Such nonsense. I Really despise this debt ceiling stuff. We deal with this debt ceiling crap I Feel like every year and it's just such nonsense because it's it. Just politicians wanting to make sure that they that that America knows they're fighting, uh to do the best for.

You know what people believe they want their politicians to do and uh, unfortunately. uh, that, uh, that means uh, you end up having this, uh, uh, brinksmanship and uh, populism and that finger pointing and name calling and it's it. I I I Don't know to some extent I Feel conflicted because our founding fathers wanted, uh, there to be gridlock. But then we've also walked ourselves into situations where gridlock sucks.

Like when it comes to having a literal debt ceiling. where which is stupid because it's like authorizing payments twice. Uh, it's it. It's really, really dumb.

If you think about it, it's like, what's the point of passing a bill? uh, agreeing to spend money if you're just going to end up holding it up in debt ceiling negotiations in the future? Just it. Really? it. It blows my mind. Uh, but uh, you know that's uh, that's what we have to deal with.

So here we are now. I mean I Really believe that nobody is dumb enough to actually let the uh, uh, the United States economy uh, tank so badly by letting a default occur. But then again, you know I've seen some pretty stupid things in politics. so I suppose I won't let myself be too terribly surprised.

but um, let's just say I'm I'm uh I'll continue to be hopeful. uh I continue to think this is uh, nonsense. the debt ceiling nonsense I I put the odds at default at well under one percent uh I I know that would be pretty wild if we, you know we ended up defaulting but it just it seems so, uh, widely impossible that that I just I can't I can't see a reason why it would happen Beyond Just again, this nonsensical breaks a political brinksmanship. I think there'd be plenty of uh ways the treasury just ends up figuring out how to you know, stop making payments for for a little bit on things that don't matter like they did in 2011.

then you get a big media spectacle and poop show. uh if you don't remember 2011 basically in 2011 the uh uh, the government stopped paying like TSA agents and park Reps for a while and everybody was freaking out because this this idea was like wow man like seriously government, you can't even pay TSA agents like this is ridiculous. This is a joke and it was so embarrassing that we had Parks basically fenced off. you know National well like uh, you know, federally guarded Parks uh like the Washington monuments or or whatever that uh uh, that uh, politicians finally figured it out.

Uh but uh, you know the good news is the stock market is actually doing surprisingly well in the face of all of this. and in my opinion, that's well. I mean I don't think I need to say the the b word I think I've already been pretty dang. Clearly bullish for you know I think I was a little early with the bullishness but I think the Nike Swoosh has been something I've been very consistent with uh and and people have regularly been asking you know since since really December and and uh in January uh and otherwise as as yields have been high, people have been asking well Kevin you know why bother being in stocks I can make five percent on you know, my cash and it's true.

You can. you can make five percent. You know you go to various different platforms I've actually resisted talking about where to place your cash to get yield. uh, you know whether that's uh uh like I mean I've I've briefly mentioned it in in sort of just lists like oh, you know you can go to Robinhood so far or you go to uh, you know what, Whatever, it doesn't doesn't really matter.

but I've resisted wanting to really make videos about this or or try to encourage people investing in a way that, uh, they're trying to get just cash yield. Mostly because when cash yields are high, you have to consider that you're not really earning five percent, right? So you get a five percent yield at say, wealth front. What are you actually getting? Well, you're getting a real return, Maybe in the neighborhood of zero percent, right? when we could when we factor out inflation. Uh, but beyond that, what are you actually looking at? Well, you're looking at.

Let's let's assume Nation doesn't matter to your cash, right? So how could inflation not matter? Your cash? What do you mean Kevin We've been talking about this for a year and a half on the channel. Inflation doesn't matter to your cash if you're applying assets that are going down in value. I Don't I Personally, if I have you know a household food budget? Yeah, inflation's going to make that household food budget go up. But if food represents I don't know one percent of our household budget then and 99 of my budget isn't affected by inflation.

Because let's say it's going into investing in assets like stocks or real estate or whatever. Then if those values go down, then my cash actually becomes more valuable in an inflationary time, not less. But ignore inflation for a moment completely. And let's think to ourselves, if inflation is zero and we're getting a five percent cash yield, what is the other risk we face with our cash And this is something Regularly people on the uh, you know, my courses have been asking me people and uh on the channel I've been asking Kevin why why not just put all my money in on five percent cash or treasuries And the the real reality that I I think is so quickly missed is this phrase I Know everyone here has heard before.

