Latest / Financial Survival Network / Avoid Investing Disaster -- David Stryzewski #5854

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Avoid Investing Disaster -- David Stryzewski #5854 · Financial Survival Network

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  I think we need to understand, Okay, where have we been, where
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  are we today? Where are we going? What worked yesterday is not necessarily
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  going to be working today, you know. But we've been looking at the
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  big fang stocks and so you know, there's been this saying that there is
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  no alternative to like these seven or eight different stocks that just continue to lead
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  everything. You're listening to Carrie Lets's Financial Survival Network, where you get valuable
• 0:23
  information you just can't find anywhere else to thrive in today's trying times. You
• 0:29
  need the Financial Survival Network now more than ever. Go to Financial Survival and
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  Network dot com and get your free newsletter in gift Financial Survival Network now more
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  than ever, and welcome. This is Financial Survival Network. I'm your host,
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  Carry Lets. Well, we got job numbers, conflicting job numbers that
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  came out last week. Does that mean that rates are going higher? And
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  we've got the PPI the CPI coming out this week. David Drzuski is with
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  us now to help us make sense of these numbers. David, what do
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  you make of the job numbers? What do you make of the upcoming CPI
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  and PPI numbers? Will great to be with you here, Kerry. You
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  know a couple things. So in my opinion, the latest jobs report,
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  you know, shows very conflicting information if you're looking at the difference between the
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  jolts and the household surveys. So just for your your viewers information. You
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  know, an ADP, this organization that just does pay rolls for all these
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  different organizations. When they come out and say, hey, there's five hundred
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  thousand new people that are working. What that's doing is it's interviewing different organizations
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  and that's saying, do you have new employees now that could be full time
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  employees, part time employees. As we look at the household survey, that's
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  actually just contacting a household. They may have two different jobs working part time
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  at different places, so they might count as two on the JOLT survey.
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  But when you call a household and they say, hey, I only I
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  have a work I'm working, there was only two hundred and nine thousand.
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  So I think that we're getting a slowing system here today, and we're transitioning
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  right now just to a slower cruising speed as we look at our economy right
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  now. But you know, worker hoarding is something that that happens here with
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  basic economies as we you know, find ourselves in new places. Right now,
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  you know, everyone's trying to wonder, hey, are we going to
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  be in another bull market that's just going to continue to go up forever.
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  I'm not personally of that perspective. I think the macro picture is very negative,
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  even though we're seeing you know, positive increases and certain parts of the
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  market if you will, here in the short term. But you know,
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  the last part of an economy to go is the employment portion, because no
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  one wants to fire anybody. And right now it's very difficult to find really
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  good labor and so you know, people are holding on. But this this
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  definitely shows a slowing for sure, uh in in specifically you know, getting
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  new workers and a lot of that's just gone through, you know, the
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  services side of the world kind of getting into CPI right now. Um.
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  You know, I think that we're we're actually probably you know, we're seeing
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  uh, you know, CPI numbers come down, PC numbers come down.
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  Um. I think that it's gonna you know, we're a long ways off
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  from from this two percent number though that the Fed really wants us to be
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  at. And uh and so I think that we're probably actually going to see
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  things, uh, you know, begin to become more inflationary, which I
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  understand I'm an outlier in that statement, but but there's a number of things
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  that are important for us to understand from from that thought process. One Milton
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  Freeman taught us that we're printing is not taking place, inflation is not occurring.
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  Well, we're seeing printing take place at rapid rates right now. Ten
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  trillion dollars just went into our our our our debt here in just less than
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  four years. We just committed to four trillion more over the next year and
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  a half. That's very inflationary. Uh. You know. Additionally, we're
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  looking at right now a lot of things that that are also inflationary. Just
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  understanding the supplying demand dynamics here, and of course, if you affect demand,
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  which is basically what the FEDS doing, which is what you know,
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  reducing our ability to pump more oil here in the United States, find new
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  minerals and copper and gold and silver and all those things that have just really
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  restrained things here. Those actually cause bubbles to be in our system and hiccups,
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  if you will, that that caused supplying demand factors and challenges. But
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  of course, if the demand continues to rise like we see and copper as
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  a result of you know, all this green energy stuff, demand rises,
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  but we can't explore and we can't keep up with this trajectory of the need.
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  Well, guess what's going to have with the price there's stewer dollar,
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  there's more dollars station, fewer ounces that are out there, the prices going
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  to go up. Now, we're also looking at reshoring different parts of our
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  economy. You know, we don't even make any antibiotics here in the United
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  States. You know, I'm a type one diabetic and I was told from
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  my pharmacists that we're low on insulin as a nation. Now it's pretty concerning
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  stuff, given the fact that type one diabetics can't live without insulin. And
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  so I think we're bringing a lot of these industries back here to the United
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  States, or we're friend shoring them. Uh, you know with other nations
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  that you know, can hopefully do things, you know, lower costs than
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  the United States. Good potentially, But all that transition, all this reshoring,
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  those are inflationary ideas. So if we see a different inflation, it
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  is definitely going to be going up, which adds to our thesis of we
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  believe that you know, Fed's going to be higher for longer. We are
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  not out of this this winter yet. I think we're actually more like about
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  to really be facing some of the real challenges as the numbers continue to unfold
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  ahead of us here, right, and you can't eventually have to pay the
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  piper. So you think inflation numbers are going to be up and interest rates?
