Welcome back everyone to another meet kevin show today we're bringing back ross gerber. I think ross is now officially the most popular most requested and most visited guest on the show. So we can welcome back ross gerber. Thank you so much for being here and, of course, check out the link in the description down below we've got a link to ross gerber uh's website gerberkawasaki.com, and you can learn more about the funds and products they offer up front.

This video is not sponsored all right ross welcome aboard how's it going kevin and kevin fans. You know, i have to say you're the first person i want to be on with when these things happen, because so many of your fans, a lot of them, are now our clients too, but like so many of them engage in such a positive manner. With with me, you know, i really appreciate it, you know it's. I want to reach as many people as possible and the right people - and you know the people on your channel - are just wonderful people, so you know i get like a million calls from networks when this all goes down.

You know - and it's like the first thing i want to do, is get on with you and and your viewers. So thanks for having me on again - and you know these times are hard, so you know that's why people like me have jobs or for these times actually, which was my speech this morning to the team um, and you know this is when we make our money. You know so i wanted to get on and give you guys the same advice, our clients who pay us a lot of money get and these hard times, and so you know, let's get into your questions and and what we did today and how we handle these Situations absolutely i love it. So, let's get right into it.

Then uh first question and i think it's the big elephant in the room is what happens if we get bad news out of jay pal tomorrow. We know that that we've talked about this many times on the channel that, at some point, this inflation fear is going to go away, but how much more tantrum and kicking and screaming are we going to get out of the stock market because of jerome powell? Well, first of all, jerome powell is doing his job. You know his job is really a hard one, because how we can predict the future of the economy is incredibly difficult and things are constantly changing. So the data points they were using in december that so many people are reacting to still from a fed note from december, actually has no relevance anymore to today in the economy.

We see today because so many things have changed with omicron in the last month and i think you've mentioned in a few tweets, where we have seen a slowdown in the economy in january from the pace that we had in the last quarter. Because of omicron, which is now starting to come back as omicron's fading, but there are many businesses that have been affected again, especially things like entertainment, restaurants, the same people who get hurt every time, omicron comes back and it hurts employment too, and so we see that The economy has already slowed, and now with the markets coming down and speculation coming out of the market. This is exactly what the fed wanted. Now, if you expect the unexpected from the fed, i think that's a mistake, because the fed has clearly been transparent, of what their plans are for the year and whether they raise rates three times or four times isn't relevant.

It doesn't matter because we're talking about a very, very low interest rate, so we're starting at zero and we're talking about going to one okay, and this should scare nobody. It should scare nobody. This is the best of all scenarios. Okay.

Why? Because where were we two years ago today? Okay, we were about to embark on one of the worst things. That's ever happened in american business and one of the worst experiences in in our lives for many of us um. You know i've lived through 9 11 and some other tough times, so i didn't actually think the pandemic was as hard for me as like the financial crisis which directly hit me. You know like hard, like sort of like being like a cruise line operator today, right um, so this wasn't as hard as as, let's say, the financial crisis for me, but it was certainly as hard or harder for many um, but we were but jerome powell took Steps in 2020 that created tremendous wealth for this country by printing trillions of dollars by lowering rates to zero by buying every bond and supporting everything and what he did was he created in some ways a moral hazard as we call, which is that the fed will Always back no matter when things get bad, the fed will always back the economy.

That's great news, because that was never really a given like it was in 2020. It became so so that makes stocks in a way more valuable. If you know that the fed's willing to buy any asset to protect the economy right, second or print unlimited amount, now it all worked, we had two years of forty percent gains. You know twenty twenty, the amazing amounts of money have been created and people started spending.

It like the minute they were led out of lockdown, yes, and the spending behavior became very un normal abnormal, including my own, and when i go out now, i spend twice as much money because i go out half as many times you know, and it's like i'm Ready to go right, you're drinking tequila and you know - and so so we get all this unnatural behavior happening some lockdown to then everybody out to then semi, everybody back and it's created supply chain and labor issues and inflation. But none of this is long term. It's all this short-term stuff that we're dealing with so now the fed's got to get back to a real interest rate, which is between one and two percent, on the fed funds rate and between two to three percent on the 10-year rate. So we still got more paying to go by the way.

So, if you think the rate thing is over you're wrong, we're just getting started, but what happens is the pain in the market or potentially the volatility the market's gon na from here? If you start investing today, you're gon na make money in the market this year. Okay, so we look at things like based off like valuations. So that's why we have confidence in what we buy on days like today is because we know what we think things are worth and when they become cheaper than that we become aggressive buyers so um, for example, i just spent the weekend in vegas doing research on Mgm we bought mgm today. Okay, yes, tell me more about your research ross.

Oh dude. I've been scared to go to vegas for a long time, and most people told me i'm idiot, so i'm i took a risk for the team. That's why i'm quarantined here in my house now for three days my wife won't talk to me um she thinks i i mean if i don't get corona, you know it's a miracle at this point after my weekend and and i was trying to be safe, i'm Trying to be safe, but i can't i can't tell you what's happening in vegas right now - is insane it's insanely fun yeah, it is insanely fun i mean 50 is now the minimum on every table. Betting.

