's he's very insightful and and yes, he kind of thinks of the world much in the way we do. We we consider our jobs, you know, every bit that of being a risk manager for our clients and uh risk actually means quite a bit when especially when you're in a retirement period where you're actually starting to spend your hard-earned savings. totally different rules of mathematics as to what dictates success when you're withdrawing funds versus accumulating funds. When you're saving, it doesn't much matter how volatile the path is so long as between point A point A and point B, you do well and your assets grow and and do all they can for you. Completely different ballgame when you're in withdrawal mode and that has every bit consequence to uh you know being mindful about but also managing risk in in your retirement years. So really really like the way he views things as we do. Um I want to reinforce some high level things. Mike will will certainly talk about um some of the applied ways in which we we use these concepts in our client portfolios. Even for example he'll touch upon some recent you know um tools that we've used. But you know, one of the things that uh Jam calls out is um that many folks in the financial services industry, registered investment advisors, subscribe to you know, what you might call modern portfolio theory. And it's basically in in a word, it's a it's a academic theory that really looks at long periods of time. And it basically has a base assumption that markets are efficient and that it's just simply a matter of ma you know u optimizing your pie chart your mix of stocks and bonds primarily to to match a risk tolerance with you know one's investment portfolio. First of all um Jam and you talked a lot about Warren Buffett and some of the sage investors. I encourage folks to do a Google search on Warren Buffett and Charlie Munger, his his longtime partner, their views on whether markets are efficient. I think I think your viewers viewers will get a kick out of that because to put it bluntly, they they think it's a load of BS that markets because bubbles wouldn't happen if markets were efficient. Now, they're efficient a lot of the time, but there are times where they get completely out of whack with what should happen in an efficient market. And that's one of the big flaws of I think the whole concept of risk. You most most investment firms and most investors will look at a questionnaire of sorts and and you know uh it'll ask them what their risk tolerance is. First of all, it's a loaded question. Many people don't even really understand the question academically but also behaviorally given their own biases. I can tell you from experience some of uh our clients over the years that have considered them the most aggressive most willing to accept risk sometimes are the the most spooked when markets go through their inevitable you know choppy period. So it's firstly it's a behavioral thing that many of us are very ill equipped to to define but um I want to share a little simple graphic because the very foundation of modern portfolio theory confuses two key concepts um and those concepts are volatility and risk. Okay, volatility is kind of the way that asset classes in an efficient market uh behave in terms of and generally speaking, one can safely say that stocks over the long term are more volatile than bonds and that's why they should command a higher rate of return. But that's kind of an academic idea of volatility, how how much things wigs wig and wags in a otherwise efficient market. We think of risk um beyond volatility and that is simply the risk of of like real losses of capital. Not just the normal machinations of of a given asset class, but when markets get inefficient and uh are mispriced bubbles or whatever you want to call them. And this works both on the upside and downside. Um risk is the sudden sudden and maybe permanent loss of capital, especially if you're withdrawing assets. But also this this happens in major bare markets. people wouldn't dare get in when when it feels like the world's coming to an end and that's exactly when you have these huge moves higher. So that's a key misunderstanding of of our industry. I don't think it's that our industry means uh to not do well. It's just a really um applied concept that um many folks don't even pay attention to. Um I wanted to talk about the lost decades. Jim talked about um you know the the fact that there have been and this is a chart that speaks exact exactly to that. This is a chart put together by Bostonbased GM GMO. You know, very uh sage value investors. They've been around a long time. Jeremy Grantham is the the figurehead there that has has, you know, earned a reputation. I think a good one as a a value investor. But you can see here going back to 1900, this is a 6040 portfolio, 60% stocks, 40% bonds on a an inflation adjusted basis. So, and you can see as Jem talked about there, every one of these great periods is essentially a lost period of time where you went flat or even negative on a an inflationadjusted basis. And these these can literally last a decade or more. And you know, it's a fair question whether we're in in the midst of one of those right now. One thing I want to tease out here is and and Chem talked about it. This is not these aren't random events. they actually cler pretty reliably to starting valuation. So this is what's called the uh where the starting cyclally adjusted PE ratio otherwise known as as the Schiller PE E ratio is. So um at the beginning long these these lost decades they tend to be very high valuations. Tech bubble this cape was 41. Uh in