Andrew Brill welcomes Michael Gayed to explain why liquidity has overtaken traditional fundamentals as the primary driver of market performance. Michael, Portfolio Manager at Tidal Financial Group and Publisher of The Lead-Lag Report, highlights the misaligned incentives that keep liquidity flowing and distort market pricing alongside the Federal Reserve’s controversial role in these dynamics. He also discusses China’s surprising stock market recovery, sectors he’s bullish on, the breakdown of traditional economic indicators post-COVID, and what this all means for investors.
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Michael Gayed 0:00
I think they’re due to be themselves. The lags are still playing out. The silliness of all this liquidity is still playing out. The incentives are wildly misaligned from what the true state of the market is. Fundamentals do not matter. Liquidity is all that matters, and liquidity is is seemingly never, ever stopping, because there’s never been an incentive to do the right thing, because you get elected in office for promising more, which just distorts the pricing mechanism of bull markets even further.
Andrew Brill 0:32
The Fed rate cuts seem to hinge on the unemployment data, but now the employment data seems to be robust. I’m your host, Andrew brill, we’ll talk about where the Fed and the economy are headed right now,
Andrew Brill 0:48
I’d like to welcome back a guest to wealthy. I’m Michael Guyette. Michael is the publisher of the lead lag report. He’s also host of the lead lag live podcast. Michael, welcome back. It’s a pleasure to have you and tell us a little bit more about yourself and how we got here and about the lead lag report. Yeah,
Michael Gayed 1:06
I appreciate it good to be back. I’m a bit of an odd bird in the industry in that I’m a portfolio manager of a mutual fund and two ETFs rules based I put out quite a bit of content research through the lead lag report, and I also work with various fund issuers that are looking for help us as relates to content, social media and financial advisor introductions to my network of allocators. So touch a lot of different parts of the industry. I think a lot of people on know me from the social media end of things, roughly a million followers across X, Instagram, YouTube, and then, of course, substack, where I’ve got 250,000 emails. But everything I try and do is couch into the idea that most of the popular narrative is largely incorrect and that you have to try to think things through from the standpoint of intermarket analysis conditions and where risk is highest. Well, I
Andrew Brill 1:58
do know that I have watched some of your live reports. Actually, just yesterday I watched some. So I know that you put out a ton of content, and it’s all good content, but let’s, let’s try and get it right. Let’s try, and we’ll figure out how to read between the lines and get get it all right. So what is your take on the economy right now? Depends
Michael Gayed 2:16
on who you ask. I guess exactly right. Because let’s face it, some people say it’s rocking and rolling, and then most people will say it’s not, because they have to take on three jobs to pay for the price of milk, right? And there’s a lot of evidence around that, that there’s this you go to vibe session, as some have termed it before, that a lot of people feel like it’s not really a good economy, even though the aggregate stats seem to suggest actually it is. So you’ve got this interesting kind of bifurcation of opinion when it comes to economic strength, when it’s no different than the bifurcation you’re seeing in markets where it’s all about large caps and the vast majority of stocks small caps are not really participating, you know, in in the euphoria that we’ve seen since last year, my sense is that we’re still in this very uneven, unclear type of juncture. There’s things which are still suggestive of a slowdown, there are things which are suggestive of a pickup, there are things which are suggestive of increased productivity. There’s things which are suggestive of the exact opposite, right? So it look, I keep going back to this point that we’re in, this still lagged, weird environment, posts shut down, reopening, stimulus and interest rate hiking cycle where things are just not co moving the way that they would normally, pre covid. We’re still in that four year, five year lag of these monumental events that are still reverberating throughout the economy and in markets, and it just makes it hard to sort of have conviction that everything is evenly behaving the way it really should. Have you
Andrew Brill 3:49
seen anything like this before, where there’s been such a weird time, you know? We, yeah, we did go through covid. We pumped a boatload of money into the economy just to try and keep it moving when people weren’t working and things seem to be at a standstill. But it almost seems like the regular economic models we follow don’t touch on any of this. It’s like, you know, now, economists like, oh my god, I have to think outside the box. And, you know, you go to economics classes like, no, no. This is the way it works. But it doesn’t work that way anymore, does it? Yeah, and
Michael Gayed 4:23