We couldn't find a 25 table anywhere. Everything's packed people are out, people don't give a crap. You know these are masks in vegas man right here, yeah or not at all, i mean so they convinced me. They convinced me to go to this club because you know i'm too old to do this anymore.

I don't even like it anymore, but a lot of guys, i'm with are young and you know so. I go and i'm wearing my mask and this girl in the elevator looks at me and she's like there's no reason for you to have that on anymore. Nobody. Nobody does in here so if you're coming in here, you're wasting your time with that mask you know, and so i just like took it off and and you walk in and there's 500 kids going off, no math nothing's changed so vegas is back.

People are back america's back. This is great news. It's super bullish rates go up because the economy is great. Um people have money, people have jobs, you want a job, stop complaining, there's tons of jobs, you don't make enough money, go get another job.

There's tons of jobs, you ask for a raise you'll, get a raise. People have money, so we haven't had this in this country in a long time, in a long time, even under obama, when we recovered, we never really got the spending going. You know it was like the financial crisis kind of had this overhang of spending that lasted forever until trump trump was really. The first president who was like go, spend your money, i'm cutting taxes, it's all about.

You know business and money and people started spending money and then we locked them down and then you and you love trump. No, i hate him with like hate him he's worse than the devil, but my this show isn't about politics. This show is about making money. So trump is good for making money and that that's what he's good for, but making money at the expense of society and what's right, isn't my goal in life, but if you're talking about making money, when the republicans win the house and senate back in six months, You don't think that's super bullish for the stock market, because they're getting everything back, yeah, huge, okay, so taxes aren't going to go up.

That's hugely good news. Okay, hugely good news for the economy. That's trying to recover! You don't raise taxes. I don't care.

If you're raised on the rich or the poor, that's econ 101. taxes aren't going up. That's great news. I'm trying to find where the bad news is right now, other than a bunch of speculators, a bunch of kids buying, dogecoin and amc and all of a sudden got their asses kicked in the stock market like welcome to the world batman, it's not free money.

So these moments, you know what what do you like, so you brought up well, first of all, when last time i went to vegas freaking loved it, it was october and you're right. Nobody cares in vegas, i had green hair and i'll tell you. There is nothing like having green hair in a nightclub because you glow, so if you would have seen me in there with red hair, you would have walked out of that elevator and seen 500 people and be like who's that guy with green hair. I should have done that.

I should have done it. It is more popular than the one old guy in a mask. If you want attention in a nightclub dye, your hair neon yeah, i see i don't need attention and i'm past that stage of my life. I try to get less attention.

You know so uh. Putting that aside. I've got a a very messy set of of of notes here from the fed and right. What i want to ask you about are a couple specific things: uh, i'm not gon na like bore you by reading this to you, but the bottom line is at the bottom corner over here they talk about how they have so much more uh.

So many more bonds than they've ever had before, and so many more shorter duration, bonds than they've ever had before and so really they're. Judging that they need a significant amount of balance sheet shrinkage like right, faster than even expected, and i think it almost goes beyond. Potentially - and i want to ask you about this - goes beyond potentially rates because you've got them saying: look: we've got financial stability risks because we've got inflation, that's elevated! We still have these supply chain constraints, uh that are potentially now getting worse because of omicron yeah people are maybe you're spending shorter, short term yeah right right, short term supply chain issues, uh that are still bad and uh we've got these. We've got so much money.

We've got to offload to me this. This was one of the most bearish sets of minutes here and i'm not sure if those conditions are any different or going to be any different at the fed meeting tomorrow. Well, no, the conditions haven't changed at all, but why is it bad that the fed is being able to sell off their balance sheet like they need to do this like see? I think there's this like opinion that the fed needs to be involved for the market to go up. Okay, that's true! Okay, that's not actually how it works.

The fact that the fed is involved with making the market go up is the problem. Okay. So why do we have inflation? Well, because the fed's been buying these bonds, like i don't need the fed to buy bonds. You think there's any lack of demand for bonds right, there's plenty of demand for bonds.

They bought bonds. Today, people bought bonds on friday when the market was crashing. It was actually the first time that we've seen the bond market rally when stocks went down, because what was happening was yields were going up and stocks were going down and that's the pattern. Okay, so pe compression as yields go up, that's what happens.

That's normal kids! That's normal! That's! What's supposed to happen! Okay! So, as the cost of money goes up, the the valuations of of speculation goes down, whether it be bitcoin or whether it be tesla, okay and so p e ratios, just compress it doesn't mean, there's anything wrong with tesla or bitcoin. You see what i'm saying. Okay, so when bonds rally when markets go down, that's when people are scared and they're rebalancing and that's what we had friday. That was sort of a hint of capitulation, because you saw stocks get murdered and bonds rally so that that kind of made me think.

Okay, now they're buying bonds, because they're scared because 1.8, i think it's going to 2-5. I don't know why you buy a 1-8 bond, so the biggest risk you have right now is not stocks. It's bonds because bonds you're going to have the fed selling and you have rates going at two and a half we know rates are going to two and a half okay. So it's just history and so like.

