In this episode, Eric Chemi teams up with Pete Najarian, CoFounder of Market Rebellion, ( @MarketRebellion ) to tackle the complexities of this week’s financial markets. From Bitcoin’s rollercoaster ride to the effects of economic uncertainty and tech layoffs, they provide valuable insights and tactics for investors seeking to capitalize on 2024’s unique opportunities.
Eric Chemi 0:05
Welcome to Wealthion. I’m your host, Eric Chemi. We are here for our weekly market recap and I’m joined by my good friend Pete Najarian. Pete, so much happened this week, I think about the Bitcoin ETF coming on board is certainly a big news event that happened. But we saw comments from Jamie Dimon, for example, at the JP Morgan healthcare conference, talking about the uncertainties in the economy right now wondering about how hard or soft this landing is going to be and, and referencing those COVID payments, they’re going to stop coming. And we’re going to start seeing a lot of issues with people’s pocketbooks. And then we saw a lot of layoffs from the most, you know, the most valuable companies that were like The Magnificent Seven, they’re laying people off. So the the richest companies are laying people off. What does that mean for everybody else? So Pete, thank you so much for joining me here. And sharing your thoughts today.
Pete Najarian 0:55
Absolutely I’m excited about it’s always fun to be with you, you do such a great job. And it’s an interesting market. It always is an interesting market to me, I dig deep into it. But to your to your point. There’s a lot of new stories out there. And this week, we were filled with multiple of stories that really kicked it off on Wednesday, it added to it and Thursday, and then we come back to Friday. And it’s and we start earning. So it’s it is a busy week, what stood out to you the most and in terms of this is going to have ramifications for the whole year because you know, there’s a lot of stuff we talked about week in week out. They just don’t matter the next week or the next month. But then little things that we don’t pick up on that become the major trend for the year. Yeah, I think this was a big deal for Bitcoin, quite frankly. I mean, that one stands out it was one of the early ones. And there was all that that craziness that was going on where the SEC got hacked and all this other storylines. I mean, this has been a very interesting journey for Bitcoin, the ETF and the creation of that. And once we finally actually saw the fact that Gary Gensler in the group, by the way, they did not endorse this in any kind of a big way. Or it’s absolutely amazing. What he said, he basically said, Look, still don’t believe I mean, I’m just paraphrasing, but like, we still don’t really believe in this whole thing. But yeah, we’re gonna grant the ETF out there to these 11.
Eric Chemi 2:19
If you’re a sucker and wants to do this, go ahead and do it. Like, I’m not going to stop you. But good luck to you, I get they felt like that kind of vibe.
Pete Najarian 2:26
That’s exactly that was the vibe. But there was huge movement, not just in Bitcoin, Bitcoin had a big move going into it. And then obviously, this big jump up to 49,000, then it pulled back. But outside of Bitcoin, it also is affecting the miners and the transactional tip, the coin base of the world and marathon and all those various names, they had great runs, but the volatility of those runs, Eric is absolutely incredible. To be honest with you, I, I look at some of those names. For instance, on the day that it was approved, they were up 10 12%. And all of a sudden, within an hour or less, they’re down 12 or 15%. I mean, the movements and riot and some of these other names marathon and suddenly, in my world, the options world, the derivatives world, we started seeing a completely different approach where we’d been seeing call buying going into this whole thing. And then once we got that release, suddenly we’re starting to see the puts getting bought, and puts for the people who don’t know, calls are looking for the upside, if you’re buying them and puts are going to the downside, if you’re buying those and they were buying puts, and they are continuing to buy puts here late into Friday. So a lot going on there. And I would tell you this, semiconductors are a very big piece to a lot of these various things, whether it’s AI or whatever. I mean, there is there’s a lot of different areas and verticals that get affected by Bitcoin and that world of this, the whole crypto world, you know, looking at the charts, right, we had the the first week of the year, when you look at the major equities, right, s&p NASDAQ, we saw that immediate downturn, right, the second, the third, the fourth, the fifth, come right back up Monday, and then we’ve stayed up higher this week. So we’re sort of now positive on the year.