Everybody's heard it before. It should come as no surprise. And so if you're surprised by what I'm about to say in terms of why you're able to get this this yield uh, that uh that everyone's excited about, well, it should come as no surprise. Uh, and that is opportunity cost.

What's your opportunity cost? Well, since January 1st your opportunity cost of being in cash as opposed to the S P 500 has been 10 percent. That means your Opera like you have earned 10 on stocks since the beginning of the year. and uh, the year is not even over. Which means hey, wait a minute.

If we continued at this level, your opportunity costs for a year of the S P 500 could be 20 right now. Of course, with stocks, there's always the risk of the market going down. right? That's that's that's the downside. Uh, if you're on the right of stocks, of course there's a risk of Market going down.

Uh, and then you could actually have a negative return on your money. But you know? Look for example, at Um two two responses to that. First of all, I Want to quickly bring up the NASDAQ The NASDAQ 100 top 100 technology companies in America is up 27.6 year-to-date That's insane. So you know if you're excited about earning five percent.

Congratulations In this time, let's see, we're five. Uh yeah, we're about a full five months into the year, right? So we're about 41 of the way in the year 41.6 into the year. Uh, let's multiply that by your five percent yield. So so far out of five percent annual yield, you've earned 2 percent all the way through May 23rd.

So you've earned two percent the S P's return 10 The Nasdaqs Returned 27 percent. That's what opportunity cost looks like Now yes. Is it possible stocks can go down? Of course it's possible, especially since they've already done so well. But something to remember is.

and this is the beautiful thing about owning stocks. The problem with Uh options, for example, is you have faded a K, You get slowly bled out. Uh, Unless of course you're a seller of options. which is is generally the way to make money with options.

You sell options and you become, uh, someone who profits off of that. Theta Decay But anyway, if you're holding stock, you don't have to worry about data. Decay You don't care at all about okay, you could just hold the stock and you ride it up and down. So really, to not be in stocks, you have to believe in some form of extreme level of bearishness.

that says, well, you know we're gonna go into an earnings recession and everything's gonna be worse going forward. you know. I Was trying to read a summary of bare pieces and uh or or like reasons to be bearish and I found one. It was in a Goldman actually in a bullish Goldman piece and we'll talk about it in a little bit.

but I I was curious I'm like okay well what's their bear case and what they did is they basically put one little paragraph out for hey like look, you don't have to look far to understand the bearish narrative so we're just not going to talk about it. Uh see So what they did is look at this they uh right there for the bear case. talk to the person next to you. Geopolitics: Fed error that would be over tightening or under tightening uh Debt ceiling Financial crisis two Recession Rich Session: that's the white collar recession Credit stagflation, commercial real estate Urban Divine Civil unrest rate Cliffs job you know jobs, stocks first, bonds, blah blah blah bad news is in The Ether and is priced in and I thought that was really interesting this this uh sorry this wasn't a Goldman piece that was actually a Bank of America piece.

but anyway uh point of this is really it's like yeah there's no shortage of like this poop. But the thing that I keep going back to and it's really what defined the Nike Swoosh uh before we you know before the Nike Swoosh actually started becoming a reality. My thesis with the market uh with with the Nike swooshes that we would go through a volatile period of ups and downs and uh, that over time would look like 2022 was it down? Uh, and then you'd have your up, but that up would not be a straight up, it would be a volatile up. And my thesis supporting the Nike Swoosh before you know, just just broadly zooming out from all of the data was when does the market feel more fearful Or when did the market seem more fearful? and I mean now we? obviously we have the luxury of hindsight.

You know, as they say, hindsight is 20 20. so it's it's you know. But then again, you, you know, you know we've talked about the Nike switch for many months. probably just tired of hearing about now.

But the point is what? What was sentiment like? Uh, think about this like yourself for a moment. how are you feeling in uh September or August or October of last year relative to how you're feeling Now Now that's a really important question. and uh, I I Personally, I try to think about it. I go Well, how was I feeling? And the reality was not that great because there was no bottom indication yet there was no bounce off the bottom.

