Calm Before The Storm: Are Markets Repeating The Covid Setup

Summary

• Energy & Oil Outlook: The discussion centers on the largest oil supply shock in decades, with Saudi and Russian export disruptions, Hormuz risks, and evidence of heavy short positioning in oil and gas equities.
• Inflation Pressures: Import/export prices are surging, aided by higher DRAM costs and a rapid gasoline price spike, with energy costs bleeding into all sectors and raising the risk of a second inflation wave.
• Bonds & Treasuries: Unusual stock-bond rallies and rate volatility highlight liquidity interventions; the guest advocates defense via cash, laddered US Treasuries, and TIPS.
• Market Structure Risks: Futures-led moves and political headlines (e.g., Trump’s tweets) drive overnight swings; AIG and Enron are cited as cautionary examples of retail investors relying on narratives over price action.
• Geopolitics & Energy Security: Venezuela crude imports rise, Russian refinery hits mount, and potential long-term production damage underscores the theme that energy is the economy.
• China & Currencies: Potential yuan strengthening could export inflation to the US, while yuan-based payments for transits and advanced Chinese tech showcase pressures on the petro-dollar status quo.
• Risk Management: A strict sell-discipline at support breaks, higher money market balances, and selective commodity exposure reflect a “stay out of trouble” stance in a fragile market.
• Consumer & Macro Strain: Rising rates, higher fuel and fertilizer costs, and AI-related layoffs point to weaker consumer purchasing power and heightened recession risks.

Transcript

Nothing in this program should be considered investment advice. It is for educational purposes only. Please hit pause and read this disclaimer in full. You've unfortunately got the weak individuals that are up there that you're just a minion as a retail investor, right? They want to offload their shares to you so that they can get in a position to buy them back from you when the damage hits. Hello everyone and welcome to this next episode of Finance Hugh with Chris Martinson. I'm your host and back today of course with Paul Ker of Kiker Wealth Management. Hey Paul. >> Hi Chris. Good to see you. >> Well, I'm trying to smile through it. We're we're at what is it? Day 25 of the uh so-called Iran war and uh hard to know what to believe. Lots of noise out there as you've seen of course same as I have. People are just grasping for understanding and and there's a lot of fake news, market jawbon, what's real? Are talks happening? Are they not happening? Nobody quite knows. And of course, that creates a lot of market uncertainty. But, you know, the markets aren't all that concerned yet as far as I can tell. >> No, they're not. I mean, they're they're either ridiculously complacent. they either are pricing through this because that's the one thing you have to you know be concerned about is does the market see something the collective wisdom that we don't or is this like leading up to the co shutdowns where it's just absolutely oblivious and ignores it and it happens all at once. >> Let's explore that because you know one of the things that could contribute to the markets roaring higher of course of course is not fundamentals but Fed printing. Um, so I want to talk about that really quickly because inflation has arrived. It's at the top of my my list again. Something you and I have been talking about. Obviously for anybody doing retirement planning, what you assume for inflation is a highly highly important number. So this just came in. Gordon Johnson reporting this morning that February import plus 1.3%. That's on a monthly basis versus estimates of 6% export prices too plus 1 and a.5% versus 6%. If you annualize that now this is just import exports annualize Paul that's 17 to almost 20% inflation and now this is February remember the Iran war started very conveniently on the night of February 28th which is actually March 1st depending on where you draw the line. So this is exclusive of anything like that. This to me says that the Fed has a problem on his hands because you can't cut and print into that kind of inflation. Um, looks tough. >> I mean, this is a nightmare scenario for the Fed quite frankly because with these inflationary pressures that are coming and and are going to continue to trickle through the system even if this is over today, right? We come out of this and we find out that both sides have agreed, which doesn't seem to be the case. There's still built-in inflation in the in the pipeline. So, what are they going to do? Add gasoline to to the You know, I said we had coals, you know, and throw gasoline on a start. We actually have flames coming out of those coals at this point. You throw gasoline on it, that's going to be a a horrific situation. >> Well, you run a a very disciplined approach, a riskmanaged approach. What what what moves have you been making of late given what your models and and your approach are telling you to do? >> Yeah. So, it's it it's quite interesting because number one, the truth is so obfiscated right now. Obiscated, that's one word I always mess up. You guys know what I mean. >> No, it's a good one. >> Um, yeah. So, at this point that the the thing that I'm really focusing on is price action. So, we we've had a lot of positions that have that have been kicked out of the portfolio because they've crossed that decision point line. So I I didn't know who to attribute it to last week when I said, "Would you rather have a fence at the top of a cliff or an ambulance waiting for you at the bottom?" It was a guy by the name of Bob Goodwin. So I like that in the environment we're in right now. So we, you know, decision point, that fence. So basically what I've been watching is every single position that we we still have in the portfolio is still sitting right on that support or the commodity positions are actually doing really good for the most part. So there are some that you don't necessarily have to worry about, but there are a lot of individual stocks that are being defended at those lines of support, but they've been consolidating for a while. So this really sets us up for a situation that uh well to to say what I would do. We look at every single position to make sure it clears our hurdles on every single day. Anything that breaks those lines at this point forces us to make a decision to go into risk management mode. So, we were already pretty conservative uh coming into this and in a high treasury, you know, money market position sitting in there. But, uh any position that breaks, we're selling immediately. No questions asked. And I'm not worried about being wrong at this point, right? I mean, the the fear, and this is what gets people in trouble, is you have a strategy, you have to trust that strategy, and you have to follow it, right? So, if we have a position that breaks down, you know, some can break down violently, but in this environment, we're probably going to see a little bit of a rollover and then a cascade, then you sell immediately. And if we get some headline the next day that causes the market to reverse, that's part of the weakness of a strategy. But you're far better off to make decisions when the information tells you to make decisions than you are to hesitate out of fear of missing out in the short run. because we're in an environment right now where where it it's stay out of trouble time, right? I mean, if if we're if the market had sold off, I'll let some positions if our parameters are in a good environment to, you know, break through sometimes and give them a little bit of margin for error, but this is a period of time where our number one focus is to stay out of trouble. And if this market starts breaking down, that is your signal to run for the exits. at least from the approach that we take. >> Yeah. So, I I'm I'm wondering how your models account for this because we have uh obviously you've got um technical analysis, you've got momentum trading, right? You've got fundamental trading, and then of course the fourth one, Trump's tweets. Is >> Oh, yeah. >> Is that in your model yet? Because this is what this this whole market seems to be trading off of Trump's tweets, which has been a little volatile, shall I say? >> No kidding. Well, I want to know who has developed that model because on Monday, right before the market open, you know, we're starting to sell off, going to open and break some technical levels which is going to force some selling. And then of course, you know, I I I don't see that. Nobody really sees it till after. But you get this tweet from Trump, you know, whatever he said. He said so many things at this point that peace is, you know, happening and, you know, the war's going to be over. Uh but we find out 15 minutes before that there were huge positions in shorting the oil price and huge positions in buying equities. So somebody has that inside information. But yeah, I mean Trump's tweets are so all over the place. I wish I could put together an algorithm to at least take that into consideration. >> Yeah. So huge market rescue uh surprisingly an hour and a half before markets open or whatever it was. uh I think 2 and a half hours before he tweeted that at 7:04 Monday morning and of course it rescued the markets and then Tuesday started to sell off. Here we are recording this on Wednesday. I just want to say that again these are weird patterns for me to be noting here where um we