If rates are going to two and a half and i'm holding a bunch of government securities, i'm gon na lose way more money on that than i will in the stock market. Because for rates to go two and a half the economy has to be doing. Three percent or more inflation should be running at three percent or more okay, and that's real good for earnings. That's real good for earnings! Okay! What do you think about uh uh? You know today we had a bond auction and we had a lot more foreign buying in bonds than you know.

Yeah. So what's are people just afraid of of china and emerging markets and the whole russia stuff, yeah yeah, so so we're the only game in town. So so this was my speech this morning to our team and part of my speech was that fact that china has made enormous errors with their strategy with coronavirus, and the isolationist strategy for cronovirus in the end will be a huge mistake for china. Only 10 of the flights that used to come into china from foreigners are coming in today, so 90 of foreign travel to china has been cut.

China is an isolated country now that is working very, very hard to have no cases of omicron. Now what i've learned from omnicron is there's no way to stop it. There's no way to stop this thing. It's the most efficient flu.

I have ever seen. Okay in our lives, everybody got it like right away. You know, like december january, like i was in vegas and most of the people were like we already have that actually gave me some confidence at the club because we were like probably all these people already had it. You know and the people i was with, who had just gotten omicron and got better, were partying twice as hard because they're like i can't even get it yeah.

I swear to god. I said this isn't made up and i'm like. Oh, i wish i had omicron i'd, be parting twice twice as hard, you know and i'm like i'm not to make joke of it, because i do have a very good friend in the hospital right now and i know and and andy i hope you get well And hopefully you're out of the hospital you really shouldn't be in the hospital, because you know, unfortunately, this just treats things differently to people, so i don't want to minimize the disease, but you know 99 of the people. I've talked to with this thing.

It was like very little sickness. Some one percent have been very sick. Some people, i've talked to have been sick, but most it's been nothing and and they're. Relieved they're like oh i'm, better, i'm gon na go out and party, so the fed getting rid of its balance sheet is what needs to be done like.

Why are they buying it's such a bad idea to print money and then buy your own bonds with it? Then, ultimately, you have to sell it anyways to somebody. So if if rates are 175 right now and the fed can slowly pay down this balance sheet, that is exactly what they should be doing and it's what's responsible? Okay, it's what's responsible! So a couple trillion dollars more of bonds will have to be absorbed and who's going to absorb them. It's going to be people who want to invest in china and europe who don't trust, china and europe, and they need something safe, and we know america is the safest government in the world now. So china is not investible today, if you're buying baba and tencent.

All these stocks they're it's not investable; they don't work because charlie charlie munger, you know warren buffett's right-hand person he's he's. He doubled his bet on all right scumbag. By the way, charlie munger is a scumbag write it down you're a total scumbag monger. Why don't you get out from your little high tower and come out and like deal with the real world instead of insulting people all day long? Because if you met charlie you'd realize he's actually an - and i know that for a fact, because my parents know him and and have gone to dinner with him, and i can tell you exactly the truth is he's an so i don't give a about charlie munger Or warren buffett because all they want to do is destroy the earth for profit.

So let's be real: let's be real okay, so so charlie munger's perfectly fine supporting the communist party perfectly fine with genocide, probably because he's buying stock in the companies that are supporting it. I thought that was just chamath: chalmette doesn't care about genocide at all unless it's his people? No, no! That's not. I watched it. I watched what he said, and i personally have said a few things about this - that weren't harsh enough and i got criticized as well, but to treat any genocide in a way that is somehow not important, i think, is huge, is a huge moral.

How would i say, deletion on his part, but you're talking about that and just you're talking about the guy invented facebook here, so he has no morals. What we're really saying is supporting chinese companies. Right now is supporting the chinese government directly and if you invest in baba and these companies, you are supporting oppression one way or another. Do you think that uh chamath you know playing devil's advocate meant the you know? Oh the wigru situation when he said doesn't matter so much or what whatever to that effect, do you think that meant didn't matter so much to the stock market or just he or both or no? I thought what he meant is that we all deal with a series of problems that are all important, whether it be the abuse of african americans in the united states, for example, or it could be lockdowns in europe or whatever the things that we care about, or Racism in our country and anti-semitism, that is, a nasty disease in this country.

So many of us care about the things that affect us directly much more than we care about these existential issues like the war in syria and the genocide. That's still going on in syria or our kurdish allies today, who are fighting today for america and values and have very little support from our country or our ukrainian allies, who are about to get invaded by putin and i've got little biden with his little half measures And what he needs to really go out, because let me tell you how the russians work, the russians only understand strength, they don't care about negotiations. What biden needs to do is put the you know, cia in there, and put the the palantir people in and start lacking them, because we got a few things to unwind here. So, first of all political issues, the uyghurs are a major issue that needs to be dealt with.