We were still free falling and nobody knew how far things were going to go. You had the Jackson Hole Summit before. We had a little bit of optimism, but boy oh boy after that, uh, not great, you know. I remember when I launched? uh uh, my ETF on November 30th December was actually a really difficult month because everybody was selling.

It was like tax laws harvesting. uh, and so it was really remarkable to see just how much bearishness there was. And to some extent, it made sense Because we're looking and saying, well, we, we don't know. where's the bottom.

Inflation hasn't gone away yet. Do we have any faith that that we've actually hit uh Peak inflation? And it's only now that we have this luxury of looking back that and this is going to be remarkable to say it. But it just shows that when you're bearish, how quickly things can turn on you, do you realize that it's almost been one year since we hit Peak inflation. Think about.

let me let that sink in for a moment. It's almost been one year since we hit Peak inflation. We hit Peak inflation 11 and a half months ago. In about two, two and a half weeks, three weeks, we will be one year away from Peak inflation.

That's crazy. That's absolutely crazy to think that we are already a year away basically from Peak inflation. especially since uh, inflation has been so Salient in our lives. And and it's create we've had so much.

Dare I say fear, uh about uh, what's gonna happen you know? Uh, so look I Guess my thinking in all of this is just that when you're getting a five percent yield and you're like, look at all this money I'm making on my cash, there's usually a reason. uh, and I think that's that's the important lesson is when you're making big, big big big money, So somewhere it usually comes to an end. Or it comes with some form of cost. and that's that's not a bad thing like keep in mind in certain cases, it absolutely makes sense to be sitting in treasuries.

Uh, there. There are some companies that shouldn't be investing in stocks. They shouldn't be gambling in stocks. There's some people who shouldn't be gambling stocks.

Look if I if if, uh, if you're a company that's going to be buying real estate, you should be in cash, right? Uh, because I know what's going to happen with real estate. I mean think about for a moment we could talk about real estate a little bit more in depth a little bit later. But think about it for a moment. The 10-year treasury went from the banking crisis of 3.3 percent all the way to where it is now.

basically a 3.7 It's actually higher. My goodness, those it's up again. 3.746 percent. So what's happening? Oh interesting.

The stock market's going up while yields are actually Rising Weird, making real estate more expensive, putting more potential pressure on real estate. We're just now starting to get those year over year negative numbers. but we'll talk about real estate differently. Uh, you know, maybe somebody else who shouldn't invest in stocks would be.

you know, somebody who's retired who's like dude? I I Just want to lock in the 10-year treasury at nearly four percent and screw it like I Just that's great I Don't need any volatility stocks. just give me the money and I'll sit here and milk the yield. That's fantastic. But if you're you know and this is my opinion, this isn't personalized Financial Advice That should be obvious, but you know you never know these days.

everybody on the internet seems to get get upset if you're not like super clear. But you know if you're uh, 18, 19, 20, 30, 40 years old, 45 years old, 50 years old and you're still going to be working for at least the next 10 years either by choice or because you have to. Who? like? If you're mostly just cash farming, you gotta look and go. Damn screwed up for the first part of the year.

Now again, that's okay. like I absolutely got back in the stock market way too early, right? So yes, in hindsight, we could probably all have done something better. Now, my belief was that the stock market would pre-price in the Fed's U-turn Remember when I sold I said in January of 2022 that you want to get back in the market when the Federal Reserve u-turns because the Federal Reserve u-turned in 87 uh February of 2009, uh December of 2018 March of 2020. Uh, you also had the Uh March of 2003 I skipped over that one, but every time the fed, you turned and Mark at the bottom of the market.

and this was sort of your broad shift in strategy Mark the bottom of the market and the market did a lot better. That's obviously led a lot of people today to say okay, but but you know, maybe maybe that hasn't happened yet and that means the Bottom's still ahead of us. Or we know that the problem isn't actually fundamental. Finally, a broken economy.

it's just inflation. And since inflation is basically you know, basically peaked a year ago, people like, well as long as the economy can just get through for a little while longer and and the FED pauses. Maybe we didn't actually over type. So so long and short of it we we.

