Latest / Financial Survival Network / Concentration and Debt in the Market with Eddy Gifford #5957

Transcript

Concentration and Debt in the Market with Eddy Gifford #5957 · Financial Survival Network

• 0:00
  We're to take the s TOB five hundred and show it so you know,
• 0:03
  year to date it's up like eighteen percent, right, But if you show
• 0:06
  the equal weight version of that, which just buys an equal weighting of each
• 0:10
  of the five hundred companies in the SEBA one hundred, it's only up like
• 0:13
  three percent. And so it shows it that capitalization and that concentration is really
• 0:20
  driving the returns. Now, that's normal for a portfolio. The problem is
• 0:24
  is what happens when those stocks have a bad day, or what happens when
• 0:29
  those spiraling like self correct. Well, that's when it can get really,
• 0:33
  really ugly. You're listening to Carrie Let's's Financial Survival Network, where you get
• 0:38
  valuable information you just can't find anywhere else to thrive in today's trying times.
• 0:43
  You need the Financial Survival Network now more than ever. Go to Financial Survivalnetwork
• 0:50
  dot com and get your free newsletter and gift. Financial Survival Network now more
• 0:57
  than ever. Ed Welcome, you are listening to and watching the Financial Survival
• 1:04
  Network. And hey, we got numbers coming out, stock markets going higher.
• 1:10
  The world is safe for democracy. Eddie Gifford's here you discuss Eddie great
• 1:15
  to have you back, So, hey, what's up? Well? I
• 1:19
  mean, I don't know if the world is safe safe safe. You know,
• 1:23
  it's funny because we got this GDP report and everything seems like it's just
• 1:26
  going so well or came in higher than expected. But you know a lot
• 1:32
  of that was due to government spending. When you really dig into the report
• 1:34
  and you see what's happened to the consumer and consumer is not spending as planned
• 1:41
  as the consumer came in underestimate. So you know, there's definitely a lot
• 1:45
  going around what going on right now that a lot of people are excited about
• 1:49
  because the market's near all time highs. Again, of course they're not all
• 1:52
  time highs of view cal for inflation. And then, you know, just
• 1:55
  to take things a little bit further, when you look at the inner market
• 1:57
  relationships and what's going on the surface right now, there's a lot of things
• 2:01
  that are blinking kind of a yellow warning light right now. So you know,
• 2:07
  is Santa on schedule? I mean, right now, I would say
• 2:10
  it appears that is the case, but I also think he might be going,
• 2:15
  you know, through a train track and then he might get a side
• 2:19
  swiped by the xenter market relationships. So he's not careful, all right,
• 2:22
  So you think the GDP numbers are fishy, I think that everything has been
• 2:28
  fishy since the beginning of the year, whether we're talking about CPI, we're
• 2:34
  talking about GDP. It just seems like a lot of this stuff. The
• 2:39
  market just feels a lot more rigged lately. Not that not that Adams always
• 2:46
  felt that way a little bit, but it just feels like there's someone behind
• 2:50
  the curtain pulling the strings. And you know, every time that it seems
• 2:53
  like we're gonna break somehow magnificently, we bounce back and it's pretty rapid.
• 2:59
  I mean, we look at last month, everyone was calling for dooming gloam
• 3:02
  and you know, I would say that it was a justified doing loom based
• 3:07
  on what's going on, and we saw that thing bounce back faster than anything
• 3:13
  we've seen, even faster than COVID. So that's not normal behavior, you
• 3:17
  know. And when you when you look at the markets over the last three
• 3:21
  years, most of the games have happened like right in conjunction with earnings,
• 3:27
  right basically like the seven days at the end of the calendar month, and
• 3:31
  that typically happens in bear market. It's not in bull markets. So there's
• 3:35
  just a lot of like weird things, weird anomalies that are occurring that make
• 3:38
  you feel like you're in a bear market. But yet we're right at or
• 3:44
  close to all time highs at least in the SNP and the QQQ, the
• 3:49
  DAS, DAC of course, Russell and retail and are telling another story.