Eric Chemi 4:08
What what do you make of that? What do you make of that first week? Sharp jitter? And then the immediate bounce back here in week two?
Pete Najarian 4:13
Yeah, I would attribute the first week to tax reasons, you know, those that want to push it out to 2020 for all those great gains, not just the Magnificent Seven. But, you know, I actually get a little tired of everybody saying they are what really did the markets to the upside. They were there’s no doubt but there was plenty of others. Eric that absolutely skyrocketed, especially if you look at the fourth quarter and the movement that we had seen there and whether it’s, you know, the financials a name, like I’ll just throw out a name like Citi Group that, you know, at the end of October was 38 bucks, and by the end of the year, it was 53 bucks. So, you know, there was a lot going on. And as a matter of fact, on the financial side, which obviously this week is that’s another piece to this puzzle, but you know, JP Morgan, Goldman Sachs, Morgan Stanley, all those names we’re flirting with all time highs, either there or very, very close. So there’s a lot going on, I think in the market outside of just the seven stocks that everybody always likes to talk about, including myself, I talk about those names a lot. But there are others out there to housing, you take a look at Linaro, you take a look at that space. And it’s amazing what what has happened there and the rise we’ve seen out of those names as well. And you can go across a myriad of different other areas as well. But the start of the week, a lot of people wanted to take a lot of those big profits that they had, they wanted to push those out. So we saw a lot of selling early. And then this week, little bit of a turnaround. And I think part of that turnaround, a big, big portion of it has to do with the treasuries. And obviously looking ahead, everybody’s always talking about the Fed. I don’t think I’ve ever been in the market, where I’ve had the Fed be that much of the influencer, that they are right now. And I’ve been in the market since 1992. And I can tell you, it just gets a lot a lot more every single year where the Fed is really the the axe so to speak. And and when you look at what the Feds doing, and some of the speculation that’s out there and everything, when you see the tenure starts slipping underneath 4%, that tends to be a good thing for the NASDAQ stocks because risk is back on, we start getting back over 4% significantly, not just a little bit I’m talking about more significantly, and then we see some of that selling so I think that’s a big part of it as well. Eric and and people are staring at a lot of different things. It’s it’s less about crude and gold and those kinds of things. It’s it’s definitely more about what’s the Fed going to do, how many cuts are they going to have? And, and all those questions that are asked every day.
Eric Chemi 6:42
Who do you think on that Fed decision? Who do you think’s got the best insight the best date? Is there a Fed follower that you think is more just clued into their mentality more than anyone else?
Pete Najarian 6:55
I don’t know that I could give you a great answer to that. But I would just say this, that, you know, when I look at the Fed, and we look at the Fed tool, I always like to look at what put money where your mouth is, right. And I look at the Fed tool, for instance, over at the CME and I watch that thing very closely and try to you know, the speculation that goes out in time as well. It’s really interesting, it’s very, it’s been very accurate. That’s given us a lot of really what’s happened, I think within the markets and what the Fed decisions ended up being. And we watch those kind of gyrate around a little bit. But it has come down to some degree at the you know, I think we were significantly higher that, hey, in March, we were going to get a cut. Well, we still are there, but it’s it’s lower, it’s come down to about a 70% chance as opposed to, let’s say, a 78, or an 80% chance. So I think there is a lot of movement and shifting going around. I still don’t know this one, maybe you could answer this one for me. How can they say that they expect six cuts this coming year? If they have to wait for the data, which is what the Fed does, supposedly? And I agree, I think they actually do. But if they’ve got to wait for the data, how can they possibly forecast that out that far? I don’t understand that at all. So I just keep my head down and focused and looking at everything that I can and ever all the different things whether it’s this week, by the way, we’ve had CPI, we’ve had the PPI numbers, so once a little bit hot ones a little bit cold. I mean, it really is interesting to see what’s going on in the markets right now. And this week
Eric Chemi 8:27
It is a good point, right? It’s like they anchor themselves psychologically to here’s a path. But you don’t have the data yet. So you’re assuming a certain path of data, to give yourself that decision, you know, that decision framework, but now the data doesn’t conform to what you thought, yeah. How much are you going to ignore? Oh, that’s an, you know, transitory that’s an outlier. That’s an exception. You know, we’re gonna deduct this and add that and adjust this, because Because is it more important that you wait for the data? Or is it more important that you stick to what you said you were going to do? So I do think that that creates a lot of confusion. And we’ve had people say, look, I wish they said less, I wish they didn’t have all these press conferences and speaking engagements. And I wish they didn’t put these predictions out there because it causes more uncertainty causes more volatility, and it causes more of a pullback, right? People say, I don’t know if I want to spend I don’t know if I want to invest, because I don’t know what they’re gonna do.
