JC Parets Returns (FvF Ep. 197)

[00:00:01][music] Welcome to the Facts Versus Feelings podcast. I'm your host, Brian Dietrich, and I'm joined by my co-host, Sonar Geese. Cutting through the noise each week with Ryan Dietrich, chief market strategist, and Sonovar Geese, chief macro strategist. Taking out the [music] boring and helping investors focus on what really matters.

[00:00:31]Well, everybody, you're in for a treat.

[00:00:33]This latest episode of Facts Versus Feelings is bringing back a fan favorite. We were joined by JC Prett, the founder at over at Trend Labs. It was an amazing conversation without leading the witness too much. So zone, did you learn something?

[00:00:47]>> Always. You know, it's just fun to hang out with JC. But no, he tells it like it is, right? He keeps it. I think that's how I would describe it. And you know, the nice thing is is he's you know, you you'll hear the conversation, you know, when he thinks about facts, he focus on price. Price is the facts. That's what I really loved. I mean, you know, if you want one fact for markets, look at the price.

[00:01:11]>> That's it. No, exactly. I don't think we need any more intro than that. You guys are going to love this one. There's a reason JC brings a lot of views and a lot of opinions. Uh because he's really, really good at it. Without further ado, here is episode 197 of Facts Versus Feelings. And backed by extremely popular demand, the world's most I was going to make a joke about Jeff Degraphth, but uh we didn't get Jeff. He was busy. So, we have the next best thing. JC Prett is back. JC Prett returns to Facts Versus Feelings, episode 197. JC, how we doing?

[00:01:45]>> Listen, if I if I can be second to Jeff Degraphth, I'm good with that. Like, I'm good with that.

[00:01:51]>> All right. Right up there. Look, thank you for coming, Jason.

[00:01:55]>> Oh, you doing?

[00:01:56]>> Thank you. Thank you for uh Thank you for having me. We've done this before.

[00:01:59]Uh it's a lot of fun, you know. Um you guys tell me about the videos that we do, so there's a lot of pressure on this one. So, let's let's try not to screw it up, you know. I I I know I said we've done well we do 52 of these a year. We do once a week. We just we just do it.

[00:02:13]We don't take any weeks off on Facts Versus Feelings anymore. Maybe we record early if it's a holiday, but we don't take any weeks off. Every Wednesday you get this. And JC, we did 52 last year.

[00:02:22]No pressure, but on the YouTube channel, your appearance literally was the most views out of every single one we did.

[00:02:29]More than Cliff Asnness, more than Dr. Jeremy Seagull, more than >> all of them. I mean, you name it, you are more in all of them. So, >> wow. That that's really something. Some of them were humans, too. If you you know, there a lot of bots in those numbers, you know. Yeah, >> there's a denominator fallacy. I mean, there's all kinds of shenanigans taking place. We'll do the best we can. How's that? Yeah.

[00:02:48]>> Yeah. Denominator blindness has taken over. Let's just, you know, we mix up a little bit. Usually we do small talk, but let's just start. Is this still a bull market?

[00:02:57]>> Equities.

[00:02:58]>> Still a bull market. I mean, >> US market. I know you look at all the other markets. US bull market. I guess bull market and what, right? But you go.

[00:03:05]>> He knows what I meant. I mean, it's it's hard what's the alternative to to suggest that it's a bare market, like you know, so I don't I'm not really seeing a lot of evidence of it being a bare market. So, first of all, you know, in order to have a bare market, and this is just math.

[00:03:19]>> Mhm.

[00:03:20]>> You need stocks to go down in price to have a bare market, right? In a bull market, stocks are going up in price, right? Like just very generally speaking, I think we can all agree on that, right? Now, in order to have stocks going down in price, right, it's not just one or two stocks. It's more and more and more stocks going down in price and seeing stocks making new 20-day lows, new 60-day lows, new 120-day lows, new 52- week lows. Those numbers are high across the gambit. And as that progresses, you'll see it in the three-month low list, six-month low list. You'll see it progress ultimately getting to the 52- week low list. And that's what you see in bare markets, right? So if we know that, why don't we ask the question, hey, are we seeing those things? And the answer is no. The answer is no. We are not seeing those things. In fact, we are actually seeing the exact opposite. The advanced decline line on the New York Stock Exchange closed last week at the highest levels ever. This is a running total of advancers minus decliners. This is a cumulative number and it closed at the highest levels ever on Friday. So we have that not something you see.

[00:04:30]>> Pod pony, let's throw that one up. the advanced decline line on the New York Stock Exchange. Go ahead. So, what So, one more time, some of our listeners know technicals. What does that mean, JC? A new high on the NYC advanced decline. What does that mean? Again, >> listen, don't put me on the spot. I'm not like Mr. Indicator mathematical formula guy, but basically, you're taking going up minus the ones going down and you're adding it to the number that you had before.

[00:04:52]>> Yeah.

[00:04:53]>> Or subtracting it, right? Depending on the situation, right? So that's that's how that's how the math works and it's at the highest levels ever for the New York Stock Exchange, which to me to me the New York Stock Exchange is the most important collection of equities in the world. It is the most important exchange in the world. That nobody can argue that. I couldn't even tell you what the second most important exchange is.

[00:05:15]Probably the NASDAQ. But nevertheless, the New York Stock Exchange, the stocks that trade there, you know, to me, when we talk about market breath, when we talk about the universe, that's got to be a universe that that we want to lean on heavily because you're not you're not just getting American companies, you're getting broader exposure to international equities. You're getting a lot more cyclical exposure. You're not getting humongous tech companies, right?

[00:05:38]Which other indexes is that? And uh so the New York Stock Exchange, which by the way, Taiwan Semi trades on the New York Stock Exchange. There are technology stocks in there. So, you're getting a a big group of equities to to lean on. The Russell 3000 is another one. You had the highest number of Russell 3000 stocks above their 200 day moving average that we've seen, you know, this cycle. So, like, you know, that's going up as well. So, none of those to me are characteristics of any kind of bare market. So, I use a deductive method when it comes to approaching the marketplace in a very similar way to in the wine world, right?

[00:06:13]I'm a certified somalier and you you deduce what the wine is, right? When you're doing blind wine tasting, if you see a red wine, it's probably not a Chardonnay. It's probably not a penog grigio because it's a red wine. So, you can already eliminate all of those things, right? And then you deduce from there based on the smell and the alcohol and all those things of what it could possibly be, right? But right off the bat, the Wyatt News white, okay, it's a white wine. It ain't a Cabernet, right?

[00:06:40]It's not a Sarra. It's not a PE, right?

[00:06:42]you could already eliminate a whole bunch. So when I see a new all-time high in the advanced decline line on the New York Stock Exchange, a new high in the percentage of stocks in the Russell 3000 above their 200 day moving average, >> probably not a Chardonnay.

[00:06:56]>> I feel like >> feel like you should bought some bottles of wine right now. But >> yeah, I'm wine. Well, let me >> Nothing wrong with drinking wine on a Monday at noon.

[00:07:05]>> Is it Monday at noon? I've been in this chair for seven hours. I had CBC a long time ago. Two things for me, then someone who jump in. Uh, I just got an alert. Apparently, my boys just ordered $47 at Door Dash. I ran downstairs. I knew I had this. Listen, whatever. Get yourself food. So, we're trying to keep the economy going. Jason old enough to do that. And secondly, Sonu is actually, we might have talked about this last time, but bring up again. Sonu's allergic to wine. So, you keep saying these words. He might start breaking out just hearing about wine. So, how allergic is allergic? I'll tell you this. I know more about advanced decline lines, which is to say not much, than wines. So >> listen, the Wine is a beautiful thing.

