What If Earnings Guidance Disappoints? How Low Could Stocks Fall? | Lance Roberts

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So again, it's not going to be what these companies report. It's going to be about what they say about the rest of this year and if their guidance. So two things are potentially and so here's two of the potential risk. You know, we talked about those earnings being very optimistic for this year. If we go through this quarter's earning season and outlooks are starting to get cut back, we're going to see those earnings estimates drop and that's going to make valuations more difficult to justify at current levels. So that may induce some more risk into the markets worth paying attention to if Welcome to Thoughtful Money. I'm Thoughtful Money founder and your host Adam Tagert. I'm very excited to welcome you all here at the end of the week for another weekly market recap featuring my good friend, the Argentine portfolio manager, Lance Roberts. Lance, how you doing? >> I am not in Argentina. I'm in Houston. Yeah. Well, folks may know Argentine is a derivative of uh Argentum, uh Latin word for silver. And right before we hopped on here, Lance, silver finally cracked $100 an ounce. So, we got a lot of celebration going on. We'll talk a little bit about that. Um both to celebrate the win, but also to urge a little bit of caution here. Um but anyways uh for everybody who has um followed the silver ride especially those of you who got in you know 6 months ago back when it was 35 or 6 years ago when it was much lower than that congratulations to you all. Um but uh yeah it's a great day for anybody who's got any interest in silver. Um and Lance raises the question. So what do you think is going to hit be hit next? 5,000 gold or 7,000 S&P because we're very close to both. >> Yeah. No, look, all asset classes are running right now and it's great. I mean, pretty much, you know, as we talked about before, you can pretty much throw money into anything and it makes you money. And I love markets like that. It makes it really, really easy to make money. And since that's what we're in the business of doing, right? That's why we all invest is to make money. It's been this has been a great, you know, such an easy market over the last few years to generate really outsized returns. I don't know how long it lasts. Um, that's kind of the theme of today's article, which is called the South Park Market. >> Yeah, we're gonna get to that. >> Yeah. Yeah. But, you know, it it's, you know, man, enjoy it. It's it's so easy, you know, just, you know, just I encourage you, though, just to be a little bit mindful about managing risk and just, you know, take some profits along the way. These prices aren't going to last forever. These things eventually always reverse. It doesn't matter what asset class it is, you're going to have a reversion in price at some point. So, just don't forget to take some profits along the way and and manage your risk. But, yeah, it's great. >> All right. So, we're going to get into all of that. Um, first, let me just congratulate you and the entire team at RA. Uh, you guys put on a wonderful conference last weekend and I was out there for it. Had a great time. Uh, and from what the audience told me, uh, they did as well. Um uh a few things I want to talk with you about that, but um we you know, you Michael and I did kind of a live weekly market recap there on the stage to conclude it. >> And I was kind of digging around with you um around the nature of this market and and and sort of finally got to >> the type of answer I was looking for from you, which was sort of given your the arc of your long career in this space, how are you looking at today's market? And I can't remember the exact words that you used, Lance, but you you basically did say like, look, this is this is one of the most overvalued markets, if not the most overvalued market I've seen in my professional career. That was not a message to say everybody sell right now and, you know, get in the bunker. But it it I found that that was very important to hear because yes, you're playing the market you have. you're you're dancing while the music's still playing, but you do have a caution in your head saying, "Look, I've been around for a long time and I've never seen things this deviated from their means." >> Yeah. No, and and again, when when you look at that, again, this is also I have some charts and stuff that we can go into when we get into the article here in a minute, but um you know, look, there's you know, when you see this type of market where, you know, stocks go stocks generally always kind of go up first, then it begins to drag every other asset class up with it. And that's because as money's made on one side of the ledger, then people start looking like, okay, here's the next opportunity. So I go buy this asset and then then you know kind of speculators move into that market and that pulls those prices up and then we find the next market so forth and so on. And and eventually that always whether it was 1999, 2008, 1987, you know, whatever, you know, those always culminate in eventually a riskoff event for whatever reason. And and look, there's always a catalyst that that causes that revers reversion in price and we just don't know what that convert that that catalyst is going to be, whether it's going to be something credit related, economic related, whatever it is. And and that doesn't mean today by any stretch of the imagination. Just because markets are overvalued does not mean that markets are going to crash. This is, you know, this is, you know, I'm actually writing an article about this in the next couple of weeks called the the boy who cried wolf. And you know there's that old parable Adam about you know the the you know the young boy's out and and the sheep you know tending the sheep and he gets bored. So he runs into town screaming wolf and there's no wolf and so the everybody runs out there to you know defend the flock and he does this a couple of times because he's bored and then a wolf eventually shows up and nobody listens. And the reason that parable is important is that's the message from valuations. And one of the things that you and I have both seen over the last really kind of 3 years is that we've seen a lot of people come on to different media channels etc like oh the markets are going to crash you know valuations are very high and that always means markets are going to crash and while there's truth to that statement um it doesn't happen immediately and so when valuations are high and these messages come out and then nothing happens we begin to ignore the risk. It's like, oh, this time's different. You know, these asset prices are just going to go up forever because there's a supply demand imbalance or there's this reason or there's that reason. But we ignore the risk because the risk haven't presented themselves. It's it's it's these markets just ignore all the risk. So everything's fine. It's different. But that's the trap that investors get themselves into. And so yeah, eventually these valuations are going to matter. The the price deviations and metals are going to matter. that supply demand imbalance is going to shift at some point and there's going to be big reversions in all these asset classes back towards their means. And that's just that's just what history tells you. Just take a look at any price chart of any any asset class going back. They go up and they also go down. So what's important is just don't forget about that risk management in your portfolio. Be sure you know remember you know take profits, rebalance risk, reallocate capital to you know other places. We just did that recently in our all-w weather model. We just sold some silver just yesterday, as a matter of fact, and bought Bitcoin >> because Bitcoin is completely beaten up right now. It's very oversold. Starting to show some signs of life here a bit. Um, so there's a there's a good potential rotational setup where I can take an overvalued asset and go buy an undervalued asset and and maintain that volatility ratio within my portfolio. >> All right. Um, so, you know, very good point. Um, we're going to talk in more specific about your article in just a second, but um, just a couple things to react to there. One is I I was literally just talking about this yesterday. Um, uh, you know, my my daughters are now getting older. You I've got a daughter who's entering her mid20s. I've got one who's, you know, 19, so she'll be 20 next. um they're they're nowhere near uh looking like uh you know they're they're going to get married anytime soon, but I'm I'm already starting to think about grandkids, you know, what it's going to be like. And uh was trying to think about, you know, what what books would I want to give them, right? What what what would I want to what library would I want to build for them when they're young? And um I I I was reflecting on one of the books I read a lot when I was a little kid, like five years old type of thing. And it was Asop's fables. >> Yeah. >> And um you know those are timeless stories, right? I mean the stories are are literally thousands of years old, right? I mean I think a lot of them date from from ancient Greece. Um and they're they're true. I mean that's that's they're true wisdoms. Um and uh you know things like the boy who cried wolf, right? I mean you you you you learn the dangers of of doing that, you know, when you're young reading this. Uh same with the ant and the grasshopper. Like a lot of kind of almost sort of like the financial values I think I developed, you know, were were the seeds were planted there wi with with Asop's fables. Um and uh so anyways, your your story there about the boycred wolf resonated with me. But um yeah, I I I I you know, I didn't I didn't I feel badly like I don't think I got that book for my girls when they were young. Um so hope to remedy that with the next generation. Um >> it's not too late. by far from now and, you know, have a have a night just reading fables. >> Well, maybe maybe I'll do that. They're like, "Why am I reading this?" >> Set them down over dinner and say, "Look, I forgot to do this when you were younger, so we're going to do it now." So, >> here, climb in my lap and I'm going to read it to you. Make it as awkward as possible. >> But, but to your point there on uh on sober too, I I just want to do a few things. And by the way, folks, I I you know, you you you'll be harder pressed to find somebody who has believed more in silver and still does. I I actually think that silver price will go higher in the future. Uh just to Lance's point, you know, the the big question there is when and at what speed. And uh I I think that the metal has just moved so far so fast here that uh to expect it to continue its current trajectory I don't think is particularly realistic and and I think it's actually kind of gluttonous right I mean you've been given a massive gift of um you know price appreciation I think nobody expected uh 6 months ago and uh just to expect that to continue it's really not that realistic and and let me just show you what I'm talking about here. So, here is the price trajectory of silver, right? Um, Lance, the these these exponential vertical moves in in any asset class, you you strip the name silver off there. If I showed you this chart about any asset class, I think you would say, "Hey, look, >> take take some gains in that thing, buddy. This is not going to last forever, right?" >> No, no, that's right. Let let me uh if you don't mind, let me just let me swap share you uh charts real quick because this is one I was just looking at this morning. >> All right, I'm going to swap share back after you do that. >> Yeah, that's completely fine. Um so here's here's a long-term chart of silver. This goes back to, you know, the late 1970s. And there's a couple of things to take away from this. First of all, just remember that silver is used in the production and manufacturing process, right? So, you know, right now the big the big narrative behind silver is this supply demand imbalance is that there's not enough supply of silver to meet the underlying demand. That's a true statement. Nothing wrong with that statement at all. Now, the question though is twofold. One, is the current price appreciation greater than the supply demand imbalance? In other words, is it is it o is it overpriced relative to the supply demand imbalance or what happens when the supply increases? So a couple of things that can increase supply of course is that when you have high prices that certainly encourages miners to go out and extract more cap more more silver or more metals um from their various assets and maybe doing it in a more unprofitable way. So they're going to go drill more unpro that were you know mines that were previously unprofitable or hard to get to are now worthwhile doing. So that will help increase supply. The other side of of this is that you know we talk about inflation all the time. Um, if you're buying an electric vehicle, and the these are the big stories right now. Oh, it's it's it's the rise in the data centers, the EVs, the solar panels, those all use a lot of silver. True statement. But that means that that incremental cost into those products is rising sharply. And what happens is you get a fall-off in the demand equation. Then all of a sudden, supply is able to catch up. So when supply and demand rebalance themselves, the price is going to become under scrutiny. And this is what's happened in the past. We've had supply demand imbalances before and then the price runs up and it can stay elevated for quite some time as you can see in the chart. But when you're six standard deviations above, this is a monthly chart by the way. So this is the the you're looking at the 200 month moving average, which is currently around $30 a share right now for silver, >> you know, and and if you'll notice, the price has always reverted back to that 200-month moving average. you know, in previous spikes, it always comes back to that level because that's where the economic balance is for for silver historically. So, when you start talking about a reversion to the mean, you're talking about a reversion from 100 back to 30. So now again, I'm not saying that's going to happen, but that's that's and when you're six standard deviations above your long-term means, that becomes more problematic um in terms of of what happens gravitationally because remember the most important thing is is this market, what you're looking at right now, this is not a function of physical demand at all. There is no physical demand input into those prices. This is all futures being traded on the New York Stockings on the New York uh Merkantil exchange. It's just just that this is large commercial speculators betting on the price move right now. And so when something ultimately reverses and they then they run those contracts in the other direction, that's why your reversals can be so sharp. >> Yeah. Um and now look, let's to your point about narratives, there's going