Now we've got to talk to a bear's perspective because every day I give my perspective I Like to see what people are saying on the other side and keep in mind I've been very, very clear. I'm bearish on Staples I'm bearish on oil I'm bearish on quite a few things. Things that have that did well in 22 I Don't think are going to do well in 23 I'm looking for pricing Power value High Freight Cash Flow High Pricing Power Energy chips Uh Automotive Autonomy Robotics, right? But it has to be high free cash flow. That's what I'm looking for I'm also of the believer that we're in this: Nike Swoosh Recovery.

It's going to be very long. It's going to take longer than we expected, it's going to be very volatile. but I think we're on a slow Trend up where maybe by the dip makes sense again and I think the real estate market is going to bottom probably six to 12 months after the real estate or the the stock market. So in other words, More Pain still ahead for the real estate market.

so a bearish on real estate as well and real estate related services. but I'm bullish on certain stocks. Uh, and so let's and I'm also bullish on this idea that we're not going to see a Paul Volcker. I Do think rates will probably have to go a little higher than we expected for longer than we expect.

but I don't see a Paul Volcker. But let's listen to what Sam Zell has to say because he has some opinions about this potential recession we're facing and I'd like to add my commentary because that's what I do sell up Equity Group Investments joins me here at post nine. It's good to see you. good to see you Sarah So there has been a bit of a rethink in the markets about recession.

Is that something you still expect? I I haven't gone through that rethinking I negative is the wrong word. but when you spread out free money for years at a time, uh, you create, you know significant drag and uh, I just don't see how we're going to avoid a Slowdown as that whole process comes to an end. Yeah, and I want to be very clear about this? Well, he's making the argument that look, we're likely to see a recession like how do you? How do you not see a recession to get rid of this inflation, right? And I think this is where it's important, where you have to make your own analysis. Remember: I run on the actively managed ETF I sell courses on building your wealth.

We happen to have a flash sale going on right now I Am a licensed financial advisor, but this is not personalized. Financial advice for you I Think you need to look at the markets and you need to ask yourself there are two things there, really two ways we we go to to primary ways we go. Way number one that we go is basically even if inflation comes down, it ends up coming back up. and then we end up having to get Pved which is Paul Volckert Jerome Powell becomes the version of the early 80s where he raises interest rates to 10 15 20.

Absolutely pushes the economy into a devastating recession and everything's horrible. That is Method Number one. Potential number one. Potential Number two is we don't get a Paul Volcker, but maybe you get like a shallow recession.

Okay, so so if this is GDP right here you get a slightly negative GDP Staples Get hit the worst. Uh, the stock market starts basically pricing through that recession and through that slower growth. It's like, okay, Nvidia's earnings are flat. Does that mean we think Nvidia's growth is gone for the next decade? Of course not.

Means we had some pull forward. We go through some flat, we go through a little period of negative, and then we're fine again. Those are the two trains of thought right now and you have to ask yourself which train are you on? Are you on train one or train two and you probably allocate accordingly. Okay, you probably.

If you're on train two, you're looking at high pricing power companies High Free cash flow. If you're on train one, you're in bonds and cash. Uh, you know, if you're in the middle then you have a mixed portfolio. You know that's the way to look at it right now.

Let's keep going. Well I Guess the the idea would be that the FED would get really lucky and engineer a soft Landing here because the data's strong, the labor market is super tight, and inflation is starting to come down. Yeah, but is is the definition of coming down going from nine to six? Yes, and then it has further to go well. But the point is, six six is still very problem.

Yeah, and you know, so you think the Fed's gonna have to do even more than the market expect I Think that, um, you know I think the Feds screwed up by allowing it to the the zero interest rates to go on for not only the negative zero interest rates going on, but the fact that they were still printing money, Quantitative Easing was still happening when inflation was six percent in March of 2022.. how stupid is that? Fed did make a big mistake. He's right for too long. Uh, I think we're just beginning to pay the price for that and uh I You know it'd be nice to say that it'd be great if the FED got lucky.

