We're back to our regular Stansberry Investor Hour programming this week. And to kick off a new year of the show, we welcome Greg Diamond, editor of Ten Stock Trader.
A chartered market technician ("CMT") and Stansberry's resident expert in technical analysis, Greg has almost 20 years of experience in portfolio management and trading across every asset class you can think of. That's why he's the perfect fit for Ten Stock Trader – Stansberry's unique daily trading service in which Greg has nailed down multiple double- and triple-digit winners.
According to Greg, "2023 is going to be marked with incredible trading opportunities." He explains that one of the tools for navigating market volatility this year is being able to identify certain trends, and he also explains how technical analysis can help you do that. His strategy might be intimidating for most, but Greg encourages folks to keep an open mind and step out of the box...
I can promise you that you'll learn something new that will improve the probabilities of success in the markets – in trading and in long-term investing as well.
Also on Greg's mind today is the technology sector, where he sees ghosts of the dot-com bust looming. And while acknowledging that investors and traders might have different appetites for risk, he says there's one trait in common that's required to survive what's ahead...
If you have no risk-management discipline, you are not going to make it very long as a trader or long-term investor.
Also in today's episode, Dan and Corey chat about today's market atmosphere, one of Dan's regrets in life (and a "crazy idea" that stemmed from it), the "perfect coda to 2022," and the uncertainty that 2023 holds for investors.
This is a can't-miss episode. Check it out now.
Dan Ferris: Hello, and welcome to the Stansberry Investor Hour. I'm your host, Dan Ferris. I'm also 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're going to talk with our colleague and Ten Stock Trader editor Greg Diamond.
Dan Ferris: And remember, you can e-mail us at [email protected] and tell us what's on your mind. That and more right now on the Stansberry Investor Hour. So, happy new year, Corey, officially.
Corey McLaughlin: Happy new year. How are you?
Dan Ferris: I'm good. I have COVID. But otherwise, I'm great. And I know you had it recently too. What a way to start the year, feeling like you've been run over by a truck. I wonder if that is really – you know, it's the perfect sort of coda to 2022 is getting COVID, feeling run over by a truck, no?
Corey McLaughlin: I suppose so. I mean, we were talking about we wanted a normal year ahead, or at least I was, and oh well, you know, COVID to start the year. Maybe that's the normal thing now. Every winter, got to worry about that, but yeah, happy new year indeed. I wasn't even going to say happy new year because, you know, Larry David does not allow people to say happy new year to him past, I think it's January 7, but this is our first show of the new year, so we can say that.
Dan Ferris: That's right. We certainly can. And we need to because something's got to be happy after 2022. And of course, I'm still in that mode. I'm still in kind of bear market, "Is this rally for real?" because let's face it, you know, I have my thoughts on how all this is going to go, but I don't know everything. I don't know the future, and my thought is still that however good you might feel about whatever the market's done in the past week or so, starting out the year with an up market, some people think that means something, the first five trading days, blah, blah, blah... doesn't mean anything to me. But I still think we're in bear market mode. I still think there's new lows ahead. I think that the next time the Fed meets and they raise rates another 50 basis points, or who knows, more or less, I don't know, but probably I'm going to say 50 at least, folks aren't going to like it. They're not going to like it one bit.
Corey McLaughlin: Yeah, I mean, guilty until proven innocent there, you know, this market. It's still – if you look at the S&P 500, which is what we have to look at, you know, looking at U.S. stocks, still in a downtrend with its kind of long term, the simple 200-day moving average. So yeah, I'm with you. There's certain sectors and individual names, obviously, that are going to be and are performing differently. So that may be something to look at these next couple months as far as what happens there. But yeah. Gosh, I forgot about the Fed for a second there. The holidays got my mind off Jerome Powell, but he's back.
Dan Ferris: Yeah, I forgot about it too, and I was actually sort of reminded kind of in reverse by a Financial Times headline this morning said, "Companies Rush to Tap U.S. Bond Market as Credit Conditions Ease." So I think this is like bear market rally dynamics. So you get equity prices rise, interest rates fall, everybody starts feeling better, interest rates are better than they were, whatever, a week or two ago, and then a bunch of companies... the quote here is, "In the first seven days of 2023, companies from Credit Suisse to Ford issued $63.7 billion worth of U.S. marketed debt," according to data from Dealogic, "compared to like $36.6 billion in the last five weeks of 2022. So you know, there is a feeling there like somebody was kind of waiting at the starting line for things to ease up a little bit, and now they see that movement and they're seizing it.
You know, fixed-rate debt... I was telling my wife the other day, "I know this sounds crazy, but I feel like we should borrow a whole bunch of money against our house right now." I know that sounds crazy to some people, but I feel like one of the mistakes I've made in my life – somewhat of a mistake, maybe not a huge one – is that I didn't borrow enough fixed-rate debt while the getting was good, and even now, I think with our credit rating, which is really good. I mean, Stansberry treats us great so I'm a moron if I don't have a great credit rating. And I think I can go to a bank right now and borrow six figures' worth of home equity for like 5% or 6% fixed, 30-year, like you know, maybe I should. Maybe I should imitate corporate America for once.
