0:01

Welcome to the Money Tree

0:03

Investing Podcast. Stock market,

0:05

wealth, personal finance, value stocks

0:08

invest in your life. Hello,

0:11

smart Money Tree Podcast listeners. Welcome to this week's show.

0:13

My name is Kirk Chisholm. I'll be your host. And

0:15

today I'm joined with my good friend, Phil Weiss. Hey,

0:17

Phil. Hey, Kirk, it is a good

0:19

Friday and thanks for having me today. Good to be here.

0:21

Yeah. Well, thanks for joining us. One of

0:23

those weird days when my kids had school, the other

0:25

doesn't. We just actually got back

0:27

from a little stick and puck at the rink

0:30

again. What else am I going to

0:32

do with him? He's home all day on a Friday. Gives me a

0:34

good excuse to get out there with him and have

0:36

a good time and the rink's closed another two weeks

0:38

and that'll be it. So this is interesting. So it's

0:41

good Friday. The market's closed today. Stock

0:43

and bond markets are closed today, which is always

0:45

interesting. We're talking about a bunch of stuff today.

0:48

It's been a crazy week. I want to talk

0:50

to Phil about this. I'm sure everybody's seen it

0:52

by now, but there was a huge bridge collapse.

0:54

I think it was in Maryland, what, right outside

0:56

of Baltimore, Phil? Is that what it was? That's

0:58

right. It was the Key Bridge. It's close to

1:00

50 years old. And I

1:02

know I heard the news, saw the news when I

1:04

woke up early this week and I was kind of

1:06

shocked and then trying to figure out what might have

1:09

happened. And your first thought is like, somebody

1:11

really messed up, but it wasn't that

1:13

the ship lost power and

1:16

a ship that size. It's not

1:18

easy to control. I was reading like you can try

1:20

to drag anchors across the bottom to slow it down.

1:22

But if you mess that up, the sides of the

1:24

boat can be sheared off. They

1:26

were really fortunate that because they were aware

1:28

of what was happening, the ship

1:30

alerted shore, they cut off traffic. So

1:32

we didn't end up with cars plunging

1:34

into the water. There were some workers.

1:37

Unfortunately, I think it was six. They

1:40

found the remains of two and they suspect the other

1:42

ones also perished. But beyond that,

1:44

it doesn't seem like it had a lot of

1:46

impact on lives, but it's going to have a

1:48

huge impact on sea commerce because

1:51

it's not the largest, but it is a

1:53

large seaport. I read there's 50 million,

1:55

I believe it was of commerce through there.

1:57

And plus it's going over water. not

2:00

like there's going to be a lot of other alternatives to

2:02

get around. That makes it a lot harder to get around

2:04

because of it. So not something

2:06

that can easily be fixed either. Yeah.

2:08

What was it? The Suez canal that got blocked two

2:10

years ago because the ship turned sideways and they couldn't

2:12

get it out and then the water dropped. Was it

2:14

the Suez or was it? I don't think it was

2:16

a Panama. Can I, was it Suez? I

2:19

think it was the Suez. I think you're right. Maybe

2:21

it was two years ago, but this big tanker

2:23

blocked the Suez canal and they couldn't

2:25

unblock it. It turned. I don't remember why, but

2:28

it hadn't been dredged properly. So it was narrow.

2:30

And so when it went sideways, it just couldn't

2:33

undo it. You have to wait till the water rises and all this

2:35

stuff. And it was just, what it

2:37

does is it brings up this idea that

2:39

there's actually two ideas I want to share.

2:41

One is that our infrastructure is

2:44

something that we don't notice on a day to day

2:46

basis, but it's so important

2:48

to commerce and our economy.

2:50

It's like, Oh, COVID happened.

2:52

Let's shut down the global economy. Well,

2:55

you can always restart that. But

2:57

when you have a ship blocking one

2:59

of the major ports or through fares

3:02

in sea traffic, now you don't

3:04

get your goods and now you got all sorts of

3:06

other problems. And this is where inflation

3:08

can pick up because, Hey, we

3:10

can't get the goods. Well, we need the goods. We're going to

3:12

pay any price. So we're going to, the price is going to

3:14

go up because we can't get them. And then it gets fixed

3:16

and be like, all right, now we've got tons

3:18

of stuff coming through. And now the prices

3:20

go a lot lower because, Hey, we got

3:22

too much stuff there. And these are things

3:24

that happen when you have a global economy

3:26

that is a finely tuned machine, like it

3:28

was prior to COVID, it was so finely

3:30

tuned that it wasn't resilient. It

3:33

was efficient, but not resilient.

3:35

So when you design systems

3:37

on efficiency, rather than resilience,

3:39

you're subject to one off

3:42

occasions, the seem to let

3:44

talks about this, the concept of fragility. What

3:47

he talks about is every once in a while, I

3:49

give a talk on this topic of resilience, because it

3:51

fascinates me. But when you think about it, there's really

3:53

two extremes. And then there's kind of a middle. One

3:55

extreme is fragile. The other steam is

3:58

anti-fragile in the middle of the. So

4:01

if you think of fragile, an example

4:03

might be, let's say you

4:05

decide to sit on the couch for the next

4:07

20 years. Well, you're

4:09

never going to get hurt because you're on the

4:11

couch. What's the worst thing that can

4:13

happen? You fall off, you live in your house,

4:16

you never leave your house. The chances of getting

4:18

hurt or injured or sick are close to zero.

4:21

Great. However, if you do

4:23

that long enough, eventually you

4:25

become unhealthy. You're sitting on the

4:27

couch, you're eating chips. You're

4:29

not exercising, you're not getting sunlight, all sorts

4:31

of stuff. And eventually you

4:33

get unhealthy. You become

4:36

fragile. Immediately you're thinking, well,

4:38

I don't leave the house, I'll be fine. No

4:40

one's ever going to touch me. Now you become

4:42

fragile because you're not exposed to germs or people

4:44

or anything. And eventually you become overweight and unhealthy

4:47

and then you have other problems. You might have

4:49

a heart attack, you might be overweight and have

4:51

other things. That is a

4:53

fragile existence. You're eliminating your risk

4:55

virtually for this example. You're eliminating

4:57

your risk, but because you're limiting

5:00

the risk, you're creating bigger risks

5:02

later. Now the example I always

5:04

use for my talk is Tom the Turkey. Tom

5:07

the Turkey lives a glorious life. Every day

5:09

he gets fed, he wakes up, hangs out

5:11

with his turkey buddies, he eats as much

5:13

turkey feed as he wants. There's no risk.

5:15

He's in a pen, in his safe pen,

5:17

safe from predators. He just sits

5:19

around and gets nice and fat. He has nothing to

5:22

worry about. And then one day,

5:24

day before Thanksgiving, whack. No

5:26

more Tom the Turkey. That's a fragile

5:28

existence because you're giving

5:30

up, you're seeking safety, you're giving up

5:33

your risk in exchange for safety. And

5:35

because of that, you're actually taking on

5:37

much, much bigger risks. Now

5:40

an alternative to that is what people would call

5:42

to the health thing is like hormesis. Hormesis

5:44

is like, I don't want to get down the

5:46

road of vaccines because I'll probably get canceled by

5:49

YouTube or someone just for even mentioning vaccines. But

5:51

it's probably already happened because I mentioned the word.