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  Are you heading? Hired David? Is that the final conclusion? Yeah?
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  I do. I think I think inflation is going I mean there's five
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  things that move markets. We've got inflation, it's not under control. We
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  are seeing things come down, but it's going to rise again. We've got
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  interest rate environment. There's a lag effect that's taken place. We just raised
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  rates faster than ever before in history. I know your viewers know all about
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  this, but you know it takes twelve to eighteen months for those interest rates
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  to get priced in. You know, one year ago we're looking at less
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  than one percent of the five percent that the FED brought in. I mean,
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  this is not even close to being priced into our market here today.
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  And so I think that then we see, you know what the Fed is
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  ultimately done. Hey, they're radical, they're raising rates. Who knows what
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  power is ultimately going to do. I think this guy's actually a lot more
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  dubbish than he claims to be at this moment, and so we're seeing a
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  lot of hawkish speak, if you will, as he's talking about raising rates
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  more. Again. Hey, we'll find out what ends up happening. It
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  looks like it's priced in to occur here on July twenty fourth. But you
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  know, I think that we're more looking at a pause right now, and
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  we're not going to be looking at a pivot to a lower rate though.
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  That's the part that the market has dead wrong. And then that gets into
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  corporate earnings as the force factor that moves markets. I think that it's really
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  important for us to understand today that corporations have to borrow at a much higher
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  price today than they did before. Whether we're talking about the office of real
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  estate, which is very expensive and there's trillions of dollars coming due here over
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  the next eighteen months, or we're looking at just corporate America right now and
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  so many zombie companies today that require more cap all to run than they actually
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  produce. Those organizations are gonna have a very difficult time making it in this
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  new economy where you know, again it's it's it's more pricey to borrow,
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  and therefore their margins are going to be compressed. The whole reason why we
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  purchase stocks is because of the profitability or the margin that they're going to make.
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  I've seen margins coming down significantly as the consumers is getting tighter. Right
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  now, we're seeing just even the credit report that came out yesterday, UH
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  indicate that it was about a third of what expectations were as far as new
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  borrowing was supposed to go over a month. So you know, that is
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  the lowest level we saw since November of twenty twenty. So that's a big
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  deals we're seeing that begin to subside. And then the fifth thing is geopolitical
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  offense. So I don't care whether we're talking about COVID was the biggest geopolitical
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  event in the last you know, several decades or centuries. You know,
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  now we're looking at wars, we're looking at you know a number of challenges
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  here. You know with China now you know very likely leading a new bricks
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  currency, Brazil, Russia, any Chinese, Saudi Arabia, South Africa,
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  Iran, these organizations are these nations are looking to gather together and rival the
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  US dollar today and you know it's not good for the US dollar at all,
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  but yet we're seeing, you know, some strength today. So you
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  know, there's a lot of people that are looking at stuff right now and
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  they feel like, you know, maybe the climate inside the house feels pretty
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  good. But if we examine things a little closer, the windows are broken
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  up and all as we did was just crank up the heat. So we
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  can't continue to print and price this thing. We will eventually have to pay
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  the piper. We are looking at tremendous debt as a nation that ultimately leads
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  to taxes. Taxes are demand suppressor, and so again supply and demand are
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  are these really big factors that are going to be playing in here for our
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  future and we cannot get past basic economics. It's just a matter of time.
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  So basic economic is eventually going to catch up with us. That's right,
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  most anticipated recession in history. Okay, so what are you doing with
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  your portfolio your clients? Where are you like looking for opportunities or are you
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  just battening down the hatches and going into full scale defensive mode. You know,
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  it's a very important question. I think that how we answer that question,
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  you know, is also very important. So I think we need to
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  understand, Okay, where have we been, where are we today? Where
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  are we going? What worked yesterday is not necessarily going to be working today.
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  Um, you know, but we've been looking at the big fang stocks
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  and so you know, there's been this saying that there is no alternative to
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  like these seven or eight different stocks that just continue to lead everything. Well,
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  I think right now that there's it's not a tina, there is no
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  alternative. It's now a tea. There are reasonable alternatives at this point.