• 3:54
  So usually it's the small caps that prevail to the upside or that the that
• 4:00
  provide the confirmation, and right now the small companies are struggling. Yeah,
• 4:06
  so uh, you know, the economy looks bleak, but don't the stocks
• 4:12
  climb on a wall of worry? Well and generally speaking, yes, I
• 4:15
  mean we've had like this wall of worry all year and the stocks have kind
• 4:18
  of like drifted upwards. Of course, you know, it's what stocks are
• 4:21
  we talking about. There's a ton of concentration right now. That Magnificent seven
• 4:27
  make up seven percent of this at B five hundred right now. And if
• 4:30
  you were to just you know, showing a client this the other day,
• 4:33
  we were to take the s to B five hundred and show it, you
• 4:36
  know, year to date it's up like eighteen percent, right, But if
• 4:40
  you show the equal weight version of that which just buys an equal weighting of
• 4:44
  each of the five hundred companies in the se Grade one hundred. It's only
• 4:46
  at like three percent, and so it shows that capitalization and that concentration is
• 4:54
  really driving the returns. Now, that's normal for a portfolio. The problem
• 4:58
  is is what happens when those stocks have a bad day, or what happens
• 5:02
  when those spieling like self correct. Well, that that's when it can get
• 5:06
  really really ugly. You know, I'm not saying run and put your hand
• 5:11
  or a mattress and just and don't invest. You have to invest. I
• 5:15
  mean, we've got to beat this thing called inflation that wasn't really nowadays.
• 5:19
  But if you are investing, you just got to make sure that you have
• 5:23
  a Yeah, you have to have a reason to get in. You have
• 5:27
  to have a reason to get out. And those have to be predetermined.
• 5:29
  And you can't just decide one day only think I'm gonna buy Apple and then
• 5:31
  the next dex they'd be like, oh, I think I'm going to get
• 5:33
  out of Apple. That's not how it works. Not If you want to
• 5:36
  be successful long term, you need to have a discipline strategy that you follow
• 5:42
  that has a predetermined reason to get out, and I think that a lot
• 5:45
  of portfolios are missing that unfortunately. All Right, so you're not convinced about
• 5:50
  this bull market yet, are you. I'm definitely not. I think there's
• 5:55
  just too too many things under the surface, too many cracks under the surface.
• 5:58
  The consumer is, yeah, they consider is spending it's fantastic, right,
• 6:02
  And the government it's spending, it's fantastic, except for when all that
• 6:08
  spending is built on debt. What that leads to is a significant bubble.
• 6:12
  And you know, I don't know if we're in the same snare that we
• 6:15
  were in like two thousand and seven inch prior to the two thousand and two
• 6:19
  thousand and nine financial crisis, but it's starting to feel similar. I Mean,
• 6:25
  the difference this time is it's our government that's really in trouble, and
• 6:29
  the consumer is in trouble too because of all these high interest rates and just
• 6:31
  because of the high credit card balances that we're seeing. So the only thing
• 6:36
  that's saving us is a lot of people were smart enough to refinance every COVID
• 6:40
  and so they have a little house payment. But you know, the more
• 6:45
  they consume, the more the other debt goes up and then at some point
• 6:48
  you hit a wall because we don't have that eliminated credit line like the government
• 6:53
  has, so unfortunately no, so we're going to hit that and when we
• 6:58
  do, it's not going to be pretty, no doubt, no doubt.
• 7:01
  So when are we going to hit it? Well, if I had a
• 7:03
  crystal ball, we'd all be kauzillionaires, right, Kerrie, I think that,
• 7:09
  you know, if we're looking at it, If we're I would I
• 7:12
  would be looking out probably six to nine months now. I could definitely see
• 7:15
  it being pushed to the other side of the election, just from the standpoint
• 7:20
  that our leadership is shouldn't They're very very good at kicking cans down the road,
• 7:27
  and so obviously if they can get it to the other side of the
• 7:30
  election and they can blame it on the new president, that that's that's that's
• 7:34
  a much easier way to do things. Right. Sore to think that there's
• 7:39
  not politics involved, you know, and silly. I mean, we've we've
• 7:42
  seen how political things have become a little five to six years and and and
• 7:47
  we're heading into next year, which is an election year, which probably means
• 7:50
  a lot more yelling and screaming at each other. Uh so you know,
• 7:57
  whenever we can do it to basically distract what actually going on and Whi's actually
• 8:01
  going on, is that consumers are have a hard out of time paying their
• 8:05
  bills, their max out on credit cards. There's that they're not going to
• 8:09
  go and refinance the house to you know, consolidate, because now they got
• 8:13
  to go from three percent orders to seven percent orders to do that. So
• 8:20
  it's, uh, it's gonna hit that point. And I think that it's
• 8:24
  one of those things where we'll all look back and be like, oh,
• 8:26
  that was so obvious, right, But it's it always it always surprises you
• 8:33
  still. You know. It's like, yeah, I remember when my uh
• 8:37
  my grandmother was really sick and then it was like a new shoes in the
• 8:39
  passway. But when she did, it's still hitting. Was like the same
• 8:43
  thing with these financial events. It's like you know they're coming, you know
• 8:46
  they're coming, and then they get You're like, oh, man, I
• 8:50
  knew what was going to happen. I didn't do anything about it, right,
• 8:52
  So I don't think this time is different, you know, That's what
• 8:54
  they keep telling us. Yeah, all right, so what are we supposed
• 8:58
  to do here. You're supposed to just sit here and wait for it to
• 9:03
  happen. Well, I think that when we're looking into the end of this
• 9:07
  year, I think that, you know, we're in an okay spot.