Pete Najarian 9:22
Right. Yeah, no, you’re right. And I remember that early on when we first started this, you were you were talking about some of the layoffs. That has been something that I think has to be looked at very, very closely for anybody investing in these markets when you start seeing the huge amounts because there was so much growth in terms of hiring that was going on pandemic time. And now all of a sudden, we’re starting to see that all right, we don’t need this many employees. We’re getting rid of 6% over at Google we’re getting rid of Summit meta, we’re getting rid of some. It’s a those numbers become very large numbers because we’re talking about an incredibly high number of employees in a lot of these various firms on the tech side, that that they had to build it up, but now they’re coming back down because they need the efficiencies. And that’s what they’re doing. And that’s going to be affecting a lot about what the Fed does, of course, because you know that that puts a lot more folks in a in a position where it becomes a little bit more difficult to navigate, you know, economically, especially if food and energy stay up as much as they have against the rest of what’s getting measured when we’re talking about inflation.
Eric Chemi 10:29
Yeah, like you mentioned, inflation in the Fed. And I’m looking at a headline here, from from Friday, Friday morning, wholesale prices, like you said, the numbers come out wholesale prices unexpectedly fell 1/10 of 1%. Right point 1% In December, in a positive inflation side. Now, I think that last year, it’s is it really a positive inflation sign? Or is this a weak consumer side? Right? Is this a price are coming down as people can afford to buy?
Pete Najarian 10:58
Eric Chemi 11:00
Is this good or bad? Right? So that that’s like, well, when you take when you look at data like that, what’s your perspective on it? How should we understand it.
Pete Najarian 11:07
I think we just have to be very real about how we look at all these things, you know, when you go to the gas station, and you look, and you see what the price is now versus what it was maybe a year ago, and when you go to the grocery store, and you see the price of eggs continues to be something extremely high. Right. And, and meat continues to be something that is projected to stay fairly high. There’s a lot going out there, Eric, I you know, it’s not easy, of course, to try to try to figure out exactly what the directions are going to be for any of these things. I mean, obviously, there’s a lot of different things that could trigger crude, and the price of oil and the price of gas. nat gas has made a pretty significant run so far, early here in 2024. We’re looking at nat gas that was sitting, you know, it was in the middle twos. And now here we are getting up towards three and a quarter. So there’s there is a lot going on behind the scenes, I don’t know if everybody always is keeping an eye on all these various levels and so forth. But I don’t think it makes it easy for folks. And I think from the from the standpoint of the consumer, how about the thought and Citi brought this up on their earnings on Friday with just talking about credit card debt? And it’s something we’ve been talking about for a very long time. And it just seems to go past people, when you look at how much debt is there on credit card debt? It’s a scary number we’re talking about plus trillions. So you know, when we look at that we look at the government, we look at all these various numbers and the debt levels that we are at right now. That is something I think you should always have, you know, somewhere in your thoughts as you’re as you’re navigating in these markets, because that certainly is something that’s going to be a factor, it hasn’t really been as major a factor yet. But I think it’s bubbling a little bit right now.
Eric Chemi 12:58
Why do you think people it’s going over their heads? Why are they not getting these major points here?
