AI: Extensive discussion on the AI boom, its funding excesses, and sustainability, with comparisons to prior tech manias and concerns about demand normalization.
NVIDIA (NVDA): Debated earnings strength versus risks like circular financing, slower replacement cycles (6–9 years), valuation, and a parabolic chart; framed as a key market bellwether that may be topping.
Semiconductors: Focus on GPU demand, pricing power, and the potential for a cyclical slowdown if AI customers curb purchases or pricing compresses, creating risk for chip stocks.
Oracle (ORCL): Highlighted as a poster child for AI-driven exuberance; post-earnings gap-up to all-time highs reversed sharply, with added concerns about cash flow, debt needs, and potential downgrade risk.
Systems Software: Examination of software names benefiting from AI narratives without matching fundamentals, with Oracle used as a case study of narrative-driven price action.
Bitcoin: Discussed as part of risk-on/risk-off dynamics; sharp declines seen as denting market confidence, with skepticism about real-world use and high retail sentiment sensitivity.
Market Outlook: Guest argues character change to a downtrend with lower highs/lows, viewing big up opens as shorting opportunities and downplaying seasonality’s reliability.
Risk Management: Emphasis on bearish positioning via shorts, caution on leverage and margin across markets, and potential policy shocks (e.g., short-sale bans) as volatility catalysts.
Transcript
This episode is sponsored by Interactive Brokers. And what changed in your portfolio this week? Which positions are driving your returns? Ask IBKR. Ask IBKR is a breakthrough AI powered tool from Interactive Brokers that lets you interact with your portfolio using plain English. You can ask a question like, "How did I perform this week?" or "What's my biggest sector exposure?" and get instant personalized answers. Ask IBKR pulls from your actual account data to deliver real-time insights into performance and allocation, risk, and so much more. It's built into the IBKR platform to help you stay informed and in control because the best informed investors choose Interactive Brokers. Remember SIPC? Stop searching and start asking. Check it out at ibkr.comask. >> The disciplined investor is all about you, your money, and the markets. Sit back and get ready for this edition of the disciplined investor podcast. This episode of The Disciplined Investor is sponsored by Horowits & Company. If you're looking for a portfolio manager, look no further. Horowits & Company. From seed through harvest, cultivating financial success. [Music] >> Well, we got the numbers. Nvidia earnings are out now. We know. And a remarkable about phase 2. Yen's at critical levels. Global markets should really be on alert. And our guest today, good timing, perma bear Tim Knight, author, trader, and founder of Slope of Hope. All this and much more on episode number 948 of the Disciplined Investor podcast. [Music] Hey, welcome to the discipline investor podcast. So happier that you're with us this week. every week. It is approaching the end of November into Thanksgiving and then we know that all important seasonally seasonably very uh cooperative time of the year that we see markets do well known as the end of the year run Santa Claus rally. And as we said many many times the setup is pretty good. Now, you may be saying, "Well, wait a second. Does that count when all of a sudden we see things that happened like we saw last week with the major moves on underlying tech really hacked pretty bad, the legs cut out of many of them on in the beginning of the week and then all of a sudden a little bit of a rebound and then we come into the Nvidia earnings and the Nvidia earnings were, you know, everybody's like, "Oh, thank goodness." You know, we have this wonderful rebound, reset. The reality is still there. The promise, the hope, the opportunity, everything is set, ready to go because Nvidia, Nvidia, the god Nvidia has posted numbers and they look pretty darn good. There's some interesting things that happened though last week. We saw that conference the conference discussion by uh by Jensen Wong and by Elon Musk at the Saudi investment forum. He says this is um uh both of them kind of combined. I'm going to give you a combined exposure of what they talked about. Uh the AI is in um the infrastructure and infasy. It's re revolutionizing every industry. And Elon Musk pointed out that humanoid robots will be the biggest product ever. In fact, in 10 to 20 years, work is going to be optional because of AI. He said at some point currency also is going to become totally irrelevant. They talked about working with Saudi Arabia to build supercomputers and um the the idea that the combination of AI and humanoid robotics, it's going to end poverty. Kind of was like a misworld competition where what do we want? We want to end world hunger and starvation and poverty. This is the concept that they want. I don't know what we have from here. Are we going to start up this discussion about universal uh basic income, the UBI discussion? Because if uh well, on one hand, if we don't have to work and we're eliminating poverty, we need money to do something. But then again, we're also talking about currency being irrelevant, work being optional. I don't know what we have to use. Maybe we're bartering. What are we doing? We're not working so we don't have any services that we could provide because the humanoid robots just like we saw in Sleeper are going to be providing all I very confusing. Is it possible? Of course. Who knows? I've been around long enough to see the I mean, you think about the history lessons of the 1900s, just that time frame, just the 1900s, the early 1900s, even back the 1800s, going from an agrarian type of society and the world structure and bartering and, you know, feeding ourselves and, you know, utilizing that to the next level that we go through with the automation, the industrial revolution and then into, you know, by far one of the biggest changes is they're all big. You know, the the technology revolution and there's been other things in between, of course, but I'm just pointing out the biggies, right? The ones that we really see as lifech changing. And is it possible that all the things that they're predicting come true? Yeah, I'll go with that. But some of it seems rather far-fetched and putting our money on that now seems a little bit premature. I think that's what's going on right now. We saw that Nvidia's numbers came out. They beat Jensen Wong was in my opinion on his back heels, you know, on a few topics and clearly paying offense on other topics. the things that we would expect from him to talk about the opportunity and how much money they're making and the future and they're sold out of this chip or they're selling that chip. All that I get and look pretty darn good. the things that he was on his back heels about. It was curious to me that he was really coming to the uh on the defensive side of looking at the whole circular financing discussion. But he said everything's good. We're good to go. Don't worry about that. Money is there. We're funded. The funding is secure, so to speak. He didn't say that. But I'm saying that Elon said that once upon a time there was there was something in the details that I thought was a little bit concerning. The earnings report came out and it's one of those h this $100 billion commitment to open AI is not actually quite a done deal. It's in fact an open discussion. That was a little bit surprising I think to a lot of people saying I thought we had all this financing in place if Open AI is guaranteeing or is at least projecting that they're going to spend this much money and that much money over the next 10 years and we need the funding from somewhere and one of the places is Nvidia to pass it through and along and then they can pass it through and along and if Nvidia doesn't have this locked down with Open III, it's not even necessarily more than a a wink and a nod maybe a handshake. That's not good enough. Also, we touched on the other hot item that is related to the useful life of chips, depreciation of the asset over time. And the issue is how long the value holds of that asset of the chips of the product um for a couple different reasons. One is from an accounting standpoint, one is from a wasting asset standpoint. One is, you know, you're going to spend a billion dollars and two years later they're obsolete. That means that I just spent a billion dollars and that's done. I got to spend another billion. What was curious for me was that he answered this question again in a defensive back heel's nature came out with this because he know there's a lot of talk about this and he talked about the useful life being maybe somewhere between six and nine years that many of these products that in place could and have been lasting that long. Now, that's good for the asset valuation question, whereas you have an asset that you're written off, but you can still use. Therefore, it still has value to the company, maybe if they sell the company, there's a value there. Or if they want to look at what the book's values are worth for all sorts of different reasons, utilize some of the assets, the pledge to maybe borrow, and you know, the health of a company, right? What are your asset base? But but I think that answer may have two sides to it and many may been looking at this whole 6 to9 years and saying wait a second if these chips are still usable for a period of time maybe just maybe the replacement cycle is not what we first thought and maybe that's why Nvidia stock reversed hard on Thursday. something we got to look into because there's something under the surface that is bothering investors aside from valuation these days. I think valuation question was the first thing that really started to peique the interest of many of the investors out there saying how much more money can I throw at this even though it all looks good how long is that going to last and they hearken back to yes the dot days and not the dot days that I'm talking about the the companies that were uh zero revenue and just losing money and they were just an idea pie in the sky a hope for and a a prayer that something would blossom from this long term. The difference what I'm talking about is those companies that actually were doing well and had the opportunity and were on the runway for takeoff, but then the realization was that they can't continue at this pace forever. It's just it's it's physics. It's just impossible. This is so far a plane can go when it is vertical. until it reaches that stall speed and has to kind of come back down to earth. Maybe not all the way, but it can't stay in that vertical posture forever. In the stock market talk, in investing, when we talk about technical analysis and charting, we call that parabolic moves. And if you look at a monthly chart of Nvidia, that is one hell of a parabolic move. onto economics for a moment. November jobs report will be released on December 16th. That's an important date because this is after the December Fed meeting and decision. The FOMC is meeting and it's going to be meeting before. So what does that mean? Well, if you think about it for a second, what that means is that's going to throw a munch monkey wrench directly into the idea that the Fed is going to reduce rates in December because if the Fed is going to be and continues to say they are data dependent, they don't have data. The best data they have to work with is something from back in September, which we're going to talk about in a second because the October numbers are cancelled. That's right, cancelled. government said they're not putting them out. So if the Fed wants to make any degree of uh reasonable expectation that they are believable, then they really can't do anything. The only reason that they will do something is if the market pukes uh or if something else bizarre comes out. because the numbers that we saw for September was that payrolls increased by about 120,000. So the August non-farm payrolls were revised even lower by the way from 22,000 down to 4,000. Not July was actually revised to 72,000 from 79,000. private sector did increase by 97,000 in September and again everything was revised about August uh down significantly. In September the unemployment rate was 4.4%. Everybody was thinking about 4.3%. So things are moving in the wrong direction for both inflation and for employment which brings up I I don't want to say it. I don't want to say stagflation. stagflation. It's, you know, that word stagflation. That's that's the basic recipe right there. And probably why President Trump backed down and said that we're going to be taking off tariffs on uh what beef, coffee, bananas, about 200 different food items because we want affordability. taking a page or a chapter from the Mandami playbook. It worked there. Let's see if it worked here. Now, the problem is that now that just