actually, there have been some interesting posts I’ve been seeing on x1 for example, that looks at how the copper to gold relationship, which used to be a great predictor of yields, suddenly broke post covid, right? And actually, a lot of interesting relationships have largely broke post covid, you can argue. So I think it makes it hard to really have a sense of where things are when you can’t rely on what’s worked before. Right now, maybe you can’t rely on what’s worked before as an indicator, because you’re still in this weird lagged window where, again, all these things are still reverberating. You know, you got to remember four or five years in the car. Context of history is nothing, right? And that’s only how far we are removed from from covid and all these monumental dynamics that took place. But I think it makes it hard for a lot of, you know, more traditional fundamental analysts, more traditional economists, to really get a handle on things. I mean, listen, I’ve been saying for, for, for, you know, almost a year now, gold is sending a warning, not because I’m trying to be dramatic, okay, but because, factually, gold tends to move in advance of tail events. It’s not my opinion. You can, you can back test that. You can prove that you’ve had no tail events, you’ve had no risk, right? And you have not not had other than the carry trade momentarily. And these junctures where it looks like World War seven or eight or nine is going to start between Israel, Iran, right? Gold’s movement hasn’t really meant anything as a signal, at least not yet, right, whereas historically, it has right. So the question becomes, do you abandon, you know, the historical you know, cause and effect, the messaging, the signaling effect of these indicators, because they aren’t working now? Or if you do that, are you doing that at the exact wrong time when it’s about to matter again? I don’t know the answer. All I know is that it’s very hard to really get a handle on where things are going here. Do individual
Andrew Brill 6:06
charts, like stock charts, still work? You know, because other things are not working, the predictors, like you said, gold is a predictor of negative events or slowdowns. But are the stock charts still working?
Michael Gayed 6:19
Again, depends on who you if they’re profiting from it. I mean, you know, the thing about charts is that if you actually back test what people reference when it comes to charts, none of this stuff has predictive power. It’s just, it’s it’s the mind needs a narrative. It needs a reason, and a chart is an easy way to give a reason to buy or sell, even though there may not be any predictive power at all. So I don’t know. I mean, it’s like, look, momentum is still obviously very real as a phenomenon, right? The argument that past performance is not is not indicative of future results, which we all have to say in the industry, momentum is past performance being indicative of future results. So trend following, from that standpoint, you can argue works, but it’s been very thematic and very concentrated in just a select number of companies and just a select number of themes. Most things I keep going back to have been chopping right at some point that changes the charts have a breakout, and maybe you have some persistence. But it’s like, tell me, show me any Chartist that thought suddenly China would be up 20% or whatever the number is in a week and a half, right? It’s like, you know, sometimes it has nothing to do with the short sometimes it’s just a matter of being there luckily at the right time. And we’ll
Andrew Brill 7:27
get to China. I just, I want to talk about the rate cut a little bit, because, you know, they were following CPI and PPI early in the year. Then unemployment started to creep up a little bit, and the latest, then they decide, okay, you know, we’re going to cut 50 basis points the unemployed that the employment numbers came in 100,000 better than they thought they were. We’ll see if those get revised down at all. But as they have been revising numbers like crazy. But did they jump the gun here? Do you think? Did the Fed jump the gun? Is things just, you know, rolling along. Okay, I
Michael Gayed 8:02
think, to your point, it’s like revisions are probably going to come now. People will say, well, the revisions were higher unless, okay, but then they’re going to revise it again. It’s like, I don’t know if anybody really has a handle on what the true employment situation in the US is, aside from the fact that we can argue that government statistics are lies and data is manipulated because it’s an election year. I mean, I mean, I think you can also argue, in general, that a lot of this stuff is is noisy because of immigration and all and part time workers and double counting. And you know, it’s like garbage in garbage out. As far as what the real health of the employment side is. What I will say, though, is that I would expect that if employment is strong, small caps would be strong, right? Because small caps are much more sensitive to the domestic economy, right, than multinational large caps. Small caps are much more tied to the consumer than multinational large caps. So that’s another one of those disconnects. Okay, so strong employment, yet small caps, which higher the the vast majority of the number of people in the US, those stocks are going nowhere, still, right? Most are still below their 2021, high, certainly after inflation. Most of them are way below on a real, after inflation adjusted basis. So I don’t know it’s it’s interesting, right? Because unemployment is supposed to be a lagging indicator, and increasingly it becomes more of a driver of what happens going forward and to driver because, you know, it’s a leading indicator, because it causes the algorithms to buy equities, which then causes the wealth effect to go higher, and which causes, then a self fulfilling cycle of money going into the economy. It’s a very weird environment from that standpoint.
