transcript

Speaker 1:
[00:00] Whenever you get these V-shape type moves, it's always tricky, it's very difficult to make money. People normally try to buy dips for a certain period of time, and then they throw in the towel and start to sell. And as fear reaches extremes, that's normally when we start to rally, and very few people want to buy into the rallies, they start selling into them.

Speaker 2:
[00:27] Welcome to Thoughtful Money. I'm its founder and your host, Adam Taggart. When today's guest was back on this program in January, he predicted that stocks would soon experience a 10% correction, that the precious metals would experience a big pullback, and that oil had found a bottom. Well, he was right. And this was before the war with Iran broke out. So how has the war impacted his outlook for the coming quarter? To find out, we're fortunate to welcome back to the program Mark Newton, head of technical strategy at market research firm Fundstrat, where he works with its founder, Tom Lee. Mark, thanks so much for joining us today.

Speaker 1:
[01:04] My pleasure. Thanks for having me back, Adam. Good to see you.

Speaker 2:
[01:07] Well, thanks, Mark. It's a pleasure to have you back. And folks have really enjoyed your quarterly outlooks, Mark. So I'm sure this will be no exception. Folks are going to love this one. I do just want to underscore the props I gave you there in the intro. Now, you didn't know that we were, well, to my knowledge, you didn't know that we were going to go to war with Iran in a month after we talked. But all the trends that you thought were in place and were going to happen pretty much happened.

Speaker 1:
[01:39] It's been a remarkable time. We've had, I guess, not dissimilar to last year, an early spring sell-off that caught a lot of people off guard for different reasons, and now just a remarkable snapback rally. We've been up 3 percent for each of the last three weeks. Quite unusual, up 12 percent now over the last 14 trading days. That kind of thing doesn't happen quite that often.

Speaker 2:
[02:06] I think it's the most violent rally, whatever you want to say, since the 80s. Did I hear that?

Speaker 1:
[02:13] I think the quickness with which we've recovered certainly has set some records. I think it's never happened in 11 days where the market's gone from a 100-day low to a 200-day high. I think the next closest was October of 2014, but certainly one for the record books and pushing aggressively back to new all-time highs.

Speaker 2:
[02:39] All right, so obviously, this is happening. Well, why don't we start with this? Why is it happening? I mean, obviously, one explanation is that the markets are basically pricing in a near-term end to this war. Oil kind of doing the same. It's down from its highs from a few weeks back. On the day we're talking, it's up a couple percent. It's kind of hovering around Brent crude futures are hovering around 90. So it doesn't seem to be as sanguine about the war as the markets, I think, but you tell me.

Speaker 1:
[03:25] Look, I think the market gave us a couple of clear indications back in late March that it could start to stabilize and turn higher, that maybe many investors did not quickly catch on to. For those that use technicals, we did see a meaningful amount of breadth improvement which really started right around mid-March, where you look at things like the percentage of stocks above their 20-day moving average in 50, really started to jump pretty substantially, and that was interesting and something that the broader S&P really didn't showcase properly if you're looking at the markets which continue to drop, but yet far fewer stocks were hitting new lows, and that's almost always something that happens when markets are approaching a bottom. The same thing happens, by the way, when you're approaching a top, and we also saw that in the middle part of January, where fewer and fewer stocks were participating and starting to turn down. The other is that we started to see some real evidence of the defensive sectors really starting to deteriorate, and sectors like consumer staples, which according to my work, we're one of the few things that actually did show the potential for a sell-off, just based on risk-off, risk-on type positioning. When the defensive sectors really start to gain in strength, that's normally a time when you have to be a little bit more cautious or expect you can see a possible trend break. We saw exactly the opposite, honestly, in March. We saw consumer staples go straight down. Those are a couple of things. But interestingly enough, we never really truly saw markets get all that oversold. We also really didn't see any true capitulation like what I normally like to see, when an excessive amount of downside volume, that never happened. So the fact that markets can all of a sudden just stabilize and turn higher, it had to do specifically with the fact that crude oil, which was at $115, started to rapidly decline. And I think that is something investors need to pay attention to, cross-asset type analysis, when you get things that have coincided with market weakness, which finally start to go the other way. Specifically, dollar moving up, crude moving up, rates, honestly, pushing higher and all those things started to back off. That was a really interesting thing and honestly coincided with a period where the markets were forward-looking and expecting that we would see some type of a truce. We know that that, of course, is honestly something that can't happen very quickly. Many are estimating that the conflict likely will continue until probably September, October, but it doesn't mean that the strait can't be reopened. And I think the market had a lot of confidence, and the speed and quickness to which we went in and sort of accomplished some of the goals that were attempted. And, you know, it's an election year. I have to say that the administration cannot afford to have crude oil at $100 heading into driving season. It would just be devastating, really, to the chances that the GOP will certainly lose the house if things don't improve dramatically. And if that happens, then Trump is going to be a lame duck in his final two years. So we know that from a political standpoint, it's essential to figure out an exit ramp. And I think that the market at least was sniffing out the possibility of yet again, you know, the negotiation style of being probably a little bit harsh initially, but then starting to back off. And that the market clearly, you know, with the strength in technology and the rebound that we've seen, you know, has been totally focused on earnings. And the fact that earnings have been good, the economy honestly has held up, I think, much better than many people expected. So those are a couple of reasons, but whenever you get these V-shaped type moves, you know, it's always tricky. It's very difficult to make money. People normally try to buy dips for a certain period of time, and they throw in the towel and start to sell, and as fear reaches extremes, that's normally when we start to rally, and very few people want to buy into the rally as they start selling into them. And so, you know, most trend followers get caught off guard. We saw commodity trading advisors, you know, had about $85 billion that they had to rapidly reverse and start to buy into this market as it started to rise. So that was, you know, initially something which might have been seen by many as short covering, but eventually it turned into real buying. And we saw a very meaningful snapback in technology, which had been lagging for largely the last six to eight months. I mean, maybe the Mag-7 had been under a lot of pressure. So it's always encouraging when a healthy slug of what really is powering the earnings environment starts to rebound. And I think that, you know, here we are. New highs for many of the indices, not only here, but also globally. And that's also something that investors need to pay attention to, is that it's not just a US phenomenon, that we're seeing the stocks 50, you know, your stocks 50 and the stock 600 in Europe, as well as the Nikkei and other indices that are pushing back to new highs. Those normally aren't things that happen if you're nearing a recession. So, you know, my big takeaway here is that history shows us that when you enter big geopolitical conflicts that normally stock market tends to bottom in a very short period of time after they've begun. And typically, it's about three to four weeks. We even look back towards World War II and know that markets, of course, bottomed very early on in 1942 and started to turn meaningfully higher throughout the conflict. So always tricky to make too much of exogenous type events. Markets tend to catch up and understand very quickly that how to price risk and what could happen. And I think in this case, you know, rebounded, rebounded very sharply for reasons that probably many people were unaware of why they should have rebounded.