[00:07:42]We're doing the same thing as technician. I remember it was the first day of Somalia school in uh Reno, Nevada. Terrible place. But anyway, >> the biggest little city. The biggest little city, right? Isn't it called the biggest little city? I think it was.

[00:07:53]>> Dude, I don't know. There was some degenerates there like with like the gas things so that they could breathe and they're like in the slots. I was like this place is depressing. Anyway, so the uh the Somalia, the intro to Somalia, I'm in there and then, you know, what's cool about the process is you're always dealing with master songs, but there's only a few hundred of them in the whole world. So, you're really dealing with the best of the best. And they're talking about the deductive method. I'm like, "Holy THESE GUYS ARE TECHNICAL ANALYSTS. THEY'RE doing the same thing that we do, right?" And so, like I I was able to pick up on it. Uh, you know, I was like, "Wow, we're doing the same thing."

[00:08:27]>> That's like your market is my point is my answer.

[00:08:30]>> Got it. I have a question. Last time, this is my favorite thing anyone's ever said on these podcasts, which is, you know, we were talking about trends and I was asking you why don't people follow trends and momentum. You're like, people are stupid.

[00:08:44][laughter] >> I think people are crazy. I think people are crazy.

[00:08:47]>> That too.

[00:08:48]>> Not so much that they're stupid, it's that they act irrationally.

[00:08:51]Stress levels are elevated. They're crazy. People are crazy.

[00:08:54]>> So, where are you seeing stupid stuff right now? Where are you seeing people acting stupid right now?

[00:09:01]The speculator position in Bitcoin is really interesting, right? Super crazy net long positions and um hedgers are super short and the hedgers have been right. Um seeing the speculators making moves there in the dollar, right? Uh it's getting a little silly there on the dollar index. So if you get if if that unwinds and the hedggers are right and you you know these are not big tops in euro and and and sterling and some of these and and yen and what all that and you start to get a rally in these things you know some strength that we're seeing in some of the emerging market currencies relative to those developed uh I think is interesting if the dollar rolls over here and those uh spec speculators are wrong which they tend to be at extremes then uh I think you got a pretty decent tailwind there for some risk assets. That's metals will probably do well. Latin America will probably do well. Seeing some strength.

[00:09:54]>> Equities too, right? The dollar going down.

[00:09:57]>> I think so. Equities in general. Sure.

[00:09:59]Yeah, I think that's a tailwind.

[00:10:01]>> I'm really impressed how well stocks have done despite a rising dollar this year.

[00:10:05]>> So, let's put that dollar chart up. I know that's one we sent. Pod pony says US dollar index the Dixie. Um, you know, again, we're showing it JC the chart you shared the other day on XL/ Twitter. So if it breaks out that's maybe net bearisherous assets but rolls over bullish >> I think that'd be a problem. You know when you talk about dollar wrecking ball you know you can argue be like listen stocks have done just fine while while the dollar's been rallying right so like you know is is a stronger dollar so bad I think to a certain extent and we've seen it and I got to take I got to flip that on its head and say you know if you would have told me the dollar would have done what it did you know how are equities responding I would said probably not as well as what we've seen.

[00:10:41]So I'm actually pretty impressed with that resilient. Now, if you get that dollar rollover, that acts as a tailwind for equities. There's your back half of the year rally.

[00:10:49]>> You know, one more I want to jump in.

[00:10:51]So, then you can come in after this. You you shared and we're going to share now on the uh on YouTube. Barons software's hard truth, right? Everybody all of a sudden realized how poorly software is doing. At the start of the year, Microsoft had like its worst quarter ever. Microsoft down 25%. If that's all you knew, you probably think the market doing a little worse. Uh but software's hanging in there. Mag seven quietly the last month. S&P is exactly flat. Mag 7's up 5%. Not saying that's great, but you know what? No one's talking about it because everybody called it the lag seven three weeks ago. Kick it when it's down. What's your thoughts on software mag 7 kind of taking the baton back?

[00:11:24]>> Yeah, I mean you're seeing the the relative strength. You're seeing that rotation. I mean, the dispersion within technology was off the charts and I'm sure you guys have run the numbers. I'm sure you could tell me more, but I could just using common sense, I would venture to say it was probably pretty out of control. I saw some of the uh correlation numbers between uh technology stocks and and and software stocks relative to technology as an index near zero where it's usually near 70 like just like whacked. And so from those extremes come unwinds and it doesn't mean that you need to have losers. You just have to have underperformers for the catchup. And you're seeing the software catching up and semiconductors coming off. You're still seeing resiliency out of some of the uh hardware and equipment stuff, which is interesting. But that alligator mouth is like closing, if you will, in that. And I think that there's legs there in software. And some of the some of them are are going to prove that they got hit for no reason. They threw the baby out with the bathwater or whatever it is they say. And there's going to be some of those that are going to come back with a vengeance. And there's going to be some maybe like into it or something. Uh I'm not I'm not picking on into it specifically. I'm just g using as an example maybe AI really did kill you know internet accounting or whatever. I don't have no idea but I'm just using that as an example like internet accounting might be dead and then some other thing like uh Salesforce might be fine. I don't I have no idea but you know like I think that there's going to be bifurcation in the outcomes here.

[00:12:53]>> Okay.

[00:12:53]>> What do you make of crypto? Because so we were on the compound and Michael Bachnik brought this up with respect to software as well. He was like oh crypto is the software. I'm curious how you think about it and does that you know speaking of that alligator jaw you know rich assets you know like you said we've been in a bull market but crypto hasn't sort of participated you think that comes back what do you think's happening with crypto >> yeah I mean generally that those relationships even came off some but I I tend to think that just bigger picture when you zoom out if software stocks are going to come back crypto's probably going to come back too Bitcoin's going to come back you know I'm just fascinated by just all the rails of blockchain to be perfectly honest with you you know as somebody who's had a front row seat to how Wall Street works for a long time. I mean, I'm on year 24 of my career. Where are you guys now?

[00:13:37]>> I'm at 21.

[00:13:39]>> You're 21?

[00:13:41]>> Um 99 is when I got the bug. So, yeah, I'd say I started around then.

[00:13:46]>> A few more years than me. So, yeah. So, like >> you know, I mean, when I when I see people like, "Oh, crypto didn't build anything." Like, nobody ever they never did anything. It's like you're missing the point. They built the future of finance, right? Okay. And like that's where we're going. And we're getting the tokenization of all of these individual equities, which is amazing because now it opens up the rest of the world can now participate in the greatest companies in the world. A big American companies. Anybody in the world with an internet access can now invest in those companies when before they couldn't, which is fascinating. And now flip that on its head. Now you got Americans that could do the same thing in international companies that before they did not have access to or we did not have access to.

[00:14:29]most recent examples in South Korea of course where you could we couldn't participate in those and then they got some tokens but I mean it goes Indian companies and you know companies all over the world that it's impossible for American investors to be able to participate in that growth that changes that now and there's just more global liquidity I think on a net basis that's a win and I I want to ask you guys I mean no gun your head like it's just for fun but like I think about the day where tokenized stocks have more volume on a given day than stocks that trade on traditional exchanges. I wonder when that day will come. Uh my guess is April the 20th of 2031.

[00:15:15]>> You ever thought of that, son?

[00:15:19]>> I don't know if we've thought of that one, JC. I don't know.

[00:15:23]>> Yeah, it is. Yeah, >> cuz I think it's coming and I've been saying it and we're seeing it. And so who are the biggest winners here? It's like, okay, great. Let's just say that's the case. Who wins? How do we make money off of it?