Andrew Brill 9:35
Yeah, and I want to, you know, do you think that the Fed backed themselves into a corner? Do you think there’s another rate cut coming in November? I
Michael Gayed 9:43
mean, tell me where the S P is, and I’ll tell you where the rate cuts are. I mean, that’s the reality. So, okay, so you’re right. I didn’t, I didn’t quite answer that question before. I think, I don’t think they should have cut by 50 basis points. I think that was probably premature. Now it’s easy for me to say that with hindsight, right? The reason I say that is, and maybe they were seeing this, and that’s why they want to get ahead of it. Credit spreads are still very tight. Now, prior to the 50 basis point cut, credit spreads were starting to wide, widen, right? Credit stress starting to creep in, and then it’s like Whack a Mole. They immediately hit it down with a 50 basis point cuts and then spreads again narrowed. The problem is, you keep doing that, and then there’s a cost to that, which is inflation, right, right? So if you’re going to keep on trying to play Whack a Mole with credit spreads starting to show some signs of stress, and then try to get ahead of it so aggressively, now you’re going to have potentially another wave of higher prices. So look, the Fed is always late to the game. The Fed is almost never right on things. Everyone says, soft landings, no soft landing. You know, boom, bust, Goldilocks, all this stuff is like, we’re all flying blind, including Powell. Let’s just be real with this. But I do think that I find it hard to believe that the Fed did not know that China would be coming in out of seemingly nowhere, right and now pushing stimulus. If the Fed did know that, then it was a mistake to cut by 50 basis points, because China now becomes a source of cost push inflation right on the commodity side, I think that’s the transmission mechanism. If the Fed didn’t know, then you know, then it’s only a mistake, because you know now China is entering the game from a an unknowable variable, as far as how their recelation, potentially and stimulus could cause global inflation to come back.
Andrew Brill 11:35
So let’s talk about China. Since you mentioned it, they they’re pumping billions and billions of dollars into their economy. Yeah, why not? Well, they see what happened to us. You’d think they’d learn from someone else’s mistakes, but we never do. We have to make our own mistakes and but they they needed some sort of stimulus, I guess, and now their stock market. Do you think the stock market is going crazy because of the stimulus, or do you think it was just primed and ready to take off. Look,
Michael Gayed 12:02
in general, there is massive under investment in China, because those markets have sucked right for the last 15 years. I mean, let’s just face it so it’s like and on top of the fact that there is this, this allergy, let’s call it among you know, financial advisors to buy anything China, because if they show their the mom and pop separately managed account investors that they have a mutual fund or an ETF that has the word China in it, in the name those and people who are not investors are gonna say, Why the hell am I in China and not the US? So you’ve had just general significant under investment and under allocation in China. And you can argue for good reason, right? So the move was, was due to happen at some point, because the bearishness was so insane. Now, the thing is, I know a lot of people are like, well, you know, like, I put a poll out after, after that huge move, and I said, you know, on, on x, at lead lag report, is there still more room to run for China? And it was like, 5050, after that big spike, which makes me think that probably is more room for China to go, that there’s still a lot of skepticism, because people are like, Oh, this was just like a short squeeze, and, you know, we’re gonna come back down. Do you in mind China has underperformed the US for what, 15 years more than that? I mean, unless cycles are dead, I think there’s gonna be a multi year cycle where China outperforms the US, not a very popular opinion. Certainly, the valuations are cheap, okay, maybe cheap for reason, sure, but there’s a price for everything, right? So I look at emerging markets as China. Obviously the biggest component of that as being long overdue for relative strength, long, long overdue for relative strength. Doesn’t have to happen tomorrow, right? That you have a continuation. And obviously we’ve seen some violent moves recently where, you know, suddenly China’s down 10% right after being up so big. But that’s, you know, I just think that there’s a lot more potential. Because nobody else thinks there’s potential,
Andrew Brill 13:53
right? It seems that it’s vulnerable to those violent those violent swings, as you said, like we were just a short time ago, when people were talking about AI, and things went up, and then they went down, and then they went up. It seems that China is going to ride that wave a little bit, and that’ll affect the us a little bit too.