Speaker 2:
[09:57] Okay. So I got a ton of questions here for you, Mark. But let's, let's start with that one. So my question, my question for you that I'm going to add a little bit to it is, is how much do you trust this rally? You know, you're a technology, you're a technical analysis guy. So you don't really take the macro much into your decision making at the end of the day. You're just looking at what the market is telling you. You're nodding as I'm saying all this. I know you look at the macro space, but you let your decisions be based upon what the TA is telling you. So for the people, so I'd like you to answer that question, but in answering it, the people who are concerned, and they're probably a lot watching this video right now, who are thinking, okay, even if this war comes to a conclusion soon, there's been a shock to the global economy. We've had this oil price shock, we have had compromised supply chains, there are delays of important commodities out there, not just oil and gas, but also helium and fertilizers and things like that. And so they're saying, look, this is going to be a net negative to the economy, even if it ends now. And of course, that net negative will just get worse the longer this war continues here. But there are a lot of people who are thinking, okay, so there's already some demand destruction that's gone on, even if the war ends soon, and we're going to have to pay that price at some point, whether that's in lower earnings for Q2, or supply shortages down the road. I'm hearing concerns about food shortages in the fall. Do you have those concerns or are you saying that the market is basically saying, it's really not going to be that bad, folks?

Speaker 1:
[11:56] To your earlier point, I don't have analytical data that tells me that all those concerns are immediately manifesting in the market. If the market rally happened and it shocked people, the most important lesson that I ever learned from technical analysis was that it's always important to understand that the market is right. Not that we think that, the market is wrong and it doesn't understand and I'm right to have maybe emotional but correct reasons on thinking something could go wrong. It's more about you have to adjust your risk parameters when things catch you off guard and understand that the earnings picture is good, it's picking up. I mean, fundamental analysts have been raising earnings revisions. Earnings revisions are going higher and honestly, the amount of defense spending is helping to juice the economy. We also know that AI is a very deflationary effect and helping productivity to such extent that the Fed potentially could afford to cut rates and not really have that be inflationary. The bottom line is those aren't things that I use to make decisions. You noted in the beginning, I'm a technical analyst. I look at things like breadth and momentum and those have improved markedly in the last few weeks and it doesn't pay to say, well, the market's up 12 percent. It's definitely wrong. The cycles were something I looked at early on to understand that we were going to be in a time when markets could in fact decline. My forecast last December, which I relayed with you, is that we would likely see a peak in the latter part of February that would fall into April and or May and then bottom and turn higher into the fall. And I'm standing by those comments. I think the market has made a definitive bottom. That's not to say that the market is a bit over, it skis a bit at this point that we've gotten a bit ahead of itself. I do suspect that we potentially give back probably three to five percent of the 12 percent maybe that we have done. So that likely could happen between now and the middle part of May if what I'm thinking is correct. Always tricky to, you know, when a market's moving this fast to say, well, I'm just going to go against it, it's rarely correct to fight trends. The trend has turned very bullish and you really have to respect that until you see proper warnings as to why that's not correct. And that's just my own discipline. So, you know, the breath has improved, the momentum has improved, sentiment certainly hasn't improved, to your point. You make a lot of great points. I think there's a lot of legitimate concern about what's happening and the implications of how that can affect the economy. But we know that this year is a midterm election year. Before the year started, it was set upon as being a year that could be very choppy, not a year that was going to be straight up or straight down. And I think we're already seeing evidence that we saw a 9% correction and now an immediate push back to new highs. A lot of sectors arguably have not participated in that move, to the extent that I would like to see. We only have one of the 11 equal weighted sectors, sector ETFs back at new all-time highs, and that's technology. So other areas like discretionary and industrials are still to some extent lagging. I would mention that it is important to see financials and discretionary and industrials have good movement, and I think that has happened to the extent that we haven't really seen since last summer. The bottom line is that when you look at things like seasonality, when you look at cycles, when you look at sentiment, when you look at pure technical structure and breadth and momentum and what's driving the market, it doesn't make me want to immediately jump on the other side based on reasons that I have no way of calculating as to whether, how they're going to affect the economy or how they're going to affect earnings. These are all, it's logical in any market to say, well, what if this goes wrong and what if that goes wrong? But the path has been set and regardless of what we think of how long this can last, and I think it probably does last till September, October. I don't think it's over immediately, but I also think that three months of the strait being closed can lead to, certainly, to global recession, and that would be something to really pay attention to if and when they can't figure out a proper exit ramp in a way that would reopen the strait. So if I have to make a geopolitical guess, I say the conflict lasts another five or six months. However, I sense that there will be some agreements that will temporarily open the strait. And the real tricky part is this fog of war, where you don't really know what to believe on either side. And that's part of proper negotiation with these conflicts. And it always is tricky to understand if what you're being told is the truth. But the bottom line is, you have to trust the market. And the market has completely priced out now any chance of a rate cut this year. We'll see if that is true or not. And we can talk more about the Fed incoming potential Fed governor. But the market, the situation with regards to things that cause markets maybe to have a certain amount of longevity in their movement seem to be on the right track. And that's the economy and that's earnings. And the technical indicators have largely, you know, breadth is at its highest level we've seen in the last couple of years with regards to, you know, some of the Russell 3000 data that look at just broader base gauges of breadth that have been pretty impressive. Now, we didn't truly get the breadth thrust that I think a lot of people were hoping for these big 90 percent updates where all the volume is on the upside. And that happened last year in April, of course. But that also followed a 20 percent decline, not a 9 percent decline. So there was a lot about this little pullback, if you want to call it that, that really fit in with sort of a garden variety correction. And very similar to last year, it was resolved by a V-shaped recovery in a way that I think is pretty convincing. If you look at past examples in history of when these kind of things have happened, like what happens to markets when they go up 3 percent each of the last 3 weeks, well, historically, the record is very, very bullish over the next 3 to 6 months. They don't go straight down. And that's obviously ignoring everything that's happening in the Middle East. But to the same point, if the fundamentals and the technicals are both pointing positively, then I will take that 9 times out of 10 versus thinking that maybe there's some other narrative that's going to cause a big sell-off or a big recession in ways that I don't understand and really can't quantitatively measure.

Speaker 2:
[19:25] Okay. Let me make sure I've taken accurate notes here. So again, you look at the real-time market action, but you look at cycles, as you've said. When we were talking in January, your cycle analysis led you to believe that the markets were going to go through a correction. And then, I mean, kind of chop around to sort of what I took from it through the summer, and then maybe start to pick back up in the fall, if I remember correctly from last time. I think you were thinking October back then. If I heard you correctly this time, I think you are expecting kind of the same thing still. We've had the correction now. You think we, your tone is definitely net bullish, but I don't get the sense that you're projecting the markets to just zoom higher from here over the summer. In fact, I think you said you could see the market kind of giving up about 3% to 5% by May or so. And I think I heard you say you're still expecting fall to be sort of an inflection point where things pick back up higher. Am I correct in that summary?

Speaker 1:
[20:40] The fall, things could pick back up higher if and when we sell off from the period of August into October, November, near the midterms.

Speaker 2:
[20:51] Let me just make sure. So we have the 3% to 5% correction around May-ish. And I know you're using a rough projection here. And then you expect it to get even weaker into the end of the summer before picking up?