early 22 uh cape was 42. Uh there's some and these are real, you know, inflation adjusted. So, and here we are today pretty much in that same level. Um you know, and one final point I'd like to make on this chart is that it might seem kind of benign. Well, well, well, so what? You go nowhere for a decade. It's actually not that way because each one of these you can see they're they look rather trivial on this chart, but this was a you know, the tech bubble selloff here was over 50% nominal decline in the market again in the housing bust. The Great Depression was I forget how many t tens of percent but it was way more than 50%. Point being is it's not just enough to just sit there passively and go nowhere. Those paths usually happen in a very devastating way. And this gets back to the importance of risk management. I want one more thing to tie in here. I know it's getting longwinded here, but this brings it back to John >> real quick just before we go to that chart. Um I just want to underscore for folks. No, you pull pull up the chart that you have there. Okay. um uh if you look at those shaded areas for the 20th century, it's 60 years. So the majority of the century was in a lost decade, right? And I think that's what Jim's point was was, you know, people are of their mindset, well that stock market just always goes up if I hold hold on for long enough. You know, the answer is is it's actually a minority of time in the market when that strategy works. um we we've just kind of had these two prolonged periods in our lifetime where we've adopted to think of that as the new normal. But if if there's mean reversion here, which generally there mathematically always is in the universe, um you may be using a playbook that is the exact wrong playbook for the era that you're going to be living through now. >> Yeah. And I again I want to reinforce so much of our industry um repeats the mantra that you can't time the market and there's nuance there. Perfection and timing. Absolutely not. No one can perfectly time the market. But you can see in that chart, these lost decades reliably occur when valuations are extreme. Not to the day, not to the month or even to the year, but to the decade. Um they are very extreme valuation. And that's where we are right now. So it may seem like a bold and audacious call that JAM is making and we're agreeing with, but it's actually, if you're familiar with the data, it's not bold at all. It's actually kind of a pretty um objectively um realistic call. Uh again, not to say with perfection because um even the tech bubble went on, you know, far longer, but it ultimately resolved in in that last decade. But um so one more chart just bringing it back to um the reality of what why our clients and most folks even think about saving for retirement. It's to basically provide a paycheck once they stop working. This is a study that Fidelity did uh in the spring of 2025 and it kind of um many folks might be familiar with the simple rule of thumb for retirement spending, the so-called 4% rule. Sometimes people think of it as a 5% rule, but it's a simple it's kind of crude and there are more refined ways to think about um dynamic retirement spending strategies, but the 4% rule basically says if you take a starting nest egg and you're at full retirement age, so long as you withdraw no more than 4% and adjust it upward for inflation throughout your retirement period for a normal life life expectancy, there should be a very low probability of running out of money. And that's what this chart, this basically is a study that Fidelity did. It's not a guarantee of the future, of course. Um, but they went back to 1926 and looked at every rolling 28-year period. 28 years is probably not too far off of what many retirees might expect for for a retirement period. Uh, and they went and did the actual return starting from those starting periods. Now, the last one they could do was uh 1996 because, you know, we haven't yet um seen 28 years hence from, for example, last year. Um but what you see here is uh the 4% rule actually withtood even the most lean. So these bars are basically Fidelity is going back with the known actual pattern returns saying well what what withdrawal rate of initial savings could an investor have withdrawn and and not had a very high chance of running out of money. And you can see in the early '7s um it was darn close to that 4%. Precisely because of the lost decade. Contrast that with the early 80s when uh going back to here right after that last decade and you had this massive uh bull market because valuations were about 20% of where they are today. Um investors there uh looking backwards could have withdrawn close to 10% or even more than 10% a year. And this is all to say that um there's there's real stuff at stake here by just simply ignoring risk. um you know, if you can avoid the big downturns, you're very likely going to be able to sustainably withdraw a much higher paycheck than if you just sit through them and suffer these lost decades because you or your adviser is somewhat apathetic about the risk environment. Um longwinded there, but I thought those were some really important points to reinforce with Jim's comments. >> Okay. And just one other thing I want to underscore to that the great data, John, is you know, why are we hammering so hard on this? Well, when you look back at the chart you showed with the different lost decades in it, yeah, they were lost decades. You know, anywhere from one from 10 to 20 years, right? And so most of the viewers who are watching this are 50 or over, you got to ask yourself, okay, if the next 10 