[00:15:34]>> There's companies that I mean, Bank of New York Melon is one of the oldest I mean it was like the second stock ever or something like that, right? And um they they are clearing all of this stuff, right? So like they're just like it seems to be like a clear winner. Bank of New York Melon and and um you know, I just think the financial system wins. I mean, the the bank index right now is breaking out to new all-time highs. S&P bank index just now, this month is breaking out or last month above the great financial crisis highs. Like, it's literally called the great financial crisis. It was pretty great if you were short. It was horrible. If you were not and you were a bag holder, Bear Stern's gone. Meil Lynch gone. I mean, just Wakovia gone. Countrywide, the guy with the tan gone. This guy's tan was like so new. Remember that guy? What was his name?

[00:16:22]>> Yes. Yeah.

[00:16:23]>> What was that guy? Not an Indian guy, by the way.

[00:16:26]>> No, >> he uh >> he was just like a Greek go with it crazy tan.

[00:16:30]>> I'll look it up in a second. Let's put that up on the YouTube channel. S&P Bank Index, the KBE. And I guess I mean hopefully this is in some compliance thing. We're going to talk about a lot of stocks. JC is going to give his opinion a lot of stuff. Carson doesn't agree with anything JC says. Maybe we do, but we got to say that none of it.

[00:16:46]>> Yeah. Well, I think we're supposed to say that. I think we're supposed to say we agree with not a recommendation.

[00:16:49]That's >> not a recommendation. And >> we we can't say whether we agree or disagree. So, let's >> I speak facts only. There's nothing for you to disagree with. Facts only.

[00:16:57]>> Exactly.

[00:16:57]>> Yeah. Facts versus feelings. Facts only.

[00:16:59]That can be your new podcast. Facts only. We'll do facts versus we look at price. It's the only fact. You can't argue with what I'm telling you because it's just math.

[00:17:08]>> So, layer layering onto that again.

[00:17:11]Banks literally went nowhere since 2007 until just recently, at least in the US.

[00:17:16]Luigi said the longer uh what is it? The bigger the base, the further in space.

[00:17:22]Well, that's a big base out of banks in general. Uh we know tech has done great, growth has done great. Is this a sign to you JC that let's just say the next two or three years maybe value financials maybe like industrials take back that baton? How do you think about it kind of from a portfolio point of view?

[00:17:37]>> Yeah, I mean listen, shout out to Louisiana. Here's something else that she said. She also said that the bigger the decline, the longer the time needed for repair is something else that she said. And you saw that tech bubble burst in 2000 and look how long it took for them to ultimately break out again, right? And you saw what happened since.

[00:17:56]>> Well, same thing here. Great financial crisis was called the great financial crisis for a reason. It was out of control. I was there. It was wow, man.

[00:18:05]It was it was abusive man. Yeah.

[00:18:07]>> So, it took almost 20 years to correct that because as Luis Yamada said so famously and so many times over many years ago, a long time ago, the bigger the drop, right, the longer the time that's needed for repair. And so, we've seen that in the S&P bank index, which peaked in January of '07, by the way, >> January of 07, >> nine months before the S&P 500 peaked.

[00:18:31]These things were already getting smoked, right? So there was already relative weakness which here what we're seeing is not relative weakness. Uh this relative strength the fact that all these banks are breaking out while all some of the other indexes are struggling that's called relative strength. And the fact that just now now this is brand new. You're like oh it's an old bull market JC. Oh JC and Dietrich and Sonu bunch of permable bulls on a podcast >> right?

[00:18:57]>> I get called a perma bear during bare markets so I don't take offense to it.

[00:19:01]One more chart then Sonu jump in. S&P midcap financials is breaking out as well. So why does that matter? I mean I know kind of the answer leading the witness but we're seeing various cap sizes break out along with let's put this one up. European financials. Put that one up pod pony as well. So you got European financials, midcaps, small caps. Financials across the board are breaking out. What does that tell us?

[00:19:21]>> Well, it's not indicative of an increase in financials going down.

[00:19:27]>> Yes.

[00:19:29]So getting back to the deductive method, >> probably not a Cabernet if it's sparkling white, right? Like you know it it's >> again if I think the bare case the S&P financials like the the European banks I mean that's I mean come on guys if the world's coming to an end European banks ain't breaking out to all time highs.

[00:19:48]>> Greek Greek banks aren't doing that.

[00:19:51]Yeah.

[00:19:51]>> Midcap financials midcap industrials is really the epicenter the heart and soul of America. But then just looking at at the S&P bank index, if you are bearish of equities, if you are part of that twothirds of US American adults that feel a major recession is around the corner according to Alian. If you are one of those two-thirds, if you are more than half of American adults that feel that investing in stocks is a bad idea right now, if you are those people, you people, then I think that it the conversation starts with the S&P bank index because if that is above those great financial crisis highs, you are wrong. You're wrong.

[00:20:33]>> You're just wrong.

[00:20:35]>> Is it really true?

[00:20:35]>> You might want to be right, but you're not right. I think the bare case starts with a failure there, >> which is entirely possible because I don't have a crystal ball. I can't tell you what's going to happen. But I got to tell you, if the if the financials are above the great financial crisis highs, if that is the case, really really hard to be overly pessimistic.

[00:20:54]>> I mean, we saw that with bank earnings coming out. I mean, not to bring, you know, I'm not a fundamentals guy from that, but I'm not I don't pick stocks like, you know, we look at asset class and things like that. But yeah, like Ryan, you mentioned in a morning call with our adviserss this morning, JP Morgan's earnings, Goldman's EPS up 100% year-over-year, >> right? That doesn't happen out of nothing. I mean, the huge trading volumes, you know, trading profits, huge investment banking profits, M&A deals are happening across the country. The IPOs are there. These guys made I I don't know was it, you know, billion 500 billion or something from, you know, the IPO. Gold Goldman made 100 million on the SpaceX IPO and if you look at like the five largest banks they cash in a cool 49 billion last quarter 50 billion in trading revenue JC I mean that all that volume all that stuff going on some of these I know we want to talk more about the leverage is out there but it's just incredible using the F-word if we can on this podcast fundamentals they are there anything else you want to talk about on on well son I jumped in what else you want to talk about >> I I think just to the point about banks I mean you know like even on the crypto side bring back you know something You said JC about tokenization and all of that. I feel like the big banks are well positioned to take advantage of that.

[00:22:06]Again, not a prediction. I don't know whether you know which bank it's going to be. I have no idea, but it just seems like, you know, they're going to ride that train as well.

[00:22:14]>> Yeah. No, 100%. And uh I love how Sonu acts like he's not ripping through financial statements on Saturday nights.

[00:22:21]You know what I'm saying?

[00:22:22]>> I would I I need an accounting degree, a finance degree in my life, finance course in my life. probably trying to play that way.

[00:22:30]>> Well, to Sonu's credit, all he's done for the past month, I don't think he's worked. I mean, I'm gonna call him out on the podcast. It's okay. Um, >> he's just watched nothing but soccer.

[00:22:39]JC, you happy that soccer's over? You going to worry about it in four years? I know you got some thoughts. You and Z and Soda might not agree on this. What are you thinking now? World Cup's over.

[00:22:46]>> No, I like to I like to have fun with it cuz uh, you know, I'm just American and >> you know, we have other sports here and things like that. Like my my family before going to Cuba was from Spain.

[00:22:58]Like on my mother's side is on my father's side.

[00:23:01]>> Congrats. I felt nothing.

[00:23:04]>> I [laughter] felt nothing. Like I wanted to like I thought about it like I'm technically Spanish. Why do I not care at all? I didn't care. I was kind of rooting for Argentina to be perfectly honest.

[00:23:17]>> Terrible.

[00:23:17]>> I mean I'm too in a way, you know.

