"Nasty" Surprise In Store For Stocks As Credit Markets & Dollar Weaken? | Jesse Felder

Summary

• Commodity Supercycle: Felder expects a multi-year bull market in commodities and real assets driven by a weakening dollar and severe underinvestment across natural resources.
• Energy Focus: He is most bullish on oil and gas, highlighting producers and offshore drillers as undervalued beneficiaries of tight future supply and rising demand.
• Precious Metals: After a parabolic surge and sharp correction, gold and silver likely enter a multi-year basing phase, with longer-term support from rolling sovereign debt risks and persistent inflation.
• Market Risks: Elevated margin debt, deteriorating credit signals (BDC write-downs, leveraged loans rolling over), and rising volatility point to potential earnings disappointments and deleveraging.
• Flows & Dollar: The “passive bid” is vulnerable to labor market weakness, while record foreign inflows could reverse as non-U.S. markets outperform and the dollar breaks down.
• Energy Vehicles: He favors diversified oil & gas producers (e.g., XOP) and notes names like Occidental Petroleum (OXY) trading near Buffett’s cost, plus offshore plays such as Tidewater and Helmerich & Payne.
• Crypto Caution: Bitcoin’s softness and MicroStrategy (MSTR) leverage pose downside risk; a shift from accumulation to liquidation could amplify pressure.

Transcript

So there's signs if you look for them that the credit markets are not healthy and they're potentially deteriorating. And that's something I would pay very close attention to too because if if business development companies are starting to write down stuff, we're starting to see more cockroaches as as uh uh Jamie Jamie Diamond recently said, we might then that, you know, plays into this theme of earnings disappointments and kind of a turn in the cycle. Rising unemployment, as we talked about, could be bad for the passive bid. I think all of those things paint a pretty uh pretty nasty potential picture for stock prices this year. Welcome to Thoughtful Money. I'm founder and your host, Adam Tagert. Today's guest has been warning for a good while now that the current bull market in stocks is approaching its end. in no small part because corporate insiders who know the most about their company's prospects are selling their shares at record levels. It's not all gloom for investors though. He also predicts that commodities and the stocks of the companies that produce them are set to experience a boom. For a full update on his outlook, we welcome back to the program macro analyst Jesse Felder, founder and editor of the Felder Report. Jesse, thanks so much for joining us today. >> Hey, good to be back with you, Adam. Thanks for having me. Hey, it's always a pleasure, Jesse. Thank you so much. Um, glad to hear that you are um skipping out on the frigid weather that much of the rest of the country is having. You told me it's going to be almost 80 where you are today. So, I'm sure we got a lot of jealous viewers here. >> Yeah. Well, it's uh it's a blessing to be able to be down here this this time of year. And I I feel for everybody around the country. It's why part of the reason I moved out of central Oregon was the winters were a little too harsh. >> Yeah. And that's an Oregon, right? Um it's uh it's getting everybody. Um Florida I hear has been you know freezing down in the 40s. New York I just saw this morning was 9° in Manhattan but felt like -7. Um my little brother lives in Wisconsin and uh a few days ago there it was like minus 20 but feels like minus 35. I mean those are just ungodly temperatures. >> Yeah. I was watching the the outdoor, you know, NHL hockey game they had yesterday in Tampa Bay and, you know, thought how can they do an outdoor hockey game in Florida, but the guys, you know, were huffing and puffing. You could see their breath and stuff. So, you know, hey, it it was uh it was a pretty cool uh experience to to watch down there. >> All right. Well, sometimes novelty is nice, but I'm sure most of the country is saying, "Okay, let's let's wrap this up pretty quick, >> right?" >> Um All right. Well, look, speaking of um uh wrapping things up, let me wrap up the intro and just get straight to the stake here. Um you and I are recording this on Monday morning, February 2nd, Groundhog Day. By the way, I don't know if this is a sign for the markets as well, but uh Punksatonyi Phil the groundhog did see his shadow. So, um those folks suffering through winter right now might have six more weeks of it to deal with normal. Um but uh on this day it is the first day of of trading since you know we'll call it silver mageddon uh on Friday but I mean it wasn't just silver um all the markets have been getting kind of beaten up but I mean the precious metals have been just been getting eviscerated. Um so let me just start by asking you a very simple question Jesse. What the heck just happened? Yeah. Well, you know, I I've been um bullish on the precious metals for the past 10 years really. 2015 I started writing about how down and out the metals have become. sentiment had become um you know I think I even referenced at the time a meb fab piece that showed when any any asset [clears throat] class or you know sector is down three years in a row subsequent returns are are really good and and metals you know that was around the time the Wall Street Journal called gold a pet rock and >> obviously the last 10 years have been really good for for gold uh bulls I think generally um you know we're still in an environment where where it's friendlier to real assets than to financial assets. We can dig into that. But I think over the past year really uh there was a speculative momentum trade that kind of came into the precious metals. Um you know Bloomberg has reported today about how much uh leveraged buying there was among Chinese um you know kind of retail investors. And whenever you see that type of parabolic advance, it always kind of ends the same way. You can it's impossible to time. Although, you know, we were talking about our mutual friend David Haye who did a phenomenal job of timing it last week. I think he sent out a thing on Thursday saying, you know, it's probably time to to be cautious towards towards the metals here. And uh that was right before they they reverse. So, yeah, for everyone else besides Dave, it's really difficult to time these things. Uh but they always kind of work the same way. Whenever you get that parabolic blowoff, you get the kind of reaction that we saw on Friday and probably should continue for a while just because you need some deleveraging. There's been so much, you know, call option buying and leveraged buying of uh, you know, the ETFs and things that it just went a little bit too far to to the upside. I still think we're in a structural bull market for real assets that will last another at least five years. But you know, another thing that I've been talking about for the past 12 months is that relative to gold, the rest of the commodity space looks really, really cheap. And that's actually one of the best ways I think for if you are a structural bull on the the commodity space to look at them, price them relative to each other. And when you look at oil relative to silver, you look at the oil price relative to gold um it suggests that you know the the energy um you know component within commodities [clears throat] had become unduly cheap and the precious metals relative to the commodity space had kind of gotten overdone. That said, I will say that I think the precious metals typically lead these types of commodity bull markets. And so this huge move by the metals is kind of foreshadowing and and we've seen it the rest of the commodities space starting to play catch-up. You know, the Bloomberg commodities index has kind of broken out recently and been been really strong. Um but I think the next leg is probably likely to migrate more towards energy and uh and oil specifically. >> All right. Like a like a great interview guest, Jesse, you are interpreting many of the questions that I have here. Um, so I want to dig into a lot of these with you, but just just getting back to um to the end of last week's actions really quickly. Um, like [snorts] I said, it wasn't just the precious metals. Um, it was the markets themselves uh were were weak across the board. Um, and the the well question I want to ask you is and I guess two things can be true at the same time. um you know, when these vertical moves happen, as you say, nobody can time when they're going to reverse. Did did we just hit the the magical moment where sellers outnumbered buyers? Um or and or um you know, the narrative that was playing all weekend was is well, it's cuz Trump surprised everybody by nominating Kevin Worsh, who's uh you know, thought to be more hawkish, and therefore that's bad for all assets because he's not going to want to lower interest rates as much. uh and precious metals being you know an inflation hedge um that uh that seemed particularly bad for precious metals. So how much of it was due to wars versus how much of it was just due to well when things get overbought at some point they correct? >> Yeah. You know it's it's funny my son um you know 26 years old just got out of the Air Force recently. and he's in college