Corey McLaughlin: Yeah. No, that's an interesting thought. And I've seen comments lately, every time, to your point, about the bear market rally dynamics. Every time the market rallies a bit and what you just said, credit conditions easing, which I don't think we've talked about in a while, does that give the Federal Reserve more reason to stick with the higher rates for longer plan because maybe financial conditions, as they say, aren't tightening. So if people are still like, eh, whatever, we'll be issuing debt and letting money flow around, and we're not concerned here. Well then, OK, the economy can take more pain and so we're going to do that.
Dan Ferris: Exactly. Dan thinks he has such a great job that he can go borrow a bunch of money. We need to beat that sucker down. We haven't raised rates nearly far enough. When Dan is whining and in pain, then we'll stop.
Corey McLaughlin: There might be something to be said for that because, you know, Dan is probably better off than a lot of people, and financially speaking-wise. I won't speak to anything else about Dan because I don't know anything in his head. But if corporate America isn't feeling the pain, Jerome Powell's pain shot, then – and they're still worried about inflation and whatnot, what incentive do they have to – even if they stop raising rates, just to keep them there for a long time, which that's what they've said they're going to do. So my point is, if we're still getting bear market rallies or rallies to begin whatever you want to call it, a little rally to start the beginning of the year or whatever it is, there's no reason in my mind, based on everything I've heard from the Fed over the last two years as to why they would cut rates anytime soon, and that's the point where – that's the real turning point of this – the next big, huge turning point of this market, I think.
Dan Ferris: I know. Every press conference, somebody comes out, and the questions, I swear it's like they're scripted because it's the same phraseology or the same phrasing, whatever, every single time. And they're saying what would it look like – what kind of scenario, under what circumstances or whatever they say would the Fed begin to cut rates? And then Powell's answer is identical every time too. We are not thinking about thinking about cutting rates. And he's practically said get this idea out of your head. You're on the wrong planet. And I think at some point – and I understand being skeptical of what the central banker tells us. I do. I understand that because when the central banker comes out and says the currency is very strong, there's only one reason why they're saying it. It's because it's not true. The lady doth protest too much, methinks.
So I get it. I get it all day long, but when someone's actions align absolutely pristinely perfectly with everything they've told you, we're going to raise rates, there will be pain, oh look, they're raising rates and it's pain. And it happens more than once, you know, we have some data points here. We have enough data points to say I think we can take Jerome at his word, and I don't think they're nearly done. I think when whatever they call inflation, which is not CPI, we talked about that before, whatever they call inflation is 2%, then we can talk about that. Otherwise, it's pain, pain, pain, raise, raise, raise, period.
Corey McLaughlin: Yeah, maybe those were – those people asking the questions will be listening to you next time. It's a tough slog ahead, I think. It's not the – you know, I've said this so many times. It's not the bull market genius days of whenever you want to call it. I'm thinking specifically of late 2020 or early 2021 where 90% of stocks were trading above long-term averages. I mean, that's like literally you could throw a dart or pick out nine out of 10 stocks on a board and you'd be making money. And we're not there. I think we can safely say that.
Dan Ferris: Right. we know that, don't we? And don't we also know where's just the basic respect for history at all? You know, are folks unaware that constantly looking for a bottom is exactly what – the mistake that people make at this point in the cycle? They seem unaware. It's like Galbraith, the financial – the brevity of the financial memory is the hallmark of the era, of the cycle, of this moment in the cycle. People just don't remember. They need to be reminded. It's insidious. It's like watching a car accident happen in slow motion, and it's like watching it right before the moment happens. If you could just get to the driver in time and say stop, stop, stop. No, you never can, and that's how I feel like the market is every so often, you know, 1929, March 2000, and early 2022. And then what happens for years afterward? Lots of stocks go sideways, the rate regime changes, the whole market regime changes from tech to value or value to tech, whatever it is. And assets like gold start being more important, and here we are again. Here we are again. And maybe at this point, I'm prone to being too smug because I was bearish, 2022 happened, so now I'm like yeah, rah, rah, rah. You know, I'm Mr. Smug now. I shouldn't be so smug.
Corey McLaughlin: Well, we are in a bear market. If there's any time to be smug, now would be it.
Dan Ferris: For the bear. The bear gets to be smug once a decade, so let him be, right. OK.
Corey McLaughlin: Well, happy new year.
Dan Ferris: Yeah, I know, happy new year. Well, yeah I think – I don't know, I think that's as good of a new year's rant as you could get out of us, so maybe we should go talk with somebody who actually has some reasonable expectation of getting his predictions right because he's nailed them over the past two years like nobody's business. He's been on fire. So that's our colleague and friend and Ten Stock Trader editor Greg Diamond. Let's talk with him. Let's do it right now.
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All right, it's time for our interview once again. Looking forward to this one because we're talking with my friend, Stansberry colleague, and how does one say expert trader, Greg Diamond. Greg is the editor of Stansberry's Ten Stock Trader. I don't know how to say this, but he's been crushing it, so let's just leave it at that and then we'll talk about it. So, Greg, welcome back to the show. It's good to talk to you again.