crushes any believability of what the president is saying about this because they talked about how consumers weren't paying the tariffs and now all of a sudden they're saying by reducing it down and consumers are going to save a bunch of money. Can't have it both ways, fellas. So average hourly wages and earnings were up a little bit, but bottom line on all this is that the unemployment numbers are a big gigantic black hole right now because we saw that gigantic revision in a in August. September's numbers looked okay. A little bit of a bounce back. There is nothing in that report which is the last report they're going to get before the numbers come out in December which is after the fact of when they vote and therefore probably doesn't lend itself to another reduction. At least that's what everybody's thinking about a 40% probability of a rate reduction by 25 basis points in December. But it would seem to me that with all that's going on the Fed may say you know what let's just wait one more month. just my two cents on this whole thing. So, we have Nvidia earnings markets got pretty, you know, squirly. Yen at critical levels. That's a big issue. We're hitting about 140 54 155. Uh not the high, but hitting a midterm high over the last year. And that is a big concern that uh you know when I say high, the dollar is hitting high against it. So the yen is dropping in value just to be clear because currency is always a two-part. One's moving up, one's moving down. So that crosscurrency exchange rate when I say high, it's about 154. That's up, but that means the reverse, if I'm confusing you, I'm sorry. That means the reverse of what's happening is that the yen is actually dropping in price dramatically. And and what's interesting is that does tell us a little bit that the thought is that the the uh somehow which I don't really feel that's necessarily the reason that the uh US is going to be in more of a tightening policy uh mechanism than than than the yen which I I just don't see that I just don't see that. Seems like they need to be tightening more because their inflation rates are are hitting pretty high numbers. I think the big issue right there is the fact that uh there there's going to be a lot of concern over uh policy and that uh the the concern is manifesting itself inside of the currency itself. That's what's going on. Bitcoin, did you see that? I think it hit 88,000ish 87,000 for a little while there. That's down about 30%. Micro Strategy stock that we've watched for a long time and wondered like what Micro Strategy well it's called strategy now Michael Sailor's company is a leverage Bitcoin play hitting a 52- week low and we're seeing lots of little areas and pockets that are seemingly getting hit pretty hard in the last three or four weeks. Well, we're going to talk about that with our guest in a minute. And I and I have uh a a I'm just looking right now at my list. Uh lots of questions and crypto is on there. Um politics is on there. Why interest rates going down there? They have this whole long list. So we're going to talk about that with him in a moment. Before we do that, I want to talk about Interactive Brokers and ask you a question. Here it is right in line. And a great segue, by the way. Will Bitcoin's price exceed 145,000 on December 31st, 2025 at 400 PM Central time. At IBKR, their forecast trader, right? We know that they have this. It's a great tool to look at the forecasting and the prediction market is saying that yes is at 6% and no is at 92%. With interactive brokers forecast contracts inside of here, you could trade on future events like Bitcoin, like climate, like the economy, maybe even politics. Pick yes or no, and if you're right, you earn a dollar. It's that simple. Forecast contracts are not suitable for all investors. Make your prediction. Go to ibkr.com/for and start predicting today. By the way, the last day for this contract, for the Bitcoin contract, is December 31st. Well, let me introduce our guest, Tim Knight. Now, he's been charting and trading since 1987. Now, that's an important date, right? That was the time he made his first stock trade. In fact, it was October 19th, 1987, the day of the crash, which probably is the reason why he has this disposition towards bearishness. Yes, he's a bear, a self-proclaimed perma bear. We've had him on many times. I try to find a time that I think in the future, we we booked three, four months in advance, that maybe there's going to be a correction. And boy, we hit it again. Last time we hit it in April, we hit it again here. He's written several books and his most recent writing has been focused on charting and the history of financial markets in the book panic prosperity and progress and in more recently in Silicon Valley Babylon and solid state his first novel. He's been running Slope of Hope since March 29th, 2005, written about 30,000 posts. And besides running the Slope of Hope and being the founder, he also hosts a daily show on the Tasty Live Network called Trading Charts with Tim Knight. Let's get right to and bring him in. Open the phone line. So Tim Knight, welcome. >> Thank you very much. >> You know, I did this for you. You know, >> I Well, and we all know that and we're all grateful. I appreciate that. Truly, >> there was a time that Tiff and I were talking and he's like, "Look, look, markets are going up and I you know me, I'm a perma bear and you know, it'd be better if we had at least something that's not going directly up when I come on the show." And I said, "The next time you come on, I'm telling you, I'm going to pick the date in advance, months in advance, that the markets are going to be going down." That was back in April. This time around, I said, "I'm going to do the same thing for you." And markets are not uh too happy right now, are they? >> Why why didn't you do this years ago? You have this kind of power. This is amazing. You and I could be a great team. >> Yeah. >> What's happening? What is the problem? I mean, I uh have been let me just give you a little bit of under undertone of of of some things. I have been with a a strange eye looking at the the whole issue with regarding uh vendor financing, circular financing, all these empty promises that could maybe possibly could and everybody's you know getting all lthered up about this and saying uhoh this is troubling me and uh you know Michael Bur style right the difference is I didn't close my shop >> and um and is that what's happening right now with this Nvidia earnings that came out that that everybody's like okay well That's great earnings, but uh we're not sure. >> Well, it was really, you know, so I on on my website, I've done literally like 50,000 posts. I mean, that's a real number. And I think the post I did last night, I've got a if it's not the best post I've ever done, it's got to be in the top five. And I just had um I I I made a crazy assertion, which was that, you know, Nvidia's come out, everything's blasting higher. The INQ is up hundreds of points. Uh I'm I'm short 35 positions. I'm they're going to wipe the floor with me at the opening bell, but I can't wait for the market to open. >> Wow. >> And there was just something about the there's there's been a character change in the market such that um we are in a downtrend. It is a series of lower lows and lower highs. we have broken all the trend lines >> and uh my supposition which turned out to be very correct was that um the the blast higher we were going to get at the opening was would probably be the best shorting opportunity for the rest of the year and that's exactly what happened. So I I came into the day uh about 100% short and I was literally like 200% short uh 90 minutes into the open. Wow. and all holy hell broke loose. So, >> is that is that on tilt short or on plan short? >> Um I'm not sure what what the distinction is you're making. >> On tilt is when you are in a casino and um you're losing and you're playing blackjack and you're losing just double you know what here take I'm going to or or when you're in playing poker and you're losing hand after hand and you just like just start putting up more and more and more. No, it wasn't it it wasn't a kind of a desperation situation. On the contrary, you know, my what what I what I trade the the portfolio I put together is so such a Frankenstein's monster that I sort of look at how it behaves and is basically two portfolios and the market open everything was blasting higher hundreds of points everything was green and one portfolio was down like 3% and another was like unchanged which is like incredible. It's like a guy jumping off a building and levitating. It's like how is that even possible? And so the nature of how they were behaving told me that, hey, this isn't too bad. And so it's like so I just went pigged out and and shorted all the stuff I shouldn't short like SMH and AMD and things like that. So um it was a really exciting day. >> So how do you finish the day though? You didn't finish 100% short. >> No, I but I'm still pretty aggressive. Um, so I I came in 100%, peaked at about at 220, ended around 150. So still pretty aggressive. I mean, you know, look, I I I don't have like the, you know, I can't wait till tomorrow opens feeling that I did 24 hours ago. >> Um, because as I'm looking at the chart, um, you could absolutely make a case that the market's oversold. Um, so I I got out of the the friskier stuff like SMH, like AMD. I'm seeing some weird stuff that looks super toppy which ain't going to care about Nvidia like WD40 my hand to god WD40 corporation stuff like that. Um so I'm getting some really goofy picks out there uh that will be kind of immune to uh you know well AI's done another $50 trillion deal with Open AI and and Oracle or God knows what else. So >> so what about cryptocurrency? I mean is is so so my my hairrained absolutely un um there there is no qualification of what I'm about to tell you but just uh hey what about this idea and that is that there was a lot of margin and leverage in the system like the largest amount ever right the largest net or largest total amount of margin outstanding for margin debt in brokerage accounts and I said okay well that's interesting and then we saw that that Bitcoin started coming down right? That that whole riskoff trade was starting to starting to f, you know, just to to simmer a little bit, right? >> What about the idea that margin was being taken out and the idea that stocks could never go down and let's go find a riskier asset to put our money into and when when Bitcoin started coming down and when margin calls started happening, you saw that Bitcoin is down what 30% in the last however short period of time here. >> Yeah. No, it's uh I don't really know how the the the relationship the plumbing relationship between Bitcoin and and and equity, but I do know there's this sort of myasma of uh of risk on riskoff behavior and you know the fact that Bitcoin has just absolutely crumbled. Um I felt that had to have some negative influence in terms of people's just sheer confidence and cockiness. Um, and so yeah, we we got up to around 127,000 uh I think early in October, I want to say. And I we were like at 85 today. And I I don't yammer too much about um Bitcoin this and that because crypto bros are psychotic and I don't really want to deal with their blowback. Um but as a chartist, it is kind of interesting. >> Calling them psychotic is not going to give you any blowback. Don't worry about that. >> Oh no. They're nuts. I mean, there is no theology on the planet. There's no radical uh uh Islamic uh uh zealot that's anywhere close to crypto, bro. So, I I I tend to just like tiptoe around and say, you know, Bitcoin's just peachy keen, and we all use it every day, don't we? You know. >> Yeah, exactly. >> It's it's it's ridiculous. >> So, going going back into this, uh I taught you what on tilt means. You teach teach me what myasma means. Oh, well, I hope I'm not misusing it, but it it's sort of just a think of it kind of like a just a general mist in the air. Just kind of a a zeitgeist, if you will. Um, yeah. So, um, the whole, um, frothy optimism that we saw earlier this year was a combination of crypto doing well, Washington DC aka Trump supporting crypto every which way he could, um, stocks going higher and higher, uh, uh, the AI mania, all the rest of it. And I I've got a sort of special view of that because I'm right here in PaloAlto and I've got very firsthand experience about like what's going on in these AI companies and what kind of money slloshing around and it's just like you know this is this makes 2000 look so conservative and prudent. This is just yaya. So um >> well the difference is I was writing about this today. I think the difference between 2000 when people think about 2000 then they come back with you and give you the you know the the defensive posture of well no companies weren't making money then you know that whole thing that they talk about right and they bring up the