and he called me this weekend to ask me about gold and why gold, you know, why, you know, obviously he and his friends are paying attention to it, which is, you know, whenever he, you know, he was asking me about cryptocurrencies, uh, a couple years ago and Dogecoin and stuff. And so when I know when I know what they're paying attention to, I know probably it's gotten a little too much attention saying boy indicator. >> Yeah. Yeah. Exactly. Is is it true there was this big gold discovery in China and that's why the price crashed? And I kind of explained to him that I think what happens is a lot of times prices move and then people look for a reason, right? And a lot of time the reason is you just you know we uh we you saw way too much speculative interest. Um you know for a period of time the call option buying in GLD SLV was off the charts. The volume in those ETFs was off the charts. Literally SLV became one of the most heavily traded vehicles on the planet um last week. Like better bigger than QQQ, bigger than any of the most popular ETFs. >> That's crazy. Sorry to interrupt only because two years ago we could have, you know, paid every American to go buy and we still couldn't have gotten that much so nobody cared. Yeah. >> Yeah. You know, and that's and that's that's how I feel like 99% of the time when I'm I'm talking to you, Adam. I'm always talking about stuff that people, you know, probably hear me and say, "Man, this guy's an idiot." But I mean, a couple years ago, I was talking about precious metals and how gold was, you know, like uh one of the the main things to own and uh you know, but but when it gets, you know, that uh overbought um you know, you can't even really look at overbought indicators, but it's really more about the retail uh influence. And I'll say, you know, that you're you're absolutely right to point that out that that is a broader um you know, condition. It's not just in the precious metals. Uh you know, I I I wrote a market comment this weekend to my subscribers about how the fact I've recently started reading Andrew Ross Sorcin's 1929. And one of the things that turned Jesse Livermore, you know, bearish in 29 to where he profited from the crash was the New York Times reporting that um, you know, retail investors had become the new smart money in the market. That, uh, you know, everyday momand pop investors had been the ones to make all the money in 1929, while you know, institutional investors had become too cautious and they were now the dumb money. And if you look around, you know, at at any of these financial publications today, even the New York Times, they're all saying the same thing that it's retail investors buying the dip that are making all the money and that are that are now the new smart money, right? They've rescued the market from the from the panic selling uh from the from liberation day. They've rescued the market from the COVID crash just piling in and buying the dip. And I think there's this idea similar to what we saw in 1929 that there's a new speculative era and that this is a persistent phenomenon that will last indefinitely into the future. And I think that's where people are making a mistake is that this type of retail involvement is always a sign of overheated markets. It's never a sign that even though people want to believe that oh markets have evolved and now and it's opened the door to wealth creation for the masses and that is actually when when people start believing that and you start seeing the the the uh major news outlets I mean every single one of them over the last six months uh Bloomberg CNBC the Wall Street Journal they've all published pieces to the to the effect that uh retail investors are now the smart money and institutional investors have suffered because they haven't been as aggressive as retail investors. And I think that's a sign that there's >> significant overheating and speculative euphoria across a number of asset classes. >> And the growing volatility that we're seeing in precious metals is a is potentially a warning sign that it that you know a lot of times margin calls in one asset class can start to affect you get a cascading effect across other asset classes. And so I would just say the rising volatility is not a great sign uh for for asset prices generally for for risk assets. >> Okay. Um yeah and volatility [clears throat] has largely been very constrained too. So it's a it's sort of a sleeping monster that people kind of forget about or sleeping dragon. Um so it's interesting just you you combined a couple of things. Um, you know, there's the saying, uh, you know, if you don't know who the psy is at the poker table, then it's likely you. And, you know, generally people say by the time the retail shows up to the trade, that's the psying [clears throat] down at the table. And kind of historically that has been true, right? When retail piles in and it's a late, you know, into a late stage mania, that usually is the sign it's it's about to end. Um, you also talked about this presumption that it's it's now different, right? and and going back to 1929, you know, back then um you know, they were saying, well, it's what is it a permanent plateau? The market is now in >> Fisher. Exactly. Yeah. >> Yeah. Yeah. And uh uh of course it wasn't right. So you combine those two things, it's like yeah, it's doubly we should be cautious here because history has shown us that this generally doesn't end well. What is kind of interesting is um there is an argument um for more persistent retail participation now and that's Mike Green's passive bid, right? The giant mindless robot of these these these uh passive purchases that are made every month through retirement programs and things like that. Um and I think he has proven um you know through white papers and study that uh that it's a real factor. It's a real factor in what's going on. Um and I wonder if that gives people who are making those those comments about well it is different this time and and retail saving everything be because to a certain extent that passive bid is really contributing to that right it's it's sort of you know retail tied money because it's it's tied to workers uh that is there supporting prices and so that you know there's a sense of not so much of a PAL put anymore but of a of a passive put to the market >> and people I think are assuming too that that's just going continue forever and it very well may not. >> Yeah, I I think that's it's a very valid point and I'm I'm a fan of of Mike's work when it comes to you know the passive stuff. I think he's he's right on. I would just [clears throat] I guess add two points. One is a point that he's made many times which is basically this passive bid then is essentially tied to the labor market, right? So labor market's going good, jobs are growing, you're going to have more inflows as people do, you know, set up those automatic uh you know uh deposits into the 401ks. Um but as the labor market weakens, right, that that passive bid necessarily diminishes, >> right? It's a two-edged sword. Great on the way up, but you got to acknowledge. >> Yeah. [clears throat] >> Absolutely. So the passive bid could potentially disappear right at the wrong time, right? you go into recession that threatens corporate earnings at the same time the passive bid disappears because unemployment's rising significantly that's that's a bad recipe and I think you know Mike Mike has talked about that the other point that I would make is that it's not just p passive bid I would say that if you look at the [clears throat] speculative flows that we've seen into equities and other asset classes that's way beyond what can be explained by passive only right you look at the the money that's flow load into um active ETFs, leveraged ETFs, right? Obviously, no, there are no 401ks, uh you know, target date funds that are buying leveraged ETFs. So, when you have massive record flows into leveraged ETFs, that's a [clears throat] sign that there's a retail bid out there that's well beyond just what's going on in passive. I'd also point out foreign flows, too. foreign flows into the equity market last year were massive new record highs. And a lot of that is kind of the same dynamic I think that we've seen with these Chinese retail investors and precious metals. You have South Korean investors that are buying a lot of uh leveraged uh vehicles in US equities and a lot of just chasing the AI theme from foreign investors and uh domestic retail investors alike on top of the passive bid which has been kind of relatively steady because the labor market hasn't quite deteriorated. So I think [clears throat] you put those things together and it's and you can understand why the market has held up so well and been so strong is is uh you know the the passive plus plus a retail flow that is is clearly speculative. All right. So, a couple things. Um, this is a great vein to to drill into, by the way. Um, so my point, which which I think you would agree with, but tell me if you don't, is I I think the passive has helped enable that speculation because whether it's consciously understood or not, there's a sense that there's this put to the market, right? There's this floor that passive is putting on it. So, it's safe to get in the pool and and be a little reckless