My thesis was okay. Well, if if the market comes to expect that the market rallies when the Federal Reserve u-turns Uh, and and the entire Market knows that this time around then what will happen is you'll actually end up seeing the stock market recover before the U-turn under the assumption the U-turn is coming. and so far that's what's happened. That's actually exactly what's happened so far, which is scary.

but it also goes to show like you could not have perfectly predicted that. Oh yeah, in January, the market was just going to start rallying again and it would have stuck. There's no way you could have predicted it. Uh, now of course there was this uh, understanding of like, oh well, all the taxos Harvesters jumping back in sure, but nobody thought that would end up being sustained.

So um, yeah, it's really incredible. It's really interesting so the point of that is can't be perfect. But the other point of that is, you know, if you're looking at your portfolio, it's like yeah, you know I know cash was great in 2020 too, but boy it sucked in 2023. That's also potentially another lesson is usually the assets that do really really well one year don't do that great the next year because fund managers are trying to find Alpha Have you ever heard of the website? Seeking Alpha Yeah, that's because they're looking for Alpha They're legitimately looking for ways to outperform the market.

That's what. Alpha is your outperformance of the market beta adjusted Anyway, Long and short of that, Uh, it. it makes sense to some extent. That's stuff that did really well.

One year isn't isn't going to be the next pitched thing. The next year you've all seen The Wolf of Wall Street right? Everybody's seen The Wolf of Wall Street And what's fascinating about the Wolf of Wall Street is is, um, remember when uh oh, what's that guy? uh, math is it Matthew McConaughey yeah I think it was McConaughey He's uh, he's like, you know you always have another idea. You never let him out of a trait. This is something like that, right? Uh, you always have another idea.

That's how I feel like the you know the real suits on Wall Street are because but but because they have to be. You know that's not to just back on suits. it's just that's just the business. It's like all right Cash did really well last year.

What do we think's gonna do really well this year? Well you have to pick, you know. Okay, great it was. It was attacking Ai and stuff that was massively oversold last year. Could it continue to do well? Maybe just maybe.

maybe we'll see with Nvidia earnings which I think is propped on a pedestal right now A shaky pedestal. Uh, but we'll we'll have a video on that probably later today. not not from this live stream but I expect to make it in video video. uh later today.

So uh, sort of just an earnings preview video. but anyway. uh yeah. it's a really fascinating time and a really fascinating market.

And I think it is a it's always good to sort of self-reflect You know. The nice thing about you is you know you don't have to be public with your portfolio and your decisions and your successes and mistakes. It doesn't matter. Uh, you know, celebrate your successes, forget about mistakes and just move on and and try to do better.

Go for it. It's difficult now because it's like you know, now and this is the conundrum. This is probably the hardest part and I I Feel bad for anyone in this situation. If you've got a bunch of cash, you're like, all right.

Kevin You're right. You're right. Too much cash, Have too much cash. What do you buy stocks Now you know And now it's like, well, you know anything can happen in the next.

Uh, you know in the next few weeks here I mean ignore ignore the debt ceiling for a moment. but I mean just look at like retracement levels. Over here, it would be very easy for the NASDAQ to at least go back to 3 30 on QQQ right? Which is your your index for uh or ETF for tracking the index of the NASDAQ 100. one of them.

Uh, you know you could easily go back to to you know, 312 or uh, you know, can you go back to 290 Pro That's probably a little bit more of a stretch, but look, you've You know you've got some downside. Yeah, we could go up to 348, but so what's the upside? Okay, well, 348 divided by 330 7.64 You're at a three percent upside. 337.64 divided by if we go to call it 312. Okay, new numbers: 312 divided by 337.2 You know, seven and a half percent downside.

Like it would be horribly frustrating to go from cash now to like the NASDAQ and then it takes down. but it'll also be frustrating to miss it if it keeps going like this. So it's very frustrating. And I think that's another lesson that we want to think about is when we're in cash, the hardest thing is figuring out well, when do you pull the trigger and deploy? Uh, you know when when looking at the stock market? Uh, because you just just don't know.

Probably Vanguard says that Statistically the best thing to do is love some invest. but uh, psychologically, most people find it's better to take your cash divide it into let's say 10 buckets and just DCA dollar cost average those 10 buckets So you know you put one ten percent bucket in and then if the market goes down great, throw in another 10. Market goes down more, another 10 Market goes down more another 10 Market goes up. Maybe wait or go wait.

