On this week's Stansberry Investor Hour, Dan and Corey welcome Stansberry Research analyst Greg Diamond back to the show. Greg is the editor of the Ten Stock Trader newsletter and has nearly two decades' worth of trading experience. He joins the podcast to give listeners his unique insight into the huge opportunities forming in the options market today.
Dan and Corey kick off the show by discussing car-rental company Hertz selling one-third of its electric-vehicle ("EV") fleet and planning to reinvest in gas-powered cars. They talk about the reasons for this move, why EVs might not be a popular choice as rentals, signs that oil and gas companies are still thriving, and how the green-energy transition could lead to higher inflation.
Next, Greg joins the conversation and analyzes the current volatility in the markets. He explains that investors and the financial media believe the Federal Reserve has beaten inflation and is going to start cutting rates soon. But as Greg notes...
Everyone's on that side of the bus. And usually when that happens, the opposite happens... It doesn't mean that we're going to have a 2020 COVID-like crash. It will probably be more of a 2022-type scenario where we see these huge moves up and huge moves down... It's astronomical the level [at which] these swings are happening.
Greg also goes into detail on his study of cycles. He explains that he focuses on when something is going to happen rather than why it will happen...
Time is the most important factor in trading and investing, then price, then fundamentals... You see these patterns develop, you see these time cycles develop, then the move happens, and then the fundamentals come. "Oh, well, this is why that happened." But you want to be ahead of that fundamental catalyst or fundamental move to make really good trading decisions.
Then, Greg predicts important inflection points for 2024, describes how legendary trader W.D. Gann influenced his trading strategy, and explores the potential ramifications of the Fed ending its bank lending program in March. He also details why he'll be trading sectors for the first half of the year rather than individual stocks.
Lastly, Greg talks about correlations between the S&P 500 and specific exchange-traded funds. He assesses what it means for the markets when divergences happen and how extreme volatility leads to great buying opportunities. As Greg sums things up, "I think it's going to be a rough ride for bulls and bears."
Dan Ferris: Hello and welcome to the Stansberry Investor Hour. I'm Dan Ferris. I'm the editor of Extreme Value and The Ferris Report, both published by Stansberry Research.
Corey McLaughlin: And I'm Corey McLaughlin, editor of the Stansberry Digest. Today, we talk with our colleague Greg Diamond, editor of our Ten Stock Trader publication.
Dan Ferris: And Corey and I will talk about Hertz selling a third of its electric vehicle fleet, and the implications for that in the economy.
Corey McLaughlin: And remember if you want to ask us a question or tell us what's on your mind, e-mail us at [email protected].
Dan Ferris: That and more right now on the Stansberry Investor Hour.
All right, let's talk about Hertz. I have to admit, I was a little shocked by this one. It's all over, all over the place. Reuters, Bloomberg, other places. And OK, so let me just read a little bit from the Bloomberg article. "Hertz Global Holdings plans to sell a third of its U.S. electric vehicle fleet and reinvest in gas powered cars due to weak demand and high repair costs for its battery powered options." Does any of that surprise you?
Corey McLaughlin: Hm.
Dan Ferris: Because all of this surprised me.
Corey McLaughlin: A lot of it. A lot of it. And I mean, yes and no. I guess, when I hear the headline, like it wasn't a headline I was expecting. Or sorry, a business move I was expecting to read about. But then once you hear the details yes, it makes a lot of sense.
Dan Ferris: I guess so, yeah. Especially, the weak demand surprised me. Because I thought well, electric vehicles are here and people just like them, and that's OK because they're fun to drive. I've driven, I guess I drove a hybrid a few times and I've driven a pure electric, I drove a Model S. Lots of fun. Pushed me back in the seat. Took off like a rocket.
So the weak demand surprised me a little bit. But the high repair costs for battery powered options, maybe that shouldn't have surprised us, because it's new tech. It's still relatively new. I know electric cars have been around for like a century or something. But you know, these are fairly new.
And they've come up as a percent of total global car sales really fast in the past, just call it several years here. So I thought well, you know, they're here. This is it. People want electric cars. But the high repair cost, it's like we can't afford to repair them, and nobody wants them.
Corey McLaughlin: Uh-oh.
Dan Ferris: So we're getting rid of a third of our electric vehicle fleet, and we're taking a 245 million related incremental net depreciation charge from these. And part of that has to be from the price cuts, you know from Tesla's price cuts.
Corey McLaughlin: From Tesla. From Tesla, yeah. I mean, this story is, there's so many different layers to it, with so many different industries and trends, globally. I mean obviously, it's like, OK. There's the big push for EVs, you know, globally and nationally. But then there's the practical matters, right? Like, OK. We're talking about the rental business. Cars are going to get into problems. You've got to fix them.
People, their preferences, I think part of the reason for the weaker demand too is, if you're renting a car in a different city or at an airport you're not familiar with and you've got to figure out where to charge this thing. Nobody wants to do that if they're on a two day business trip or a week-long vacation with their family. More than once, I would say. I would say somebody might try it and then oh crap, I've got to find out where to charge this thing in Poughkeepsie, New York or whatever.
I think that's part of it too. Which, it's different if you own one, I think. You're used to that. But renting it is a bit, I would think a bit more challenging. I've been in a Tesla Uber, and it was cool, too. Like late at night I was staring out the ceiling.
Dan Ferris: Oh yeah.
Corey McLaughlin: Of the open roof. But I mean, that was just an Uber. I don't have any expenses on that one.
Dan Ferris: Another thing that surprised me is that Bloomberg has a whole thing. I think it's even a print magazine, called Bloomberg Green. And Michael Bloomberg is all hyped up about the big climate scam or whatever. And the headline on Bloomberg reads "Hertz to sell 20,000 EVs and shift back to gas powered cars." You'd think Bloomberg would not frame it like that.
It's like Bloomberg saying you know, OK, well we tried. This is it. It's over. People want gas powered cars. And car rental companies can't afford to have electric vehicles, so they're going back to gas powered cars. Gas powered cars are better, and that's what we say here at Bloomberg. I mean, that message is subtle if there at all. But just the way they frame it, they frame their headlines in a particular way, and that one caught me off guard.
But I'll tell you, we're talking about who was surprised by this? Hertz of course. You know, they're taking a $245 million charge. But in 2021, they announced plans to buy 100,000 Tesla vehicles, and they were buying them from another firm too. They weren't just buying Teslas. But 100,000 of them.
Corey McLaughlin: And didn't get there. Didn't get close, right?
Dan Ferris: Yeah, doesn't sound like it. I mean, their total vehicle fleet is like 60,000, so.
Corey McLaughlin: And that was in 2021, right? When they announced they were going to buy Teslas and EVs and add them to their fleet. And that was what pushed Tesla's market cap over a trillion I believe at the time. Remember, this is 2021, right? This is like prime, we're at prime bubble season there. And it was, rates were still at zero. Inflation, nobody was caring about inflation at that point. Everybody was still on the pandemic stimulus high.