here because you've got to back stop. Would you agree with that? >> Yeah, absolutely. I mean, the passive put is is maybe a more accurate way to describe, you know, the what people have called the the Fed put, >> right? >> Um, you know, especially in the last number of years, >> right? Okay. So, we [clears throat] got that condition and then I was going to bring this up, but you just mentioned it. Um, so you talked about foreign flows, which you said have been like off the charts, right? Um, you probably haven't seen this yet. Uh, but just yesterday I released a video with David Haye. So, his name keeps coming up here in this discussion. Um, and he is is fascinating idea that he put out there where he said, "Look, those of us paying attention are worried about the potential for the the giant mindless robot, right, to go into reverse as you were just saying, right? It's been driving everything up. It could drive everything down." Dave is saying I actually think there's a bigger risk than the giant mind giant mindless robot when it comes to capital flows and I think it's foreign flows into but potentially out of the the US financial markets because they've been going in at record levels over the past recent years as you mentioned and right now US stocks make up the largest percentage of the you know basically the global portfolio as they ever have. Um and he you know he's saying now all of a sudden you're starting to see emerging markets start to outperform the US markets right so all of a sudden there's starting to be an alternative to the US market right at the same time when the dollar continues to weaken right so you know you you get a currency benefit to investing in your own market if it's outperforming the US right you don't have the currency risk there that you would do with a weakening dollar and at the same time with The US is ruffling feathers geopolitically and people are looking for reasons to take their money out of the US, right? I don't really like what they're doing. I don't really want to support them that much. And my opinion has been, yeah, that's just going to be a lot of hot air until the money gets better treated outside of the US than inside of it. Right? So, you kind of have these three things potentially happening all at once. So, you could get this basically reverse tsunami of capital coming out of the US markets going to the rest of the world. So, I kind of compared this to Godzilla, right? You who's who's going to win? The the the big robot or or Godzilla? And you've seen some of those old, you know, movie theater posters of Godzilla fighting giant robots and Godzilla usually wins. >> Um, so I I I just think it's a fascinating risk that's really not on a lot of people's radar right now, but but really could be the big risk in in the relatively near term over the next couple years. And what's interesting is David noted that like South Korea, which you mentioned, they they just announced a kind of rep recapital repatriation campaign and they said, "Look, if you bring your your investments uh you know, home to into our country, we won't tax them, right? They they'll be free of taxes." So imagine if other countries start doing that, right? Right at the time where people think that, hey, you know, maybe I'm going to get a better return in my domestic market anyways than the States. that could be a huge gamecher that I I mean besides David mentioning that I hadn't really heard anybody talk about that before. >> Yeah. Well, foreign flows are one of those um indicators, you know, you look at they they are uh very cyclical and and uh you know, are are maybe the you know, like we were saying, the passive bit is kind of the underlying thing, but the foreign flows are really the the fluctuation that drive the difference between bull and bare markets. And and I think I've even seen studies that show that the PE ratio in the S&P 500 is more driven by passive flows than anything. Um and so you know when you see these massive inflows into >> sorry passive flows or foreign flows >> I'm sorry foreign flows. Exactly. Thank you. [snorts] Um you know the foreign flows you know peaked back during the dotcom bubble in 2000 rolled over just it's the same time as the kind of the dot bubble began to burst and went into a massive bare market. You know the it's really a good real-time indicator of where you are in the cycle. And so the the huge inflows that we've seen by foreign flows uh you know are are on their own I think a good cycle signal of where we are in terms of the cycle. And I would just point out too they don't we don't even need to see outflows to affect stock prices. If if it required such massive inflows exactly for for the markets to to do what they've done over the last year, um you know, then then just the marginal buyer just kind of saying, "Okay, well, we're just not going to buy anymore." Uh would be enough to kind of create some relative weakness compared to what we've seen in the recent years. I I would just say too that, you know, Dave and I talk about markets a lot and and uh one of the things one of the main themes that I've kind of highlighted is the trend in the dollar. Um because the dollar the trend in the dollar is probably the best indicator of whether you want to own real assets or or financial assets. And so dollar bull markets are usually coincide with bull markets and financial assets. So bonds and stocks do well when the dollar is doing well. Um and you know that's usually like money's flowing into stocks and bonds and so the dollar goes up. Um you know that it's kind of a chicken or the egg thing. Um but when the dollar does poorly um you know is that is that a driver of of uh you know money out of out of uh dollar based assets or is it the fact that you know stocks and bonds start doing poorly and so it drives the dollar down as as money starts to come out. The dollar recently got as overvalued as it's ever been and it's a really good that valuation whether you're looking at real effective exchange rate or purchasing power parody whatever kind of indicator you want to look at is a really good indicator of the next 10 years trend in the dollar the dollar's on the verge of breaking down uh out of a major uptrend channel right now if it does convincingly um you know that's another clear sign that I think we are in a longer term bare market for the which is as clear a signal as you'd want to have that it's you need to f favor real assets over financial assets. And so stocks and bonds uh you know dollar denominated stocks and bonds are things you going to want to underweight and you're going to want to overweight uh real assets, commodities, uh you know the the precious metals, etc. As I said, within the commodities space, it's more attractive to to focus on some of the more undervalued commodities right now. But but I think that trend in the dollar is is really key. Whether it's you know the cause of you know people to uh reduce investments in dollar-based assets or it's the fact that you know dollar based assets just ran too far too fast and now they're uh you know in for a prolonged period of below rate returns. As you said January was the worst relative return for the S&P 500 relative to the rest of the world in 20 years I think. Um, and January is pretty good in the S&P 500. So, there's the big incentive out there for money to start flowing back. Uh, aside from all the, you know, political stuff that's going on, there are economic reasons for money to flow back home to South Korea, to Japan. Um, and and that, uh, that dynamic could last for a long period of time. >> All right. Um, well, look, we'll be definitely keeping our eye closely on this going forward. Um, all right. So, let's let's get into commodities. Um, I know you think the whole complex is is set to have a I think you said a 5year bull market or so ahead of us. Um, I I want to dig into where you see capital going next, but let's stay with the precious metals just for a moment. Um, so um, like you and David, uh, in recent weeks, as all viewers of this channel know, you know, I was ringing the warning bell about vertical price moves don't last and they don't end by going sideways, right? And we have we we've got two very pronounced um similar price action um charts with gold and silver where we had a massive vertical spike like this and then it it got pretty ugly, right? I mean it the prices collapsed. They gave up almost all of the spike and then the metals were kind of dead money for a decade or more. >> Yeah. Um so you know the the warning was just hey folks you know it looks uncomfortably um odds look uncomfortably high that you're going to see some sort of material violent pullback soon. A lot of debate on how to you know prepare for that. Um the big question now is okay so we've had a pullback. Is this the start of a complete collapse in the gains that these metals have had just like in those two prior peaks? Or is it different this time? Will they find footing and will they eventually potentially go off to higher highs as this 5-year uh bull market in in real assets continues? Do you have a a strong opinion one way or the other on that? >> Um, you know, I do not think this is a 1980 type of top uh for the precious metals. I think that it's difficult to have a sustained bull market for