China's abuse not only of this group of people but every religion. To be honest, they do the same thing to the christians. You know not a lot of chinese jews, they don't believe in religion. I don't know if people understand this, there's no religion in china, there's no religion, it's communism, so the oppression of the uyghurs are because they're muslims and because they oppress religion itself and that's why the issue is bigger than the uyghurs and why we should care, because It's just flat out oppression and then they're willing to implement it in a genocidal manner.

I don't know if they're killing all these people - i don't really know, what's happening, but i know it's wrong. So you mentioned biden and his half measures. Last week, biden somewhat suggested that, even if, by or if, if putin had a a small scale, incursion biden wouldn't do anything. It was almost like this big signal to russia like just go step on me: they're gon na do it yeah and now biden is considering deploying maybe 5 000 troops.

Meanwhile, russia has 100 000 troops or more on the border of ukraine. What what is going to happen when we see a 48-hour blitzkrieg uh, you know basically, the entire ukraine get replaced. Okay, so yeah russia is much better off having a coup in ukraine. The government in ukraine is very weak and they don't have a ton of support and, if you know the history of the government, ukraine, there was this uh face-off many years ago between the russian-backed government of ukraine and the sort of freedom back government ukraine.

It was like yanovich versus yanukovych, you know there were like two leaders, one was the western-backed one and one was the russian-backed one and the russian-backed one was the one who got thrown out of town in the overthrow and they went into his house and it was Like all golden shoes and the whole bit um, and so when the russians lost their influence over ukraine um, it was a real sort of black eye for them and and they are much more interested in the influence than getting involved with the military conflict. So it certainly makes a lot more sense for them to try to overthrow the government. I believe that's probably what they're trying to do now, um similar to the trump people. Secondly, um russia doesn't have the ability, due to a blitzkrieg in the middle of winter.

Okay, if you've ever operated a russian tank in the snow, you would learn that they don't work very well, so russian equipment is very, very poorly maintained and their military has mostly relied on wars of attrition for victory. They're not known for their strategic prowess, they're known for losing lots of people to win okay, so this conflict, if they get involved with it, could be very detrimental to russia, because the ukrainians know how to fight these are not non-fighters. My relatives left ukraine over 100 years ago because these people are mean okay, so the eastern ukrainians are not nice people and they're tough as hell. So this fight is not a fight that is easy and they're entrenched and they've been doing it for a long time.

So what we're doing is what needs to be done? Is we just sent tons of weapons? We send the stinger missiles in the anti-aircraft, the anti-tank weapons, because we can knock out their tanks like super easy, and then you just send in your cia guys, like the same guys that went to afghanistan who are already there, we already have troops on the ground. Don't be confused, british special forces are already deployed and what we do is we actually hope they invade, because if they invade, we can kick the out of them one day at a time and it's a hugely costly venture for putin that could cost him his his Power because they don't have a lot of money, that's why oil is 85 a barrel, so invading ukraine is much higher risk to poot than it is to the west. If we lose ukraine, it really doesn't mean anything to us. Okay, but russia could have bogged down in a war that could be incredibly costly to them.

If, and so i don't see putting five thousand troops in the ground as any, and that's that's a bad idea. Actually, i i think what we already are doing is what we need to do. Is you create a guerrilla war just like afghanistan and they have nightmares every day over afghanistan? So eastern ukraine is like a modern afghanistan and if they want to get into it, they're going to be messed, but we should make it very clear to russia that we intend on fighting them uh and do you think biden has not made that very clear and Led to some uncertainty, the market biden is one of the worst democratic presidents. I've seen in my lifetime.

He's he's like if dukakis would have won, i'm so disappointed with the democrats right now, i'm a democrat. Well, actually, i'm not! I i gave up the party this year because i decided that they don't represent what i thought they should represent. Yeah yeah. I don't, i don't believe in the progressive agenda.

I don't believe in the progressive agenda. I think it's a regressive agenda. I think that we are handing our government over to the right wing, because they're so incompetent and a liberal set of ideas that make sense for this country would easily win out. But instead we've moved into a bunch of policies and belief systems that only a very few people believe in and that's socialism or the progressive or regressive belief system aoc in the in the goofballs.

So that's really bad for this country and and it's putting in power people it will put in power people that have not the same moral direction as me, but i think ultimately will be better for the economy. You know and better for the country. So you know it's probably bad when, when joe biden has to say on a two-hour q, a with media, i am not bernie sanders right right and, and he and i think politics is always this balance between like trying to make all these different groups happy with Certain amount of them being unhappy and you have to have um some sort of uh like a political litmus test that you're willing to like this is where i stand, you know. So, where does biden really stand, and i don't know like because he's not you know saying this is what i think is right.

You know so whether it's like cannabis reform, which is an easy way to have a progressive win and let african americans out of prison and everybody's happy nobody's against cannabis reform, and we don't have a bill. We don't have anything, you got nothing. If i don't want to win an election, why don't you give us free legal weed? Okay, legal weed alone would be a huge boost for the democrats and they're so stupid. They can't even do that.