5:53

But if you think of vaccines, the point of

5:55

them, we all get them when we're

5:57

small. The point of vaccines is to give you

5:59

a... small amount of the foreign

6:02

invader, so your body builds up an

6:04

immunity to it. So you're actually

6:07

deliberately making yourself sick. So

6:09

your body builds up immunity to it. So next

6:11

time you won't have the issue,

6:13

but because they give you such a small

6:15

amount, your body fights it off and now

6:17

it knows what to look for. And it's

6:19

built up this immunity. So next time you

6:22

see it, you're like, yeah, we've already dealt

6:24

with that. You're good. Go somewhere else. That's

6:26

why vaccines work. I'm not going to go

6:28

into the FSC that, but anyway, that's why

6:30

they work. That's the concept of hormesis. You're

6:32

becoming antifragile. Antifragile is giving yourself the medicine,

6:35

giving yourself the vaccine in this case and

6:37

giving yourself that virus to make yourself stronger

6:39

against it. So next time your body is

6:41

stronger, the principle holds true for going to

6:43

the gym. You sit around your house and you

6:45

can become flabby and whatever, or you can go

6:48

to the gym. Well, the concept of going to

6:50

the gym isn't so you can throw weights around.

6:52

It's so you can tear your muscles. You

6:55

lift weights to tear your muscles. And what does

6:57

your body do when you're injured? Your

6:59

body repairs it, but your body doesn't just repair

7:01

it. It actually makes it stronger. So the reason

7:03

you go to the gym has become stronger. So

7:06

you go lift weights, you tear some muscles, you

7:08

get really sore. Two days later, you're

7:10

healed up and you can lift more weights next time

7:12

because your body is becoming stronger. You break a leg,

7:14

it heals. It's stronger in that place because your body

7:16

doesn't want it to break again. That's

7:19

the concept of antifragile. Now,

7:21

resilience is a little different.

7:23

Resilience is basically coming

7:25

up with ways to bolster

7:27

yourself against the tough times.

7:30

It might be storing goods in your

7:32

basement would be resilience or being prepared

7:34

for bad times. So all these concepts

7:36

are really important, whether it comes to

7:38

commerce or really the markets. I mean,

7:40

I'm trying to segue this in the

7:42

markets very poorly, but this is really

7:44

a concept that you need to learn

7:46

about the markets because if you're doing

7:48

things properly, if you're looking at your

7:50

portfolio, if you're all in big tech,

7:52

you have a fragile portfolio. You're all

7:54

in energy. You have a fragile portfolio.

7:56

If you're all in crypto, you're all

7:58

you've grown One thing. Fragile. Know.

8:00

You could do really really well or it

8:03

could go down a lot and you lose.

8:05

I might that's fragile. The point. Of

8:07

diversifications become resilience and as not

8:09

anti fragile to diversify and all

8:11

these different funds and stocks and

8:14

bonds. That. Becomes resilience. So in the

8:16

market goes up or down to go up

8:18

or down little little less. That's the point.

8:20

anti fragile as when the market goes up,

8:22

you go down on the market, goes down,

8:24

you go up. so it's really reversing. It's

8:26

so the concept of resilience is really about

8:28

bolster yourself against good and bad times. So

8:30

in the good times you take some of

8:32

the profits off the table, you put it

8:34

away, but at the nest egg and you

8:36

put it in a safe and it went.

8:38

Bad times can be take that out, use

8:40

it and it makes it less bad. So

8:43

that concepts really important in this is where

8:45

the global infrastructure. Especially in the

8:47

Us. Infrastructure Us infrastructure is

8:49

poor. You. Look at the ranking Zola

8:51

time and always gets think the highest ranking

8:53

like a be minus and as like one

8:55

single thing everything else is like us, a

8:58

C minus or deer and us and we

9:00

just don't put money into our infrastructure. Because

9:02

why do that? We can line the pockets of

9:05

our favorite lobbyists and other things was wait till

9:07

something blows up like a bridge and then we'll

9:09

have put money into that and sell it was

9:11

because of this. Now I want to share different

9:13

concept but so what do you think of the

9:16

concept of fragility in your line of work and

9:18

has come into play with you. You

9:20

may be sick of a great example. He. Ever get

9:22

a new client? The. Really? Conservatives? They're.

9:25

All invested in fixed income. but then I'm

9:27

really not. Investors conservatively say think because they

9:29

want income so it's high yield. And.

9:31

Then they look at the returned from the market's going up

9:33

and say. My. Returns aren't that good.

9:35

Said I go and put all into

9:38

a high interest savings account. And.

9:40

Received emails like this at Net which want

9:42

to do because that's in the long run.

9:44

You're going to end up liking inflation, you're

9:46

purchasing power is gonna go down, and you're

9:48

not going be able to accomplish your goals

9:50

and lift the kind of like such a

9:53

walk because you've actually limited your returns by

9:55

doing that. I understand that markets don't always

9:57

go up at that Friday diversify. That.

10:00

part of being resilient is that diversification. But

10:02

sometimes we get so scared

10:05

that we have this really fragile portfolio that's

10:07

not going to do what we want and

10:09

doesn't really have the capacity to do

10:11

it because of how it's set up. You have

10:13

to understand what you own. If you

10:15

have a portfolio that's full of high yield bonds, it's

10:18

really risky. High yield bonds are

10:20

right after stocks in terms of the risk.

10:23

And you're really not going to get a

10:25

lot of growth. I mean, yeah, if a company's credit

10:27

rating improves that the value of the bond is going

10:29

to go up, but you're really just hoping you're going

10:31

to get your interest payment. And those companies can go

10:33

bad. That's why they're high yield debt. That's why we

10:35

get junk bonds. There's a reason that they're called junk

10:37

bonds because they don't all make it

10:39

through. To me, that's a great

10:41

parallel from an investing perspective of exactly what

10:43

you're talking about. And just to get

10:46

back to the boat thing for a second, the other

10:48

thing that happened, besides what you talked about with the

10:50

Suez, I know my business partner, her son is in

10:52

the maritime industry. And they had

10:54

to take so much more time this year to get

10:56

to the other side of South America because there wasn't

10:58

enough rain. And the ship couldn't

11:01

go through the Panama Canal. So that's something else

11:03

that can happen. So then it becomes, not only

11:05

does it take longer, it's much more dangerous because

11:07

going around it's called the Horn of Latin America,

11:09

South America. That can be dangerous. The waters are

11:11

pretty treacherous. So that's where the

11:13

infrastructure matters. And our infrastructure here is,

11:16

as you said, it is poor. Look

11:18

at the electric grid. We can't move things. There's a

11:20

lot of alternative energy sources that we can have, but

11:22

we don't have a way to move them around. And

11:25

I do want to bring up one more

11:28

concept here associated with the boat is, this

11:30

is the second time it's happened. So I

11:32

actually like using these two examples. When the

11:34

boat took out the bridge, as

11:36

you said, no one's really to blame. It

11:39

just kind of happened. And I'm sure you

11:41

can find someone to blame. Here's

11:43

the thing. Anytime something bad happens, people

11:45

always need someone to blame. What

11:48

happened? Who can we blame? This is somebody's

11:50

fault. And they're going to pick off Joe

11:53

Sixpack, who just got hired in the maritime industry.

11:55

And they're going to be like, it's his fault.

11:57

And they're going to blame it all on him.

12:00

really know it's him. They just, we as

12:02

human beings need closure. We need closure. So

12:04

if there's a question out there and nobody

12:06

has an answer, they'll make up stuff. Now,

12:09

my wife, she got a master's degree in

12:11

design. Her final thesis was a concept of

12:13

the void. And I love this because I always come back

12:15

to this and I'm like, this is such a cool concept.

12:17

Concept of the void. You're creating a

12:19

room. You're creating a void in the

12:22

room. Like there's a space. You don't

12:24

fill it. Like it's deliberately empty and

12:26

it creates a feeling. There's that void

12:29

in the space. And so I always

12:31

think about this. I'm like the void. What is the

12:33

void we can fill? What's the meaning of

12:35

life? I don't know, but

12:37

let me go find someone with an answer.