Michael Gayed 14:12
Look, it’s all interconnected, right. Again, the transmission mechanism, ultimately, is about commodities. So to the extent that commodities were to keep on running because of a feeling that China now is going to stimulate and they can’t back down from the stimulus, right? Then commodities should run. If commodities run, then you have another bout of cost push, inflationary pressure, in which case the Fed next move maybe to actually have to raise rates. I’m not saying that’s guaranteed, but I’m saying that’s a very plausible scenario with China now coming in like this. What does
Andrew Brill 14:42
this mean for the dollar? Michael, because when China gets stronger, obviously the dollar would get a little bit weaker. Or am I over analyzing
Michael Gayed 14:50
that maybe. I mean, it’s going back to that point about everything’s sort of uneven and unusual. I mean, the dollar is weakening because of interest rate differential. On expectations, the Fed’s going to keep on cutting rates. The Fed doesn’t keep on cutting rates, and the dollar strengthens, right? So I think it’s unclear what happens to the dollar. I I’ve been arguing that the dollar can have one of these super spikes at some point, right, where just suddenly it’s and that maybe sparks a sovereign debt crisis. I still think that’s possible, especially if you know you have another reverse carry trade scare at the end where the dollar would spike in every currencies outside of the end. So it’s, I guess, my way, it’s hard to get a handle where the dollar goes next. Everyone now is seemingly bearish because it’s it’s turned lower. The recency bias is unbelievable now in terms of the way people extrapolate the most recent past of the future, I don’t think it’s going to be that simple when it comes to currency movement.
Andrew Brill 15:43
I want to get back to unemployment for a second. And I had a I told you I had a little theory about this. And after covid, it seemed a lot of people didn’t leave the workforce, but they went to work for themselves. They opened up an LLC, and they became consultants, and they realize that there’s all kinds of tax advantages to be their own boss and a consultant. So now they’ve opened up their own company, an LLC. They have their kids on the payroll. So now it looks like there’s extra employment so they can put money into a Roth IRA for college, for whatever it is. And it seems like a lot of people have done this, but that skews the unemployment numbers, because it looks like a lot of people are working, but when you have family members getting paid by your LLC, that’s definitely going to skew the unemployment numbers, isn’t it? Yeah,
Michael Gayed 16:34
I haven’t looked at that. I don’t know at the margin of how big of a driver that is, from what I’ve seen, it seems like immigration is sort of the biggest variable, from a noise perspective, to really get a handle what the real numbers are. But I think there’s a degree of truth that it’s hard to really know what the true employment picture is. That’s why I prefer to look at market prices, right? And I keep going back to the market that that clearly is most sensitive to. That is small caps, is consumer discretionary stocks, none of those look that interesting.