to be a bunch of people watching pushing back on this and saying Lance, but you don't get this part and it's different this time for this reason. >> The honest answer is >> it's always different this time. >> It is. And look, it could be. We The honest answer is we we just don't know. But you're walking through the math. the statistical math here that that you have to be that you're fighting right now if you're saying look it's not going to correct look I I'm still bullish I I actually think there are elements that that wouldn't surprise me if it is different this time but it's all about price and value right which is okay well you know what is given all that what is the true price right now I don't know I mean I I think it's higher than it was you know back at 35 back in June but um you know it's moved so far so fast. I am totally open to just the dynamics of price action to say, "Hey, look, things tend to get overheated, way ahead of themselves. A chart like you just showed that is an extreme of an extreme." And so I think to just be naked long here is, you know, it's it's it's not responsible. Um, now could silver still go a lot higher here? Absolutely. Like I said, I'm a big fan. I haven't sold any of my physical ounces. I'm not going to. I'm I'm still in it for the long haul. Um, but two things I just want to note. One is, um, uh, folks may remember, uh, I put on, uh, the silver laser eyes on my, uh, profile photo on X and, uh, back when silver made its breakout above 35 back in June. Um, so again, you know, big fan of silver here. Um, I think I was one of the first, if the only people to to actually do this. And as a result, uh, if you have, uh, followed me on this trade, um, congratulations. I'm only going to ask for 20% of your gains above $35 an ounce. You can send those to Adamoney.com. Um, but, uh, I am hanging up the silver laser eyes for exactly the reasons we're talking about here, Lance. They have totally done their job. I think to ask for more out of them, like I said, uh, is is not just unrealistic, but I think just downright gluttonous at this time. And I I remember the Wall Street axiom that pigs get fat but hogs get slaughtered. Um but I do want to take him out just for one last ride. So if you'll bear with me here, Lance, let me do that now. >> Nice. Very nice. >> But but you bring up an interesting point though, Adam, which is so let me ask you a question. So you have a you you have a lot of physical silver. I get that and that's that's great. But why would you not sell some of your physical silver here? And because we know historically prices going back to 1970 that this may be the highest price. You may get slightly higher prices in in silver. Maybe you go to 120. Maybe you go to 150. Maybe maybe that's the case. >> But these are probably prices that you're not going to see again for 30 years. >> So e and even if you expect silver prices to go higher, right? So there's an economic balance for metals, right? their use in in jewelry to the use in manufacturing. So there's a there's a supply demand equation that'll work out there. So why wouldn't you sell some some not all but sell some physical silver and look to buy it back at cheaper levels? Maybe that level's 50, maybe it's 40, maybe it's 30, maybe it's 60, but why would you sell some physical here and buy back physical later cheaper and capture that gain rather than just write it back down again? >> It it it's a totally fair question. Um, you know, for me there's, um, there is a part of it, I know you're not going to like this word, uh, I'm going to say in the debasement trade. Uh, and and I I don't mean in in the sense of how it's just been used in the past couple months, but as you know, you and I have talked over the years, um, everything we talk about is probabilities, Lance. The thing that I have uh one of the highest probabilities uh highest levels of confidence in is that the purchasing power of fiat currency is going to lose value over time. >> Inflation. Yes, of course. >> So, I want I want to hold part of my assets in actually real tangible physical things whose intrinsic value can't be inflated away. Now, I know you're going to say, "Hey, look, let me show you the charts. Stark stocks have done better than >> you have you haven't solved that you haven't solved that issue. You're still invested in dollars, even in silver. because to to spend so if let's just say currency goes away you've now got to spend or let's say the world ends as as so to speak but to spend that silver you've got to convert it back into dollars nobody's you can't go down to Starbucks and shave off a little smidge of silver and buy a cup of coffee >> well if the world ends yeah you can and I've got my junk silver where I could take out my little you know mercury dime and pay for something with that but that's not really why I own it I I don't I don't spend a lot of time >> and my point is more fundamental you're not going to get any younger Neither am I. >> Yep. >> And let's say the price reverts back to 30 for the next, you know, >> 30 years. Do do I have 30 years to wait on that? I I >> And then again, you sell some here and again, you buy it cheaper. You're still not getting out of that trade. You're just managing. You're just taking some extremely insane profitability out of this, capturing that value. Your wealth has now increased. And then at some point down the road, I'm not saying sell it all either. I'm not saying haul all your silver down and sell it. Uh we're still long silver and gold and uranium in our portfolios, but we're taking profits, >> right? You're taking profits. Yeah. And and just to be clear, you know, I'm taking I'm taking profits in paper physical exposure. So it's not that I'm So I am taking some off the table and I am using hedges and I put a hedge on this morning against my physical silver part. So I'm I'm not just going blindly long. And like I said, this this isn't all of my wealth, right? And so I want to hold some of my wealth in atoms, right? Not in paper claims, not in digital bits, right? Which and and I do in other things. So part part of the answer there is just I I'm I'm holding it because I still believe in the long-term value and and to your point, Lance, let's say it's another 30-year cycle and let's say I'm dead by then. Right. Well, this is part of what goes on to my progeny, right? >> Right. >> Yeah. It's it's not all of my wealth. I'm I'm not I'm not completely tied to the mast on this one. >> Yeah. Yeah. No. So So that brings up an interesting point. So why would instead of holding a silver bar as an example, which is totally tied to the the commodity, you know, price driven by the futures market, why would you not own nismatic valued coins instead? So in other words, buy coins that have a collectible value that's not tied necessarily to the commodity price because they hold an intrinsic value because of their rarity. Would that be a better way to store your wealth? Yeah, I think that's not a bad question. Um, uh, one, you you have to become an expert in this. So, this is something that that takes a fair amount of time, right? Uh, because the numismatic world, like like any sort of collectible world, there's a lot of scams out there. You know, there's a lot of things that you can be oversold. Um, part of that is I'm just, you know, I've got lots of other things I'm spending time on. I don't necessarily want to become a numismetic expert. Um and and and I do feel that >> have a trusted adviser for that. Like I mean somebody that is an >> Yeah. Yeah. You could get a coin guide and like I said that that I I would if somebody has that interest absolutely right. You've got an additional optionality value on on your gold. You've got the underlying gold content. Then you've got the collectibility value. Um yeah. No, I think it's fine. I I do think for for some of the people who are more worried about kind of end of the world type stuff and that's why I'm holding holding gold and and I'm not really one of those guys. But you know I have thought like well you know in that case the numismatic value kind of just goes away because nobody really cares about collectibility. They've got a they've got a bigger >> better you better have more lead than you've got silver at that point. >> Yeah. And it was interesting, you know, my my father for a time in his life collected US currency and this is like old notes like continentals and early forms of the D. He really got into it. But I do remember like it took a lot of his time. >> Oh yeah, that's a hobby, >> right? >> Yeah. But but I mean like he really had to get very well educated because there was a lot of kind of crap out there, you know, shysters and people selling you, well here's, you know, this is why this thing is so valuable. and then you do the research and my dad was, you know, probably somewhere on the spectrum, you know, looking back in retrospect and he would just do the work to finally be like, you know what, I actually think that's a bad deal. I've got way more other things that I'm trying to, you know, I I'm I'm just right now still holding on my fingernails trying to get done in my life. So, but but it's not a bad question. Yeah. And and look, I think it's super fascinating. And I I I think I told a story um I think I told a story here about um going to see one of the world's best mineral collections recently and uh I mean it's wicked cool when you see what a what what an expert collector can can build. >> Yeah. Yeah. Absolutely. No, it is. And and again I had an uncle that was a big big coin dealer um and collector and you know that was his passion in life and he knew everything there was to know about every coin ever made. I mean, maybe you need to go out and buy pennies, you know, the 2025 penny since it's all going away now, >> right? Before they before they're all gone. Yeah, >> guess that'll be the next big collectible, the last penny ever made. >> Yeah, it is funny. I did um you know, I'd had a little penny collection when I was a kid and um with my older daughter kind of gave it to her and we continued building it when she was young. And yeah, when they decided they were going to cut the penny, I'm like, you know, I think that collection has just all of a sudden gotten a lot more valuable. Yeah. A a because they're not making anymore and B because you know those old pennies are copper. Yeah. Unless you've got the the World War II penny that's that was steel for a little bit. >> Oh, yeah. >> All right. But my my my point there was really just trying to um to to underscore what you were saying, Lance, which is, you know, even a big silver bull like me is saying, look, we we we've had it so good for so long. Time to exercise some prudence here. just the charts are suggesting that a pullback is is quite likely. Um not saying it's guaranteed, but um again, when when you when you're faced with those probabilities, just to be blindly long uh to me doesn't seem like too much of a prudent strategy. You should have some defenses in place. And of course, the simplest is just taking some chips off the table, right? As Lance always tells us. Uh but I did want to let folks know, too, that I had put on a hedge. This is not personal financial advice for you. So obviously you should talk to your professional financial adviser to see what might be right for you given your current positions and all that stuff. Um but uh you know I am I am putting some defense into the mix although I still have a lot of offense on the field. >> Yeah. Yeah of course. And and as you should. So again like I said we're still long our medals and you know we're just doing a little bit of rotation in the portfolio just keeping you know risk balanced and you know the portfolio is doing fantastic. You know that then you know nothing wrong with that at all. So, you know, again, if we get uh you know, if we get a rotation in the markets, you know, there's some things that we've been allocating some assets to over the last couple of months that that should do extremely well. >> All right. I want to um we'll get to that when we get to your trades about kind of what's on your target list. And it's interesting that you mentioned Bitcoin there. Um real quick, just to get back to the conference for a second. Um there were a couple, you know, Lance, it was it was actually a great event and um I took some some good notes out of there that we'll we'll talk about near the end of this, but um for me, the most meaningful part of it was the vast number, but oh well, two things. The quality, the caliber of people who were there was just off the charts. >> Um and it was so interesting. It was such a a wide variety of people. I mean we had people who were scientists, people who were doctors, people who were entrepreneurs, people who were um you know, oilmen. Um there was the woman there who was the yeah the actress producer. Um I mean s such a well-healed and well accomplished group of people. So again, congratulations uh to RAIA for for cultivating that type of following. Um but people were extremely generous in coming up. I think you got a fair amount of this too, but coming up and just saying, you know, how much they >> appreciated what we do and and how much sort of this financial education has really helped them become more successful investors. Um, and also to a certain extent, you know, how how people have, you know, really come to to um look forward to these conversations that we have here, Lance. One, to get educated about what's going on in the markets, but also just, you know, get some of the life advice that you don't really get elsewhere in the world. And um I mentioned this briefly when we were on stage, but um two quick stories to tell. Um one was the the young gentleman who I think handed both you and I uh handwritten notes saying how much he appreciated what we did. And of course, you know, we're like, >> who does that? >> Who does that anymore? I mean, this kid was certainly raised right. You know, his his his mom definitely needs to get some flowers in the mail. um but but said some very nice kind things. But he said, "My wife really wanted, you know, she pushed me to come to this uh this conference because I follow you guys so closely." And uh and uh she, you know, when I listen to you guys every week, she she asks me, "Oh, okay. You going to go listen to your boring guys now?" Exactly. >> And it's so funny because I think probably a lot of people watching probably have that same experience where at the time they're listening to us, their spouse is maybe rolling their eyes a little bit saying like, "Oh my god, you're listening to these guys just talk about money and riff on life. How boring." Um, but somewhat in in in her and our defense. Uh, his wife, I think English was her second language, so maybe she doesn't, you know, pick up a lot on the jargon that we use. So I can understand. But anyways, Lance, like I said on stage, I'm totally happy to be your boring wingman any day. >> You and me both. You know, this is one thing I because you know that actually struck me and I was