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  Um, you know, you're getting paid right now, at least at the
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  treasury for short term commitments and money. You know, you can get paid
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  five percent now, your personal inflation might be higher than five percents, so
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  you can still be going backwards on that. So it's not going to solve
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  all of our problems here in life. I think that the biggest place that
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  we need to be paying attention to as far as allocation goes, is,
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  yes, the risk return assets. We need to be very strategic in the
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  things that we're doing and I think that we can find out where we are
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  in cycles. I think that there's ways of playing this that are more defensive
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  and hedged. But I want to just draw specific attention to protected assets where
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  we would primarily be looking at bonds. You know, most people here today
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  are either trying to beat inflation that's going to be a risk on strategy,
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  welling to accept whatever the downside is, or they're going to be trying to
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  be protected today and you know they're going to be allocating to higher percentages of
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  things like bonds. Okay, big caution though, So bonds can lose money
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  in five different ways. The one that we've seen so significantly this year is
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  that with all these interest rate rises that we just discuss, there's a seesaw
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  fact between the value of bonds and in the interest rate environment that we find
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  ourselves in. So this is the reason why Selicon Valley Bank went out of
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  business in two days. They had a run on the bank. They didn't
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  have to mark to the market what their true value was of their assets.
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  So they have a billion dollars of treasuries. Well, actually it's thirty to
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  forty percent less than what you thought. You just didn't have to market to
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  the market because of some obscure law that happened in two thousand and eight and
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  two thousand nine with the Dodd Frank Act. Okay, well, there's a
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  number of things that are not priced in today that we're ultimately seen. But
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  these protected assets, in my opinion, all five of these areas and reasons
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  why bonds can lose money are on the table, and that's really concerning for
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  people that are trying to be protected today. They're trying to be more conservative,
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  they're trying to allay this next whatever comes, but they also need to
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  understand that the sixty forty portfolio last year had its worst year since O eight,
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  and the reason for that is because of the challenges that interest rates bring
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  to bonds. But could you imagine our bond market here today, just one
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  year ago, when junk bonds could trade at four percent interest, we could
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  lend to junk bonds less credit worthy organizations. How can you not make it
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  at four percent? But you're somehow going to make it at ten percent today,
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  It's just not going to happen. I think we're going to see tremendous
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  defaults. I think we're going to see Chapter eleven's very specifically, which are
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  not full bankruptcies, but bankruptcies that say, hey, debtors, we make
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  commitments to you, we can pay sixty percent of that just help us to
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  reduce it. We've got a viable business who get paid something versus nothing,
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  and so that's a real big concern. So where do we go for protected
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  assets today? I have this very simple idea that also sounds pretty obscure probably
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  the most listeners, and that is a growth oriented fixed indexenuity. I can
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  tell you right now, based upon math and science, I cannot prove more
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  specifically that there is a better time in history to own a growth oriented fix
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  indexinuity than the present moment that we have right now. And what's amazing is
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  that these this insurance industry is actually growing at a faster rate this year than
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  it has in any other previous year. And so you know, I'm somebody
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  that's fallowing the trend. I'm financially agnostic. I don't care the whole goal
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  here, just like the theme of year, So it's financial survival. You
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  know, this is a journey that we're trying to get someplace, and so
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  you know, how do we ride bowls? And tame bears. Well,
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  here's the deal. We've got to be able to play defense. When it's
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  time to put defense on the field. We all know how to play offense.
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  And I hope that you know, the market could go up ten percent
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  more, that'd be nice. It probably wouldn't change most people's retirement. We
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  get to drop a thirty forty fifty percent, which is what I believe is
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  coming here in the next quarters, then you know that will definitely change people's
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  retirement. Hey, and it could very well be a buying opportunity for the
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  so called value investor if fingo she has not to infect extinct at this point.
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  Well, David, interesting thing to chew over here. Your view,
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  your take on the market certainly not what you expect from a traditional financial planning
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  outfit. Hey, tell us, how do we find you? How do
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  we connect with you on the web? Again? Sure? So, my
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  website is myspg dot com. People can follow us up. There got a
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  lot of different things going on. We do a lot of educational events.
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  You know, we work with retirees and pre retirees. So this is all
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  about making plans for the next thirty plus years. Taxes are one of the
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  most important ways that we can be doing that planning today. Do not miss
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  out on the Tax Cuts and Jobs Act. We got three D ten forties
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  to be able to file three more years of tax returns to take advantage of
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  here it so, yes, we are not traditional. We actually work on
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  behalf of the families that we represent. We're here to try to help to
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  make sure that they can ride bulls, tame bears, know what accounts of
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  what amounts are going to be drawn from in order to create the most tax
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  opp and lend complants for the rest of their life. So all right,
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  so I find us We appreciate that. And if you've got a question for
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  David myself, kl at Kerry Lutz dot com is the email address, and
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  of course you can find a link to David's site right on our site,
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  Financial Survival Network dot com in the show notes to this interview. Just click
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  through. While you're there, sign up for your free newsletter. David always
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  a pleasure, Thanks for coming on. He appreciate you. Carry, thank
• 16:33
  you, thanks for listening to carry Letts's Financial Survival Network your solution to today's
• 16:40
  trying times. For the latest, go to Financial Survival Network dot com.
• 16:45
  Financial survival Network now more than ever