see stocks up and bonds up and that's normally a high liquidity cycle like like you would usually see these things trade kind of in opposition. I actually think some people, Paul, were saying that that the concern was even less stocks, but maybe how bonds were behaving with the 10-year, you know, at 4.4 threatening to just start go the other direction. We're seeing bond sell off all across Europe, you know, long bonds in particular. And so there were a lot of pieces moving. So it came at just the right time. We had this market moving tweet and somehow there was this wall of liquidity to buy stocks and bonds. And um a number of people started to ask questions about what's really happening here. And I'm seeing more and more of this. People starting to openly question, do we have a do we have an invisible hand in this market at this point in time? And I would have to say yes based on what I've seen so far. >> Well, I would say yes. And and the one visible hand is Trump and his tweets and and the rhetoric. You know, when we go into the weekend right now, that's where I actually really start to get nervous because one, I pretty much expect to see more reality of what's taking place in the Middle East on the weekends now because information, as hard as it is to find, it seems easier to find on the weekends. Mhm. >> So coming into Sunday afternoon, my big question to myself is, you know, can Trump say something on Sunday night or Monday morning to juice the markets and they and and still get this reaction because it's pretty obvious at this point that he's that that when we break technical levels, now for those that aren't don't implement technical analysis, it's a little bit harder to see, but I can see it. If we break technical levels, there's always a response to kind of juice the markets. >> Now, hindsight, I tried to find it. that it's on my home computer that I don't have linked here, but um uh apparently we had a lot of Treasury maturities that were taking place this week. I've been watching so many other things that was off my radar. So interest rates were very important in this environment and then that happened to kind of bre fill in this you know euphoria of investors that are so scared of missing out right now that they're not taking into consideration any downside risk you know and and my question is Chris and I and I don't know cuz you know you can't necessarily see it in the money flows but you can see it in the price action we've been in a range in the S&P for nearly six month six months now you know just consolidating ating that tends to be the time, you know, the markets tend to consolidate before they break down because you've got retail euphoria that's taking place right now. And what amazes me is just the sheer belief both of the supporters of Trump and the detractors of Trump that believe that he's not going to let these markets come apart. I mean, even those who despise him, you know, will will fall back on the belief that, hey, you know, Trump's not going to let this come apart. Well, what what if he doesn't, you know, that's assuming a whole lot of control, right? Because I mean, I saw the news right before we got on here. You know, uh, Zero Hedge posted in several other places. You know, we are told to believe that we're coming to an agreement. We're told to believe that the Iranians have to save face because they don't want to show weakness. So, they're not going to admit that they're coming to agreement. and then all of a sudden today they come out and say, "Look, we've given you our five terms and and until we get these these met, we're not stopping." So, you know, the problem is is there's so the political environment is so full of weak individuals now and there's a lack of love for the truth, you know, and and look, I get it. I get the temptation, okay? because one side hates the other side so much that they're looking for a gotcha moment and they're all both fighting for, you know, the next election cycle to be in a position of power that they're afraid to speak truthfully for whatever because the other side will spin it. Now, politicians seem to be worried about propaganda. The Bible tells us there's a way that seems right to a man, but its ultimate end is death. So, I wish we had the truth because the truth is the best option no matter what. And then let investors and especially those who who are are living off of this opium right now at least choose to position themselves instead of having absolutely no clue the downside risk and the potential negatives to the environment we find ourselves in if what we're being told does not come to reality. Well, I think there's a ticking clock here. Again, I don't I don't do political analysis except you and I have talked about what might happen from a market standpoint. If it turns out the midterms come and Democrats regain control, I think everybody's aware of this idea that there would probably be more impeachment hearings and certainly a whole lot more gridlock and and political fighting because, as you said, the two sides hate each other at this point in time. It's just cats and dogs, different moral frameworks, like there's not a lot of overlap there. Did you see this? It just came out today that um it turns out a Democrat Emily Gregory w won a special state house election in Palm Beach. That's the district uh that includes President Trump's Mara Lago. So, uh he actually lost his his own uh district as it were, you know, if you consider Mara Lago his home away from home. So, uh that that's a that's a pretty telling sign right there. And so, we've also seen a number of other things where incumbents have been flipped out, right? So Dan Krenshaw out in Texas, also uh Jackson out in the Republican and a Democrat. So maybe it's just an anti- maybe people are just tired of incumbents at this point. But I think we're going to see a lot more political drama as this begins to unfold through all of this because this is a very unpopular war at home. I mean, least popular war ever, right? >> Yeah, it really is. and you know and and and we've just started to see the impact of the inflationary effects of of the oil you know and let's go back to co okay investors have been trained that the that the government's been able to step in the Fed's been able to step in and print so let me let me pull this up because I think this is relevant uh where we are and what I want to share is the S&P 500 from January 1st of 2019 until what is April 15th, I think, of of 2020. So, Chris, I remember you warning people well ahead of time. Can you remember cuz I can't remember exactly when you started warning people about CO >> uh first date was January 23rd, 2020. >> Okay. So, January 23rd. Now, notice how the market had this, you know, back and forth action, some selloff, you know, uh you're warning people around January, but notice all of a sudden the market just gets in this technical run like it's in a blowoff run now. You're warning people in January 31st. Uh if I remember correctly, China locked down several weeks before us, right? >> They did. Uh they actually locked down, I think, on the 22nd. That's why I put out that thing on the 23rd because I saw Wuhan had been locked down. So say it was around January 20th give or take. >> Okay. So this was the first time in quite some time that we front ran our tools because I kept looking at I'm like look this price action is is wrong. We started hearing rumors about you know lockdowns coming and I actually had uh well I'm not going to pick a point but we sold before we actually had the the sell signals. Um and the reason being is is that the information just didn't add up and the market price action didn't add up. Now, I know we're in a completely different environment now, but this is very similar in a different environment. Market's been consolidating, but the lockdowns happened and there was a a flush to the downside and and retail was buying like crazy coming into that shutdown. Now, hindsight, you know, they shut things down, all goes negative, but the difference between then and now that I can't stop thinking about is, you know, there's the belief that, oh, this is going to be like CO as soon as this is over. And I know the markets haven't dropped at this point, but let's take oil prices going higher. There's the narrative out there that that as soon as we come to a ceasefire, if if that was to happen sooner rather than later, that everything's just going to go back to normal overnight. And the problem is is we've had tons of destruction in the production capability and a lot of lack of trust that's not going to be turned back on overnight, right? I mean, you know, the lockdowns kept people from using it. So it's stockpiling, it goes negative. People didn't know where know where to put oil. But you know all these details better than than me. You can you can pull them up. But the reality is what that one of the natural gas fields that was hit is 3 to 5 years before it comes back to full production even if they start now. So you've already got this inflationary backdrop. But but this is relevant because this is just an indication of a period of time that the market which was supposed to be all knowing was absolutely ignoring the warning signs and then it happened all at once. And that's my concern about where we are right now. >> Paul, I want to continue to compare uh this feels like a a a COVID pre-awareness moment in the markets as you just sort of laid out there. So, I want