Pete Najarian 13:02
You know, that’s a great question that I couldn’t give you a great answer other than you know, there are there are folks out there that as long as they can continue on what they’re doing, which is, you know, the debt levels keep going a little bit higher, a little bit higher, not able to pay all this off, and then those incredible, you know, percentages, you’re going to have to pay on that. At some point that doesn’t end well. And I don’t know when that point is reached, but I thought it would have been reached last year to some degree it didn’t. And it’s something that I think we do have to continue just to have that, at least in the back of our minds that that is an issue. And they the consumer might be strong, but why are they strong? How are they strong? And, you know, we look at housing prices, and we look at all those types of things. And we have seen mortgage rates come down, that’s been something good, we’re seeing some of the prices for homes going back up. That’s been something very good. But you know, when you look at a lot of the different debts that are out there, whether it’s college debt or whatever, it these numbers are extraordinary.
Eric Chemi 14:04
How should people, you know, position themselves around that though, right? Because these numbers have been bad, and they’ve been bad for a while. But markets are shrugging them off. And if you if you stay too, how do you say, if you stay too narrowly focused on the bad numbers, you’re missing out on a lot of gains out there. So it can get very confusing for people of him trying to watch these macro fundamentals. I’m trying to do the right thing. But I’m gonna get crushed against my benchmark here. I’m just gonna not make any money if I don’t just go with the herd at some point.
Pete Najarian 14:35
Yeah. And it’s it’s kind of why I think that you know, John and I have always been guys that are very focused on specific names, very less about the big ETFs. We do we do, obviously, take note of them. We do trade them and invest in some of them. But the reality is we are very focused on where we’re looking and we base a lot of what we’re doing on the unusual options that we see and it is It’s an interesting thing to, to see where the big guys out there are focused and where they’re kind of shifting. And it, you know, it was, again, technology that was where everybody was focusing, and then all of a sudden, it shifted late in the year, all of a sudden financial started to get that little bit of a hit to the upside as well. And then you start seeing other areas in the market and this rotation. So anytime you see the healthy rotation, that’s a good thing. I just think that it’s important to have an Eric in the back of your mind that, you know, hey, there is a lot of debt out there, it’s something we got, we should we should be conscious of. Hopefully, it’s not with you or with me. But in any regard, it’s somewhere out there. And it’s something we have to keep an eye on. But you can’t just have that is your only focus, you still got to focus on the specific companies, what they’re doing, how they’re doing it, and how are they executing as they’re doing this? And, you know, I think that’s where a lot of these technology names and it’s why they’ve done the right thing, probably they did all that hiring, now they’re doing some of the firing. But it’s because they’re being disciplined, they’re being disciplined, because they know exactly where they need to be. And they need to be as efficient as humanly possible, and still be able to hit some of these numbers. And so it’s one of those things that I people always think I’m just a bullish guy, right? They always say, well, you’re just a perma bull, all you ever do is talk about positive things. And when I do talk about those kinds of things, which does happen a fair amount, but when I do talk about that, it’s because in my world, the derivatives world, it’s much easier to understand why somebody might be buying call options, as opposed to buying put options, because there are so few shorts out there. Now, there are some massive, you know, obviously, groups that are there short, that’s exactly what they do. They short stocks all over the place. But compared to the Long’s, it’s not even close. So I’m oftentimes watching the incredible activity that we are seeing in specific names. It could be an Nvidia, it could be Tesla, whatever the name might be. And we see this gigantic call buying, you know, two months out and you know, $20, higher, that’s something that’s going to be in my my brain, and I’m gonna look at it might execute on it myself. And if so, I am looking to the upside. And it’s not necessarily just because I’m bullish, but I look at the fundamentals, I look at the backdrop, and then I, I look at the company themselves and say, You know what, this actually makes a heck of a lot of sense. And it could be NVIDIA, it could be in, you know, micron, it could be in any of these stocks that we talk about all the time. But, you know, it’s just all part of how you got to parse through things and try to have your own lane and your focus on what are you looking at. And I don’t get caught up in all the negativity though I, I just have to know that it’s there. And understand that that debt at some point in time, some point in time is going to be an issue, but it isn’t right now.