thinking about that after the fact which is you know isn't it interesting right from the standpoint we know we talk about this K-shaped economy and if you really dig down at the K-shaped economy yes there's some bifurcation in the markets because of you know things that happened you know post the the the pandemic shut down sent checks to households those type of things there's certainly some of that there but there's a big chunk of that you know issue and and when you know, particularly when you talk about the the millennials and the Gen Z in particular, they're, you know, they're like this, you know, this term financial nihilism has popped up over the last couple years, which is complete nonsense, but >> which is which is screw it, right? Like this. >> Yeah. Yeah. Just screw it. I'm just going to invest. You know, I'm just going to take the most risk and all those type of things, which we all know, right? Um, you know, turns out badly at the end of the day. And you know and it's interesting that you know people find this subject so boring when outside of your marriage probably finance is the most important thing in your life. Right? >> If you get your finances under control all the other problems take care of themselves. Home affordability takes care of itself. Um the ability to to live whatever kind of lifestyle you want to live will take care of itself. And and but yet that's the thing. We don't want to listen to, oh, economics is so boring, finance is so boring. You know, it's and it's just so fascinating to me because it's such an, you know, money is such an important component in our daily life, yet we pay literally no attention to it on the most part. >> I know. And this um I mean, this could be a whole rant in and of itself, but this goes um to the lack of financial literacy in this country and in much of the West. and we we've sort of I don't know if we told ourselves this or been convinced of this or whatever, but it's that I it's mathy. Math is hard. I don't want to pay attention to it cuz it's hard and and and you know, I'll just let other people think about it or or you know what'll be is is what'll be and I'll just kind of keep my head down. >> Um and obviously we know no strategy is a terrible strategy, right? All right. When it And what's crazy too is like when I talk to people, especially young people about financial literacy, I'm like, look, all the skills you need mathematically, you learned in like second grade, right? I mean, it's not that hard. You don't have to be a calculus major. >> Yeah. >> Yeah. You know, and it's interesting like if you take a look at some of the the the the highest trending topics on social media, um it's, you know, like like stupid pet tricks. um followed probably by health and fitness. Um you know, people want to look better about, you know, they want to feel better about themselves, they want to lose weight, they want a diet. I mean, like on my feed, and and this is partly because I'm interested in this stuff, but on my feed, like every other every other video is, you know, high protein intake, diet tips, you know, those type of things ve and I'm in the finance business, but there's very little good quality financial content that actually comes, >> right? I I think quality was the key word there. So, I'm not on Tik Tok, but the the Tik Tok videos I see around money, and I believe there are a lot of them, but they're all like get-rich gimmicks, get-rich quick gimmicks, right? It's like, oh, fold your money this way and it'll multiply. Or the the dude who was talking about um taking out the business loans to buy Rolexes and flip them or what. I mean, it just it it it it's scary stuff. It >> Yeah. terrible stuff. >> Terrible stuff. >> It's just interesting. I mean, we pay more attention to to food and exercise, which is important, don't get me wrong. I mean, you and I talk about health and fitness and how that's very important to, you know, your future outcomes. You know, wealth is great, but if you don't have any health, it's what's the money good for, right? Right. >> Um, if you can't do anything with it, but again, we just pay so much attention to our health, but we pay such little attention to our wealth. And I just think it's it's just it just fascinates me, >> you know? I'm going to push back on that, too. Um because I don't think a lot of people on average pay attention to their health. Um I think they're watching those Tik Tok videos because they've got beautiful people with abs in them, right? And and there there's a hope and aspiration that maybe one day I'll do that. But I think they're watching that and then they're door dashing dominoes. >> Yeah. But you know what? I'm not going to argue the point. So I think >> Yeah. Yeah. Um All right. So, uh the one other story I want to tell and I and I did get this gentleman's permission to to share it. Um, so the the night before the conference, uh, you guys did, uh, you know, sort of a a VIP cocktail type party and, um, and I ended up kind of closing it down. And, uh, I was talking to, um, a couple there. Oh, and by the by the way, I also should say too, real quick, um, I was also really, uh, encouraged by the number of younger guys who were there. And I'm talking guys in their late teens, early 20s. They came with their parents. Um, and you know, I asked a couple of them on the side like, "All right, are you getting dragged to this thing?" And they were, "No, no." They were I really interested in this. I'm following this. I'm I'm planning to be an economics major or whatever. Um, so it really did give me heart that there there are members of the younger generation for us older guys to pass the torch to in terms of financial literacy. But anyways, um, so I was I was, you know, talking to a lot of people during the night and the place was closing down and, uh, there was a guy standing right next to me and, you know, he I was like, "Look, I'm I'm going to have to get out of here." And he he he as I was walking out, he said, "Hey, look, I I just want to walk you out. I'm not going to I'm not going to slow you down." So, I just want to tell you how much listening to you and Lance has really changed my life. And um, he said, "Let me just quickly break it down for you why." And he he talked about how um his mother had gotten very old gotten old and ill and he was having to manage um her her money for her and his father had managed the money in a very particular way that was probably really overly conservative like CDs and type of things like that and and the CDs weren't she was in weren't really yielding anything but he didn't feel like he could um change the approach while she was alive cuz it would stress her out right? You know, she was like, "Look, this has always worked. You're you're deviating." He didn't want to just give her that stress in her last years. >> Uh so she passed away. He inherited his half of the money. >> And um basically said, "Look, I I at that point of his life, he wasn't sure if he was going to be able to retire. Um he worked a state job. And um uh he said, "Look, this is my last chance. I don't have I don't have time in my life to go through another cycle if I don't manage this money well." and he ended up reaching out to Raia uh he ended up working with John Penn at your your place there Lance and said that the um basically the performance since he's done that um and look performance no guarantees it differs for everybody um but he said now retirement is not even just a possibility for me it's becoming a probability and I cannot tell you like the psychic weight that has lifted that has lifted from me and how that is changing my life And so, you know, I just thanked him for sticking around and sharing that story with me and telling him, "Yeah, look, that is the absolute best feedback that guys like you and I can can receive because that's exactly why we're doing what we're doing, right? I mean, we're trying to change lives for the better. I don't pretend that we're successful in that all the time, but when we do really give somebody a pathway to a better future, man, does that feel good." >> No. And you know, look, you and I spent a lot of time talking about the price of silver, the stock market, and all those type of things. And I've said this on the the our my radio show before in my in my in my YouTube channel, which is you know what I do inside of our company is the least important thing. And you know that's just the management of the assets. That's all I do. I just try to make sure the money grows over time. That's my job. But that's the the least important part of building your retirement and getting to that goal. And and again, John Penn is I I've worked with hundreds of financial adviserss over the course of my career. And you know, I can't tell you how blessed I am with the group of people. Richard Roso, Danny Ratliff, John Penn, Jonathan Mccardi. These guys are rock stars in terms of the financial plan. I've never worked with guys as smart and dedicated as these guys are. They, you know, it's and when it comes to financial planning, you know, you can't ask for anybody better. And but that's that that financial plan which everybody it's kind of like you know I was talking about a minute ago about we don't pay attention to finances. >> The fact that people don't have a financial plan is is beyond me because that's the blueprint for building wealth. You know once you have a financial plan in place then you know how to invest and it just fascinates me that people invest money >> with no plan. And it's not like it's like building a house without blueprints. you'll get a house, but no telling what it's going to look like. But you don't realize how much when you do that that way, when you don't have that financial plan in place that that dictates how much risk you need to take, tells you, you know, what your savings rates need to be, those type of things to reach your goal, you wind up taking on a tremendous amount of risk in your profile because all you have to benchmark against is just chasing the market, >> right? >> Rather than looking at your financial plan saying, "Look, I need 6% a year. That's what I need to to to hit. that's my number. If you don't have that, you just start chasing markets. You take on this exceptional risk and then you have the corrections that eventually will come that winds up setting you back years or even a decade from your goal because you didn't have that plan to work off of. And that's that's one of the most fascinating things that I find about individuals when I talk to them is like, "Oh yeah, I'm in I'm a DIY investor." I'm like, "That's fantastic. Me, too. I'm a DIY investor." And I said, you know, you know, how do how do you how do you you know, h how are you investing and and what you know, kind of what are your goal structures? Like, oh, I just look to beat the market every year. I'm like, that's a terrible plan. They're like, why? It's like, well, what happens when the market's down 50%. You know, if you're trying to chase the market on the upside, you're going to beat the market on the downside, too. And they're like, I never really thought about it that way. I'm like, "Yeah, that's, you know, this is this is why you and I spend so much time talking about risk management, taking profits." You know, I don't care what assets you're you're invested in. You know, you can make money in it. It doesn't matter. But, you know, understanding the risk profiles that you're taking, understand how to manage that risk is what's important because again, volatility price volatility is not risk. And this is a big mistake that investors make. They go, "Oh, well, I look at volatility as a measure of risk." Volatility is not risk. risk is the potential of destroying your wealth. And if you lose your wealth, you're out of the game. You're done, right? It's like going to Vegas, betting all on black and it turns up red. You're done. You go home, right? That's what h that's risk. And that's what you need to be mitigating against in your portfolios. Well, and so as we've talked about, um, you know, understanding risk personally is is really the most important thing that you need to do here because you may find I don't need to get 8% or 9% a year to hit my goals. I only need four. Right? And so you can get to where you need to go by the time you need to get there with an awful lot less risk. Right? So all of a sudden the chances of you being knocked out for a decade or more, they they they drop precipitously, right? You can sleep much better at night, right? Um the the key thing is a having the plan, but then also, as you've said in the past, Lance, is revisiting that plan and updating it. I mean, how many people do you know, yeah, I have a financial plan. Okay, great. When do you put it, you know, when did you put it together? Oh, about eight years ago, right? Well, when's the last time you updated it? >> Eight years ago. >> When was the last time you looked at it? >> Yeah. Eight years ago. >> Yeah. And it's so funny because like you know with with the adviser I probably have the majority of my assets with you know they use a a financial software for financial planning and I was calling them so often to run scenarios on it and they just said Adam let's just train you on the software here's the software >> use it yourself whenever you want right and so I just geek out you every couple weeks I get on I play around with stuff right so >> we do we do that as well so you know we update our financial plans for our clients every single year we have reviews with them those type of things but they have access All of our clients have access to their financial plan and they can go online and and we have listen it's funny because I mean I hear from clients like they're up at 2 o'clock in the morning like I was laying in bed and I had this dream about this and so they'll get up and log in and start messing with their financial plan you know for whatever reason and you know I think it's fantastic right to when you're that >> that's me by the way I'm that type of client. Yeah. >> Yeah. Yeah. But when you're that engaged with your money your success rate goes up dramatically because you start understand things. you make you make a really good point a second ago. I just wanted to encapsulate that for for listeners, which is he said, "Look, if you're I'm going to use an easy number. We'll use 4%." >> So, let's say your financial plan says you just need 4%. Who wants 4%, right? That's boring. Market's up 20%. So, what if I got five? Okay, just and again, we're just keep this just math-wise. >> Yep. >> So, to go from four to five, that's a 25% increase in the rate of return, right? So, I'm just I just want an additional 1% gain each year. That's a 25% increase over your 4% goal. >> Yep. >> The problem with that is is the amount of risk you have to take for that 1% additional gain goes up by almost double. It's an it's an exponential increase in risk for every percentage point rate of return over your goal that you need to make. And and this is this is the and this is why