Speaker 1:
[21:03] No, I expect the markets are going to rally really into the latter part of July, probably mid-August. I think it's actually going to be a pretty decent rally. So, you know, it's tricky because the beginning of the year, I thought we would get to 7,300 and that included a 15% to 20% decline this year. And so we've had nine and now we're back at new highs. So the risk reward is, you know, for me, it's probably not as favorable over the next three to five weeks. But I think that generally markets can press higher to that 7,300 level. And if I want to bet on the market going down again, I need to see several things. I need to see breadth really starting to dry up materially. And that means far, far fewer stocks hitting new highs and things starting to roll over. And I need to I'll tell you the biggest risk in my technical lens of what I'm seeing is that long rates start to go up dramatically based on either signs of growth or signs of inflation coming back, or signs of incoming chair Warsh's potential. And I'll say in the event that he's confirmed, if they eliminate forward guidance and they don't care about the dot plot, that can raise the risk premia and fixed income. And honestly, he's got a tricky job in terms of trying to not only implement quantitative tightening, but also his view is that AI has been so revolutionary that they could, in fact, drop rates and that it wouldn't be all that inflationary. So that duality of trying to be a monetary dove, but a sort of fiscal hawk and cut the balance sheet, likely is going to lead the yield curve to steepen, not flatten. So it means long rates go up. So if we see the 10-year get above 460, then that means we probably can get to 5 percent. And if rates go up, then that's, to your point, is going to be problematic for the economy, but it also is not going to be something that happens right away. And so I think that my own time frame for real estate is that we peak this or next year and pull back into probably 28, 20, 2029. And that should be a cyclical long-term low for the real estate market. And this is based on cycles that have stood true for the last 100 years. So part of what drives that is, and my thinking is, I'm jumping around here a bit, but homeownership and basically housing is largely the one thing that is very, very crucial to the economy. And if we start to see long rates move higher in a way that they cannot get them to move down quick enough when home prices are already elevated and interest rates start to skyrocket, then yeah, that's going to have an eventual problem for the economy. But I see this year as being choppy, but look, there's a lot of reasons to be optimistic based on what's happened over the last month, specifically with regards to the stock market, not what's happening in the Middle East necessarily.

Speaker 2:
[24:22] All right. I want to ask you about works in a sec. But so beginning of the year, you had your 7,300 S&P price target. Is that still your target for the end of the year, or do you have a different one at this point?

Speaker 1:
[24:35] Yeah, very tricky. I don't view those as being something that had a lot of value for people. Honestly, if I had to give people something that I thought might be a better sticking point as to my views, is that this year is going to be a choppy year, full of both declines and also big sharp advances, but I think the market ends higher. 7,300 was my target. I'm not willing to immediately raise it substantially based on what's happened in the last month. I think that's, honestly, a lot of it's going to depend on really what happens between August and October. And if we do start to pull back there, then I could probably adjust it at that time, if I felt like we would go meaningfully higher. The biggest time investors want to concentrate on is any sort of weakness that happens into the midterm elections, because that's normally the best time during the entire four-year cycle, the presidential cycle, that it's good to buy stocks.

Speaker 2:
[25:39] So, 7300 is not that far from where we are.

Speaker 1:
[25:43] No, and it doesn't mean that you... Look, so it's important how you use that information. Many people say, well, the risk-reward is so poor, so I might as well just be out of the market or short or whatever, based on all my concerns. And the economy is, the earning situation is very, very good. So trends did not deteriorate meaningfully enough to turn this into a bare market or a bare tape. And if I had to give one piece of information as to how long-term trend followers can watch the market who do not use technical analysis, it's that you just have to keep an eye on the 10-month moving average. And when the S&P is above it, then you're long. When it's below it, then you're cautionary. If the 10 months starts to turn down and the S&P is below it, then that's the time you're absolutely out of the market. And if you look back over the last, even the last 50 years, let's look at the period from 2000 to 2003, and I can give you charts to support all this, but the S&P turned down in March 24th of 2000 with the Dow. You know, the 10-month turned down and it was down for about two and a half, three years. And it remained lower. And the same thing happened from 2007 to 2009. And even from 2021 to 2022, we had a brief period where the S&P was under that. Now, back in February, March, it did get under the 10-month, but the 10-month never turned down, and now it's right back above. So these are things where, you know, you have to obey long-term trends. They're really what help you to make money and stay with the market in times of fear and uncertainty, which is precisely where we are now, at least with regards to uncertainty. And I think that, you know, if trends start to fall meaningfully, then it's right to pay attention to that. But otherwise, you really, really have to stick with what is happening and not be quick to dismiss it or say that the market's wrong, and it doesn't understand that, you know, most times, nine times out of 10, it'll be the investor that's wrong and that needs to readjust his own way of looking at things.

Speaker 2:
[27:51] All right. So one of the things I'm taking, you tell me if this is an intelligent thing to take or not from what you're saying is, as long as the S&P is remaining above the 10-month moving average, given your expectations of CHOP from here, it sounds like, you know, a DIY investor who doesn't like want to be like a day trader in terms of reacting all the time. Maybe a good rule of thumb here would be, maybe hold a little more cash than normal, you know, still remain invested, but hold some cash stores as dry powder so that when there are drops in the coming months, you can deploy at the load, or you can deploy during the dips and then ride things back up, you know, use that volatility to your advantage. What's your reaction to that?

Speaker 1:
[28:44] I believe that everybody's got a different time frame for investment. Everybody has a different risk tolerance. If I told you that my key takeaway was that we're not going into recession and I expect the stocks are going to finish higher than where they are right now by the end of the year, then it's going to be choppy. It's going to be choppy, sure. So look, after a 12 percent move in two weeks, three weeks, I would say it's always proper to probably have some cash to buy dips, but that's individual philosophy as to how you manage your own money and how you... I would say that the market having pushed higher makes me more encouraged about the intermediate term than if it was near its lows. And as a trend follower, I have to respect strength and I'm more emboldened about what should happen between now and August, I guess, because of what's happened. So do you want to hold more cash if the SP is going to 7300? I don't know. I think, yeah, I'd love to be able to buy dips. I think a lot of people missed out on the sharp rally and always proper to have cash handy for opportunity. So to some extent, I agree with that. I guess it's all on the narrative and the way you frame it. Like, does that, you know, like this shouldn't be seen as, oh, Mark Newton thinks you need to have a bunch of money in cash. You know, it's more about the markets have improved dramatically and you need to respect what the markets told you. Certainly, if we pull back to 68, 6900, I'd love to participate. Sure. Love to buy dips. And, you know, I think we probably do get that into May. If not, then it's going to happen into June. But I think June in general into the summer will be actually quite good. So I'm pretty strong.

Speaker 2:
[30:34] Yeah.

Speaker 1:
[30:35] Yeah. I think that the market, we'll see what happens with, with Warsh and we can talk about that. But if he's going to be confirmed and the market gets comfortable with his communication style, then that's going to set the market at ease in a way that maybe right now it's not.

Speaker 2:
[30:53] Okay. All right. You did my job for me, which is to say, look, none of this is personal financial advice and everybody has their own unique situations. Of course, that's why I always am referring people who want some help to our endorsed financial advisors. But we do have a lot of DIY people that watch this. And I was making that, putting that idea out there because really more in contrast to the, I don't hear you saying, hey, the market's not going to go up that much this year and it's going to be volatile, so everybody should just sit in cash and write it out. You seem to say that there's still going to be some opportunity and there was a net bullish bias to the market and you think the summer is actually going to be pretty good after the dip you expect beforehand. Okay. So let's get to worse. Now, I used to think that Powell's tenure ended in June, but is it sooner? Is it actually next month that it ends?

Speaker 1:
[31:50] My understanding is that it's mid-May, but I'm not an economist and it's not my skill set.