And times have changed in two years. Now they're selling these cars back into the market at like $20,000 less than, each, than where they bought them at. Hertz. They're also going to have a bunch of used Teslas and EVs on the market, too. Which I don't know, will people buy them at that point, too? That will be another thing to see about demand for individuals buying them. Maybe they will at that point, if they're cheap enough.
Dan Ferris: Right when, in the fourth-quarter 2023, electric vehicle sales growth in the U.S. slowed way, way down, rising just 1.3% in the fourth quarter, year over year for the fourth quarter of the previous year. So yeah. Not good, the whole thing looks like it's going into reverse, for some period of time.
Corey McLaughlin: Yeah, it reminds me of something, our Doc Eifrig wrote in one of his publications, several years ago, about just how long it's going to take. Even if there's demand for EVs and they're produced consistently, like just how long it would take for them all to overtake the gas-powered cars on the market. And I don't think that pace is even close to happening at this point.
And I don't know, it just speaks to how gas and you know, fossil fuels are still the dominant player in autos. Unless GM, what are GM and Ford doing, or these other companies like? What are, I mean, why can't they compete with Tesla as much? I guess they started way behind. They've got like 10 or 15 years to catch up on everything, so. Unless they, unless EVs get affordable and more efficient, you know, when like what you say, when they break, you know? And cheaper to fix and all that stuff, so. Maybe the story would be different.
Dan Ferris: Right. You're talking about these other competitors of Tesla. Oh and by the way, Hertz also has an agreement to buy 175,000 General Motors electric vehicles over the next four years, and 65,000 from Polestar. And you know, they're saying well, you know, we're going to keep an eye on that. It may take much longer to complete those orders, so.
Corey McLaughlin: Yeah, sounds like we should be surprised if that ever happens with GM.
Dan Ferris: That's right. It should be surprising, because that's a hell of a lot of cars. This whole thing though, it's one thing when you're responding to demand. Right? Hey, people want electric cars. And I thought well, at first I thought it was a big green push. It was all subsidized, you know. People didn't really want them as much as the, you know, as Tesla and other makers were consuming.
And then I thought well, OK. You know, they're growing sales like crazy. And you know, it's an increasing percentage of level of sales, like you're, OK. Well, maybe this is real. But I don't know. Maybe it's not as real. And not only that, but the more I look into all of the claims by all of the hysterical climate folks, just one after another of them kind of falls by the wayside and turns into, hm. At least something questionable, if not outright fraudulent in some cases.
Like, you know, I found out NOAA, National Oceanic Atmospheric Administration, there's like 20-odd thousand of these weather stations around the U.S. And I think they're up to at least 350 or so that have shut down but NOAA's still fabricating the data for them. So I'm like, oh, OK. And the whole thing was born I feel like with Al Gore and his hockey stick graph that came from a guy named Michael Mann which has been called out and proved as fabricated like many times.
So, anyway. I don't want to get into all that, even though I just did. But the point is, maybe the wheels are falling off this whole thing, literally now you know, in the form of all these problems with electric vehicles that Hertz is having. I have no doubt we'll have plenty of electric vehicles, and we'll have more of them, you know, 10 years from now than today, probably. I'm going to guess. But they're not taking over the world. And they're certainly not going to be 100% of the fleet any time probably in our lifetime.
Corey McLaughlin: Yeah. I mean, it's not a shoo-in to you know, change gas powered cars to EVs in five years. That is not happening, by any stretch of the imagination at all. It's got a long road ahead of us. You know, whatever you think about climate, I don't honestly even know what to think about it. Like, these things are going to take time, no matter what the goals are.
I talked about nuclear a couple weeks ago, like that's part of this push too, among advanced economies, are looking at nuclear, looking at different sources. I mean, but still. I mean, if you need to get a new HVAC unit or something, you're still, the cheapest option, most affordable option, is hooking it up to gas, right? And it's like, those types of things, these are going to take a long time to change if at all. So Hertz is going back to gas cars. So there we have it. Nothing has changed in the last 15 years.
Dan Ferris: Right. And nothing really has changed. The global energy mix hasn't changed. A guy named Jeff Currie from Goldman Sachs, and I wrote about this in The Ferris Report a short while back. He looked at the global energy mix and he said it's something like, I don't know, I think the figure was like four trillion bucks has been put into this thing in the last 10 years and you know, the world has built solar farms or whatever you call them, and wind farms.
So they've built plenty of this stuff. But the global energy mix hasn't changed. Fossil fuels are still, I think it's 82% of the global energy mix. Like, hasn't moved. You know? And so they're building this stuff everywhere. And those technologies are problematic, right? The situation with the whales and the east coast of the United States, gosh, that breaks my heart.
And they claim that they're not sure what's doing it but I don't know. It seems like maybe that's not genuine on the part of the utilities and the folks doing the wind farms. And I've seen pictures of massive solar installations in China where they just coat the landscape with these things. It's like, ooh. That's environmentally friendly? Ooh. That is so ugly. But they're out there. But they have not changed the global energy mix. So you know, fossil fuels are just too darn good.
Corey McLaughlin: I know, and you look at so like what's happening right now in geopolitics and in the Red Sea. You talk about disruption to shipping channels and what that's doing to oil prices, natural gas prices. I mean, and then commodities. These are things that the market's reacting to that, right? That more than I think EV use. In the short term. Like, that's, you've got oil prices up you know, like 3% in a day when something is happening in the Red Sea. And I think those things are more important to think about certainly in the short term, and probably in the longer term as well, in terms of like what, how this affects investments and energy companies and all those kinds of things. So yeah, EVs are cool.
Dan Ferris: Yeah, exactly.
Corey McLaughlin: To talk about. Maybe they are the future. Maybe they're not. They still need to pull things out of the ground to power them and make them go. So let's be real about what we're looking at. And I mean, people younger, you know, the younger generation doesn't want to hear about oil and gas. But they also don't know and we, I'll include myself in that.
Everything that I'm looking, you look around at computer wires. Everything that is made from plastic and derives from chemicals and oils. Like, be careful what we wish for and trying to speed this along so quickly without knowing the consequences about it. That's not to say it's not worth doing, innovating and doing things. But it's not going to happen overnight. The green push, I'm talking about.
Dan Ferris: Yeah, not going to happen overnight if it ever happens at all during our lifetime. And you're right. It's, the macro force moving oil, you know, and it's as we speak pushing 74 bucks a barrel, is not green energy transition. It's where's the, you know, where's the oil going to go if it can't move around in the Red Sea?
Corey McLaughlin: And the overall demand too. Like, global demand and supply and, from OPEC and all these things that are affecting that. You know, energy prices right now.
Dan Ferris: Yes. That's what's moving energy prices, not electric vehicles. And the idea also, you know, you'll still talk to somebody now and then who'll say you know, oil's a bad bet. You know, the demand is just going to go down and down and down the more we use these electric vehicles. I'm like, you're not within the ballpark of sanity with that. It just makes no sense.