[00:23:20]>> So like I just don't feel it. Like I'm more interested in like is LeBron coming to Miami or what? Like I'm more interested in like I got other priorities like college football starting now. Hurricanes look great.

[00:23:30]Like >> you know >> I just I felt nothing. I kind of wish I did cuz I I wish I could be happy about something like that but I just I didn't care. It was really >> Yeah.

[00:23:40]>> It was almost sad. I kind of wish I did care. I just don't >> Well, Sona, you're going to put together a blog on your experiences. When are you going to have that done? Just so people on a podcast note you >> probably Wednesday. Wednesday morning, you know. Carson.com is which is where we put all our stuff.

[00:23:54]So >> all but yeah no I feel a little like wistfulness I think is the word >> it's over four more years you know >> watch cup America euros things like that but >> what about the Olympics in two years do you soccer people do you care about that or no >> not much I mean I I like watching the 100 meter sprint and that's about it I tune in for that and then go away >> world cup is way more important than the Olympics >> totally totally >> world cup and then you know oh it's American sport >> the Olympics is in LA I don't know if They they let you in there.

[00:24:26]They still let people in there. I don't even know.

[00:24:28]>> I don't know.

[00:24:29]>> He had no idea.

[00:24:30]>> Sonu, you know what Sonu learned last year though? He learned that the Chiefs are in the AFC. So, we're working with them, JC. We're working.

[00:24:37]>> We're starting.

[00:24:38]>> You know what? I was at the Chiefs stadium and now I do. My next goal, you know, sports-wise is to go for a Chiefs game. Goodness.

[00:24:45]>> I'm dying to go there for a game. I've never been on a road game. I hear it's crazy.

[00:24:49]>> We should plan something, you know.

[00:24:51]>> Go see Chris Go see Chris Kimell. He's out there. Go see shout out to Craig. Uh so you you shared something that I love this conversation. Margin debt like uh like uh the phoenix. It's just back again. You can't you can't kill it.

[00:25:03]Margin debt's high JC. They tell us last time margin debt was high. The end of the world. Pod pony. Feel free and put the chart up that says margin debt. How do you think about when you keep hearing this like we have for the last 15 years?

[00:25:14]>> I think people are crazy. [laughter] I think they're crazy, man. Like I think they're they're just like there's something wrong with them. I mean, you know, like we know I mean we know this, but like yeah, like think about it. Like think about what kind of serial killer you need to be to take an absolute number of shares total dollar amount that's borrowed, right, on the New York Stock Exchange stock to go to borrow so that you can have leverage, right? And then you take that number and you divide it by US GDP.

[00:25:54]Can't even say it with a straight face.

[00:25:56]Really?

[00:25:57]Really? Margin debt relative to US GDP.

[00:26:02]WHAT DOES ONE HAVE TO DO WITH THE OTHER?

[00:26:05]IT'S LIKE, OH, hey babe, our house is worth twice as much uh this month. Yeah.

[00:26:10]Why? Oh, because of the corn crop in Ohio. Uh what? Well, divided by >> divide the value of our home by the annual crop in Ohio. Oh, what >> that's funny. Talk about the speaking of crazy uh the exchange traded products. I think I'm pretty sure I saw it from something you shared. It's Todd Son's chart of the exchange traded products.

[00:26:35]How much a levered exchange traded products are coming to market. It's about 200 billion right now. $500 billion notional massive explosion in 2025 2026 it's all levered long products right and I was thinking because we always see this like people say oh you know consumer sentiment is terrible but then if you look at the consumer spending numbers everything looks you know like red hot >> you see the hotel and resorts index hitting alltime highs yeah it seems nobody can afford anything >> so it's sort of like watch what they what they do not what's what they say right same thing at sentiment seems like yeah it's not that great but Then if everyone's buying all these levered long products, forget set aside South Korea for a moment, right? I'd love to go there. Get to take seems like what there's a lot of demand for this stuff and you know people are buying this stuff. They want to buy this stuff.

[00:27:21]They're buying it on single stock.

[00:27:23]>> So I'll put things in perspective.

[00:27:24]Right.

[00:27:25]>> Well, one second JC, sorry. Let's put this up on the YouTube channel. Leverage ETP products courtesy of our friend Todd Son of Strategus. Put that one up there.

[00:27:32]Go ahead JC.

[00:27:33]>> Shout out to Todd Son. So we're seeing just explosion in participation in these leverage vehicles. $200 billion, which sounds like a lot of money, but it isn't.

[00:27:42]>> Yeah, >> it isn't. It's about a quarter of a percent of the size of the stock market.

[00:27:46]>> Yeah. Stock market 70 trillion dollars or something like that.

[00:27:50]>> It's really a rounding error. It's it's 10% the value of cryptocurrencies, which just for perspective is nothing. So, this is a rounding error at best. It's because people are like, "Oh, JC," because when you put things in perspective, the the you when you want to look at that margin debt, you want to look at it as a percentage of the the value of the total stock market, >> like a percentage of what that leverage is buying, not some random other number like US GDP. Like, one has anything to do with each other.

[00:28:17]>> So, you want to compare it to the size of the overall market, which is about one and a half percent. It's nowhere near what it was in '07, nowhere near where it was in the 1980s before the 87 crash. Like, it is like crazy low numbers. People like, well, people don't that's not how people take advantage of the downside with the le they're buying the leverage ETFs and no they're not because all of them combined don't don't move the needle at all. So the leverage is just not there uh that I think people uh would suggest that there is um you know and from a sentiment standpoint you know sentiment is really good at extremes you know it's really helpful at extremes I don't think we're at either extreme I think we're probably somewhere in the middle right uh in terms of sentiment you know I don't think we're at crazy bullish extremes by any stretch of the imagination and I don't think we're at crazy uh bearish extremes I think there's anecdotes that you could take and I think it's about you know somewhere you know putting it all together and I think the answer is we're probably somewhere in the middle. Mhm.

[00:29:19]>> So that uh SKH Highex ETF, we can throw that up. Leverage shares 2x SKH High.

[00:29:24]We're seeing, you know, a lot of these on individual companies. So these are like the most volatile companies anyway.

[00:29:28]I mean, that stock goes all over the place. Now you're adding 2x. Um you Sony UX. Maybe we'll go to Soda for a second.

[00:29:34]I mean, Sony, you and I talked about that this morning with our um Carson advisers. What's your thought on all those different ways to play leverage on top of leverage on top of leverage? I mean, for one thing, it's a it's good revenue for the people putting these things out.

[00:29:48]>> Exactly. That's what it is. Yes, sir.

[00:29:51]>> I mean, but of course, they wouldn't be putting it out there if there wasn't demand. I mean, South Korea is actually an probably the extreme example of this where you get all these it has a lot of leverage margin and you know, they're trying to look cut back on that. I mean, essentially it's volatility then, right?

[00:30:05]So, but then that's what we talked about. Yes, we like everything and the momentum. We've liked momentum for years now. The momentum factor, it's done well, but it's been going crazy the last 3, four, five weeks. Up, down, up, down every night. I was joking that, you know, first thing I look at is South Korea. What did South Korea do? That tells me what momentum is going to be.

[00:30:24]>> That's not a joke. That's not a joke, Sonu. That's a a sign of the environment. I was doing the same thing and I was joking about it, too. But it wasn't a joke. Like that was real life.

[00:30:32]>> Yep.

[00:30:32]>> Yeah. I probably copied it from you or something. But anyway, but that that's you know that that's what's happening.

[00:30:37]But that's why you need the other side.

[00:30:38]what has actually done not quite as well as momentum this year. Small value stocks. We were talking about, you know, financials and the small banking index.