Eric Chemi 17:48
And that’s the hard part. The hard part, the hard question at some point in time, but may not be this week, this month, this year, if this decade, this lifetime this century? We don’t know. Right, that you mentioned specific names, what stood out to you this week, anything unusual options activity that is getting you on certain focus areas right now from this week?
Pete Najarian 18:08
Yeah, you know, one of the things that has stuck out for us for a little while is just looking at an area where we’re seeing a lot of acquisitions, and that’s in the healthcare world. And so that’s been very interesting. And we just had UnitedHealth, report Friday, and their numbers were pretty extraordinary. But they did talk about some of the costs that are going up against them as well. So the stock got sold off a little bit. And when I say a little bit, I mean just a little bit because this is a stock that’s made an incredible run up towards those 52 week highs, but it’s given back a little bit on Friday. But when I look at what their numbers that they put up absolutely incredible. And you know, so I look in healthcare, I see names like UnitedHealth. But as far as unusual options, we’ve seen a lot in the biotech space because biotechs are getting bought up it seems like every single day, or it’s absolutely incredible. And some of these numbers are pretty massive. So that’s something that’s definitely caught our eye, my eye early on and 24 has been all of this acquisition will type thing. And that’s even before the the JPMorgan health conference and all the rest of that we just are seeing so much and it whether it’s a Merck or Novartis or it doesn’t really matter, there are so many different names out there that are approaching and executing on some of this that I think that’s something that’s going to be a theme probably this year is some of this acquisition or buyouts that we’re starting to see already in that area. But I think we’ll start to see it in other parts of the market as well, not just the biotech and healthcare markets. I think we’re going to start seeing that in other areas as well, because the opportunities are there and we talked about this about JP Morgan. It wasn’t necessarily intentional at the time until it was but you know, the acquisition that they made in the regional banking crisis that seemed like that ended up doing pretty well for them. From what I can see,
Eric Chemi 20:03
they always seem to find a way to make the right move. Yeah, anything you don’t know the flip side, and he trades any areas that you’re sort of moving away from over the past week, anything that, you know, I just asked you what what are you looking at to get into anything you’re like, I think this move is done. I’m wrapping this up,
Pete Najarian 20:20
you know, not not really right now, I haven’t really seen a lot of that, quite honestly, I see a lot of protective things in ETFs that are out there, though, Eric, and
Eric Chemi 20:29
Like what, what’s an example of that?
Pete Najarian 20:32
Well, so what we’re seeing is are names like ETF, like the IWM, for instance, and massive put buying in their massive put buying in the SP y as well. Now, that doesn’t necessarily mean they’re negative, those those puts, oftentimes, and they’re oftentimes used as spreads. So they’re buying one and selling the other. It gives people the opportunity to maybe hedge, and whether it’s a huge institution or whatever it may be, if you if you can get that hedge to the downside, and gives you a little bit of an ability to feel a little bit more free about how you’re playing things to the upside, you’ve still got that as your backstop down there. And that’s that’s what we’re seeing a lot of we’re seeing a lot of ETF put buying, put spread buying. And that’s that’s been pretty common for a while now, especially like last year, when we had that incredible run, of course, to the upside that we had along the way. They’re not wasting money, folks, when they’re buying those put spreads. That’s basically like buying insurance, and we all insure our cars, we all insure our houses. And so why wouldn’t you insure your portfolios, and that’s my interpretation of it is the insurance side of it far more so than the negativity of the markets. But that’s just my own speculation. But it’s been right because the markets continued go to the upside. And they continue to do these kinds of trades, even at the end of last year, but even at the start of this year, including on Friday itself, massive trading on the put side there.
Eric Chemi 22:00
What do you think, is buying these puts this is this retails institutions who’s out there looking for this insurance institutions?