not having a financial plan is so detrimental to your future outcomes because you're kind of just throwing darts at a in the dark hoping to hit the dart board. But a financial plan will help you navigate that risk profile that you will drag yourself into unconsciously by not having a plan to work off of. Anyway, I think that horse to death, but there you go. >> Yeah. Okay. So, folks, we're we're going to get back to the discussions of the markets from a glance. We're going to get to your South Park post in just a second here. But the reason why we're spending so much time on this right now, folks, is because of what Lance said at the very beginning, which is this is a market where correlations have largely gone to one and and the tide is r the rising tide is rising, you know, just about all boats right now. Um, and this is where people just don't want to hear about risk mitigation. It's boring. It's not sexy. It's not fun, right? But this is where it matters the most. the the the the moment that people uh start taking losses, they're going to care. This is all they're going to want to hear about. How do I mitigate risk? How do I get back to where I was, right? Um but the problem is is that the information has much less value then, right? So, we're just trying to hammer it home right now while times are good and the sun is shining. You know, you want to this is when you want to fence the roof. This is when you want to think about defense. All right. So Lance um last year at the beginning of last year you wrote a seminal post uh called curb your enthusiasm and it was all about you know setting expectations for the year. Um I would say you know you you might feel differently. I I would give that that post um maybe a B for for how the year turned out. Uh because definitely it started out really volatile and the piece was really timely there. Then we kind of went back to the old um old blade market's just grinding higher and you know that teflon market nothing nothing sticks to it. Um this piece is is sort of a revisitation of curb your enthusiasm. You're now picking a different TV show South Park. Um let me just hand you the baton. You can tell people why you wrote it. But I but I do believe it's it's in the spirit of what we've been talking about here. >> Yeah. Yeah. No. And and again, you know, so you know, in in terms of so curb your enthusiasm, the the point of that article was is that all Wall Street analysts were extremely bullish and nobody was looking for any type of volatility and and the point of that article was be prepared for volatility. We think it, you know, we thought the market would end up about 10% for the year. We did 17. So yes, get a B- rating on the article for, you know, missing returns by 7%. But um we did have volatility. had a 20% decline kind of mid year. Now, everybody forgets about that because the markets did so well, but everybody forgets about the volatility that happened in between. So, you know, and and I think that is a a good um kind of backdrop when thinking about 2026. So, I'm going to we'll just share some charts with you from the article. Um right now Wall Street forecasts for 2026 are all expecting near 15 to 16 for you know 14 15 16% gains on average. So I mean they're very optimistic about this coming year for a whole you know and again this whole premise is based on economic reflation which is a surge in economic growth with no inflation. So that's that's kind of the premise for this year. The Fed's going to keep cutting rates. And over the next couple of weeks, we're going to revisit, you and I are going to revisit this article. Not this article, but I've got a couple of articles coming out over the next couple of weeks talking about this reflationary cycle and the risk that we need to be paying attention to relative to that reflationary idea. Um, >> and just to note, this reflation without inflation is what the administration is selling hard right now. >> Yes, absolutely. You know, everything's going to be fantastic. you're going to have economic growth, higher wages, all going to be great, but no inflation. So, um, we'll see how that works out. But, you know, and again, that's why I'm writing some articles on this. So, we're going to rehash this topic a couple of times here over the next couple weeks because I think it's really important for positioning portfolios for the rest of this year. So, again, everybody's very bullish. >> Hey, do me a favor. Just just magnify the chart if you can if you're going to bounce through a few more. Um, >> yeah. Yeah, we're going to clip through a few more here. Um yeah, >> so >> just thinking of the boomers like me, the guys like me whose eyes are going. >> No problem. Um so let's talk about market structure. Um as kind of the fir this article kind of goes through three phases. Market structure and then you know kind of the underlying fundamentals. Um but one thing we've had over the last three years are these exceptionally large outsized returns which now put us about 18% above the three-year moving average. And that's and that's an inflationadjusted real return basis. So we're we're the markets have had exceptionally high rates of return and that's very hard that structural nature of the market is very hard to maintain. In other in other words, the the odds of having four years, not saying that it can't happen, but the odds of having four years of above average returns is going to be much harder to accomplish simply because of the natures of the markets. And again, this goes back to the reversion to the mean. And again, it's not just the stock market. It's silver, it's gold, it's precious metals, it's it's it's any ass. It's midcap, small cap. You know, you kind of look through markets. A lot of these markets had exceptionally high outsiz rates of return over the last few years and that reversion to the mean becomes a function of process over time. It's a structural foundation of the market. That gravitational pull will create that reversion. Now, does that mean that you're going to have a 50% decline in the market? No. What it does mean though is that returns could be substantially lower over the next couple years. Maybe we're doing five 6% rates of return in assets versus 18 20 30 40 you know whatever they are you're going to have that reversion in process. So structurally something very much pay attention to this is the deviation of valuations for the stock market. Again, this is using the Schiller Cape Cape ratio, but this is the deviation of valuations from the long-term exponential growth trend of valuations going back to 1900. We're currently at about 167% deviation from that long-term exponential growth trend. And we've only seen that peak back in really around 1900 was the last time we were even close to that peak. and we went through a 20-year secular bare market during that dur during that period before we had the runup from 1920 and 1929. So again, this this is not something that you go, oh, market's going to crash tomorrow. That's not what that means at all. These valuation levels, and you can see here, even back in the early 1900s, you kind of peaked at those high levels over about a 10-year period before the markets actually started going through a big mean reverting process. So these things can last much longer than you think. And this is why it's important not to immediately react to valuations because valuations in the short term over the course of a year are simply just a reflection of sentiment. So everybody's very bullish about the markets. Very every everybody's very optimistic about the markets. That's all fantastic. But you know valuations longer term do tell us that the risk of reversion are becoming much larger. Hey c can I just say one thing here? >> Yeah. >> So um uh right now there are charts out there you've shown a number in the past that show that forward returns 5 year 10 years are projected to be negative for the markets given today's valuation levels. >> Right. >> Um >> like this one. >> Like that one. Exactly like that one. Right. >> Okay. >> Um so go back to the other chart for a second. Uh the one you were on before. Um, so you know, a lot of people who are watching here, Lance, are older, right? Right. >> Um, we don't know what's going to happen in the next 10 years, but let's just assume that that that prediction is true. And let's even just assume that it just goes sideways, right? Market just goes flat for for 10 years. Um, >> you know, there's a lot there's a lot of people who don't have the ability to recover from a lost decade, >> right? Um, and and you're you're showing here that, you know, like the the 1900 one, that was a 20-year bare market. And and a 20-year bare market is actually more the norm than not, looking at this chart here, right? And >> so just real quick to your point, >> 1900 to 1920 was a secular bare market. Then you had a secular bull market from 1920 to 1929. >> Then you went from 1933 to 1953 before that bare market ended. So there was another 20 years. Then you went from 1962 to 1982 in the next bare market. You know, these bare markets last just about as long as the bull markets last. So again, we're very, you know, we're, you know, if you take a look at 2008, that was the bottom of the secular bare market from 2000 to 2008. It then took 13 years basically to get back to even in terms of returns. So you say, okay, well from 2013, if I have 15 years to 20 years, you know, in a secular bull market, we're getting closer to the tail end of that rather than the beginning, right? So, you know, the the to your point, you know, don't dismiss these periods of of low returns. That doesn't mean returns are low every year. You're going to have some really good years, but you're going to have some some down years, right? So, think about 2000 to 2013. That return was zero on an inflation adjusted basis, >> but you had two 50% corrections in that process, right? And that's what really damaged a lot of people that were trying to retire in 1999, 2000, they didn't retire. >> Yeah. And and that's where I'm going with this, which is look folks, is this the peak? We don't know. You know, could the bull market last for another 10 years? Yeah, sure. Probably. I mean, possibly. Um, the point is, if you're 65 and we're just about to enter a 20-year bare market, >> you know, that's that's really unpleasant. Like, a lot of your retirement dreams are are are going to get wrecked by that unless um, you know, you're positioning yourself in such a way to try to not be as vulnerable to the the downside of that cycle, right? And I'm just guessing, Lance, like, you know, in at 1900, the folks who who, you know, somehow managed to um avoid the worst of the downdraft just on a relative basis were way better off than the vast majority of the rest of Americans here. And so, you know, yes, in this type of period, an active investing approach uh is probably going to work much better than a passive investing approach. And and you may actually be able to make some good money during a period like this, you know, if you if you catch the uh the good years. Um, and look, I'm not trying to sell fear. I'm not trying to tell everybody, hey, you gota you got to sell everything because it's the top right now. I'm just saying probabilistically this chart is saying at some point in the not too distant future, you know, it's probably more likely than not we're going to enter a prolonged bare market at some point. And if you're approaching retirement there, you want to make sure that you are taking steps at a minimum uh to try to, you know, position your portfolio uh to to not take a 100% of the downside, >> right? And and look, you know, and and this is why it's important to monitor port, we're talking about the market here, but you know, if markets began to move into a bare market, it's going to be every every asset class that went up at the same time is going to go down at the same time. So, because money is going to rotate within markets. So, whatever assets you're in, it's like, oh, I'm not I'm not in stocks right now. I'm in silver and gold. Fantastic. Great. You're having an awesome run in that. But when money starts to leave the market, it's going to leave the market across the board. And it's going to look for the most undervalued risk averse asset, which right now would be Treasury bonds because they've been unloved now for about four years. So, you know, those those you're going to start to see that rotation of money. if that if it occurred tomorrow, that's what you would see happen. Now, um the next bare market, secular bare market period may not start till 2030, right? So, you know, we may have three more, five more years of of this type of a market and life is good, everybody's happy. You know, we've got data centers, we've got all this other stuff going on, but what we do know historically going back to 1900 that these markets cycle about every 15 to 20 years. And the the the upsides are fantastic and the downsides are brutal and you're just going to have to be able to na navigate through that. And again, I was talking about real quick, Adam. This is a this is the point about valuations and again a lot of people are saying, "Oh, valuation." And this is why I want you to be really careful when you take a look at valuations and talk about them is because everybody looks at valuations. I got valuations are high. Everybody's been saying the market's going to crash for three years now and it hasn't crashed. So obviously valuations are wrong. Um the problem is in the short term and this is consumer confidence and this is consumer confidence of higher stock prices in the next 12 months overlaid against the rolling 12 month PE ratio. You'll notice there's a very high correlation. So in other words, all valuations tell you in a 12-month period is what consumers think about stock prices. That's it. We're we're willing to overpay for valuations right now because we think asset prices are just going to go up. There's no risk in the market. It's fantastic. Now, this was the chart you were talking about. This is forward five-year real returns based on Cape valuations. So, at current Cape valuations, the forward five-year return from today is somewhere around zero. That's that's what history tells us historically going back to 1900. Now, does that mean it has to happen? No. But whenever you've had these levels of valuation, four and fiveyear returns have been sub they they I tell you what they ain't they ain't 20% a year. So you know I think that we've milked a lot out of you know kind of where we are. But again I think you have to be more cognizant about what you're paying for asset prices right now. >> Yeah. And ju and just to add to that and Lance while I'm talking if you can expand the size again a little bit. I think maybe it shrunk back a bit. Um, but uh, you know, let's say you're somebody who's listening closer to the administration. You say, "You know what, Lance? I actually think the economy is going to do great this year. I'm I'm picking the over on the GDP. I think maybe we could get 