commodities without the precious metals participating to some degree. I I will say though that they did go, you know, way too far too fast and that uh you know the corrective action the the way the precious metals work is kind of inverse from the stock market, right? Um they kind of like I think you know Tom Mlullen has talked about this how you know stocks um you know bottoms are kind of a point in time and tops are a process. >> Well the reverse holds true for the precious metals >> where tops are a point in time and bottoms are a process. It's kind of the inverse of the stock market. So I do think the bottom in in precious metals again just like it was you know in 2015 16 just like the bottom was after the top in 2020 2021 you know you had a period of kind of uh corrective action that lasted for a couple years. I think that's probably what the precious metals are are doing right now is you see these big spikes and then they they kind of just go through a corrective period for for a period of time and you go through a long bottoming phase that's long enough for people to forget about them, you know, and I think that's when when they get interesting again. And so I you know I think that what what will happen now is we'll see precious metals go through another corrective phase uh that will kind of be a more longer rounding rounding bottom thing just like we see usually takes a couple of years as the rest of the commodities complex catches up and then because we need some time for the rest of the space to play catchup. >> Okay. um might not be what folks here want to hear, but uh you know, better than hey, it's another 1980 or 2011 where it just collapses and then does nothing for 15 years. >> Yeah. >> Um okay. Uh so, um I guess you've talked a little bit about it, but maybe just clarify a little bit more your general thesis for um why you expect commodities in general, hard assets in general to do well going forward. Is it really just a story about the dollar? >> It's a story about the dollar. It's also a story about um uh you know I I really think it's a story of the capital cycle. Um that I think longer term the capital cycle is the main driver of returns in all asset classes. Um you there's a book behind me uh capital returns um is a good uh you know uh kind of primer on how this works. But essentially, it's follow the money. Whenever a ton of money flows into a sector, you naturally get overinvestment that creates over supply and terrible price performance going forward. We saw this right in the wake of the financial crisis, interest rates came way down. Uh money got really cheap and a lot of that money went into the commodities space because what was booming from 2000 to 2011 was commodities was the oil price went did really really well. And so you had overinvestment in oil. The oil price crashes in 2014, 15,1 16 and returns were terrible for a decade uh for energy investors. All the capital today, where's it going? It's going into AI. And so we necessarily we have an overinvestment, over supply in compute right now. It's going to lead to terrible returns going forward for for a period of time in the AI. >> Sorry to interrupt. So totally agree. You've talked a lot about this. I just want to add in here >> from a valuation standpoint, right? We're seeing valuations at levels [snorts] historically extreme or record historically, which to your point generally precedes a decade or more of of poor performance because you pulled all of tomorrow's value into today. >> Oh, absolutely. Yeah. Yeah. And the valuations are driven by that overinvestment, right? So, Exactly. Yeah. so much money flowing into the AI space right now that it just drives massive overinvestment, overvaluation and that you know that results in in terrible uh over supply which pricing collapses and uh and and you have a you know a decade a lost decade. I think if you look back where has the what what areas of the world of the the economy have been starved for capital for the past decade. You go look back to the energy space look back to just natural resources investment in copper mining in um a lot of these types of things in in oil and gas investment and that moves in in very long-term cycles too. So we had all this massive investment US became the largest producer uh in the world. Um, but now that you know the Peran Basin and a lot of the other the rest of the oil production in the United States is is plateauing and rolling over. At the same time, demand continues to grow. We haven't found any new resources, any new oil resources. At the same time, we're cutting back on investing [clears throat] in green energy. We're cutting back on people buying EVs. And so the demand for for fossil fuels is actually going to have to be revised higher because all a lot of this investment in in alternative energy sources is faltering. [snorts] So you know I think that the the from the capital cycle standpoint um energy has been massively underinvested for a decade now which going to make make supply tight going forward. I mean, right now it looks like there's talk of a major over supply this year. But even the even, you know, energy bears concede that three years from now, 5 years from now, we're going to be at massive uh potentially massive deficits in terms of supplies uh of oils and things if demand continues to grow and uh we have no more new supplies coming online. So I think you know to just come back to the capital cycle is is very important kind of big picture thing for investors to kind of keep an eye on what's going to do well over the next 10 years is partly a dollar story is the dollars overvalued. It's going to come down. Real assets should benefit. Uh but at the same time capital you know uh for these for these companies has been um highly highly restricted meaning that uh supplies are going to be constrained for the foreseeable future. >> Okay. Um I' I'd love to keep picking your brain on um oil and gas. Um but uh I did very recently do an hour plus long drill down on exactly this industry with Rick Rule. Um and so folks, if you if you really want to get a deep dive in that, go watch that video with Rick. I think it was about a week ago. Um Rick also kindly goes through a bunch of um specific companies that are on his watch list. So if you're looking for potential companies to invest in the playlist, that'll give you some to consider. One thing that Rick said, Jesse, that I'm going to guess you agree with is um what's what's kind of especially attractive about the opportunity in um in oil and gas right now is yes, it has the potential uh to to enter back into boom. Uh it's it's a boom bust industry. It's famous for being such. It's been in bust for a long time. So hopefully the boom is ahead of us and if you get in now, you're getting at better valuations and you can ride the boom. But most of these companies, you know, the larger ones pay really attractive dividends. And so you get paid to wait. Um, which a lot of times, especially in the hard asset space, you don't, right? A lot of these companies, you know, generally, um, you know, are kind of cash flow challenged during the bust years. Um, and so, you know, like Rick was talking about, like with uranium as a good example, you know, he saw that opportunity coming. He recommended it several years before it caught fire. and he said while I was waiting I just had to eat the opportunity cost of that capital whereas in in the oil and gas space they kind of cover it for me >> right yeah I mean you get paid a dividend I would also point out too like everybody thinks that the sector is so depressed just because the returns relative to the broad market have I mean they've basically gone sideways energy has really started to do well again this year but really since 2020 energy is the single best performing sector in the S&P 500 since 2020 >> since what really since 2020, right? It's it's it's the single best performing sector. It is by far the best performing sector year to date uh in 2025. And there was an article this morning in the Wall Street Journal, you know, that analyst saying, "I've literally have not had one portfolio manager ask me about the energy sector. Nobody wants to own it, but it's literally the best performing sector for the last five and a half years." >> That's crazy. and it's performing, you know, it's because the last two years have been uh, you know, oil peaked a couple years ago and has been coming straight down for three years. But I come back to that, you know, I brought I I mentioned this a minute ago. Mbed Faber has shown a really interesting statistic. I used this kind of for my bull case in in gold back in 2015. When any asset class declines two years in a row or three years in a row, it usually is a really good sign sentiments become too bearish and returns statistically are very good over the next over the following few years. So oil's down uh if you just look at USO ETF, it's down three years in a row through last year. So that's a sign, you know, that's why, you know, people are so bearish on on the group. Um and it suggests that that uh you know, it's it's primed for some much better returns in the next couple years. Wow. Um, I'm doing this from memory, so [snorts] if you have better numbers, please correct me. Um, I think I think it was Rick