In the latest episode of TheStreet Stocks & Markets podcast, TheStreet Pro’s Chris Versace is joined by David Miller, CIO and senior portfolio manager at Catalyst Funds, to discuss the best investing strategies for turbulent times.
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00:00Welcome to the Street Stocks and Market Podcast, where we focus on, well, you guessed it, folks,
00:07what's driving the stock market, the economy, and individual stocks. I'm Chris Versace,
00:13Portfolio Manager of the Street's Pro Portfolio, and joining me this week to break it down and
00:18share what he's seeing is David Miller, co-founder, chief investment officer,
00:22and senior portfolio manager of Catalyst Capital Advisors and Rational Funds.
00:30David, thank you so much for joining me. Great to be here.
00:38So, David, we're kind of at this weird point in the market. We've had a tremendous run.
00:44There's renewed uncertainty on the trade front, questions about the speed of the economy,
00:49inflation. What are you seeing? What are you thinking? What are you sharing with your clients?
00:54Sure. So, when you look at markets, things have certainly calmed down quite a bit since the peak
01:02of the trade war. It looks like Trump has made it clear he really wants to show that the stock market
01:07can go up from here, and he's willing to do what's necessary to make that happen. Additionally, you have
01:13these challenges in the courts as to whether he has the right to put his tariff plan into place.
01:21When you look from a Fed perspective, they're in a bit of a tough spot. I think conceptually,
01:28they would like to actually be able to raise rates, but practically, when you look at the last
01:34GDP print, it tells them, hey, maybe they should be cutting rates a little bit. It's kind of that
01:39quagmire that you get into when things look like they could be stagflation-like, although I think
01:45that was more a product of what was going on with the rate hikes that we had back in 2022
01:51and the lag effects associated with that. So, David, let me just back you up a second. So,
01:56there's a lot of folks out there, you know, you look at the CME FedWatch tool, they're saying,
02:00oh, the Fed's got to cut rate three times this year. But you just said you think the Fed wants
02:04to actually raise rates. Now, that's kind of counterintuitive.
02:07I don't think there's any chance the Fed actually would raise rates. I just mean,
02:13I think when you look at inflation, conceptually, they've always promised this 2% target. We're not
02:19that far from 2%, but it doesn't necessarily make the most sense to say you have a 2% target to be
02:25a little bit above 2% and then be cutting rates. So, it's a bit of a quagmire, but frankly, they can
02:30just keep rates where they are from a pragmatic standpoint. I don't think that they have to cut
02:36and, you know, from an inflation standpoint, it might even make sense if they raise slightly,
02:42but that's not going to happen.
02:44Okay. Okay. So, I mean, my view is that the Fed is not going to do anything until at least September.
02:50I question whether or not we're going to get two rate cuts this year. I don't know if you saw it,
02:54but, you know, as we're taping this, Atlanta Fed President Rafael Bostic was out today saying,
03:00you know, I could maybe see one, you know, and I just think that there's room for the market to be
03:05potentially disappointed depending on how the Fed communicates, you know, dialing back the number
03:11of rate cuts from the three the market sees potentially with the next SEP exiting the Fed's
03:17June meeting going down to one rate cut. Remember the March one had two. So, maybe they're, you know,
03:24potentially easing the market down, trying to get the market comfortable with the notion that,
03:29hey, we're not going to deliver as much as you might think.
03:31Yeah, no, I think you're on to something there. I don't think there's any real indication that
03:36there's a possibility that they're likely to go ahead with three rate cuts unless something
03:40really starts to collapse in the economy.
03:43I totally agree. Totally. But we haven't seen it yet. I mean, we'll have to see what the upcoming
03:46data brings. And we are kind of in a big data week. We've already had the May ISM PMI numbers.
03:54Personally, I'm looking forward to the May service PMI numbers. Is there anything out this week that
04:00you're really focused in on from a data front?