5% GDP growth." >> Yes. >> While stock prices are a function of earnings expectations. So, earnings go up, you know, in general, that should be supportive of stock prices. This goes back to valuations, right? It's it's it's it's price versus value. And right now prices are extremely deviated uh in terms of a multip you know in ter in terms of uh average multiples that we've had in the market. And my point here is is you could be right and we could actually have an economy that grows faster next year that doesn't guarantee the stock market's going to continue to go up. In fact, you could have a stock market correction or pullback even with a growing economy. >> Absolutely. And you brought up the most and you started that whole statement with exactly the right issue which is earnings expectations. This is the deviation of earnings and over here on the right hand side this is going through 2026 earnings expectations. The expectations for earnings growth this year puts earnings growth at the highest deviation from the long-term earnings growth trend going back to 1900 ever on record. Um we're at 44.4% deviation right now. Tech bubble was 35.87. The real estate bubble was 4245. So you know even in and we had the liquidity bubble going into 2015 we weren't there. And even in going into the pandemic we weren't anywhere near these close you know close to that. So, you know, you've got very high expectations for earnings in an economy that is looking at slowing, you know, slower employment growth. Um, I was just posted a chart this morning talking about weight, you know, real weight real real disposable incomes are declining. Savings rates are falling. That's so, you know, falling savings rates, you know, are good for economics in the short term because it means people are spending money. But if you take a look at GDP growth over the last two quarters, it's been almost entirely a function of tariff issues, which is net imports and exports. So we take a look at net exports as a percentage of GDP growth. It's normally doesn't show up. It's a very very small fraction of GDP growth. It's been very big parts of the last two quarters. Now that's going to eventually reverse. Most of that's been gold exports to get ahead of tariffs um and worrying about future tariffs. You know, these this recent tariff threat over Greenland was another good example. You know, those gold exports have very little to do with the economy, but it has a huge impact on what's happening with the GDP calculation. So, you're getting this, you know, exceptionally strong growth and something that actually has nothing to do with actual economic growth and and I think the payback on that is going to come this year and we may see slower economic, you know, I think we may fall short of these economic growth expectations people are hoping for, >> right? And uh I think that came up in the um live u weekly market recap that we did on stage. Um if memory serves correctly, you were taking the under uh for the year. Yeah. Right. Your your eyes are open to that potentially changing, but right now you're starting with an under. Well, and I look, I I think the way to to couch this is I think we just need to go into this year with kind of wide, you know, eyes wide open uh to a degree is like look, the bullish case is great. The bullish case is awesome. That's the easy part of the strategy, right? I'm invested. We're overallocated to equity risk right now. Portfolios are doing great. I don't have to do anything with a bullish case. If the bullish case comes to fruition, I'm fine, right? It's kind of like I'm driving a a a robot Tesla at the moment. My hands aren't even on the wheel. We're just cruising down the freeway. Everything's fine. So, the only thing I have to worry about is if something goes wrong. And so, that's why I'm spending a lot more time here over the next three weeks focusing on the potential risk >> that could occur. Because if if none of if the risks don't occur, I'm fine. The markets will do great. My portfolios will do fine. My clients are happy. Awesome. But I've what I've got to be prepared for is the thing that goes wrong so that my clients don't have heavy impacts because of that. >> Yeah. And folks, this is in my opinion what you want in a good financial adviser is you want somebody who is, >> you know, kind of neurotic when times are are are going really well um for exactly the reasons that Lance mentioned. And similarly, you want somebody when when everything looks awful, you know, somebody who's trying to look for the light at the end of the tunnel as well. Um, hey, real quick, just because you mentioned it, did you see the uh the headline yesterday that a couple of guys basically did their version of the cannonball run in a Tesla with full self-driving? They had the car drive them from LA to New York and they didn't touch the wheel the whole time. >> Really? No, I did not see that. That's awesome, though. >> Yeah. Yeah. So, yeah, it just it just shows that look, this this technology age that we are h hurtling into is continuing to to improve at an exponential rate. >> Yeah. I saw also saw a headline yesterday that Elon Musk was taking safety managers off of the self-driving cars in Austin. So, I'm not sure what that means, but >> Well, actually, I saw I saw an article today, and this is just a headline, so I could be wrong. Um, they they um they're now in follow cars. So, they're not in the car itself, but they're in cars behind just to make sure that that that nothing goes wrong. >> Gotcha. Gotcha. Gotcha. So yeah, just I'm still look I at the end of the day I'm still kind of a control freak. So I I'm personally not quite ready for robo cars. I'm sure a lot of you are. You know, hey yolo, you only live once, right? Right. Right. >> You know what's interesting though is um apparently auto insurance companies are now offering discounts for um Tesla owners who use the full self-driving because statistically the cars get into accidents less. Um >> well yeah but you don't have a lot of history on that. That's the only >> you don't you don't have a lot of history. But but it is interesting which is it is interesting if they indeed prove and look I'm >> uh I mean I'm like you Lance I'm kind of a dinosaur and probably will never feel fully comfortable with my hands off the wheel >> but I also know that you know you ask humans if they're you people if are you an above average driver and about 87% of people say yes right which mathematically isn't possible. Um so I'm I'm going to bet that the collective you know wisdom of the technology does drive more safely than the average American. You know what? And and here here's the bottom line of all that. I am all on board with robot everybody having a robotic car if it gets rid of traffic in major cities. >> Yeah. >> Yeah. Well, I I am all for it. We may go 30 miles an hour everywhere, but you know the these you know when people have accidents on major free especially here in Houston, right? It just backs up traffic for an hour. So I'm all for it. I'm all for And not not to turn into an this into an Elon love fest, but um I mean one I mean the research totally shows too like like merge lanes and things like that, you know, these are where the big bottlenecks occur and they occur because people aren't moving efficiently, right? It's it's you you just trust the car next to you so you slow down too much and whatnot, right? Where if it's all being kind of controlled by, you know, the hive mind of the AI, everything can move as efficiently as possible. So, you probably won't get the 30 m an hour crawl, but you also add things like the Boring Company into this, right? Where, you know, we can have these kind of underground express routes and stuff like that. Like, >> like who knows, traffic might become an artifact of the past in 10 years. >> Hey, I'm I'm 100% all for that. >> All right, back to the topic. >> Back to the topic. >> This is this is econ this is the world uh economic outlook from the IMF for 2020. This is as of October 25 for 2026. And you know the interesting thing is is that you know Europe and emerging markets they've been on fire lately. They've been doing great. Small m small caps and midcaps have been on fire. Now they're underperforming pretty dramatically here on Friday. But um they've been doing very well on this idea of this economic resurgence. Yet the IMF is projecting 1.1% economic growth in Europe and 2.1% growth in the US. That's well below what Wall Street's currently expecting. So yeah, you know, so again, you know, I'm not saying that's the case, but just fundamentally, we're now moving into the kind of the more fundamental structure of the market out of the out of the structural side of it. >> I think that's something worth paying attention to because economic growth is where revenue and earnings come from. Without economic growth, you can't have revenue and earnings and and that's going to be the big watch for this year. Yeah, I don't think I'm going to be able to. Well, I don't think my the probability is super high, but um folks, I am going to do my best to try to get somebody close somewhere to the administration. Um you know, my my my dream would be Scott Bessant. And actually, without outing them, one of the people I interview is actually friendly with Scott Bessant and has said, "Hey, I'll I'll Adam, I'll pass your request along to them." Um, but I want to get somebody from the the administration who's close to, you know, the the economic side of things. Um, to come on here and just make the case for the five to six plus% GDP growth this year. Um, not not not saying I'm going to be able to do that, folks, but just letting you know I'm I'm trying my best. And if anybody watching has a connection there, please uh just email me at uh at adamthawfulmoney.com and uh I'll I'll respond right away. >> Yeah, absolutely. Um, so kind of moving into more of the kind of the fundamental, you know, kind of backdrop of this equity, household equity ownership of the S&P 500 is at all-time records. So you've got, you know, it's interesting, we talk about this, right? We say, well, you know, only 20% of the, you know, the market is, you know, 80 90% of the market's own by 20% of income earners, but yet household equity ownerships at record highs. And this and this has a lot to do with passive investing as well as you know 401k plans which are you know which by the way you know as we've talked about before 401k plans are very small factor in the overall market only 25% of employees actually use their 401k plans >> right >> um you know so it's it's sad all right we you know more people should be contributing to 401k plan but you know it's not as big of a factor as a lot of people make it out to be but passive investing by individuals um at the household level has risen. In fact, you know, one of the bigger concerns right now, I think for 2026 is that in 2025, you had a thousand new ETFs come to market. So, every year, we've just had an explosion in new ETFs come to market, but last year it just went surging off to the moon and a big majority of those were leveraged and single stock leveraged ETFs. Um the the issue with that is is that this is kind of reminiscent of what we saw in 2021 when we had this big rush to get spaxs to market. We couldn't get, you know, we couldn't get companies to IPO fast enough. So we started doing spaxs and all kinds of other stuff uh to meet that de that speculative demand in the markets. And you're seeing that again with these ETFs. You know, ETF providers are happy to provide you an ETF. If there's even an incremental piece of demand for something, they'll throw an ETF out there for you. And you know, the problem with ETFs though is that you need to you need about $10 million in aumum, assets under management, just to make it viable to launch an ETF. You need about 50 just to break even on it. And to make some money with it, you really need about 100 million under management. So the point about that is is that a lot of these ETFs, especially the leveraged ones, are going to wind up going away because of the leverage and and again, you know, we saw a lot of 2x leveraged ETFs come out. You know, we talked about recently there was this push to do a 5x leveraged ETF, >> right? >> Um, thank goodness they go. Yeah, thank god those didn't go through. But just as an example, uh you know, let's say you've got a 2x leveraged ETF on some asset and it's and it's got a limited amount of assets under this is why you always want to take a look at the at the at the both the volume of the ETF, how often it trades and also look at the underlying assets under management. But let's say you got a leveraged ETF which is using options to create that value. And if that stock price goes nowhere for a period of time, in other words, the under whatever it's tracking goes nowhere for a period of time, the optionality inside of that ETF will continue to erode the value of your ETF and eventually you can wake up one morning and they close the ETF because there's simply not profitable and they'll close that ETF on you and you may or may not get money back depending on where it closes. There was recently a um ETF. It was um that was issued and the notice was sent out. It's a 2x leveraged ETF and a notice was sent out to owners of the ETF that the value of their ETF as of that day was 0.0000. >> Oh jeez. >> So, you know, it can happen and and so just be careful. And but the the the bigger point here is is that households are all in. You know, everybody's in the pool in terms of either equities or precious metals or whatever it is. They're all invested. They're 100% in the markets. And because of that, Wall Street is rushing to get more product because it's an asset. It's a land grab for assets, right? If I just get something out there, I can get some assets and make some money. So, there's this big rush to get out there, which means you're getting poor quality product coming to market. your risk is going up exponentially and when this reverses that kind of adds the fuel to the fire because of forced liquidations that'll occur as a lot of these things have to unwind delever and and basically close up shop. So this is one of those structural underpinnings that is not this does not mean markets are going to crash tomorrow, but this is that fuel to the fire, right? That's the kindling and that's the the the lighter fluid, you know, kind of in in in you know on the coals. All you're missing here is a catalyst for that reversal. And same thing here. This is margin debt. So there's been a lot of analysis about margin debt. This is margin debt as a percentage of real disposable income. And the reason I did this one is there was an article by Bloomberg. I think it was Simon White did an art Bloomberg looking at margin debt as a percentage of GDP. And you know, I was looking at that saying, well, that doesn't quite measure what's going on within the markets because economic growth comprises a lot of things, right? You got imports, exports, you have government spending, you got household