who was saying uh definitely in past decades, but maybe this was an average of of the past number of decades or whatever. Um uh I can't remember what percentage of of is it percent of the S&P percent of the S&P or percent of people's portfolios but some but oil was represented like 20% right and it's now like 3%. >> Yeah it was literally a as a sector relative percentage of the S&P 500 it got to like two and a half% last year nothing and it's you know historically gotten up to 10 15%. >> And it's the thing that the world still runs on. [laughter] >> Yes. Yeah. Absolutely. And demand, I mean, there's no sign that demand, global demand is is uh diminishing anytime soon. Demand continues to hit record highs and we have no more new supplies coming online that the literally US production. I think, you know, when you start to understand the dynamics of of the the potential supply constraints we're going to see, you start to understand why what's going on in in Venezuela, you know, these types of things are happening because you know the the the cash cow that has been US oil production for the last uh you know 20 years is potentially peaked and roll over. I mean US could production has potentially peaked and is now rolling over. Um, and so if that's the case, >> at least at these prices. >> No, no. I I would say generally, and the the thing is, and Rick probably talked about this, but that all of these um frackers have high-graded all the production. So, they drilled all of the easiest wells first, >> right? So now all the rest is is tighter and tighter oil more difficult to drill and more and so so to bring supply online now is much much more difficult than it was three years ago 5 years ago because all of the easy wells have been drilled all the the the most attractive fracking has been done. And so to to if if you know demand continues to grow, it's going to be very difficult to meet that with uh the supplies that we currently have and uh because production has has uh has has has certainly plateaued is potentially going into decline. >> Yeah. So um so so I agree with everything you're saying. The reason why I chimed in there about um current prices is um uh you know we're at the point I I I you probably saw the articles um was it Harold Ham is that the guy's name who's been a driller in the Perian or I can't remember which basin >> you know yeah he Continental Resources yeah he he was uh he was one of the big insiders who was buying back in 2020 buying shares of CLR was the stock back then the stock like tripled and then He took it private. So, yeah, he he's one of the smartest guys in the space. >> Yeah. And apparently, I mean, he's been in the space for for decades and has has said he's never not had an active drill rig. And he he just basically took his last active rig offline. And that's because, you know, to your point, um, in the Shell basins, we've just hit the point oil price-wise where it's just uneconomical to to do the extra work that you're talking about, right? It it's get, you know, it's becoming more expensive to extract below a certain price. you don't. So, you know what's interesting and I don't want to give a huge lesson here on it, but there's conventional oil, right, which sort of peaks in a bell peak, right? If you heard of like peak oil, but these these shell wells that we've it's been a magnificent bounty for America that we sort of discovered how to tap efficiently, they drain asymtoically, right? Um, and so, um, you know, you get the majority of the barrels out of them in the first couple years and then it's a very long small tail after that. or it's a very small tail after that. Um, and to your point, humans being humans, you go after the easiest stuff first, the most profitable stuff. So, we we've hygraded it, right? There probably still is a fair amount of oil there that we can go after and extract to increase production, but it's going to have to come at a substantially higher oil price because those wells aren't economic to to drill right now. Um, you know, that being said, at some point in time, you know, these these basins will be played out. I have no idea when when that's going to be. I'm not a geologist. I don't know. But I do know that to your point, unless oil prices go higher here, um they're just going to continue to just stop going for it. And we've seen that on the more conventional side as well, where a lot of the oil companies, this is, you know, Rick's whole point is, um, you know, o oil prices have been driven down. Um, so less incentive, economic incentive to go out and explore and develop. But also until recently, you know, the regulatory environment was so antagonistic that these companies were like, "Well, I'm not even gonna I'm not about go out exploring because feels like the government's trying to put me out of business in five or 10 years, right?" So, that's changing a little bit. But oil prices are still so low that it seems like, you know, the companies aren't aren't really willing to open the purse strings are yet. And even if they were, well, you're not going to see the results of that for many years down the road. So, you know, there's a lot of reasons like you're saying that there's good reason to anticipate real tightness in supply going forward, which obviously is met then by higher prices. >> Absolutely. And and I think, you know, I would just come back to I think the CEO of Saudi Aramco, you know, has been talking about this a lot saying we've literally just spent more than a decade with zero exploration and production in the energy space. There's going to be consequences for that. you literally I mean and that's the oil price crashed as I said in 20145 and since then there's been literally no new exploration for oil and so you know I I refer a lot to the work of Garing and and Rosenwag and and Lee Garing has probably done some of the best work in this space and he shows that every one of these major cycles in prices is driven by new new uh new finds >> and so you you you have a new find it drives prices down and then you don't find you don't explore for a while um because prices are down and then you get tight supplies prices boom again and so then exploration happens and you find oh okay we found this new big oil thing and and so you know it was the North Sea oil uh for a while and then it was now the the last cycle was the you know discovering the um you know the the fracking technology that that drove another another big boom in production but we're not going to get another big boom in production like that without oil prices literally at least doubling if not tripling off of their current levels. >> Okay. And for folks who were saying, "Yeah, but Jesse, we just, you know, got control of Venezuela's oil and isn't that going to bring a ton of oil onto the market?" Folks I've talked to have said, "Uh, maybe." But if so, if it does, it's going to take a decade plus. It's not something that's going to happen anytime soon. >> Well, and the investment, you can't just um, you know, shutter the production and then just flip it back on with a switch. It takes so much work and engineering and and a lot of the companies that uh are able to do that work to bring that production online, as you said, it'll take years. But the risks the the political risks of going back into Venezuela after they've already been privatized a couple different times and had all of their investments taken away from them is is too great. So the return potential returns have to be massive for companies to want to even invest at all in bringing a V Venezuelan production back online. and and even if they do, it takes years. And so, yeah, that it's going to take much much higher oil prices to even make that uh possible. >> Okay. And then the last question on this, if you have an opinion uh to somebody who says, well, you know, let's cross our fingers and hopefully the war in Ukraine ends and then Russia oil isn't embargoed anymore and then maybe there's a friendly regime change in in Iran and uh you know, we lift the sanctions there. you know, is there is there a chance for geopolitics to change the game here and supply the cheaper oil the world would need in the next five years before these new discoveries come online? >> You know, I mean, we're we're pretty much using I I think China is now building a a surplus or, you know, strategic reserve. We're trying to rebuild our strategic reserve, which has been, you know, was was uh essentially emptied to the greatest extent that it's ever been emptied. And so I think that, you know, like are we more susceptible to is the oil price more susceptible to political risks that drive it higher or drive it lower? I would say it's clearly skewed toward prices driving it higher. The strategic petroleum reserve here in the US is still at the lowest levels been in decades, right? Uh and uh oil supplies outside of that, right? Just commercial supplies are are running at their lowest levels and you know fiveyear average uh kind of levels too. So um I I would say that uh the risk uh is much more to higher oil prices from any potential political developments just because of those those uh those very low inventories um in terms of like you know I mean imagine if we have another oil price spike today for whatever political reason and there's