04:04I would be focused if I see a real surprise from what I'd be expecting otherwise. But I'm not
04:10really expecting surprises right now. But I don't have any particular data point that I think will
04:17be very different than market expectations. Okay. Okay. And are you kind of concerned at all with this
04:24Atlanta Fed GDP now forecast? You know, it's a rolling forecast. And exiting last week, it was
04:29like 3.8% for the current quarter. And after yesterday's manufacturing PMI numbers, it actually
04:36popped higher. I was totally surprised by that. I thought it would have been revised lower, but
04:40it was revised higher to 4.6%. Or do you think the OECD is right, that we need to be dialing back our
04:49expectations for GDP this year? Yeah, no, I mean, those expectations do seem a little bit high as to,
04:58you know, what they're communicating. I think we're going to have a decent GDP growth, but I don't think
05:03it's going to be quite there. Okay, okay. So from a market perspective, you know, is there anything
05:10you're eyeing that would help the market move substantially higher from here? Or do you think we're in a
05:16period of, you know, as some technical analysts like to call it, digestion, where we're going to, you know,
05:22churn sideways for a little bit? Or perhaps do you see some more downside risk near term?
05:28I don't see a whole lot of additional downside risk in the near term, barring
05:32some big event that's completely out of the norm. I think when you look at the changes that have
05:43happened recently in expectations, when you think about it, when Trump kind of came into office,
05:48there was a lot of rhetoric about tariffs. Obviously, he didn't try to go ahead with those,
05:54but then he wound them back. There was a lot of talk about Doge, and he started with Doge.
05:59But then when you look at this most recent bill from the House, it looks like the reality is things
06:04are heading in the opposite direction. Sure, there's a little bit of tariffs that we've added,
06:09but it looks like we're actually going to continue to have a deficit similar to where we had it. It
06:14looks like we're going to continue to grow that, you know, $36 trillion debt load at a pace of probably
06:21about 5% annualized. So that's actually, I think, a pretty good thing for stocks on a go forward
06:27basis. I don't think that's a great thing for the purchasing power of the dollar or inflation.
06:33Okay. Okay. So you see more dollar headwinds coming or no?
06:38So I don't think it's specifically from the macro environment. I think it's more just from
06:43deficit spending combined with this scenario that we've had ever since 2022, when after the Russian
06:52invasion of Ukraine, the U.S. weaponized the dollar against Russia to effectively seize $300 billion
06:59of Russian central bank assets. Once we did that, I don't think any of these other emerging market
07:05banks feel comfortable relying on the dollar, given what we did to Russia. You have to imagine if you're
07:11China and you held $750 billion of U.S. treasury bills, and you just saw that Russia had $300 billion of
07:19theirs taken, you'd feel a lot more comfortable if you held more gold in vaults in Beijing and,
07:24you know, less U.S. treasury bills. So I think that's the biggest issue for the dollar over the
07:30long term is a combination of the deficits and de-dollarization from the EM central banks.
07:36So are you looking more domestically focused with catalysts these days, or are you looking
07:41at international opportunities?
07:42I'm pretty much almost always more domestically focused. The macro is much harder to predict,
07:50and on a micro basis, you can find wonderful companies that are very likely to do quite well
07:57in any relatively normal macro environment. So I think that that's the easier way to make money.
08:04Aside from, you know, huge macro trends, like, you know, I think gold is a no-brainer right now,
08:10given what's happening to the dollar.
08:13So it kind of begs the question, right? Are we in a normal macro environment? GDP looks good.
08:18Inflation, yeah, hot. But, you know, how do you see those tea leaves coming together?
08:24Or normal environment, not so normal? Where's the opportunity?
08:29So I guess there's different variations of that. So are we in a normal, like we had in the 90s,
08:35when you had deficits that were roughly sometimes turning into surpluses? Certainly not. Are we in
08:42a more similar environment to what we've had over the past eight years or so? Yeah, I'd say we're
08:47still in that environment. But as that environment continues, that likely is good for large cap growth
08:54stocks. That's largely not great for people holding dollars. That is likely good for gold and Bitcoin
09:01and hard assets. Okay. Okay. So let's talk a little bit about Catalyst, because you are the CIO there.
09:09And for folks not familiar with it, what's kind of your investment strategy, if you will? You know,
09:15how do you see the world? How do you select, you know, positions for the portfolio?