personal consumption. So, >> and it can be distorted by like what's happening with gold with the tariffs and stuff. >> Yeah. Yeah. And you get some bifurcation in there. So, but if you take a look at margin debt versus real disposable income, so this is this is what individuals theoretically have left after they pay taxes, >> right? This is not dissimilar to a a home price to to local incomes chart. >> Exactly. Yeah. And so what this is suggesting is is that individuals have run out of capital to invest and they're now so my real disposable income I can invest out of that. I've now used all of that to invest. any of my savings, I've now invested and now I'm turning into margin debt. And that's the highest level that we've seen ever on record. Now, >> I think this is one of the scariest charts you ever showed me. >> Again, this is bullish, right? Margin debt going up is bullish because it provides buying power for the market. What's it >> It's bullish while it's going up. Yes, >> correct. It's also fuel for the fire when it goes down because that's the liquidation event on the other side. So again, just one of those structural issues. Nothing doesn't mean anything today, but I think there, you know, this adds more of that fuel to the fire, so to speak, that if there's a catalyst that ever shows up that ignites the sell-off, there's plenty of fuel behind it to make it a bigger sell-off than a lot of people are expecting. >> Okay. Hey, can I can I can I make one corrective comment here? Of course. >> Can you go back to the pull pull up the chart you had uh two charts ago? Uh thanks, Lance. So yeah, here I I just ju just in case folks got confused earlier. So these two things can be true at once, which is we can have record high household equity ownership um and we can have uh 90% of financial financial assets owned by the top 10%. And that's the that's the stat that's been out there. Um and the way to understand this is is >> yes um more and more households may be participating in their 401k or whatever. they just might not have that much in it compared to the top 10 percent of households which have basically all the wealth. Um, and they own 90% of of the stocks that are out there to own and the rest are distributed amongst the the other households there. >> Correct. And again, if you look at the bottom 50%, they own like 2% of the market. >> Yeah. Exactly. >> They barely show up. Basically, the only tie they have to how the stock market is doing is if your company's stock gets hammered and it has to lay you off, then it matters, right? But otherwise, their lives aren't that impacted by what happens in the stock market. >> Exactly. Right. >> Yeah. Um Okay. Um I guess they're impacted in the sense that those who do own assets are just getting further and further ahead of them, which is, you know, right something we have ranted about a lot. Um >> well, that's the K-shaped economy that we were talking about earlier, >> right? Um okay. So, a couple other topics I still want to bang through in the time we have left, but real quick since we're still kind of on the markets, Lance, do you mind just doing a quick TA and and showing where we are right now? Yeah, absolutely. And what's interesting is we we are closing in on 7,000 S&P as I mentioned earlier. Uh and Lance, it looks like we're going to hit 5,000 gold before we're going to hit uh 7,000 S&P. Gold of the time we're trading here has less than $15 to go. Uh silver is now at 101, just FYI. Uh S&P is down on the day. It's it's got almost 700 bucks it needs to go to get to uh to to um Sorry. Uh, sorry. S&P is uh >> we're up >> 50 bucks. It need it needs 50 bucks to go. Um, >> yeah. And we're still up so far on Friday right now, but uh >> Yeah. marginally, right? >> Yeah. >> Yeah. Okay. Um, so, but despite the fact that we're knocking on the door of 7,000 S&P, um, if you go back here, and maybe I need to have my glasses on here. Um, but the S&P hasn't really gone that far since what, October. Um, you got the sort of rising wedge there from the the low that we saw in mid November. But if you go back further, you know, the the October high isn't that far away from where we are right now. >> No, no, it's not. And uh, you know, Tuesday, so Monday was a holiday, right? So nothing happened on Monday, but on Monday, you know, we were starting to worry about this whole, you know, issue about Greenland. Then on Tuesday, the markets opened over this whole Greenland concern. There was some comments by the White House, maybe about using force or whatever it was. And again, as you and I have talked about before, the the White House is very good about using the stick and carrot and and why the market keeps buying off on these announcements of, you know, we're going to we're going to impose tariffs on Europe across the board, you know, over this Greenland deal. Why anybody takes that seriously is beyond me at this point. >> It's like Charlie Brown with the football. Like when is he going to learn that Luke is going to pull it? Right. >> Exactly. And and yeah, so you know why? Yeah. So yeah, Adam, you're absolutely right. You know, why the markets, you know, respond, you know, like they do relative to these, you know, announcements beyond me. But what it does show you, one thing that we've talked about here before is that when markets are rising, there are the reason markets go up. There's only one reason that prices rise is because sellers are being drugged into the markets. So a good example today, you know, you were talking about silver earlier. So silver is up sharply today and that's because the sellers are people willing to sell silver today are saying, "Yeah, I'll sell it to you, but you're going to have to pay me $100 for it." And then somebody does that and so the next seller goes okay you don't have to pay me 101 for it and then somebody does that and so the seller sells. But the problem with that is is that the buyers are now way below that number. Somebody willing to buy silver is is s or in bulk are sitting much lower than that $100 a share. So in other words as prices rise you have a marginally fewer number of buyers and sellers willing to transact that price at that level. the bulk of sell buyers are sitting much lower and that's what you saw on Tuesday with the markets is buyers were there they were 2% lower in the markets >> and we saw retail investors in particular heavy buyers of uh S&P 500 indexes on Tuesday and that's why this week the MAG 7 stocks have been doing very well Google Microsoft Amazon Meta they've been up sharply this week because all that money flowing into passive indexes is fuel 40 cents of every dollar as we talked about before fuels those stocks. So you're seeing those stocks go up because of that buying of those indexes. So importantly technically we we had a little bit of destruction here. We had this rising wedge pattern which was great. We broke that bullish trend line on Tuesday. That that trend line is now resistance to this rally. So if we get a rally back up here close to the previous highs, we're going to intersect to the bottom of that rising trend line. So that may make it a little bit difficult here temporarily for stocks to get to new to you know make new all-time highs. Um we're also on a momentum sell signal right now which suggests that markets may be a little bit weak going into next week. Uh also money flows have turned negative here temporarily because of that selloff on Tuesday. So we need to see that recover as well. But next week and the week after we have earnings. Um we're going to get into the heart of earnings season next week and then the following week we get Apple, Microsoft, Tesla, and Meta. So you're going to get a lot of the big boys uh coming up the not this coming week, but the week after. So over the next couple of weeks, we're going to have about 80% of earnings hit the markets. That opens up the buyback window for this market. And again, so part of this sloppiness that we've seen here as of late is simply a function that you've had no buybacks going on in the market because that window's been closed. >> And I was just about to ask you about that. So how concerned are you about the market's prospects in the next couple weeks as capital flows seem to be turning negative. The buybacks window is shut or ending. Um and you know, we're not going to have that marginal buyer back in the market for what, three, four weeks from now. Well, so this all it's a great question. It all hinges on earnings next week on how good they are. >> Yeah. Well, so Netflix was a really good example. Netflix reported really good earnings. Their revenue growth was good. Their their uh earnings numbers were good. Their subscribe, they had 375 million subscribers. I mean, Netflix is killing it. They're doing really well. But the stock got hit by almost 7% after their earnings because of their forward outlook. So again, it's not going to be what these companies report. It's going to be about what they say about the rest of this year and if their guidance. So two things are potentially and so here's two of the potential risk. You know, we talked about those earnings being very optimistic for this year. If we go through this quarter's earning season and outlooks are starting to get cut back, we're going to see those earnings estimates drop and that's going to make valuations more difficult to justify at current levels. So that may induce some more risk into the markets worth paying attention to. If outlooks are fantastic, awesome, right? Markets are going to do great and particularly around the AI story, right? So Apple, Microsoft, Amazon, Google, Nvidia doesn't report till the end of February. So we're going have to wait for the king of of AI to report for another month and about a month and a halfish. Um, so you know, we've got a lot of stuff coming up that's going to detail that narrative around the AI story, the capex spend, the data center buildouts, the infrastructure development. You know, that's the things to really be paying attention to here for over the next couple weeks because a lot of it'll define both the economic growth expectations and earnings expectations for the rest of this year. >> Okay. Let me ask you this, Lance. Um, so one of the things you and Michael have been talking about, we talked about this at your conference is capital rotation and um, you know, this year the um, the big hyperscalers um, have have been weaker than they've been um, and we've seen capital flow into midcaps, small capsu, other industries, >> right? Um, and of course, one of the big questions that we've been talking about is is okay, is this just a little blip or is this going to be kind of a major theme for the year? >> Let's assume for a minute it is a major theme for the year >> where um the the hyperscalers kind of cool off a bit um but the other parts of the market catch fire. Can the market still be up like 15% plus um without the hyperscalers given how big of a chunk of the market share of the the indices they are? No, because the the small cap, midcap stocks in particular, they don't make up that, you know, if you think about where the major assets are held, right? It's mostly in large cap equities. You know, think about, you know, your largest ETFs, stock market, the Vanguard total stock market. Um, you know, the spy, the VOS, that's where the bulk of the assets are held. So if and again since those are primarily made up of the large cap stocks particularly the the the kind of these hyperscalers that make up a big percentage of that it'll be very difficult for the overall market to be up that much if you don't have those guys kind of pulling the horse so to speak I mean financials make up a big part of the market healthcare makes up a big part of the market. So again, if we start if those if those guys do better, then you know, a positive return year will be a good, you know, we'll have a good positive return year. We'll be up, you know, 8 n 10% this year. I think it'll be difficult to jin out another 20% return without the without the big mega caps driving the the the leap. >> Okay. Now, now on an individual basis, you could create a portfolio that has a lot of exposure to these other industries and these different cap sites and and you could have a great year, right? Um, but I hear you saying, and this is the math I was chewing on, it's going to be hard just for the overall indices to perform as they have in the past three years if the hyperscalers cool off, >> right? And again, you know, I I'm not sure that that's the case. Uh, that that's that's going to be the case. You know, if I was a betting man and saying, okay, what do you think is going to happen over the next, you know, six months to a year? When I look at the fact that you have emerging markets, small caps, micro caps, small cap growth, dividend developed markets all shut in this upper right hand corner. >> There's not a lot of gain to be taken out of these yet. Uh, you know, more there's not a lot of gain to go. In other words, these these things are so extended and so deviated from means, you're going to get a rotation. And that rotation, ironically, would be into the most oversold sectors, which are mega cap growth and and buyback achievers. >> Yeah. because those are the ones that have been under the most pressure. >> Okay. So, we we could return to our regular programming is what you're saying. >> Yeah. So, so again, look, I have no idea um if that's going to indeed be the case, but again, knowing how sector rotations work and and again, so you a good example of this um you and I were talking last October. We said, "Hey, you know, we're buying some healthcare stocks because they're really beaten up. Nobody likes health care right now and tech is really overbought." So we reduced our tech and bought healthcare. They did great through the end of the year. U early earlier very early in this year we I told you that we were shifting a little bit out of growth and buying value and staples and staples have done fantastic over the last couple of weeks. So these rotations happen all the time in the market. And this is why it's important to pay attention to them because it'll help you identify risk sooner than later so that you can make that so you can take advantage of what's out of favor and start buying stuff that's in favor. And a good example of this financials have been under a lot of pressure over the last, you know, couple of weeks in particular here. Let me light these up. There we go. Um transportation uh has been running with that small cap trade. um very overbought. Energy's been doing great part of that small cap trade very overbought. Materials same way. This is that economic reflation story at work. These are extremely deviated from their long-term means. And again, financials now, utilities, real estate, technology are more the are more of the oversold camp. So, I, you know, again, this is where I'd be looking at maybe buying some financials, maybe buy some, you know, kind of value growth, uh, you know, and kind of look at maybe taking some profits