49 min
Markets Fall: The Difference Between Old VS Bold Pilots PodCasts Archives - McAlvany Weekly Commentary
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- Investing
Secular Bear Markets are substantially longer & deeper than cyclical bears
Dollar up over 11% - Gold only down 3.3% YTD
NFTs (Digital Rocks) lose 90% YTD
Markets Fall: The Difference Between Old vs. Bold Pilots
July 5, 2022
“You have bear markets account for up to 40% of all timeframes in terms of market trading going back to 1877, and then the last six months of pain are just the introduction following a greater than 12-year expansion. Cash and gold. Haven’t we said that before, Kevin, where— You want optionality. There’s your justification for cash, but you have to have stupidity insurance.” — David McAlvany
Kevin: Welcome to the McAlvany Weekly Commentary. I’m Kevin Orrick along with David McAlvany.
I can’t help but think back to the year 2000, the tech stock bubble. I’m thinking January, February, about the time of the Super Bowl. And the tech stock bubble, it was flying high. You had sock puppets that were representing companies that were worth more than all the airlines combined, and it was just pet food online. It was this vision, vision. I think of the commercial—this was in the year 2000 before the tech stock bubble blew up—I think of the commercial—this Super Bowl, Dave, with Matt Damon. It starts out and he says, “History is filled with almosts.” So he starts shaming people immediately for not buying what he’s talking about. “There are those, however, who embrace the moment and they committed.” Then he ends the commercial. He says, “Fortune favors the brave.” Of course, you remember the scenes. He’s walking past guys climbing mountains and Magellan and his boat, and trying to let you know that if you go to crypto.com, that’s the future. Now, here’s what I remember from that. The year 2000 changed within a very short period of time, and those who had those tech stocks that were just never going away, a lot of them did. What we’re seeing is the same type of thing right now in the crypto space, even in the speculative FAANG stock space. What are your thoughts? Is this going to be short lived, or is this going to be long and painful?
David: This weekend over the 4th of July, we stopped in a place called Pagosa Springs. It’s known for its hot springs. Right along the edge of the river, there’s a place where you can go and soak for free. We call it the hippie dip because it’s kind of a locals-only.
Kevin: It’s right in the river. These hot springs are in the river.
David: If you want to pay 40 bucks, you can go to the spa—per person, or you can just go to the hippie dip and kind of hang out with the locals. And it gets colorful. I’ll say that. On the 4th of July, we’d never seen that many people down at the hippie dip.
Kevin: Just the whole family?
David: You say fortune favors the brave, the whole family’s there. We’ve got to pull the kids aside and say, “Sometimes bravery can be confused, and it’s just flat stupid.” There’s a kid probably 16 years old. Into the rapids, he decides that it’s a great idea to dive head first straight into the rapids. You can’t see what’s underneath the waters. You have no idea what’s going to happen next. You have belief that you’re going to make it through. It looks as if the way the water curls up and out, there is no major rocks.
Kevin: At the moment you feel like fortune favors the brave.
David: And that’s how he’s feeling, is fortune favors the brave. I’m downstream in the middle of the river actually waiting to drag him out because this does just not look good. Fortunately for him, nothing bad did happen. Mary Catherine and I are comparing notes, going, “Let’s make sure the kids understand, floating is fine. Diving headfirst is not a mark of intelligence. It’s a mark of someone who hasn’t had their prefrontal cortex fully developed yet, and in that sense,
Secular Bear Markets are substantially longer & deeper than cyclical bears
Dollar up over 11% - Gold only down 3.3% YTD
NFTs (Digital Rocks) lose 90% YTD
Markets Fall: The Difference Between Old vs. Bold Pilots
July 5, 2022
“You have bear markets account for up to 40% of all timeframes in terms of market trading going back to 1877, and then the last six months of pain are just the introduction following a greater than 12-year expansion. Cash and gold. Haven’t we said that before, Kevin, where— You want optionality. There’s your justification for cash, but you have to have stupidity insurance.” — David McAlvany
Kevin: Welcome to the McAlvany Weekly Commentary. I’m Kevin Orrick along with David McAlvany.
I can’t help but think back to the year 2000, the tech stock bubble. I’m thinking January, February, about the time of the Super Bowl. And the tech stock bubble, it was flying high. You had sock puppets that were representing companies that were worth more than all the airlines combined, and it was just pet food online. It was this vision, vision. I think of the commercial—this was in the year 2000 before the tech stock bubble blew up—I think of the commercial—this Super Bowl, Dave, with Matt Damon. It starts out and he says, “History is filled with almosts.” So he starts shaming people immediately for not buying what he’s talking about. “There are those, however, who embrace the moment and they committed.” Then he ends the commercial. He says, “Fortune favors the brave.” Of course, you remember the scenes. He’s walking past guys climbing mountains and Magellan and his boat, and trying to let you know that if you go to crypto.com, that’s the future. Now, here’s what I remember from that. The year 2000 changed within a very short period of time, and those who had those tech stocks that were just never going away, a lot of them did. What we’re seeing is the same type of thing right now in the crypto space, even in the speculative FAANG stock space. What are your thoughts? Is this going to be short lived, or is this going to be long and painful?
David: This weekend over the 4th of July, we stopped in a place called Pagosa Springs. It’s known for its hot springs. Right along the edge of the river, there’s a place where you can go and soak for free. We call it the hippie dip because it’s kind of a locals-only.
Kevin: It’s right in the river. These hot springs are in the river.
David: If you want to pay 40 bucks, you can go to the spa—per person, or you can just go to the hippie dip and kind of hang out with the locals. And it gets colorful. I’ll say that. On the 4th of July, we’d never seen that many people down at the hippie dip.
Kevin: Just the whole family?
David: You say fortune favors the brave, the whole family’s there. We’ve got to pull the kids aside and say, “Sometimes bravery can be confused, and it’s just flat stupid.” There’s a kid probably 16 years old. Into the rapids, he decides that it’s a great idea to dive head first straight into the rapids. You can’t see what’s underneath the waters. You have no idea what’s going to happen next. You have belief that you’re going to make it through. It looks as if the way the water curls up and out, there is no major rocks.
Kevin: At the moment you feel like fortune favors the brave.
David: And that’s how he’s feeling, is fortune favors the brave. I’m downstream in the middle of the river actually waiting to drag him out because this does just not look good. Fortunately for him, nothing bad did happen. Mary Catherine and I are comparing notes, going, “Let’s make sure the kids understand, floating is fine. Diving headfirst is not a mark of intelligence. It’s a mark of someone who hasn’t had their prefrontal cortex fully developed yet, and in that sense,
49 min