to talk about that and um we'll do that just as soon as we come back cuz this inflation that's about to happen, I think is going to be something that's going to really tear the markets apart. So, we'll hear about that uh as soon as we come back. Today's markets are more volatile than ever with ongoing economic and geopolitical uncertainty. Navigating such environments requires thoughtful, adaptive strategies, not a one-sizefits-all approach. At Peak Financial Investing, our registered investment advisory firm connects clients with experienced wealth managers who focus on active portfolio management. These professionals use evidence-based strategies designed to respond to changing conditions, not outdated formulas, but customized approaches grounded in research, discipline, and risk awareness. We believe in open, informed conversations, including discussing tools like precious metals and diversification as part of a broader financial strategy. Every investor's situation is unique, and our advisers tailor their guidance accordingly. Visit peakfinancialinvesting.com today to schedule your free consultation and explore how proactive management can support your financial goals. I'm Dr. Chris Martinson, proud to work with Peak Financial Investing and my support reflects my professional views. I encourage you to take control of your financial future by making informed decisions. All right, welcome back everybody. Paul, let's talk about the inflationary pressures. First to explain that that import cost, Zero Hedge explains part of it at least is soaring DRAM. That's the dynamic random access memory. Uh that that AI has been so grabby for any DRAM. It's gone wildly expensive. Little tiny, you know, those little tiny um SSD like drives, hard drives you used to be able to get for 100 bucks are like 400 bucks now just because of this. So that but I don't know how much of our imports are really DRAM. So but he says soaring DRAM costs had a bigger impact at pushing US import costs higher than Trump's tariffs. So this is what it did. Obviously, we import a lot more things than just memory chips, but but it it did have a big spike there coming into February. Fine. Looking forward, however, we see the gas prices were here at 298 and then, you know, basically a buck higher here. Um, so that's a pretty big increase. That's a 33 34% increase in 25 days. That's what's going to be coming into March. This is going to have a huge impact on the infla the official inflation readings that are coming through. Um so obviously energy bleeds into everything right you know because diesel is more expensive that means shipping things is more expensive making things is more expensive distributing them the plastics the input cost so here's the point I want to make it's a little bit like co in the sense that we have this shock and the market was slow to digest that shock in co and I think it's also slow to digest it here for maybe similar reasons I guess psych techology uh computer algos I don't know what it is but what's different Paul was that those shutdowns that we engineered for co those were human constructs remember there were essential workers and non-essential workers and then non-essential workers was everybody with a laptop who could go home essential was anybody who delivered things and cooked food and you know brought Door Dash and all that make of that what you will but we could have undone that at any point in The energy shock that we are now experiencing is totally different. Yes, humans initiated it. But when you are lacking natural gas or diesel or bunker fuel or jet fuel in a region, what stops economically is not under control. You will you will get economic destruction. Full stop. That's what happens. We've already heard about flights are being trimmed particularly on the weaker routes not being run. We've heard about ships not actually making transits. We've heard about trucks not making deliveries. So those are the sorts of impacts that I think separate this from co a little bit like it but kind of different too cuz now we can't just call up you know we there's nothing we can do to fix those shortages of products besides stop the war right away. Begin to bring all those oil and gas assets back online as quickly as we can. It'll still be months, but there's going to be this hole in energy that will always be there no matter what we do. >> And imagine if their solution is, hey, we're going to shut the economy down again. Everybody needs to work from home for a period of time. That's just going to further exacerbate the situation. And I think, you know, one thing that I realized that shocked me during the COVID lockdowns and the aftermath of that was how everything is just in time inventory now. Okay. There's there's really no reserves built up within the within the supply chain system. And why not? Because it's max just in time inventory is absolute maximum profitability. You don't have to have the warehouse space to store it. But you also have to assume that that the world will not change where everything comes quickly. So, you know, we're already seeing, what was it? Russia announced a couple of days ago that they're not allowing any exports of fertilizer until April 21st until they get done with their planting season. You can't take that back. Like, you miss that planting window season. And that's going to dramatically reduce the harvest for food that we have. So, even if this is over now, there's going to be more pressure that's put down on the average individual and the consumer, which is going to reduce their retail purchasing power. you're seeing massive layoffs that you've been sharing within the a you know whether AI is the reason for it or whether that's the excuse for it. You know, we've got a really weak undercurrent right now. We're not It's like the uh um story of the three little pigs. We're we're in a straw house right now and it's not going to take much to cause everything to come apart and that house is built on sand. Um so I mean we are priced to perfection. the market seems to be ignoring it. And my concern is is, you know, Cynica stated, "The more you want, the less you see." So, everybody wants a positive outcome. My concern is is there's there's a lot of people that are thinking about this and they're like, "Oh, no. That's going to be a really terrible 12 months. It's going to be terrible for business. I might lose my job." I really want to believe that Trump what Trump's saying and I really want to believe that this is over but the facts are not pointing to that. So just you know I encourage everybody out there to really think about what you want and try to set what I want aside and and and embrace the courage to really search for the truth with all that you have. you know, and and the truth's hard to find right now because of all the propaganda, the the outright lies, and we just got to be careful about what we want right now because I don't think this is a time to be a hero as far as speculate that everything's going to be okay. And I believe it's a time to build a solid foundation to not panic, but logically weigh out. Is it going to hurt my feelings if if this we do get perfect scenario? And if I got defensive, I miss a little bit of opportunity. or what if it's not different this time and we don't get that immediate COVID bottom because if oil prices are are double from here just to pick a number, not a prediction. Is the Fed going to be able to print with food prices going higher and and fuel inputs going higher? That's just going to add more inflationary fuel to the fire which could get us in an outofcrol situation. Well, the Fed has a lot of trouble here because um a all those Gulf states, formerly very rich, but now um obviously suffering from tourism and prochemical, pro dollar declines, all those things, they're not going to be large buyers of treasuries going forward and US financial assets. In fact, you could imagine them being net sellers if they have to pull those funds home to support all those missing funds that keep them keep the social stability. particularly in Saudi Arabia, I'm thinking of Bahrain as well. Um so you got that dynamic plus uh very clearly I think that you know this this Iran war was really a war of choice between Israel and the US and the whole world seems to have noticed that right maybe not as much in our press here but it's it's a fact established fact we bombed during negotiations um decapitating Iranian leadership and that was noted so of course that also may contribute to maybe less demand appetite for US treasuries on the other side of We had Pete Hexith just the other day ask for 200 billion you know more which will be on top of whatever our deficits already were. So if they were running I think they're running close to 2.3 trillion for this year now it'll be 2.5 right? So again all these things are going to be pressures on those Treasury rates. The Fed desperately doesn't want that. Right? They want rates to go back down again. And and as a quick aside on that um oh I didn't put it in here. I grabbed it but I forgot to. It turns out that the number of home sale cancellations at something around I think it was around 13 and a half% was was very high for February. People were backing out of these things because in because mortgage rates started to climb back and touch 7% again. Fed can't have that. So what do they do? Do they print money and buy all these bonds? Well, now they're printing money. The world sees