Then they get scammed by cinema and mansion, pretending that they're democrats and we all know they're not so pretending you have an equal majority or a majority in the senate. When you don't have served them, nothing, yeah, no, okay, so they don't have a majority in the senate. They just don't and they have to accept this and make a bipartisan bill. They need to start thinking like instead of taxing everybody, so much.

Why? How do we do something that both parties are going to agree to because we're not going to pass anything otherwise, so you start with climate, because everybody can agree with that. You start with cannabis. Everybody can agree with that. You start with some sort of infrastructure, but the giving away free money to everybody is over yeah.

You can go get a job. To be honest with you, i as much as i care for people, and i have sympathy for people who are in need. I have never seen the demand for labor in this country like it is right now. I have never, in my life, seen the demand for labor that we have today in this country.

How now just a a few minutes ago, you mentioned that uh we should send in the cia, with with talent here uh and now you some people have gotten a little upset, because i don't know what you said. Apparently, i'm not going to talk about something about palantir i'd love to just have an open dialogue about it, because some people are upset with me too, and i haven't getting it all out. There is a good thing ross what i said. No, it's not a good thing! I'll! Tell you why? Because there's two things one! I want to make it perfectly clear: i'm an american and i'm pro-america.

Okay, i'm a patriot, okay, my parents, my grandparents, have served this country in the military. My dad is the longest serving member of the california guard, he's 85 years old, he's still serving he's the chief medical officer, i believe, in a strong military i i believe very much in the american military and our power. So i don't want anybody here to think that i'm some sort of like julia assange, loving liberal i hate snowden, for example, okay - and i don't, i think, the wikileaks people are traders, okay. So i want to start off by saying from a perspective of i support american uh strength, but i do not think we should be outsourcing our cia activities to a private company.

Now i don't want to go into it any more than that because they attack me and they attack me viciously again after my last comments. Okay, but that's the way this world works and if you want to know some of the that you don't really want to know, so i can't talk about it. I literally just can't talk about it. It's just not worth putting my family at risk.

So wow, that's my thing. So that's we'll leave it on that one! Okay! So then let's go to jobs. So uh look, i think the last time we talked uh, i don't know - or maybe i tweeted it. I can't remember the last time we talked around that time.

I talked about how automation companies, who, which are companies trying to make robots to replace employees, can't find employees for work right at some point, though, the expectations for pay will stop, and businesses will stop hiring and we'll get back to a normal level. Right when, when is that coming, when are we getting to normal wage growth, so it's kind of what's happening in my company, so you go through this period of like everybody gets the raise right because everybody's making more money, but then they're going to come back next Year and we're going to be like look, we gave you a big raise last year, so it's in a year in a year: okay, so, okay, okay, the next year, you'll, see normalization and you'll, also see a lot of the sort of benefits have dropped off and That that excess spending that we got from the penta benefits that people had saved, plus the market gains that they had remember, there's also a health effect, and so a lot of young people felt wealthy because their bitcoin gains and their stock market gains. So they got their stimis, they put it in robin hood, they tripled their money and their two grand was now 10 grand and they started spending more money. Yes, okay and that's a real thing when the public is investing, there was really no wealth effect for a long time, because obama like people weren't in the obama bull market - you know, but but they were they got in under the sort of trouble market and and They really got into the last pandemic: bull market right and so, like people were like spending money they didn't have like.

You saw the tick tock videos of like the dudes, with the lambo and they're like 25 and they're, like i'm a trader, here's all my screens and here's my lambo and here's my day and i'm like you know, zero percent of your day involves beating anything. Oh, my god of your day, involved doing an actual research on the stock. You know you know, which is where i spend about 80 percent of my time, is i'm going through the nooks and cranny mgm, i'm looking through the dumpsters, because i want to see how business is i'm going on the app, because i can't use the app here. I'm trying you know: gambling apps are much more complicated than i realized, like the whole gam online gambling thing, because why? Because draftkings in california it's like freaking, impossible man draftkings, wasn't that hard? Actually relative to you, can't even use the other app.

I got left behind. Yeah, it's not too bad right. No but but mgm like just bought cosmo, and we were at the cosmopolitan and cosmo's one of the best properties on the strip by far, and it was a huge score to get cosmo and they're going to be able to now upgrade operations and gather all this Data on the younger generation for the mgm app and like the the sportsbook operation at cosmo's decent, but it needs to be modernized and what they've done in the mgm hotels, which is kind of crazy, is like when you go into the sportsbook. Now like you.

Just can use the app you don't have to like bet at the desk. You know like you used to go up to the desk. There was nobody even at the desk, and it was like a sign. It was like just download the app you know, and so you like sit there and you bet on your app and you're in this great sports book.

But i was sitting here thinking the leverage that a company like mgm has with their lists and their and their clients and the casinos. You know it's such a huge advantage over draftkings, where it's like sort of like i sign up, i lose and i move on, but with mgm you go to the hotels you go to the shows you go to dinner, it all comes in with the app and All your credits so you're like dumb. If you go to vegas not to use the bet, mgm app, because you get all the credits for your mgm, which is like all the good hotels in vegas, you know so then in vegas you have the win, which is the other wonderful properties that are in Vegas are the wind, but it's poorly managed since steve wynn was kicked out so and the wind has half their business in macau which isn't coming back that anytime soon. You know it's going to take some time, and so win is a little bit hobbled um venetian.