Pete Najarian 22:08
Yeah, somebody’s very big. It could be hedge funds could be a lot of different folks out there, not retail, retail is not going to come out there and buy 70,000 100,000 calls or puts or anything, that’s it’s just massive. And and I can add to that, it’s these are not, you know, 10 allotted at a time these are going in and buying 40,000 Come back with another 40,000 Come back with another. These are big players. So whether it’s institutional or hedge funds, whatever it might be, those are the big guys that are playing. And that’s that’s what we like to follow. And if we’re right on some of our speculation that, hey, they’re doing this more as a as an insurance than they are as an aggressive move for downside. It’s at least something else that you can put that feather in your cap as far as when you’re trying to get get yourself positioned into the next week and the next month, and the next three months.
Eric Chemi 23:00
It makes you want to hear at the beginning of the year, for the normal people, right? It’s a new year on pay, you can fund your IRA and you can and put money in your 401 K and you can you know like the new limits, you just start doing more stuff right here in January. And typically, it means you’re bi, right, you’re going wall and you’re investing. And here we are at basically all time highs and a lot of nervousness about do I really want to be buying these all time highs. Now you’re telling me well, all the big guys, all the billionaires, right? The firm’s a smart money, here’s like an insurance, they’re buying tons of puts. It doesn’t make me feel good to hear that.
Pete Najarian 23:39
Yeah, but if you look at it as what I was saying, as insurance, then you should feel pretty good about your portfolio, right? I mean, because they’re just trying to protect something. And I think that that is a big point. One thing, and I just took a quick glance as we’re talking but one thing that also is an area that I talked about a lot last year, and I’ll continue to talk about it even this year, because we’re seeing a lot of option paper as well. But uranium is another area where you know, it’s not a name everybody in the world wants to talk about because everybody wants to, you know, be green and this and that. And I get it all. But that doesn’t keep me from seeing what I see going on in the markets, right. And I and I see in the Uranium, Uranium space, I see more and more of the call buying again. And we had it last year. And if you look at certain names out there, like a Kumiko, for instance, CCJ. That was a name that absolutely took off last year had an incredible run to the upside and it continues to have incredible run now and from what we’re seeing this past week, as far as the options go, they’re expecting more they expect this thing to continue to move to the upside. So you know, it’s whether people are happy about it or not. That is the case and I brought this up last year a fair amount of times in the last probably the second half of the year specifically but it just became another part of the energy world where we just saw that much more and it was, it was a large option paper again, it I’m not talking about somebody going in and buying 2000. I’m talking about somebody going in buying 25,000 or 5000, at least options at a time. So those are the big guys. And you know, I like to follow that, you know, like you said the smart money. We’d like to follow that smart money because it’s not an option.
Eric Chemi 25:23
They have you have to. what else stood out to you this week? What else were you surprised about in terms of whether it was a news or market move something that that you weren’t expecting?
Pete Najarian 25:34
I guess I was a little bit surprised, just because we just kicked off your earnings season on Friday, and you look over and JP Morgan fabulous. And you under you can understand why and the stock reacted at least early in the day pretty, pretty, pretty well. Citi, kind of the same thing, because they’d already gotten the bad news out there. They had kind of leaked all that already earlier in the week. But I’m amazed that at the problems for Wells Fargo and the problems that we saw from from Bank of America, they just, you know, you just wonder sometimes, okay, they’re all, you know, the big banks, but what, why are some of them really kind of struggling, you know, trying to get to, to get anywhere close to the performances and, and, and anything close to, you know, be able to report, you know, on the earnings, it’s just not there. And it’s just an amazing discrepancy that we are seeing. And it’s been there for a while. But that’s something that stood out, because you know, we’re kicking off earnings season, we’re looking at all these names, I think also just the turn on Delta. And I’m not saying this as a bullish or a bearish guy on on airlines, but Delta’s numbers were pretty outstanding. And you would have thought that maybe the reaction would be better, but there was a little bit of clouds around the whole thing. So that kind of pulled the stock down as well. And, you know, we all know this Boeing story from the past week or so it’s just extraordinary, to say the least. And that may be as a factor and the price of crude may be the concerns of the crisis prices of crude going up, maybe as we get more