As you pointed out, for example, an incredibly fossil fuel intensive process called mining has to happen, and a lot of copper has to be mined. In fact, a lot of copper has to be mined just for normal GDP growth, regardless of electric vehicle use. Never mind that electric vehicles, many of them use four or more times the amount of copper as an internal combustion vehicle. Never mind that.
Just normal GDP growth, and we're going to need Robert Friedland, the copper magnate, says basically eight Escondida mines over the next approximately eight years. So even if he's off by eight years, you know, even if it's one every two years, not one every year, you know, there aren't eight of those deposits in existence. The Escondida's the largest copper mine in the world. There aren't eight of those deposits in existence, period. So you know, I think copper's still a good bet over the next whatever, five, 10 years.
But it's, I don't know. Decreasingly do I believe it will be heavily dependent on this green energy transition. It's just, the green energy transition is too problematic. As you keep pointing out, you know. Even without Dan's views about the climate crazies, it's just making it happen. Even if it's all real and it all has to happen, because we're saving the planet, physically can't do it.
So we're in an interesting position here. I wonder, and of course Time Magazine has recently informed us that the climate industrial complex is a trillion-dollar-a-year undertaking globally. So, that is you know, that's a big piece of the global economy. And I'm curious to see how it all works out over just the next year or two or three.
Corey McLaughlin: Yeah. Me too. What I'm hearing is more spending, government spending too. And higher prices for everything. That's what I'm hearing. You know, inflation basically. Going on and on. You know, if we're talking about copper shortages for all of these things that will, that government money will be put toward, I'm pretty confident in that.
And whether they work or not, whether people want them or not, whether they make business sense or not for people who actually want to make money, whether all of that happens, the government's going to keep spending money. That much I am confident in. And we only have a limited supply right now of natural resources and energy, and we're only getting more people on old planet Earth.
And so it's, I don't see anything changing for the inflation picture any time soon. Even if you know, central banks, whatever, do whatever they think they can do to lower it in the short term. I don't think, you know, I think people are worried they'll never have enough money to keep up with higher prices.
Dan Ferris: Which, it's odd. Here we are in early 2024, and you can make that statement reasonably and the whole narrative for most of last year was inflation's coming down, inflation's coming down. But inflation is like governments borrowing money and doing the things that governments do with it, primarily. And if they keep the fire under them for you know, green transition, I agree. It's, that's a fundamentally inflationary trend. All right. Well, I guess, it sounds like you and I are right now saying we don't believe the narrative.
Corey McLaughlin: That inflation is crushed?
Dan Ferris: Yeah, that inflation is permanently crushed, that it's over. I know I don't.
Corey McLaughlin: Well yeah. I know you don't either. I know I don't either. You shared that chart before of what is it, CPI? You know, like nominally over however long.
Dan Ferris: Right.
Corey McLaughlin: And it's just straight up and to the right.
Dan Ferris: The actual index, not the year over year changes. Yeah, it just never goes anywhere but up. People are like well you know, it's all about the rate of change. Sure. But you know, tell a struggling couple who's got a baby on the way.
Corey McLaughlin: Right. It is about the rate of change for the market. It is not about the rate of change most of the time for regular people, unless, until when it, you know, process go up 20% and don't go back down. That's what people notice.
Dan Ferris: Right. All right. Well, I'm not sure where we're going with this. But you know, we're not liking a couple of situations here. The future of the green energy push and government's willingness to borrow and spend to make, try to make it happen, is not, I don't think it's a net benefit for humanity.
Corey McLaughlin: Yeah, I would just say it's, to me it's more of just an inflationary pressure. A big one, that is never going away, I don't think. And it's just what we need to consider as central banks say they can tighten and beat down inflation. They can do this, in this paperwork world that they live in. You know, of rate of change and CPIs of .1% and .2% and .3%. But like you know, add it all up and fundamentally, like you said, it's still government spending, inflation, not going anywhere.
Dan Ferris: Right. All right. I think we agree on that. And let's move on and talk with our guest. We know our guest very well. He's a friend and colleague, and one of the finest traders that we know. His name is Greg Diamond, and he called us and said man, I've got something to say. So I really am excited for you to hear what he has to say, as always. Let's do it. Let's talk with Greg Diamond right now.
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Greg, welcome back to the show. Always a pleasure to see you.
Greg Diamond: Thanks for having me on again.
Dan Ferris: OK, so once again I feel like I need to tell people that mostly when people contact us and want to be a guest on the show, I don't pay it much mind and I just move on. And they don't get on the show. But when someone I know well and you know, whose work I have a lot of respect for, contacts me and says you need to have me back on, I don't question. I go with it immediately.
You may recall we had Vitaliy Katsenelson on the show because he said look, I need to get on. I need to talk about something. And I had him right on. In this case I guess we need to get right on it. It's been about a month, I think, since the first time Greg contacted me via Twitter. I think you tweeted, you replied to something on Twitter. But here we are.
Greg Diamond: Here we are.
Dan Ferris: All that to say here we are. And I'm dying, just dying, Greg, pal of mine, to find out what is on your mind.
Greg Diamond: Well, there's a lot, actually. And you know, some of this is probably consensus and the fact that 2024, I'm expecting an incredible range of volatility. And you can go down the fundamental catalysts that most everyone wants to talk about. No. 1 being the U.S. election. But that's in November. OK? But before that, there's a lot more happening.
And the first thing I'll talk about is, and I wrote about this to my subscribers last week, or two weeks ago, is that the general consensus among investors, you know, among the financial media, is what? The Fed has beat inflation. Everything is going to be fine. And they're going to start cutting rates, if not start QE. So, and everyone's on that side of the bus. And usually when that happens, the opposite happens. So, and some of the cycle stuff that it look at tells me that the opposite will happen.
Now it doesn't mean that we're going to see you know, a rise to 10% on the 10-year or anything crazy like that. But what the market loves to do is hurt the most people. And if everyone is thinking that the Fed's going to start cutting rates, that they're going to start QE, that everything is fine, the opposite's usually going to happen. So I'm expecting that.
It doesn't mean that we're going to have a 2020 COVID-like crash. It will probably be more of a 2022 type scenario where you see these huge moves up and huge moves down. Which for me as an options trader is fantastic. So that's kind of, you know, just the basic premise of why I wanted to go on and you know, that to kind of start our conversation.
And I have more to talk about, but that's kind of why I wanted to get on and be like OK, starting in January, fireworks are going to pop off. Because when you also look at positioning, I saw a chart not too long ago. And if you look at the extreme positioning, and just in the futures markets, of net longs and the net shorts just over a three year period, it's astronomical the level that these swings are happening.
And that's not going to change any time soon, because when you look at inflation, when you look at Fed, when you look at the United States election and just throw it all in the mix. Russia has an election in May. You throw all these, earnings, you know. What's that going to look like? We're going to see these huge swings in positioning again. So again as an options trader, I'm really excited about that potential environment.