years or even worse 15, 20 years are are admired in one of these lost decades, what does that mean for me? And I I've got to imagine that that probably the majority of people would say, "I don't have a plan for that yet." Um, and if you don't, I'm not we're not guaranteeing that that's what's lying ahead of us here, but we're saying probabilistically it's dangerous to just dismiss it. And so you should work on figuring out what your plan would be in case that were to be uh true from here. You're nodding as I'm saying all this, John. >> Yep. Absolutely. >> Okay. Um, and obviously that's an expertise that financial adviserss like your firm can help people with. sit down and look at where people are and say, "Okay, if this were to happen, this is what we think, you know, how we think you'll fare and these are potentially some recommendations we would make to change your behavior today to increase your future resilience." Correct. >> I totally agree with that, Adam. >> Okay. All right, Mike, thanks for your patience here. Um, what would you add to what John has said so far? >> No problem. Uh, Adam, you guys covered a lot, but Jim uh predicted a few things that I thought were interesting. Number one, he said 6040 is probably not going to work and balanced portfolio is probably not going to work in the next 10 to 20 years. That echoes what you guys were just talking about with a lost decade. And the last 40 years were way too favorable. I guess it's really no strange luck that that was the case once we came off the gold standard in 1971. Guess we didn't really realize what kind of Pandora's box that would open up. But once we got through the inflationary 70s, it was very tempting to use monetary stimulus every single time that we had a problem. And the first big problem was October 1987 and Alan Greenspan, who was brand new on the job, rushed with stimulus, and it's been going on ever since. So the last 40 years were way too favorable. You know, we also benefited from offshoring jobs, manufacturing, that kind of thing. Jam predicts that that's going to start coming back over the next uh decade like a deglobalization. He also predicts that there'll be a commodity scarcity. We agree with that. We think we're in a commodity decade here, one that will highlight or an outperformance in commodities. One of the reasons why we favor emerging markets because they're commodity-rich countries. But you know, Jam furthermore predicts that we'll have a move towards populism. Populism is basically the many, the crowd versus the few. You know, right now we have the most insane wealth disparity certainly I've ever witnessed. But I I think the most insane wealth disparity that I've read about. Maybe it's a little bit similar to maybe what we saw in the late 1800s, the Victorian era, but really within the last 10 and something years, the wealth disparity is off the charts. And that works so long as everyone feels like they're in the club, as long as they're all in the same pool, right? And so as long as the middle class, >> which the majority is not feeling right now, they're not feeling that way. >> You can almost mask it though if their 401ks are going up and they're, you know, the home prices are going up and even if they're paying more taxes, they feel like they're they're along for the ride. But the truth is they're not really compared to how the super wealthy are are going along for the ride. And if we have a major crash, if this 40-year bull market ends, which I I believe is going to happen in the next few years, then we could have a lot of bitterness. And I think that's why we agree that likely, yeah, there's going to be some populism. We get through this fourth and we enter a first earning a high and you know, I think that there'll be more a thought of the many versus the few, you know. So that I don't know how that relates exactly to investments, but I but I just wanted to point out that I agree with him on that. >> Yeah. Well, a big a big part of it is is that journey from the fourth turning to the first turning may very well involve confiscatory uh wealth redistribution. So it definitely does impact finances. >> Absolutely. >> By the way, just not just not Adam Tagert's thoughts. I know Jim probably feels the same way, but certainly Neil How the co-author of the fourth turning has warned that. >> Absolutely. I think that he and his um his co-author overall have have the best framework I've read about, you know, over the last few decades since that book first came out in the '90s and then the the the new version came out a couple years ago. But there's that's one of the questions that almost everyone asks is what is this climax? What is the next few years going to look like if we peak out and we have a crash in the markets? Well, that's going to lead us at the climax of the fourth earning. And that's the hardest thing to predict. But I think we can predict that populism is likely some type of anger towards the elites, that type of thing. And furthermore, I think we can predict that commodities should do well, which includes precious metals, that type of thing. But really, it's all about risk control. And and Jam talked a lot about the analogy of the race car. If you have a race car, it's like you can't just drive a race car without brakes. You know, you can't make the turns. You just fly right off and and crash. And so, our industry has gotten so used to and individual investors have gotten so used to the buy the dip mantra that they have no breaks. It's just always in all the time. And that's going to probably lead to a lost decade like John was just showing. And there's