Greg Diamond: Likewise, Dan. Great to be here. Thanks for having me on.
Dan Ferris: Yeah. Yeah, you bet. I want to say anytime, but you know, it would get a little crazy if it was just like the Dan, Greg, and Corey show. So the year has begun. Last year you crushed it. You actually – you crushed it in 2020, you called that. You crushed it in 20222. You called the downturn there. So like when somebody's on a roll and somebody's doing what you're doing, I've got to know a week or know even two weeks into the year, what are we looking at? What do you think?
Greg Diamond: Yeah, so to start the year, I think it's going to be a continuation of 2022, meaning much higher volatility, and you guys know from following me for a few years now that I look at things a little bit differently than I would say 95% of our colleagues at Stansberry in terms of my technical approach to the markets is based on time cycles and price. So I don't see any change from 2022 in regard to that in terms of volatility, at least that's what the technical setups are telling me, but I like it because as an options trader, that volatility means a lot more opportunity rather than just some boring uptrend.
So to start the year, I do think that we're going to continue to see volatility, and we've seen that starting this week with some big relief rallies, but we saw huge relief rallies all of 2022, and you know, I had a good year last year, but as I told my subscribers, that doesn't matter. You have to leave the last 12-month window in the past and focus on the next 12 years. But having said that, this is just another relief rally, and then especially in some of these technology stocks, I do believe that we will see new lows, and this will add to the overall market volatility, but without getting into too many details, I see some tremendous trading opportunities, especially within the first three months.
Dan Ferris: OK, I'm going to guess that within the first three months, it's mostly on the short side.
Greg Diamond: Most – in technology stocks, yeah. Yep. Absolutely. Yeah. Because think about what's still in focus. It's the Federal Reserve, it's inflation, and technology stocks are going to struggle in that environment, and regardless of what inflation is going to do or not do, it's still elevated. Yes, is it coming down? It is, but it's still – if you go back to their 2% target, what is it at now, 7%, 8%? I mean, depending on – if you want to look at it, some people would say eggs are up 30%, so it depends on what metrics you're looking at, but inflation is still elevated, even if it comes down, which means the Federal Reserve isn't going to move relatively soon. So if that's your fundamental focus, then technology stocks from the short side is where you want to be.
Dan Ferris: Sounds good. In my mind, there's sort of a – there is somewhat of a bifurcation, like a wall in-between. The absolutely garbage, the really money-losing garbage in the tech area, the highly speculative stuff that has gotten crushed, a lot of it's never coming back, and then there's the other stuff, which to me seems more tradable. Do you agree or not?
Greg Diamond: Well, everything's tradable, but in terms of – I agree 100% that some of these stocks that are highly speculative remind me almost perfectly of the dot-com bust where it's going to take a decade or more before any of these stocks even come close to making new highs. So off the top of my head, Twilio, DocuSign, Block, you could even say – some of these semiconductor stocks, even AMD or NVIDIA, it's just they've lost 70%, 80%, sometimes 90%. That, historically speaking, it takes 10 years or more for them to recover those highs. So yes, I agree with you 100% it's going to take a lot more.
And then on the flip side, you look at Caterpillar, you look at JPMorgan, you look at Hershey, you look at McCormick, you look at Train Technologies, some of these industrial stocks, Caterpillar made a new all-time high, or it's right there. So that's making all the new-time highs, you know, have these dog tech stocks making new all-time lows. There's your bifurcation that you talked about and there's your tradable opportunities. Now you have to focus on what's going to lead, what's going to lag, and that's kind of where my technical strategy comes into play. So from a 10,000-foot level, again, I'll say I think 2023's going to be marked with incredible trading opportunity.
Dan Ferris: I've got to bring Corey in here. What do you think, Corey? What do you want to know while we have Greg here with us?
Corey McLaughlin: Well, yeah, I mean, Greg, as he said earlier, you're looking at this from the technical analysis perspective, which 95% of our colleagues probably don't focus solely on that. A lot of people are aware of it and know about it, but there was a time, to your point, on Wall Street where you would have been laughed out of the room if you were – said, hey, I'm primarily a technical analyst, right? And so it just shows you now I don't think that's the case anymore as far as with what you're doing with us. I mean, to me, it's – a great thing about it is what you're able to point out these bifurcations in the market and trade them, like you said, like everything's tradable. I guess for people that might not be aware of your style of just from a simple perspective of your style, how would you describe it to a new investor or somebody like a casual investor?
Greg Diamond: Well, I think – you know, you talked about Wall Street, and I worked on Wall Street for 14, 15 years, whatever it was. I didn't get necessarily laughed out of a room, but people would kind of roll their eyes when I would talk about different things, which is fine because, at the end of the day, we'd sit around in these meetings and we'd have, OK, what do you think, what do you think, what do you think, what do you think, and then it just got to the point where it's like, guys, we all have a way of expressing our opinions via our portfolios and what we're going to trade. So it doesn't really matter what I think. What are you guys going to do to make money? And so I would – you know, I'd leave the meeting and I'd just go focus on what I needed to focus on to be successful.