Uh, this video is sponsored by the Programs on Building Your wealth linked down below and the experience to Shadow me. If you'd like to do that in person, check out all of that link down below. You get lifetime access to all of the content, the course member live streams, and new information that's regularly added. I've been around for 50 years and I've never seen the FED get lucky.

Uh, he's making the argument here that can the FED actually engineer a soft landing and pull off getting rid of inflation? Uh, this would essentially make Jerome Powell a God if he could pull off a soft Landing No recession, a no mass unemployment and somehow prices go back to stable. Good luck. Uh, that there are indicators that could be happening I happen to lean towards the idea that that could actually happen Or we get that soft recession. shallow recession.

Uh, and and the stock market price is through that. Now who knows. Maybe that's Goldilocks a fairy tale or hopium. But let's keep going team.

The FED do is is mistake in terms of not acting fast enough. So how do you? How do you take that view and prepare some of your companies and your portfolios for that eventual outcome. I Think you basically do two things at the same time. One, you prepare for higher interest rates and higher costs and then at the same time.

uh, you also prepare for dealing with inflation. So a year and a half ago we went to our companies and said, hard to imagine we're not going to have significant inflation and we need to prepare for it, not respond to it. So in effect we reached out and and changed the number of our policies to prepare our companies for escalating costs. Are you now preparing for disinflation? Are you? You're just not convinced that No.

I I You know I You know preparing for disinflation would be a very optimistic thing to do at this point. I Think it's going to take a while for you know, the inflation pressures to ease and I think that's that's that's that's that's what we have to look forward. Sounds like you think the stock market may be a little too excited about this notion that inflation is coming down. It has a long track record of being too excited about everything he's He's also not wrong about that, right? It's easy to be too optimistic about what's happening in the market.

Uh, and yes, for those of you in the comments wondering yes, this is live But anyway, Uh, yeah. so so this is. this is really interesting. Uh, now prepping for higher rates for longer? That's In Fairness where we look at this and go.

Do we really believe that the real estate market is going to go back to two or three percent interest rates on a 30-year fixed uh rate quickly? No. and the longer it stays High the more pain comes to the real estate market. Is it possible that the stock market sees through it? Yes, but only if the stock market does not believe that number one is going to happen if the stock market removed if right now somebody went to you and said I guarantee you Scenario Number One is not going to happen like Jesus Christ himself came down and said World fear not there will not be another Paul vulcram I could I would bet a lot of money that the stock market would Skyrocket And that's because the stock market is not afraid of number two. The stock market is afraid of number One.

My belief? Let's keep going. Uh, both negative and positive. and uh, I think you know when the stock market reflected the fact that interest rates were going up and inflation was a problem. Uh, it was a little slow to pick that up.

uh and then at the first opportunity the stock market has gone and flipped and said oh, everything is wonderful and we're gonna have a soft Landing I think both those extremes are unsupportable. What about real estate? Which is a big business for you, It's it's what you're known for. how how much how much is real estate off the lows if at all because we have seen mortgage rates come down? Yeah, but you know. think about the fact that you know, uh, if you had bought a house in January or February or you know last November your your mortgage rate would have been two and today it's six.

Yeah, uh, that's still high. That's a pretty staggering jump and a relatively short period of time. And I think there's just going to be uh, you know I I think the real estate industry as a whole Uh is got to deal with both loans and all kinds of things that were the result of very, very low. Unrealistically low across the capital.

Yeah, yeah. So essentially he's making the argument here like Hey Look, you're still going to see prices decline, which reiterates what the Federal Reserve says in their Fomc minutes where literally, in the Fomc minutes they say and I'll show you the summary first and I'll show you my citation. They literally say real estate has the potential for large declines. This was just said yesterday, just released yesterday.

Real Estate has the potential for large declines. Valuations remain high, and then when they talk about stocks, they say the Spy is just slightly. Well, it's above its median. Trend Uh, which I think is propped up by Staples right? So look, this is important.

Here's the citation for that so you can read it yourself. You could take a screenshot out right there yourself. Look, I do my best to provide as much value as possible every single day if you want to take advantage of the flash sale for the programs on building your wealth. I'd Love to see you in the course member live streams.

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