been a lot of them throughout history. And really, the I guess the most recent one was 1996 to 2009. Of course, that was rescued in a V-shaped recovery. But what if the next time it's more like 66 to 82, you know, which is 16 plus years or even worse, 1929 to 1954, you know, which was 25 years. It could easily be that and valuations are at least as extreme as they were back then. The only thing that we can argue slashdebate is whether this time will be permanently different, which history says it won't be. So, he talked a lot about that. He said, John mentioned the Buffett marks uh quote, try to get to a point where you're usually good, never terrible. That's what we try to do. We're aiming for capital preservation, you know, returns that are reasonable without much draw down. And you know, last thing I guess I'd add is he talked a lot about long volatility hedges. Um we did just add some hedges to our portfolio. would be happy to describe that to you and why, but using some things that blow up in value if the market blows up to the downside can defay a good amount of the risk, not all of the risk. So, we agree with them on that. >> All right. Um, so yeah, can I take you up on that? Uh, what exactly did you guys do and and why and how? >> So, we have a number of indicators that we follow. Really, we're looking at breath a little bit, momentum, moving averages, that type of thing. Let me just say there's no perfect system, but we have a system that we believe in and that's the most important thing for the individual investors out there that are doing it on their own. That's great. But have a set of rules at least, you know, so that you can you can know which way the wind is blowing. And so our process basically told us that storm clouds were gathering over the last couple weeks. And this is all while we were hitting new highs. We hit a new high last week, 7517. And by the way, we had a a big move within a few weeks. I know that we've been talking about this in the past. If you see like plus 500 points in just a few weeks time, there's a pretty good chance we're in the blowoff. So, what I'm going to say here has a little bit of contradiction in it, but here it goes. Um, we had a five plus 500 point move in a few weeks time. That tells us there's a fair chance that maybe either, you know, we're late in the blowoff or mid blowoff, but certainly it's like feels like a blowoff. But over this time, this has really been driven primarily by semiconductors. Semiconductors have just been off the map. They've almost doubled in just a short period of time, and they reached almost 23% of the S&P 500. So, this is mostly driven by semis. Our measures will primarily look at breath amongst a number of other things. And just over the last few days, those indicators rolled over, telling us to be cautious. Because of that, we added an S&P put down here. So, a put option is the right to sell stocks at a certain level. We have 48% equities. We added a 15% put at 7,000 that expires in July. So, 2 months. So, doing the math here, if we have a crash, that'll take us automatically from 48 down to 33 roughly. However, there's a deductible between here and here. So, we don't want your viewers to think that anything's guaranteed because it isn't. Um, we actually have a bias to think that we're going to keep going up. Uh, we'll see cuz our system might very well and our the various indicators we look at might reverse back up, but we've learned not to second guessess these types of signals, particularly when things are extended as they are. So, 48% stocks, 15% hedge down here. So that's about what 6% below here. So the first 6% will feel all of that and then it will start to defay. But at the same time, we look at all of our different positions and our weakest positions right now in terms of technicals happens to be XLI. Industrials is getting a nice bounce today. But we sliced through the 50-day moving average. That's the red line. We sold covered calls on XLI up here at 175 or so. We brought in, I think, $4. Selling covered calls is a is a slight hedge, not as much as puts, but it brings in four or five bucks worth of premium, which essentially, if you look at it, will give you, you know, four to$5 worth of downside protection if it were to go down while still keeping you in the trade. The other one was biotech that we happen to own also was weak. Nice day today. We used that strength to put a hedge on that. So these two pieces have hedges. Other things that we have that are relatively weak that we're we're seeing. We're giving them some time to see if they pop. Utilities is also in our portfolio. It's been weak, but probably because yields have been so strong. bonds have fallen and yields have been strong and utilities don't like rising yields. We're giving this one a little more room. >> But going back to SPX, that's how we do things. We set a risk level happens to be 48%. We want to follow the market up. If we start to see storm clouds gathering, we'll start to add puts as hedges. Then we'll start to add covered calls. And if we were to continue down here, then we'll start to take stops, mental stops on our positions. If those positions continue to weaken, we'll start to sell them and then reduce equity. 