And so I think for anyone listening, to your question, Corey, where does this technical stuff come into play? You need to have an open mind about what is possible and what you've been, I would say, conditioned to learn, whether CNBC or getting your MBA or studying finance or studying economics. It's all the same stuff all the time. So to step out of that box and to get into something new is difficult for people to grasp because it gets out of their comfort zone. It's something that they don't necessarily understand. How does this work? Why does it work? It doesn't matter. Does it work?
And I think – and one of the struggles that I knew I was going to have, starting at Stansberry Research, getting subscribers to understand that the framework of technical analysis, yes, it's different, yes, you've probably read some crap about some dope on Twitter who thinks they understand technical analysis, but they don't. And so to get that, what did I have to do? I had to be successful. I had to win. I had to show that you could do this and that it does work. Why? Well, if you want to figure out the why, go for it. I'm just telling you this is the strategy that I use, and it works. And some of this stuff – it's not perfect. There's no holy grail, and we all know that, and I take risk management very, very – it's very important to me. It's something that I stress all the time to subscribers.
So it's not to say that it's perfect because there's no such thing as perfection, but it's about improving your probabilities of success, and I've proven that, especially in a year like 2022, like look, these are the turning points, these are the setups, and we're going to trade to win, and you had a nearly 80% win rate last year. So if people want to – I'm never going to make everybody happy. That's just impossible, so if you like what I do, fantastic. I'm going to show you what to do, and I have a passion for what I do, great. If you don't, that's great. Follow somebody that you do like, that does make more sense to you. That's fine.
Corey McLaughlin: Well said, yeah. I mean, the difference when I got into this industry too, I was in a similar position. I was reading a lot of the – and I talked with Marc Chaikin about this too, who he's way smarter than I ever will be when it comes to markets, but what he has –
Greg Diamond: He's only been doing it for like 55 years, so what does he know?
Corey McLaughlin: Only invented amazing indicators and technologies and whatnot, so you know, we can get there eventually. But his point was when he first started was 60 years ago and he was reading these fundamental reports and seeing all different conventional things. But then you could have the best company – or a good company, say, and if the market conditions aren't right and the technicals weren't there, he was losing money, and people were losing money. So that's – my point was when I first got into this industry too, that's what I picked up on as well. There's good ideas that are out there, but to have it to apply the technical analysis, and for somebody who may not be a short-term trader or – you could still apply technical analysis to any sort of investment. Is that right?
Corey McLaughlin: Absolutely. Absolutely. And what I think a lot of people don't focus on, which they should, especially on the fundamental side – and I look at the fundamentals. It's not like I don't look at the fundamentals because I do, especially over the long term. They do matter. But when you have an environment like we had at the end of 2021 and all of 2022 where emotions are high, where there's a new macro setup, whether it's inflation, whether it's war with Russia and Ukraine, whatever the situation might be, what people don't understand or what they should focus more on is imagine all the big funds that are out there, and all of a sudden they're down 15%.
Do you think that they care about these fundamental reports and what the underlying macro or specific EBITDA, whatever the heck that's called in a company? They don't care. It's all about the risk management for them, so that's where emotion completely takes out every other fundamental aspect that you could think of, and then it becomes an emotional roller coaster across trillions and trillions of dollars across funds all around the globe, and that's where the emotion comes in. what is emotion? Well, that emotion is what we study in technical analysis because that emotion is expressed in the chart via the price action. I think that's an important concept that people don't understand.
Dan Ferris: Yeah, I mean, it harkens me back to good old Ben Graham, you know, the market is a voting machine in the short term and a weighing machine in the long term, and both of those terms, it's not like they're cut and dried. The emotions can take over and reign supreme for a long time, months, couple years, these speculative episodes you see it for years at a time.
Greg Diamond: It's a humbling mechanism. It's humbling. It really is.
Dan Ferris: And they can stay crazy for longer than people can stay solvent, so yeah. and here we are again. I always say this because we always wind up back at this spot, risk management. We always wind up back here. We'll start out talking about breakouts or fundamentals or whatever your thing is, and then it'll all converge right here. That's where the rubber really hits the road, and how you – in other words, one way I look at it, it's like how you enter the position is of course very important. Let's not say that. But how and when you exit, that's like make or break.
Greg Diamond: And especially trading – so I trade long options. I buy calls and I buy puts. Now, you talk to the majority of anyone out there and they'll say, well that's a losing strategy because you have time decay and you're going to have all this stuff. Well, it can be a losing strategy. For most people, they don't understand the time aspect, but this is where time analysis is such a big part of my strategy, and by having that timing mechanism, I'm able to say look, yes, time decay data is an issue, but by using time analysis through the methods of W.D. Gann, I'm able to capture that and use it to my advantage and have a really good win rate and be successful where most people would prefer to sell options.
Dan Ferris: Yeah, they would. And I've talked about options with a few guests over the past few years here, but I remember Wayne Himelsein we talked with, and he was buying options. He was buying like near the money puts and things. And again, though, what you said, Greg, is intriguing. Let's talk about that. This is one place where you can really shine because nobody talks about this. Nobody talks about time. Nobody talks about analysis of time. Company fundamentals, technical, the usual thing, the Fed, we all talk about the same stuff more or less, but nobody brings this topic up.