web vam and the peep pods and they bring up the Amazon at the time uh and they bring up this whole idea that well that's why it's different because companies have money >> they have access to money they have all but what's similar about this what is the funny thing what what what the similarities about this is there was pie in the sky promises on an unproven technology, >> right? >> And the amount of money that was being dedicated. The other thing that was I I I bring this up a lot. This is a story that I just can't shake and tell me what you think. Back in the day, we'll say 1999 or whatever the year was, maybe even 98 when we're all getting computers. Everybody's buying computers. We're buying computers for basic stuff before internet, right? But what are we buying? We were buying Dell's. And the Dell stock was through the roof, parabolic, direct up, you know, moonshot, great stuff. Because the the the growth numbers of revenue because of sales was astonishing. >> Mhm. >> But when we did a calculation one time and said, okay, if they if they continue with this 50%, you know, period over period increase in sales, everybody in the world is going to have to have three Dells on every one of their desktops. That makes no sense, >> right? And the idea that Nvidia is having this kind of move and then by the way and I talked about this in the beginning where they even talked about how and they had to defend the replacement cycle saying well it's not it's not quick it's maybe six to nine years and I'm thinking well that's not good either because the replacements won't happen. That's what reminds me of 2000. >> Yeah. No, it's it's a very different world. And if one were to, you know, because like you know, Facebook back then had uh well, no, there was no Facebook. Um but uh social media had like millions of people and today it's like Facebook has like what three and a half billion. It's like well there's not a whole heck of a lot left growth left there. And you know, as far as this Nvidia thing goes, if if you said all right, give me a bare case for Nvidia. Just just tell me what's going to change in the world to change their story. It's just so easy because naturally they are selling out of GPUs. They just can't build them fast enough. They're making money hand over fist because you've got a bunch of incredibly wellunded companies gobbling those things up left, right, and sideways. Let's just say that OpenAI and XAI and Anthropic and Google are cool. We're good now. We're going to just kind of like uh grow into this and uh you know, we'll we'll be in touch. God help them because Nvidia is absolutely addicted to endless purchasing from endlessly funded um so-called startups. Um and if that stops, you know, doesn't just shrink, but like even stops growing >> or or or let's be honest, they're also everything you just said and I'll just add one point at the highest prices possible. >> Yeah. with with no limitation on what the pricing uh is. And what if everything that you said stays the same, but they're just not willing that they're paying less for the same deal? >> Yeah. Yeah. Well, and the the particularly interesting thing about this world we live in now, because I've done this for a while, is that a very meaningful portion of traders in quotes um have never seen a bare market in their life. I mean to my mind there there hasn't been a bare market since the autumn of 2008. You know the COVID crash and such that's measured in days not years. And so there hasn't been I'll say it again. There hasn't been a bare market in 17 years. And so a goodly number of traders have no idea about what it's like and how to behave. added to which we've got a um unusual and rather unique administration in the federal government now that whose only bragging point at this point is the stock market. And if things start to go uh badly sideways, uh Lord only knows what sort of uh uh tricks they'll toss at the market to try to prop it up because that if that starts going down, game over, man. Well, I think what they'll do is they'll first of all, they're going to allow Nvidia chips to be uh sold in China against the better judgment of any of the security adviserss. That's going to happen in my opinion. They already talk about the tariff issue, but um you know, you talk about and you've mentioned and we've talked about together the president and and his influence on the markets, but you know, if we stop just look at cryptocurrency, it was great for a minute. Uh, Bance guy, Bonance dude is out. Maybe he's gonna even >> Sam Sammy boy Sam Bankman Freed is gonna be really freed. Instead of fed D, he's going to be F R E D. >> Oh, is he? >> I don't know. I DON'T KNOW. I DON'T KNOW. I mean, they got the Banance guy out because he did nothing wrong, >> right? >> Who knows? I mean and and then and but but Bitcoin now if we if we are in fact judging our quality of the administration on all the things he does, Bitcoin is under where he started as president. >> Yeah. And plus if you look at um you know this is a man who loves to put his name on everything. You could just punch in dollar D. Uh you could punch in dollar Trump for, you know, the Trump coin. Uh or DJT for, you know, uh Trump Media, which is, you know, Truth Social. Um and they both look like, you know, triple diamond uh ski slopes. I mean, they're, you know, huge huge losses on those. um he's profited wildly from this stuff, but manpettle who who've been buying these things and want to show their support have gotten frequed on this stuff. >> Yeah. Uh so the um I it's it's going to be you know I think you and I have talked about the fourth turning before and this is all lines up beautifully with it because I can I can absolutely picture a situation in which um equity you know asset markets crumble and as I said earlier that's kind of like the last good news they can point to as a success and you know they're going to run out of patience with this absolutely unchecked insanity we're all sort of like trying to ignore and it's going to be a very interesting 2026. >> I mean, I think I think the interesting thing here is that we all recognize and I think we all agree and I'm I'm I'm pretty certain you're going to agree with me here too that um markets defied gravity in the face of that doesn't mean they had to go down. That's not what I'm talking about. Right? But they defi they levitated they well more than levitated, right? They went directly up on almost, you know, wars, uh, you know, talk of nuclear, >> uh, us randomly deciding that we could shoot and kill drug runners in Venezuela, >> right? >> Uh, and then that's just a partial list. There's a very long list, okay, of of bad, >> not necessarily bad decisions, but just like questionable things that usually would be like, oh, that's not good. and you know firing of a of a federal well the the discussion of firing of federal uh of Federal Reserve uh uh voting members and uh Federal Reserve people having to resign because of their bad actions. The list goes on and on. Right. Right. >> And um you know I was thinking are tech companies now I just went sideways. Sorry. Are tech companies now the bad actors as in the banks of the 2006 plus era that were spending recklessly didn't care because they know that who cares? They'll get rescued somehow. >> Yeah. Well, uh that's a really interesting point because not only put it this way, Apple was funded by selling a VW bus and an HP calculator. Steve Jobs and Steve Waznjak each sold their one price possession and those 1,300 bucks and thus began Apple. And it was not that long ago where startups, real honest to goodness startups like in garages um could be created with almost no money um and become something really big. And I say not that long ago, I mean only like 20 years back. Uh so guy named Andy Berolstein uh lived a couple of blocks away from me. He was the co-founder of Sun and he funded a variety of companies including a place you've probably heard of called Google. And his his investment in Google which got the whole thing started was $100,000 bucks. That's because he wrote everything every investment he made was $100,000. That was just the simple figure for him. And these days uh you know funding is measured in tens of billions, hundreds of billions of dollars and people call themselves startups when they have like you know 5,000 employees etc. And so we've changed from an environment so banks used to be like super gargantuan and need government to bail them out. And to your point tech companies are now super gargantuan. You have people like Sam Alman saying like uh oh the government should backs stop us and uh >> that was that was the turn by the way that that that was it was actually his CFO that that talked about >> oh yes yes I forget her name but you're right ab it was in a just a I don't know even why she said it that we would like government guarantees on our bonds and everybody's like >> wait a second you're doing debt find what >> right yeah because these these companies are cash bonfires and you know, it's not like, okay, for for 18 months we'll be losing money, but here's our here's where we drift into profitability. It's basically like hundreds of billions of dollars of losses as far as the I can see. And to my way of thinking, you know, we just have to look at our day-to-day lives and ask ourselves, you know, how much we're using such and so. So, like when the iPhone came out, the iPhone 1, I got it the very first day it came out, you know, and I I brought it down to my little girl's gymnasium and all the parents crowded around and it became kind of instantly indispensable. Um, crypto I have used in my life, zero ever. Um, and AI I use I mean, and I'm I'm a I'm creative for a living. I do creative things for a living. I write. I have my website and there's lots of applications for creativity which AI is supposed to excel in. And I use it from time to time to make funny pictures. That's it. End of story. And so, >> wait, you do writing and you don't use Wait, you don't use AI for a little bit of uh grammatical uh overview and things like that because I find that very helpful? >> Uh, no. I maybe I'm just too proud of my writing and don't want anybody touching it, but yeah, I don't. I mean the most the most AI thing I have in my life which I use constantly is >> full self-driving. >> Um and so that that's very AIish and that's you know the old Arthur C. Clark quote any technology sufficiently advanced is indistinguishable from magic. That's what FSD is like. Mhm. >> Um but in terms of uh and you know I just what I do daytoday is by no means a proxy or like well this is what humanity does dayto-day because if judge me it's like there wouldn't be any video game market because I don't play video games. So I'm not saying like I'm the I'm the litmus test but you know I'm I'm pretty into tech and I just I really don't find myself uh using it at all. So, it'll be running to see if if they uh basically take over every industry under the sun um and and are are worth the trillions and trillions they believe they're going to be worth later on. So, we have all this going on. This this this these little I don't know if they're canaries or if they're just little mini firecrackers exploding around, you know, that we you know, for example, the Sam Olman CFO, the OpenAI discussion about that. And then we have things like, you know, Oracle, by the way, Oracle is the poster child in my opinion of this whole thing, >> you know, where where they went from 220 to 350 down back to 216, 215, full round trip on a $300 billion promise of revenue coming in over a number of years. And and by the way, a very good earnings report. Um, but their debt may be downgraded to to junk. Now, there's a discussion about them having to borrow because their cash flow is not sufficient to pay for this and that and this. But what but was the other thing you have other things like for example murmurss little things like the I think it was blue owl pulling out of a private credit rollup deal and little things like discussion about you know is there too much private credit and private equity for that matter uh but private credit in particular being issued on what it's like the private credit is funding these startups giving them billions of dollars at favorable terms terms right now. Maybe for a little bit of equity back in the back end too, right? And that seems to be like all this stuff is like really fishy. >> Well, I think your Oracle point is an excellent one and I've observed that myself because the last time they had earnings, you know, the earnings was was stunk, but their conference call um was got everyone just thrilled and the thing uh just blasted higher. I mean for your for your listeners just to just to be precise about it uh the earnings call took place after um the market closed on September 9 and the closing price that day was uh $241.09 the next day uh it went and it went to $345. So and this isn't some little biotech company. This