48, 44, 40, you know, so on and so forth. We'll we'll be lightening up on a move down. And then eventually our hedges will kick in to lighten us up even faster. We don't know any other better way to do this to ride a bubble, ride a market, and also miss the big downside because Jam talked about that. He said, "Don't be unusually bad," I think is what he said. And that's, you know, that's a big part of the most important thing. >> That was super useful, Mike. Thank you. Um, you know, not just showing us where you see current weakness in the market because right now the market breath is is pretty darn narrow again, right? we're back at the old days where it's just the the AI and AI adjacent companies that are really powering the current um ferocious market moves. Um but you also walk through kind of the exact tools you use and the logic in which you use them, right? Hedges, covered calls, puts then reducing equity exposure. Um these are all folks um practical applications of risk management. Um, and uh, you know, whether you like Jem's approach, whether you like New Harbor's approach, whether you like somebody else's approach, just make sure to Jeem's analogy that you are, you know, driving a race car that has an accelerator and a brake so that you can use them both prudently to actually end up getting where you want to go faster. Um, so thank you, Mike. That was super useful. Gonna come back to you quickly, John, and then Mike, we're going to end with you on the precious metals, um, because they've been quite volatile of late. Um, so John, for the person who's watched this program and is thinking, you know what, I think maybe I do need some more risk management in my portfolio, just talk quickly about, you know, if they were to call you guys and say, hey, help me out here. What what what what should they expect from a good financial adviser in terms of how that adviser can look at their personal situation and then start to come up with personalized recommendations for that person? you know, given their current allocations, but also their goals, their life stage, their risk assessment, risk tolerance, all that type of stuff. >> Yep. Well, of course, the first ingredient is someone who listens and truly wants to understand where that particular person's coming from. And our industry generally does a pretty good job at that. you know, we uh we all I think our industry cares about the clients we serve and we want to know why they're reaching out to us and why they are looking for some some potential guidance. Um but I think it goes beyond that. Um, you know, I think it a conversation like this demands, I think, an adviser to have some, uh, have a stance on something, you know, to take a stand, you know, to not not be wishy-washy about, well, markets can do this or they can do that, which is factually correct, but, you know, it's not a coin flip. And, you know, I think a a some, you know, we we have a cheat a cheat sheet of common questions we think folks should ask an adviser. And some of those, for example, are tell me what your your buy discipline is and what your sell discipline is. It's a simple question, right? And you know, there are some in our industry, and I don't think they're bad people, but they they literally uh if not literally subconsciously think their job is to never get clients to sell or to talk clients out of selling no matter what. And that's just a blind faith in in markets, which totally ignores the idea of lost decade. So, I think, you know, um first you want to hear someone that that's obviously uh has some experience. Um you know, we're in many folks that sit in a seat like this haven't even seen a a meaningful market pullback, never mind a a true bare market. And that means something whether you've lived through them like Mike and I and our team have or you've studied them. You know, we have studied market history as if we were there, right? We we we've looked at the 70s and and what you know what was at play there and what kind of things did and did not do well. We we've looked at the Great Depression. Not that we were there, but we can understand and take lessons from them. So, you want to have someone with experience. Um someone that brings back to your situation. you know, we we often times um hear from folks we talk to that, hey, I I consulted this other advisor or even adviser I've been working with for 20 years and they looked at me like I had three heads when I said I wanted to reduce risk or I wanted to have some precious metals in my portfolio. Um not only is that insulting to I mean these are clients, it's their money, not their advisor's money first of all. So it's kind of arrogant and cons and insulting. You know, our job is to make sure clients do prudent things, not not emotional things, but to just dismiss, which we hear all the time, you know, a concern that a client has is is, you know, especially there is no one right answer. And, you know, folks that have done a good job at at saving and probably their biggest risk is messing it up, not missing out on late stages, absolutely they should be having a conversation with their advisor about reducing risk, especially if they're not sleeping at night. So, so these are all the kinds of things that you should expect of an adviser you work with or or one that you um choose to have a cons consultation with. You won't hear from us any kind of pressures. You know, we we we we like to educate and and whether we get paid for that as a a paying client or we're just able to have a um just an objective conversation with someone that reaches out to us, that's that's fulfilling on in and of itself. So, we appreciate those calls. >> All right. Well, thanks so much for doing that. So folks watching um you know I have the financial adviserss on this channel like the guys at New Harbor to offer a standard in terms of a firm that I think of is a good firm. And I'm not saying you have to work with these guys. I'm just saying that if you are um if you're not going to be