12:39

Let me go find some sort of guru

12:41

or religion or whatever. It gives you the

12:43

meaning of life. Oh, okay. Now I have

12:45

an answer. I feel good, but people feel

12:47

unsettled when there's no answer. It's

12:49

our brain kind of taking advantage of us. They're

12:51

like, whoa, I can't handle this. There needs to

12:53

be an answer to this question. It's

12:56

not the same, but it also kind of ties into

12:58

the concept of, I think it was a Zagarnik effect.

13:00

You open loop. I'm not sure if that's the one,

13:02

but it's basically, it's an open loop. The show's 24

13:05

started this. You start

13:07

the show and then at the end of the

13:09

show, you leave a cliffhanger and you're like, Oh my God, what's

13:11

he going to do? What's Jack going to do now? And then

13:13

you're like, I can't wait till next week. And you're on pins

13:15

and needles all week. And then the show starts five minutes. They

13:18

wrap up the cliffhanger and then they get onto the show.

13:20

And then the end of the episode, Oh no,

13:22

another cliffhanger. Something else is going to blow up.

13:24

That's the open loop. 24 was the first show

13:26

that did it. And it was just mind blowing.

13:28

Everybody loved the show. So now every show does

13:30

this. And if you go on Netflix, the reason

13:32

you binge watch is because you can't stop watching.

13:34

I know because I have this problem. So

13:37

if you look at the psychology of it,

13:39

if you understand the psychology, it's really important.

13:41

So if you look at the boat disaster,

13:44

I don't know if anyone's to blame. It doesn't sound

13:46

like it. I mean, Phil's probably fallen this closer than

13:48

I am, but it sounds like nobody's at fault, but

13:50

I guarantee you they're going to find someone to blame

13:52

because I have to because this

13:54

stuff doesn't happen on its own. That

13:56

would be scary. You mean random

13:59

chance can. happen in life? No, no,

14:01

no, that's not possible. We need somebody to blame.

14:03

Somebody that falls here. We need to

14:05

pin it on somebody so we can yell and scream

14:07

and say, this is never going to happen again.

14:09

And we're going to put this person in jail for 500 years, even

14:13

though they were off duty or something. So

14:15

I think it's important. And I'll use a

14:17

second example. So we had locally, we

14:20

had a hockey playoffs for high school and I believe

14:22

it was St. John's first Winchester and it was tied.

14:24

I forget the score. I think it was two to

14:26

two, but it was tied going into like seconds left

14:28

in the game. St. John's comes

14:31

down and scores, but in

14:33

the replay it was like one or

14:35

two seconds after the period ended, but

14:38

the horn was delayed. So you can see

14:40

in the replay, the light went on like

14:43

period over and then it went in and

14:45

then the horn goes off like a few seconds

14:47

later and it clearly was after the end of

14:50

the period. But because there was no instant replay

14:52

because the refs, I mean, the refs, you know,

14:54

they can only watch so much at once. They

14:56

didn't see it. They went back and talked or

14:59

like, ah, it stands. But you can't blame the

15:01

refs because the refs, their job is not to

15:03

like, Oh, well it was this close and they

15:05

can't do instant replays, a whole bunch of reasons

15:08

why it didn't happen. I guess

15:11

St. John's out of winning. But the

15:13

point is, is you watch like the podcast

15:15

and the news are like, Oh, it's a

15:17

false. The refs, they were doing a bad

15:19

job or it's this person's ass person. It's

15:21

like, there's really nobody to blame. It's a

15:23

crappy situation. One team that worked

15:25

really hard to get into the finals loses when

15:27

they shouldn't have lost, you know, they should have

15:29

gone to overtime. The team that won, they can't

15:32

feel too good about that. How do you feel

15:34

good about that? You're like, yeah, I won kinda

15:37

with an asterisk. Look, I

15:39

get it. Everyone wants to win, but do you want to win

15:41

that way? Do you want to win by

15:43

cheating? Like I'm not saying they cheated because nobody did

15:45

anything wrong. This is the point. Nobody really did anything

15:48

wrong. There's really nobody to blame.

15:50

It's a bad situation that happened. It's too

15:52

bad. I feel bad for the losing team

15:54

because maybe they would have lost, but they

15:57

were going into overtime and they were tied

15:59

and I probably still should have gone over

16:01

time and maybe if I was a

16:03

coach and be like, you know what? I don't

16:05

know. It's a tough situation. There's really no easy

16:07

answer But the point is people are always looking

16:09

for someone to blame Somebody sent me a copy

16:11

of a local podcast It was like a half-hour

16:13

show about blaming somebody in this situation. It's like

16:15

there's nothing you could do You just gotta say

16:17

it sucks. It's life. It's random chance.

16:20

You could blame the rink. You could blame the

16:22

league You can blame this at

16:24

the end of the day. What are we gonna

16:26

do? We're human beings. We're gonna say oh, that

16:28

was bad Let's fix it and not only let's

16:30

fix it. Let's spend 20

16:32

times the money we need to do to fix it so that

16:34

never comes close to happen again The bridge

16:37

wasn't built right or the boat needs 50

16:40

more redundancies just so this never happens And

16:42

so you got the government up your wazoo

16:44

trying to keep everybody safe It's like, you

16:46

know, sometimes these things happen and it sucks

16:48

and people died and I'm not making light

16:50

of it But it happens. I mean hundreds

16:53

of years ago People died

16:55

every day for no apparent reason and now

16:57

like everyone's so Fragile because

17:00

we're not used to because we've like taken the risk out of

17:02

so many parts of our life that when these things happen It's

17:04

like oh, it's a tragedy which it is But

17:06

if you went back like hundreds of years and

17:08

be like, yeah, okay Now let's rebuild the bridge

17:10

and move on people die every day You know

17:12

people had ten kids and only five of them

17:14

survives because of various reasons that doesn't happen now

17:16

But it did I just bring

17:19

it up because I think the overlay works

17:21

for life as it does in the markets

17:23

And I'll give you a market example. Then we'll move on.

17:26

I remember back 15

17:28

and it was somewhere around 2015. Anyway, it's one gold

17:30

peaked Maybe

17:32

it's 2012 Somewhere in there

17:34

gold was going on like a bull market run like

17:37

one of the biggest runs of my lifetime went from

17:39

well Actually, not my lifetime, but I was

17:42

young when the last bull market happened but

17:44

recent lifetime is if you're looking like

17:46

99 at bottom and interest like Skyrock

17:48

and I think it was 2012 and

17:51

it just went through the roof and then it

17:53

went down and then just kind of like one Side was

17:55

for a little while and then April 15th

17:57

if you guys understand technical

18:00

analysis, there is like support and

18:02

resistance. Resistance is the top,

18:04

you try to break above the resistance, support

18:06

is the bottom, you're trying to break below.

18:08

So the market's going above to resistance and

18:11

down to support. If it breaks

18:13

through, it usually breaks through hard. If it

18:15

breaks through resistance, it breaks through hard. That's

18:17

the whole point is once it breaks up,

18:19

it's a bullish sign. So

18:21

what happened April 15th, I remember this because I was

18:23

in the airport, and it was tax

18:25

day. So this is how I remember it.

18:27

Otherwise, I don't remember the date. It's tax day. I'm

18:30

in the airport, we're going on vacation, and

18:33

somebody calls me, you're like, what happened to gold? I'm

18:35

like, I don't know. It's just bouncing around. You're like,

18:37

no, it's dropped like 5% or whatever it was. It

18:40

broke through the floor. So I'm like, wow, that's crazy.