no oil in the strategic petroleum reserve to be released to meet it. I mean that's where we're at right now and I don't think a lot of people appreciate that people are behaving as if uh you know oh well we can just uh you know handle any type of polit you know spike um you know by increasing production or releasing from the reserve we don't we can't increase production anymore uh we're we're you know the the US production is is plateaued and potentially rolling over and the SPR is is empty so I mean the the risk is clearly to the other side of the ledger, I think. >> Okay. Um, I want to just jump back to the precious metals for a second and then we'll get to a few other commodities that you like. On the precious metals side, um, uh, you know, there's there's the metals, which I think you've said, hey, they could, um, they could have a prolonged period here now of recovery, and there's the miners. And I just want to mention Rick Rule again. Um he caught a lot of folks's attention a few weeks back when on the way up he sold 80% of his physical silver at $75 an ounce um and shifted half the proceeds into silver miners and basically said hey look um you know I think the metals are moving probably too far too fast. I'm not going to be greedy. I'm going to take my gains off the table. The miners haven't moved though in their leverage way they normally have. And you know, even though up until this past up until last Friday, you know, that the the price was going higher and higher, Rick was like, "Look, if if if the prices comes down and just kind of hangs out around $75 an ounce, I think these miners have to dramatically repric higher because they're just going to have such great um profit growth um from the higher metal price. Uh, do you have an opinion as to even though the the metals have just been kind of monkey hammered here, do the miners still look attractive to you or would you not touch them until the metals start showing signs of life again? >> You know, yeah, I really use them as a trading vehicle to trade trade the metals. And so until I get b, you know, bullish on the metals themselves again, I'm not I don't have a ton of interest in in uh, you know, increasing stakes in in any of the the miners. I will say, you know, one of the the main things that I think will keep a relative bid underneath, um the precious metals, uh you know, keep them from being a 1980 type of event is the prospect of um a debt crisis, right? This is the big difference between today and 1980. In 1980, debt levels were tiny. The deficit was was tiny compared to where we are today. um and you know the the the the the money printing that the the Fed is being forced to do in order to support um the the massive amount of debt issuance that we have to do, right? I mean to for the for the Fed to go back to expanding the balance sheet at a time when inflation is still above target is a clear sign that you know we are in and have been in an era of fiscal dominance for quite some time now where the Fed can only shrink its balance sheet to the extent that it starts to create problems in the money markets problem in the Treasury market and then they're forced back into expanding the balance sheet which is essentially money printing. Um I one thing that I'm paying close attention to and Robin Brooks has pointed out is that we are probably already in an age of rolling financial uh sovereign debt crisises. Um right we had the Liz truss uh kind of moment for the UK. Japanese yields have been soaring and the yen is super weak. Right. Um, we're starting to see this with dollar weakness at the same time as the 30-year Treasury yield is starting to push back up towards 5%. This is something to keep a very very close eye on that if the 30-year Treasury yield does break back above 5% and the dollar breaks down out of this uh this u uptrend that it's been in for 15 years. It's a clear sign that this rolling debt crisis has come to the to the US. So that's something I'm paying really close attention to and I think that the the the risks involved with rolling sovereign debt crisis around the world. Uh you know are going to keep a bid underneath the precious metals. Uh and that will really be what separates um you know what what makes this not another 1980 uh is and uh like a persist you know support for real assets for the next several years at least is uh until there's some kind of fiscal resolve to deal with what's driving these uh these rolling fis you know sovereign debt crisises um you're going to have uh you know a secular bull market in the things that are limited in supply, [laughter] commodities, precious metals, etc. So, so while I'm not tactically kind of bullish on the precious metals just yet, I do think as part of this bigger bigger uh theme, they they will, you know, maintain certain certain price levels. I just am more bullish on some of the more undervalued commodities right now. But this idea of a rolling sovereign debt crisis is is really part of one of the main themes uh that goes along with a lot of this other stuff. Okay. Um, big macro theme again, something we'll be watching really closely as time goes on here. Um, you were talking earlier in regards to the dollar about a weaker dollar versus other currencies. You hadn't really talked that much until I think just now about just sort of inflation. Um, about the dollar versus real things. Um, I don't put words in your mouth, but are you sort of expecting an inflationary era ahead here? >> Absolutely. I I think that [clears throat] that's that is the message from from gold and commodities is gold uh you know is basically saying that uh inflation is is not dead and the Federal Reserve's resolve to bring it back to 2% is not what markets would like to see right copper price breaking out to new highs. The the commodities complex has been really strong over the last few weeks. Um and interest rates typically and inflation typically follow the commodities. Uh weaker dollar is part of that too. So uh yeah all of those things right now are pointing towards a uh you know a resurgence in inflation. Right? The PPI numbers that we saw last week suggest that the PCE is still running way above the Fed's target. Median CPI still well above you know uh you know probably 4%ish. Um, and so, you know, there is no resolve at the Federal Reserve to really [clears throat] bring inflation back down to target. That's what these markets are saying. >> Okay. Um, all right. So, back to the commodity complex. We've talked about precious metals. We've talked about oil. Um, not so much gas yet, but um, what other commodities are kind of at the forefront of your radar [clears throat] right now that you're most interested in? you know, it's it's really the the broader commodities complex um you know, relative to uh to the precious metals when I I look at them as as gold is a leading indicator for the rest of the the complex it leads by I don't know a year year and a half different different commodities but when I look at it you know the oil prices specifically and and sorry to keep coming back to this but it's it's uh you know the oil price has lagged the broad commodities complex to a greater degree than I think we've ever seen. As I said, the the oil uh price relative to gold has only ever been as cheap as it is today when oil price went negative back in 2020. >> So, literally, it's it's it's so cheap. Oil prices so cheap relative to the broad commodities complex and relative to the precious metals that something has to change. either precious metals prices have to come way back way down even further to kind of bring this relationship back to some sense of normaly or the oil price really has to start to take off in a major way and it's showing signs that it's potentially ready to ready to break out um you know I don't know what the the catalyst would be it's probably just revising you know some of the EIA you know kind of estimates IEA estimates uh higher in terms of demand um because they've they've been under underestimating ing demand for years and uh so so revising those estimates higher could be one of the potential catalyst but it also could be you know political things obviously with everything going on in the world. So to me it's it's it's energy um is is the main one um that I'm focused on. >> All right. And when you say energy, is it pretty much all oil or do you have gas, [clears throat] uranium, coal, other stuff in your watch list or is it >> No, no, it's it's all it's all oil and gas producers. Last year, um I wrote a couple of pieces about the actually offshore drillers were got so cheap, those stocks, Noble Energy, Tidewater, um Helmer and Payne. the these stocks got so cheap last year that uh you know they they almost had you know had to bottom and reverse higher. They've they've performed really well over the last six months or so, but probably still aren't aren't close to kind of fair value. Um and and you know, offshore is one of those areas where yeah, production has has kind of just gone away because of uh the the oil price. And so, um, you know, if it's going to take much higher oil prices for the offshore stuff to really start doing well, but that's where a lot of the insider buying was last year was in offshore. And I it's very very curious because it does require probably