Dan Ferris: Sounds good, yeah. That makes a lot of sense to me. And it's, I think we both have the same sort of contrarian instinct here. But hours is much more based on your study of cycles, right? You're not just, like with me, I see you know, a year like we just had. Interest rates being where they are, but having the same contrarian impulse that you do about this belief in cuts is kind of overdone.
And then I look at the overall valuation, you know, CAPE ratio and price to sales and all the usual stuff I yammer about. Which I did in the last Digest, you know, last week or whatever. That's where I come from. But with you, it's different. You're not looking at that stuff. So tell me more about, we talk about this every time you're on. But I think it's necessary, because it's not something most folks know much about. Tell me more about your study of cycles and how that gets you to where you are right now.
Greg Diamond: So time analysis is hard. It's dynamic. Because you have short term cycles, you have medium term cycles, you have long term cycles. But they're all in play all the time. And timing matters in the market. So you can be the biggest contrarian, but you know, if you were short Nvidia in January 2023, you know, it rallied 300%. You know, wow, this is overdone. Well yeah, maybe. You know, you can get some of that right some of the time. But you have to know when.
And that knowing when is time. And I write about this all the time, you know, that I'm not necessarily concerned about the why. It doesn't mean that I don't focus again, you know, what the inflation's going to do or what the Fed might do or earnings or you know, how the election or this election might pan out. What some CEO said. All that stuff matters. But determining when something's going to happen is my bread and butter, because as an options trader, I have to be able to understand when.
And when we talk about time, we're talking about Gann analysis, the famous W.D. Gann, legendary trader back in the early 1900's. But to understand how these time cycles work takes a lot of work. But it's something that you know, you mentioned how you look at things in a contrarian mindset. That's true, and you know being on social media, I'm not a huge social media presence.
But the reason why I got on it, especially over the last few years, is to follow some of these folks who just have this instinct of calling these big market moves at the exact wrong time. So that is something that I like to incorporate. But the main thing is really about when, just like I said at the start. When everyone's on the same side, that tends to be the best time to get in. And then you start factoring these shorter term or medium term time cycles, and that's a lot of what I cover in Ten Stock Trader.
So you know, I don't have, if you have 20 years for me to explain time analysis, I could do that. But we have a limited time. But you know, W.D. Gann said it best. Time is the most important factor in trading and investing. Then price, then fundamentals. And it's a very hard concept for I'm sure some of your readers to comprehend. It was hard for me to comprehend, you know, starting out.
And Paul Tudor Jones, legendary hedge fund trader, was actually the first one where I heard that concept. You know, time, price comes first, and then fundamentals follow. And it took me years to really understand what that means. But then once I did, it just kind of clicked, and you're like ah, I get it now.
And so what that means is that you know, you see these patterns develop. You see these time cycles develop. Then the move happens, and then the fundamentals come. Oh, this is why that happened. But you want to be ahead of that fundamental catalyst or fundamental move to make really good trade decisions.
Dan Ferris: Right. Just that last nuggets is super important. Time and price move before fundamentals are usually widely understood. You do get the odd genius, fundamental genius who will figure it out ahead of time. And every now and then, you know, even I've gotten ahead of it a little bit. But that's mostly luck over time.
My forte is nothing about price and time. It's just about finding great businesses and sticking with them, which is completely different from what you're talking about. So let's dig into like, can you give me any either time or price targets, like for example you mentioned the election is a huge fundamental, but that's not till November. But what we just said is we thought time and price would get ahead of that.
Greg Diamond: I'll give you a few. And actually, this will be really fun, because what we'll do, I'll give you specific time factors for 2024, meaning time cycles that I think are going to be important inflection points. I can't tell you right now whether they're going to be highs or lows. But I will tell you right now, in early January, what they'll be. And then we'll come back on say November and see if I'm right, OK? So what I'm looking at right now – you want to write them down?
Corey McLaughlin: All right, Dan, I'm going to play too. I'm going to play this game too.
Greg Diamond: OK, so starting off around February 14, let's call it Valentine's Day, that's going to be an important inflection point. And then the end of March, call it spring to April fools, April first, OK? And then we're going to look at probably around June 21st, call it June 16 to June 21st, OK? And then one of the biggest ones that I'm expecting is late August into Labor Day. So call it I don't know, August 25th to September 5th. Those are the big ones. From my cycle work.
Now again, I'm not going to sit here and tell you exactly which one's going to be a high or a low. That's now how this game is played. And a lot of people get this wrong like oh, you know, Gann analysis time factors, and it's going to be a big crash, it's going to be this. That's not how this works. The way in which this strategy works is you're understanding which time cycles matter. And we gather time cycles from understanding the past.
And then how we, you know, people talk time and price. I mentioned it before. How these markets, let's just call it the S&P 500. How the S&P 500 trades into those specific time factors that I just mentioned will determine likely whether it's a high or a low. It doesn't necessarily mean it's going to be a big crash or a big bottom, but they are inflection points to trade. And as you guys know, that's what I do. I trade those big inflection points. So that will be fun. Let's see how that forecast plays out.
Corey McLaughlin: And Greg, I'm just fascinated by like W.D. Gann, you mentioned a couple of times already. How much did you know about him before, when you were like, I don't know. What attracted you to his like, findings initially?
Greg Diamond: The initial W.D. Gann light bulb going off was I saw a picture of his 1929 forecast that he had published in 1928. And he kind of, I mean, he didn't kind of. He made this forecast for what the prices will do, and into more importantly the time that it would do it. And he nailed it. I mean, 95, 90% correlation. 95% correlation. It's unbelievable. And so I was like whoa, how did this guy do this without computers, back in 1928? How did he understand that?
And so I mean, you know, and I've always had this insatiable desire to learn and understand, and I have an open mind. And I don't, you know, I don't get caught up in biases like you should only look at balance sheets. I'm not saying some of that stuff isn't important. of course it is. Dan looks at long-term great business. It's very important. My grandfather did that. He thought I was crazy for being a trader and doing all this stuff that I was doing. And he was really good at it.
But my whole thing was, I started out a hedge fund. I was doing short term trading. It's what I was trained to do. And so that kind of eld me down a little bit of a different path. But when I saw this guy, W.D. Gann's forecast, I just jumped right into it. Really jumped into the deep end.
You know, and it's been 20 years in the making. And I'll fully admit there are still things about understanding time that I'm still learning about. Which to me is great, because it keeps me on my toes. And obviously, the market is always changing. There's always new things to incorporate. So it's not like you can just wipe your hands and say you know what, I got this all figured out fellows. I'll see you on Greg Diamond Island in 30 years. That's not really how it works.
That's kind of how I got started, and it continues to this day, of understanding how these time cycles work. How to incorporate price. And then how to incorporate the fundamental catalysts that go along with it.
Corey McLaughlin: Yeah, Dan, I don't know. You want to get back into those dates a little bit? That August-September one.