[00:30:48]I mean, small value has been doing really well. We were talking just before this call with the team about managing portfolios. How do you want to diversify? Momentum is volatile. Without giving too much away, we're like, yeah, we like small value. That's how, you know, especially from a long-term perspective, strategic portfolio. I think that's what I want to hold right now. I mean, again, not a recommendation, anything like that, but yeah, I think it's a good diversifier to everything else.

[00:31:11]>> Well, hitting new small cap uh growth uh small cap value here, hitting new multi-month highs relative to small cap growth. So, keep that in mind in the the Russell 2000.

[00:31:20]>> Um and then when you look at large cap uh value versus large cap growth, you're hitting new new 52 week highs, right?

[00:31:28]So, you know, back on the SKH Heinix, it was pretty funny when we're talking about these leverage vehicles, you know, in London there's the triple leverage SKH Heinix, right?

[00:31:37]>> Okay.

[00:31:38]>> I I did know that.

[00:31:39]>> So, if SKHX falls by 30%, they say you're wiped out.

[00:31:43]>> Yep.

[00:31:43]>> Right. Goes to zero overnight legitimately. But hold on, it gets better. Wait, there's more. Not only is there a triple leveraged SKH Heinix ETF in London, right? Or ETP or whatever.

[00:31:53]Like, I know the difference, right?

[00:31:56]There's a there's a currency hedged version of it where you can get it priced in USD, the triple leverage.

[00:32:01]Swear to God, can't make this up.

[00:32:03]>> So good. Come on. So good.

[00:32:05]>> Why not?

[00:32:06]>> It's probably like 75 basis points expense ratio or 100 basis points expense ratio.

[00:32:11]>> Yeah, the expense ratio is the least of your problems, don't it? [laughter] >> Yeah, but the there's somebody making money on the other side of you know.

[00:32:19]Yeah, >> definitely. You know, these these ETF companies are making a a killing. All these idiots slinging around these triple leverage vehicles. Dude, it's great. I love it.

[00:32:29]>> Actually, on that, you know, a lot of our friends and let's say to their friends have ETFs now coming out. Do you have an ETF, JC, or you >> My grandmother's launching an ETF coming up here. Um, yep. She's, uh, she's very excited about it. Uh, she's 96. Uh, shout out AA coming out with an ETF.

[00:32:47]Yeah, everybody's got an ETF these days.

[00:32:49]Um, you know, I listen, obviously I think about it. Every ETF company and their brothers approached me over the year to launch an ETF and like, you know, you know, it's it's just not it's just not necessary. Um, you know, I'm building out new strategies for my own portfolio. I have, you know, my own basket. You know, I share it with the public what I'm doing. And like that's just so much easier. I've managed a hedge fund before. I know what it's like. I have a lot of clients that are hedge funds also, you know, for what, you know, and then an ETF like, you know what, I raise I raise a billion dollars and I make like a million, million and a half maybe.

[00:33:26]Yeah. I don't know. It seems like a lot of work.

[00:33:28]>> Mhm.

[00:33:28]>> Uh I'm not trying to travel. My travel days these days are I've been to New York City five times this year, right?

[00:33:36]I'm an hour away, so I'm I could go a lot more, but I want to be more, you know, this is the least I've traveled in a long time. And I've traveled I've gone on a plane like four or five times so far this year. You know, that's light for me. That's the lightest it's been for me in a long long long time. Um, if I launch if I launch a fund, if I do, first of all, you do it, I'm not going to do an ETF. I'll do a 2 and 20 LP.

[00:33:58]But, uh, all the traveling and stuff like that, you know, it's not not for me right now in my life. Maybe down the road.

[00:34:04]>> So, let's go there a little bit. Um, most people probably remember you for Allstar Charts. Right now, you're with Trend Labs. talk about the kind of the evolution and what what does Trend Labs do and how does it help our industry and how can people learn more about it?

[00:34:16]>> No, thank you. I appreciate it. Listen, Allstar Charts started as a blog back in 2010. Like literally just a blog and very quickly that turned into, you know, I was hosting shows all over TV and getting invited to conferences and universities all over the place and invites to happy hours and dinners where I met a lot of friends, you guys included, and everything like that over many years. And you know, sure, it opened up a lot of doors for me business-wise, but I mean, the the friends that I've made along the way just because I'm just sharing thoughts, sharing ideas, like, man, I will never be able to pay that back. It's been unbelievable the relationships that that's built. And so, all search charge ultimately became a premium research company for, you know, the world's biggest financial institutions all the way down to individual investors, you know, looking for ideas and perspective on the market. And we were acquired in early 22 by an AI company, uh, Tiffen.

[00:35:07]And so I worked for an AI company for a few years, you know, just running all-star charts, helping the robots understand technical analysis, which was, you know, really something. And, um, >> you know, so, uh, Allstar Charge is now run by Steve Straza, right, who's the chief market strategist there. Does a great job. Strza is absolutely killing it and provides a great service. where I am in my career. I'm focused on what I'm doing for me and my family and my portfolio, right? So, I have kids college funds that have a fortune in there, which is crazy how much money my kids have in their college funds. These 529s are pretty awesome. Uh, you know, we have our retirement accounts. We own real estate. We have multiple real estate properties. Like, I'm in. I'm in in in you know, the stock market goes up, the economy is great, I'm in. And if not, that sucks cuz I'm going to lose, right? And there's nothing I can do about it. So, with the rest of my time and energy and all the money that I have, I'm trying to do something else, right? So, I'm looking for uncorrelated strategies to all of those things, which by the way, I know for a fact I'm not the only person that has retirement accounts, kids college funds, real estate, and is just exposed on the long side. I'm not the only one. So, that's why what I'm doing with additional strategies, I manage two public portfolios and I'm launching a third, is what I'm doing with my money for the reasons that I just shared. I don't have a choice. I have to have uncorrelated strategies to those other things. And I'm sharing those every day uh at Trend Labs, which I don't I don't know any other way. If I'm not blogging and sharing what I'm thinking, I'm going to go crazy because my wife certainly doesn't give a damn. None of my neighbors or my friends, nobody cares.

[00:36:44]Nobody car. You guys care, but like you guys are the exception, right? Um my wife doesn't care. So if I don't have a place to go and share my thoughts, I'm going to go crazy. So that's that far part of it, too.

[00:36:55]>> Well, That's why people are so crazy.

[00:36:57]They're not sharing their thoughts and they're keeping they're keeping it in. I I look at this as therapy.

[00:37:02]>> Yeah. That's what we do week in week out.

[00:37:05]>> Yes. You know, I've told this story before, but I'll do it quickly here. Uh June of 2012, I was at a different shop in Cincinnati, flew to New York, ran around, did some media, I did a I guess a tweet, said, "Hey, I'm in New York."

[00:37:16]And this uh this guy reached out on a DM said, "Hey, you're in my town. Let's go to lunch." Now, this is it's kind of normal to do this now because you >> I called New York my town.

[00:37:25]>> He did. eBay >> and I was like, "Who is this guy?" I told my wife, she's like, she goes, "You really going to go to lunch with this guy?" I said, "I think I will." I said, "We'll probably pay, you know, like I'll risk it. He might kill me, but I might get free life out of the whole thing."

[00:37:35]And sure enough, we went to I always forget the name of the Cobblestone Road right by the New York Stock Exchange.

[00:37:39]What's it called?

[00:37:40]>> Stone Street.

[00:37:41]>> Stone Street. Thank you. We went to Stone Street, ate at that um uh the Mexican place. And uh we've been friends ever since June of 2012. So, thank you uh for taking me out. And Son and I ate on Stone Street just a few weeks ago.

[00:37:52]And um >> call me Well, >> I feel like the next trip is for Kansas City to see the Chiefs, but we'll find that out.