some, you know, significantly higher oral prices for it to to to make sense. [clears throat] >> Okay. So, um, if if you're comfortable sharing, are are you mostly playing this by owning individual producers, individual companies there versus say an oil industry ETF? >> Yeah, I, you know, as for an ETF, I think the one that still shows kind of relative value, a lot of, you know, the the uh oil and gas um service um and equipment companies have kind of done done well lately, but the the oil and gas producers themselves are still kind of lagging. And I think [clears throat] that's a function of the the bearishness towards the commodity itself still. Um and so you know XOP is an ETF of just the oil and gas producers. I like it because it's more diversified too. It's also not super just heavily into Exxon and Chevron. It's it's pretty well diversified among a number of different um producers. But, you know, I just point out too that I think accidental petroleum, for example, is still trading at a price like right around Warren Buffett's uh average cost basis. So, you know, for almost any other stock in in the Berkshire portfolio, if you said you can buy it at Buffett's cost basis, people would be jumping all over it. But as soon as you say it's accidental petroleum, people say, "Oh, well, it's energy. Yeah, I don't want to own that." And that to me, that's about as bullish a sentiment sign as as you could hope to see. I was going to say that that's where you see the opportunity, right? Is sort of you think the market's mispricing, right? It's it's thrown the baby out with the bathwater. Yeah. The baby's on the cheap. >> Um Okay. So, uh I mentioned in the intro um one of the indicators that we've talked an awful lot about when you've been on this program in the past, which was the insider sell to buy ratio. And [clears throat] I mean, it seems like every time you come on this program, you're like, "Oh my gosh, that's at an even higher percentage than it was before." or where is it now? >> It's actually started to roll over um and and get a little more bullish. Um and I will say that it leads by about 18 months. So, and I've said this I think every time is that the [clears throat] insider selling that we saw in 2024 and into early 20 the first half of 2025 was like nothing I've seen in my data set. It's literally like off the chart. Um and that sell to buy ratio hit record highs. uh whether you're looking at a 12-month look back period or a 22-year look back period, you hit record highs in the sell to buy ratio. It's come down as a function of two things. One is, you know, um Elon made a billion dollar purchase of Tesla shares last year, you know, I think as a try way to influence people to vote for his new pay package. So, you could say that was maybe kind of a performative purchase. Um but I'm not adjusting, you know, my numbers for that. It seemed like it was so big that it impacted the entire data set. >> Yeah. I mean, you know, over a 12-month period, if you get, you know, 78 billion dollars worth of buying, that's a lot. So, 1 billion in one transaction by by Elon skews kind of the numbers in in one direction. Um, but I'd also say too that selling has dropped off. um you know uh we're not seeing the amount of selling that we saw uh la you know last year like uh you know and and a lot of that is also just like look Oracle's down 50%. Palunteer is down 30 40%. Um you know Palanteer was one of the big sellers. Nvidia has gone nowhere. Nvidia sellers were were big last year and so I think you're starting to see [clears throat] some of the selling dry up which brings the ratio down. But my big point is that it leads by 18 months. And so that massive selling >> that we saw uh over you know uh the last couple of years really suggests now that's as a group that's in that's corporate American insiders CEOs CFOs saying that right now essentially in this the you know by the in the first half of this year we should start to see some real economic deterioration some real uh you know uh earnings uh start start to be this you know reflect in earnings disappointment over the next couple of quarters. And so, you know, we're right kind of in that danger zone. Um, and so what you would want to see before you kind of the insiders start getting you bullish is uh that ratio come down to, you know, 10 times um, you know, sell to buy ratio and be there for a period of time because then that says 18 months from then you're going to start to see some real, you know, more bullish dynamics in the economy and things. So, we haven't gotten to that bullish reading yet in the numbers and even that would be kind of an early signal. So, I think right now we're right in that time frame, that window where where insiders have forecast for economic and earnings weakness um in the next couple of quarters. So, it'll be interesting to see if it materializes [snorts] um because it's been really really accurate. Probably one of the best leading indicators that I've I have in my in my arsenal. Okay. So, as we start to wrap up here, um your overall market outlook for 2026, um [snorts] is it more bullish? Is it more bearish? Um I will just note, um that we've had three successive years of 20 plus% returns in the market, which in and of itself is statistically rare. >> Yeah. Um, so to expect a fourth one, you know, uh, you're pushing the statistics, of course, doesn't mean it couldn't happen. Um, but I'm curious with that lag with the sellers and everything if you're more net bullish or bearish. You're definitely bullish commodities. >> Yeah. No, one other thing I'd point out too is that margin debt, you know, the surge in margin debt that we've seen over the last 18 months, two years, has been huge. You've seen like a 30% increase in margin debt. that's usually a good leading indicator that that you're you're in for a deleveraging event. Um, you know, so you have that kind of compare along the insiders saying earnings could disappoint over the next over this next several quarters. At the same time, you know, the speculative juices that the the the amount of leverage that we saw put on in margin debt over the last two years also suggests that we could see a deleveraging event sometime this year. I think you put those together and it it create paints a pretty bearish picture of you know earnings disappointments and then uh you know magnified by some sort of deleveraging um you know among investors. Margin debt is at absolute record highs whether not not just in nominal terms but margin debt to GDP uh is higher than it was in 2021 at the peak and significantly higher than it was in 2000. But it's also that rate of change. So the amount of leverage investors have put on in the last couple years suggests that it's gone way too far. It's very similar to the message that we saw in gold and silver and that's what kind of why I was saying that you know like a lot of this rising volatility that we're seeing in precious metals in Bitcoin in uh you know a lot of these different things. Um and and one other sector that I would point out is there's some signs in the credit markets that things are not healthy. Right? We had the sudden bankruptcy of first brands uh which is now you know being brought up on fraud. Black Rockck just disclosed that at their their business development company. They wrote down the asset value uh in that fund by 19% overnight. Um, and so just pull up a chart of, you know, BISD D and you'll see that business development companies are saying there's something not healthy in the credit markets. Same time, leverage loans are starting to roll over now. Leverage loan prices. Leverage loans are now actually a bigger market than the high yield market, than the junk bond market. So fact, leverage loans are starting to roll over in terms of price, too. >> We hit the highest level of chapter 11 bankruptcies in the third quarter last year that we've seen since 2011. So credit markets are starting I mean and and it's obviously it centers in AI right you see Oracle CDS these types of things blue owl which is Meta's biggest partner private you know private capital partner in funding blue owl shares hit a new 52- week low today so there's signs if you look for them that the credit markets are not healthy and they're potentially deteriorating and that's something I would pay very close attention to too because if if business development companies are starting to write down stuff. We're starting to see more cockroaches as as uh uh Jamie Jamie Diamond recently said we might then that you know plays into this theme of earnings disappointments and kind of a turn in the cycle. Rising unemployment as we talked about could be bad for the passive bid. I think all of those things paint a pretty uh pretty nasty potential picture for stock prices this year. >> All right. Um so uh in terms of uh how investors should consider consider playing this year um I'm hearing sort of a mixed message um or not a mixed message but I'm hearing different components. I'm hearing uh maybe play offense when it comes to hard assets particularly oil um but probably play defense certainly with the markets in general. Um, so what does this look sort of like a barbell type of position here? >> Yeah. Well, usually, you know, when energy does well, it means inflation's going