went from like it it went up like 50% overnight. And the thing is that that was the peak. That very day was that was the lifetime high. And then it went on to over the over the >> And Larry Ellison was the richest man for a moment. >> Yeah. And so from 910 to today, it went from 345 to uh 209. So the entirety of that gap is long gone and it's beginning to appro the next kind of gap it would close would be down at 178 which is the prior earnings report. But to me, what we saw take place today and hearkens back to your Oracle example is what happened way way way back on September 19 of 2008 because that was the morning just before the market opened that um the powers that be you know stood up and said we are banning short selling on on these 400 stocks and naturally the market opened very strong. It's like, cool, those damn bears, it's banned now, you know, eat it, suckers. That was the peak. Now, that wasn't the peak for the market, but that was the that was basically that was the last gasp. And so on September 19, um the market opened strong and it went higher and then all holy hell broke loose. >> Yeah. >> Uh and so I I you know, I think today is a cousin of that kind of event because, you know, markets die. bull markets die on good news and they got really good news last night from the from the granddaddy of them all and it's like um fellas if blow earnings from Nvidia yields a market that falls 606 points on the NQ in one day what else we got up our sleeve >> you know it's also interesting that uh I I think there's a believability issue here right because first of all we've had VF after VFV recovery you know whether it was COVID or dailies uh three-day drops of 3% then it's all back uh and off to the races from there. And I think there's a believability where people are like, "Hey, I don't believe we're going to see this because all the bulls are telling me this." Right? You listen to any show and they're all it's not 2000, it's not this, which okay, I'm not saying it's that, but they they they they feel compelled to compare it to a date in in in history that something bad happened. Uh and we all do that, right? We got to kind of measure things by uh example. But there are so many people that have just absolutely are are convinced that this whole thing is just the next forever. >> And I think that's where the problems came in. And that's where I think again these little cracks with private credit uh and and and the and the the re the reality of what we saw with a few different uh companies recently you know out of nowhere just like the auto parts industry with the private credit and the credit deals and and the the the promising of pledging of their of the receivables and doing to many people like the producers movie. This is important stuff. But um I I I think that the other thing that I just I am alone in this battle and it maybe it's not a battle. I'm alone in this weird think that market cap weighted indices are a blessing and a curse. Any thoughts on that? >> Well um it's a blessing for those who want the market to go up which is almost everybody. um you know there's a chart I follow ratio chart which is basically the um equally weighted S&P divided by the you know market weighted S&P and it it it it looks like um it's dreadful. It's just down down for years and it's illustrative of the fact that fewer and fewer companies been doing all the heavy lifting. Um, and I think that what we're leading to to your firecrackers and such is in 2026, the wheels are going to completely come off because what's going to happen is that uh Trump will figure out, you know what, the only problem is this damn Powell jerk and if interest rates are lower, life would be great and he's going to get some lackey in there and I guess we'll do his bidding. Oh, I get Steen Moran. Moran and And just a few days ago, Trump started to interrupt, but Trump said, "Yeah, maybe I'll have to fire Bessant." What? Who does that? >> Yeah. Well, a man with um I I'll alienate too many of your listeners if I get into it. So, yeah, it it seems uh his his decision-m is rather rash, and I think that if the results don't match what he desires, then he will find whoever is closely associated with that action and just get rid of them. It ain't going to work. And uh he's gonna the things they tried will get crazier and crazier and I I would bet a box of crispy cream donuts that they will ban short selling again next year. >> Please, that's great for you, by the way. >> Yeah. Oh, yeah. I mean, that's >> Yes, let's do that. Yes. >> No, absolutely. Because >> let's make decisions. >> Yeah. Uh his his he he tends to be rash and he tends to be rather myopic in uh the consequences of his actions. And I'm highly confident that, you know, because and it's just, you know, it for time immemorial. I mean, Alex Karp, the Palanteer founder, is pulling this stunt a couple of weeks ago. Blame the bears. Blame the bears. This is the equivalent of of an obese person blaming a mirror. You know, um, >> sometimes mirrors are a problem, but yeah, I get it. >> Yeah. Yeah. So, it's just Yeah. So, yeah. Don't don't pick on us beers. Neither of us need to hear this crap. So, here's here's something. I think a lot of people want to know this. Two things before we go because we have a hard stop coming up uh on the show. And number one, where do people get the information to understand what you're thinking, what you're writing, what you're doing? Oh, uh well, come on over to Slope. Uh I have a little website I started as a blog 20 years ago and uh that's uh I've um that's kind of my livelihood and I just write whatever I'm thinking. It's usually about the markets, but it could be about anything. And so, yeah, slow.com has been around for we're in our 21st year now. And uh I'd love I'd love for people to swing by and see what I'm up to. >> You know, we've known each other probably about 15 16 of those years. >> I I think so. I think so. >> Yeah. I was writing a blog back in the in the day, too. And uh I was always reading Slope of Hope and um >> Well, and and every time you're kind enough to invite me to your show, and I piss and moan about it, and then I have a great time. It's ridiculous. One of these days I'll learn. >> Yeah. So, here's my question. I think people want to know this. I want to know this. When when being bearish, right? When being or or it's not it's not I'm not putting that on you, but >> Oh, please do. I deserve it. No, >> your your How do you affect your bearishness? What is the ways that you will provide what do you what do you how do you position stocks, futures, options, all the above? I mean, what is your play? >> It's really simple. Honestly, it's it's I mean, I say often times with my Tasty Trade audience, I'm I'm the least sophisticated of trader among any of you. I I I'm a simple soul. I just short the stock. Uh I I I put in a stop-loss order. Um there there there's nothing fancy. You know, I've played with crypto. I've played with futures. I've played with forex, but I like to keep things very vanilla. Um on on rare occasions, I'm looking around with options. It was sort of funny cuz um uh a couple of days ago I bought some Russell puts very short term and I bought them for three bucks. Yesterday the market was strong. I sold them for like 250 $2.50. Took a little loss on it. This morning they were 10. By the end of the day they were $6. It's like oh that's where the big money's made. >> That's exactly right. That's the hardest thing to do. By the way, as you know I I do that too with the options. And I got to tell you something more more I like to go a little bit longer with the options. But I know for a fact that usually what ends up happening when I target this that I'm right in the end that I should have waited waited waited waited waited till that point. You know >> that's probably the prominent reason that I that I keep things so boring because I >> I have a lot of personality flaws that don't lend themselves well to good trading like you know impatience. Um, and so if I'm going to shoot myself in the foot, I'd rather do it with a BB gun than a shotgun. Um, and so I I deny myself a lot of fat profits, but I also stay afloat. >> So what about how did you get to 200% net short? Did you use some leverage product? Because >> Oh, yeah. I mean, I'm and I'm probably using clumsy terms. I'm I'm just using margin, you know. So I I do have buying power, in my case, selling power uh based upon my account, but it it's just, you know, they'll let me keep shorting for, you know, way more than I actually have in my account. So, >> so but you could hold overnights in those kind of numbers like >> Oh, sure. Sure. Yeah. It's not like portfolio margin or anything. It's just simple um reggg type stuff. So, uh yeah. Um so, when I talk about 200%, it's just sort of like I'm kind of putting all my chips forward. >> Yeah. Good stuff. Well, I mean that's awesome. I think that um you know, we'll see how this plays out. I wouldn't be surprised either way if this is a breaking point in the markets. Although, seasonally, of course, we are in a better time place. You know what? I I just want to address that. Um, you know, I I don't I think we're in such a weird place that seasonality doesn't matter anymore. Uh cuz like as a as a long-suffering bear, I was uh as I approached September, it's like, well, at least we've got September cuz it's, you know, statistically by far the weakest. It's the only negative month of the year. And it just went went higher. So, you know, September should have been down. It was up. November should be incredibly strong. It's puking all over the place. I we're in such a crazy market now. I just don't I think we can just throw the can throw the calendars in the >> I would agree. I think the big thing is the margin. Once I heard that we're at top level of margin uh and and some companies by the way, brokerage companies were bragging about that they are at such high levels and that's good for them and I was like oh h and then on top of that some of the other things that I've seen with the leverage and the excess money being spent um by companies and and and and elevating stocks just on promises that were empty uh uh based on hope and prayer. Uh and that's the whole open eye thing. I I was just like so we actually for our our our portfolio for our clients we we've for our global allocations we keep it the same basic thing but outside the US a little bit more now but in our trading portfolio actively trading managed growth strategy that we have you know we have uh 36% short affected through leverage products. >> Huh. So, uh, that's but that means still we're still long, by the way. But we're we're 30, you know, we have 36% on the short side to offset. >> Well, the the the one last kind of funny wrinkle I'll say about what happened today is that almost to the penny, the high for the day and the low for day uh equal what took place, the last good tumble we had, which was back on October 10, that was the day that out of the blue Trump said, "Maybe I'll just >> Oh, yeah. >> tariff tariff China options on that day." That was a good day by the way options. >> Yeah. So, but if you look at the INQ chart, it's it's literally it's it's uncanny. And interestingly enough, today actually got lower and as I'm speaking right now is lower than that day. But we're in a very different market than we were then because after then, you know, the weekend transpired and it's like, oh, didn't mean it, didn't mean it, didn't mean it. Did the whole taco thing and then the market proceeded to lifetime highs. >> So, that's kind of an interesting little tidbit to share. >> Yeah, interesting stuff going on. Well, uh, I next time I will put I'll put my pen to paper. I will do all my bake, you know, good technical analysis to figure out the next time that you'll be on. >> Oh, good. You'll catch me in a good mood every time. That's great. >> Have a great day, buddy. Have a great holiday. Have a great Thanksgiving. Have a great new year. All the best to you and your family. >> Thank you very much. Thanks for including me and thinking of me. And uh, likewise, happy Thanksgiving to you and your listeners. >> All right, bud. See you soon. Thanks. >> Thank you. >> Lots going on. A tremendous amount of action, good information from great information from Tim Knight. Next week coming up, Howard Silverblat, the keeper of the keys, the information uh right before Thanksgiving on the S&P 500, Dow Jones Industrial Average numbers, all the stuff that we need to know. He'll give us the inside information on that. We have uh Harry Dent coming up in December of Ed Easterling, Andrew Wilkinson. Lots of great things happening all through the end of the year. So, don't go anywhere. Don't touch that dial. Don't touch that dial. And we're going to be here again next week. Thanks for joining me this week. And thanks for joining me every week. Thank you for telling your friends. Thanks for giving the reviews. Going over to whether it's Amazon or Apple, Spotify, and iHeart Radio or wherever you find your podcast. This is available there. And also DH Unplugged. Myself and John C. D'vorak. talking on Tuesdays about everything that needs to be discussed when it comes to the uh the markets, finance, uh taxes, uh money, crypto, you name it, we talk about it. So, make sure to be there. Again, thanks for joining me and I'll see you again real soon. This podcast is intended forformational purposes only and does not constitute personalized investment advice. Investing involves risk including the possible loss of principle and past performance is not indicative of future results. The views and opinions expressed are those of the host and any guests and may not necessarily reflect those of Horowits and Company Inc. an investment adviser registered with the US Securities and Exchange Commission. Registration with the SEC does not imply a certain level of training or skill. Advisory services are only offered to a client or prospective clients where Horowits a company is properly registered or is excluded from registration requirements. 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TDI Podcast: Bearish Revelations (#948)