[00:38:00]>> One more that only I would care about and maybe they would get the markets.

[00:38:04]Um, you travel a lot and I joke when I go to a random town. I just ask JC where should I go because you know every restaurant, you know every bar, you know everybody there. Uh, what's like your favorite town for like food, JC?

[00:38:14]>> Kyoto.

[00:38:16]>> Oh, wow. Okay. Why?

[00:38:19]>> Dude, Kyoto is the greatest place ever.

[00:38:21]>> Oh wow. Like you call me right now like JC we got the jet all filled up. Where are we going? Anywhere in the world. Are you kidding me? We are going straight to Kyoto.

[00:38:30]>> Okay. Okay. Are you kidding me? What a great place Kyoto. Like I don't want to take anything away from Tokyo cuz Tokyo is the greatest place ever. And there's >> Kyoto is like smaller. So it's like >> it just I it makes me want to cry just thinking about it. Like it is a special special place man. What a great place.

[00:38:49]You know, I went to Japan about it's been about goodness 20 years now, 20 21 years. And I miss Kyoto. I went everywhere. I went to Sai, Tokyo, Osaka, all these places. I miss Kyoto. And I still regret it. I want to go back with the family. And now from what you say, obviously that's a must.

[00:39:06]>> And the Mediterranean, you know, you can find me uh you know, if I'm in if I'm swimming in the Mediterranean, I'm h something right that day. You know what I mean? uh down in um like in Knoxos or something like that or down in like Sanrope Nice area.

[00:39:24]Definitely all that uh you know Sicily like downtown tower Mina in Sicily. Oh, what a great place. So like that I like I like Japan and the Mediterranean is kind of like where I like to Yeah.

[00:39:37]>> All right.

[00:39:39]>> I have a question. You mentioned like managing money. I mean for yourself and then writing about it and you know we manage money too and like I said we were just having a debate just before this I mean you know about momentum or all all the volatility there how to diversify feel like it's look uh it's always up you know it's not easy managing money to be clear I feel especially now it's you know you can lean into all this AI stuff you know but then if it goes south you get crushed you know but then you feel like you kind of have to write it or you could position for a rotation. You know, you could argue maybe that some of it is happening right now, but then if that AI thing continues and like, oh my god, I'm positioned for rotation didn't happen.

[00:40:21]You know, I've been crushed by momentum or you know, and so from a relative basis, you know what I'm talking about.

[00:40:27]like relative to a benchmark. everyone's benchmark even you're you know managing money for other people they're like okay you know I've underperformed or you know you just go back to the benchmark but now the benchmark leans into technology stocks and you know if technology goes stocks goes south then you lose money period right on an absolute basis curious how you think about portfolio construction right now with all this happening right you mentioned that return dispersion right there's so much of dispersion how do you position things to take a bunch of one versus the other or just to sort of protect this off.

[00:40:58]>> Well, that's just it. Sonu, I put myself I'm in the position where I don't think about that at all. Right? Because if these mega cap tech stocks are doing well and stuff like that, great. I'm in it, >> right? Like I don't have to think about that at all. I don't have a benchmark.

[00:41:12]My whole goal is to have uncorrelated strategies to that, right? And it it doesn't it doesn't fall within this like, oh, I have to beat this benchmark, right? We're looking for absolute returns in completely different ways.

[00:41:26]That's the whole point, right? So, you know, um, uh, the the whole holy grail adding additional layers like Ray Dallio has the uh can can see different strategies which he says is optimal.

[00:41:40]>> I don't think that's necessary to have 15, three, four, five, you know, that's manageable and that is because after that you get the law of diminishing returns, right? Like that's where the real money is generated. Having that >> hard not finding three or four let alone 15.

[00:41:57]>> You don't need 15 because after the 14th strategy like how much better right? You know what I'm saying? So it's less of a benefit. So for me that's the holy grail. And when you talk about diversification it's not you're not sacrificing forward returns >> in favor of diversification. That's not what you're doing.

[00:42:15]>> Actually it's the opposite. What you're doing by adding uncorrelated strategies to your portfolio is that you are lowering the volatility of that portfolio returns and therefore the compounding accelerates and you make a lot more money faster, right? Which is once you understand that math, you look at the whole world differently.

[00:42:34]>> Yeah. Well said. No, absolutely. We were just talking about like managed future type strategies adding to that and you know like it may not all go up at the same time but then >> it doesn't have to outperform the S&P to have a major impact on your portfolio.

[00:42:49]>> Absolutely. No totally.

[00:42:51]>> You mentioned holy grail and I think I asked you this last time but I want to take a different angle on it. You think about the holy grail of like technicians right a campor mentioned Luiga Katie Stockton. Um, you know who else is some big ones that they're >> Edwards and McGee, >> Edwards McGee, uh, Degraph, >> Charlie Dao, >> Chris Kimell, you know. So, who are some young uh, Ari Wald forget Ar. Uh, who are some young upandcomers? You follow a lot of people obviously on social media that probably most people haven't heard of uh, that you think could be someone in 30 years is that this is a big time.

[00:43:27]Who Who's people you follow that no one knows about?

[00:43:30]Um, you got Sam Gatlin, speaking of Kansas, >> Kansas shout outs today. Got to be a new record on right on your podcast on Kansas mentions. I mean, man, so Sam Gatlin for sure. Um, Alfonso de Pablo, >> uh, he's over in Spain. Speaking of Spain, um, >> uh, young guys that you'll be seeing a lot in the future, like the young young guys. I think Sam was like the youngest CMT ever, and I think Alfonso was too.

[00:43:59]Ricardo Saraf. Ricardo. Slick Rick. He's down in Mexico City.

[00:44:04]>> Okay.

[00:44:04]>> He's He's big time. I'm thinking the young young guys I know.

[00:44:10]>> Okay.

[00:44:10]>> Um Yeah, those are probably the ones that I would I would lean in on. Yeah.

[00:44:14]Sam, the FS. There'll be there'll be more. There'll be more.

[00:44:19]>> Yeah.

[00:44:19]>> And who else is on the um Mount Rushmore? We mentioned some. Who who who I forget on the Mount Rushmore? People you've learned a lot from in your career.

[00:44:27]Um, Ralph Louise Allen Shaw.

[00:44:30]>> Allen Shaw. Y >> Allan Shaw for sure. Uh, James Bardone.

[00:44:36]>> Ah, yeah.

[00:44:37]>> Um, Connie Brown, who just passed, >> uh, which is a bummer.

[00:44:43]>> Um, I'm a big Charlie Dao fan. Leonardo Fibonacci the Pisa.

[00:44:48]>> Yeah, >> shout out to Big L.

[00:44:51]>> Um, >> well, John Murphy, he passed also, so I know you're a John Murphy guy. I'm a John Murphy. Huge John Murphy disciple for sure. Um my understanding he wasn't doing we hadn't seen him for a while.

[00:45:01]>> No we haven't. Yeah.

[00:45:02]>> Um but I am a true John Murphy disciple.

[00:45:04]Read all the books then stop read them again. Big Edwards and McGee disciple.

[00:45:08]Like all of that plays plays hard still this day. And then more recent you know Degraph. Um John Ro >> uh John Ro.

[00:45:20]Spoke to him a couple days ago actually.

[00:45:22]Um >> and then I like all the strategist guys.

[00:45:25]Veron S. like those guys a lot. Clifton.

[00:45:28]Clifton's the man.

[00:45:29]>> Yeah.

[00:45:30]>> Ari Wald.

[00:45:32]>> Yeah, Ari for sure.

[00:45:33]>> Ari Wald gotta be in there for sure.

[00:45:34]Does great work.