09:22Sure. Well, so at Catalyst, well, we're not just Catalyst. We're Catalyst Rational Mutual Funds and
09:28Strategy Shares ETFs. We're roughly 30 different funds, about $12 billion in AUM across those. And each
09:36one is its own kind of variation of a unique hedge fund type, like strategy in a mutual fund or ETF
09:43wrapper. So if you think about our largest fund, our flagship, the Catalyst, Milburn Hedge Strategy
09:49Fund, that fund is half managed futures, half equity ETFs. Now, the magic to that is that it doesn't fit
09:58the style box, but it does fit what Markowitz told everyone to do, which was to diversify.
10:02And he didn't mean go out and buy 500 stocks. That's 500 versions of the same bet. He meant
10:08invest in some things that do their best in bull markets and some things that do their best
10:12in bear markets. And managed futures tend to do their best in bear markets, because that's when you
10:16get big trends in the market. Equities do their best in bull markets and obviously poorly in bear
10:23markets. So when you combine the two, you can add the returns of the two together, which is why,
10:28you know, a fund like that, Bethes and P500. But adding the two together is also a bit of a natural
10:33hedge, which is when you look at why in every major bear market that fund's been up, you know,
10:402001, 2002, 2008, and 2022. It's clearly the managed futures driving that. So that's kind of the idea
10:46behind what we're doing is we're trying to get out of the style box and go back to first principles and say,
10:52what is the right way to invest if your goal is to put up the best risk-adjusted returns?
10:57Okay. So talk to me a little bit about the equity side of the house, if you will, in that particular fund
11:03or just in general. What's the process for, you know, picking stocks for the fund? You know, some folks
11:10are more fundamental, some are more technical. We're a blend of fundamentals, technicals, and thematics
11:16when we talk about the pro portfolio. But what's the secret sauce or the, you know, investment
11:23mosaic, if you will, over there? Well, so in terms of that fund, that fund is sub-advised by a firm
11:28called Milburn Ridgefield. They've been managed futures experts. They've been doing that for 50
11:33years. Their equity piece is globally diversified equities, but their special sauce is the managed
11:40futures overlay that both adds return and downside protection. But when you look at what we're doing
11:45more internally, like we recently launched an ETF, MPLY, the Monopoly ETF.
11:52Oh, yes. Yes, yes, yes. Go ahead. Sorry. Sorry. I was just reading about this. That's great.
11:58Yeah. So, you know, when you think about it, there's a lot of things that Peter Thiel has written
12:03about how your goal in business is to avoid competition. You're either in perfect competition
12:09or you have a monopoly or an oligopoly. And clearly anyone who owns a business wants to be in that
12:16position where you have a monopoly rather than being in perfect competition. Historically, airlines
12:22haven't even earned their cost of capital or frequently end up going bankrupt. If you look at
12:29restaurants, terrible businesses that have very high fixed costs. They're very cyclical. They just never
12:36earn outsized economic profits. Whereas you look at a company like a Visa or a MasterCard
12:41or Microsoft or an Apple or an Adobe or an NVIDIA, phenomenal businesses, phenomenal margins,
12:50great tailwinds, really strong free cash flows. Why do you have to invest in the companies that
12:56aren't monopolies or oligopolies when all the best returning stocks in history have turned into
13:01monopolies or oligopolies? And I think, frankly, you don't have to try to pick which stock is going
13:06to be the best stock. You can just take these categories of businesses that are far superior
13:11businesses and invest in those. So that's kind of the ideology behind that fund and, you know,
13:18why we launched it because we thought, yeah, it's hard to beat the S&P 500 because if you miss an Apple
13:23or a Microsoft or a Visa or an NVIDIA, you're naturally going to underperform because those companies
13:28turn into a hundred baggers. But if you invest in every company that has great monopolistic
13:34characteristics, you don't have to miss those. And we've never seen this situation where you have
13:39a company that's in perfect competition that turns into a tremendous grand slam home run like those
13:45companies did. So is there is you're watching an industry evolve? Is there something, you know,
13:51some rule of thumb that you're using that says, aha, yes, this is the monopoly company that we want to
13:58invest in? Or are you just looking more in, you know, when you talked about some of those industries,
14:02they're more mature. So you can kind of more readily identify the likely players that you might
14:08want to invest in with that strategy. Well, when you look at the biggest players, it's to your point,
14:14fairly obvious. You know, if you want to buy a computer and you want it to work, you need to buy
14:18Microsoft software. So now I would have said Apple, but same side of, you know, different side of the
14:26same coin. Sure. But a different variation of a monopoly or an oligopoly in the sense that once
14:31you're in Apple ecosystem, they own you, you don't have a whole lot of choices. And they can get great
14:37margins. I would say this about that as someone who's been trapped in the Apple ecosystem,
14:43willingly since 2005, I am perfectly content and happy.