Andrew Brill 16:57
And I also saw a tweet of yours saying that people aren’t leaving jobs the way they were. And I know I think it’s Gen Z, they switch jobs almost annually, and that’s not happening as much anymore. So it seems that, you know those job openings where somebody would leave and go to another job, those job openings aren’t available,
Michael Gayed 17:17
yeah, and it’s been trending lower, and that’s simply what you’ve seen in advance of recession. All right, so it’s a process, not an event. From that standpoint, we’ll see maybe some of that is, is because of uncertainty around the election. I don’t know, right? It seems plausible that that’s there’s a component to that, or it could just be that finally, the the effects of the fastest rate hike cycle in history are causing companies to scale back, and they’re saying, You know what? Maybe we no need to have as many job openings, because AI is going to, you know, solve a lot of the employment issues we might have. Again, who knows? Another example how this has been a hard environment to really have conviction in the in the what’s right to the right of equal sign right in the solution that we’re looking at from all these variables. So, you know, all the talk about soft lane.
Andrew Brill 18:01
Do you think a recession is on the horizon?
Michael Gayed 18:04
Everyone’s been thinking that. And you can argue, I’ve been, you know, negative on equities. I’ve been flagging these risks around Japan, which worked for two trading days, and then everyone forgot about it with the worst period. I don’t know. I mean, I think when you think about recessions of the most recent past, for the most part, they’re almost event driven, right? They’re not really recessions that are like overcapacity, and then you’ve got to work that off with with layoffs. I mean, it’s been, you know, almost like stock market crashes, wealth effect crashes, that caused momentarily a slowdown in the economy, or reversal in GDP, and then you come right back when the Fed just kind of bombs the whole situation with more and more stimulus. I think it’s it so much of this is going to depend upon the refinancing wall, right where all this debt is rolled over into higher rates. Can these companies survive? If they can survive, then you probably don’t have a recession. If they can’t survive, unemployment continues to rise because now companies can’t afford their labor, in which case, then you have a real slowdown in consumption spending. But honestly, it’s hard to know how many economists have been saying recession that you know, and it’s like, it’s not a knock on them. I mean, they’re trying to figure it out like everybody else, right? And nobody knows, right? It’s everyone, just like everyone’s saying soft landing now, well, if everyone’s saying soft landing, I don’t know, maybe they’re gonna be wrong too.
Andrew Brill 19:31
So what does let’s talk about the debt for a minute, and what effect do you think that that’s gonna have? Because that’s not getting any lower, and we’re going to continue to service this debt, which means we’re going to have to continue to print money to service this debt, and it’s going to be a vicious cycle. So unless we stop spending, which neither one of these presidential candidates is going to do. Because, you know, on one side, I hear seven and a half trillion added to it. On the other side.
Michael Gayed 19:59
There’s all kinds of infrastructure spending. So, you know, how do we get a handle on it? The way to do it is get Nancy Pelosi to train the entire government portfolio. Because she will just, I’m just, obviously the profits will take care of the debt. Clearly, I don’t know. I mean, debt only matters when people care about it. I mean, look, right, it’s like, we talk about it, but nobody cares about it until it actually creates, you know, some kind of a crisis. And you haven’t had that yet, right? And then it’s a question of, okay, well, okay, so debt to GDP. What is the magic debt to GDP number where the so called vigilantes kick back and say, you know, we’re not gonna pay government debt, and then if the so called bomb vigilantes say we’re not gonna buy bonds, then the Fed will. And, you know, as long as the dollar is the reserve currency, as long as we have military bases over the world, that dynamics not gonna change, right? So, what’s
Unknown Speaker 20:53
the,
Michael Gayed 20:54