Greg Diamond: Cycles.
Dan Ferris: Yeah, so tell me about this.
Greg Diamond: So whenever I bring it up, and I'll have more of an overview here because I don't have enough time, but the – it's always, well, how do you measure it and what are you looking at, why does it work. The why doesn't matter. I'm not concerned – when you start – and look, the time – when I talk about time analysis, I'm talking about W.D. Gann, you can look him up. If you're an alliance member, you've probably seen me talk about it. And you'll see all types of stuff on the internet. He's nonsense, he's this, he's that. If you don't want to believe it, I get it. I've been doing this for so long that I don't try to convince people whether or not they should follow. I'm not trying to – or I don't try to convince them to say this is the end-all-be-all, but it works and it makes sense, and that's all I care about.
So when I look at different cycles, and there are multiple, multiple cycles when it comes to cycle and time analysis, it's not easy. If it was easy, then everybody would be doing it. But I think the most important part is that there's nothing new under the sun. The times change, the characters change, what moves the markets sort of changes in terms of technology. We had railroads back in the early 1800s, 1900s. Now we have planes and battery cars and all this – all that stuff changes, but the reaction over time of investors goes in cycles, and that never changes, and that's what's so fascinating. Now, are you going to read one book from W.D. Gann and you're going to have it all figured out? No, you're not. It's going to take you years to understand. But my subscribers, I think, would attest that I go through as much detail as possible and explain these cycles in a way that is easy to understand, but more importantly how we use it to trade to be successful and make money.
Dan Ferris: So maybe just give us a little taste. Like the seven-year cycle is an important thing to you, isn't it?
Greg Diamond: Right, yes. And this is what I'm going to be covering this Thursday in my webinar. What is fascinating about seven-year cycle, it allowed me to call the top in 2022, and without giving too much away, there's an important inflection point in 2023, but there is someone named Samuel Benner who predates W.D. Gann, but what I found so fascinating is that they both studied the concept of time and these cycles, and they didn't know each other, they weren't alive at the same time periods, but they both came to the same conclusions, and what's fascinating about 2023 is that both of these setups, or both of these cycle analysts who are now dead and were alive at different points in time over 100 years ago now is coming to 2023 as an inflection point, and both of them are saying the same thing. So again, I'm pretty excited about 2023 just based on that concept, and again, I'll have more to say about this Thursday.
Corey McLaughlin: I mean, yeah, that's great. I mean, what you just said there about how two dead people can be on the same page about something that's happening in 2023. I've never – that speaks to cycles from the reverse perspective. Like today we're living, obviously, and you're going through these cycles and adding them up to certain times and dates and likelihoods and possibilities and all those sorts of things, but for two dead people to be arriving at the same conclusion posthumously, this tells you about this too. I've never actually thought of it that way before, but – and to your point – to the same idea, me and Dan have both talked about or written about this before with the idea of the Neil Howe and William Strauss's the saeculum, the 80-year cycle, which to me when I first came across that, it made so much sense to me because it's basically – I won't get into all the details about it, but basically the idea comes on that there's every 80 years, or the length of like abnormal human life, there's these cycles, and from start to finish and various cycles within that period. And it makes too much sense when you think of it that way. When you live a human life, you start at the beginning, you get to the end, you learn stuff along the way, and that happens repeatedly over time.
Greg Diamond: And think about how much information or how many traditions or how many solutions to problems are then lost within that 80-year period, and then we start all over again and we do the same thing, especially when you talk about government, politics, which I'm not going to get into, but interesting you mention the 80-year cycle because Gann followed an 84-year-old war cycle, which I'm sorry to say is really coming into the fray right now. So if you start from 1939, 1941, the kind of beginning of World War II, you add 84 years to that, and we're kind of getting into that little cycle. But from a longer – from a 10,000-foot view, it also, like I said, some people are probably listening to this and being like what in the hell is this guy talking about with all this cycle crap?
All I'm going to say is that it takes – you have to have an open mind about what is possible, and again, as I mentioned earlier, kind of step out of the box and be like, you know what, I'm open to other interpretations about how the world works, how cycles work, and how the markets work. And again, there is no holy grail, but I can promise you – I can promise you will learn something new that will improve – not guarantee, but improve your probabilities of success in the markets, in trading, and in long-term investing as well. It's not like I'm just sitting here day trading. It's not what I do in Ten Stock Trader. I look for shorter-term opportunities, but I also look for – I started this in 2018, 2019, and since then we've kind of been in this crazy, volatile, round-trip market as I call it. So we haven't really had those long-term plays since I started at Stansberry Research. So down the line, hopefully that's something that I can get into, and I think 2023 might be the start of that, but again, going back, I just want to mention that to those who are listening who have no idea about understanding time and time analysis that yes, it's something new. Just open your mind to what is possible, and I think you'll enjoy it.