Speaker 2:
[31:55] Yeah, but I think that's what I heard too, but it's coming up.

Speaker 1:
[31:58] It is coming up, yeah.

Speaker 2:
[31:59] Yeah. Presuming that worse gets approved, and there's so much hyper-partisanship these days that might take a while. Powell has said, hey, I'll stick around for as long as it takes to fill that seat. But it seems worse has been approved before to the Fed, and it seems like he'll get approved this time around. I guess first and foremost, just from your study of the Fed and past Fed chairs and what you personally would like to see there, what do you think about worse? Is he the right guy for the job at this time?

Speaker 1:
[32:36] He strikes me as somebody that at least he's convinced me that he likely will be independent. I think that's really the key for the Fed is to have somebody that is independent. I respect his views on trying to fight inflation and honestly take down the balance sheet. I think that's certainly a positive. I don't know that I have as much respect for the institution of the Federal Reserve, just given that the data that we continue to look at is so backward-looking and really any of the Fed's tools and what they do tend to have this long effect before they even take place. And I just think that in this day...

Speaker 2:
[33:19] Sorry to interrupt, but you can include this in your answer. But I don't think Warsh has a complete respect for the institution either. I mean, he's kind of coming in as a little bit of a new sheriff who's going to clean things up, right?

Speaker 1:
[33:34] I think that's right. My understanding is that he wants to eliminate forward guidance. And if we get rid of the dot plots, then that can certainly shake up the bond market a bit. It would certainly create a little bit more volatility.

Speaker 2:
[33:48] Yeah.

Speaker 1:
[33:49] All right.

Speaker 2:
[33:50] And you talked about some things that could push the far end of the yield curve up going forward. Do you think it's baked in the cake, given what you imagine works to do? Or are you more like, look, we're just taking a wait and see approach?

Speaker 1:
[34:18] Well, the bond market certainly hasn't suggested at all that it's baked into the cake. I mean, rates have fallen over the last couple of months. So at current levels, I mean, rates are rising today, even with the hints of his comments on forward guidance. And so, you know, there's going to be an immense amount of supply that probably has to hit the bond market and who's going to absorb that. And that's really the key. I think rates do have to go higher. You know, this is part of a six-year cycle for the bond market. So despite the best intention of getting affordability back, I just don't sense a sense that the market probably has other things in mind. So yeah, we'll see the extent to which, you know, yields start to rise on the back end. That's really my thinking of what could happen between now and October, November. So if it happens very dramatically, and we start to really accelerate, then certainly the equity market would be spooked. And if that happens, 460 is a big level for the 10-year treasury, based on just triangle-type technical resistance. And if that is exceeded, then we likely are going to make a beeline for over 5%. So that's something that, you know, markets have to understand and become comfortable with, that potentially equities can rise even with a rising long-term yield. And we'll see the extent to which they can affect QT and maybe try to cut the balance sheet size in a way that doesn't disrupt liquidity too much. And, you know, we know that generally it's the liquidity of keeping the balance sheet large that it's sort of fueled a lot of this move, but I don't sense that it's going to be rapidly taken down. So I think it's a delicate balance, honestly. I'm not an economist by trade, but I do understand sort of what their goal is, and it's very tricky, and it certainly goes against the wishes of the administration, or I guess any administration. I mean, you know, Nixon had this same feud with his Fed chair, and, you know, demanded they cut rates. And in a way, you know, everybody wants, every president wants rates to be lower, of course, to make things affordable, but it doesn't always work out that way.

Speaker 2:
[36:40] Okay. So you said that the market is not pricing in any rate cuts anymore.

Speaker 1:
[36:45] Right.

Speaker 2:
[36:46] Now, Warsh has said, in terms of policy, he would prefer to work with rates versus the balance sheet. And you've said that, you know, he's coming in with the intent to continue to shrink the balance sheet. And that'll probably be done, I imagine, just by roll offs. But you said they got to be careful, you know, not to constrict liquidity too fast. So he'll be judicious about it. Now, it's interesting. So everybody just sort of assumed that Trump was going to put in, you know, a total patsy, right? A total yes, man. Warsh amongst the candidates sort of seemed to be the most independent minded one, which is interesting. And you can, you know, maybe give Trump props for that, or maybe you can be suspicious and think, well, they've arranged something different. And Warsh is just going to, you know, fold like a cheap suit, I guess, TBD on this. Now, Scott Besson, Treasury Secretary, was a big advocate for Warsh, and he actually led the search committee for the replacement, right? So you got to imagine Besson and Warsh have had a ton of conversations about, hey, this is going to be the game plan when you get in there. And administration really wants to bring its borrowing costs down. It has been doing so by continuing Janet Yellen's program of buying on the short end, sorry, lending on the short end, issuing much more short-term treasuries than long-term treasuries. It's probably going to continue. And if Warsh is more willing to work with rates than with the balance sheet, maybe that makes sense then, right? He'll maybe push rates on the short end lower and that'll help Besson. Do you expect there's some sort of pre-planned agreement like that going into this?

Speaker 1:
[38:34] I agree with-

Speaker 2:
[38:35] Or start to interrupt just to add, or like an operation twist, like, hey, Kevin, if we start getting near 4.6, you guys got to step in on the long end to bring that down.

Speaker 1:
[38:46] Supply-demand works in funny ways. I mean, ask the BOJ how intervention has gone there. It's always tricky to try to think you can do things to bring rates down and it doesn't always work as easily. Yeah, I think that you're right. I sense that they're going to avoid long-term issuance and want to steer towards shorter-term. We'll have to see how the data shakes out. Honestly, I don't pretend to have a great understanding of how anything that they do would have an immediate effect. It's just that the lag time of really most decisions tends to be something that most should just concentrate on. Concentrate on the stock market and technicals and earnings more than in Fed policy. I just don't think it. It's really what the market's priced in, that people need to be concentrating on. I assume that that will change as Warsh gets, if, when he gets confirmed and we start to hear more of what type of a poll he has with others within the committee and what he truly wants and how quickly that can happen. But my own view is that that's going to cause the bond market, at least on the long end, yields will probably rise.

Speaker 2:
[39:59] Okay. All right, great. I want to get specific with you in a couple of other asset classes, but bond yields you think largely will rise, so that gives a good sense of what you think is going to happen to bond prices over the rest of the year, at least their trajectory. Of course, that's lower bond prices as yields go up. Okay. Right before I get to some of these asset classes, let me just ask you this question. Again, you're a technologist, right? You look at trends, you look at what the market's saying. How challenging is it to practice that in an environment like now, where there's so much potential for non-market developments to change the game? An example could be, you and I are recording this the day of the second round of peace talks are supposed to be happening in Islam about Pakistan. We still even don't know if they're at this point, if they're going to show up. But it could go really poorly. And Trump could make good on his pledge to, okay, you didn't sign a piece of paper, and so therefore, it's, what does he call it? Bridges and power plants day. And all of a sudden, things in the war just dramatically escalate from here, right? And let's hope this doesn't happen. But of course, the worry is that at some point, if Iran feels desperate enough, it kind of triggers its dead man switch, and it just starts blowing up all the infrastructure of all the other Gulf countries and stuff like that, right? Hopefully, that didn't happen. But that's something that could totally change the current market expectations almost overnight. So how challenging is it to be reliant on market technicals in an environment where a development like I just described could completely change everything?