that. Um that creates more inflation on one end. So on one side they have inflation they have to battle. On the other side, they have rising interest rates they have to battle. And I'm not I think the Fed has less control over that now because of all the some of the circumstances I mentioned and some others. Less control now than they've ever had. So, they're going to have to be very delicate here. And on the other side, you have Trump breathing down their neck, demanding lower interest rates all the time, just pounding on the table, right? So, a tricky tricky position to be in right now. Think >> one bit of news that I have seen and it came out. So a first squawk this is 15 hours ago so yesterday. Yeah yesterday the people's bank of China sets the one reference rate at $6.8911 US indicating a marginal strengthening from the previous close. Okay. So my concern is is from a currency standpoint, what makes it so cheap in the past? And why did we ship all of our manufacturing over to China? Because the dollar's purchasing power was much stronger than than the Chinese one. So So we had more purchasing power over there, right? So they've kept it linked to the dollar. Now, if inflation gets too strong for them over there, they do have the ability to export that inflation to the United States. So if they increase that peg and start raising the the purchasing power of the Chinese one uh and they can do that then what happens? Our dollar purchases less from our manufacturing base that comes over and that would just add fuel to an already inflationary situation. So now that's just a minor move. They're calculated, but that's a move in a strengthening situation to export some of that fla inflation to all of the countries that are going to lose that exchange rate and that purchasing power. And that to me is something I'm watching really, really closely. That's on my radar like crazy now. >> Yeah, it's going to take a while. There's a lot of ripples and perturvations in this whole thing. But for sure, we know we have a pig and the python. The python ate the pig and that inflationary bololis is going to move down that pig as we go. We've seen all kinds of things. Plastic costs, you know, going up by quite a bit. Um, input feed stocks, fertilizer costs, obviously the actual fuel components, jet, diesel, bunker, plus gasoline, all going higher, except except in the US markets where there's been this astonishing bearishness in oil. The tiniest little tweet, Paul, about some light at the end of the tunnel in oil prices crash on Monday morning. We had oil down 20% if you can believe it, at one point. Mhm. >> before it recovered down to only down I think 15% on the day. But look at this. Make sense of this. So the oil and gas production ETF coming in through here. It's hit an all-time high and short interest is at a very very multi-year high. It only had this one little peak in 2021, but that was a very shortlived thing. So how do you explain uh you know people looking at this particular energy landscape the largest energy shock in the world knowing that there's absolute production destruction that's happened in the Middle East that will take months if not years to overcome. And in the case of oil fields it may be more permanent than people understand because sometimes when you shut an oil field down you never quite recover it back to its current run rate of production that it was at before you shut it down. There's damage that happens geologically speaking, but look at that. This is like we got kind of like max bearishness and and that's odd. Who who's who's max bearish oil right now? And and uh oil and gas, do you think? Who would that be? >> I don't know. That's a good question. I I would say it's broken down to several individuals. It's those that fully believe that Trump's playing 12D chess and and and this is going to be over quickly. Um, I would say it's algorithms because a lot of the algorithms are play are moving off of short-term moves and past returns. So, that's part of the algorithms. My biggest concern would be is if if you have some political intervention to because, you know, look, it's scary to buy oil at this price if you really believe that things are coming apart with that much short interest because then you get that vacuum to the downside. So, is it is it a heavy hand that's trying to control the price from going higher and keep other people from moving in? I don't know. That's a good question. But but that from my perspective and everything that I'm looking at and may you know, if you've got inside information, you see things that that we can't see, then maybe it's a no-brainer to short oil. I think that's a very speculative position right now with the information that we can at least confirm and see. Yeah, there there's been open open speculation all over the place that uh the Treasury Department andor a proxy has been shorting oil. It wouldn't surprise me, Paul, because when when we get into what they call systemically important moments, we know that the Treasury rides in and does stuff. Um I just came across this chart the other day. Let's go back to the great financial crisis. Do you remember AIG, the big insurer? you know, they mistakenly accidentally oops sold a whole bunch of uh mortgage derivative products and interest products, interest rate products that were naked and they got really caught off. And so there was quite a bit of turmoil around that. So let's look at this. If you had held AIG just during the intraday, your returns would have been - 99.93%. But if you had held AIG in the overnight markets where the futures players come out to play, you would have gains of 119% from that period of time of the great financial crisis through to current. >> Wow. >> This is we've shown the same sort of a chart for silver. We've shown it for gold. I submit to you it's the same thing for oil right now, which is that somebody comes out and plays in the overnight and paints a starkly different picture than you find when the open cash market is open and people are buying and selling actual shares. >> Mhm. I call that market manipulation, but it's it's really stark. This is not a functioning market at this point, right? No. Well, I mean, unfortunately, it was functioning, but it's not an honest market in any way whatsoever. And I'm not disagreeing. It's not a functioning market, but it's certainly not honest. >> Right. >> What's amazing to me though is look at that chart. >> Yeah. >> How it it was relatively normal until they get to the point where there were people who knew, right? There were people who knew they were they were telling everybody that was retail investors that it was going to be just fine. Ben Bernani comes out and because we had some clients back then that were discretionary. But, you know, it's kind of funny because it's a it's an interesting story to tell. You know, I I was a they tell me I was a smiling kid, but at church, you know, I'm swinging from the rafters and I was always didn't do anything bad, but I was take things apart. So, you know, I had some clients that trusted me enough to do business, but they still remember me swinging from the rafters at school, so they wanted me to run things through them before. >> And I remember telling people, I'm like, "Hey, in our discretionary portfolios, we're out. We're out of the market. Please get back, you know, please get out." Well, then they go look at the TV that night. Ben Bernani comes out and says it's under control, everything's fine, you know, and here I am writing letters. So finally I'm, you know, market's down another 10%. They would have been 15% better off if they'd have followed it instead of listening to that mainstream media news. So finally I I resorted to sending letters out to people and said, "Look, my hands are clean. I may be wrong, but you you know, you need to get out. It's it's not my responsibility. I've warned you at this point." Some people did. Most most people got out. Some people didn't. But that's people doing things when they really know what's going on behind the scenes while the mainstream media is telling the retail investor that it's going to be okay. And that infuriates me about the world that I live in and I'm forced to play the game by the rules that are forced upon us because because if we as individuals manipulate the market, the SEC is going to crush us. But if you're big enough and you can pay the attorneys and you're closely connected, you get away with it. And that's clear evidence in the past. >> Well, it is. And this, you know, again for people watching this, green is the open intraday cash market. And you can see here when the news first broke, Paul, there was some departure between the the overnight and the intraday there uh leading up to this moment, but you see that first big blue tick down for the first instant. I don't know how long that tick is cuz this is a multi-year chart. Is that a week? For the first week or so, whatever that that tick down, you know, these two were were plummeting together. And then somehow this just absolutely went the other direction holding it all. So if you sum the two of them together, yeah, you're up about 20% on on your AIG from there to here, right? Um and and because those two sum, but isn't that a crazy thing? >> That's crazy >> that the overnight markets where the paper futures are traded now dominates the actual experience of that particular um stock, commodity, whatever have you. And of course, that's what