18:42

I mean, it's gold. It's, you own it for good

18:44

or bad or whatever, whatever reason. But the point is,

18:46

it had broken through. Some people were freaking out. They're

18:48

like, oh my God, it's going to go zero. So

18:50

people act. And what was

18:52

interesting was after the fact, I

18:54

started to analyze it. I'm like, huh, why did

18:57

this happen? Because by all means,

18:59

fundamentally speaking, it should have been fine where

19:01

it was. So I read the news. All

19:04

right. What did the news say? I looked at a bunch of different

19:06

news stories. Every single one of them was different. Every

19:08

single news story was different. Their reasoning for

19:10

why gold broke down was different. And

19:14

in further analysis, because I was very curious,

19:16

upon further analysis, what I realized is every

19:19

single one of those stories is wrong. And

19:21

there is no possible way anybody could know

19:24

the answer to that question. There might be

19:26

five people on this earth who might've known

19:28

the answer to that question. It

19:30

depends on what happened, which unless you're in

19:32

the bowels of the financial system, you might

19:34

not even know. And if you're down

19:36

there, you still might not know. Now people

19:39

blamed it on China, dumping their

19:41

gold. They blamed it on a

19:43

fat finger trade. Again, they

19:45

blamed it on a computer error. It was

19:47

so many stupid stories and every single one was

19:50

wrong. And the reason I know they're wrong is

19:52

because there's no possible way the reporter could know

19:54

the answer to that question. I also

19:56

know, even if they had a source, there's No

19:58

way that anyone could... The Do is the

20:00

answer to the answer they gave. Oh it was

20:03

a festering or trade. Really? who did it? I

20:05

mean who gives us a zinger trade? Is it

20:07

a person? Tell me who was? Oh you don't

20:09

know or can see? Really? don't know. It's a

20:12

fat finger trips over the computer. Our great list

20:14

of a log. See what happened? Oh you just

20:16

guessing? Okay oh China? Really? Do they come out

20:18

and confirmed that? Know? Okay, see the really? Don't

20:20

know. If you look through all of these stories

20:23

you realize that the really is no way to

20:25

answer the question. What? Because

20:27

we're human beings, we require an

20:29

answer. So. All those

20:31

ten or twenty stories had an answer. Animated

20:34

really feel better. Oh. Okay, that's

20:36

what happens. When reality we didn't know the

20:38

answer and you're never going to know the answer and you

20:40

have to be comfortable with the fact that you're knocking. know

20:42

the answer? And that's why when you

20:44

look at the fundamental analysis, it can be

20:46

tricky. Oh, what happened and

20:49

missiles a fundamental guide. Things. Happiness

20:51

Us. summers, Have to add up.

20:53

Things have to make sense when things don't make

20:55

sense. As for the technical guys, come in because

20:57

they're like well make sense because of this chart

20:59

Discharge going to make up a chart make it

21:02

all makes us The reality is as many times

21:04

we don't know and as was price matters most.

21:06

It doesn't determine right or wrong. it's just

21:08

the price is the final arbiter. The price

21:11

of the price. It is the truth. And

21:13

you don't have your room of the truth.

21:15

You don't have to disagree. The truth is

21:17

that earth. it is with us to slight.

21:19

oh it's ah the middle. a day in

21:21

the sun's out. okay that's the truth. I

21:23

can deny the fact the sun's out xenos

21:25

cloudy even though get sunburned. but the fact

21:27

is the sun's up and so when you're

21:30

trying to find answers. To. Questions in

21:32

your mind like wise bitcoin going on. Well.

21:34

As because all the institutions recombinant.

21:37

maybe? Maybe. Not I don't know.

21:39

so I think we have to get

21:41

away from this idea of chasing the

21:43

truth. We need an answer. And

21:45

realizing the markets. That's. Just not

21:48

going to happen most times. You.

21:50

have to accept that it's going up or

21:52

is going down and over the long run

21:54

fundamental people should be right if they're good

21:56

at their job over the long run though

21:58

before In the short run, they won't. In

22:00

the short run, we have no idea why

22:03

things move. There's millions

22:05

and millions of people buying and selling every single day,

22:07

except for Good Friday, of course, to get the day

22:09

off. But every single day, people are buying and selling

22:11

in the markets, and that determines the price. That's

22:14

it. If you have more buyers and sellers, price

22:16

goes up. More sellers and buyers, price goes down.

22:18

That's the answer. It may not be

22:20

good enough for people. People feel like, eh, I need more

22:22

of an answer than that. Okay, well, good luck, because you're

22:24

never going to find it. You're going down a rabbit hole,

22:26

and there's not an answer at the end of it. There's

22:28

just more questions. So I don't know. What are

22:30

your thoughts, Phil? As you're telling that

22:32

story, I'm thinking back to when I was an analyst, and

22:35

I covered energy stocks, so oil and

22:37

gas. And I

22:39

used to hate the question. So why

22:41

is this stock moving today? Or why

22:43

are oil prices moving today? I don't

22:45

really know for sure. It's just all

22:47

guessing. There's no way to know. I

22:49

always have to tell people when you ask me, so what do you

22:52

think is going to happen? Well, my crystal

22:54

ball is both cracked and cloudy, because

22:56

I don't know. And that's really all I'm doing is

22:58

I'm guessing. And the

23:01

reason that I would get asked those questions

23:03

is just what you said. People

23:05

want answers. Even if

23:07

they're not right, even if there's not really a basis for

23:09

them, they just want an answer. They

23:11

want an explanation. Go back to the ship for a second.

23:13

I was listening to a podcast earlier today. I

23:15

don't want to get political. I'm not going there. But

23:18

people were blaming it on DEI. People

23:20

were blaming it on the right. People were blaming it on

23:22

the left. None of us had anything to do with it.

23:24

The ship lost power. It wasn't a

23:26

conspiracy of somebody trying to break the grid.

23:28

All these things. It's just people want answers

23:30

and they want to blame. So

23:33

it's not just wanting answers, but then they want to blame

23:35

somebody, because it makes them feel better if they can find

23:37

somebody to blame to pick on. And

23:39

it's really not the right way to go,

23:41

because as you said, the bottom line is

23:43

when something goes up, there's more buyers than

23:45

sellers. When it goes down, there's more sellers

23:47

than buyers. That's the only thing that we

23:49

know for sure. Hey, Doug.

23:53

Did you hear? We're giving away free money. Well,

23:55

I'll tell you about it in a bit. There's

23:57

a saying in the mining community. Well,

23:59

press. precious metals mining that is. The

24:02

thing is that if you want the best deals, you have

24:04

to be in the room. Now, you're probably

24:06

thinking, what does it mean to be in the

24:08

room? Well, I'll tell you. Being

24:10

in the room means that you're on the short

24:12

list of people who get invited to be

24:15

a part of the best deals. These

24:17

are the deals that most investors will never have access

24:19

to. You mean like IPOs?

24:21

Nope. IPOs are chump

24:23

change. Those are for retail investors, small

24:25

potatoes. That's nothing compared to these

24:27

deals. These deals would have you

24:30

salivating to get access to them. Once

24:32

you know they exist, you will never look

24:34

at investing the same way again. I almost

24:36

don't want to tell you they exist because it will

24:38

ruin your thinking of how the investing world really works.

24:41

Now, you might be excited that these deals exist,

24:44

but you only have access to the deals if you're

24:46

an insider or in the room, as they call it.