They just lost their founder and ceo died of old age, sheldon adelson who's like the grandfather of vegas. They don't also have great management and they're really levered to conventions which is going to take more time to come back. But mgm is now in the prime position and they just shed all their casino ownerships for cash, so they've got cash and they've got this app and now the business is growing like and it's just going to keep growing and growing as the conventions come back. But what hit me in vegas this time is that companies, because of the hybrid workplace, are going to have to rely on conventions and meet meetings and get togethers to build culture, and vegas is a great place to do that in central and america, and so as As coveted ends, more and more companies are going to immediately book conventions and events in vegas for their teams and for their customers, because it's the best place to get people together and the easiest place to get people together and build culture.

And that's going to be the biggest challenge that companies face in the hybrid workspace is building culture, and that's where these conventions, i think, are going to become very, very important for companies. And it's going to be a big win for vegas over the next five years. As it recovers, so vegas is in the early stages of the recovery now, but what we've seen are incredibly encouraging, so mgm hit 50. Now it's 42 is up today all day.

Actually it didn't decline at all today and um. I i like super bullish. I was a buyer today i was really happy with i see management's excellent. Do you think you would ever move your operation to like florida or vegas for those benefits? Well, my operation is irrelevant to my family.

You know the hardest part would be my family because and first of all i'll never move to florida i'll, never move to florida, my entire life, i don't care what happens? Okay, uh yeah! I don't like john desantis come on. Man he's the worst i like nikki, though nikki is running against him. Nikki freed for governor um, and i like florida in general, but i'm not raising my kids in that state no way no way. It's not the values that i live by and i'm not trying to make a judgment like i'm fine with the values that florida people have they're, not my values, but i'm not judging them.

Okay, but my values are much more represented here in southern california. The things i believe you know - and so i want my kids to to grow up in that world um. Secondly, um i don't believe in moving places for taxes, okay, okay, i think life is too short to sit around in a place. You don't want to really live in just to save some money.

That makes sense. You know not in that world. Like i live where i want to live, i don't care that makes sense. So now here's a question for you on the market.

Personal savings are back to 2019 levels. We are 66 higher in stock market margin today than where we were in january of 2020 before the pandemic, so savings are down. Margin is way up uh. At the same time now the federal reserve of new york this morning released a study and they said our latest survey indicates that people are spending more money on essentials and, as a result, less money on non-essentials because they have less money for non-essential.

So non-essentials would be like are buying a new iphone or ipad or computer or refrigerator or whatever right, but they're spending more money on gas and food because of inflation. How much do you think that's going to weigh on the fomc over the next two days? I mean that's the stats straight from the fed today, so data gathering at the fed is not accurate. Okay government statistics are not accurate. We use zero percent of them.

Okay, what the hell do they know what people are really doing? Okay, they just look at numbers. They don't actually like survey people, i don't think right, they're, just looking at numbers, they're saying, look at the spending's gone up here and the spending's gone down here, and this is that and that okay now most people, of course, are spending more money on food and Gas, okay, but they're, also making more money and they've got stimulus checks. So the question is: is our wages, outpacing inflation and the answer is yes? In most cases? Okay, the answer is yes actually. So if you look at how much i would say, wages have gone up for especially service type jobs anywhere from 10 to 20 percent, okay, which is what's really kind of driving.

The inflation, too, is actually wage growth, okay, because that makes it more expensive to buy food when the waiters get paid more. So you know what we're seeing a lot of the inflationary pressures coming from energy and that's completely manipulable down okay. So this is what i keep telling people. Actually my inflation rate hasn't gone up at all.

Why? Because i have a tesla okay, i don't my gas prices haven't gone up. My transportation costs haven't gone up. What cost of mine have actually gone up right? Food? A little bit of food, but you know it's gas. It's used.

Car prices, it's energy, it's transportation! So it's like when you're shipping ship it's more expensive but for the most part most of the inflation's been absorbed by the companies themselves and they haven't really raised prices and you're, seeing that in margins with several of the companies that have reported already, you know it's Like maybe margins are a little tighter in some of these companies because they they're paying more for shipping, for example, but they're not really passing it on my wife deals with this with her company wildling.com, it's a beauty company. She she does a lot of shipping from china back and forth and the whole thing and that's been hard and more expensive, but she hasn't changed the price of her actual product and her sales are off the charts. You know so they make a little less margin, but you get a lot more sales. You add up with that more money and that's what i think we're going to see this quarter and they'll all complain about supply, chain issues and all say this or that and and s p profit margins actually reached a all-time high.

I think it was two quarters ago, and then last quarter was a close second right, so actually margins are bigger than ever before. Why technology adoption technology adoption. So a lot of companies like let's say the restaurant industry are using this wonderful product called toast. Toast is a public company and it is a very good company.