Trump is targeting when he does his 7 a.m. tweets. He's in the he's playing in the futures market where these sorts of moves are, you know, can really happen. So that leads to all this confusion, at least in me and some other people I talked to about what's real, what's not. Markets are supposed to be these beautiful discounting machines that give you fair warning and look into the future. Now, as you showed with the that COVID stretch for the markets, they were not forward-looking at all. They were highly reactive only once it became apparent that this thing that they should have been foreseeing had actually already happened. Right. >> That's right. And I want to show another example, but I I think it was when you and Dave were having your conversation. It was Dave Colum and he and and this is so true. So Dave Colum made this quote. I think it was during y'all's interview. Um he said, quote, "Inves investors seem so green." He said, "I think it's because every new bubble has a new generation of people who do not know the history of the markets." And that's crazy important. And I do want to share another example. Let's go back to Enron. And Rudy Rudy Havstein posted this the other day and and I put it in my teaching u uh bookmarks window because this is this is very important to where we are. So this is Enron stock price, right? going from 1997 all the way up to to the collapse >> and and I remember you know there was rumors around what was taking place and I'm I'm sure there was somebody that downgraded them but let's go back to Moody's and Rudy Havstein put this out on March 17th he said stock price is the ultimate truth and that is true one thing that I learned at the start of my career from 98 through all of that there Tom Dorsy was ridiculously good at at at teaching and educating I spent a lot time with him and uh he said price doesn't lie. It's the ultimate truth. So uh you look at this Moody's didn't downgrade them to non-investment grade until it was too late. So you know and that's the handicap that unfortunately a lot of retail investors have if you don't have the tools and you don't if you're just passive, the only thing that you can rely on is is the narrative. But if you're passive and you follow that strategy, you're not even supposed to pay attention. you're just supposed to do whatever. And you know, how's that work out in any other area of our life? Because unfortunately, or the truth is, you know, if you have character and discipline and the ability to make some sacrifices today for the betterment of the future, you are not passive. You're you're you're not f there's times to follow the herd, but if you're disciplined, you're getting up in the morning before other people are. I remember when you when I started in the career, you know, I I was working working. I mean, you know, yeah, I had the freedom because you you're technically a a contract employee. I had the freedom to go play golf 5 days uh a week if I wanted to, but the guys that went and played golf 5 days a week and didn't have the uh the discipline to stay the course never succeeded in the business. So I it just frustrates me that there's the belief that passive is is this holy grail of the investment standpoint because history shows that passive decisions are not right. We know we know that passive aggressive communication is not a great way to keep a relationship going. And then you've got these you know you you've unfortunately got the weak individuals that are up there that you're just a minion as a retail investor, right? They want to offload their shares to you so that they can get in a position to buy them back from you when when the damage hits. And you know, and I hate to be so frustrated, but that's the negative of the investment world when it's run by weak people. >> Didn't we just see that though? Did you you and I talked about this in early 2025? It was just odd to us that all of a sudden private credit, private equity, they lowered the the minimums and you're getting calls and you know, Wall Street's busy dialing for dollars saying, "Oh, we've got these great products." They push it all out there and then poof, now they we have all these gated redemptions and we don't even know how bad the damage is because um you know, they've stopped the ability of people to access their funds. very complicated products obviously, but you and I both knew that the minute that Wall Street opens that up, that means the same thing every time. That means all the gains are gone and they've got some dodgy product moldy bread on the shelf, they'd rather get out the door and uh that's just who they are. And private equity is just a classic example of something that is a good sleeve at its core within the market. it fulfills a role in a certain area. But like everything else in the financial markets, it goes from being where it should be. It's it's underutilized, it's appropriately utilized, and then it's overutilized and it drops. And that's where I think Dave Collins's quote is so important because, you know, people don't know the history of the market. They don't they don't want to learn from the mistakes of the past. They want to be told that it's great today. And then and then they're just amazed that they get taken advantage of by these big players. And unfortunately, they put their trust. And for us as advisers, just like it is with doctors back during co there are a lot of doctors that put their faith in an institution that earned their faith over a period of time. But that' been a long period of time that they it wasn't a trustworthy institution. They just didn't know it until it was too late. >> Right. Well, Paul, um when we come back, we're going to talk about oil and gas. There's some really big news there that I think people need to hear about. And of course, that's our job. We'll help people know about that. We'll talk about that as soon as we come back. Markets are facing heightened uncertainty and thoughtful portfolio management has never been more important. If your current strategy relies solely on passive investing or diversification without active oversight, it may be time to consider a different approach. At Peak Financial Investing, we connect you with experienced wealth managers who actively manage portfolios using disciplined, research-driven strategies designed to adapt to evolving market conditions. Our focus is on helping clients navigate volatility with clarity and confidence. While no investment strategy can guarantee results or eliminate risk, we believe that preparation and active management can make a meaningful difference over time. Visit peakfinancialinvesting.com to schedule a complimentary consultation and explore whether our approach aligns with your goals. I'm Dr. Chris Martinson and I am proud to support Peak Financial Investing. This is not a guarantee of future performance, but a call to take your financial planning seriously. Again, that's peak financial.com. Investing, of course, involves risk, including the potential loss of principle. Past performance is not indicative of future results. Please consult with a qualified adviser before making investment decisions. All right, welcome back everybody. Oil and gas in the time we have remaining, Paul, because it's big. It's the big the most central thing. Obviously, we care about prices at the gas pump, but it's much bigger than that because energy is the economy, right? All economic activity, Paul, involves work. All work gets done because you have energy available to perform that work. Mhm. >> Circle that back. The economy equals energy. Energy is a master resource. So, um, here's some things people need to know. The former number one and number two exporters in the whole world were Saudi Arabia and Russia, okay? By far. And then it's a distant third and it drops off from there. So, when we talk about oil markets, we really care about the export markets because countries that neither import nor export are producing as much oil as they need for themselves, they're kind of irrelevant. Oil gets set not by within countries, it gets set on the export market. So, whoever is willing to pay the most for that next barrel of oil kind of sets the price. That was true up until it broke about 3 weeks ago um into different markets. So, now we know Saudi Arabia's uh going out through this pipeline into the Red Sea, but their exports are roughly half what they were before, maybe 60% of um what they were before, but down quite a bit. In case you haven't been paying attention, because I know there's a lot going on, Ukraine has been really dialing up the attacks and hitting Russian oil export facilities and refineries. And it turns out uh as of by in Reuters March 25th, it uh it says exclusive at least 40% of oils Russia's oil export capacity is now halted. This is another big part while everybody's still focused on the Persian Gulf, the straight of Hermuz very important story. This is a big deal, too. and it's coming at the exact same time. So, I'm a little bit curious about all those bearish oil people. I I don't know who's who's bearish. I I I look at this and I just go, "Wow, we've never seen a supply shock like this. Not in my lifetime. It's the biggest supply shock and we have all this complacency." Again, I'm getting that February 2020 COVID vibe off of this right now. >> And I I did see that. I didn't dig into the headlines, but I remember thinking, what what are they thinking right at this situation? If we have any