24:49

As loyal listeners of the show, I'm going to give you

24:51

a chance to be in the room. Money

24:54

Tree Investing Podcast has created the Insiders

24:56

Club. This is a community of our

24:58

show's members who are loyal listeners of the show and

25:00

want to get more out of their investing experience. Being

25:04

a part of the Insiders Club gives

25:06

you insider status for upcoming events and

25:08

private webinars, discounts, free stuff

25:10

and books, and influence on

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the future direction of the show. This

25:15

is an opportunity to join us as we expand

25:17

our content and services. Oh, did

25:19

I mention you're getting free money? Yes.

25:21

In the next few weeks, I will be giving free

25:24

money to members of the Insiders Club as my appreciation

25:26

for listening to the show. There's no

25:28

cost to join the Insiders Club. Just

25:31

go to moneytreepodcast.com/free

25:33

money. Do that today

25:35

to join the community. That's

25:38

moneytreepodcast.com/free money.

25:41

I hope to see you in the room. I'm

25:44

going to share a news clip. So I went

25:46

on Google and I just typed in recent inflation.

25:49

I think it was the metric. Anyway, so I

25:51

got the top stories. I actually like this little

25:53

snippet because it just shows a bunch of headlines

25:55

from different places. So this is

25:57

top stories, Federal Reserve's February inflation gauge. If

26:00

you read through them, you'll see, US inflation

26:02

ticked higher last month, reversing some

26:04

recent progress. Inflation

26:07

gauge shows price pressures easing. Fed

26:10

doesn't need to be in a hurry to cut rates. Inflation

26:13

gauge rose 2.8 annually in February

26:16

as expected. Inflation down

26:18

from its peak, Fed is prioritizing its

26:20

dual mandate more. Gold price rally

26:22

isn't about inflation this time. Like, if you look at

26:24

all these, they're all over the map. Some are saying

26:26

one thing, some are saying another. Oh,

26:28

and Fed's favored inflation gauge rose 2.5%

26:30

in February. If

26:33

you look at all these, you're like, these are all over

26:35

the map. What are they trying to say? I have no

26:37

idea. They're just trying to get your eyeballs to click. You're

26:39

going to find one, you'll be like, ooh, I like this

26:41

one because it aligns with where my head is. Are

26:44

you going to click on the one that's

26:46

against your thinking? No, you're not. You're

26:49

going to click on the one that aligns exactly

26:51

how your brain is wired. You're thinking, oh, I

26:53

don't think the Fed is going to cut rates. Ooh, let me

26:55

click on the Bloomberg article. It says they reiterate they don't need

26:57

to be in a hurry to cut rates. You

26:59

know, we've been saying this in the show for like a

27:02

year. They're going to stop around five, five and

27:04

a half, and then they're going to stay there. And

27:06

everyone thinks, everyone thought in December, hey, we're going to

27:08

cut rates like six, seven times. I'm

27:10

like, nope, that's not going to happen. Slowly we're

27:12

a quarter in and we're no further to

27:14

cutting rates. According to this Powell

27:17

reiterates don't need to be a hurry to cut rates. Yeah,

27:19

no kidding. Thanks, Jerome. If you could have just listened to

27:21

the show, we would have told you that. And

27:23

so I would click on that one because that aligns with

27:26

my thinking. And I'd look at this other one and it's

27:28

like, ooh, I don't know if I want

27:30

to click on that because that doesn't agree with me. So

27:33

we live in this world where we're

27:35

constantly seeking affirmation for our opinions and

27:38

younger generation gets this more,

27:40

unfortunately. And that's why things

27:42

like TikTok and social media is so dangerous

27:44

because it sends people down a rabbit

27:46

hole and it basically causes

27:48

people to get more extreme. Because

27:51

if you think that the Democrats are

27:53

the devil or the Republicans are Hitler, whatever

27:56

the meme is today, then you're going to

27:58

follow that train. And the more. you follow

28:00

that train, the more they're going to align

28:02

you with that thinking and they're going to

28:05

send you more posts along with that thinking

28:07

and you're going to constantly see consistent confirmation

28:09

that you're correct. You're

28:11

not going to see the other side that says,

28:14

well, actually your side's Hitler and your side's the

28:16

devil. You're not going to see that. The

28:18

algorithm of social media is going to show you what you

28:20

want to see. They're never going to

28:22

show you the other side and that becomes problematic.

28:25

In my opinion, this is one of

28:27

the factors into the extremism in this

28:30

country is social media. You can

28:32

blame it on the extremist groups, but they've always been

28:34

here. They haven't changed. You've

28:36

always had extremists. They're never going away.

28:38

We've had communists in this country even when

28:41

we were worried about communists. It was the

28:43

thing. You had freedom of press. You had

28:45

freedom of speech. You could be a communist.

28:48

It's okay. We don't have to agree, but there's a certain

28:50

percentage of the population that fit that. The

28:52

thing is, when you're constantly seeking

28:54

that affirmation, you're going to

28:56

find groups that confirm that and agree with you and

28:59

then you're going to align with those groups. The

29:01

extremism, which I don't even think it's that extreme.

29:03

I think it's more media driven, but the

29:06

media makes it seem extreme. Then the rest of us are

29:08

kind of like, I guess I agree. I'm

29:10

not going to go take a gun and

29:12

hunt down my foe in the next, quote unquote,

29:14

civil war everyone's afraid of. It's just not going

29:17

to happen. But the social media

29:19

does send people down these rabbit holes because

29:21

it continues to align your thinking with

29:23

similar thinking and it's not contradicting it. It

29:26

was Mark Twain or if it was one

29:28

of the famous authors said this, he said,

29:30

the sign of a first rate intelligence, somebody

29:32

can hold two contradicting idea opinions in his

29:34

head at the same time and still function

29:37

properly. I paraphrased it, but that's basically the

29:39

thing. You need to be able

29:41

to do that if you want to have

29:43

success in any realm in life, in the

29:45

markets, socially, economically. You need to be able

29:47

to be mindful of both sides and say,

29:49

okay, you both have a good thinking around

29:51

it. I agree with this. I don't agree

29:53

with this and it helps make you a smarter person. But

29:56

if you align yourself with one side or the other in the

29:58

market, whether you're a bull, a bear or. Republican, you're

30:00

going to miss so much. You're

30:03

going to miss the truth and nobody really knows

30:05

the truth if you really get into it. But

30:07

you miss more of the truth because you're blinded

30:09

by sending yourself down one side. In

30:12

the market, this happens all the time. I

30:14

hate talking about politics, so I'm going to take this back to

30:16

the market. But this goes into the market, right? You're a perma-bore,

30:18

you're a perma-bear. No matter

30:20

what happens, talk to any crypto perma-bore.

30:23

No matter what happens, they always will give you a reason

30:25

why it's going to keep going higher. Every

30:27

single day. It's going down, it's going up next week. I'll

30:29

tell you why because this is going to happen. Then

30:32

that thing happens. Oh, what's going to happen

30:34

next week? You know, it's like these people think the

30:36

world is going to end on this date and it

30:38

doesn't end. They're like, well, actually, we misinterpreted. It's five

30:40

years from now. And there's always some reason to get

30:42

people to think that, oh, something's going to happen. Same

30:45

thing with perma-bores and perma-bears. They always

30:47

have the same thinking and they can't

30:49

change their thinking because they're not

30:52

mindful of the fact that they could be

30:54

wrong. I mentioned this in the show

30:56

a few weeks ago, and I'm not going to mention

30:58

the person's name because he's got more money than me.