out of my kind of >> Wait, wait, wait. What's value growth? >> Sorry. >> What's value growth? >> No, value and growth. >> Oh, value and growth. Okay. >> Well, and and look, there's look here's here's a, you know, kind of an interesting stat for you, right? Nvidia is a value stock. It's if you take a look at Nvidia, >> right? >> If you look at it on a price to growth basis, is that what you're talking about? >> Yeah. It trades at a 049 price to growth. Even their forward PE is 24, right? This is not an overvalued stock man by any stretch imagination, not given the rate of growth of their earnings, right? So, I mean, you know, that's what I'm saying. So, there there is an argument to be made for a quote unquote value growth stock. Those do exist, but specifically what I'm talking about is building a portfolio that has some growth components to it because if markets do well, they'll do well, but also add some value for protection. >> Okay. Um, hey, and folks, he just hopped off it, but the charts that Lance was going through earlier were from RAA Simplevisor Service. fantastic services as we've talked about in the past, but it during the conference last weekend, I one of the members of Lance's team actually kind of did a real deep dive and walking through a lot of the the powerful tools that are in there. It is such a phenomenal tool that you guys have built there, Lance. >> Oh, wait. I'm so excited, too, because we're we're we're very close to launching the new version, which is got AI integrated into it, and it's really really cool. So, I'm really excited about that. >> All right. And I'm still not entirely sure what that means, but when when it launches, we'll let you walk everybody through it. >> There you go. No problem. It just basically says that it's smarter than I am. So, >> by the way, which doesn't take a lot. >> I was going to say, how high is that bar, brother? >> That bar is pretty low, Adam. Pretty low. >> Um, all right. Look, gota still some more topics I want to bang through. We're gonna have to get to kind of lightning round here. Um so uh you you you made a case that uh if things get rocky in the markets uh because everything has gone up pretty much um capital is going to rotate into assets that are unloved right now like treasuries. Um but in in the interim, given all of the um drama that's been going on, particularly with tariffs in Greenland and Trump going over to Davos and kind of reading the riot act, all the Europeans on their home turf, um uh we've seen bond yields rising, especially as Europe has, you know, puffed up its chest and people have said, "Well, we're going to stop buying your uh your your treasuries, America." And that's already happened with a few >> brought that story up. >> Yeah. Um so anyway, >> that's hysterical story, by the way. We'll talk about it. >> Okay. Uh I just want to give you a chance to speak to the rising bond yields. >> Well, they haven't risen. Um you had that they >> Well, I mean, come on. They have a little bit. They were close to four and now we're 4.2 or whatever. >> You're 4 today. You're running yields at Wait, wait, hold on a second. I just looked at this a second ago. Um you know, your yields 4.25. I mean, you you've been hovering around, you know, 4.1 to 4.3. And and you know this isn't you know yields have been stuck here for a while but again you know there was kind of a knee-jerk reaction to the announcement that this Denmark fund this Denmark pension fund was going to sell their treasuries in response to this whole issue over Greenland which was laughable because they own a hund00 million worth of treasuries. Um just as comparison >> which is what like 10 minutes worth of buying or something. Well, just a comparison, my firm, we own near 300 million in treasuries because we're we have two billion under management. Right. So, >> Right. Right. >> You know, >> and you're a 6040 firm, so you got >> Yeah. Yeah. Yeah. So, you know, we have almost 300 million in treasuries. So, but even with that, we could So, I'm I'm going to make a statement. Tomorrow morning, we're going to sell We're not Okay, just if you're a client watching this, we're not going to do this, but I could make the statement. Tomorrow morning, we're going to sell all of our treasuries in response to this action. It would not even move the market. There'd be a there's a there's a pension fund sitting there going, "Yeah, I'll take all that, but you got give it to me now. I'll >> have any more." >> Yeah. Um the the latest bond auctions went off with a dramatic increase in foreign demand. Uh foreign demand of of owned treasuries now are are at an all-time record. But importantly, you know, Europe saying Europe's great because I always say this stuff that's complete nonsense. First of all, there's, you know, most of the Treasury bonds in Europe are owned by individuals, institutions, those type of things. They're not owned by the central banks. And so trying to get a coordinated effort of that would be near impossible to get them to dump their treasuries. But secondly, it's it's it's it's nuclear death for them be because again, their whole trade system is based on the US dollar. And so if you go dump all your treasuries, you have to eliminate all your reserve currency. You've now completely screwed yourself. So, it's, you know, these these narratives are hysterical. They make great for headlines. Um, and everybody kind of re reacts to them, but again, just the the reality of it is so laughable that it was funny that even paid attention to it. >> Yeah. Well, and it also just begs the question, okay, you know, you don't want America's debt, right? Whose debt are you going to hold? >> Where you going to put your reserve currency now? Yes. >> Yeah. And and look, I I I'm not saying that to to sound like a um you know, braggadocious American, but it really is at some point it's just like look, you know, the the next alternative has a lot of issues along with it. >> Oh, I've got I I did an interview um it's going to air on Monday with um a guy named Parker White. He's the the chief officer for DeFi development. Um you heard Daniel Kaine o over the weekend at the summit. as a partner. But we just did a deep dive into stable value coins or stable coins. >> Stable coins >> and the impact that is going to have because all of those stable coins are basically going to be using treasuries to peg to the dollar which is another you know and as those stable coins gain traction for immediacy of payments etc. that's just increasing the rate of demand for US treasuries which is going to require all these other countries to own even more treasuries to maintain these stable coin transactions. So it it's you know this is going to be a you know stable coins and and again the more I got in that conversation with him it really be was fascinating because I knew that was going to be important. I had no idea how big that's going to potentially be. So folks should definitely go listen to Lance's interview there. But Lance, I think we talked after I'd interviewed Brent Johnson back in November about this. And it was it was so mindexpanding when you really start, you know, peeling the onion there. And it it really, >> you know, all this concern about ddollarization in the world, it's it's hard once you understand stable coins not to see red dollarization >> uh as an inevitability here. So anyways folks, watch that interview with Lance and then um if you haven't watched the one I did with Brent, highly recommend you go watch that one as well. And >> by the way, if you ever want somebody to to talk more about it, I'll I'll hook you up with uh Parker. He's really really well spoken. Um very very knowledgeable on the whole crypto space, how it works. So yeah, it was a good interview though. >> Well, thanks and >> I learned a lot. >> I'll def definitely watch it. Um okay, so bond yields you're kind of like nah, not a big deal. um at least not at this point. Um okay, so couple other quick things. Um want to get your your quick thoughts on what's going on with oil and gas. Um they're having quite a strong start to the year. Uh natural gas is a week for the ages. Uh I think it's up like you know 30 plus% on the week. Um which is huge for a commodity. Um just a quick promo here too. So, this video is coming out on Saturday, Lance. The day after Sunday, I'll be releasing an interview I just recorded with Rick Rule. That's a deep dive in the oil and gas industry. Um, and I'll I'll just say folks that um Rick, uh, I asked him, you know, on a scale of 1 to 10, um, you know, given your long career, uh, Rick and and your many different successes, uh, with with identifying, you know, getting in early on a big trend, um, how are you looking at the oil and gas opportunity right now given their current valuations and given where you think the value of the sector could go? And Rick's answer was a one. And it for a minute I thought really I I thought this you were excited about this and he said oh I thought one was the best. >> So he goes into a lot of details. >> Yeah. Exactly. So he goes in a lot of detail with that. But when a guy like him who has made so much money from basically riding repricings of major commodities says I think this is one of the best opportunities I've seen in my career. We really should pay attention. Um, so anyways, um, you and I have talked a bit over the recent months about how this is this is looking like an attractive time to start building, uh, positions in oil and gas. And I know that you guys have some core positions anyways at RA. Um, but you know, we've talked about maybe you guys might start increasing your positions and whatnot. What do you think? How are you feeling about what you're seeing so far in the performance of oil and gas so far this year? >> Great. I mean, um, you know, we just launched recently an entire energy ccentric portfolio that's already up 6% for the year. Um, and we I mean, literally just launched this thing like four weeks ago. So, um, it's doing really well, outperforming the market. But again, yeah, you know, I you know, I still think there's risk to the oil market this year. Um, if the economy slows down, if >> you know, there's a lot of ifs, right? But, you know, I think, you know, you're you're going to see little spurts in oil, right? I mean, things are going to happen like, you know, natural gas went up 30% in the week because we're all going to die of of frostbite over the weekend. >> Yeah. >> By the way, my little brother lives in Wisconsin. He just texted me. It is um the the weather thing said it's like -15, but feels like - 38. I mean, that is god- aful cold. >> Yeah. And it's look, it's going to be, you know, we're going to be, you know, freezing here over the weekend in Houston. Um, you know, it's supposed to be in the 20s this weekend. And I know for a lot of people it's like you know in South Dakota they're in the 20s they ought to beach weather you know but for Houstonites you know that's pretty damn cold here. So but you know so but so yeah not not surprising natural gas but you're going to have that kind of stuff with oil going on as well. Uh oil has a lot of seasonality to it. Um hurricane season is a good example as we get further into summer. But, you know, so I think oil, you know, my my base case outlook is that oil is going to struggle a little bit maybe this year unless something you know happens. But if we get something like peace in the Middle East and all of a sudden we get a lot of reserves released into the, you know, the market that's going to suppress oil prices. So I think you need to watch >> or peace in Ukraine, too. >> Right. Right. Yeah. I think you need to watch those type of events. But I do think longer term and again we've got some core positions as we discussed at the conference on that kind of behind the meter play on the power gen side of oil and gas. But I do think there's a place as we get through this year for companies like an Exxon Mobile or a Diamondback drilling or a slumber those type of things. Um which those companies will do well and probably continue to do well. Plus you get a nice dividend from these companies as well. >> Well so so that's exactly it. So Rick Rick I think wouldn't disagree with you Lance where you know he he thinks it could take a year or two maybe even three years for this sort of repricing that he expects to happen to occur. Um and I'll say I'm actually hoping that oil goes down this year. Um because I'm kind of on a dollar cost averaging program right now and I would love to be buying over the next year at lower and lower prices here as I as I build my positions. But you know I asked Rick this and he said yeah it's absolutely great. He said, you know, I said, look, versus a number of the other things that you got in early on. So, like Rick was very big on uranium several years before it took off, right? And he was beating the table saying, "Look folks, you know, I don't know when this is going to go, but when it goes, it's going to go big." He was exactly right. But during th those years where he was in and waiting, he's just eating the opportunity cost of the capital he has invested in there where here in the oil and gas space, you actually get pretty attractive dividends. So, you know, he's basically saying like there there kind of almost is no opportunity cost to capital. Um, and so, you know, that's getting subsidized by the dividends. And then, you know, if you're cor if the thesis is correct and and the price then pops, like you know, you're you're it works doubly well for you. So, >> yeah, absolutely. No, and and look, we're we're big advocates, you know, we run two different types of dividend models. We run a pure dividend model and we have a dividend growth model, um, which combines growth stocks with dividend stocks. Um, but you know, we're even in our our standard core portfolios, we have positions that yield dividends because again, when you know, when you think about investing, you should always factor your portfolio on kind of a a three-legged stool. And the biggest mistake that investors make is they they they start focusing on one aspect of their portfolio. It's like I'm all in growth stocks, which is fine, but now you're solely tied to capital appreciation. Your stool, your portfolio should have three legs to it. Dividend income from from stocks that you own. So that's an income stream that you're going to get. >> Interest income from bonds because bonds protect your capital and provide an interest payment into your portfolio. you're constantly getting cash flow coming in which can then be reinvested into other stuff and then you know then have your capital appreciation component. So all three of those give you a nice total return structure for your portfolio that will not only lower volatility of the portfolio but in periods of sideways markets or down markets you're still accumulating cash because of all the of that income that's coming in. So it's always helping the portfolio grow stabilize maintain itself and gives you cash flow you know to reinvest. It's