Now we've got to talk a little bit about the bull case. And one of the things propping up the bull case, in my opinion, is what some surveys are showing about the allocation to equities relative to bonds and, uh, cash. Now there are two surveys we're going to look at. We're going to look at a Bank of America survey and we're also going to look at a JPM survey JPMorgan Chase Now what I think is very interesting as well.

Before I hit those surveys is there's a lot of talk right now about potentially patiently going back into markets. Barclay Starts off by suggesting that maybe you can patiently go back into markets specifically. They prefer EU stocks versus U.S equities. They're advising Care at current levels, but I Thought this paragraph here was very interesting.

The rates Equity Paradigm of last year may be changing with Equity markets now responding more to improving growth. meaning they are in a better place to cope with higher rates, right? Think about that. If growth maintains, we could get through higher here for longer. We think stocks can continue to climb in the wall of worry as sentiment slash positioning are more cautious.

Post the February consolidation, terminal rate expectations have been recalibrated to realistic levels and earnings are holding up better than feared. Oh my gosh, this is like a like this is like beautiful hopium here. like I'm I'm just getting turned on by the amount of opium this this this piece is giving me Now remember I let I cover the Bears I cover the Bulls But this is very interesting because they're making this argument that hey, if so many people are on the side, it's actually really hard for you to have a a big leg to the downside if so many people are already sitting on the side and we're calibrating to the idea of higher for longer and we're calibrating to the idea that, okay, guess what, we're gonna have higher interest rates and and as long as earnings hold up, we're happy. We just look for pricing for our stocks, we just go find our PP and then we, we, you know, ride our peepee.

We write our pricing power stocks. uh through the recession they do, uh say that, uh, look at this I'll just read this. earnings are holding up better than fear and investors who missed out on the rally have dry powder to chase the rally. Interesting, However, we're advising care there is no free lunch.

Yes, there is a lot of liquidity on the sidelines for now. Uh, Barclays is keeping a risk on bias and of course, uh, you know that while there could be a big downside, they argue quote We see little risk of a Sharp reversal in positioning given the current moderate exposure. So they're really making the argument like dude, so many people are bearish. Like you have less downside now with how many people are bearish.

Now they do argue that it looks like the Federal Reserve you turning is far off. The self self-induced recession may be the price to bring to pay to bring inflation down. Uh, and macro is certainly volatile and and unclear right now. Uh, but look at this sentiment here.

sentiment is not so complacent anymore. Uh, this is the fear greed indicator where basically lower is more fearful and you're seeing a change in Trend I Drew these little red lines here. so this circle I'm making on the left here shows you people getting more fearful. Now people are very slowly becoming less fearful.

so you got a trend over here at the same time. Global Activity rebounding. Look at this: Rebound in Global Activity 2022 straight down. Basically and now you're getting that inflection point in global activity.

Very fascinating. So this Barclays piece was phenomenal. but I want to align this Barclays piece with what I actually saw from from advisors and surveys. So we're going to do the B of A survey and then we're going to do the JPM serving.

So B of A survey. What does it tell us? cash is King Uh, what do we have for cash is King average cash allocations Rose 10 the highest in our survey history. Just 26 percent of financial advisors plan to buy stock with excess cash versus 42 last year. So in other words, you have less people interested in buying stocks right now while more people are buying bonds or staying in cash.

41 of financial advisors expect a recession starting in Q2 23 in Q3 Advisors are cautious in the near term, but they're actually bullish. In the 12-month forecast, 70 percent expect that the bear Market will end in the first half or the bear Market is already over. So even though they think either the pain is going to be over by the second half or the that you know the bear Market is already over. Despite that, they're still allocating more money to cash and sitting on the sidelines right now.

They prefer value over growth, which in my opinion, creates massive opportunities to build an allocation in growth stocks. And Tech I want to be where people are not. You know I Want to buy real estate when everybody is afraid to buy real estate I Want to buy stocks when everybody else is afraid to buy stocks. What are people most bearish on right now? Consumer discretionary real estate and Tech well, it's not.

It's way too soon to buy real estate, but I think it's a perfect time. not Financial personalized Financial advice or a guarantee for you but I think it's a fantastic time to look for pricing power stocks in the tech space and maybe certain pricing power stocks in a consumer discretionary. I think there are some by the dip opportunities in discretionary. You have to be careful though.

Yesterday we did an analysis on Amazon versus let's say Etsy For example, check out the course member livestream for more on that which remember we've got that Saint Patty sale going on link down below, which you can take advantage of to get lifetime access to those programs on building your wealth. It's the only sponsor for my uh, my channel here, so if you want to help out the channel, you want to join those course member live streams, use them as an archive. use them as something you can sort of download and watch over time. I'll play back on 2x Whatever you want to do, There's some phenomenal opportunities to get great perspectives there, and in my opinion, if you stop learning, you die so you always want to learn.

If you like my perspectives, check those I like programs out down below. There's there's definitely something there for you. Plenty of programs anyway. Bonds over stocks.

firmly Consensus Advisor Bond Allocation Rose Okay, we already talked about Advisor Bond allocation. What do we have here? Near term cost is 70. Expect the market. Okay, we talked about that already.

All right. Only 13 of financial advisors expect the US economy to avoid a recession over the next two years, so it's pretty much a foregone conclusion by financial advisors. We're going to go in a recession. Biggest tail risks, recession, and the FED Last year, we were worried about inflation.