control or influence over Ukraine, why would you go after that infrastructure right now? That's just going to further exacerbate the situation. >> Almost seems intentional, doesn't it? It's kind of kind of an odd time for Ukraine to really be successful um targeting these things. By the way, there were rumors that the most recent one on the Baltic Sea that just got hit that those weren't drones. uh that that maybe those were missiles which would be if you can reach there with a missile you can also reach Moscow that could actually inflame things quite a bit in the region if we have supplied those missiles to Ukraine which is it's it's the west it's NATO NATO had to have done that I don't believe they have a domestic rocket industry at this point in time that would be able to do that so that's also a potential volatility moment here >> it is and then what was it in addition to that too China uh put out a hand to Taiwan that says, "Hey, you know, if you want some energy support, we're willing to help you if you'll merge together or whatever they stated, but something along that lines." That's like, "Hey, come on, come over here. We'll take care of you from an energy standpoint." I thought that was interesting timing, too, with their military activity picking up around. And that's off the radar. >> Well, it is. And so the the Iran strategy is kind of interesting because uh they're allowing ships to transit of friendly countries as long as they pay them a couple million bucks in yuan Chinese currency. And so that actually begins to put a dagger straight into the petro dollar. And if you know your history, every time anybody's ever tried to like even minorly threaten the petro dollar, it has not worked out all well for that well for them from a living, you know, longevity standpoint, right? >> Bad for Saddam, bad for Gaddafi. Bad, bad, bad, right? >> So, so this is what Iran's doing and and that's kind of a big deal. And also you notice there there'll be some wedging showing up there because now Thailand for instance has to say okay I guess we got to we got to be friendly with you which means by definition I think we have to be a little less friendly with the US. Um so that they're driving wedges politically as well um because of that strangle hold they have on on the straight. Now, people said today, Paul, that that oil really got crushed because we had this big giant um it it really went down this morning cuz the markets were expecting our oil inventories to be down 1.2 million barrels. Instead, we saw this massive build of 6.9 million barrels. Biggest build since June of 24. Uh or first thing, do you trust it? Hard to say. You know, it is hard. You know, is this a BLS statistic? you know, is this a Mc Jobs report? Is this a Mccoil report? But also, I I I did tweet out, it may have something to do with this. Uh, US crude imports from Venezuela jumped to the highest since 2019, which is actually quite a big deal. So, the United States is busy importing as much oil as it can from Venezuela as fast as it can. That would have contributed to that build. Not necessarily bearish for oil um considering how oil markets balance. Um, it was it could be an import deal. >> That's interesting. My question is now that now Venezuela makes a lot more sense and if you had inside information that this was coming and you you helped uh to shore ourselves up a little bit better, especially with that Cushing number. Um, was this planned all along? Was this planned in in some advance? And it appears that it has. At least the little bits of information that we can gather. Well, there's a lot of weird, like I said, it's very hard to figure out what's going on. You want to see this next weird piece of news also from Venezuela. Don't know if it connects or not. >> Yeah. >> But the U, it was just reported this morning on March 25th. US Interior Secretary Bergam says he brought back $100 million worth of physical gold from his visit to Venezuela. Isn't that more of a Treasury Secretary? Why is the interior secretary talk bragging about bringing gold back from Venezuela? Did we pay for it? Like how did the what? I'm just a little confused there. >> That I had not seen that. I don't even know what to think about that quite frankly. But hey, if you see the value in gold, you're going to want to try to bring it back home. >> Well, I guess. But is Venezuela selling? Why? Why? It's bizarre. Um >> that that is bizarre. >> 100 million. Doing some numbers in my head. Roughly speaking, what is that? Maybe 2,000 contracts on comics. Um, something like that, >> a minimal amount. >> I was like, yeah, they can dump that at 2:30 in the morning in a single one minute window. So, at any rate, um, hard to make sense of of all the stuff, but I think you're right. I think one you when you look back, you say, of course, of course, the first thing you do is you go after Venezuela. And of course, of course, of course, the United States is going to lean on any sort of independence that Alberta might be going for because between those two pieces, north and south of us or south and north, depending on which way you add it up, uh we could be fairly energy independent as a region on the basis of those flows for for quite a while. I would imagine actually >> we could that helps us, but my my big concern is that's great if it's here, but how much of our manu how much of how much do we manufacture and bring in from China, right? And if they strengthen their currency in relation to export that inflation over to the United States, that's going to help us in the short run. At least we can keep the trucks moving, but that's not going to help the prices of things at all. >> Yeah. I I think China is trolling us now um pretty routinely. And and uh the re the way they're doing this is with um this is by showing off their technology. Have you seen this? Check this out. It's only 20 seconds long. This car drives up, right? And then it sort of transformers itself and the back opens up and some things come down and then Oh, it's a it's a it's a flying car now. Wow. Huh. How about that? The future has arrived. Isn't that amazing? >> That's amazing. We don't have anything like that in development here. And it's already a reality in China. I don't know how big of a reality, but that's part of it. Now, also >> uh >> that's amazing. You know, it's interesting cuz cuz I'm hearing reports and had a client that traveled to China recently for the first time in uh 8 years. >> They were blown away by the advancement that has occurred over there and just how how much has taken place. They were absolutely mind blown. They could not believe that in an eight I think it was eight eight or nine years uh the advancement that had been made in the major cities uh because you know everybody thinks Shanghai but it was all the other cities that are out there. It was fascinating. >> Now and remember like uh right now the United States is actually desperately short on what they call interceptor missiles. These are the Patriot Pack 3es um you know uh all of these uh the Airhawks all these things but very short supply. Um, meanwhile, China just announced that they've just fielded their TM300 supersonic heavy swarm attack drones. They fly at Mach 1.8, 100 kilo warhead, range of,200 km. And oh, by the way, they can produce hundreds of these per month. Um, looks pretty sophisticated. Don't know. Uh, and then and then they just put this out showing the first time how they launch swarms of drones out of tubes and off they go. You see pairs of them flying out. So, I'm I'm watching this and Paul, what I'm coming away with is is China is is very obviously reminding us that they have these capabilities and these technologies and that if we're having this much trouble with Iran, we probably wouldn't want to really entertain the idea of trying to take on China at this point. I don't think we would or could for all sorts of reasons, not least of which is if they stopped trading with us. I don't think our military could function anymore for because somebody gave away our supply chains to China. I I don't think that was a smart thing to do, but that's an editorial comment. >> When the leaders are making decisions for maximum profitability, that's usually putting your your people in the position of the weak in the weakest position, quite frankly. >> Mh. because um I hate to say it again, I beat some of these to death, but there's a way that seems right to a man, but it's end leads to death. And that may not necessarily be death. Death, right? But death of the vision that you had. Um you miss the mark. You don't end up where you ideally could have been and made the impact on the lives around you that that you could. you know, you end up in a very weak position and and have generations behind you pay the pay the pain >> for for weakness. Let me add all these dots up real quick. There's going to be printing. That's why I add all these dots up, right? Because the the Fed when pushed up against the wall will always resort to printing to save the markets. um whatever that means to them versus worrying about the impact on on the masses of the people who have to pay higher prices. It I mean that's been true my whole adult life. Maybe it'll be different next time, but I don't think that's a good bet. So more printing is on the way. Um and the I guess you know we have to just sort of factor that in. That must be hard for you for retirement planning because I know a lot of a lot of firms, you