31:00

I don't want to get sued, but I heard a

31:02

debate between two thinkers in this space and one of

31:05

them sounded like complete buffoon. And

31:07

it was no matter what, the other one was asking good

31:09

questions. He asked a question to the guy because it was

31:11

a debate. So at what point do you

31:13

think that your opinion would be wrong? He's like, I'm not

31:15

wrong. I can't be wrong because this and this and he

31:17

goes off on a tangent. He's like, yes, but at what

31:20

point would you say, okay, I understand. I

31:22

believe what I'm saying, but at what point could

31:24

I possibly be wrong? He's like,

31:26

it's not possible. That's buffoonery. If you

31:28

can't be wrong, you're a buffoon. Everybody

31:30

can be wrong. Unless you know the

31:32

future, you're bound to be wrong at something. By

31:35

the way, the same person also told people to short the

31:37

market all the way up from 2009 until probably still telling

31:39

them to short the market. You lost all your money. I

31:41

didn't listen to him. So I'm not going to mention his

31:44

name. But point being is there's stuff like this out there.

31:46

And if you keep a list of the same people, you're

31:48

going to get yourself into trouble. You

31:50

have to be able to discern right from

31:52

wrong. You have to be able to discern

31:55

people who are uniform thinkers where they can't

31:57

change their mind. And they're useful. I listen

31:59

to them. this guy, he's useful. He

32:02

helps me contradict other ideas I have.

32:04

He's bringing up ideas that

32:07

I may not be agree with. And

32:09

I'll say, okay, well, withstanding your ridiculous

32:11

thinking, what's your argument? Okay, great.

32:13

You made some really good points. And I agree

32:15

with that. It makes me smarter. I don't agree

32:17

with him, but I listened to him. Because

32:19

I know that he is well thought

32:21

out. He has a good argument. It

32:24

just may not make complete sense because he's never

32:26

willing to change his mind. If I want to

32:29

think about, all right, I think goals going

32:31

down, hypothetically, I'm not saying it is. And he thinks it's going

32:33

up. Okay, what's your thinking around it? Why do you think it's

32:35

going up? Okay, I hadn't thought of that. I hadn't thought of

32:37

that. All right, let me go look at this. So

32:40

as a thinker, we should all be doing this. We

32:42

should all be looking for things that

32:44

contradict our opinion. If we don't, we're

32:47

just not as smart as we could be.

32:49

And I think that's really important. What do you

32:51

think, Phil? You bring up a concept

32:54

that I think I talk about almost every

32:56

time we have these conversations, which is confirmation

32:58

bias. That's really what you're talking about. We

33:00

seek out people that share our opinion because

33:02

we want to be right. And it's also

33:04

why sometimes we have so

33:06

much trouble communicating. Because not

33:08

only do we want to be right, we only want

33:11

to hear people that have our point of view. We don't want to

33:13

hear the other side. I went to

33:15

a financial conference, a very different conference than

33:17

the typical one last September. And

33:20

at this conference, there's not really an

33:22

agenda. People that come, they present topics that

33:24

they want to talk about. And

33:26

my favorite session, this is what

33:28

we did. We went into a room and said, when it

33:30

comes to politics, we never talk

33:32

anymore. There's no agreement. There's no compromise.

33:35

It's the Democrats or it's the Republicans and that's it. And

33:37

you're only going to do that. And you're going to stay

33:39

with your party. You're going to stick to the party line.

33:42

So we were given an issue. The

33:44

issue was actually gun control. Doesn't matter

33:46

which side you're on. This side

33:48

of the room, you take the liberal point of view. This

33:51

side of the room, you take the conservative point

33:53

of view. And I want you to have

33:55

a conversation about it. And the whole

33:57

purpose of the exercise was to force

33:59

you. Give consideration and think

34:01

about how the other side thought about that

34:03

issue and it was a really helpful

34:06

exercise and it's something that we don't do. And

34:08

this applies in investing as well you

34:10

like to stop or you like this

34:12

sector you like this asset class whatever

34:15

may be that's great but don't just

34:17

look for things that support your thesis

34:19

or your belief try to understand just

34:21

like her to the other side. Because

34:23

you might be missing something you want

34:25

to make sure you understand and then also

34:28

you can say you know i don't really agree with

34:30

what that other person said or that other point of

34:32

view. What is your where

34:34

is something starts to change and that starts

34:36

to become more likely than you

34:38

thought originally maybe it means that you should get

34:40

out because you were wrong. We

34:43

don't want to make were wrong and we only want

34:45

to find people agree with us you really have to

34:47

guard against confirmation bias i think it's one of the

34:49

most important things that we can do when it comes

34:51

to investing. I wanna bring up some images

34:54

here in our trade publication investment news

34:56

they had some good charts here and

34:58

i wanna share some of them in

35:00

part because it aligns with our conversation

35:02

here here is one. So

35:04

this is the upcoming two thousand twenty four

35:07

election which everybody thinks the legal civil war

35:09

and i think it's gonna be a dud

35:11

basically what it says is how much importance

35:13

are clients placing on two thousand twenty four

35:16

election season regarding their financial plans. I

35:18

love about this is it pretty evenly

35:21

spread people said not important at all

35:23

is three percent and my opinion those

35:25

are the smartest three percent in the

35:27

group fourteen percent not very important someone

35:30

important thirty three percent important thirty three

35:32

percent and very important seventeen percent. Now

35:35

seventeen percent are clearly driven by fear and i'm

35:37

just point this out and i think people are

35:39

right or wrong because i don't know the answer

35:42

either but the seventeen percent are driven by fear

35:44

the thirty three percent is important for someone to

35:46

hear. And you have to look at that as

35:48

a gauge and i look at this and i say

35:50

that's an interesting segment of the population how people

35:52

think people think it's not very important either they're smart

35:54

enough to know that it's not very important or

35:56

it means they're not political it could be a

35:58

bunch of reasons but. The reality is,

36:01

we always think politics is important. And if you

36:03

go back 100 years in the

36:06

markets, politics actually has

36:08

very little to do with outcomes

36:10

in the investment market. Very

36:12

little. What's funny, and this goes back to

36:15

some of the things we're talking about today, we as

36:17

citizens of the United States feel like

36:20

the president is in

36:22

charge and they're responsible for the

36:24

economy. So wow, the

36:26

stock market's up. Good job, Biden. Good

36:29

job, weekend at Bernie's. Biden, that's all

36:31

you, buddy. You did that. Or

36:33

when Trump got in and we had an old

36:35

market, hey, good job, Trump. You did a great

36:37

job there. And yet the president

36:40

has very little to do, if

36:42

anything, with market

36:44

performance. It's so minute, it's not

36:46

even worth measuring. Now, can they

36:48

have an impact? Absolutely. There

36:51

are things they can do to have an

36:53

impact, but it's mostly not due to the

36:55

president. They could have a bad impact. They

36:57

could send us a war, like most presidents.

37:00

I will say that the one good thing Trump did, and I

37:02

don't agree with 100% of it, but the one

37:04

good thing he did is he's a promoter. I think we

37:07

all know that he's a really good promoter. That's like what

37:09

he does. He promotes himself, but he's good at it. You

37:11

have to give him respect, even if you don't like him.

37:13

He's a good promoter. And he was

37:15

a promoter for the United States. And that

37:17

was actually a bolster. And in some ways,

37:19

if you think about him, his

37:21

job as president is the same job that

37:23

CEOs have. The CEO's job

37:25

is to be a promoter of the company and

37:28

to get the stock price up and for growth

37:30

and to help people in the company to grow

37:32

and all that stuff, they make decisions, but they're

37:35

basically a promoter. That's their job every day. They're

37:37

out there promoting the company. A president's job in

37:39

large part in this day and age

37:41

is promoting the US, US businesses,

37:44

US commerce, promoting rah rah rah,

37:46

go USA. That's the president's job.