14:48And I certainly understand why a lot of people, you know, love Apple. I certainly have the iPhone
14:55and I like Apple and I don't particularly like Microsoft, but I'm definitely a customer of my
15:01customer Microsoft. I think the best businesses are those where you'll do business, even if you
15:06don't like them. Fair enough. Fair enough. Fair enough. So what about, there were some other names
15:12that I saw in getting kind of ready for this? And I think Tesla was one that you guys have identified
15:17as well. Is that in this particular strategy or is there another strategy that they fit into or maybe
15:22both? So Tesla is in this particular fund. And I think Tesla actually does fit the dynamic. They
15:30launched a new monopoly or an oligopoly, depending upon how you look at it. Certainly from a market share
15:36perspective within EVs in the US, you could say that they're a monopoly. And once you decide you're
15:43going to get an EV, it's a lot easier to go ahead and buy a Tesla and be part of their ecosystem and
15:49chargers than it is to, you know, buy an EV that's not part of that Tesla ecosystem. So whenever you see
15:57a situation where they have the margins that they do at Tesla, which are incredibly abnormal
16:01in the car business and hard, high switching costs, that's a pretty good indication that
16:10they're a bit of a monopolist. But frankly, one of the most straightforward telltale signs
16:14is the courts. Once the courts start coming after you for being a monopoly, that's a pretty good
16:20indication that you have some monopolistic characteristics in your business, whether or
16:24not you want to admit it. And if you look at companies historically that have had the courts coming
16:29after them for those monopolistic characteristics, they've actually been phenomenal investments.
16:34You know, if you got into Microsoft, when the courts first came after them pretty hard,
16:39you'd be sitting pretty today.
16:41True, true. So I have to ask this question then. So if you look across the MAG-7,
16:47I would suspect you have all of them, even including Netflix.
16:51Yeah, that's true. So basically all of the MAG-7, you could say, are monopolies or oligopolies.
16:59Yeah. Are there any companies in this strategy that might surprise anybody?
17:06I don't think it's so much that you'd find that the names in the strategy are things that would
17:10surprise people. I think it's maybe more what's not in here that might surprise people a little bit.
17:15Because if you have an electric monopoly, sure, that is a monopoly, but it's not the type of monopoly
17:21we invest in. Meaning once it's a natural monopoly, rather than they built a product that everyone
17:29wants to use and then divide high switching costs and benefits to that network, then they can't earn
17:37monopolistic profits or economic rents than monopolist would. So if you're a water monopoly,
17:43or if you're a Comcast, or if you're in a space where you have a product where your profits are
17:51regulated as to how much profit or how much return on equity you can actually generate, we actually
17:57avoid those. Because what we want to go for is those that are growing monopolies. So if you look at a
18:04company like Intel, sure, they used to be a monopoly. But once you see that that company starts going
18:09into decline, we don't want to be owning something that used to be a monopoly. So we're looking for
18:14growing free cash flows, growing revenue, high margins, high return on equity that indicate
18:21that they're currently a monopoly and growing as a monopoly rather than contracting or a regulated
18:29monopoly. Yeah, so kind of underneath it, it sounds like you want companies that people are voting,
18:34you know, you could say with their feet or more importantly, with their wallets,
18:37choosing to choose these products. Whereas, you know, you mentioned, you know, water utilities,
18:43electric utilities, most people don't have a choice, right? They're, as you said, they're more
18:47natural monopolies just by the limited factor that they have. You know, but let me get to the point
18:53where you talk about, you know, like Intel and the decline. You know, when you guys measure that start
19:00to measure these declines, is it one quarter, two quarter? Are you looking, you know, for a year?