always fascinated me. It's like people go, "Well, you should just buy and hold the markets." And then dollar cost average on the way down. Sounds great. Except if I'm buying and holding, that means I'm fully invested into these ETFs. And so when the market's declining, I've got no money to invest, right? I profits. >> Well, what dividend and income gives you is the ability to reinvest capital all the time back into your portfolio. >> So, you know, so yeah, we're really big advocates on on dividend. It's such an important function of the portfolio over time. >> Yeah. And I got to say on that, you know, as as I have built my wealth over time, um, like most early investors, you know, I I was I had a very equity capital appreciation mindset. >> And once I started working with a financial and, you know, I would write things up and write things down. Um once I started working with a professional financial adviser um and you know I sat down with them and they really tried to understand what kind of investor I was and they were like whoa all right you're actually a pretty conservative guy. Um so you know let's make sure that we have a good income you know sort of conservative income part of your portfolio. Um, I got to say, as the years have gone on, god, do I love just logging into my account and just seeing it go up because the income checks just keep coming in. And of course, as your wealth builds over time, those those income streams get bigger and bigger, right? And you don't have the the the huge varieties that you had before. It's just for a guy like me, it's great just to see a steady Eddie improvement. Yeah. >> No, absolutely. You know, and look, I I love the stock market and I'm like you when I was younger, I was all about the stock market, right? So all my money was invested in stocks and blah blah blah. And and now that I'm older, you know, I've shifted a big chunk of my money to assets that generate me 10 to 12% a year every single year and just create that with with no volatility risk, right? So I've got, you know, I do a lot of >> You're going to get you're going to get so many emails after this of people saying, "Wait a minute, where can I get this no volatility 10 to 12% return?" >> Well, again, but I I do hard money lending and I know how to do it. So, you know, I have and I have other firms that I work with that also do hard money lending. Um, but I mean there's it's it's a complex process, but I've built this ability to create these 10 to 12% rates of return. And so, if the market goes up 20, great. I don't care, right? If the markets go down 20, great. I don't care. I get checks every single month. And you know, it it it changed my outlook about investing in markets over time because once you can become okay with just having cash flow, all of a sudden the the risk profile that you need to take to generate wealth drops dramatically. And once you can get yourself away from chasing markets to build wealth, you know, again, one of the worst things that we ever did to individuals, particularly younger kids these days, is televise everything, right? is like, you know, the market's up today. This is happening. And so we benchmarked everybody against this this index that goes up and down every day and just turned the markets into a casino. And that kind of erodess the real ability and and the real fact about investing capital, which is to make it grow steadily over time. And and so once you can get to that mindset that if I can create enough in inflow that I don't have to worry about anything else, life becomes really easy after that. >> All right. Um well look folks um especially if you are older, income becomes a really important part of your life too. Um if you if all this stuff sounds attractive to you and you don't feel like your portfolio is is set up optimally the way you'd like and you want to talk more about the potential of things like income or making sure at least the three stools of your portfolio are working together in unison, go talk to your financial adviser or go talk to Lanson's team. And of course, I'll tell you how to do that in just a second. Um, all right, Lance, I'm going to punt uh the rant for today just because we're we're getting long here. >> Just tell me the topic so I can be prepared for next week. >> Uh, it's it's one you're going to like. There's a fitness element to it. Don't worry, you're you're going to react to it just fine. Um, >> but real quick, we're going to get to your trades real quick, but before we do, I just want to put up the bad idea of the week. All right. And I'm just going to read this headline to you. You may soon be able to use a buy now pay later plan for your rent. >> Jesus. >> Yeah. >> This this this right here is why the youth is basically destined to faith. >> This is terrible advice. >> Oh, it's the worst advice. Um it it really is just the worst advice. It's going to create a a whole, you know, generation of lifetime debt slaves, debt surfs. Um, again, you and I have said this, this is the the most obvious uh future headline we're going to see, which is, you know, catastrophic losses in the buy now pay later space. Whoever could have seen this coming and we're just going to be raising our hands saying, uh, us and probably almost everybody else with two neurons. Yeah, >> exactly. Yeah, you talk you talk about how how creative, you know, consumers are when times get tough that they can still find money to keep their spending going. they can. Um, and part of that is an, you know, a a positive attribute of of the creativity of human beings, but but a huge part of that as well is um, you know, whatever you want to say, a massive uh, uh, condemnation of the evils of the industry that will sell these people the rope to hang themselves with. >> Exactly. No, it is. And unfortunately, it's just, you know, again, this goes back to our whole conversation at the beginning of the show talking about financial education, you know, we shouldn't even be offering this stuff out to people. This shouldn't even be an option. And, you know, but we did this with subprime mortgages. We did, you know, we've done that. You know, why do we have a housing problem? Because you did subprime mortgages. You can trace it all back to, you know, zero interest rate, subprime mortgages, all this type of stuff that we did to let people buy stuff that they shouldn't be buying. And, you know, we keep doing it. And and then we wonder and again to your point then when it all blows up everybody goes well nobody could have seen that coming >> right >> it's not hard to see it coming right >> and then by the way we need to bail them out it's like why we all could see that this was going to be the end case and you know what's so interesting to me too Lance is like we the regulators stepped in front of the five time leverage ETFs >> right and I think they should have I I applaud that right but all right if you've got money to be investing and you feel like you're sophisticated enough to take the risk of a five-time ETF and it blows up on you. You know what I mean? That that was a risk that you largely took with your eyes wide open. Yes, there will be pe you novice investors who get burned on that, right? And again, that's why I think they should have stepped in. But that that's a class of people who's not necessarily in dire straits right now. The people who were turning to buy now pay later to do things like Door Dash or pay their rent are people in dire straits right now. How come how come the the regulators aren't lying in front of that that you're you're going to help a lot more people who need it with that, right? >> Yeah. I mean, this is why the whole what what was the what was the whole organization we put together, the financial um >> the consumer finance protection? >> Yeah. >> Yeah. I mean, this is their that's their job. They should be looking at that going that is not good for consumers. You know, look, I I we shouldn't have to put guard rails on consumers. we shouldn't have to tell you what to buy or not to buy or how to save, but apparently we do. So, >> I'll bet you if we looked at the Congress people who were involved in creating that, they're getting big checks from companies like a firm. >> Exactly. >> Yeah. >> Exactly. So, >> all right. Um Well, that wasn't the rant, but I I I knew that would that would trigger you a little bit. >> Yeah. Next week, we'll we'll we'll get into that. >> Okay. Um All right. So, trades. What trades have you made over the past week? The the only trades we did were just basically yesterday we just took our positions in silver and gold back to target weights. We've done this like three times this year. >> They get they get like extremely overweight in the portfolio. We trim them back to target and we've been kind of watching Bitcoin here lately and just, you know, on a weekly basis, Bitcoin's getting extremely oversold, getting to start to see a little bit of a technical recovery and and we're not on a buy signal yet, but starting to approach that on a weekly basis. And historically, when we've seen these types of signals occur, it's been a pretty decent little run, you know, probably 20 25%. So, um, we just started taking, you know, you know, as we were saying earlier, right? If you take profits in silver, what are you going to do with it? Just let it sit in cash. No, you know, we're looking for opportunities elsewhere that haven't come yet. And I think at some point people are going to go, you know what, Bitcoin's really kind of been beaten up here lately. I think there's going to be some opportunity there, and you can get at least you get some buying interest here for the near term, just a rotational basis. So, that's what we did this week. >> All right. So, let's try to talk a little bit about that next week. Um, it sounds like you haven't bought yet. You're just watching closely. >> No, no, we did. We we we bought a we bought a uh So, our portfolio weight in Bitcoin could go up to 5%. So, we're at 2% right now. >> You're at two. What were you at before you bought in? >> Zero. >> Zero. Okay. All right. Um, so you've made an entry position in it. Um, when when we talk next week, I also want to ask you about Micro Strategy. Um, because I was actually talking to my wife this morning. I was looking we were looking at the portfolio and I said look the >> the one thing that's really not doing well is Micro Strategy which is down over 50% from where we bought it. I I actually didn't buy much at all. It was a little just sort of tow in there because I don't have much Bitcoin exposure and I'm thinking about maybe taking some profits from from silver and putting it into that for exactly the reasons you're talking about. But we'll get into that. >> We will and I'll tell you why not to do micro strategy. But we'll talk about that next week. Well, and that's why I want to talk with Micro Strategy because there is there is leverage uh going on there and and one may argue, well, hey, when Bitcoin, you know, goes back into their upcycle, Micro Strategy might, you know, go to the moon. So, I want to hear your thoughts on whether that may or may not happen. Um, okay. All right, folks. Um, well, look, if um if you think that uh the the the fastest way that you could uh send your personal prosperity to the moon is to continue to watch Lance Roberts on this channel week in and week out. Please let them know that by hitting the like button and then clicking on the subscribe button as well as that little bell icon right next to it. Um, just a reminder, if you would like to get some help from a personal financial adviser for all the reasons that we've already talked about here, uh, if you don't already have a good one advising you, consider talking to one of the ones that Thoughtful Money endorses. These are the firms you see with me on this channel week in and week out. Perhaps you'd like to talk to Lance himself and his team there at RAA. To do that, just fill out the very short form at thoughtfulmoney.com and the advisors will be in touch with you very quickly after you do that. Folks, I'm going to give you a couple of other links here, too. Um, uh, so Lance just had his conference. Um, the thoughtful money spring conference, uh, is now fully planned out. It's going to be Saturday, March 21st. I haven't kicked off the marketing for that yet, but that's going to start happening really quickly. So, those of you that are signed up for our newsletter on our Substack, keep your eyes out for that. Um, I will just mention though, u the faculty gets better every year. This year, it's amazing. Um, I'll give you the full list in a little bit when we kick off the marketing, but it'll be kicked off by Lacy Hunt. As always, we've got u Matt Taibbe joining us this year. We've got Ed Dow joining us this year for the the first time. Um, we're going to have Rick Rule come on and really open his kimono on um, not just all the oil and gas stocks that he likes, but a number of other commodities as well. Uh, there's a whole bunch of other folks as well, but I'll keep you um, in suspense for those until we uh, we do the official announcement. But if you want to lock in your ticket at last year's prices, it's I'm not sure yet whether we're going to be able to keep them flat or whether we're going to have to raise them a little bit for the spring. But if you want to buy them now at what the price was last year, you can go to thoughtfulmoney.com/2026 and you can buy your ticket for the spring conference there at a 0% inflation rate. Um, last thing is um, you know, silver, who knows what's going to happen. And I just talked about how if you've if you've got a lot of it, you're sitting on big gains, you should protect them. But if you haven't been in and you want to either create your initial exposure or if you think silver's still got a fair amount of road to run here, um we just want to remind folks that the U promotion that Andy Sheman uh of Miles Franklin, Thoughtful Money's precious metals solution, indoor solution, um he still has supplies that he is making available to this audience to buy junk silver at just 99% uh sorry 99 cents above spot price. And Andy has said this is one of the lowest premiums he's ever seen in his career. So if you want to take advantage of that or just talk to Andy and his firm about any other precious metals need you may have for buying, storing, um or um selling, uh just go to thoughtfulmoney.com/bygold and fill out the short form there and Andy and his team um will be in touch with you right away. Speaking of buy gold, Lance, um gold is now uh what's that? uh just $15.17 away from the big round number of $5,000 gold. So maybe we'll talk about that next week, too. >> Yeah, we we'll get there. I mean, you know, markets love round numbers. So 5,000 gold, 7,000 S&P. >> Yeah, markets love it. >> Markets love it. All right. Um well, thank you, my friend. Another great week again. Really wonderful to see you in person and congrats on a great event. >> Thank you so much and I'll see you soon. >> All right, everybody else, thanks so much for watching.