deeper into 2024. Who knows, we did have a little bit of a spike on Friday on crude back up towards 74. But we’ve been in this really interesting range Eric, where I call it 68, to call it 74 for the price of crude, and we’ve just been bouncing back and forth. And it when I say that, I don’t mean it’s gone from 68 to 74. And there it is, I mean, it’s 68 to 74, back to 70. Back up to 73. Back down. It’s been trading like a meme stock almost. And that part, I think, is something that John and I have been hitting on a lot when we’ve been talking about the markets because it’s a you know, it’s something very big everybody talks about, it’s international, of course, and so you’re you’re looking at those numbers, and the fact that it’s moving the way it is on a daily basis. I think that’s pretty amazing as well. And it’s something that that’s been standing out now for the last few weeks, I’d say not just the first two weeks of 2024. But even a little bit before that. It’s just been an incredible up and down. And it’s as volatile as I’ve ever seen crude trading. And a lot of guys could say, well, Pete Well, what about when the thing ran up to 120? Sure, but it ran up there and then it pulled back. And now here we are, and we just can’t that we are in this little trap, at least for now. If it can break through that 74 call at 75. upper end, then maybe we get back up into the 80s. I thought matter of fact, last time we were in the 80s I actually was a guy who and I was self admittedly, say I thought we were going to 100 We got up into the low 80s. I thought you know what, based on everything going on in the world, and there’s a lot, I just felt like, well, it made a lot of sense, you know, the cutbacks and all the rest of the things that are going on, you know, in the Middle East, and it’s just an amazing time in our lives. But it just hasn’t happened. And I think a lot of people are puzzled by that just be based upon a lot of the backdrop that we’ve got. And yet here we are at crude at 74. I could easily have seen it in the 100 area.
Eric Chemi 29:14
You know, it brings up a good question, right when a lot of people saw it a certain way doesn’t happen. And then people are confused by it. And we see that a lot right to different kinds of trades. Do you have a sense of advice for people when you see something like that happen? What tends to be the final result? does it tend to be that the that hey, if it’s not going to click it never clicks? Or is it though if you stick to your guns, what you thought will eventually happen? You know what I mean? Like like that oil example we see a lot right? What’s typically the end result with that kind of confusion.
Pete Najarian 29:50
Well, at some point you you kind of expect something to actually occur that causes it to get back to some more more of a normalcy. I would say, I would think that if you put all the oil analysts out there at one time, a couple of months back, and we were, you know, making that move, and we were seeing the cuts and everything else, I think pretty much everybody probably would have been on the I was about to say, the right side of the boat, but it wouldn’t have been. But on the bullish side of the boat that, hey, we are going to 100 this thing is, you know, it’s ready to start running again. And it’s going to be an issue, and we’re all gonna have to deal with that, and the prices that come along with it. But the reality was, it just didn’t didn’t make it there. So I think that, you know, at some point, it’ll get back to trading. And I don’t know when this comes, but it’ll get back to trading with with a lockstep with the headlines. But for right now, it just is not. I mean, like I say, these headlines, every day that we get from all parts of the world, it would make so much sense to see that we did doesn’t have to be 100. But somewhere, probably in the mid 80s, to low 90s would make some sense, based upon everything that’s going on. And yet it’s not there. And at some point, it’ll get back to that type of thing. But it can take a while, and it can make you broke if you fight against it too much. So I try never to fight the markets. And I think it’s advice that John gave me when I got into this business. And it’s something that I’ve never forgotten, because you could be right about every single thing, Eric, you can be right about all the different categories of the earnings and the revenue and the growth and the projections and the outlook and all the rest of this, it doesn’t mean it’s going to have to happen. When you just have to, you know, we’ve always talked about you got to swallow your ego, because there comes a point where you’re wrong about it. And from my perspective, I like to just cut and then come back and revisit another time. Some people will try to ride it out as long as they can. But the problem with that is, it might even just sort of accumulate even more losses. So a lot of the time, we you know, I like to have sort of my own way of looking at things and when I’m gonna hold on, and when I’m gonna get rid of it, and that’s based upon, hey, where are we right now? All right, I’ve lost X amount of money, okay, I’m gonna sell I need to get out of this. It’s I was wrong, and I need to move on. And a lot of guys and gals do not want to admit they’re wrong. And that’s a problem.