Are you buying it? No because it doesn't have earnings and you can't buy stocks that don't have earnings in a rising interest rate environments, so write this down. Kids write that down. That's a good one! Okay, rising interest rate environment means that stocks without earnings can go down all the way down to 20. okay.

So i have this theory that stocks without earnings are all worth 20 dollars. Okay, what about rocky well in this case they're even worse, but i told everybody that from the beginning that buying robin hood stock was like basically the dumbest thing you could ever do you've. That's i don't even take credit for that. That was too obvious.

You know um yeah, but um, but so like. I think investors need to look at their portfolio because so this is the second part of my meeting. What do you own? How well do you know what you own see i own tesla and i know tesla's gon na blow out numbers all year. I know it.

No. My estimates are anywhere close to 15 a share and, if that, if they hit 15 a share this year and it's trading at 8.50, like it was this morning - that's like 50 times earnings or something that's such a buy and we picked some up. I haven't really aggressively bought tesla in a while. What do you make of kathy's saying, hey, buddy kathy is done.

She's done, she lost the mojo. Like i don't know, what's wrong with her. I i feel like we were so in touch with each other like during. Like 17 and 18, and all of our ideas, even through 20, like lined up and then like, they had so much success, and we did too, you know with tesla and our tech picks, especially at 20.

You know like we killed it in 20, like she did. Okay and when 21 rolled around, like we just looked at the world differently, because it was opening up zoom, wasn't that attractive anymore, not because it's i don't use it every day, it's because of the valuation you know now: zoom starting to get cheap at 40 times. Earnings right, but like loading up on the way down in tech stocks that aren't working, isn't the way i manage money got it. So what happens? Is you have to understand that your mindset has to have flexibility when it's not working for you? You know, like some things, might not be working for me at certain points of time and it's happened to me too.

Don't worry, i'm not perfect. I've had these moments, but i got a team of people who yell and call me idiot and like that, and i don't know if her team says that to her i don't know people trust me. My team says things to me that other people might fire those people, okay, interesting, so in other words, i actually encourage it now. Last time you were on, you were talking about this like battlefield mentality, that y'all have where y'all shouting at each other, like maybe that titanic just hit the iceberg and everybody's like you're, saying that's a good thing.

Yeah today was no today was leadership day. Today was the day we get to do what we like to do: that's when panic's in the air and shits down 10, and that's when we get to play so this morning we were like put on the helmets, guys we're landing on the beach we're buying today And people are like really and i go. I don't want to hear anything from you guys, i'm not saying but by the farm but we're buying stocks today. So i want you to get on the your computers, the minute this meeting's over and start buying stocks.

Okay, that was hugely profitable day for us from that perspective, not that we took a huge bet because we're not market timers, but when we know when the people are scared, the most when i'm getting calls that kevin sold all his stocks, i'm a buyer. That's awesome because that's what's good, we'll take your stock cheap corporation there, i'm not going anywhere. You know so i'll, be here in 10 years, i'll be on your show, i'm not going anywhere either right. So what uh? How much more pain do we have uh going forward? Because that's a big question see a lot you're suggesting we've got a lot of pain going forward.

You were in a different position than i in that you're a fund manager, so you've got to take care of all the clients. It doesn't make sense for people who have portfolios to try to day trade that right that that makes zero sense at all. Like we don't fund manager, trades you're, saying i can day trade it. The only difference between me - and you is - i know i can't do it right, so we do no.

We we do dollar cost averaging. So yes, like we buy every debt for my entire life. Now now i'm 50, so i started buying dips. When i was about 16, okay, the first big dip was 87..

I remember that yeah people were jumping out of buildings, they literally jumped out of buildings. It fell 40 in two days, or it was like one day in a kind of rally back and then the third day, another 20, so it was 20 a little bit and then 20 percent and you were down 40 yeah. Okay, people jumped out of buildings and the market recovered by the end of the year. Oh yeah, oh yeah, you know 87 was an up year.

Most people don't realize that yeah, because before 87 the market had doubled in a year. So people just don't remember that you made 100 a year and then it drops 40 percent and you're like oh, oh rally's, back and 87 was like an up three or four percent a year, as i recall so yeah. It was like all this machinations and if you just didn't do anything, it was a decent year and that's one of the things we've learned the most. In my experience, investing is sometimes doing.

Nothing is just the best thing just turn off. That's so funny. You say that yeah, that's it's funny. You say that on on saturday, i made my video talking about why personally selling was the right decision.

It was the right decision for me, but i mentioned in that look at first of all, if you're passive investor buying the dip is the best thing to do just buy your your funds or whatever and and move on uh. But another thing that i mentioned is the other honestly, sometimes best thing to do is just do nothing, walk away from your portfolio. Don't look at your portfolio, i didn't look at it. You can't get freaked out by it.

You know yeah. I don't look at anything. Yeah me personally: hey you know what i'm doing a little bit of a trade i like it. I had a put on friday.

I closed it. Today i made half a million dollars and i didn't lose three million dollars. You know so like that. That doesn't mean i'm going to be net up.