what’s the debt to GDP? Where it becomes, you know, the real crisis point? That’s the only question that matters. But who knows that could be 200% for always it could be 300% I mean, I don’t know. The one thing that I think you can say about the debt situation is that it further makes the point that no matter what they need, they in quotes the policymakers, they need negative real interest rates, meaning they need inflation to be higher than the cost of capital, to eat away at the interest expense from an inflationary perspective, right, right? So, which is why would you can argue to me, one of the reasons the Fed did lower rates because they want to get back to negative real rates, right? If there’s another wave of inflation and they keep rates where they are. So from that standpoint, it goes back to this point that they’re going to keep on jamming, you know, money into the system. It’s, that’s gold bullish. That’s, you can argue, non correlative assets bullish. I think a lot of, large part of the gold move is because of that government debt and the realization that they have to keep rates negative. And gold does well, when you’re a negative, real environment. So
Andrew Brill 21:58
where are we with bonds? What do you think about the bond market and obviously lowering rates, but I think the 10 year went up and they’re cutting rates. So how is this working? It doesn’t make any sense. Well, I
Michael Gayed 22:11
mean, I don’t get make sense from the standpoint of, it’s, I mean, part of that’s the China response, right? It says, again, going back to cost, push inflation so the longer end rises. It’s also maybe the the bond market saying the Fed was wrong to cut rates, even though the Fed, even though the bond market was saying they should cut rates, that maybe they were wrong. It’s funny how that that works. But it also goes to this point that it’s like, All right, well, how much control does the Fed really have? So they lower rates, and then rates rise on the 10 year. Well, the 10 years, what drives mortgages, right? So did they really lower rates? Are they actually raise
Andrew Brill 22:45
rates? Yeah, I guess it’s perception, right? And that’s not going to help the housing if the 10 year goes up and mortgage rates go up, that’s not going to help the housing market at all. And I you know if that could have a positive effect, then maybe prices will come down,
Michael Gayed 22:59
maybe, or, or people are just gonna say, you know, let’s move to another state. Or I’m okay living in a warehouse. I can buy from Amazon Prime, you know, and put on my piece of land in the middle of nowhere, and I could just live off of that. I mean, it’s weird, right? We’re in this environment where it’s like, there’s a substitution effect, even for housing, right? Where you can buy stuff on demand that’s just basically a roof and live comfortably. You know, I can’t make heads or tails of this environment in any way that thinks they can themselves. I think they’re due to be themselves. The lags are still playing out. The silliness of all this liquidity is still playing out. The incentives are wildly misaligned from what the true state of the market is. Fundamentals do not matter. Liquidity is all that matters, and liquidity is is seemingly never, ever stopping, because there’s never been an incentive to do the right thing, because you get elected in office for promising more, which just distorts the pricing mechanism the whole market even further. So you can tell I’m very optimistic on the state of analysis when it comes to markets.
Andrew Brill 24:10
So you know, in sticking with that theme of markets, AI has been like the big you know thing, and is it as big as from a market standpoint, it seems to have died down. Obviously, Nvidia isn’t climbing the way it was, and other AI stocks have taken a hit, but it’s now grown tentacles into other places. Are we still watching AI, or are we looking at the peripheral of the periphery of AI, and you know what it can do for other things, like energy, like, you know, stocks that not don’t, aren’t, don’t build the chips, but they build the racks, they build the cooling systems. Are we looking at all of those things?
Michael Gayed 24:52
I mean, it hasn’t mattered much from a market perspective recently, but it matters a lot from a marketing perspective, right? Because how many companies are. I’m saying they’re using AI and getting subscriptions because people are like, Oh, it’s got AI, it’s gonna be better than ever was. It’s the same damn service, right? And deliverables are all the same. I The one thing I have confidence in is that the human mind is notoriously bad at estimating how long things take to play out, right? It’s like, you know, different than construction you do something Construction wise, there’s an estimate that’s gonna take nine months, and suddenly it takes two years, right? It’s the same thing the human mind is. There’s all kinds of studies on this. We’re very bad at estimating time. So is AI the future Sure. Is it gonna happen as quickly as people think? I don’t think so at all. All right, it’s fine. You’re still moving in that direction, right? But we gotta temp our expectations a bit, I