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This episode is sponsored by Interactive Brokers. And what changed in your portfolio this week? Which positions are driving your returns? Ask IBKR. Ask IBKR is a breakthrough AI powered tool from Interactive Brokers that lets you interact with your portfolio using plain English. You can ask a question like, "How did I perform this week?" or "What's my biggest sector exposure?" and get instant personalized answers. Ask IBKR pulls from your actual account data to deliver real-time insights into performance and allocation, risk, and so much more. It's built into the IBKR platform to help you stay informed and in control because the best informed investors choose Interactive Brokers. Remember SIPC? Stop searching and start asking. Check it out at ibkr.comask. >> The disciplined investor is all about you, your money, and the markets. Sit back and get ready for this edition of the disciplined investor podcast. This episode of The Disciplined Investor is sponsored by Horowits & Company. If you're looking for a portfolio manager, look no further. Horowits & Company. From seed through harvest, cultivating financial success. [Music] >> Well, we got the numbers. Nvidia earnings are out now. We know. And a remarkable about phase 2. Yen's at critical levels. Global markets should really be on alert. And our guest today, good timing, perma bear Tim Knight, author, trader, and founder of Slope of Hope. All this and much more on episode number 948 of the Disciplined Investor podcast. [Music] Hey, welcome to the discipline investor podcast. So happier that you're with us this week. every week. It is approaching the end of November into Thanksgiving and then we know that all important seasonally seasonably very uh cooperative time of the year that we see markets do well known as the end of the year run Santa Claus rally. And as we said many many times the setup is pretty good. Now, you may be saying, "Well, wait a second. Does that count when all of a sudden we see things that happened like we saw last week with the major moves on underlying tech really hacked pretty bad, the legs cut out of many of them on in the beginning of the week and then all of a sudden a little bit of a rebound and then we come into the Nvidia earnings and the Nvidia earnings were, you know, everybody's like, "Oh, thank goodness." You know, we have this wonderful rebound, reset. The reality is still there. The promise, the hope, the opportunity, everything is set, ready to go because Nvidia, Nvidia, the god Nvidia has posted numbers and they look pretty darn good. There's some interesting things that happened though last week. We saw that conference the conference discussion by uh by Jensen Wong and by Elon Musk at the Saudi investment forum. He says this is um uh both of them kind of combined. I'm going to give you a combined exposure of what they talked about. Uh the AI is in um the infrastructure and infasy. It's re revolutionizing every industry. And Elon Musk pointed out that humanoid robots will be the biggest product ever. In fact, in 10 to 20 years, work is going to be optional because of AI. He said at some point currency also is going to become totally irrelevant. They talked about working with Saudi Arabia to build supercomputers and um the the idea that the combination of AI and humanoid robotics, it's going to end poverty. Kind of was like a misworld competition where what do we want? We want to end world hunger and starvation and poverty. This is the concept that they want. I don't know what we have from here. Are we going to start up this discussion about universal uh basic income, the UBI discussion? Because if uh well, on one hand, if we don't have to work and we're eliminating poverty, we need money to do something. But then again, we're also talking about currency being irrelevant, work being optional. I don't know what we have to use. Maybe we're bartering. What are we doing? We're not working so we don't have any services that we could provide because the humanoid robots just like we saw in Sleeper are going to be providing all I very confusing. Is it possible? Of course. Who knows? I've been around long enough to see the I mean, you think about the history lessons of the 1900s, just that time frame, just the 1900s, the early 1900s, even back the 1800s, going from an agrarian type of society and the world structure and bartering and, you know, feeding ourselves and, you know, utilizing that to the next level that we go through with the automation, the industrial revolution and then into, you know, by far one of the biggest changes is they're all big. You know, the the technology revolution and there's been other things in between, of course, but I'm just pointing out the biggies, right? The ones that we really see as lifech changing. And is it possible that all the things that they're predicting come true? Yeah, I'll go with that. But some of it seems rather far-fetched and putting our money on that now seems a little bit premature. I think that's what's going on right now. We saw that Nvidia's numbers came out. They beat Jensen Wong was in my opinion on his back heels, you know, on a few topics and clearly paying offense on other topics. the things that we would expect from him to talk about the opportunity and how much money they're making and the future and they're sold out of this chip or they're selling that chip. All that I get and look pretty darn good. the things that he was on his back heels about. It was curious to me that he was really coming to the uh on the defensive side of looking at the whole circular financing discussion. But he said everything's good. We're good to go. Don't worry about that. Money is there. We're funded. The funding is secure, so to speak. He didn't say that. But I'm saying that Elon said that once upon a time there was there was something in the details that I thought was a little bit concerning. The earnings report came out and it's one of those h this $100 billion commitment to open AI is not actually quite a done deal. It's in fact an open discussion. That was a little bit surprising I think to a lot of people saying I thought we had all this financing in place if Open AI is guaranteeing or is at least projecting that they're going to spend this much money and that much money over the next 10 years and we need the funding from somewhere and one of the places is Nvidia to pass it through and along and then they can pass it through and along and if Nvidia doesn't have this locked down with Open III, it's not even necessarily more than a a wink and a nod maybe a handshake. That's not good enough. Also, we touched on the other hot item that is related to the useful life of chips, depreciation of the asset over time. And the issue is how long the value holds of that asset of the chips of the product um for a couple different reasons. One is from an accounting standpoint, one is from a wasting asset standpoint. One is, you know, you're going to spend a billion dollars and two years later they're obsolete. That means that I just spent a billion dollars and that's done. I got to spend another billion. What was curious for me was that he answered this question again in a defensive back heel's nature came out with this because he know there's a lot of talk about this and he talked about the useful life being maybe somewhere between six and nine years that many of these products that in place could and have been lasting that long. Now, that's good for the asset valuation question, whereas you have an asset that you're written off, but you can still use. Therefore, it still has value to the company, maybe if they sell the company, there's a value there. Or if they want to look at what the book's values are worth for all sorts of different reasons, utilize some of the assets, the pledge to maybe borrow, and you know, the health of a company, right? What are your asset base? But but I think that answer may have two sides to it and many may been looking at this whole 6 to9 years and saying wait a second if these chips are still usable for a period of time maybe just maybe the replacement cycle is not what we first thought and maybe that's why Nvidia stock reversed hard on Thursday. something we got to look into because there's something under the surface that is bothering investors aside from valuation these days. I think valuation question was the first thing that really started to peique the interest of many of the investors out there saying how much more money can I throw at this even though it all looks good how long is that going to last and they hearken back to yes the dot days and not the dot days that I'm talking about the the companies that were uh zero revenue and just losing money and they were just an idea pie in the sky a hope for and a a prayer that something would blossom from this long term. The difference what I'm talking about is those companies that actually were doing well and had the opportunity and were on the runway for takeoff, but then the realization was that they can't continue at this pace forever. It's just it's it's physics. It's just impossible. This is so far a plane can go when it is vertical. until it reaches that stall speed and has to kind of come back down to earth. Maybe not all the way, but it can't stay in that vertical posture forever. In the stock market talk, in investing, when we talk about technical analysis and charting, we call that parabolic moves. And if you look at a monthly chart of Nvidia, that is one hell of a parabolic move. onto economics for a moment. November jobs report will be released on December 16th. That's an important date because this is after the December Fed meeting and decision. The FOMC is meeting and it's going to be meeting before. So what does that mean? Well, if you think about it for a second, what that means is that's going to throw a munch monkey wrench directly into the idea that the Fed is going to reduce rates in December because if the Fed is going to be and continues to say they are data dependent, they don't have data. The best data they have to work with is something from back in September, which we're going to talk about in a second because the October numbers are cancelled. That's right, cancelled. government said they're not putting them out. So if the Fed wants to make any degree of uh reasonable expectation that they are believable, then they really can't do anything. The only reason that they will do something is if the market pukes uh or if something else bizarre comes out. because the numbers that we saw for September was that payrolls increased by about 120,000. So the August non-farm payrolls were revised even lower by the way from 22,000 down to 4,000. Not July was actually revised to 72,000 from 79,000. private sector did increase by 97,000 in September and again everything was revised about August uh down significantly. In September the unemployment rate was 4.4%. Everybody was thinking about 4.3%. So things are moving in the wrong direction for both inflation and for employment which brings up I I don't want to say it. I don't want to say stagflation. stagflation. It's, you know, that word stagflation. That's that's the basic recipe right there. And probably why President Trump backed down and said that we're going to be taking off tariffs on uh what beef, coffee, bananas, about 200 different food items because we want affordability. taking a page or a chapter from the Mandami playbook. It worked there. Let's see if it worked here. Now, the problem is that now that just crushes any believability of what the president is saying about this because they talked about how consumers weren't paying the tariffs and now all of a sudden they're saying by reducing it down and consumers are