a DIY investor uh then find a firm that is at least as good as these guys, right? and I have them on here every week so that you can see how they think, how they operate, how they're reacting to what the markets are doing. Um, but I think very specifically or very importantly at this time, if you are retired or if you are approaching retirement age, you know, 50 plus, um, as I said earlier, I I I don't think this topic of risk management is one that you can afford to ignore. Um, obviously it's up to you to determine at the end of the day what you want to do about it and how you want to implement it. But if it's something that you don't feel very confident on on handling for yourself, then highly recommend you get the counsel of a a firm that is, you know, well practiced and well experienced in risk reduction. Um, all right, Mike, let's come to you real quick to wrap things up here. Uh, we only have a couple minutes left. Um, but the precious metals last time you were on uh looked like they had just gone through an important breakout. Silver had gone from I want to say like low70s to 89 bucks an ounce um within really less than a week. Um and here we are basically a week later and silver is now back down to what 75 76. It gotten as low as 74 I think. Um so it it gave up a lot of those gains very quickly. Is that a material sign of weakness to be concerned about or is that just the fluctuations of a highly volatile asset? >> I'm going to share SLV which is the ETF that we normally look at and you're right. We're back to like 7677. And wouldn't you know it, you're right. I I came out last week and said it looks like the silver chart has healed. And and and why? Because I've been talking about this downtrend line for a while. This is the exhaustion gap up here. start the line there and then connect the tops of this triangle. And so I made it kind of thick so that we could see it. And then I was I said, well, look for a bounce outside of that downtrend and then look for a price of about 80 on SLV, which would be around 88 89 spot. And it was that exact day last week we're recording. I said, it looks like we're starting to heal. It looks like the chart may have healed. Well, I look pretty foolish cuz the next couple days it fell 10 to maybe 12 $13. So, I'll be as objective as I can be. This wasn't great that this happened. You know, all I can say is that we're still kind of walking along that downtrend line. Silver has had a massive base building process here since the January 30 high. The one thing I guess I will say is that silver itself has tripled. It went from about 35 on SLV up to about 105 and now it's given a good chunk of that back. The second major breakout on SLV was 50. That's the big triangle back here in um I guess October 25. And we went from 50 to over 100 really quick. That quick doubling and now we've given back you know maybe half or a little more of half of that like a 61 Fibonacci retracement. I know I'm getting kind of technical here and none of this is exact. There's a a lot of guesswork based in technicals, but to me it looks like this is still a very very large pullback. And what gold and silver are doing is they're making people that came late to the party feel really really uncomfortable. And in my experience, not just gold and silver, but any big big up market is not going to let you sit in a concentrated position without discomfort. And so a lot of our clients have bought way back here. silver miners, gold miners, silver and gold, and they're able to sit through this if they have the right allocation. But this is not comfortable. I believe once we do break and we stay above 80 on SLV that we're going to keep building this base, we're going to ultimately take out this high and go to 150ish silver. That's what I think going back to the daily chart. Now, you can see right now we've got a number of touches at this low level. This March uh mid-March shakeout here, I thought that was it getting people out. And actually, that has been it so far. But look at how long this has been going sideways. This was a fake out. Maybe this gets the last weak hands out. I don't know. It's hard to predict. I can say this for for people that are, you know, holding an overleveraged position, needing to stop out if we break those lows, that's a tough position to be in because we could easily take out those lows and still go up. So, just be careful with your position size. The best thing I could say on these things is at this point of the base building process, have a position size that you can somewhat detach from and let it work because I do think the big picture is that silver is going to double from here. And if I could just go to gold. Gold is looking similar. Gold has been below the 50-day moving average, which is this red line. It's been t This is the 200 day moving average. The green line, one, two, three, touches down here. And so, I know I've said many times in the past that triple tops and triple bottoms don't hold. Um, I hope this time it does. You know, I hope that we're not going to continue down, but I can't say for certain. There's got to be some amount of fundamental belief that one has in these things to hold through these times because these times right now are pretty difficult times because the market is trying to shake you out, you know. And I can show miners, too, but miners have roughly doubled last year and they're all in big pullbacks. Let me just show the biggest one, I guess. GDX, it's looking similar. It doubled last year, went from 50 to 100, and now it's pulled back to 86, bouncing along its 200 day moving average. My gut feel, my