Andrew Brill 25:45
think so, what sectors are we looking at that are like, obviously, utilities, energy, powering, AI, you know, depending on who you ask, either you know, natural gas or natural power, whether it be wind or solar. Where are we looking these days? That is it interesting to you? Yeah, look, I
Michael Gayed 26:08
think I argued at the start of the year, utilities would likely be the best performing sector, partially because of the defensive nature and partially also because of the AI play, right? Because of the electricity usage demands. I think energy broadly. I think commodities and material sector broadly. Right again, I go back to that’s a bit of a China play. From that standpoint, I think those are probably sleeper sectors that should start to outperform. And I do think in general, healthcare is probably due. And I say healthcare outside of GLP, one place, primarily biotech type companies, I think again, let’s go back to if AI is real. Nothing is more complex than the human body. So you would think that if AI is going to be this, this incredible, you know, driver of breakthroughs, it should apply mostly to to health, right? So I think, I think those areas are probably the most powerful if you’re going to have some kind of recession or slow down, consumer staples end up being the place to be. From defensive allocation perspective, again, I I’ve been wrong on emerging markets for a while. I am hopeful that this is, you know, a turn for that as an investable play, because as long as we’re in an environment where it’s just large cap tech and that’s the only thing that works, like it has been, the truth is, yeah, if you’re a retail investor, it’s great for you. You’re you’re making money. Those in the industry hate an environment like this, right? Because you can’t beat the S P when it’s the only game of town. You can’t beat the NASDAQ once the only game town, you can’t raise assets. When, if it ain’t broke, don’t fix it with the s, p, the NASDAQ. And that’s a story of tech. So
Andrew Brill 27:44
commodities that they’ve been beaten down for a while. Is that, because China was in such a such bad shape, is China? Does the Chinese economy drive the almost the commodity market? I think
Michael Gayed 27:57
in the in the eyes of most investors, they are the, the marginal driver, right of of demand. Now, India is a part of that too, because they there’s a whole bunch of infrastructure that that needs to take place, or many, many, many years for that country. But I think, you know, from a, from a from, like a Pavlovian response perspective, China rallies, commodities, rally, it’s
Andrew Brill 28:21
just the it’s just the way it’s been, the
Michael Gayed 28:25
way the algorithms love it. That’s how they respond to it. So,
Andrew Brill 28:30
you know, we talked about energy. Do you see nuclear becoming a much bigger thing? You know, Microsoft just reactivated Three Mile Island, which is not far from where I grew up. So it makes me nervous a little bit, but the world is using nuclear power. I know here in the United States, we try and shy away from it a little bit because of the nuclear waste and the dangers of it. But do you see nuclear power as being something that we get further into imagine?
Michael Gayed 28:56
So Microsoft, in that restart, doesn’t suddenly have a blue screen of death when it comes to nuclear, because that would scare me, given the history of how Windows operating as a force. I’ve been bulletin nuclear for the last like two years. I’ve written about it extensively. I think it makes a lot of sense. I think the concerns are overblown. From a lot of perspectives. It’s actually among the safest forms of energy, when you look at aggregate statistics against coal, against a lot of other things, as far as deaths per unit power, let’s call it, having said that, there’s always going to be the stigma, right? And these are very long tail type of dynamics. When it comes to nuclear, I don’t think you can possibly have an AI driven future with that nuclear. You’re not going to power that stuff with wind. You’re not going to power this stuff with solar. So that is the bottleneck. Right to AI, it is the nuclear play. I think it’s, it’s going to likely continue, as you know, it’s volatile, as you know, it’s a relatively small part of the mythical landscape. But I think it makes sense for most people to consider, you know, sizing it appropriately, somewhat of a position in anything uranium.