going to save a bunch of money. Can't have it both ways, fellas. So average hourly wages and earnings were up a little bit, but bottom line on all this is that the unemployment numbers are a big gigantic black hole right now because we saw that gigantic revision in a in August. September's numbers looked okay. A little bit of a bounce back. There is nothing in that report which is the last report they're going to get before the numbers come out in December which is after the fact of when they vote and therefore probably doesn't lend itself to another reduction. At least that's what everybody's thinking about a 40% probability of a rate reduction by 25 basis points in December. But it would seem to me that with all that's going on the Fed may say you know what let's just wait one more month. just my two cents on this whole thing. So, we have Nvidia earnings markets got pretty, you know, squirly. Yen at critical levels. That's a big issue. We're hitting about 140 54 155. Uh not the high, but hitting a midterm high over the last year. And that is a big concern that uh you know when I say high, the dollar is hitting high against it. So the yen is dropping in value just to be clear because currency is always a two-part. One's moving up, one's moving down. So that crosscurrency exchange rate when I say high, it's about 154. That's up, but that means the reverse, if I'm confusing you, I'm sorry. That means the reverse of what's happening is that the yen is actually dropping in price dramatically. And and what's interesting is that does tell us a little bit that the thought is that the the uh somehow which I don't really feel that's necessarily the reason that the uh US is going to be in more of a tightening policy uh mechanism than than than the yen which I I just don't see that I just don't see that. Seems like they need to be tightening more because their inflation rates are are hitting pretty high numbers. I think the big issue right there is the fact that uh there there's going to be a lot of concern over uh policy and that uh the the concern is manifesting itself inside of the currency itself. That's what's going on. Bitcoin, did you see that? I think it hit 88,000ish 87,000 for a little while there. That's down about 30%. Micro Strategy stock that we've watched for a long time and wondered like what Micro Strategy well it's called strategy now Michael Sailor's company is a leverage Bitcoin play hitting a 52- week low and we're seeing lots of little areas and pockets that are seemingly getting hit pretty hard in the last three or four weeks. Well, we're going to talk about that with our guest in a minute. And I and I have uh a a I'm just looking right now at my list. Uh lots of questions and crypto is on there. Um politics is on there. Why interest rates going down there? They have this whole long list. So we're going to talk about that with him in a moment. Before we do that, I want to talk about Interactive Brokers and ask you a question. Here it is right in line. And a great segue, by the way. Will Bitcoin's price exceed 145,000 on December 31st, 2025 at 400 PM Central time. At IBKR, their forecast trader, right? We know that they have this. It's a great tool to look at the forecasting and the prediction market is saying that yes is at 6% and no is at 92%. With interactive brokers forecast contracts inside of here, you could trade on future events like Bitcoin, like climate, like the economy, maybe even politics. Pick yes or no, and if you're right, you earn a dollar. It's that simple. Forecast contracts are not suitable for all investors. Make your prediction. Go to ibkr.com/for and start predicting today. By the way, the last day for this contract, for the Bitcoin contract, is December 31st. Well, let me introduce our guest, Tim Knight. Now, he's been charting and trading since 1987. Now, that's an important date, right? That was the time he made his first stock trade. In fact, it was October 19th, 1987, the day of the crash, which probably is the reason why he has this disposition towards bearishness. Yes, he's a bear, a self-proclaimed perma bear. We've had him on many times. I try to find a time that I think in the future, we we booked three, four months in advance, that maybe there's going to be a correction. And boy, we hit it again. Last time we hit it in April, we hit it again here. He's written several books and his most recent writing has been focused on charting and the history of financial markets in the book panic prosperity and progress and in more recently in Silicon Valley Babylon and solid state his first novel. He's been running Slope of Hope since March 29th, 2005, written about 30,000 posts. And besides running the Slope of Hope and being the founder, he also hosts a daily show on the Tasty Live Network called Trading Charts with Tim Knight. Let's get right to and bring him in. Open the phone line. So Tim Knight, welcome. >> Thank you very much. >> You know, I did this for you. You know, >> I Well, and we all know that and we're all grateful. I appreciate that. Truly, >> there was a time that Tiff and I were talking and he's like, "Look, look, markets are going up and I you know me, I'm a perma bear and you know, it'd be better if we had at least something that's not going directly up when I come on the show." And I said, "The next time you come on, I'm telling you, I'm going to pick the date in advance, months in advance, that the markets are going to be going down." That was back in April. This time around, I said, "I'm going to do the same thing for you." And markets are not uh too happy right now, are they? >> Why why didn't you do this years ago? You have this kind of power. This is amazing. You and I could be a great team. >> Yeah. >> What's happening? What is the problem? I mean, I uh have been let me just give you a little bit of under undertone of of of some things. I have been with a a strange eye looking at the the whole issue with regarding uh vendor financing, circular financing, all these empty promises that could maybe possibly could and everybody's you know getting all lthered up about this and saying uhoh this is troubling me and uh you know Michael Bur style right the difference is I didn't close my shop >> and um and is that what's happening right now with this Nvidia earnings that came out that that everybody's like okay well That's great earnings, but uh we're not sure. >> Well, it was really, you know, so I on on my website, I've done literally like 50,000 posts. I mean, that's a real number. And I think the post I did last night, I've got a if it's not the best post I've ever done, it's got to be in the top five. And I just had um I I I made a crazy assertion, which was that, you know, Nvidia's come out, everything's blasting higher. The INQ is up hundreds of points. Uh I'm I'm short 35 positions. I'm they're going to wipe the floor with me at the opening bell, but I can't wait for the market to open. >> Wow. >> And there was just something about the there's there's been a character change in the market such that um we are in a downtrend. It is a series of lower lows and lower highs. we have broken all the trend lines >> and uh my supposition which turned out to be very correct was that um the the blast higher we were going to get at the opening was would probably be the best shorting opportunity for the rest of the year and that's exactly what happened. So I I came into the day uh about 100% short and I was literally like 200% short uh 90 minutes into the open. Wow. and all holy hell broke loose. So, >> is that is that on tilt short or on plan short? >> Um I'm not sure what what the distinction is you're making. >> On tilt is when you are in a casino and um you're losing and you're playing blackjack and you're losing just double you know what here take I'm going to or or when you're in playing poker and you're losing hand after hand and you just like just start putting up more and more and more. No, it wasn't it it wasn't a kind of a desperation situation. On the contrary, you know, my what what I what I trade the the portfolio I put together is so such a Frankenstein's monster that I sort of look at how it behaves and is basically two portfolios and the market open everything was blasting higher hundreds of points everything was green and one portfolio was down like 3% and another was like unchanged which is like incredible. It's like a guy jumping off a building and levitating. It's like how is that even possible? And so the nature of how they were behaving told me that, hey, this isn't too bad. And so it's like so I just went pigged out and and shorted all the stuff I shouldn't short like SMH and AMD and things like that. So um it was a really exciting day. >> So how do you finish the day though? You didn't finish 100% short. >> No, I but I'm still pretty aggressive. Um, so I I came in 100%, peaked at about at 220, ended around 150. So still pretty aggressive. I mean, you know, look, I I I don't have like the, you know, I can't wait till tomorrow opens feeling that I did 24 hours ago. >> Um, because as I'm looking at the chart, um, you could absolutely make a case that the market's oversold. Um, so I I got out of the the friskier stuff like SMH, like AMD. I'm seeing some weird stuff that looks super toppy which ain't going to care about Nvidia like WD40 my hand to god WD40 corporation stuff like that. Um so I'm getting some really goofy picks out there uh that will be kind of immune to uh you know well AI's done another $50 trillion deal with Open AI and and Oracle or God knows what else. So >> so what about cryptocurrency? I mean is is so so my my hairrained absolutely un um there there is no qualification of what I'm about to tell you but just uh hey what about this idea and that is that there was a lot of margin and leverage in the system like the largest amount ever right the largest net or largest total amount of margin outstanding for margin debt in brokerage accounts and I said okay well that's interesting and then we saw that that Bitcoin started coming down right? That that whole riskoff trade was starting to starting to f, you know, just to to simmer a little bit, right? >> What about the idea that margin was being taken out and the idea that stocks could never go down and let's go find a riskier asset to put our money into and when when Bitcoin started coming down and when margin calls started happening, you saw that Bitcoin is down what 30% in the last however short period of time here. >> Yeah. No, it's uh I don't really know how the the the relationship the plumbing relationship between Bitcoin and and and equity, but I do know there's this sort of myasma of uh of risk on riskoff behavior and you know the fact that Bitcoin has just absolutely crumbled. Um I felt that had to have some negative influence in terms of people's just sheer confidence and cockiness. Um, and so yeah, we we got up to around 127,000 uh I think early in October, I want to say. And I we were like at 85 today. And I I don't yammer too much about um Bitcoin this and that because crypto bros are psychotic and I don't really want to deal with their blowback. Um but as a chartist, it is kind of interesting. >> Calling them psychotic is not going to give you any blowback. Don't worry about that. >> Oh no. They're nuts. I mean, there is no theology on the planet. There's no radical uh uh Islamic uh uh zealot that's anywhere close to crypto, bro. So, I I I tend to just like tiptoe around and say, you know, Bitcoin's just peachy keen, and we all use it every day, don't we? You know. >> Yeah, exactly. >> It's it's it's ridiculous. >> So, going going back into this, uh I taught you what on tilt means. You teach teach me what myasma means. Oh, well, I hope I'm not misusing it, but it it's sort of just a think of it kind of like a just a general mist in the air. Just kind of a a zeitgeist, if you will. Um, yeah. So, um, the whole, um, frothy optimism that we saw earlier this year was a combination of crypto doing well, Washington DC aka Trump supporting crypto every which way he could, um, stocks going higher and higher, uh, uh, the AI mania, all the rest of it. And I I've got a sort of special view of that because I'm right here in PaloAlto and I've got very firsthand experience about like what's going on in these AI companies and what kind of money slloshing around and it's just like you know this is this makes 2000 look so conservative and prudent. This is just yaya. So um >> well the difference is I was writing about this today. I think the difference between 2000 when people think about 2000 then they come back with you and give you the you know the the defensive posture of well no companies weren't making money then you know that whole thing that they talk about right and they bring up the web vam and the peep pods and they bring up the Amazon at the time uh and they bring up this whole idea that well that's why it's different because companies have money >> they have access to money they have all but