Dan Ferris: That, yeah.
Corey McLaughlin: Jumps out to me as being two months ahead of presidential election.
Greg Diamond: See, that's what's fascinating about it is, again, I don't know whether it's going to be a low or a high. But it's, from everything that I study, it's going to be very, very, very important.
Corey McLaughlin: Yeah, it is amazing how, and just from following your work. Like, it is amazing how often these inflection points have lined up with just, you know, very significant moves in the market and very significant events just in general, in life and culture. So it's looking forward, well, we will see at the end of this year how it goes.
Greg Diamond: We will see.
Dan Ferris: So when I look at this, the first thing that I thought was on the first date that you mentioned, was around Valentine's Day, February 14th. And then you're talking end of March to around April Fools. And then it was June 16th to 21st, roughly, and of course that August/September time frame you just mentioned. And it seems like they're all roughly two months apart. Just roughly. Is there a rhythm, like a six week or an eight week rhythm here? Or is it not that simple?
Greg Diamond: You know, you can follow all the, there's tons of different rhythms. Again, short term cycles that you can follow, you know. Like it tends to be a 28 to 30 day cycle. There's a lot. But you know, if you take, let's take 2022 versus 2023, right? 2022 was all over the place. If you just looked at the Nasdaq in 2023, for the most part, you know, it was a pretty smooth rally sans July to call it October, where it was just kind of down. But it's not the same pattern.
So my point is again, you can't just have these static cycles and think that you have it all figured out. So you know, to your point, is that what I was looking at, in terms of being two months apart? Not really. These are kind of the bigger time cycles that I've been focusing on. But here's a nugget that combines a fundamental catalyst with these time cycles. And that's that late March to early April time factor I mentioned.
So let's talk about banks for a second. And I'm going to start writing about this, and I'm 100% going to trade it. I'm just not exactly sure which way just yet. And that might take some patience. But hear me out for a second. And you guys will appreciate this.
So most of your listeners I'm sure know, you guys know, Silicon Valley Bank last year. They, and a bunch of regional banks, they went under. They didn't manage their bond portfolio which is just, I just can't really fathom that. I mean, imagine the arrogance of a bunch of billionaire bankers who have all these bonds in their portfolio. And they're so arrogant in their risk management principles, or should I say lack thereof, that they know that oh, the Federal Reserve's not going to raise that much. They know how much bonds exposure we have, da da da da da.
And then they do it, and they blow up. And then the Fed comes in and says you know what? It's cool, guys. Don't worry about it. So they introduce this funding program where you get to post your bad bonds at par, right? At par. And we give you free cash. Now where, why, in the land of the free and you know, free markets, why in the world, if I own a business, can't I do that, you know what I mean?
Why can't I, whatever losses that I have, or if I worked at such and such hedge fund or whatever, regardless. You know, you lose money in the market as a retail investor. Well, I lost. Why can't I post my losses and you give me cash? It's just ridiculous. But that's the world in which we live.
All right. So anyway. So, fast forward that program is going to expire in about a month. Two months. March 11th, OK? Now, the risk is, is that there's no risk and they just say OK, we're just going to extend it, you know? What is the big risk? And it kind of goes back to what I talked about earlier with the fundamental catalyst of everybody being on the wrong side. Of what? Inflation. If inflation goes higher. If they stop this lending program because they think that they're going back to a quote unquote normal inflation environment, or that the Fed is going to start cutting rates and therefore bonds are going to rally.
And so the banks keep those bonds on their books. Guess what happens with the shock of rising inflation? And the Fed is not going to cut. Those banks are going to get hammered again. And you know, what happens if the Federal Reserve gets this one wrong? They take it off, they say oh you know what, the banks are in good shape, blah blah blah blah blah. Boom.
So what I find interesting is that this happens on March 11th, and what happened with the time cycle I mentioned, that's the end of March, beginning of April. So to me, it's kind of like this, we might see this rally into the end of March or beginning of April. Like hey, everything's fine. The Fed's got it under control, the banks are in good shape. Boom. We get higher inflation, everyone's got it wrong, and then banks take another tumble.
So that's one of the big trades that I'm looking for earlier. Call it first half of the year. But again, I'm not predicting what's going to happen. I'm just saying, this is something I'm kind of coming up with my mind, and putting the price and time together.
You know, if you also look at it in terms of price, and any of your readers can look this up. Look at XLF or KRE relative to the S&P, relative to the Dow, relative to the Nasdaq. It's not even close to coming into those you know, late 2021, early '22 highs. So this is what's known as technical price divergence, and it usually sends a warning. Doesn't mean there's going to be a huge crash. But it means there's going to be volatility again, which is why I'm excited about this year.
Dan Ferris: It's interesting that you mention the BTFP, the Bank Term Funding Program, which as you pointed out, ends March 11th. There was an article I saw recently where the banks are actually gaming this program, which you know –
Greg Diamond: Oh yeah.
Dan Ferris: If they can of course, they will. You know, once again the way the Fed has managed interest rates has just created a kind of an arbitrage, you know, where they can borrow cheaper enough than they expected. And the Fed is paying them more than they expected. So, they can just borrow and deposit and you know, deposit with the Fed and borrow and deposit, borrow and deposit, and make money just –
Greg Diamond: Why do anything else? Why do anything else?
Dan Ferris: Yeah, exactly. Exactly. You know, there's always an unintended consequence somewhere. When the Fed starts getting involved in a big way in saving people, there's always an unintended consequence that usually makes a few people rich and frequently makes a lot of other, life more difficult for lots of other folks. Anyway, I just wanted to throw that in there.
So these are inflection points. We don't know if you're going to be long or short around these dates. You know, in other words, we don't know if these are going to be highs or lows. But the real point is that we think that this, these will be the inflections. And that's what all of, I just want to be clear. That's what all of these dates you gave me are. You know, whether it's a high or a low, you think it's going to be put in around those dates.
Greg Diamond: Correct.
Dan Ferris: Correct?
Greg Diamond: Yep.
Dan Ferris: OK. That is fascinating to me. You'd better believe I will be taping these to the wall in front of me. I will be watching every single one of them.
Greg Diamond: There you go. Well, here's the other thing too. You guys know from seeing what I do every day. I'm going to be trading it. And I'll be trading from the long and short side this year, there's no doubt about it. So I just wanted to give you guys, and give your listeners, a heads up of exactly what I'm looking at.
Corey McLaughlin: Yeah, it's very cool. We've talked a lot here about have a plan. You know, as investors, have a plan. Now with your trading strategy, it's great that you can like, peg things to a very specific days in some cases, weeks, you know, years. And make those decisions based on that. If you're in a short term trading, I mean, you could go willy nilly into it and just go off gut. Or you could actually have set dates and times, I think is very helpful if you're looking to get into this.