Dan Ferris: All right. Yeah, everybody wants to enjoy it after last year, don't they? People enjoyed it and enjoyed it and enjoyed it and then they got their heads whacked off, and they'd kind of like to enjoy it again. But let me ask you this. Part of my thing, my outlook, whatever you want to call it, has been that this was a major inflection point. We were in a major financial mega-bubble, not even just your run-of-the-mill bull market top, but a major financial mega-bubble. And for the next, I don't know, I call it five or 10 years, I don't even know. I won't claim to know the period of time, but for some significant period of time, the regime has changed and will remain changed.
Now, I know you mostly care about technicals. I get it. So let's focus on that because you and I have talked about all kinds of things – the Fed and the economy and everything – but let's focus where your expertise is the greatest. For you, are these seven-year cycles, it's just very generic and you don't look forward and say, well, technology worked gangbusters, and now I'm shorting it, but do you look beyond the current opportunity this year? Do you look over the next seven years and say, you know, I suspect technology is really going to suck wind for five years or something like that?
Greg Diamond: Yeah, you know, so I try not to because I want to focus on the present and the next trade or the next investment, but I can't help myself, especially this weekend I was just looking over stuff, I'm like, OK, well if this equals this and this equals that, then I start getting into 2027, 2028, I'm like, OK, let's come back here for a second.
But – so to your point, technology five years out is going to suck. Look at what happened after the dot-com crash. Look at what happened technically, and we talked about this earlier, it took a decade for some of these stocks to just attempt to get back to those all-time highs. Some never did, and then what'd you have? Then you the housing crisis, and then it just dropped everything again, and then here we go. So again, for those who are interested in this cycle analysis, one of the – aside from the seven is the 20-year cycle. And if you go from 2018 to 2022, 2023, it lines up almost perfectly with 1998, the tech bubble which goes through 2018 to 2020, the COVID crash, and those things both rallied, crashed, rallied, crashed, and we're kind of in that 20-year cycle again.
So to answer your question, Dan, absolutely. We can absolutely see a lot of these tech stocks still follow that same cycle, yes, that we will see incredible rallies. I mean, you see today Advanced Micro Devices up 15% in two days. It's a short squeeze – there's no doubt in my mind, but again, it's not even – it's still down 70% from its all-time high. So over the course of the next five years, we'll see a lot of that, but they're going to struggle in terms of the relative strength relative to Caterpillar or JPMorgan or some of these industrial stocks that are probably going to do pretty well through this higher inflationary environment.
Dan Ferris: What about sectors, Greg? A lotta guys who trade options, one of the basic things they like to do is just to carve the S&P 500 up into all its component sectors and kind of – I think Druckenmiller calls that looking inside the stock market.
Greg Diamond: Yeah, I love that, and it's a big proponent or it's a big aspect of understanding technical analysis and something that I've been stressing since October really is something called price diversions, and that happens within these sectors, and you can see it. I just mentioned earlier Caterpillar made a new all-time high and we're seeing Microsoft made a new low last week. So I mean, those are two – and if you look at the correlation from the 2020 low, those stocks were trading in tandem. Caterpillar would rally, Microsoft would rally, well look at the sectors that they're in, and you can do that with semiconductors, you can do that with financials, so yes, absolutely. I mean, the sectors matter, and when you have these huge price divergence, well, what does that set up for? It sets up for what are the next five years going to look like. It's going to be more of the same where you have these huge price divergences, and for me, it's great because they're great technical signals to trade on. So absolutely I look at the sectors every day.
Dan Ferris: Do you do perish trades?
Greg Diamond: No, not really. I tend to keep it very, very simple, just buying calls and buying puts. I really don't like having big exposure to being long and short at the same time. It's not that you can't do it. You can. It's just it's not – in a market like this, it's tough. It's tough.
Dan Ferris: Gives you two ways to be wrong.
Greg Diamond: Yeah, exactly. Exactly.
Corey McLaughlin: And what I'm hearing here is the – you know, when you bring up Microsoft and Caterpillar, and one of my favorites of the last couple months has been John Deere. Tractors are in vogue again, which there's a lot of interesting things you get into with that, but I think what I'm hearing is you really need some sort of plan or strategy to identify these sectors and trends, and then to your point, Greg, I guess act on them.
Greg Diamond: Yeah, it's really a roadmap, Corey. And I talk – I just happened to bring up Caterpillar and Microsoft. Those two – that pair helped me identify the top among the other cycle stuff, but just on the price action, it helped me identify the seven-year cycle, it also helped me identify the 20-year cycle, which added to my conviction that 2022 was going to be a major top. And then I go back to time and price and people go, well why? I don't know. I don't care. It worked in the past, and there's a relatively good probability that it's going to work again in the future. And so when you see these historical rhythms or cycles or patterns in the market and they keep happening over and over and over again, why not follow them? And I say it all the time, let the market prove me wrong.
And that's why I incorporate risk management into what I do, but I just think – and I think I – I don't think, I know I have based on a lot of the feedback I've received is I don't want to say like turned people, but made them believers in the strategies that I use. And again, it can be a little bit eye-opening and surprising and if not confusing, what is this guy talking about, but when you start to study it and you study it for nearly two decades like I have, you start to see this stuff all the time, and it works. It works to the point where I'm so confident in it that it's the first thing that I focus on rather than what Wall Street thinks. I never watch CNBC. It just completely changed how I look at the markets, the world, politics, everything.