what's similar about this what is the funny thing what what what the similarities about this is there was pie in the sky promises on an unproven technology, >> right? >> And the amount of money that was being dedicated. The other thing that was I I I bring this up a lot. This is a story that I just can't shake and tell me what you think. Back in the day, we'll say 1999 or whatever the year was, maybe even 98 when we're all getting computers. Everybody's buying computers. We're buying computers for basic stuff before internet, right? But what are we buying? We were buying Dell's. And the Dell stock was through the roof, parabolic, direct up, you know, moonshot, great stuff. Because the the the growth numbers of revenue because of sales was astonishing. >> Mhm. >> But when we did a calculation one time and said, okay, if they if they continue with this 50%, you know, period over period increase in sales, everybody in the world is going to have to have three Dells on every one of their desktops. That makes no sense, >> right? And the idea that Nvidia is having this kind of move and then by the way and I talked about this in the beginning where they even talked about how and they had to defend the replacement cycle saying well it's not it's not quick it's maybe six to nine years and I'm thinking well that's not good either because the replacements won't happen. That's what reminds me of 2000. >> Yeah. No, it's it's a very different world. And if one were to, you know, because like you know, Facebook back then had uh well, no, there was no Facebook. Um but uh social media had like millions of people and today it's like Facebook has like what three and a half billion. It's like well there's not a whole heck of a lot left growth left there. And you know, as far as this Nvidia thing goes, if if you said all right, give me a bare case for Nvidia. Just just tell me what's going to change in the world to change their story. It's just so easy because naturally they are selling out of GPUs. They just can't build them fast enough. They're making money hand over fist because you've got a bunch of incredibly wellunded companies gobbling those things up left, right, and sideways. Let's just say that OpenAI and XAI and Anthropic and Google are cool. We're good now. We're going to just kind of like uh grow into this and uh you know, we'll we'll be in touch. God help them because Nvidia is absolutely addicted to endless purchasing from endlessly funded um so-called startups. Um and if that stops, you know, doesn't just shrink, but like even stops growing >> or or or let's be honest, they're also everything you just said and I'll just add one point at the highest prices possible. >> Yeah. with with no limitation on what the pricing uh is. And what if everything that you said stays the same, but they're just not willing that they're paying less for the same deal? >> Yeah. Yeah. Well, and the the particularly interesting thing about this world we live in now, because I've done this for a while, is that a very meaningful portion of traders in quotes um have never seen a bare market in their life. I mean to my mind there there hasn't been a bare market since the autumn of 2008. You know the COVID crash and such that's measured in days not years. And so there hasn't been I'll say it again. There hasn't been a bare market in 17 years. And so a goodly number of traders have no idea about what it's like and how to behave. added to which we've got a um unusual and rather unique administration in the federal government now that whose only bragging point at this point is the stock market. And if things start to go uh badly sideways, uh Lord only knows what sort of uh uh tricks they'll toss at the market to try to prop it up because that if that starts going down, game over, man. Well, I think what they'll do is they'll first of all, they're going to allow Nvidia chips to be uh sold in China against the better judgment of any of the security adviserss. That's going to happen in my opinion. They already talk about the tariff issue, but um you know, you talk about and you've mentioned and we've talked about together the president and and his influence on the markets, but you know, if we stop just look at cryptocurrency, it was great for a minute. Uh, Bance guy, Bonance dude is out. Maybe he's gonna even >> Sam Sammy boy Sam Bankman Freed is gonna be really freed. Instead of fed D, he's going to be F R E D. >> Oh, is he? >> I don't know. I DON'T KNOW. I DON'T KNOW. I mean, they got the Banance guy out because he did nothing wrong, >> right? >> Who knows? I mean and and then and but but Bitcoin now if we if we are in fact judging our quality of the administration on all the things he does, Bitcoin is under where he started as president. >> Yeah. And plus if you look at um you know this is a man who loves to put his name on everything. You could just punch in dollar D. Uh you could punch in dollar Trump for, you know, the Trump coin. Uh or DJT for, you know, uh Trump Media, which is, you know, Truth Social. Um and they both look like, you know, triple diamond uh ski slopes. I mean, they're, you know, huge huge losses on those. um he's profited wildly from this stuff, but manpettle who who've been buying these things and want to show their support have gotten frequed on this stuff. >> Yeah. Uh so the um I it's it's going to be you know I think you and I have talked about the fourth turning before and this is all lines up beautifully with it because I can I can absolutely picture a situation in which um equity you know asset markets crumble and as I said earlier that's kind of like the last good news they can point to as a success and you know they're going to run out of patience with this absolutely unchecked insanity we're all sort of like trying to ignore and it's going to be a very interesting 2026. >> I mean, I think I think the interesting thing here is that we all recognize and I think we all agree and I'm I'm I'm pretty certain you're going to agree with me here too that um markets defied gravity in the face of that doesn't mean they had to go down. That's not what I'm talking about. Right? But they defi they levitated they well more than levitated, right? They went directly up on almost, you know, wars, uh, you know, talk of nuclear, >> uh, us randomly deciding that we could shoot and kill drug runners in Venezuela, >> right? >> Uh, and then that's just a partial list. There's a very long list, okay, of of bad, >> not necessarily bad decisions, but just like questionable things that usually would be like, oh, that's not good. and you know firing of a of a federal well the the discussion of firing of federal uh of Federal Reserve uh uh voting members and uh Federal Reserve people having to resign because of their bad actions. The list goes on and on. Right. Right. >> And um you know I was thinking are tech companies now I just went sideways. Sorry. Are tech companies now the bad actors as in the banks of the 2006 plus era that were spending recklessly didn't care because they know that who cares? They'll get rescued somehow. >> Yeah. Well, uh that's a really interesting point because not only put it this way, Apple was funded by selling a VW bus and an HP calculator. Steve Jobs and Steve Waznjak each sold their one price possession and those 1,300 bucks and thus began Apple. And it was not that long ago where startups, real honest to goodness startups like in garages um could be created with almost no money um and become something really big. And I say not that long ago, I mean only like 20 years back. Uh so guy named Andy Berolstein uh lived a couple of blocks away from me. He was the co-founder of Sun and he funded a variety of companies including a place you've probably heard of called Google. And his his investment in Google which got the whole thing started was $100,000 bucks. That's because he wrote everything every investment he made was $100,000. That was just the simple figure for him. And these days uh you know funding is measured in tens of billions, hundreds of billions of dollars and people call themselves startups when they have like you know 5,000 employees etc. And so we've changed from an environment so banks used to be like super gargantuan and need government to bail them out. And to your point tech companies are now super gargantuan. You have people like Sam Alman saying like uh oh the government should backs stop us and uh >> that was that was the turn by the way that that that was it was actually his CFO that that talked about >> oh yes yes I forget her name but you're right ab it was in a just a I don't know even why she said it that we would like government guarantees on our bonds and everybody's like >> wait a second you're doing debt find what >> right yeah because these these companies are cash bonfires and you know, it's not like, okay, for for 18 months we'll be losing money, but here's our here's where we drift into profitability. It's basically like hundreds of billions of dollars of losses as far as the I can see. And to my way of thinking, you know, we just have to look at our day-to-day lives and ask ourselves, you know, how much we're using such and so. So, like when the iPhone came out, the iPhone 1, I got it the very first day it came out, you know, and I I brought it down to my little girl's gymnasium and all the parents crowded around and it became kind of instantly indispensable. Um, crypto I have used in my life, zero ever. Um, and AI I use I mean, and I'm I'm a I'm creative for a living. I do creative things for a living. I write. I have my website and there's lots of applications for creativity which AI is supposed to excel in. And I use it from time to time to make funny pictures. That's it. End of story. And so, >> wait, you do writing and you don't use Wait, you don't use AI for a little bit of uh grammatical uh overview and things like that because I find that very helpful? >> Uh, no. I maybe I'm just too proud of my writing and don't want anybody touching it, but yeah, I don't. I mean the most the most AI thing I have in my life which I use constantly is >> full self-driving. >> Um and so that that's very AIish and that's you know the old Arthur C. Clark quote any technology sufficiently advanced is indistinguishable from magic. That's what FSD is like. Mhm. >> Um but in terms of uh and you know I just what I do daytoday is by no means a proxy or like well this is what humanity does dayto-day because if judge me it's like there wouldn't be any video game market because I don't play video games. So I'm not saying like I'm the I'm the litmus test but you know I'm I'm pretty into tech and I just I really don't find myself uh using it at all. So, it'll be running to see if if they uh basically take over every industry under the sun um and and are are worth the trillions and trillions they believe they're going to be worth later on. So, we have all this going on. This this this these little I don't know if they're canaries or if they're just little mini firecrackers exploding around, you know, that we you know, for example, the Sam Olman CFO, the OpenAI discussion about that. And then we have things like, you know, Oracle, by the way, Oracle is the poster child in my opinion of this whole thing, >> you know, where where they went from 220 to 350 down back to 216, 215, full round trip on a $300 billion promise of revenue coming in over a number of years. And and by the way, a very good earnings report. Um, but their debt may be downgraded to to junk. Now, there's a discussion about them having to borrow because their cash flow is not sufficient to pay for this and that and this. But what but was the other thing you have other things like for example murmurss little things like the I think it was blue owl pulling out of a private credit rollup deal and little things like discussion about you know is there too much private credit and private equity for that matter uh but private credit in particular being issued on what it's like the private credit is funding these startups giving them billions of dollars at favorable terms terms right now. Maybe for a little bit of equity back in the back end too, right? And that seems to be like all this stuff is like really fishy. >> Well, I think your Oracle point is an excellent one and I've observed that myself because the last time they had earnings, you know, the earnings was was stunk, but their conference call um was got everyone just thrilled and the thing uh just blasted higher. I mean for your for your listeners just to just to be precise about it uh the earnings call took place after um the market closed on September 9 and the closing price that day was uh $241.09 the next day uh it went and it went to $345. So and this isn't some little biotech company. This went from like it it went up like 50% overnight. And the thing is that that was the peak. That very day was that was the lifetime high. And then it went on to over the over the >> And Larry Ellison was the richest