19:05How do you, you know, because it's a big trigger to pull and make that decision.
19:09Yeah, we're really looking for a combination of two things. So we, if there, if it is in decline,
19:16the stock price trend will tell you that, and it'll be kind of visually obvious on a chart. So
19:21from that perspective, it's technical. You can also see it from the free cash flow statement or from
19:26the revenue statement. If you see revenue and or earnings in multi-year decline, as opposed to some
19:31cyclical bumper or sell-off that's more economically driven, those would be the scenarios where we'd say,
19:38hey, this looks like it's on its way out rather than a growing monopoly.
19:44Okay. Okay. Any other areas in there? I feel like, you know, credit rating companies, some of
19:50these stock exchanges might be candidates for this strategy. Anything else?
19:54Yeah, no, there's a lot of those. If you think about a company like FICO. And to your point,
19:58if people like a product, that's great. But what I'd really prefer is actually that they need the
20:03product rather than they like the product. And that there's some growing demand around it. Meaning
20:09like if you're Visa or MasterCard, nobody's making an active choice to use Visa or MasterCard. But
20:14Visa or MasterCard don't really have any cost of goods sold either. People are naturally switching
20:19internationally from cash to cards. Inflation is good for them. So certainly in the payment space,
20:27Visa or MasterCard is a tremendous example of that. Similarly, if you're like FICO or, you know,
20:34Fair Isaac, you need a credit score if you want to go out and get a loan. And that you're not going to
20:39be that price sensitive for getting that credit score. If you're about to take out a mortgage,
20:44that's several hundred thousand or million plus dollars. You're not going to not be willing to
20:50pay a dollar more for that credit score and say, you know what, FICO, I'm not willing to pay you for
20:55that credit score. Those are the ones we really want to be in.
20:59Yeah. Yeah. I feel like, you know, in the portfolio, we have a couple different inelastic,
21:05what I call business model opportunities in the portfolio. And it sounds like you're saying that
21:09these kind of check that box as well. Yeah. Same thing applies. Like if you think about like a
21:14TransUnion or an Equifax, you know, even after people lost all their private information to a
21:20company like an Equifax, nobody said, hey, I'm not going to be an Equifax database anymore.
21:25So those are, I think, those sweet spots where you have such a good business that even if people
21:32hate them, they continue to grow and grow with high margins and high EPS growth.
21:38That's interesting. Yeah. It's, you know, you raise, in my opinion, a lot of interesting points
21:43about this. And I know that like in the portfolio, we have some of these names, but we don't, we don't
21:48have some of the others. And it's kind of an interesting, it's a different lens. And I like that.
21:53It's the same, similar in respects to why we lean into thematics, you know, in order to,
21:58in my opinion, to outperform the market, you have to think differently than the market. And I think
22:02this captures it in a slightly different way from what we do. And I, kudos to the strategy.
22:09Yeah. I think the interesting thing when you look at it historically is it's not what you're paying
22:13in terms of valuation. It's really what happens with the EPS growth of that company and how
22:19inevitable is that? So those companies where you have to be on top of a trend and people have to
22:23really like you, those are really hard. But if you thought about what was Visa or MasterCard 12 years
22:29ago versus what are they today? Certainly their stock price is tremendously higher, but it was
22:35inevitable. There wasn't anything that you had to predict was going to change for those companies to
22:40continue to do very well and continue to grow. And that's what we really like is when we can bet on
22:46the inevitable rather than a hunch that we have as to what we think the future will look like.
22:51Right. So what's the turnover in the ETF? It's got to be small.
22:54Well, we just launched the ETF, but the turnover is going to be very small. It's going to be
22:58essentially, yeah, we would have owned an Intel a long time ago, but we wouldn't own it today.
23:03We would have owned Comcast when they were growing and we wouldn't own them today. But,
23:08you know, the probability that we're not going to own Microsoft three years from now, I'd say is very low.
23:13You know, the probability that we're not going to own Visa or MasterCard is also very low. You
23:19know, the possibility that we won't own Google, you know, maybe that changes. Maybe OpenAI really
23:23takes, OpenAI takes over and they come up with a much better search solution. So there are
23:30possibilities things will change, but it's going to be a single digits type turnover that we expect.