Corey McLaughlin: I should say that we get a lot of feedback e-mail in the Digest, and I've seen – a lot of people might be hearing this and thinking, oh, how does technical analysis fit in my thing, but I've seen long-term investors, guys with 401(k)s talking obviously maybe not even exactly making the trades as you say them – you know, I'm talking about alliance members and long-term subscribers not even using the exact trading advice but using your kind of macro outlook and applying it to your own portfolio, and that's something that people may not recognize too, and that speaks within the Stansberry universe of how you can use your kind of outlook much like anybody else's, you know, Doc's or Dan's or the investment advisory team to fit all these pieces together. So even if you're not into the exact specific – if you check out Greg's stuff and you don't want to make the specific trades, you can still use the information to make decisions in your own portfolio.
Greg Diamond: Yeah, and I think this is something that is really fantastic about Stansberry Research in general. So I worked for a hedge fund. Think about – if you're an investor in a hedge fund, think about what you're doing. So some people would invest $1 million, let's say, and some people invested up to $100 million. Talking serious wealthy people, but let's say you've just got $1 million just to keep it simple, and that's a lot of money, it's a big part of your portfolio. You are stuck with that one strategy for the time that you are in that fund, and usually you have a lockup period two to five years, whatever it might be, different rules.
Well, think about what Stansberry Research offers in terms of, what, 25 different products or editors or whatever it might be, so last year Greg was doing great, this year Dan's going to do great. So my point is that you have these options to say, you know what, Greg's saying this, Dan's saying this, Doc is saying this, and some people look at that as a negative. I look at it as a positive because you have so much different information from different strategies that you can lean on and say, you know what, this is – I like all three, this is what I'm going to do to my portfolio as a result. So I think having those options is really beneficial as opposed to just sticking your money all with one person and then crossing your fingers and hoping they do well.
Dan Ferris: Yeah, there was a lot of finger crossing. I think there's a lot of broken fingers now.
Corey McLaughlin: Well, we should say – I don't think we've said specifically, Greg this time last year was calling the top in stocks. And so who else – how many other people were doing that? Let's give credit that this is why we're talking about this is because all of these things kind of can line up to an independent thought where you can see the top and –
Greg Diamond: I appreciate that. And the other thing too is you listen to – this is probably going to get me in trouble, but I have no sympathy or I just find it hard to believe that these economists on Wall Street at these big banks make over $1 million a year, they have all these big things, but they don't take any risk. Zero. They take zero risk and then they just – you know, they just – they get on the shows and they do this and they do that, but they don't – there's no accountability when they're wrong. When they're right, you know, they're all over again. You see this all the time.
It's one thing for me to call a top. It's another thing for me to trade it, to put thousands of subscribers' money on the line and say this is what we're going to do based on my analysis, and we're going to make money doing it. And again, I'm a trader. That's what I do, but I think for – it's that old saying that talk is cheap. Put your money where your mouth is, and again it kind of goes back to the confidence that I have in time, in price, and while it seems suspect to a lot of people, when you follow something for so long and it works over and over and over again, that's where you build confidence, and that's – you're not going to see me on television or on CNBC. It's going to be with subscribers and saying, look, this is what I think and this is actually how we're going to trade it and invest in it.
Dan Ferris: Yeah. Yeah, that's right. It's money where our mouth is, and those guys, those Wall Street guys especially, they basically – it's almost like they're working for the government because you're –
Greg Diamond: Part of me is jealous. I'm like you make [inaudible] a year and you just sit there and talk? It's great. I mean –
Dan Ferris: If only I could get $1 million pretax without having any consequences for being wrong.
Greg Diamond: Yeah, it's kind of like being the weatherman. They're like being the weatherman. It's unbelievable. If you're a meteorologist in San Diego, California, what's it going to be like today? It's going to be nice. OK, well back to you.
Dan Ferris: That's right, sunny and 70. Back to you. All right. Actually, Greg, I love talking with you. It's always a lively conversation, and we always learn something. So it sounds like – but it sounds like you don't want to give too much away. I understand you want folks to tune in on Thursday night to your webinar. What time is it?
Greg Diamond: I believe it's in the morning. I believe it's at 10:30. I think. I'm pretty sure that – if you go to – there will be a link at the end. You can sign up for it, and then – but you can watch it for 24 hours or 48 hours or whatever it might be. So I want to say it goes live at 10:30, but if you're working or something, you can check it out at night, whatever it might be.
Dan Ferris: OK, the link is actually dan2023.com. I guess I'm just so –
Greg Diamond: Oh, you're taking over my stuff? You're taking the credit there, Dan?
Dan Ferris: I know. I'm so stuck on me, I just – it had to be dan2023.com to see Greg's webinar.
Greg Diamond: I like it. I like it.
Corey McLaughlin: Go to that domain a long time ago.
Dan Ferris: That's right. I've been waiting for this moment to use it. So if you go to dan2023.com, you can sign up and then you'll get an e-mail and they'll tell you when Greg's webinar goes live. And you don't want to miss it. I hope everybody by now gets the fact that Greg is different from many of the investors that we interview. He's different from, like we said, among our Stansberry colleagues, myself included. I'm just like one of those fundamentals-driven guys. But yeah, definitely check that out, dan2023.com.