I've got taxes to deal with. Who cares? I could have been upside down making that trade right, there's trading and there's investing, and i think it's important and they're very, very different and that's what's so important for folks to remember, is if they're, a long-term investor, don't don't trade, this crap, if you're a trader, Then trade but separate those two people we have. I have like a separate account like so like. Most of my investments are just investments, and that's done very well for me because one of the things i've tracked over my life, which you might not like this stat - is that the more you trade, the less money you make.

You are right. So absolutely i'm a very strategic trader yeah, you know so, like you know, when i do trade i want to. I kind of take big swings at stuff and that's just like a part of my portfolio, but the majority of the money. I have i'm not doing anything with because, like i own tesla, the only thing i care about is how well tesla's doing if the stock goes down this much, i actually bought some for myself.

Personally, i haven't done that in so long, but at under 900. It's just masked to me: look it's math right, are you uh buying or i'm sorry are you selling puts to try to get in on these positions? Are you just trying to buy shares? No so one of the things i found in my life as well, and if you have a lot of time to mess around with options all day and try to make a little bit extra money with those things. I i'm not trying to discourage you from doing that, but when you manage over two billion dollars and thousands of accounts, your most important strategy is efficiency like what's efficient, to do and not sitting there with options, not that it's just like. Do i like the stock? I don't like the stock like i can buy, sell, puts against it and maybe save a few bucks, but maybe not because there's a there's, a relationship between the risk and reward and, of course, it's usually pretty asymmetric.

So like you're, not really outsmarting anybody. You know, like you, guys, understand what i mean by like options. Pricing is very accurate to risk and reward so when you're right on an option, you're actually really smart, because it's really rigged against you. It's really rigged against you.

You've got time and and direction working against you, okay, so like selling calls we've talked about this on your show. Is the easiest trade in mind weekly you like yeah, like selling the weekly calls, you know or yeah, not right now, don't do that right now because mark. Oh, thank you for saying that yeah. Thank you for saying that don't sell calls at the bottom! No! No! No, no, no, you know if if powell does what he did in 18 and he goes out and says, don't worry, i'm not going to kill the economy on wednesday we're going to get a 5 7 day instantly, yeah, yes, and then, when it happens, so he Might not do it, i'm not saying he's going to do it but like he could easily make the market go up five to seven percent on wednesday, and i'm not betting on that.

So i want. I don't want any. So what i do in these times is not try to bet what's going to happen next, what i do is, i go back to work and i go what is tesla going to earn this year now, gary's telling me they could do 14 or 15 dollars a Share this year we had them at 10 12.. I was working around 10.

well if they can do 14 and any way you look at it. The stock would be over a thousand said 900., so you got to buy okay, you got stocks like nvidia that typically trade at 50 times, earnings that are still kind of expensive, but are growing really really fast, and then you've got stocks that are just dirt. Cheap stocks that just don't make any sense like this full gin, genetics i own it's like a coronavirus, testing company. It's a small cap, it's gotten hammered it trades at two times earnings or something it's insane.

Something is wrong here. This stock is worth way more. Look at moderna you'd think that coronavirus was a bad thing for moderna it trades at like six times earnings. I think it's cr, i don't get it look at lennar.

It trades at seven times earnings, so there's plenty of low pe stuff. You can buy that make! No sense that could easily make you some good money and then your high p e no earning stocks are what you have the most risk. It's just like that sort of market, whatever kathy's buying, has the most risk. Oh so so let me ask you this: let's just say you had a portfolio because you've been smitten with with kathy wood over the last couple years.

You believe maybe there's a chance of innovative deflation. Whatever uh. Let's say you have a portfolio and it is, it is 10 kathy woody in stocks. It's it's t-doc.

I don't know, i don't think she owns lemonade, but it's like the laminator. I like it, it's all profitable. What do you do? You sell it? You sell it. Okay, now is that paper handing, or is that rebalancing rebalancing, i'm not saying, sell stocks and get out of stocks? You just got to accept where the market's going.

So, where does the market go in a rising interest rate environment? You can just look it up in history: okay, there's plenty of rising interest rate environments. I've lived through, and i can tell you exactly what does well, it's financials and healthcare. Those tend to be the areas that are not the financials get the advantage and you know so. How does it work so we added schwab to my fund gk and we're adding schwab right now, as our financial schwab is a broker dealer and they manage money for lots of people.

They don't charge commissions how they make their money is on their cash balances that people hold in their accounts like right now, we've raised cash, so we have tons of money, millions of dollars in cash at schwab and lpl. Now these firms don't pay any interest on cash. We have to move it into money, markets or bond funds. Now, unfortunately, bond funds are the worst investment.

You can make right now: okay, so right back down to in a rising interest rate environment. There is no safety in the bond market, so you have to hold cash. You just got ta hold cash, it's the only thing that works okay, so maybe so i bought some of these. Like uh.

It's t, i think it's tdt. It's like the one to three-year tips. You know like short-term stuff like jpst, which is like the jp morgan short-term fund earns like one percent, but any anything, that's not hedged to higher rates and it's a bond you're going to lose for sure.