Speaker 1:
[41:58] I don't want to come off as self-righteous or look down on any sort of discipline. But for those that have taken the time to study technical analysis, you realize that the trends don't change overnight as rapidly as maybe what people think. Long-term trends are very important. They're upward sloping. We did have a short-term trend that was down and now has started to turn back up. If something changes dramatically, then that is almost always seen in the price first and foremost. My own thinking is that the upside is probably going to be a little bit limited in the short run, just given the move we've made. I'm thinking that we're close to a time when we start to probably retrace and consolidate a bit. But yeah, whatever news comes out, if it changes the price, and that's something that I have an ability to look at and analyze and see and interpret, probably a little bit easier than people that do not look at price action at all and are looking at fundamentals who always go to bed upset thinking that things are either far too overbought and overpriced or far too underbought and oversold and underpriced versus what they want. That's just what makes the world go around. My tools tend to fortunately keep me on top of trends on where they're moving and what to expect. It doesn't mean you'll always be right if you have a short-term perspective, but that's how you make and or save money by risk management, is by adapting if things start to go differently than what the trends say. You look at all the different pieces of information and use that to make the highest probability forecast that you can at the moment. It served me right. I try not to let wars and Fed policy and even economic data influence my decisions one iota. I mean, they're there and I see something that will reinforce what I'm seeing, then I choose to use it. But I never dig in my heels to say that this is what needs to happen, and this is a concern, and the market's not seeing it. And that's almost always the incorrect way. You have to look at, take the blindfold off, and utilize technical analysis that will honestly keep you on the right side of the road nine times out of 10 and help you in terms of managing your own risk and strip emotion out of the equation. I think it's hugely important for investors to take advantage of. These things aren't stochastic, where they're all over the map and you don't know, and oh, the technicals aren't working, and things are very methodical, and trends are very much in place, up, down, and sideways. And there are ways of analyzing it and making profitable forecasts and knowing to get out right away when those don't materialize. And that's the whole name of the game, is cutting your losses when you're wrong. And if you do that, then you can be wrong seven times out of ten and still make a phenomenal amount of money, because the times that you're right, you double and triple your position, and you make your entire year. And a famous guy by the name of Steve Cohen said that from SAC, now Point72. You know, it's not really a matter of, you know, always wondering whether you're right or wrong. It's always risk management that rules the day, and not being afraid to push positions when you're right. And so that's Druckenmiller that said that part.

Speaker 2:
[45:38] Okay. Well, definitely very smart, very successful investors. Okay. So if we can, let's go into the lightning round about what your models, your TA is telling you about certain asset classes. We talked about bond yields very generally. Private credit is in the headlines a lot right now. The question for you is, what impact, if any, do you expect private credit to have on the bond market over, let's just say, the next quarter or two?

Speaker 1:
[46:07] Yeah, very tricky only because there's not a lot of ways that I know how to really quantitatively look at that. I mean, I do look at relationships between investment grade and junk bonds, and I think that in general, the response to the bond market has been quite tepid as to what is happening. I mean, certainly parts of technology, you started to see some of the CDS went a little haywire for a minute. But in general, when you look at things like the options adjusted spread, the OAS or just the ratio or the spread between junk and investment grade, I mean, to be 450 basis points above treasuries is really not all that important. Almost every larger bear market has been usually steered by the bond market initially, and what's happening with credit, either they're going re in some way or some type of distress, and that largely did not happen. This is a supply shock only and really nothing with regards to it, and not to make light of the private credit woes, but I haven't seen it affect the bond market in ways that normally I would use to say this can be a problem.

Speaker 2:
[47:26] Okay. So you're not seeing private credit right now is looking like a big threat. Obviously, you can update that, but right now it's not keeping you up at night.

Speaker 1:
[47:34] That's right.

Speaker 2:
[47:35] Okay.

Speaker 1:
[47:36] Nothing, by the way, ever keeps me up at night, Adam, so you should know that.

Speaker 2:
[47:39] Oh, I'm very envious of you.

Speaker 1:
[47:44] All right.

Speaker 2:
[47:44] Well, let's go to stocks because you talked about stocks generally. So you've given us your thoughts on the general market, which are positive. You talked about, certainly looks like the market bottomed. It's momentum has been really strong. Breath has been looking good. For all the reasons you mentioned, you expect it to end higher this year with a bit of a pullback coming in the next month or two, but then a pretty strong summer.

Speaker 1:
[48:14] All right.

Speaker 2:
[48:14] So that's sort of the general indices. Are there sectors in there that you're particularly bullish about or particularly wary of right now?

Speaker 1:
[48:23] Yeah, I think the next three months has massive outperformance in technology, honestly, because it's underperformed for such a long period of time. And most fundamental guys would tell you that many tech stocks have become just outright cheap. So tech has begun.

Speaker 2:
[48:39] Is this all tech? Is it mostly the Mag-7 or is this also the software?

Speaker 1:
[48:43] Well, look, obviously, parts of the memory space and the optical, they've remained at new highs, and many semis have snapped back in pretty resilient fashion. So yeah, it's more about the Mag-7 have gotten back to very reasonable levels with regards to valuation and obviously software. Software, I would caution that it's tricky to buy something down 20, 30, 40 percent and expect immediate mean reversion. That takes time. So it's normally a two steps forward, one step back type process. And I think this will be no different. So I completely support the idea of buying stocks like Microsoft and Oracle if you're going to hold them to 2028. If you have a one or two month time frame, then it could still be a little choppy, to say the least. So to get back, technology I like, industrials I like, financials I like, those are my top three. I don't care as much about discretionary, that has begun to move, rally a little bit, but I'm less keen on putting really actionable money to work in discretionary. What's bad is right now, most of the defensive sectors are really being hard hit. So utilities just in the last week or two has really started to show relative weakness. So maybe that would be sniffing out, you know, long rates starting to lift a little bit. I don't know, but groups like health care have been out of favor. I see health care as probably being the second to energy, probably the best of the defensive sectors. And then utilities, REITs, Staples, Telecom are really uninvestable, at least if you hope to outperform in the short run. Now that could certainly change, but for the time being, that's what the near term sector trends are showing. If you're investing in health care, parts of it are actually quite good, like biotechnology is phenomenal, but other areas like med tech and health care services, and pharma has taken a backseat to biotech, and I wrote a little bit about that last night, actually.

Speaker 2:
[50:52] You mentioned earlier, by the way, this is super helpful, so thank you. You mentioned earlier something that I've heard echoed by some other folks I've interviewed this year, that earnings estimates keep getting ratcheted up, and they've been getting ratcheted up this year at a faster rate than going into this year, and that's through the war. So the war definitely doesn't seem to be weighing on analysts' optimism about the future here. And it seems to me like one of the benefits to the equity market, moving on from here, is that it may get the tailwind of rising E in the P-E ratio, rising earnings estimates. But now you're saying here in the near term, it might get some tailwinds from a rising P or the multiple. So multiples got depressed over the past two months or so. Now they're starting to recover while the E continues to grow. So I mean, this is a pretty nice setup, it sounds like.

Speaker 1:
[52:00] I think the earnings have kicked off and have been much better than anticipated. With regards to technology, you have seen companies like Micron Technology and Sandisk in particular, the earnings increase has been so dramatic with these that they have affected almost the entire technology sector and a lot of it has been pretty concentrated, but it's still something that's moving higher and something that I think investors really want to pay attention to, so yeah.