experience tells me you want to be long this market, but don't be there in such a big way that you're going to get shaken out if we have one more big down day. I know from talking to people that the worry is starting to increase in this group. So I hope next week we can talk and it's going to or the week after that will be a lot higher and say look that was a successful test. But I just can't say that today. >> Okay. So, I have an opinion here, but before I share it, Mike, what do you think will happen with the precious metals if there's a peace deal with Iran? >> I think they'll go up sharply with the market. I do. I mean, they went down sharply with the breakout of the of the war. And so, they act like they acted like a risk asset. They acted like something that reacted to liquidity. And so if there's a peace deal, I think they go up and probably the dollar and yields come down, >> you know, because the dollar has g been going up and yields have been going up all with kind of well new Fed president is one reason, but another reason is the persistent oil prices and the ongoing conflict. So I think they go up. What do you think? >> Yeah. No, I think they go up. I I think the primary driver for why I think gold will go up and bond yields will come down and uh uh the market will probably go up too um is more of a function of of the high oil prices than anything else because I think the market will very quickly start pricing in a much lower oil price and I think what's been happening has been um almost like a margin call where at the sovereign level you've had countries that are now having to pay for a lot more expensive oil and in doing so they're selling what has value like gold. You know, gold has really appreciated a lot over the past year and you know a lot of these countries have been net buyers. So I think once that pressure is removed off the the neck of the precious metals you you could potentially see a nice pop here. >> I completely agree. I'm glad that I had no idea anytime soon. >> I had no idea what you're going to say but >> Well, I'm glad I'm glad that we're like-minded. Yeah. I just again the one unknown there is is there actually going to be a peace deal anytime soon? >> No, we nobody knows. >> Yeah. >> And I guess the flip of that is if there's a resumption of of kinetics which is very possible right now precious metals investors might want to gird themselves for even lower prices ahead. >> Yeah. I don't know. The charts say that the prices are one way or another the prices are are going up on I that's what the charts say. The prior trend is up. We're at a kind of a crux here at a difficult point, but I think they'll result on the upside and that could very well coincide with good news on the politics. >> Well, no matter what happens from here, I know you guys will be here every week uh helping make sense of it all for this audience. Can't thank you guys enough. Another great week here. Um so, um again, Mike, we'll look forward to just tracking this in real time as the in the weeks ahead. Folks, if you've enjoyed this interview with Jim Carson, would like to see him come back on the program again soon, please let us know that by hitting the like button and then clicking on the subscribe button below as well as that little bell icon right next to it. As a reminder, we're gunning to try to hit 200,000 subscribers by mid July cuz that's my birthday in or end of July, which is my birthday. Um, but uh that really will help um the YouTube algorithms give this channel even more love. So, if you're watching and haven't yet subscribed, please do. Um, and then obviously if you would like to get some help in, you know, assessing your current financial situation and what forms of of risk mitigation might make sense to add to it. Um, you know, highly recommend if you don't already have an adviser who's helping you do that, uh, finding one that can. If you'd like to talk to one of the adviserss that come on this channel week in and week out, perhaps you'd like to talk to even Mike and John themselves there at New Harbor, which is a firm that very uh clearly prioritizes risk management. Uh you can do so by filling out the very short form at thoughtfulmoney.com. Only takes you a couple seconds to fill out that form. These consultations are totally free. There's no commitments involved. Just a service these firms offer to be as helpful to as many investors as possible. All right, boys. Great job again this week. um look forward to seeing you next week and uh in between now and then just good luck riding the uh unpredictable volatility of this market. >> Thank you, Adam. I think this probably will air right around Memorial Day. So, I want to wish your viewers uh happy Memorial Day. We're going to enjoy some time away from the office because the markets will be closed. But let us not forget the um the meaning of the day and all the sacrifice that uh folks who uh served in our military have have uh have made over the over the countless decades of our of our uh 250 years as a country. >> Very well put, Mike. And including the folks that are continuing to be in harm's way for our our collective benefit right now. We got a lot got got a lot to be very grateful for and very um uh yeah just appreciative for >> Mike >> and I echo your comments and uh thanks for having us again Adam and thanks to your viewers for watching us and uh we hope to see you soon. >> All right, Jensen. So yeah, have a great Memorial Day. Same to everybody else watching folks. Uh really appreciate you watching this channel and everything we do here. See you next time. Thanks again for watching.