Andrew Brill 29:58
Do you, uh. Do you think about oil at all? I know that right now there’s maybe a little bit of volatility in oil, only because what’s going on in the Middle East. I think it jumped over $70 a barrel, and because it had been low. But then now that this conflict between Israel Iran is getting a little more sticky, do you view oil is something that’s going to continue to rise
Michael Gayed 30:22
maybe. I mean, the thing is, like, every time you end up having one of these scares, oil spikes and comes back in, right? And oil is is, I think, more of a treating commodity than a hold. And the history of oils would suggest that, right? So I don’t think it’s as big. And again, it’s like oil is also not going to be as volatile, just because we have so much of it, you know, from the US right, as far as how much we’re producing, so important to watch. I don’t think it ever has any sort of significant long term implications, unless you have a real receptor, unless you have some real global conflict that lasts for more than a day. So
Andrew Brill 31:01
the million dollar question, where are you know, you’re sitting down with your family and friends. What are you telling them to do with their money these days, you know, other than sticking under the mattress and wait for, you know, a rainy day, is there some place that you know, whether it be a sector or, you know, something like that, where you’re telling people, you know, this is where I think is safe right
Michael Gayed 31:23
now? Well, saying nothing is safe, everything No, really good. I mean, because everything has risks, right? Everything is tailored. There’s no such thing as a store value, from that standpoint, by definition. Honestly, I think the best thing to do with your money is create memories rather than putting into markets, because the reality is, our time on this earth is limited. Nobody knows what tomorrow’s investment drawdown is going to look like, so you might as well actually get a higher high of a nice smile by being with your family and being with your friends. Right. Aside from that, I would say I’m a fan of barbell type strategies where you’ve got 80% of your assets and safe, relatively safe, conservative investments that don’t really move that much, and then 20% in the really aggressive side of the marketplace, where you can play speculative. I think you end up having a much more robust portfolio like that than a more moderate, 6040, type allocation. But yeah, I I just don’t think I’m cynical of this industry. I’ve seen a lot of cycles. I’ve seen a lot of things come and go. I’ve seen a lot of optimism. I’ve seen a lot of pessimism. Everything has risk. Yes, you can diversify, but then you have a year like 2022 and diversification doesn’t matter. So now, yes, you’ve got to put your money to work, to work for you, but you also have to enjoy that money where you can without breaking the bank, and memories and things you do with your loved ones matters more than anything else.
Andrew Brill 32:50
So safer stocks, stocks that traditionally have have moved, but not skyrocketed, but continue to just creep along, and that’s the safe play right now,
Michael Gayed 33:01
relatively likely to outperform play.
Andrew Brill 33:06
So Michael, where can we find you? I know that you know lead lag live and the league lag report. Where else can we find you? I know you’re on Twitter. Give us your Twitter handle and let us know where else we can find Yeah, I
Michael Gayed 33:18
mean everywhere, except telegram. Scandals on so that lead lag report on X, Instagram, YouTube, threads, LinkedIn. Lead Lag live on Spotify, Apple, YouTube, you know, podcasts and substack. Lead Lag report.substack.com, where I put our research, daily look. I think it’s like everything else, right? The one who wins the the content game is the one who gets people to think. Getting people to think doesn’t mean that I’m right or wrong. It’s just trying to get people to think differently, as opposed to the mainstream stuff, where it’s all confirmation bias. So that’s what I try and do with the content. I believe in what I’m putting out there, what I’m saying, I have a particular way of framing things on x, which is part comedic, part sarcastic, part loud, but it does work with the algorithm, but everything I do is ultimately about intermarket relationships, cycles. This has been a very difficult cycle for me. I’m very public and open about it, but I think it’s because so many things are off in this environment, at some point that will stop.
Andrew Brill 34:15
Well, Mike, I appreciate your time, and I really appreciate the sarcasm and the cynicism on Twitter. You know it’s I enjoy it, and I enjoy listening to your your your podcast, and I appreciate your time. Thanks so much for joining me. Thank
Michael Gayed 34:31
I appreciate it. Thanks
Andrew Brill 34:32
so much for watching our discussion here on wealthion with Michael guy Ed. It was a pleasure having him, and hopefully you’ll check out the lead lag report. But before you do if you need help being financially resilient, please head over to wealthion.com/free for a free, no obligation, financial review. And of course, if you could like and subscribe to the channel, we would greatly appreciate it, and don’t forget to turn on notifications. So you know when we post new videos on the channel. And please do the social media thing with us. All the links are in the description right below. And if you like this content and are looking for more ways to achieve long term wealth, watch this video next. Thanks again for watching until next time. Stay informed. Be empowered and may your investments flourish.