23:36Yeah. I mean, I don't think anybody can say that they're locked forever, right? That would be the
23:41equivalent. Of course. As I like to say, crockpot investing, you know, fix it and forget it. You
23:45can't do that. You have to be an active investor, in my opinion. And that doesn't mean you're an
23:50active trader. That doesn't mean you're flipping positions around. But as we all know, and certainly
23:54we've seen over these last few months, things evolve, things change, and you have to adjust your
24:00thinking as fresh information becomes available. So David, is there another big strategy inside a
24:06catalyst outside of monopoly that we should be talking about? So when you look at what we're
24:12doing, another strategy we look at is insider buying activity. And when you think about insider
24:17buying activity, you know, clearly I know some things about firms and I know things about the
24:22companies that I invest in. But there's virtually no way that I can, as an individual investor,
24:28know more than the collective intelligence of the CEO, CFO, chairman of a particular firm,
24:35certainly in the aggregate of that company for their entire management team. How am I possibly
24:39going to know more about that business than the entire aggregate management team of that business
24:44knows? So if you can look at what they're doing with their own money, if they're all buying their
24:50stock in their own firm, even though a lot of their livelihood and their net worth and their stock
24:56options and their RSUs are already tied to that company, that's an incredibly good sign. And it's
25:01an especially good sign that they're not going to default on their debt because while certainly
25:06an executive, if they know that they have just got the cure to cancer and they're a biotech and
25:11they're about to get approved and they have some special information, they're not allowed to buy
25:15right ahead of that. But there's certainly no law anywhere that says that an executive who's privy to
25:20material, non-public information, that something really bad is going on at their firm. There's no law
25:25it says they have to buy their stock right before they declare bankruptcy. So by default, you can
25:31avoid those situations by avoiding the companies that insiders are selling heavily or those that
25:37they're not buying. So we have a short duration investment grade corporate bond fund. It's called
25:42the Catalyst Insider Income Fund, IIXIX. And, you know, I think the reason that fund's been top
25:47decile past 10 years or five years or three years isn't that we're predicting the future better than
25:53anybody else, but rather that the insiders give us a really good tip off as to whether or not they
25:57think their company is going to be solvent enough to service their debt by buying their own stock as
26:05an indicator. So that's kind of an interesting lens to look at, I think, aside from monopolies,
26:10because in equity investing, the key is identifying those companies that are going to be the tremendous
26:15winners and letting them ride, because that's where all the returns come from a very small slice of
26:20companies that turn into the hundred Xs or the thousand Xs of the world. But when you look at it
26:27from the perspective of bond investing, the real key is avoiding the losers, not investing in the winners.
26:35So with this particular strategy, David, how many constituents are there in the ETF? And I'm just
26:41asking because, you know, you have to cull through a lot of filings, obviously, to capture this
26:47information, but not all stocks have insider buying in all periods, you know, all quarters. So how do
26:54you, you know, identify those companies and kind of make sure you have enough stocks or constituents,
27:00I should say, to keep the strategy going?
27:05So we have a ranking system that ranks each company from a 10 down to a one based on how many
27:11executives are buying, how much they're buying, what their rank is at the company, how many are buying
27:15and or selling at the same time, what their record to their insider buying or selling activity has been
27:22historically. And then we use that rank from 10 to one to, you know, we don't pay much attention to
27:28those that are ranked below seven. And then we do a deeper dive that are a seven or higher.
27:33Okay. So just because a company might see some buying in a particular quarter does not say,
27:39oh, it automatically gets folded into this product.
27:43That's correct. So it's not automatic. The prerequisite is that we see a high insider buying score.
27:49And then what we really care about after that is, well, what if those insiders are wrong? How can I tell
27:55ahead of time, if there's a possibility that they could be wrong? And frankly, what we found is when it comes
28:01to debt, there's one really easy indicator, or a couple that are really easy indicators as to where you're
28:07taking a material risk. And one is if that company is very levered. The other is when you compare the
28:13debt to equity ratio. And if you see that a company has a very strong debt to equity ratio, and they've
28:18got a lot of cash on their balance sheet, that company is incredibly unlikely to go bankrupt.