up, interest rates go up, bad for bad for the rest of the stock market, which is why, you know, energy can actually work as sometimes a hedge. You look at 2022, right? We had a bare market in the S&P 500, the NASDAQ, uh, and energy had a had a terrific year. Um and so so yeah, I don't think it's inconsistent to say, you know, let's, you know, be bullish on energy and be bearish on on the rest of the stock market because that's typically um you know, that's how it's worked uh in recent history and probably will work going forward is is real assets will benefit to the extent that financial money comes out of financial assets. And so I you know, yeah, I think inflation could surprise to the upside, earnings surprise to the downside. And uh it's not hard to kind of think of how do I want to be positioned in that environment. I don't want to own long-term bonds. I don't want to own too too many stocks. Uh want to have uh you know basically do what what Warren Buffett is doing. It's large cash position. I think it's very interesting that you know people were saying oh well he was raising cash because he was wanted to set up his successor for you know to do what he wanted to do. Well Greg Abel's now taking over and he's selling down the hind stake even raising more more cash. So, uh, you know, so I think, yeah, yeah, cash is cash is king right now and you're getting still getting paid three and a half% risk-free on your cash and there's a lot of optionality there uh to take advantage of things uh weakness in and and other asset prices if the volatility as I said in precious metals and cryptocurrencies starts to to uh creep into the rest of the asset markets. >> All right. And I am wrapping things up here, but since you mentioned it, um, Bitcoin um, Bitcoin has been um, underperforming relative to the precious metals and uh, while it didn't get as eviscerated as they did on Friday, uh, it's still dropped um, fairly notably over the past couple of days, I think it's trading in the mid70sish [snorts] right about now. Um, so any particular thoughts on Bitcoin's direction from here? >> Well, it saw over the summer a real similar dynamic. I think it kind of led the precious metals where you had all of these Bitcoin treasury companies kind of copying the Michael Sailor model. We're all going to, you know, sell sell debt or sell equity and use it to buy crypto. And that that kind of >> getting like a 25% stock price pop on the announcement. Yeah, >> exactly. And that type of speculative euphoria really kind of marked the top for that group. Now, you know, you have all these companies that are highly highly leveraged to crypto, right? Micro Strategy or sorry strategy is the new company name uh you know is kind of the poster child for this and their cost basis is I think 76,000 on on Bitcoin. So if you get Bitcoin weakness you know Sailor has said he's he's raised it's interesting he's raised a bunch of cash right and not put it into Bitcoin. So I think that's pretty telling right there that you know to meet be a to meet debt payments and things. The company that says don't hold cash is now holding cash. And if cryptocurrency continues to go down, they could be forced to go from a uh an accumulator to a liquidator. And I think you probably were probably headed in that direction. >> Would that be like a nuclear event for two reasons? One, because they hold so much Bitcoin, they'd be, you know, potentially flooding the market with it. But but also just the signal that the most religious uber bull on on the on the asset all of a sudden is I mean maybe he's being forced to maybe he's doing it against his preferences but he's doing it >> right. Yeah. I mean that would be that would be uh very telling. I think it already is very very telling for the one guy to say, you know, never sell your Bitcoin uh and never hold cash to, you know, be be doing exactly what he's, you know, the opposite of what he's been preaching is is, you know, building up a cash position in order to meet debt uh you know, debt payments um and so and dividend payments and things and so so I I I think yeah, it would be it would be very telling if it were to go into reverse and and sadly I think that's probably where it's headed. >> Okay. Uh, last question just to slip in. I'll just take a one sentence answer. Um, but back to the precious metals for a second. Do you see them hitting new highs by the time this 5-year bull market in hard assets is over? >> Oh, yeah. Yeah. I think, you know, by the time it's over, um, you know, as Lee Garing has pointed out, we've seen the Dow and gold at parody several times in the past. And I think that's that wouldn't be unsurprising again to see the Dow Jones Industrial Average and the gold price at par at some point in the future. How we get there is anybody's guess, but uh but I think that wouldn't be unsurprising to me at all. >> All right, let me just note at the time that we are recording here, the Dow is at 49,500. Gold is at 4700. So, um gold would have to go up by an awful lot or the Dow would have to come down by an awful lot. It's probably some combination of both. [laughter] >> All right. [snorts] Um, Jesse, thank you. It's always just uh so easy and and informative and and a pleasure uh to interview you. Thank you again for coming on. Most important question for folks who would like to follow you and your work in between now and the next time you come back on this channel, where should they go? >> Well, my website is the felderreport.com. Um, I publish a free uh weekly blog post there highlighting typically five things that I found during the week, the five most interesting things. It could be a, you know, a research report, a chart, a quote, um, and, uh, put put that out every Saturday morning. Also write a weekly market comment for premium subscribers and, uh, publish specific trade ideas for for pro subscribers, individual stocks where there's compelling insider buying. Um and uh and and and yeah, the feldreport.com. >> All right. And as usual, when I edit this, Jesse, I'll put up the link to uh your website there on the screen so folks know exactly where to go. Folks, the links will be in the description below this video as well, so you can get there with one click. All right. Well, in wrapping up here, folks, um please show your appreciation for Jesse coming on and uh just delivering everything on the whole table the way he always does. uh please let them know your thanks by hitting the like button and then clicking on the subscribe button below if you haven't already as well as that little bell icon right next to it. Uh two quick uh notes. Um one obviously if you would like to take some action based upon um any of Jesse's ideas here and you'd like to get the help of a good professional financial adviser in doing so. If you don't already have one who's advising you, consider talking to one of the ones that Thoughtful Money endorses. These are the firms you see with me on this channel week in and week out. To set up one of those free consultations, just fill out the very short form at thoughtfulmoney.com. As a reminder, these consultations are totally free. Only takes you a couple seconds to fill out that form. Uh there's no commitments involved. This is just a service these firms offer to be as helpful to as many people as possible. Secondly, uh we are officially announcing the Thoughtful Money Spring online conference. It's going to take place on Saturday, March 21st. Don't worry if you can't watch live. Uh everybody who registers will be sent replay videos of the entire event, all the presentations, all the live Q&As's uh immediately afterwards. We're getting pretty good at sending those things out just a few hours after the event concludes. Um and as I've said, we have the absolute best faculty that we've ever had. Uh I'm doing this from memory, so I'm not going to be able to hit everybody, but we've got Lacy Hunt kicking it off with his amazing keynote as always. Uh we'll have Ed Dow joining us this year. We've got Matt Taibbei joining us this year. We've got uh Mr. Liquidity himself, Michael Howell. We've got Darius Dale. We've got Luke Groman. We've got Brent Johnson. Um we've got uh Judy Shelton, Daniel D. Martino Booth, Grant Williams, Stephanie Pomboy, uh David Haye, who we've talked about here. Uh Melody Wright, Andy Sheckchman. Um gosh, I know there's one or two others there. Um uh I'll just mention them. uh you'll hear me mention this again, but anyways, you can find out all the details by going to thoughtfulmoney.com/conference. And if you go now, you'll be able to buy tickets at the early bird price, which is the lowest price that we offer. We want as many people to get that lowest price as possible. And if you are a premium subscriber to the Thalam Money Substack, uh you'll get an additional $50 off that low early bird price. Um and so if you are a um premium subscriber, look at your email inbox. I sent you an email out yesterday that's got the discount code that you should use. Um, all right. Well, look folks, um, it's always a complete pleasure and joy to interview u Mr. Felder. Jesse, can't thank you enough. It's always such a pleasure, my friend. >> Thanks for having me, Adam. I always enjoy doing this. >> Thanks. All right. And everybody else, thanks so much for watching.