know, think 2% 3% inflation, but most of these retirement plans just get shredded when you go to five. >> Oh, yeah. >> Seven, >> eight, 10, you know. >> I mean, that's one of the things that I go through with with nearly everyone. Well, everyone is, all right, let's look at three and a half because that's what you're that's what everybody Well, most people are not even telling them three and a half. I said, "Let's look at 3 and a half% compounded inflation." And then I and then once we get everything in there, I duplicate the scenario and I go, "The only thing we're changing is 5 and a half% compounded inflation." and and the shock that I consistently see on people's face when they look at that and and just how precarious it puts them in in their circumstances, you know, and then I show them the total lifetime income that they need under the assumptions and I'm like that's exactly why inflation is so evil. I mean it is evil on the citizenry and you know and it but why it's so important and why I do this for everybody that I meet with is I give you the information right if you're wanting to retire two years from now or one year from now or if you're already retired you need to know this information whether you like it or not no matter how scary it is so that you can at least mentally prepare if there's nothing you can do about it but if there are things that you can do about it to position yourself now to better survive of that storm. Maybe that's carrying a little bit more risk in the portfolio. You know, maybe that's making a few sacrifices here or there. Maybe it's eliminating that second property. But people need to know so that they understand the risks of the path that they're on. And you know, it it's still as much as inflation has been for the past 5 years, Chris, I still get made fun of by my industry peers because I stress test people at 5 and a half% inflation. I'm told that's needless fear-mongering. You know, why would you do that to people? You know, what's your, you know, what's your self-serving benefit? There's no self-s serving benefit in that. It's literally I have studied history enough to understand the lessons of the past and I'm trying to prepare people for what could happen in the future. And we hope it doesn't. I would rather prepare for that and it not happen than to stick my head in the sand and be wholly completely under unprepared uh uh for the clients that that we have the opportunity to serve. >> Absolutely agreed. And and to just drive home what we're possibly talking about here if we do repeat the 70s8s experience, we put this chart up before. I really like to bring it back up again because I think we're about to repeat it, Paul. It feels it just feels like we are. And so we had our first inflation here which topped out at about just somewhere between 8 and 9% during the 2021 to 2024 era there. And inflation has come down some, but it hasn't gone away. Trump keeps getting this wrong. He says prices are coming down. They're not. What's happening is the rate of inflation has come down. Prices are still going up, just not as fast. Right? So let's a different thing from prices have come down. Maybe eggs. It's the one thing where that may be true, but if we go into this second hump and we repeat, it's going to be higher than the last time, right? And we don't know where it'll go, but in this uh 79 to 80, it peaked out at 14%. And the only reason it came down, Paul, is because we had this man named Paul Vulker, then the chairman, big 6 foot five cigar chomping tough guy from Texas. He had to run up short-term interest rates to 21%. To get that back under control. And my favorite quote about him is big tough guy. I mean, this guy apparent very imposing um physically. And uh he was asked in an interview. He said they said, "Hey, if you had known that that kind of inflation was coming along, you know, would you have taken the job?" He said, "No, I would have curled up under my desk and cried like a baby." That's an honest man right there. But he had the strength to do what needed to be done. Had the strength. >> Only Fed chairman to be burned in effigy on the Washington Mall lawn. Right. So people were very unhappy with him because he did what he had to do to get that second hump down. I I don't think we have anybody of his character that I'm aware of in the political pipeline for that particular role. So I think Paul, if we get into this second inflationary hump, if or when it gets started, I don't think we have the political coahones to to actually do what has to be done because that could easily cause a spiral, a debt spiral for the United States. Can you imagine the government all packed into the short end of the curve, suddenly having to pay 20% on their short paper? >> Yeah, >> I can't. It would just be it would just be a runaway, you know, exponential explosion of debt >> and a combination of the two or forced austerity and forced fiscal responsibility. And that means a lot of people are going to have to go back to work and stop relying on a paycheck. And that's assuming that AI doesn't take all their jobs. >> Oh, right. That's that's still looming. And Paul, that's picking up speed as we we talked about that last week. But I have more and more conversations with people all the time. people who've either lost their job or to AI or people who are concerned they will soon because they can see it the writing on the wall. They work for consultant companies, they work for software, they work in project management and planning. These are all areas that are getting nibbled at very quickly uh by AI. >> Mhm. One thing, if you don't mind, will you pull that that last chart that you showed again of the inflation because I want to point out something and this can be scary and this is not my intent, but this is the one thing that absolutely terrifies me because it's a completely different environment. You have to have a completely different mind shift. You know, I'm not going to enjoy if we get a surge of inflation, but we have a vulker that comes in and stops it. What I'm really concerned about is when we look at that, there's the the subconscious perception that, hey, if we repeat the 70s, we're going to get through that and then it's going to come back to normal. We're in a completely different environment than we were back then. America had the integrity and we were not questioned as, well, the benefit of history, you can, but bear with me. Compared to today, um, you know, the rest of the world looked at us as a light, integrity, rule of law. we could be trusted. When we told you we were going to do something, we did it right now. We know at the edges under the seams that corruption was already starting there when you look back in history, but we had earned that right. My concern is now there's already been challenges and concerns with our our position as the global reserve currency and our banking system and weapon weaponization of Swift. What happens if we get that inflation and then the bricks roll out the unit or the Chinese one replaces the dollar as the pro uh uh the petro dollar as the petro one. I don't know if that'll happen or not, but it's certainly a risk on where we are now. And that inflation is going to be far worse than what we saw there if we end up with a currency crisis where the rest of the world says enough. We can't trust you anymore. We're going to do business with individuals that want to bring us together, that want to abuse their position. Now, ultimately what'll happen if it's the Petra one, weak people will take over in the future and the cycle will repeat itself. But my concern is is you get that inflation and then you have the one gain more steam in that that uh oil pro one replaces the dollar and then the unit comes out with a goldback currency that's linked to the commodities of the countries that have more reasonable debt. That is a completely different environment uh uh from an investing standpoint that the average American has no plan to protect themselves from. And I've spent a lot of time I don't know the answer but I've spent a lot of time trying to figure out and studying history okay god forbid that happens to us. How's the fiduciary? Do I guide our clients to change their portfolios and and and everything within the rules of our strategy are built built in there so that we can confidently make those decisions. I hope we never do but that's a completely different environment. something that we have not seen in any of our really market history going back because we have been building on the discipline of the past into you know where we are and now that weakness of weak men bring about hard times >> and you know one thing I want to go back to with Vulkar it goes back to my favorite quote be more concerned about your character than your reputation now reputation matters that's earned by having good character But the problem with our politicians today is they're so concerned about what people think of them that they don't have the character to lead people down that that tough path like Vulkar did. Like I can only imagine how angry I mean I've heard stories about how angry people were at him, but he was in his position. He understood what needed to be done and he took the heat in the short run. And that's the reason why he's so respected is because he went through the persecution in the short run to go through the right path to lead our nation into a position where he stamped out that inflation. I just don't