28:23If you see that that company is extraordinarily levered, that company is far more likely to go
28:29bankrupt. But I think that's a bit of the irony as to how we approach fixed income investing versus,
28:34you know, how the rating agencies like an S&P or Moody's would work. Because I don't think anybody in their
28:39right mind who looked at the leverage of a Lehman Brothers or a Citigroup, or an AIG going into the financial
28:45crisis would say these companies have very little leverage, we should rate them investment grade or for AIG,
28:50AAA. But if you just did a common sense check and said, well, what's the leverage look like? There'd be a very
28:56easy indicator to tell you, hey, you probably should not consider this to be a low risk situation,
29:02certainly not a AAA that would be, you know, extremely bankruptcy, remote in the case of AIG,
29:09or that actually was right on the precipice, or, you know, Citi or Lehman, where, you know,
29:14Citi had to get bailed out in a pretty big way, or Lehman actually went under.
29:18David, you had me at common sense.
29:22Common sense can go a long way sometimes.
29:24Yes, it can. Yes, it can. You know, probably, you know, on the one side, you know, we always say
29:29that folks can fall victim to too much data analysis paralysis. But the other side of it is,
29:34you know, sometimes folks make things way too complicated. You know, and I think common sense
29:40and asking sometimes a couple key questions can carry you a lot further a lot faster. You don't,
29:47as I say, get lost in the sauce. Quick question for you. So I totally understand the strategy behind
29:53investor buying. Do you have a strategy with investor selling? And the reason I ask that is,
30:01I think that's a little trickier, you know, from time to time, you get good signals if you're
30:06managing insider selling, but not all insiders sell for the same reason.
30:13So when it comes to insider selling, most of the data that you get is frankly useless, or sometimes
30:18that's even a good indication that they're selling. Meaning like, if you look at a company
30:22that's been doing very well, very consistently, and the executives have an enormous percentage of
30:27their net worth tied up in that firm, by default, those companies are going to have selling. So if
30:31you look at the mag seven, while they're tremendous monopolies in aggregate, they're going to have
30:36insider selling. Because, you know, if I started Google, or if I started Nvidia, there's no way I'd be
30:42buying more Google or Nvidia if I had 10s or 100 billion plus of their stock, no matter how much I liked
30:50it, what you're really looking for with insider selling is changes. If somebody starts buying,
30:55and then they flip to selling, or several executives flip from buying to selling, or if
31:00they weren't selling, and then they all start selling at the same time, while the stock price
31:04is declining, that's what you're really looking for. So you want to avoid stock option exercises,
31:09because they tell you nothing. You want to avoid companies where they're doing well, and they
31:13have insider selling. What you're really looking for is, where is a material significant change
31:19taking place. Totally agree. Totally agree. David, I got to tell you, you've been very
31:25generous with your time. I really appreciate it. I hope to have you back. But before we
31:29get out of here today, is there anything that we didn't talk about that we should?
31:35Oh, no, I think we covered a lot of key bases. But I think, you know, what we did top on a
31:41little bit in terms of gold, I think gold is going to be a tremendous opportunity over the
31:45next three years. Aside from equities, I am bullish on equities. But when you look at the
31:49collective buying of the central banks, they bought over 1,000 metric tons in 2023. They bought
31:56over 1,060 metric tons in 2024. And then we combine the impact of the weaponization of SWIFT
32:02and the back and forth with tariffs this year. There's been points where they've been buying
32:06more gold than the gold mines are actually producing. And this trend towards de-dollarization
32:11after we were willing to weaponize SWIFT against Russia is not a trend that is likely to reverse
32:18unless we give Russia their money back. All right. Well, you know what? I'm not sure I'm
32:25going to take that bet. But I will say this. We will have you back in the coming months to kind
32:29of follow up on gold as well as some of these other strategies. What do you say?
32:33Sounds great to me. Looking forward to it.
32:36Awesome. All right, folks. That is the latest edition of the Streets Stocks and Markets podcast.
32:41Thanks for joining us. We'll be back with a fresh episode before you know it.