Dan Ferris: That's right. And another way to look at this, like, we all know you can't predict the future, right? There's no system for predicting the future. And predicting the future would be to say price and time, I know what price and time are going to be with high conviction on this date, this time, this price, whatever. You can't do that. But you could certainly develop you know, an idea based on you know, in your case these cyclical studies of one or the other. OK? And your is time. That's the one that you have more conviction about.
Greg Diamond: And to add to that, Dan, you know, I think it's important for your listeners to understand, and you said it. But you don't predict everything. And I always talk about it with both price and time. We're dealing with probabilities. We do not deal in certainties at all. We're dealing with probabilities. So if I can tell you that on a statistical measurement, and a lot of people you know, and they read about Gann. It's financial astrology. It's just complete crap.
And it's just not, OK? What we were dealing with is statistics. We're dealing with the mathematical probabilities of when a certain time cycle happened in the past, and this happened with price. This is what we are thinking, in terms of a probability, that it could happen again. Doesn't, if it's a low or a high or a high or a low, that doesn't matter. Well, it does matter. But how the price moves into that time cycle. That's the probability of what I'm trading.
Dan Ferris: Yes. So a lot of people, and I get a lot of this type of thing from SentimenTrader. We need to have Goepfert from SentimenTrader back on. And they impute, they do what a lot of people do. They impute probability based on how often a certain thing has happened in the past. You know, let's say how often in the past has the S&P 500 gone up nine days in a row or something like that, anything like that. And many things like that.
Like, they come up with a new one it seems like every other day. And then they look back over a certain period of time and they say well, it's happened 17 or sometimes 50 or 60 times before. And 90% of the time the market went up or down or whatever in the next three, six, nine, 12, 18 months, whatever it is. So you know, a lot of people do this. I think you know, even quant firms do all kinds of stuff like this.
So it's not astrology. I mean, there is no system for predicting the future. And astrology certainly is not a system for doing anything. But like you say, you want the odds on your side. That's all we're saying here, is that Greg thinks the odds are good that these dates are inflection points. That's it, right?
Greg Diamond: That's it.
Dan Ferris: So specifically I know you publish a service called The Ten Stock Trader. And you've had some really great trades since you know, I know 2022 you were just all over it. What specifically do you think you'll be trading? Do you know that? Is it going to be like Russell 2000, S&P 500, Nvidia? Do you know what you might be trading?
Greg Diamond: So I think specifically this year, and this could change. But I'm concerned about single stock names and trading single stocks, because we're seeing so much divergence from a technical perspective. And I mentioned it with banks and the S&P. But we're also seeing it intact, you know. Just take a look at Taiwan Semiconductors. One of the biggest chipmakers out there relative to Nvidia, relative to AMD.
You know, Apple's start this year is completely underperforming Microsoft and the Nasdaq in general. So I can say at least for the first half of the year, I'm probably going to stick with just sectors or just you know, the S&P 500, the Nasdaq. IWM yeah, probably. And obviously I mentioned the banks. So XLF, KRE. I'll probably stick with some of the sector stuff, and then maybe later in the year, once I kind of figure out where we are with the roadmap if you will, I'll dabble again into some single stock names.
But I'm concerned about trading those individual stocks in the first quarter, heading into earnings. Specifically because of that divergence. And basically what that means is like you know, you can see Microsoft pop and Apple drop and it's just kind of all over the place. And when things don't line up as a technical trader, or as a trader in general, that makes it difficult. So by sticking with the sectors, you kind of smooth things out.
Corey McLaughlin: That reminds me of something about you know, specific names versus sectors. We had a guest on a couple of weeks ago, Hari Krishnan who you know, trades volatility and hedging and you know, pretty expert in all of that. And he mentioned just the scale of moves that you see in the market, like today compared to 10 or 20 years ago. What is your observation on that say compared to your hedge fund days, and whether that affects what you look at or how you make a certain trade?
Greg Diamond: Well I mean, I'll take the bigger scale because I love volatility. And I certainly think COVID changed things, when everyone was working from home and everyone became a hedge fund trader themselves. So you're getting more people into the market and obviously the Federal Reserve flooded the market. And I mentioned it earlier, you have these huge swings in positioning, and you know, whether that's due to an increase in the algorithms and the herd mentality, and they all pile in and they all pile out at the same time.
You know, back in my hedge fund days it was all, I just traded futures and options and commodities. So it wasn't, I didn't trade any stocks back then. But you still saw these huge moves. And it was a quant fund that I worked for, and we took advantage of that. So I don't think that volatility's ever going to change. And you know, the fact that we see these huge swings now, a reflection of the time cycle we're in.
And a reflection, you know, Dan's talked about this in terms of the mega-bubble. You know, how much more money can you possibly print all the time, keep sloshing around and sloshing around. And you know, you have more money in the system and you have more people involved in the financial markets, you're going to have bigger swings and we're seeing that. So you know again, I like it as a volatility trader. As an options trader. So you know, and even if it goes away, it's never going to go away. We're going to see these big spikes continue.
Dan Ferris: Yeah, more money. Lower volumes. Fewer stocks. How do you think that's all going to turn out, right? So, over time, right? And other things too that lead to that. We had Mike Green on talking about passive investing and basically the big question there is what if the bid goes the other way? I mean, because it's this endless bid under stocks, right?
So what happens if the algorithm reverses, and instead of receive a dollar capital, buy a dollar of equity is, you know, redeem a dollar of capital. Oh, well, sell a dollar of equity at some point. You know, for any length of time, doesn't have to be forever. It, you know, could be for a month or something. Big enough flows out could create a problem, I think was the point we were making there.
But anyway, this is a fascinating discussion, because it's nothing like you know, we get macro guys who talk about macro things, and geopolitical guys who talk about geopolitical things. And fundamental value investors, like you talk about individual businesses and cash flows and competitive advantages. But I think you're actually, I think you have a monopoly on this, Greg, amongst our guests.
Greg Diamond: I'm just a weirdo. You can just call me a weirdo.
Dan Ferris: Greg is a – no. You do. You have a monopoly on this, you know, intersection on price and time and time cycles.
Greg Diamond: Well, I don't know. I mean, a monopoly is not right. Because there's a lot of, maybe we're a smaller monopoly. But there's a lot of Gann traders and. Yeah, yeah, how dare you. No, no, I mean, definitely within Stansberry for sure. But you know, there's a little group of, there's the foundation for the study of cycles. There's tons of Gann traders out there. Just don't get the type of notoriety.
You're not going to see us on CNBC or Fox Business or anything. You know, because it doesn't, there's a narrative, there's a consensus about what works and what doesn't. So you know, I've kind of come full circle. It's like no, you have to believe in this. And now I'm like you know what? If you don't believe me, I just don't give a shit. Because I've been doing it for 20 years and it's worked.
So look, if you want to come follow me, great. I will show you, hopefully I motivate you. And show you some really cool stuff about what I've been doing, and some of the successes I've had. And if you don't, that's OK. But what really, that doesn't make me upset.