• 9:11
  When we look at kind of like the metrics, the market internals and and
• 9:15
  what's going on, that looks like we do have some upside edd into the
• 9:18
  end of the year. I would definitely have stops and targets in place on
• 9:22
  my portfolio, you know, like that the holding goes down my fifteenth birth
• 9:26
  site kind of loose. There's no reason to hold on to it if it's
• 9:31
  if it's not doing what it's supposed to be doing, and as it rises,
• 9:33
  take some profits on the way up. That's a way to kind of
• 9:37
  put somebody in your pocket. I'm a I'm a Vegas guy, So yeah,
• 9:41
  you know that the casinos are down the street from me, and the
• 9:43
  first role is get that, get get your gallant money back into your pocket
• 9:48
  as soon as possible, right. So yeah, So it's just be disciplined
• 9:52
  in what you're doing, don't be scared. But at the same time,
• 9:56
  it's okay to be nimble and flexible. And right now cash is pained five
• 10:01
  percent. I'm not a fan of just holding cash, and I understand why
• 10:05
  a person would. Okay, so so cash is king. I thought cash
• 10:11
  was trash, but I guess I was wrong. So you think we're going
• 10:18
  to have an event. But of course you're in the same boat as the
• 10:22
  rest of us. None of us know when, no, if we could
• 10:24
  call that, and that's what gets movies made about us. Right well,
• 10:30
  but I mean that it would be it's coming. I mean, and it
• 10:35
  feels like this is this low peus, but like it's when it actually reaches
• 10:41
  its indpoint. It's it's usually sudden, it's usually fast, it's usually very
• 10:46
  painful, that's for sure. Hey, so what about the gold going up?
• 10:52
  But what do you read into that? And the dollar goes sound?
• 10:54
  So gold has been the primary thing that I've been watching over the last two
• 10:58
  weeks. You know, goal is is definitely giving us a warning signal.
• 11:03
  Right now, it's it's starting to it's been out performing would or lumber.
• 11:07
  It's starting to outperform S and B five hundred. And then even if you
• 11:11
  go and you look on like the other side of the risk off cell,
• 11:15
  the TLT has also been outperforming the SNP and has also been outperforming high yields.
• 11:20
  So those are typically risk off warnings. The only thing that we're seeing
• 11:26
  that usually like tips over to is utilities versus the SMP. Right now,
• 11:33
  SMP is still outperforming utilities by a little bit. Of course, it just
• 11:37
  depends on the timeframe that you're looking at. But we see that flip too,
• 11:41
  and we're kind of in like a one risk off type scenario that means
• 11:46
  heads your portfolio if that happens or you know, takes the profits for sure.
• 11:52
  Yeah, yeah, all right, I buy it? All right,
• 11:56
  Eddie, where do we find you these days? How do we connect to
• 12:00
  you on the web? Same Samuel Attactive wealth dot com, slash Eddie Dash
• 12:05
  Gifford or just jump on the Google ipened Eddie Giffer. That's Eddie with a
• 12:09
  Y E D D Y Giffer to g I F F O r D and
• 12:13
  you might even find me on this show. So all right, and the
• 12:18
  links in the show that it's this interview on Financial Survival Network dot com.
• 12:22
  Make sure you go there, sign up for your free newsletter, and if
• 12:26
  you got a question for Eddie or myself, emails k l at Carrie LUTs
• 12:31
  dot com. Eddie, appreciate you taking time out for your busy day and
• 12:35
  sharing your wisdom with us. We're just gonna sit back and see what happens
• 12:39
  next. All right, sounds good? Thanks? Okay, thanks for listening
• 12:43
  to Carrie Letz's Financial Survival Network, your solution to today's trying times. For
• 12:50
  the latest, go to Financial Survival Network dot com. Financial Survival Network now
• 12:56
  more than ever. Cruis