Speaker 2:
[52:28] Okay. Part of the reason why I asked this too is coming into the year, the administration was saying, look, we did a lot of work last year, it's really going to start paying off, Golden Age of America is going to kick off in earnest, you're all going to see it real soon. It's going to start with the record tax refunds. Then we had the war happen and oil prices went up and everybody has been understandably very concerned. I recently just released a video with the CEO of Freightwaves, who tracks global transport. When I talked to him, the end of last year, I thought he was going to put his head in the oven. He was really despondent about what was going on in the industry. Now, he's singing a completely different tune. Says it's the bullishest he's ever been. Says that America's industrial economy and manufacturing economy are booming right now. He doesn't see that slowing down at all. The war, believe it or not, is actually not only not affecting it, but in some ways actually adding tailwinds to it. So my question for you just real quick here on the economy is, what are your thoughts on the US economy this year?

Speaker 1:
[53:43] I think the economy will hold up. I'm not an economist by trade, but I think that my only worry is that long-term rates go up in a way that will really hurt. Certainly housing, you certainly feel that there is almost always a K-shaped economy that develops whenever you have true freedom in markets. And when you allow, in terms of the, how do I describe, how do I explain this the best way? I guess, yeah, look, in general, when you have a huge real estate boom, like we've had in the stock market boom, certainly those on the upper end will always prosper by that, whereas those that do not own assets like that will not prosper, and it's proper to hear both sides of the equation and not neglect any arguments on either side. But I think that I tend to be optimistic that we're not going into a recession, and that probably is not anything that will happen until 2028, 2029, and that's largely because I think real estate will be pulling back, and that's one of the main things I look at. We have to look at the potential of a grand deal being carved out with China. We haven't really talked about that. That could happen literally in a month, and the fact that we've not only gone into the war and also went in and removed Maduro very quickly, a lot of that is due to make China come to the bargaining table. We need their rare earths, and they have a very big need for energy, as does most of Europe right now, that is dependent in ways that they've never been before. So the US definitely comes out ahead in that department. Energy infrastructure and on-showing manufacturing, I mean, those are certainly things that are positive. It's obviously negatives, and whether you decide to choose to harp on the negative or try to see the positive, you look through the lens and there's certainly a lot of good things that are happening, but there's also things that are concern and can't be overlooked also. So, but I tend to be an optimist with regards to the economy and the stock market this year, so I have to think that there won't be any major, you know, below at this point.

Speaker 2:
[56:06] Okay, so the reason why I was kind of digging here is, again, it sounds like your general advice to the people who are concerned about what's going on right now, particularly with the war, is take a beat. Like, there's enough positive things going on, both with the markets and the economy, that you expect markets to be higher by the end of the year, despite having volatility, and you don't expect a recession this year. Now, obviously, that could change if things, you know, really go south with the war, and oil prices go higher for longer. I mean, all that stuff could eventually force you to change your opinion. But right now, based upon what you're looking at, base case, no recession, base case, no bear market.

Speaker 1:
[56:53] I also think it's proper to separate investors' thoughts on any event that's happening from what's happening in the stock market. Those are two separate things. Investors would be wise to put in the earplugs and honestly not pay attention to what's happening, because it rarely impacts the market in a way that emotionally it makes you feel like it should. That's always been the case since the beginning of time. Unless the market vastly underestimates what's happening, and it's such a huge negative that is a big shock, and arguably that didn't really happen in a way that would affect the stock market this time around. So I sense that never wrong to be concerned about things in the world. I think it's great to talk about things and try to make them better. I just think that most people would be wise not to always listen to the news sources that might try to paint a world of negativity when there's still a lot of things that are going on that are right in the world, and a lot of things moving in the right direction. It's all depending on how you want to feel when you get out of bed in the morning. Some people choose to be happy and focus on the glass half full, and others say, well, this can be wrong and this can be wrong, and they're not wrong, but it's just how will those affect your portfolio? It's almost always proper to just really try to separate that from what's happening in the stock market.

Speaker 2:
[58:23] Yeah. No, you do a really good job of saying, be a Vulcan, and your approach is not only to be a Vulcan, but to be a Vulcan that basically reacts to what the data is telling you, the data of your technical analysis, and it seems real clear right now, you are positioned for optimism, not raging optimism, but your position for optimism versus pessimism.

Speaker 1:
[58:44] The cycles can also tell us in advance as to what's happening too, as you talked about earlier in the interview. A lot of my stuff said the market turns, that wasn't based on anything in the past, that was based on what could happen in the future. But energy gave us a very clear buy signal back in December as to what was going on, and crude oil started to lift for reasons that many didn't understand and then the war finally started and it all made sense. But yeah.

Speaker 2:
[59:10] Do you think that was sniffing out the war? Is that your opinion?

Speaker 1:
[59:16] The extent of the move from the lows was very dramatic and happened at least about a month and a half ahead of when the conflict started. So I had my own reasons based on cycles that suggested crude oil would go up meaningfully this year. And I think I shared those with you. If not, then I'm happy to share the cycle that I looked at. But it pointed crude. I went overweight energy for the first time in years after being underweight and it's been negative. And I guess one thing I didn't do was to overweight materials like Tom Lee did. So to his credit, but most of my stuff did not show materials moving up as fast, but both of them ended up moving in tandem. Now, energy is dropping, materials are still holding up.

Speaker 2:
[60:02] Okay. I'm just going to ask my question one more time and then we'll move on. Because I do want to ask you specifically about what you think energy stocks are going from here. But do you think that the Iran War was just coincident with this cycle that your trend analysis was predicting? Or do you think it was actually causal? The cycle started because it was somehow sniffed out the word.

Speaker 1:
[60:28] The long-term cycles, and that's a whole different conversation of some esoteric things that we won't get into, that suggested that, you know, there's an 84-year cycle of war with regards to the United States that happened in 1942. It happened back in, you know, 1860.

Speaker 2:
[60:45] This is the old court-turning thing, yeah. Audience is very familiar with it, yeah.

Speaker 1:
[60:49] That's an 84-year return where it suggested the US could be involved in conflict, and here again, it materialized. So it's not, I'm not taking credit for that, but I study the cycles, I watch what's going on at Crude, and these things happen, and people are shocked. But honestly, a lot of this stuff, if you take the time to study history, you know, makes some sense.

Speaker 2:
[61:10] Okay. All right. So you said earlier when we were talking through stocks, that energy may still have some life left in it, but it was sort of an offhand reference. So I'd like you to clarify, what are you expecting from the energy sector? And maybe if you want to parse it like, oh, I like nuclear, but I think gas is going to sell off or whatever, go for it.

Speaker 1:
[61:36] I think that energy is still in the midst of a pretty violent short-term decline. I don't know if that's over yet. My own thinking is that crude probably gets down to under $60, which might shock people. But I think that crude has already fallen a good amount and the straight is not even open. And so when it actually, when we do reach an agreement, I think we'll see that fall much further. I do sense that's temporary. I think the oil market did in fact establish it's an end to the bear market that lasted since I guess 2022. And so I think this was the first big, huge sharp move off the lows and now we're seeing the consolidation. So when that's over, then I think energy will start to be attractive again for investments. It had such a huge lead over every other sector being up 30 plus percent on the year that it's natural to see it sort of give back a little. And it's sort of a challenging sector in the short run. Yeah, I do respect that the nuclear end of that energy, I think, you know, it's tricky. Parts of alternative energy still really aren't working all that well. You know, it's going to take some time. Natural gas, I'm not as fond of, but except for, I guess, European natural gas, which I think is going to be very much in need by the fall to your earlier point. So for those that want to buy gas type, you know, I think that the TTF makes more sense in looking at Henry Hub for natural gas.