Now we're actually not worried about inflation anymore. We're actually worried about the Central Bank just breaking something or a recession. Geopolitics are up there as well. I Think geopolitics are less of a risk I Don't see a Taiwan Invasion and while Ukraine Russia is dragging on I think that to be a little bit more of a sort of edge issue right now.

Obviously that's not to say that the loss of life is is not a problem, it is. It's something we should pay attention to. But yes, I agree that the EPS write Downs are probably the biggest issue for the market right now. and that's again why I Focus on pricing Power stocks.

I Actually think the best way to be exposed to pricing power stocks. And yes, I'm biased, but it's through a pricing power style. ETF The reason for that is if one of the pricing power stocks runs a lot, we could basically at an ETF exchange the stock that ran for reallocating or rebalancing to other stocks that are pricing power stocks without passing on capital gains. the ETF Like you pay a tiny little fee for an ETF compared to the the potential taxes you save to be able to rebalance.

you know one stock doubles and you sell half of it at a massive gain. You're paying like 30 percent in taxes in some cases instantly, depending on short-term long-term whatever. But if within the wrapper of an ETF, an active ETF manager can exchange that for a diversified basket of other pricing power stocks and pass on no capital gains to you. Because of the ETS structure, you're just holding on to the ETF ticker.

And as long as it's structured correctly, when there are plenty of gains to avoid, it's a phenomenal opportunity to avoid taxation. I mean ETFs are awesome. Uh, you know just over the last few years have I become so bullish on these? but I think this is very, very interesting. Advisors are most bullish on small caps.

I Think that's very interesting. Advisors say Tina is over Tina is. Uh, there is no alternative for stocks, right? Anyway, with the end of zero interest rate policies, stocks are no longer the only compelling asset class. I Actually think this could lead to a violent Resurgence in stocks because so many people are on the sidelines with cash.

You can see this violent entrance into stocks. Kind of like what we saw in January I Think you're going to see more of those violent up moves on the Fibonacci retracement lines. look at this: Equity allocation is sitting at the lowest levels in our survey history. Here's the Bank of America survey going back to 2017.

we're sitting at the lowest Equity allocations around 57 here where usually we're well above 60 percent. I Find that very interesting. Uh, some other charts here. look at this.

Look at this. This is a very cool one. This is Extreme bullishness for stocks which is bearish, right? and we were at that level at the end of 21. Extreme bearishness for stocks which is actually bullish for buying stocks.

You saw that sort of at the end of 2012 12 over here. so this can go very low below Trend. But look at where we sit right now. we're sitting very close to that green line over there.

So I again I Like buying when other people are fearful, right? Warren Buffett Be fearful of people are greedy. Eighty percent of clients have higher cash balance than before. Covid clients are looking to either stay in cash or buy bonds with excess cash so they're not super bullish on on stocks. However, look at this.

Financial Advisors advise cautioned in the near term, so more cash and more bonds. But in the long term, what do they advise? Bullishness on stocks? This is really fascinating my opinion. Advisors also expect the FED to be less hawkish than what the FED is pricing in. uh, some suggesting with a higher likelihood that we're already in the recession or downturn era.

Uh, this is, uh, financial advisors really expecting to see that recession Q2 Q3 I Think that could really push out to potentially Q4 But also, look at this: 2023 could be a good year for active management. Hey, we were just talking about that. Passive is crowded Bank of America saying passive Investments Are crowded right now. Active actually is not very crowded Again, potentially suggesting active ETF Management could be a good idea.

Single stock buying out of equilibrium? All right. let's now jump over to for a moment. Uh I Want to jump on into uh, the JPM survey and we got to jump on over to the course member live stream. China Reopening Somewhat positive.

Okay, this survey kind of keeps going on. but the the most important parts we've already hit: I Want to look at the JPM survey and then we're going to get to our course member live stream. Okay, ready for this: JPM survey. Uh, this is this the survey? This is.

Yeah, they're initially someone. Okay, here's the survey part. So look at this survey. What is your current Equity position or sentiment? In historical terms, Look at this.

in historical terms: most bearish zero percentile to most bullish 100 percentile. The vast majority people are sitting over here. in the 20 to 40 percentile. That's somewhere around 42 sitting over here, 18 sitting in the middle.

A much more of a bearish bias than bullish bias for stocks right now. Are you likely to increase or decrease Equity exposure over the coming days the blue line is planning to increase Equity exposure. Look how low it is. Only 30 percent expecting to increase Equity exposure in the coming days? Look at this: Which asset class do you expect to perform best over the next three months? Equities only at eight percent.

People are very bearish on equities right now. folks. that's buy time. In my opinion.

that's freaking bye bye bye time. I'm gonna do some buying today I've decided I I I'm gonna gonna do some buying today I Like buying? so uh yeah wow uh I think personally, these surveys are making it very, very clear. uh that, uh, you have a lot of, uh, excitement in my opinion. For people who are contrarians, most people are so bearish right now on this idea that this EPS recession is going to be so painful.

So what I like to do is I like to look at this these surveys and say okay, well if positioning is very bearish and people are focused on cash and bonds, then I want to be looking for pricing power opportunities because I think pricing power opportunities are going to do the best in a potential recession focusing on higher income businesses and higher income individuals. But also if people are mostly bearish right now, maybe now's that opportunity. especially leading into these, uh, this this uh era here of um, of pain as we wait for these, uh, these data sets to come in you know, jobs and CPI and that? So anyway, that's my take. Really appreciate you all being here folks.

Thanks so much and we'll see in the next one. Goodbye.