man for a moment. >> Yeah. And so from 910 to today, it went from 345 to uh 209. So the entirety of that gap is long gone and it's beginning to appro the next kind of gap it would close would be down at 178 which is the prior earnings report. But to me, what we saw take place today and hearkens back to your Oracle example is what happened way way way back on September 19 of 2008 because that was the morning just before the market opened that um the powers that be you know stood up and said we are banning short selling on on these 400 stocks and naturally the market opened very strong. It's like, cool, those damn bears, it's banned now, you know, eat it, suckers. That was the peak. Now, that wasn't the peak for the market, but that was the that was basically that was the last gasp. And so on September 19, um the market opened strong and it went higher and then all holy hell broke loose. >> Yeah. >> Uh and so I I you know, I think today is a cousin of that kind of event because, you know, markets die. bull markets die on good news and they got really good news last night from the from the granddaddy of them all and it's like um fellas if blow earnings from Nvidia yields a market that falls 606 points on the NQ in one day what else we got up our sleeve >> you know it's also interesting that uh I I think there's a believability issue here right because first of all we've had VF after VFV recovery you know whether it was COVID or dailies uh three-day drops of 3% then it's all back uh and off to the races from there. And I think there's a believability where people are like, "Hey, I don't believe we're going to see this because all the bulls are telling me this." Right? You listen to any show and they're all it's not 2000, it's not this, which okay, I'm not saying it's that, but they they they they feel compelled to compare it to a date in in in history that something bad happened. Uh and we all do that, right? We got to kind of measure things by uh example. But there are so many people that have just absolutely are are convinced that this whole thing is just the next forever. >> And I think that's where the problems came in. And that's where I think again these little cracks with private credit uh and and and the and the the re the reality of what we saw with a few different uh companies recently you know out of nowhere just like the auto parts industry with the private credit and the credit deals and and the the the promising of pledging of their of the receivables and doing to many people like the producers movie. This is important stuff. But um I I I think that the other thing that I just I am alone in this battle and it maybe it's not a battle. I'm alone in this weird think that market cap weighted indices are a blessing and a curse. Any thoughts on that? >> Well um it's a blessing for those who want the market to go up which is almost everybody. um you know there's a chart I follow ratio chart which is basically the um equally weighted S&P divided by the you know market weighted S&P and it it it it looks like um it's dreadful. It's just down down for years and it's illustrative of the fact that fewer and fewer companies been doing all the heavy lifting. Um, and I think that what we're leading to to your firecrackers and such is in 2026, the wheels are going to completely come off because what's going to happen is that uh Trump will figure out, you know what, the only problem is this damn Powell jerk and if interest rates are lower, life would be great and he's going to get some lackey in there and I guess we'll do his bidding. Oh, I get Steen Moran. Moran and And just a few days ago, Trump started to interrupt, but Trump said, "Yeah, maybe I'll have to fire Bessant." What? Who does that? >> Yeah. Well, a man with um I I'll alienate too many of your listeners if I get into it. So, yeah, it it seems uh his his decision-m is rather rash, and I think that if the results don't match what he desires, then he will find whoever is closely associated with that action and just get rid of them. It ain't going to work. And uh he's gonna the things they tried will get crazier and crazier and I I would bet a box of crispy cream donuts that they will ban short selling again next year. >> Please, that's great for you, by the way. >> Yeah. Oh, yeah. I mean, that's >> Yes, let's do that. Yes. >> No, absolutely. Because >> let's make decisions. >> Yeah. Uh his his he he tends to be rash and he tends to be rather myopic in uh the consequences of his actions. And I'm highly confident that, you know, because and it's just, you know, it for time immemorial. I mean, Alex Karp, the Palanteer founder, is pulling this stunt a couple of weeks ago. Blame the bears. Blame the bears. This is the equivalent of of an obese person blaming a mirror. You know, um, >> sometimes mirrors are a problem, but yeah, I get it. >> Yeah. Yeah. So, it's just Yeah. So, yeah. Don't don't pick on us beers. Neither of us need to hear this crap. So, here's here's something. I think a lot of people want to know this. Two things before we go because we have a hard stop coming up uh on the show. And number one, where do people get the information to understand what you're thinking, what you're writing, what you're doing? Oh, uh well, come on over to Slope. Uh I have a little website I started as a blog 20 years ago and uh that's uh I've um that's kind of my livelihood and I just write whatever I'm thinking. It's usually about the markets, but it could be about anything. And so, yeah, slow.com has been around for we're in our 21st year now. And uh I'd love I'd love for people to swing by and see what I'm up to. >> You know, we've known each other probably about 15 16 of those years. >> I I think so. I think so. >> Yeah. I was writing a blog back in the in the day, too. And uh I was always reading Slope of Hope and um >> Well, and and every time you're kind enough to invite me to your show, and I piss and moan about it, and then I have a great time. It's ridiculous. One of these days I'll learn. >> Yeah. So, here's my question. I think people want to know this. I want to know this. When when being bearish, right? When being or or it's not it's not I'm not putting that on you, but >> Oh, please do. I deserve it. No, >> your your How do you affect your bearishness? What is the ways that you will provide what do you what do you how do you position stocks, futures, options, all the above? I mean, what is your play? >> It's really simple. Honestly, it's it's I mean, I say often times with my Tasty Trade audience, I'm I'm the least sophisticated of trader among any of you. I I I'm a simple soul. I just short the stock. Uh I I I put in a stop-loss order. Um there there there's nothing fancy. You know, I've played with crypto. I've played with futures. I've played with forex, but I like to keep things very vanilla. Um on on rare occasions, I'm looking around with options. It was sort of funny cuz um uh a couple of days ago I bought some Russell puts very short term and I bought them for three bucks. Yesterday the market was strong. I sold them for like 250 $2.50. Took a little loss on it. This morning they were 10. By the end of the day they were $6. It's like oh that's where the big money's made. >> That's exactly right. That's the hardest thing to do. By the way, as you know I I do that too with the options. And I got to tell you something more more I like to go a little bit longer with the options. But I know for a fact that usually what ends up happening when I target this that I'm right in the end that I should have waited waited waited waited waited till that point. You know >> that's probably the prominent reason that I that I keep things so boring because I >> I have a lot of personality flaws that don't lend themselves well to good trading like you know impatience. Um, and so if I'm going to shoot myself in the foot, I'd rather do it with a BB gun than a shotgun. Um, and so I I deny myself a lot of fat profits, but I also stay afloat. >> So what about how did you get to 200% net short? Did you use some leverage product? Because >> Oh, yeah. I mean, I'm and I'm probably using clumsy terms. I'm I'm just using margin, you know. So I I do have buying power, in my case, selling power uh based upon my account, but it it's just, you know, they'll let me keep shorting for, you know, way more than I actually have in my account. So, >> so but you could hold overnights in those kind of numbers like >> Oh, sure. Sure. Yeah. It's not like portfolio margin or anything. It's just simple um reggg type stuff. So, uh yeah. Um so, when I talk about 200%, it's just sort of like I'm kind of putting all my chips forward. >> Yeah. Good stuff. Well, I mean that's awesome. I think that um you know, we'll see how this plays out. I wouldn't be surprised either way if this is a breaking point in the markets. Although, seasonally, of course, we are in a better time place. You know what? I I just want to address that. Um, you know, I I don't I think we're in such a weird place that seasonality doesn't matter anymore. Uh cuz like as a as a long-suffering bear, I was uh as I approached September, it's like, well, at least we've got September cuz it's, you know, statistically by far the weakest. It's the only negative month of the year. And it just went went higher. So, you know, September should have been down. It was up. November should be incredibly strong. It's puking all over the place. I we're in such a crazy market now. I just don't I think we can just throw the can throw the calendars in the >> I would agree. I think the big thing is the margin. Once I heard that we're at top level of margin uh and and some companies by the way, brokerage companies were bragging about that they are at such high levels and that's good for them and I was like oh h and then on top of that some of the other things that I've seen with the leverage and the excess money being spent um by companies and and and and elevating stocks just on promises that were empty uh uh based on hope and prayer. Uh and that's the whole open eye thing. I I was just like so we actually for our our our portfolio for our clients we we've for our global allocations we keep it the same basic thing but outside the US a little bit more now but in our trading portfolio actively trading managed growth strategy that we have you know we have uh 36% short affected through leverage products. >> Huh. So, uh, that's but that means still we're still long, by the way. But we're we're 30, you know, we have 36% on the short side to offset. >> Well, the the the one last kind of funny wrinkle I'll say about what happened today is that almost to the penny, the high for the day and the low for day uh equal what took place, the last good tumble we had, which was back on October 10, that was the day that out of the blue Trump said, "Maybe I'll just >> Oh, yeah. >> tariff tariff China options on that day." That was a good day by the way options. >> Yeah. So, but if you look at the INQ chart, it's it's literally it's it's uncanny. And interestingly enough, today actually got lower and as I'm speaking right now is lower than that day. But we're in a very different market than we were then because after then, you know, the weekend transpired and it's like, oh, didn't mean it, didn't mean it, didn't mean it. Did the whole taco thing and then the market proceeded to lifetime highs. >> So, that's kind of an interesting little tidbit to share. >> Yeah, interesting stuff going on. Well, uh, I next time I will put I'll put my pen to paper. I will do all my bake, you know, good technical analysis to figure out the next time that you'll be on. >> Oh, good. You'll catch me in a good mood every time. That's great. >> Have a great day, buddy. Have a great holiday. Have a great Thanksgiving. Have a great new year. All the best to you and your family. >> Thank you very much. Thanks for including me and thinking of me. And uh, likewise, happy Thanksgiving to you and your listeners. >> All right, bud. See you soon. Thanks. >> Thank you. >> Lots going on. A tremendous amount of action, good information from great information from Tim Knight. Next week coming up, Howard Silverblat, the keeper of the keys, the information uh right before Thanksgiving on the S&P 500, Dow Jones Industrial Average numbers, all the stuff that we need to know. He'll give us the inside information on that. We have uh Harry Dent coming up in December of Ed Easterling, Andrew Wilkinson. Lots of great things happening all through the end of the year. So, don't go anywhere. Don't touch that dial. Don't touch that dial. And we're going to be here again next week. Thanks for joining me this week. And thanks for joining me every week. Thank you for telling your friends. Thanks for giving the reviews. Going over to whether it's Amazon or Apple, Spotify, and iHeart Radio or wherever you find your podcast. This is available there. And also DH Unplugged. Myself and John C. 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