Speaker 2:
[63:09] Okay. And then precious metals. So they've gone through a pretty big correction, particularly silver, since we last talked. I think that was one of the easier calls to make, because when you and I were talking, that was, I mean, silver was like pushing 120. The price action had just gone vertical. Is the sell off over? Do you expect continued weakness? What are your models saying?

Speaker 1:
[63:36] I'm viewing the metals, honestly, very similar to what I'm viewing the stock market. And I think we'll probably have a dip in May, and that's going to be something to buy into. And I sense between May and the month of October, that we can have a final push back to new highs in the metals across the board. And that means not only precious metals, but honestly, what's going on in copper is very impressive. We're seeing all types of bullish fundamental news coming out of China, and a huge source of demand. I think copper is going to have a phenomenal year, but copper has underperformed gold for so long. We need to see some evidence of that shifting. I like silver, I like gold between now and the fall, but it's not going to be an easy ride. I think gold initially probably will stop around 5,000 area and we'll need to consolidate, which means we probably give back about half of what we've won since the latter part of March. The metal is largely bottom near where stocks did and we had a pretty decent push up, and now we're getting towards the first target, which I think probably happens within the next couple of weeks. Thereafter, we sell off and you really want to buy dips. We still have a lot in place that favors the metals. My only worry intermediate term is that we've just gotten very, very overbought and we're also very late in the cycle and the stage. I sense that metals probably peak out for good, probably this fall and probably have another couple of year bear market. I think that happens as rates start to gradually go higher. I think that in general, real rates pushing up are going to be negative for precious metals and we shall see. I think it's still with regards to Fed independence and the deficit, and all that's a huge driver in central bank buying. Some of that did in fact stop a little and slow. So we finally got a big pullback and now we've had a first rally off the lows, and it's been a pretty decent rally, enough that I want to be invested, I think, over the next six months. But thereafter, I think it's going to be tricky for the metals.

Speaker 2:
[65:38] By the way, this detail in your forecast is just greatly appreciated. Commodities, but the softs, like agriculture. Any particular opinion?

Speaker 1:
[65:50] I love agricultural commodities this year. They're in a year when they should experience a year very similar to 2020 and have a very big rise.

Speaker 2:
[66:03] Were you thinking this before the war, just to be clear?

Speaker 1:
[66:06] The cycles showed that this year should be a year of gains, and that happened very much before the war. Yeah, so anybody that looks at these same cycles will come to that conclusion, and just so happened that, oh, by the way, now we have a reason. So yeah, I think the food is a bigger area of concern that you can't just shut down right away. The longer the straits close, it's going to be a real crisis, I think. But it's going to be good for the grains. It's going to be good for ag and fertilizer stocks. Like I added bungee to my upticks list, which is a list I run of my technical favorites, and stocks like CF Industries and Bungee are great, as well as the ags. They should do well.

Speaker 2:
[66:49] All right. Then the last sector, the slack sector that's coming to my mind, feel free to add any others you care a lot about. But Bitcoin, do you track that?

Speaker 1:
[66:59] I do.

Speaker 2:
[66:59] I know your partner does.

Speaker 1:
[67:01] Yeah. I came in at the beginning of the year not to take a victory lap. I think the year is obviously just getting going. But I suggested Bitcoin to fall to 60,000. I now have sort of lowered that target. I think that the lows are not in for crypto. And we are going to pull back to new lows likely into May. I think Bitcoin gets to 52,000. You know, it's tricky. We're in a four-year bear market for the cycle of the crypto winter, which happened in 2022, 2018, 2014. So the sell-off didn't surprise me. It's more just the... You know, I still sense that there isn't realistic reasons why crypto should be rising right now. The infrastructure doesn't seem to be in place. It doesn't seem to be real buying. And the structure of the whole move off the lows is still very negative. So it's very choppy, overlapping. It's very much sort of a corrective move that I think honestly, in the last week, we've peaked. And I think we're actually going to start to fall pretty rapidly in the next month. So that's a move I would buy into. I'm actually positive for the year. But I think that this spring is going to be one where crypto needs to get to new lows first. And thereafter, we can finally experience a pretty good move. Now, normally, most of these bear markets last at least a year, which means October of last year is when we peaked. October of this year, we bought them. That would make perfect sense to maybe establish a higher low. So we have a sharp rally maybe between, let's say, June and the fall, and then we pull back probably to a higher low and bottom in October, November, and then we can probably rally with everything, I think, into 2027.

Speaker 2:
[68:44] Okay, great. So just to be clear, it doesn't sound like even though we expect a recovery from a bottom somewhere in the next couple of months, you're not expecting new highs in Bitcoin this year.

Speaker 1:
[69:00] Yeah, that's tricky only because I sense that the fall can still bring some issues for both for equities and for crypto. So I'd be more comfortable with saying, depending on where they are by the month of October, in general, I think that the bottom for the year very well could be made in the next one or two months for crypto. I think it's probably going to happen, but it needs to start to move down quickly. And I think that's something that investors should watch carefully, that happens in mid to late May, that should be a very good time to buy dips in crypto. Finally, I sense that any move to new lows is really going to shake people out, who are really hopeful that, okay, equity is moving up, crypto should move up. And I sense that both can consolidate, the move of crypto should be a lot more severe, and that's going to flush people out, likely at the lows, which would be a great buying opportunity for 2026.

Speaker 2:
[69:54] Okay. All right, Mark, this has just again been wonderful. Thank you so much for this. And folks, I'm going to tell you in a second where to go to follow Mark in between now and his next time, but Mark will be back on next quarter to give us an update on where we are in this. We are where we are in all of this. And I mean, I know you're painting with the finest brush you can, but it's still a fairly broad brush. But if your expectations are correct, we should probably be through the correction that you're expecting and then poised to have a really strong summer. So the timing of your next appearance, Mark, is going to be really, really interesting. Okay, Mark, so for folks that would like to follow you and your work in between now and then, where should they go?

Speaker 1:
[70:42] So I have, let's see, a couple of different things that I could share. Let's see, I do have a, I guess a QR code that I could, why don't I do this? Why don't I send it to you? And you can add it to this at the end. I would say you go to fundstratdirect.com. That's our retail arm of Fundstrat. That's where if you're a retail investor, you can subscribe to notes of people like myself and Tom Lee, and our crypto department and our policy guy. fundstrat.com is for institutions. If you're an RIA or an institution, you want to have face-to-face meetings. We certainly do a lot of Zooms every day with institutions. That's how you reach out to us there. I am on X at Mark Newton CMT. And so you can follow me there. But generally, I'm happy to extend an offer to come and view our research, at least for a two-week trial, and you can sort of check it all out and see what happens. We have a new app, which is pretty neat, where we give sort of intraday-type messages, and you see everything sort of live as it happens, and it's pretty remarkable. A lot of people have given us some good, and we actually have a brand-new AI product that we're starting, where we can whitelist things if you're an RA and you create reports, you can basically whitelist as your own and give to clients and share with that as well. So, and we also have three new ETFs.