Whatever right? Uh, so um, it's it's a really weird time. but uh, you know I'm I'm happy I'm grateful that so far things are going well with this thesis. but I've I you know I want to be humble enough to say we we don't know what the next leg down could bring. Everybody's talking about a Q3 Q you for recession.

If we get sticky inflation that encourages the FED to hike more or we have to basically price out the idea of rate Cuts then maybe there's some downside if. uh, if we really are going to have this earnings recession which I feel like many companies already had? Sure, maybe there's some downside, but I don't I'm not convinced that, uh, an earnings recession isn't already built into valuations that we've seen here. The earnings recession seem to be most feared here, and it's almost like markets pre-priced in the bad earnings of 2023. Here you know they got out before 2023 and that's really what we saw widely.

So now it seems to be okay. You know by the dip on everything is what it feels like which I understand to some extent feels like ludicrous Now gosh like how could you keep by The Damp by the damage it seems like oh oh oh why? while time to do that and certain last year was this was I mean look at this. Okay, go back for a moment to 2009. So where's 2009? Oh look it's it's way way look I'm gonna I'm gonna zoom out on the month.

Wow. okay we're gonna zoom out on the month on on uh, weeps, uh it's gonna take I should have just left it on the week chart or whatever. it'll come up in a sec. But anyway, um, your opportunity to to buy the dip was fantastic.

Between 2009 and quite frankly 20 end of 2021 you just buy the tip and the market just went right back up within the next month consistently. So Buy the dip worked for what is that? 11, 12, 12-ish years and then you have one bad year and all of a sudden everybody's like buy the dip sucks. Buy the dip is stupid Nookie to YouTubers and you buy the chip mentality. It's like, ah, buy the dip was bad strategy in 2022.

Abso freaking lutely. but wait a second. wait a sec. But the dip was already back to being great in 2023..

So now you look back and you go. Hmm. Is it possible that one out of 12 years is a bad buy the dip strategy? Well, I mean we'll see. Maybe it'll be two years if this market ends up being a little poopy doopy? Uh, you know, for longer it's possible.

But again, here's here's your chart. Look at this. you know I mean it didn't matter what. Debt crisis.

You know, the debt crisis. The last debt crisis was over here. Can you even notice anything on the month chart? I Don't know. Maybe it's a little flatter than they need to.

hope. maybe you'd hope it was a little bit more of a perky chart over here. but I mean like, okay, so there's 2018 when the fed you turned over here. All right.

But but other than that, on the month chart, you know, other than 2022, by the day, it worked really well. so it's It's fascinating to me. So this, uh, this? Chase I I guess it's sort of in summary on this this part. uh, the important thing to remember is there is a real cost to cash yield and it's the cost of your opportunity.

That's a problem. See this and and this is exact. You know how many times I've heard this You know like I'm not blaming you I'm not blaming you I know you're just the messenger. your name is literally the messenger I appreciate you being a channel member over here.

but this this fear over election Cycles I've just never actually seen it be the Catalyst for the stock market doing anything in particular. It was never an election that did it. It was the housing crisis of 08. You know, the the.com bubble of of valuation implosion.

Uh. but then look, look outside of those or or covet, right? But then you look outside of those. 2020 was a really contested period. Nobody cared.

The stock market had like two weeks of heart palpitations. Oh my gosh, What if there's a you know, uh, uh, a contestant election? Oh no, body cared in terms of the stock market 2016. Oh my Gosh. Donald Trump Won You know everybody's like Donald Trump wins.

We're going Poopers Nope. 2008. Oh you know if uh, the first black man wins the presidency, That's it. We're going to the toilet.

You never had a black man before, only had a white man before. No, it didn't matter, You know Obama Took office near the bottom of the market. Bottom of the market was like February or March it was February of 2009 he took office Jan 21. I Mean come on.

if anything the elections help. Uh, so it's just you know I Think the news media has us convinced that there's always a reason to be fearful. Always a reason to be fearful now. I Want you to know this when it comes to AI Time is what's going to make you money, and if you can prove that value to an employer, you'll always be able to be employed.

So this is another way of making sure that you don't get replaced. Foreign.