[00:45:36]>> A lot of good guys.

[00:45:37]>> Oh yeah.

[00:45:38]>> Okay.

[00:45:39]>> Time. Speaking of Degraph, I wanted to bring I I I saw Degraph's note from this morning and he was talking about he's been talking about like momentum, you know, being in a worrying state since April actually. So late April, I think.

[00:45:52]So he's saying his note was about S&P ETFs and futures seeing excessive inflows and large netlong positioning by speculators which he said is not a big problem but he talks about that being bit of a problem in the face of weakness. So he talks about inflows into Q's and SMH ETFs despite this momentum unwind. He's saying basically the bulls are emboldened by weakness and by the dip and things like that instead of usually sentiment just follows returns.

[00:46:22]Returns go down, sentiment goes down.

[00:46:24]But he's saying we're not seeing that.

[00:46:25]That can be a bit of an issue. Curious how you're, you know, like do you buy into that or >> I've tried man for years and years to try to understand ETF flow. I got nothing. I got nothing. I tried. I swear to God, I've tried. I I can't I can't figure out like how to use it to my benefit. So, I got nothing. I mean, your guess is as good as mine, you know?

[00:46:49]>> Yeah. No, I we call Todd something and I'm like, "Hey, Todd."

[00:46:54]>> Right. That's what I do. Or like Valunis or something like that. I'll be like, "Hey." Right. Like, I don't know, man.

[00:46:59]I've tried.

[00:47:01]>> It's I I think that there's I think there's better data for what I'm trying to accomplish elsewhere than ETF flows.

[00:47:07]And maybe I'm just like dumb and I can't figure it out. Maybe that's certainly possible. Ask my wife. Uh I just I don't know. Uh I I just haven't been able to crack that code where I could say, "Hey, this is really helpful for me."

[00:47:20]>> Yeah, I'm in the same camp. I look at the flows. I feel like it should help somehow.

[00:47:24]>> I have no idea what to make of it >> that I'm reading the graph. I'm actually meeting Todd. Well, this episode's going to come out on Wednesday, right? So it's like Wednesday. So yeah, Wednesday evening is I'm having dinner with Todd.

[00:47:38]So >> Todd Zone.

[00:47:39]>> Todd S. Yeah.

[00:47:40]>> So tell him I said JC says to ask you.

[00:47:44][laughter] >> Yes.

[00:47:46]>> Yeah. When I I hung out with Todd last summer. I got him ice cream. Ask him about that. That was a fun fun day. We did we we actually did a live spaces from an ice cream shop in Cincinnati. We had fun. JC, this has been awesome. We obviously are big fans of you. We're nearing the end unfortunately. Uh thanks everyone who listens to these podcasts.

[00:48:03]Give us a like. Give us a follow. Give us a positive review. Give us a negative review. We cannot have leave the witness. Feel free and mention um anything that JC said you like or didn't like in the YouTube comments. We like those comments for those algorithms.

[00:48:14]From a social media, I didn't know I was going to ask you JC until right this second. From a social media point of view, you've been extremely successful.

[00:48:21]You mentioned you started with a blog in 2010. It probably wasn't even called blogs back then. I said, I was doing podcasts before they were called podcast. I was doing blogs before they were called blogs. You've leveraged social media a lot to be very successful. What is the number one thing you think some young person should do to leverage social media to be successful at it?

[00:48:38]>> Yeah, you know, it's it's a great way to show off your work and there are people watching and think of it kind of like your portfolio where like if you're like an artist, you have like these like, you know, paintings or whatever. You're like a video guy, you have like these video documentaries that you've shot or whatever. Think about it your portfolio, you know, and there's people watching because I can tell you as somebody who has, >> you know, hired and, you know, employed people for a long, long time from all over the world, >> you know, these are these are kids that are getting their CMT. They're still in high school. They're passing CMT exams already. And they're like, JC, how do you find these guys? It's like, they find me. And that's the whole point.

[00:49:21]They find me. I I they're like, "Guys, you are the best at like cultivating and fighting." And I'm like, "Strasa told me to hire this guy. I don't know what to tell you. He's great." You know, [laughter] you know, like, you know, it it and it's and it's true, you know, because I put myself out there and I share my work. So, you know, people who are looking for opportunities, who are putting out great work, somehow we find each other. The algorithms really help. Um, you know, don't don't grow up to be one of these angry people, you know, like you see them out there on Twitter every day, whether they're complaining about some war or they're complaining about the president. It's like it's so depressing, right? Like you're just making people around you depressed. Like you're like Debbie Downer on SNL, like you know that that's not you're not making it easy for people to work with you. You're not making it easy for people to be friends with you. like sad angry people on social media like you want to distance yourself from those types of people. So don't end up the old angry guy is kind of like a good uh you know and then be very grateful right you know looking for opportunities out there I mean I love you know Twitter because I've been able to meet so many friends right I met all of them on Twitter literally all these finance all these connections that I have I met him on social media and um you know be open to meeting people IRL like what Ryan was talking about how I DM' him I slipped into his DMs and went on a just some a little bromance uh down Stone Street. No big deal. Little Mexican bromance. And um >> you know, we had a great and we're friends ever since obviously. And we've hung out a million times since then, right? And I can tell you countless stories that are kind of similar, but they're happy hours or dinners or whatever or an event or something like that. And you know, the relationships are are really what makes it awesome.

[00:51:09]Being able to learn from people, have I a great idea flow. And Twitter has done a great job at like now taking the hashtags and then having the whole conversation around that particular ticker symbol and having everything in one place. So if you see why a stock is rising or falling, you could see on Twitter how it's rising and falling.

[00:51:29]YouTube's been a great benefit um to be able to consume content. I I pretty much just watch YouTube for the most part personally. So you know, to me that's what social media is. YouTube and and Twitter is probably where it's at. Um >> Well, that was awesome. Um one more time. So, you write um everybody's wrong. I don't know if it's daily, but many times a week.

[00:51:52]>> Every day, baby. That's what I told every day. So, you write that. You obviously have the uh the morning show every day. You do a straza most days.

[00:51:59]Tell us one more time where people can find those and how to sign up for them.

[00:52:01]>> Go to trendlabs.com. you can sign up for everybody's wrong because in my experience uh the group the consensus is wrong on something at all times. So it's about finding where that vulnerability is for a massive massive unwind. And so that's what we're talking about every day on everybody's wrong is looking for those opportunities and uh I manage two public portfolios a third one coming soon uh that I've been dying to launch small cap portfolio uh that's where big big money is made. you go around and and and talk to the old-timers, talk to people who've been around 40, 50 years and ask them about their biggest winners ever, and you're gonna find that they come from small and midcap stocks.

[00:52:42]>> There's my challenge for all of you. And so, uh, I've recognized that over the years. So, I'll be launching another one. So, all that at Trend Labs, come hang out with me. I'm very lonely here.

[00:52:50]If I didn't have a community to talk to every day, I'd be I'd go crazy. I'd go crazy. So, I need it. So, come join me.

[00:52:56]>> You and us both. But I do have one last thing.

[00:53:00]I still have on my list of things to do.

[00:53:02]Get you together with Dietrich and take Dietrich out for Indian food sometime.

[00:53:07]>> Okay, [laughter] >> let's go. Mumbai is one of my favorite places in the world. We're talking about Kyoto in the Mediterranean. I love >> love Mumbai. Absolutely love it.

[00:53:19]>> I know all the way there, but someday >> food in BKC. Go all the way downtown.

[00:53:26]Let's go, man. Let's go. Why don't we just go to Bombay? The three of us.

[00:53:32]>> I'm all for it.