Speaker 2:
[72:08] Geez, you've got a lot going on.

Speaker 1:
[72:12] Our granny ETF is up to about close to $4 billion and about 16 months. So GRNY, which is modeled after the granny shot. We won't get into the nuts and bolts of all that right now. But in general, we have three ETFs that you might want to explore. One is a small to mid-cap ETF. One is more of an income generation, or it's designed to give you about a 10 percent yield. The other is just based on Tom Lee's methodology called GRNY Shots. The three of those are about 4.5 right now, billion, and very happy that they've succeeded and done well.

Speaker 2:
[72:51] That's fantastic. I love the fact that you named GRNY after Rick Berry with his GRNY.

Speaker 1:
[72:56] Many don't know that he taught that to Will Chamberlain, and he scored 100 points in the next game. A lot of that was due to the GRNY shot. The thinking being that you invest in all these companies, and they hit on a bunch of different buckets, and it raises the probability hopefully for success. Yeah, it's a cute name and it has a good story.

Speaker 2:
[73:13] Yeah. I want to expand on that in just a second. I'm going to put the ETF tickers up. That's why I'm asking for this. GRNY is the one for that one. What are the other two tickers?

Speaker 1:
[73:22] GRNI.

Speaker 2:
[73:25] Which ETF is that one again?

Speaker 1:
[73:27] That's the income, and then GRNJ is the small to mid cap.

Speaker 2:
[73:33] Okay.

Speaker 1:
[73:34] Great. That's based on the same philosophy. It's just small and mid cap companies. It's nice to be able to cover the spectrum. If people feel defensive, they can buy the income or just the regular GRNY. It's been, I don't want to boast about the outperformance, but it has outperformed since inception. It's been remarkable. Very happy.

Speaker 2:
[73:53] Okay. The thing I'm going to say about the GRNY shot, it's germane to our earlier conversation about people's investors' emotions, oftentimes being their worst enemies. Real quick, I'll put up the QR code earlier if you send it to me, but clicking on that QR code or snapping it with your camera lens, where's that going to take you?

Speaker 1:
[74:17] I believe that will take you to an area where you can sign up for a two-week trial. That's my understanding. I was just sent this about 20 minutes ago. So I do have the QR. I'd recommend you just go and explore the website itself. Just go to fundstrat.com and go to Fundstrat Direct. There's a lot going on there. So we're very happy to share our research with you and have you see what we're all about.

Speaker 2:
[74:45] Okay, great. So just in wrapping up here on this whole Rick Berry thing. So I've talked about this before in this channel, and I'll just give the super quick summary of it. Folks, if you've heard me say this before, I apologize. But so, yeah, Wilt Chamberlain is famous for that 100-point game, right? And the season he hit it was the season that, so he was a terrible free-for-shooters, and he was a liability to his team because in the last couple of minutes of the game, well, what would you do? If Wilt got the ball, you would foul him, he'd go to the foul line, he'd missed, you'd get the ball back and another chance to score, right? So I think the coaches there said, hey, look, Wilt, you've got to shore up this weakness, and they got Rick Berry to come instruct him on the granny shot, and Wilt's field goal percentage went way up, and folks don't realize this, but in that 100-point game, he had like a career high from the foul line. It was like 80-something percent, right? So it was actually really material in helping him hit that scoring record he's so famous for. And he hit a pretty good year in that year. But then he stopped doing the granny shot, and his free throw percentage went to an all-time career low. The hey, let's foul Wilt thing came back in. And in his memoir, he basically wrote about it with regret, saying, I should have stuck with it. He said, the problem was, I just felt too much like a sissy. It was totally emotions that got in the way.

Speaker 1:
[76:27] It's not macho to be able to have to do a grant. I understand.

Speaker 2:
[76:31] Right. It's not macho. But when you think about it, think about the career stats of his that suffered. Think about the points that weren't made, the games that weren't won, the economic opportunity cost of that to him and his teammates. What's so crazy about this is in the decades since, pretty much nobody in the NBA went back to the granny shot. The only player who, I don't know if he's still playing now, but the only player who recently in the NBA who was shooting the granny shot, Rick Barry's son.

Speaker 1:
[77:06] Okay.

Speaker 2:
[77:07] Yeah.

Speaker 1:
[77:08] It could have been Shaquille O'Neal maybe. He could have benefited from that.

Speaker 2:
[77:12] He certainly could have. But that's the point. It's like there is like gold nuggets on the ground there, that these guys are just choosing not to pick up for an ego reason.

Speaker 1:
[77:23] Right.

Speaker 2:
[77:24] And it just shows how oftentimes our emotions can influence to do things that aren't in our best interest. And same thing can happen with investors. And again, Mark, I just want to underscore why your Vulcan, very technical approach really helps insulate from that risk.

Speaker 1:
[77:41] Thank you. Yeah. Don't have an ego, choose Fundstrat and we'll hopefully get to the finish line. So thank you.

Speaker 2:
[77:48] All right. Well, look, Mark, when I edit this, I will put up the links to everything we talked about. Folks, the links will be in the description below this video as well. And if you are someone who would like to apply in your portfolio management, a lot of the things that Mark and I have talked about here, but you don't want to be your own financial quarterback. You have a life. You want to focus on the things that you're great at, like maybe earning income, but farming out the actual management to a manager that could benefit you in the way that Mark benefits the folks that follow his funds. Then highly recommend you get that help from a good quality professional financial advisor, importantly, one that takes into consideration all the concepts that Mark and I have talked about here. If you've got a good one who's advising you on that, great. Don't mess with success. But if you don't, feel free to talk to one of the advisors that Thoughtful Money endorses. These are the firms you see with me on this channel week in and week out. To schedule one of those free consultations with them, just spell out the very short form at thoughtfulmoney.com. Only takes you a couple of seconds. Again, they're totally free, no commitments involved. It's just a free service these firms offer to be as helpful to as many investors as they can be. Mark, thanks so much, buddy. Really look forward to doing this in the quarter with you. If we can, just 20 seconds. Any parting bits of advice to investors as they navigate. What is arguably emotionally a challenging time in the markets right now?

Speaker 1:
[79:15] Yeah. Look, I think it's honestly, it's really important that investors just start to become comfortable with looking at charts and gradually teaching yourself how to marry what's actually happening in the price action with what you think, and hopefully, the two will be on the same page. But it's great for risk management. I always endorse it. Bottom line, you have to ignore as much as it pains anybody to do it. We're all deluged by news every day, but you have to just try to focus on really what matters. For the stock market, it's not necessarily all the news that matters. It's really what's happening with trends and volume in the buying and selling, and what's happening with momentum and sector leadership, and interest rates in the dollar, and expectations much more than all the negative news.

Speaker 2:
[80:07] All right. So listen to what the market is saying, not what the pundits are saying.

Speaker 1:
[80:11] That's exactly right. Yeah.

Speaker 2:
[80:12] All right. Thanks so much, Mark. Very much.

Speaker 1:
[80:14] Thanks Adam. Thanks everybody.

Speaker 2:
[80:16] Look forward to seeing you next time. Everybody else, thanks so much for watching.