37:49

In large part, it's not the only job, but it's a large

37:51

part of their job. And I will

37:53

say Trump did that well. You didn't do everything

37:55

well, but you did that well. And I think

37:58

if that is something the president can do. That

38:00

is a positive. I had this argument with a buddy

38:02

of mine a while ago and he's like Well, Bill

38:04

Clinton was the best president because look at the stock

38:07

market under him like really did Bill Clinton invent the

38:09

internet I thought Al Gore invented the internet Bill Clinton

38:11

didn't do that Like he doesn't get credit

38:13

for the internet boom And I'll

38:15

tell him I said he does get credit

38:17

for one thing in that he allowed the

38:20

stock market To do what it's

38:22

gonna do. He actually one of his thesis

38:24

is hey hands off I'm not touching it

38:26

Because there are a lot of presidents who try to mingle in

38:29

the market good or bad I mean some have good effects

38:31

some of bad effects But a lot of them try to

38:33

like manage or mingle in the markets He was just like

38:35

no hands off you guys do you're gonna do I

38:37

thought that was a very positive thing a lot of people

38:39

Don't give them credit for that because

38:42

how do you give somebody credit for

38:44

something that didn't happen you doing nothing? You

38:46

don't get credit for doing nothing. It's kind

38:48

of like in this country. It's like, oh

38:50

we prevented another terrorist attack Well, it didn't

38:52

happen. So how do I know you have

38:55

any value? What was that movie wag the

38:57

dog? I think was Dustin Hoffman who was

38:59

in the car with the CIA director? William

39:01

Maci and he goes in he's like hey,

39:03

there's no war and he's like, what are

39:05

you talking about courses a war? He's like we

39:07

have satellites. We've seen it There is no war

39:10

and he goes in this great monologue about if

39:12

there's no war. Why do we need you? H

39:15

Macy's like have a good day, sir Like

39:17

all right. I agree if there's no war then

39:19

we're not needed. So go ahead have your war

39:22

It just brings up the fact that all of

39:24

this stuff kind of wraps together. So if you're

39:26

thinking about politics Politics has

39:28

very little to do with outcomes of the

39:30

markets and has very little to do with

39:32

outcomes of the economy Doesn't have

39:35

an impact. Absolutely. Is it significant?

39:37

Absolutely not but we Disproportionately

39:40

worry about it. So looking at this

39:42

the impact of elections of financial plans

39:45

That's not what it should be the concern if

39:47

I had to put a concern on the elections, it

39:49

would be maybe 10-15

39:51

percent. What's the probability that the election will

39:53

have a huge impact on the market? 10-15

39:56

percent I would probably also give 10% chance to

39:58

alien aliens coming

40:00

down and taking over the world. It's that

40:02

low of a probability in my mind. Maybe

40:04

it's 5% on aliens, but anyway. If you

40:07

really look at probabilities, it's really not high

40:09

up on the spectrum. Now

40:11

if you look at this other one,

40:13

which I think is really helpful as

40:15

well, which is what is stressing out

40:17

clients? And this is apparently a survey

40:20

from clients about what's stressing them out. This

40:23

is done by Janis Henderson. Yeah, it's a survey,

40:25

I think, of their clients. And it

40:27

says the US presidential election, very concerned, or

40:29

49%, 29% are somewhat concerned. Persistent

40:34

inflation, 35% are very concerned. Risk

40:37

of recession, 29% are very concerned. Rising

40:40

interest rates, 27% are very concerned. Poor

40:43

stock market performance, 20%. So

40:46

poor stock market performance is very low, probably in

40:49

large part because the stock market has been going

40:51

up since October. It's gone straight up, so everyone

40:53

feels good. But if you look

40:55

at this as a little disproportionate, the US

40:57

presidential election, which isn't happening for whatever, six

40:59

months, is disproportionately concerning most

41:01

people, and people are stressed out about

41:03

it. So 78% of the people

41:06

are very or somewhat concerned about the presidential

41:08

election. Only 68% is persistent inflation. That

41:11

could be because most people don't understand inflation,

41:13

which is unfortunate because if you

41:15

want to know where the next governmental tax is coming, that's

41:18

it. Don't worry about your tax rates going

41:20

up. You can worry about inflation going up. That's going to do

41:22

the same thing. Risk of

41:24

recession, 61%. Rising interest

41:26

rates, 56%. So you

41:28

see it's very disproportionate for the presidential election,

41:30

and yet it's probably one of the

41:33

least important things on this list. Rising

41:35

interest rates, that should concern people. Only 56%

41:37

have any interest in it. And

41:40

it's actually less than poor stock

41:42

market performance, which is weird because

41:44

that's just a residual effect of

41:46

all these other things. Rising interest

41:48

rates, in my opinion, should be

41:50

the biggest concern that people have.

41:53

Persistent inflation, I mean, that's just a

41:55

new normal risk of recession. Those

41:57

should happen, even though we don't allow them to happen anymore.

42:00

Anyway, I just wanted to share those because

42:02

those are surveys of people, real life people

42:04

that are thinking about this. And

42:06

how do you compare? Are you in the

42:08

presidential election category? Are you in the inflation?

42:10

I'm not asking you to take a survey,

42:12

but just think about what is the thing

42:14

that's concerning you most right now. And

42:17

then think about what's the probability of it

42:19

actually having a big impact on the market?

42:22

Because the election will not. Now,

42:24

if we have an actual insurrection,

42:27

because blast one, you don't count

42:29

like 21 people with

42:31

Billy Clubbs insurrection. It's not going to take over

42:33

a government. But anyway, I don't want to go

42:35

down that track because someone will cancel me. But

42:37

are we going to have a civil war? No,

42:40

we're not going to have that. Anyone who's telling

42:42

you that's just trying to get your fear sensor

42:44

up. But if you're looking about what's worrying, yeah,

42:46

a recession should be worrying. High inflation or persistent

42:48

inflation should have some concern. Eventually, that's going to

42:51

impact people. It's starting to. We didn't

42:53

have any chance to go over the charts in the show this

42:55

week. We'll probably do it next week. We got tons of charts.

42:57

But here's one. I'll show one before we give it to Phil

42:59

to wrap it up. Here's one that I

43:01

saw and I had to share it. Interest rates

43:04

and US credit cards. So this

43:06

chart is comparing 30-year mortgages, auto loans,

43:08

personal loans, and credit card. And these

43:10

are annual rates that they charge. So

43:13

low rate was somewhere around three for 30 years.

43:16

That was the low. The low for auto

43:19

loans was a little under five. The low

43:21

for personal loans was somewhere around eight. The

43:23

low for credit cards was probably somewhere around 12.

43:26

Now I can attribute that that's not the low because

43:29

I had lower credit card loans than that. I

43:31

think it was like sevens for one of them. But if

43:33

you look at it, they spiked. So 30 years,

43:35

somewhere around seven. It's actually probably higher than

43:38

that. It's probably seven and a half. Auto

43:40

loans are somewhere around eight. Personal

43:42

loans are somewhere around 12 and a half. And

43:44

then credit card debt somewhere around 22. I'm

43:47

pretty sure it's more than that because I

43:49

have good credit. I think my rate's like 30% even

43:51

though I've never had an issue. They're just

43:53

trying to just stroke people now. They're just

43:55

gouging people because they can. But

43:58

the point is, if you're looking at this, rates are... And

44:01

this is going to impact a lot of

44:03

people. You're going to start to see a

44:05

lot of credit card debts. You're going to

44:07

start to see foreclosures and bankruptcies over the

44:09

next year or so. I'd say probably mid-year,

44:11

you're going to start to see some economic

44:13

factors tick up in these areas because people

44:15

are running out of money and they're running

44:17

out of credit. So just be aware that

44:19

even though the recession is not imminent, it

44:21

doesn't mean that it's not going to happen.