But like, I love when people were like no, that's wrong. There's no, time cycle's not going to do this. I'm like, did you study it? Did you look at it? Have you invested with it? Have you traded it? Well, no. Then how do you know it doesn't work? Just because it doesn't align with what you've been conditioned to believe doesn't mean it doesn't work, right? So you know, that's kind of where I am on a lot of this.
Dan Ferris: There's more than one way to skin a cat in the market.
Corey McLaughlin: Yeah, and to that point I would say, and I read everything that, almost, try to read everything that we publish. And it's, you know, a good part of my job. And there, we're not many people either, within us or anywhere, that called V Top in January 2022. And, the bottom in October. And that was based using this time cycle analysis. And so if you don't take this kind of thing into account, I think you're missing something, is all I'll say.
Greg Diamond: Yeah, right. Well said.
Dan Ferris: That's right. When somebody's succeeding at something and you're telling them no, you're stupid and you're wrong, they're like OK. Thanks. Bye. I mean, who cares, you know? Why?
Greg Diamond: Yeah, I just laugh at this point.
Dan Ferris: All right. Soi have to go back to, you mentioned IWM. Which is something I've traded before, and continue to watch. I'm watching for a couple of things here. But you and I have also traded little bits of conversation over the past few years. And noticed basically the gist of it, our comments, if you recall is that thing behaves so much weirder than the other big indexes.
Greg Diamond: I like to say it has a mind of its own. And you know, so it's smaller businesses. I mentioned it earlier, but if you look at just the price aversions of the banks relative to S&P, IWM's doing the same thing. Another index or sector really, it's not a major index. But it's the iShares USA Momentum Factor fund. Huge, I wrote about this to start off the year.
Huge correlation between S&P 500, the ticker is MTUM. It's a UTF. You know, huge correlation and momentum in S&P. And that completely died last year in 2023. Just completely died. So again, you know, that's kind of a warning for 2024, and within IWM there's a lot of regional banks. You know, KRE and IWM, sort of mixed in there.
So, and then looking to the start of the year. Look at the relationship between IWM and Apple. It's actually the same move in the first you know, few trading days which is fascinating to me. So again, and I mentioned not trading those single stock names. We're seeing tons of divergence here to start the year. And that again tells me that we're on the cusp of some serious volatility.
Dan Ferris: Yeah, I'm just looking at a chart of MTUM. And certainly ff that October bottom, it really came back to life.
Greg Diamond: Well, look at it relative to the top, compared to S&P, you know? Or Nasdaq. That's the divergence.
Dan Ferris: Oh, I see. So you know, it peaked around the same time Nasdaq did, so just compare those two and it's kind of sucked wind since then. So what does that tell you, Greg? What does that really tell you?
Greg Diamond: Exactly what I've been talking about. That's why I wanted to come on here. It tells me that we're going to have extreme, well, here's another way to look at it. Let's take into the fact of the time cycles, and let's say I'm right about what happens with the banks. I don't know if I am yet. But let's just say for you know, theoretically I am, OK? What we could see is, MTUM or an IWM, KRE or maybe XLF. But let's just take MTUM and KRE.
And what we could see if this volatility is to happen are new lows below 2022 below those October lows, in an MTUM, an IWM or even the banks. The banks should be the biggest one. But we see higher lows in an Nvidia or a Microsoft or the Nasdaq. See what I'm saying? So basically what we had is we have this, a huge flush out into 2024 that actually creates a big buying opportunity, because then you have positive divergence, where OK, all these things are making new lows while the leading sectors like semiconductors and the Nasdaq, don't.
And then we have this run up for another year or two. So that's kind of the big picture that is formulating in my mind if you will. But again, you're talking 12 to 18 months out. But that's how I could kind of foresee that situation playing out in the long term. But in the short term, it's like hey, you know what? These things did not keep up in 2023. Therefore new lows in these in 2024. You know, and then everything kind of goes back up after the election.
Dan Ferris: So folks, what Greg is talking about here. So from November 19, 2021, Nasdaq topped, right? MTUM is minus 15%. KRE is minus just about 30. And SPX is up almost 2% since that top. I didn't do its top. But there you go. So it's a huge divergence. And Greg is telling us that this means something to him in terms of basically expected vol for the year ahead. For the whole year ahead.
Greg Diamond: I think it's going to be a rough ride for bulls and bears. I really do. I don't know anything, it's not, if you just looked at the Nasdaq in 2023 since March, it was kind of again you know, a nice uptrend, sans a couple of months here in the summer. But I don't think that's going to be the case for 2024. I think it's going to be volatile.
Dan Ferris: All right, that's the message. Greg, you have answered our final question once or twice before. I hope you don't remember what it is. Do you remember what it is?
Greg Diamond: I usually go with risk management. It's one thing, if you go to an island or something like that.
Dan Ferris: Yeah, you're close. If you could leave our listeners with a single thought today, what would it be?
Greg Diamond: Right, right, right. So, I don't like repeating myself. Obviously, risk management is an important one. We've talked about that. Let's see, what can I go with this time? One thought. Here's a good one. And it kind of goes back to what we were talking about in terms of, have an open mind about what's possible.
When you looked at some of the great traders of all times, they always talked about how the reason that they were so great and made so much money is because they never thought that you know, if Apple was trading at 100, that it couldn't go to 300 or that it couldn't go to zero. So they always had an open mind about what was possible. And I think that's an important thing to have, whether a stock, what stock is going to go to, what stock is going to move what.
Or, it goes back to what we were talking about or what I do. You know, how do the markets work? How does time work? How does price work? How does understanding a good business work? How does value in investing work? Have an open mind about the avenues in which you can be successful in investing and trading, and don't be afraid to pursue it regardless of what other people think. So I like that one. I'm going to stick with that one.
Dan Ferris: Sounds good. Sounds very wise. All right Greg, always a pleasure man. I love talking with you, and I love having you on the show.
Greg Diamond: Likewise my friend.
Corey McLaughlin: Thanks, it's good talking to you.
Dan Ferris: We're definitely going to have you back. Maybe we won't wait the whole year. Maybe we'll check in around June or so.
Greg Diamond: Yeah, that works.
Dan Ferris: Maybe after two or three of these.
Greg Diamond: Maybe after Labor Day.
Dan Ferris: There you go. That would be perfect. Right after Labor Day, all of these dates.
Greg Diamond: Right before the election, and then after the dates, yeah.
Dan Ferris: Perfect. Let's remember to do that.
Greg Diamond: Cool, cool, cool.
Dan Ferris: All right man, thanks a lot.
Greg Diamond: Yep. All right, guys
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Well, Greg Diamond is one of our own. He's a friend and a colleague and it's always good to talk with him. I have spent plenty of time with Greg and been absolutely shall we say three sheets to the wind with him on occasion. And it's been a lot of fun. But isn't it cool though, Corey, that like, he gives us a framework of time. We don't know what's going to happen.