So, Greg, it's time for the final question, which is the same for every guest. If you could leave our listeners with a single thought today, what might that be?
Greg Diamond: Ooh, a single thought. I'm going to say if the most important thing in real estate is location, location, location, then the most important thing in trading is risk management, risk management, risk management. And I know we always talk about that, and you're right we always get back to it, but it's that important, and it doesn't matter if you follow a weird technical guy like me or a fundamental person like yourself or you throw darts at a board. If you have no risk-management discipline, you are not going to make it very long as a trader or as a long-term investor. So that – it's No. 1, 2, and 3, and then everything else comes after that.
Dan Ferris: Well said. And like you say, maybe we say this over and over again, but there's a reason for that, isn't there? It really is that important.
Greg Diamond: I think people really found that out in 2022.
Dan Ferris: Yeah, they really did.
Greg Diamond: And here's actually a quick story to end which I think you'll find interesting. I'm not going to name any names, but I interviewed a long time ago – I want to say 10 years ago – for a fund, and we're going through the whole process, and I got to the head guy, the head of the firm, and we were talking strategy, we were talking options actually, and I said, you know, his strategy was a little different than what I was used to, but that's fine. He was the head, and I said, "Well, OK, what happens if you're wrong?" He said, "Well, I don't use stop losses." And I said, "I'm sorry, what did you -?" And he said, "I don't use stop losses," and I just very politely just put my notebook down and I said, "I don't think this is going to work out," and I shook his hand, and I left. And three years later, they went bust. So again – and he's a smart guy, successful before that, but I heard no stop loss, no risk management, I'm sorry, I want no part of that.
Dan Ferris: Yeah, the market doesn't care how smart and successful you are, does it? It'll wipe you out just the same.
Greg Diamond: Absolutely not. Absolutely not. No way.
Dan Ferris: All right, man, thanks for being here. Always a pleasure to talk with you.
Greg Diamond: Likewise, my friends. Have a good one and check out my presentation on Thursday.
Dan Ferris: Right, dan2023.com to sign up.
Corey McLaughlin: Yes. Thanks, Greg.
Greg Diamond: Thanks, guys.
Dan Ferris: Hey, Dan Ferris here. As you just heard on the podcast, one year ago my colleague Greg predicted a market crash. He was spot on. He had the nerve to say 2022 will see the worst crash since 2008. Sure enough, you could have doubled your money six times with Greg's recommendations after he nailed the crash of 2022. Well, today Greg is back with his newest prediction for 2023, and keep in mind he even predicted the 2020 crash three months before it began, and you could have doubled your money 11 different times on his picks leading up to that. He's been doing all this using a strategy that dates back to the Civil War, and once again he's agreed to show you how to potentially double your money in 2023 over and over again without touching a single stock along the way, including the exact date he predicts a huge market move.
To learn more, go to dan2023.com. That's my first name, Dan, 2023.com where we're posting the full details of where stocks are really going next from the guy who nailed the 2022 crash. And by the way, we also have a special surprise for you on that site which has drawn the interest of 750,000 people already, but you can see it free of charge at dan2023.com, including the name of Greg's No. 1 stock for 2023, which you could have already doubled your money five different times using his strategy. You'll get it free of charge from dan2023.com, so check it out right now.
What a pleasure to talk to Greg. Puts it all in the simplest terms, and what he does is simple and effective, and I just – I can't thank him enough for reiterating the importance of risk management. I feel like we should do a whole – we should do some kind of a whole show on risk management. We could probably interview 20 people and get all the best segments, but that was a lot of fun.
Corey McLaughlin: Yeah. I really – I would encourage people to check out Greg's event just to hear more on what his strategy is and his outlook on the year ahead and the risk management he uses. He really does a good job in Ten Stock Trader of giving instructions – very specific instructions on the trades and how to do them and why we're looking at them and what's the risk/reward. That's a lot of – gets – maybe people don't even get to that part of the investing part, and that's largely due to his technical analysis approach, the risk/reward of a certain trade. So yeah, I know we talked about a lot of different things there, but I think he – you should really hear him out. He did call before the pre-COVID crash, he was already saying – basically calling a top there, and then in 2022 same thing. So I don't know what else you need to say or hear. Listen to what he's saying now.
Dan Ferris: Greg called the top like five days before it happened or whatever, and then boom, traded it. I called the top for like five years... little bit different.
Corey McLaughlin: And I didn't call anything.
Dan Ferris: You're smarter than all of us. That's right.
Corey McLaughlin: But yeah, it was a good talk, and happy to be a part of it.
Dan Ferris: Yeah. I mean, just another great talk with Greg Diamond. And not only another great talk with Greg Diamond, but 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 like this episode and know anybody else who might like it, tell them to check it out on their podcast app or at investorhour.com. And 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 ay [email protected] or call the listener feedback line at 800-381-2357. Tell us what's on your mind and hear your voice on the show. For my co-host, Corey McLaughlin, till next week I'm Dan Ferris. Thanks for listening.
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