44:23

And you just have to be aware because

44:26

the stock market right now is feeling a little

44:28

bit too bullish for me. It

44:30

feels a little bubbly and it

44:32

doesn't mean it can't keep going higher, but you

44:35

should have one foot on dry

44:37

land at least, even though you can watch the

44:39

market go up, at least have one foot on

44:41

dry land so that if something happens, you can

44:43

manage your risk. So Phil, final

44:45

thoughts from you. A couple of

44:47

things I want to bring up when I think about

44:50

that first chart that you showed people's concern about the

44:52

election. So a lot of recency bias

44:54

that comes in there too. What do I mean by that?

44:56

What are people hearing about now? We have

44:58

an election that is not that far away.

45:01

Eight months away, seven months away,

45:04

but it's in the news a lot. There's a lot of

45:06

stuff going on. So we hear about it. So just the

45:08

fact that we hear about it. Oh my God, that must

45:10

be something that we have to worry about. That's

45:12

what happens. We take what we hear now

45:15

and that's when we get fear around that. I'm

45:17

not really that worried about the election either. I don't really

45:20

factor it in that much when I'm thinking about how I

45:22

invest because I've seen the data and as

45:24

you said before, it doesn't really have a big impact. The

45:27

other thing that I just want to add, because I've seen

45:29

this, the credit card industry

45:31

and those rates, it's so

45:33

predatory and it's even worse because

45:35

I've seen cases where people have credit cards

45:37

with all that interest on them and

45:40

they have their total combined credit card

45:42

lines are more than their income. How

45:45

does the system even let that happen? That

45:47

just should never happen because that's something that's not going to be

45:49

able to pay it off if they owe more

45:51

than what they earn. How can they ever pay it off? And

45:54

then you got these ridiculously high rates. So then it puts

45:56

somebody in a hole. They probably did

45:58

it because an emergency came up. and they had no

46:00

other choice, and it's nice that there was something there to

46:02

help them. But then they have these really high rates, and

46:05

unless their fortunes change, they're now

46:07

in this spiral where they're never going to be able to

46:09

get out, and that's what our system allows. And part

46:12

of the reason that my firm is called

46:14

the prize is because that means to inform

46:16

and the whole system that we have, we

46:18

don't teach people financial literacy.

46:21

And it's really a shame because it lets so many of

46:23

these things get out of control. And then

46:25

you have people and companies that are willing and able to

46:27

take advantage of it, it just doesn't seem right to me.

46:30

As for me, I work with people who are

46:32

experiencing big life transitions because I know they can

46:34

be stressful. And my job is to

46:36

help empower women facing new beginnings with the financial

46:38

knowledge and tools they need to make self-assured decisions.

46:41

My firm's a prize wealth management. We'd love

46:43

to get to know you. If you'd like to learn

46:46

more about us, you can download our free ebook, How to

46:48

Flour Civilized Big Changes, at apprisewealth.com/ebook, and

46:50

you can also sign up for our blog.

46:53

Thanks for having me today, Kirk. Enjoy the conversation. Yeah,

46:56

thanks for coming on, Phil. And before we wrap it up,

46:58

I wanted to culminate at least

47:00

a year of waiting for SPF,

47:02

Sam Bank Binfried, reading some

47:05

of this from a law firm press release.

47:07

So if it's incorrect, don't hate me. But

47:10

apparently, Sam Bank Binfried was sentenced for 25

47:12

years in prison, three years of supervised release,

47:14

which I guess I mean, he's out in

47:16

three months on good behavior, ordered to pay

47:18

$11 billion in forfeiture

47:21

for his orchestration of multiple

47:23

fraudulent schemes. He's the founder

47:25

of the cryptocurrency exchange FTX

47:27

and trading firm Alameda Research,

47:29

misappropriated billions of dollars of

47:31

customer funds deposit with FTX,

47:33

defrauded investors of more than

47:36

1.7 billion defrauded lenders, more than

47:38

1.3 billion, and found guilty on

47:40

two counts of wire fraud, two counts of conspiracy, blah, blah,

47:43

blah, blah, blah. Okay, I just wanted to read that because

47:45

people have been kind of waiting around. It's like, all right,

47:47

what are they gonna give them? They gave them 100 years

47:49

because they could. My understanding is they

47:51

gave them extremely light sentence on this scale, like

47:53

25, I think was the low end and 100

47:56

years of the high end, but they had a

47:58

lot of latitude based on the crime. he was

48:00

convicted of. In order to pay

48:02

$11 billion in forfeiture, yeah, what's he

48:04

going to do? He's going to have to have another

48:06

Ponzi scheme, not to say that

48:08

he committed a Ponzi scheme. I don't want to

48:10

get myself in trouble, but he has to commit

48:12

a Ponzi scheme in order to get $11 million

48:15

to pay back that. I mean, what kind of

48:17

ridiculousness is that? I have to ask, when Alex

48:19

Jones was convicted, I think they said that he

48:21

owed like $100 billion. I

48:24

don't know what the number was. Some crazy number.

48:26

It was like 100 times the highest number ever,

48:28

and it was just to make a point. It's

48:30

like, what point are you making? Is

48:33

the point that the legal system is corrupt? Because

48:35

that's not the point. The point is the legal

48:37

system is supposed to be about fairness, not

48:40

about making a point. I get

48:42

it. I'm not commenting on crimes or anything like

48:44

that. I'm just saying, is the

48:46

legal system really a political arm now that

48:48

the point is to make a point? I

48:51

look at this, and there's a lot of things

48:53

wrong with the whole FDX bankruptcy or whatever, because

48:56

crypto's gone a lot higher since, and a lot of people

48:58

are complaining. They're like, hey, wait a minute. We should be

49:00

getting our money back because crypto went through the roof since

49:02

then. So we should be getting more, and good luck to

49:04

those people, those trustees in charge of that. That's

49:07

the lawsuit waiting to happen right there. Anyway, I just wanted

49:09

to talk about that because that's kind of a culmination of

49:11

a lot of people waiting. It's

49:13

interesting. I'm sure plenty will be written about it. I'm

49:15

not a legal scholar, so I'm just reading the press

49:17

release, and everybody can make of it what they

49:20

want. So that's the show for this

49:22

week. Thank you again for joining us in the

49:24

Money2Investing podcast. My name's Kirk Chisholm, wealth manager of

49:26

Innovative Advisory Group. We don't just manage

49:28

your wealth, we make your life better. You can find

49:30

more about me at innovativewealth.com, and of course, you can

49:32

find me every week here on the show. Please

49:35

remember to subscribe to the podcast and the podcast app,

49:37

if you're choosing. You can also check

49:39

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49:41

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49:43

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If you're there, say hi. Please subscribe and leave

49:49

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49:55

This show is for informational news only. We're not

49:58

telling you what to think merely, how to think

50:00

about it. investing. We're also not selling any products

50:02

or services and do not consider this advice. If

50:04

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50:06

Please send me an email, express your feelings. If you're

50:08

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50:11

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50:13

one. What I said earlier, I'm not selling anything, but

50:15

I'm easy to find. And one more thing, I'm

50:18

not a legal scholar. Please don't take legal advice

50:20

from me on this episode. Please disregard everything I

50:22

said because I'm sure something in that was wrong.

50:24

Anyway, have a great week ahead and remember, no

50:26

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50:29

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50:32

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50:35

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