But now, you know, we're going to be laser focused on these dates. I'm going to be looking forward to Valentine's Day. And my wife is like oh, he's so excited about Valentine's Day, isn't that great? [Laughs] You know, and all the other ones.
Corey McLaughlin: Yeah, right. And that's what I mentioned there in one of the questions about how it's, as an options trader, if you're trying to trade options, you need to have some, you need to have a risk management strategy. And if you can peg things to times and cycles like Greg does, I think it's a no brainer. Because what he –
Dan Ferris: It's cool.
Corey McLaughlin: What his subscribers know is he'll, so say he thinks something's going to happen, or there is a big point in February or something. He will be eyeing up like he's saying, recommending trades up until that point or after it, but with very specific targets. Technical targets of profit and loss. So like, things that he'll get out at, or when he'll get it. And it just does it repeatedly over and over, within this time cycle. And is also switch.
You know, I think once you kind of see it in action, it gets a little even more compelling, when you see these different times and just, and you know. Sometimes I think oh, well, OK. You could name any date, and something important happens. But that is not the case here. It's, he's really proven it over time, that it works.
Dan Ferris: Yeah, he really has. Especially over the last couple of years, he's done great. And I'm glad also that he mentioned IWM, because I have a personal interest in that, because I follow it and I trade it. And I thought well, OK, I wound up not doing so great second half of last year. And I sort of backed off. When I'm not doing well I back off. But now I'm like OK, I'm aiming to figure out if anything's going to happen as of February 14th. Like, that's the next date that I'll be looking for, just because this guy that I trust who studies this cyclical phenomenon, has given me that date. It will be interesting.
Corey McLaughlin: Yeah, it's interesting that he brought up the banking program expiring in March. That's something that was on my mind too, before the conversation, the last couple of months. Ever since we were on, I was listening to one of the Fed meetings, press conferences, and a reporter actually asked Jerome Powell, he's like hey, that program expires in March. What do you think about that? He was like well, that's a good question. And I don't really know yet.
And so there will be some volatility around that scenario. And whatever happens with that I think, like you mentioned, there's, the banks have been taking advantage of that. They've kind of cashed in the reverse repo facility for this, the new one from last year. And, or exchanged it. And so yeah, that will be, I don't know if it will crush the banking system or not. But it's definitely going to change how they've been operating the last three, four, six months, so.
Dan Ferris: That's a very specific target date in time, and a very specific event, which I think it's got great potential for a by the rumor, sell the news style trade. So if you, you know, if you think you want to be short because of that, you'd short ahead of it. And maybe you'd buy, or maybe you would avoid the trade altogether and then buy that day. And vice versa, right? So it will be, it's a nice target, you know.
And there's some decent fundamental reason. I mean, if banks are just kind of right now gaming it and minting money, and you see the balances on it have been rising quite a bit. So if you don't think it's because they're afraid of you know, having problems and not being able to meet their depositors' demands. Because that was the purpose of it.
Then, you would have to assume that they're gaming it. And that when they stop doing that, and the whole thing is withdrawn, you know. Whatever, whichever way you think it goes, that would, that could help you form the basis for some type of a by the rumor, sell the news trade, is what I'm saying. It's the first hugely interesting thing that's kind of different this year that will come along.
Corey McLaughlin: Yeah.
Dan Ferris: Anyway, Greg gave us some good ideas about it. And he gave us some good ideas just about trading in general, as he always does. I don't know. I just, I always enjoy talking with Greg. Lot of good stuff.
Corey McLaughlin: Me too. I forgot to bring up the, we share an unfortunate fandom in the New York Jets football team. I forgot to bring that up, but maybe next time.
Dan Ferris: Maybe next time. All right. Which will definitely be sometime this year. Hopefully as Greg suggests, right after Labor Day so we can find out what happened on all these dates and what to do about it, and what to do going into the election. Which I think this year, I normally don't even express any views about this sort of thing. But something about this year makes me feel like volatility going into the election will be high. I think there's potential for you know, violence in the streets and god knows what else. It is slightly scary to me.
Corey McLaughlin: It is slightly scary, yes, to say the least. To me as well. I wrote, I just wrote about, I promised, well. I didn't promise anybody. But I wrote about the election today in the Digest, that's what I was writing about. Just because the stuff I was hearing from both, from Biden and Trump already. And we're 11 months out, it's painful to my ears.
You just, you have Biden taking credit for job creation, which was essentially just the unemployment rate going from 15% back to where it was at around 3.5 because of just like, you know, bean counting during the pandemic and afterward. And then you have Trump saying that the economy is running on the fumes of what he did, which was you know, he's probably, might be referring to the tax cuts too. But also four trillion of stimulus, which led to the 40 year high inflation, which then continued with two trillion more under the current administration. So there we are. I don't know.
Dan Ferris: I love when presidents especially and other politicians take credit for what happens in the market, and what happens you know, over the economy short term. And they say how wonderful it is because of them. It's hilarious, you know. Hundreds of millions of people waking up every day just like they've been doing their whole lives, but all of a sudden, this guy made a difference.
Corey McLaughlin: And meanwhile, Congress is again trying to figure out how to agree to spend more money to keep the government open. And that is the only actual practical thing that's happening right now, is that. So. But yes, I'm with you on the concerns about the election later this year. Although you know, I was thinking about it today too. Like, maybe the fact that so many people are concerned is a good sign, in that people have an eye out for this. I mean, like 2020 kind of, I feel like, took a lot of people by surprise. Yeah, 2020 took a lot of people by surprise.
Dan Ferris: Yep.
Corey McLaughlin: So maybe there's something in that.
Dan Ferris: I think that's how it works.
Corey McLaughlin: Maybe we're on the, getting through this crazy political time. But maybe not, too. Maybe we still haven't seen what can happen.
Dan Ferris: And the other thing is, I think that's the way life works. And in the market too, if we get greater volatility, you know, that is sort of, those little bumps probably keep us from having bigger ones, right? So if we get lots of you know, little runs of 10% up and 10% down, maybe I think, I suspect maybe that's what makes those, you know, rapid 30% you know, two or three week descents pretty rare. And so we'll see. We'll see how it all turns out. But yeah, that's another interview, and that's another episode of the Stansberry Investor Hour. I hope you enjoyed it as much as we did.
We do provide a transcript for every episode. Just go to www.investorhour.com. Click on the episode you want, scroll all the way down, click on the word "transcript" and enjoy. If you liked this episode and know anybody else who might like it, tell them to check it out on their podcast app or at investorhour.com, please. And also do me a favor. Subscribe to the show on iTunes, Google Play, or wherever you listen to podcasts, and while you're there, help us grow with a rate and a review. Follow us on Facebook and Instagram. Our handle is @investorhour. On Twitter, our handle is @investor_hour. Have a guest you want us to interview? Drop us a note at [email protected] or call our listener feedback line, 800-381-2357. Tell us what's on your mind and hear your voice on the show. For my co-host, Corey McLaughlin, until next week I'm Dan Ferris. Thanks for listening.
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