know that we have anybody in the political position now that really is concerned about their character love enough of the truth and is really thinking long term. I think it's all short-term thought, instant gratification, and um and that's just a sign of the weakness of the character of the people that are in charge. >> Well, in indeed, and so this calls for extra extra caution, precaution, all of that. Um, I understand it can be very anxiety if not fearinducing these these sorts of moments, but these are the times when you actually got to you got to try and set that aside as best you can and make good prudent decisions because as you've remarked over and over again, a 50% fall is 100% just to get back to even, right? It's an asymmetrical thing, right? You lose half, you have to double that half to get back to where you were, which is a tall order. So, first do no harm, right? That's the hypocratic oath. like first take no losses would be would be the financial hypocratic uh oath in a time like this I think which is you just be defensive be protective watch carefully what's really happening see where you think you know things are going it's it's tough environment I get that right um apparently I see the world very differently from a lot of people who are oil bears at this point in time but hey those are markets right you know um >> right >> viva la diffos over time but >> that that is Right. And that's what makes a market that battle back and forth. It's the hidden hand that makes the market be dishonest, right? And that's that's my biggest concern that I have. So, >> what can people do? I mean, the markets are holding up really well at this point. >> And and I'm a big if you don't have a strategy, then you're falling back on emotional decisions and you're getting swung in both ways, right? I mean, that's one of the reasons why po passive investing became popular is because people stress over making these decisions because they don't have a well-considered strategy. And a well-considered strategy, people need to understand. Every strategy has its own unique set of strengths and weaknesses. And if you don't understand what the weakness to your strategy is, then you do not understand your strategy. Because one thing that I promise and this is what I've experienced even in our own strategy in full market cycles you are going to experience the weaknesses of the strategy because there is no perfect strategy and if you don't understand it you're not going to have the wherewithal to stay the journey through that weakness. So what's the weakness in a in a passive strategy? Well, we can clearly see that in the most recent past, 2000 to 2003, 47% decline in the S&P 500. It gets back to even in 2007. Was it 57%? I missed the number right now, but I think it was 57% decline in 2008, top to bottom. Market goes sideways for 14 years. Okay. What happens to your retirement if you endure a 50% decline, get back to even, and then another 50% decline? you're out of money quite frankly very quickly and we had a you know minimal inflation environment then it was there but nothing like what we've experienced now so what happens if we get that type of environment it's not funny with inflation that's running five six or 7%. I mean that that's going to completely upend the lives of the people that are retired and that's going to completely upend the lives of their kids that think that they've got this big inheritance as their their fall back to make sure they're you know uh to to reach their goals. So you've got to make sure that you prepare yourself and consider that. So, you know, the reality is is you've got to have a strategy. And if you don't have a strategy, you got to make the determination right now as to what do I do? You know, at least develop a line in the sand. If the markets come apart, do you lower risk from a historical context? I believe so. But I don't know each individual circumstance out there unless I've had a chance to advise them. But you have to consider at least stress test your circumstance. Look at your situation. say, "Hey, you know, most baby boomers are in a passive investment. They're at the highest equity allocation that we've seen in quite some time, right? That that their actions are showing that they believe that nothing can go wrong. That's usually the time when everything starts to go wrong. And I'm not saying to make decisions out of panic and fear. At a minimum, if you've had great returns because you've been passive, look, maybe peel some stuff off and ladder treasuries over the next five years. you know, a one-year Treasury, a two-year Treasury, buy some inflation protected treasuries, so that you've got some resilience and you can at least have a chance to not be forced to liquidate your investments at the absolute worst time. And that's why I keep encouraging people, hey, 24 months worth of savings right now, if you're in a passive strategy, is not a foolish thing. You might miss a little bit of opportunity, but what if it's not different this time and the market goes down a lot? Now you've got a you're in a position to where you're not forced to liquidate at the absolute worst time. Um you know if we have supply chain disruption if you have the ability get a month worth of food. Okay that that makes you more resilient. You have some options. Get three months. You know if you have the resources and you know your circumstance where you can take that risk maybe you get a little bit more for the family around you that can't uh because of the circumstance. And you know, we're in a situation where 70% of the population has less than 90 days worth of reserves. And even in that, the 90 days that they were counting, they would have to borrow money or sell something. So the thing is, you know, don't be in a situation where you're forced to sell when everybody else is selling. Sell before everybody else does because in all of the context of history, this is in general the most expensive market that we've seen throughout history. And at a minimum, you've had flat returns for quite some period of time, but in those flat returns, you've had some massive declines. Do not be in a position where you're forced to sell at the absolute worst time. >> Indeed. And to talk with somebody at Paul's office, very simple. Go to peakfinaniinvesting.com. Fill out that simple form and somebody from Paul's office will be back in touch with you within 48 business hours to start the first of what should be three calls. Uh, an introductory call and then a planning call. And then if it goes that far, a recommendations call and if all that pencils out, maybe it's good for you all to work together. Uh, and so that's the process. I encourage everybody to begin the process as early as you can because when things get really turbulent, uh, uh, Paul, you tend to get busier. So, just want people to be aware. Um, you know, if you're thinking about this, now would be a great time to just go ahead and, uh, go through the process. And again, no obligation. >> No obligation. And I'm quick to tell people, hey, there's nothing I can there's nothing that's appropriate for me to manage for you. Hey, you've got a well thought strategy. We've stress tested you. I've shown you things that nobody else has shown you. And my goal is if I can make a positive impact on somebody else's life, whether it's appropriate for us to work together or not. And it's not just me, it's John Alexander, it's Dylan Smith, it's Alex Snellgrove, the entire support staff. you know, our action is our responsibility is to love people and try to help improve their lives. And if you do the right things, everything else will take care of itself. The one thing that I do want to point out right now though is our first responsibility are to the clients that we serve. And I had somebody a little frustrated the other day because it took a while to get in into the schedule. And I just told him, I said, 'Look, you know, my first responsibility as a fiduciary is to serve those clients that we have and I keep capacity to make sure that I can, you know, I'm available and the team's available. So, you know, I've got some people that have gone through it. They're not sure whether they, you know, whether they're ready to leave the passive, but now we've laid the foundation because I've taken them through the plan. I've given them a recommendation. They can get in the door a lot quicker if they if they decide that it's appropriate to work with us. So, you know, takes a while to specifically on my schedule a little bit more than the others just because of the responsibilities that I have. So, don't think that we're not interested. We are. We want to help people. But remember, our first responsibility is the clients that we serve. And if you get in that journey, you know, and you take that time, you have the ability to move a lot quicker because if things come apart, I would assume that we're going to have a lot more calls coming in. That's exactly what happened in 2008 and other periods when people all of a sudden realized, hey, maybe I should have made some deci, you know, at least had some conversations before I realized I needed to. Well, with that, Paul, thank you so much for your time today and um thank you everybody for listening and being here for finance. We'll be back next week with hopefully um a a clearer view of how the world is actually unfolding. So, with that, hey, Paul, thanks and have a great weekend. >> Thank you. You too, Chris.