[00:53:33]>> What are you gonna eat American Indian food? You gonna eat that garbage? Let's go get the real thing, man.

[00:53:39]>> Dude, let me tell you something. First time I went to India, I've been to India a whole bunch of times and learned my lesson. First time I went to India, I I knew they didn't have meat, right? But I didn't truly process it. I was there for like a week. I was literally I would have murdered somebody for a cheeseburger.

[00:53:53]>> I I was shaking. I did not realize how I was like, "Oh, I can eat fish every night in my life." No, I cannot. No, I cannot. My butt. And then I'm in the airport and I see a Burger King. I'M LIKE, "OH MY GOD, IT'S A BURGER KING.

[00:54:05]THIS IS THE greatest day of my life."

[00:54:07]I'm running over there. I'm going to miss my flight. I'm like, "I don't care.

[00:54:10]It's worth it." I get to the Burger King. I'm like, "You don't have any meat? It's Burger King. No meat." I'm like, "Oh my god." So every time I go to India, ever since that first experience, every day for a week or two weeks, just burgers and ribe eyes all day. Every day, burgers and ribe eyes so that you're safe and you can go eat everything else.

[00:54:31]That's the trick.

[00:54:32]>> We should take you down south where I'm from originally, which has we have all the meats there. So >> let's go.

[00:54:38]>> I'm in in >> Well, just avoid the lettuce at Taco Bell. That's my disclaimer as we sign off. eating a Taco Bell.

[00:54:47]>> Anybody who tells me, "Oh, I got sick of Taco Bell." You deserved it. Sorry.

[00:54:51]>> Right. Yeah. There's a >> Who eats a Taco Bell? Like, be an adult.

[00:54:56]>> Yeah. I mean, I'll double check. My boys very well might have ordered food from Taco Bell with that door dash they got about 40 minutes ago.

[00:55:02]>> $47 for Taco Bell.

[00:55:05]>> Yeah, maybe that's not what they got.

[00:55:06]>> Caviar, these burritos. What's going on over there?

[00:55:08]>> I don't know what they got. They're probably Five Guys. They love Five Guys.

[00:55:11]I mean, let me I can look real fast. Let me see here. What else, JC? What are you watching? Let's let's wrap up about a minute. What else you watching out there? What should we know about?

[00:55:18]>> You know, consumer discretionary down in the dumps, man. Uh down in the dumps. If you recall, financials were kind of down in the dumps not too long ago. Healthc care down in the dumps not too long ago.

[00:55:29]Um you know, so I'm looking at that. Uh I got crack spreads on my eye. I don't know if you guys have been uh looking at the cracks.

[00:55:38]>> Yeah, those have been, you know, >> refining margins.

[00:55:42]>> Yeah.

[00:55:42]>> Yeah. So, I'll leave you with that. you know, uh, for those of you who don't know what the crack spread is, let me school you, okay? Because I, some of us who were around 20 years ago, the last time these things mattered, right? So, we remember, see, the older you are, the more cycles you go through, the more things you learn about random stocks.

[00:55:59]So, it's called a crack spread because they crack the molecules, right? And they turn them into usable energy fuels.

[00:56:05]So, you think about it like an apple pie stand, right? You buy the apples, you make apple pies, and you sell the pies.

[00:56:10]If you could buy the apples for 30 bucks and you could sell the pies for 80 bucks, now you're making 50 bucks. Now all of a sudden you could sell the pies for a hundred bucks, 120 bucks, now you're making more money. So what's going to happen? You're going to go buy more apples so you can make more apple pies, right? So that's how it works in energy. These refining companies buy the apples, they buy the crude oil, right?

[00:56:30]And then they crack the molecules and turn them into gasoline and, you know, other energy sources, right? So they're essentially buying more apples because they're making so much money selling the gasoline. So they're buying more uh gas, right? So that's why the crack spread, how much money these refiners are making, how much money the apple pie stand is making, that increases the demand for the apples, that increases the demand for the energy. So tends to be a leading indicator for oil. You're seeing the uh refining stocks obviously doing great. Valero, Philip 66, all these things doing fantastic. And you know that's they've been a relative leader for a long time and with these crack spreads blowing out they're just making more money. They're printing this stuff. And you know it's interesting because you know just for everyone listening the pump price that you see it's not all oil prices. It's about 50% oil prices but a good bit you know quarter of it is actually crack spreads.

[00:57:23]It's that refining margin that is also adding to pump prices. Right. So, it's not just oil's up, >> but then you have to look at what crack spreads, these refining margins, gasoline, diesel, are doing as well.

[00:57:34]>> And then, of course, when prices are going up, you know, they're very quick to raise prices at the gas pump, and then when prices go down, magically, they they just take their sweet little time. It's amazing how that happens.

[00:57:45]>> Rockets and feathers.

[00:57:47]>> Yes. Um, they answer the age old question. It was Chick-fil-A. My kids ordered Chick-fil-A. They they get that all the time.

[00:57:53]>> You know, you know, these chicken biscuits are only for breakfast. Did you know that this is a breakfast uh thing for uh chicken people?

[00:58:00]>> Well, I don't know.

[00:58:01]>> South. They eat chicken sandwiches for breakfast. I just learned this like a year ago.

[00:58:05]>> The kids must have just woken up or something. But >> they've been sandwiches for breakfast.

[00:58:10]That's aggressive.

[00:58:11]>> That's a weird one.

[00:58:11]>> Yeah, that's uh chicken waffles are always good. But listen, um JC, this was awesome. We are huge fans of you. Thank you for joining again. Uh episode 197 of Facts Versus Feelings. JC Prett returns.

[00:58:24]I think that's what we'll call. That's a pretty good title, I think. Um, all right, JC, any last words? Last words of wisdom that we are going to sign off for real. What do you want to tell?

[00:58:32]>> Just um, you know, it it's hard. It's hard out there uh to make money. It always has been. It always will be. You know, there are people that are having a harder time than you. You don't know what's going on in their lives, right?

[00:58:45]Um people are always sitting out there angry all the time and you know calling people out for making a mistake or saying something wrong or you know talking about foreign policy and government decisions like you're in the room and you have all the information like you know anything like you know there's a certain element of gratitude you know they say scientifically that you can't you can't be grateful and then have anger and anxiety at the same time like scientifically in your mind right so if you're constantly striving to find reasons to to be grateful and I mean I have an unlimited amount of reasons to be grateful my to my kids and my health and my family I mean I'm good right so like I think about those things even on a bad day you know I'm sitting there having you know a glass of Cabernet eating my ribeye you know helping my kids eat their food having a nice dinner like you know those are the moments right like that's that's really what it's all about you go back and [music] you know fight another day and go get them on the next day and that's all that's all it is so just gratitude I think is is a really really really uh [music] you know powerful weapon to, you know, attack the world with. Love it.

[00:59:48]There is no better way to end the latest episode of Facts Versus Feelings. JC, thank you as always. Uh, Sonu, thanks to you for a great discussion and thanks to you all the listeners. We'll be back next week. We'll see you right then.

[00:59:58]Take care. Thank you.

[00:59:59]>> Adios.

[01:00:00]>> Information provided on Facts versus Feelings with Sonovar Geese and Ryan Dietrich are for general information only and are not intended to provide specific advice or recommendations for [music] any individual. The statements and opinions of show guests may not be reflective of CWM LLC or its affiliates.

[01:00:19]Past performance [music] is no guarantee of future results. All indices are unmanaged and may not be invested in directly. Investing involves risk, [music] including possible loss of principle. No strategy assures success or protects against loss. To determine what may be appropriate for you, consult with your attorney, [music] accountant, financial, or tax adviser prior to investing. Guests on facts versus [music] feelings are not affiliated with CWM LLC.