Eric Chemi 32:17
Right? If they’re still in the trade, they can say I’m still fighting I’m in the trade. I didn’t give up. I never actually quit. I’m not wrong yet. So I appreciate you said to John guided you into the business to help help the viewers understand. There’s the football career. There’s the options career. who’s older John or Pete. You know, because I got some I have some football questions for you before we go to
Pete Najarian 32:39
I’m so offended by who’s older. No, I’m just kidding.
Eric Chemi 32:43
I know I wouldn’t be half of the new audience member who made me so I’ve never heard of Pete Najarian. This is my first time watch.
Pete Najarian 32:49
Right? Well, and a lot of people forever thought John and I were twins. The reality is there’s two brothers between us. He’s the oldest I’m the youngest. I don’t need to say my age, I guess. But anyway.
Eric Chemi 33:04
You’re the fourth.
Pete Najarian 33:05
Eric Chemi 33:06
I didn’t realize there were two brothers in between. I didn’t know that.
Pete Najarian 33:08
Yeah, we have we sold my my oldest brother John who bounced around us. He’s brilliant guy. I don’t just say that because he’s my brother. He just absolutely one of those guys that he had that ability to do really well at school. I remember he gave mom and dad every every year he would give mom and dad for Christmas, his his report card because he got all A’s. I mean, I was one of these brilliant guys who just always, always did really, really well at school. And he just has that good brain for a lot of different things. But John ended up playing football into college and then actually ended up with Chicago Bears. We left Chicago Bears, he went to the Chicago Board Options Exchange. And and that’s where he’s been literally ever since although we stepped away from the trading floor itself. Right?
Eric Chemi 33:57
Pete Najarian 33:57
And then I played in the big 10 at the University of Minnesota and then I bounced around in the NFL, they traded me Eric, oftentimes for a couple of boxes of socks. sometimes an elbow pad maybe or something like that.
Eric Chemi 34:11
If you throw in a helmet we’ll do the deal. And I can repeat that easily.
Pete Najarian 34:19
But I even did some coaching as a matter of fact, I was offered some jobs coaching in the NFL that I turned down, I actually at one point in my life, I said, you know, I’m in my mid 30s I need to get a real job. And so I ended up in my low 30s I ended up at the Chicago Board Options changed myself and was just going to be there a little while because I was gonna go to med school and that was going to be the end of that I wanted to be an orthopedic surgeon, my father’s a transplant surgeon so I wanted to get into that field. And it just was something that I liked it and it stuck with me and I started to understand it and so that kind of built along this whole thing and, and I’ve actually coached football at the XFL I coach football in college as well. I got offered a job once you’ll like this one Eric, I got offered a job once. Coaching and playing in arena football down in Orlando, Florida. I didn’t take it.
Eric Chemi 35:11
Coaching and playing?
Pete Najarian 35:12
It was intriguing.
Eric Chemi 35:16
I guess I guess if you become an orthopedic surgeon that you can coach you can play and when people break their bones, you can fix them up to
Pete Najarian 35:22
You can fix them. I mean, you get it, you get the quad, you know.
Eric Chemi 35:25
And then older players have some money, get him into some options deals and take commission. Yeah.
Pete Najarian 35:30
Yeah. It’s it is amazing, though, that when I go places, how many guys you get connected in the in the world of football, especially NFL, once you’re there that it’s like a big family. And everybody kind of knows somebody else from some other era even. And it’s great. I mean, I’ve been approached as recently as in the last 12-16 months, on a couple of different opportunities, potentially semi GM type roles in the NFL, which is kind of one of my dreams, but you know, there’s there’s sometimes there’s the easy time to say yes. And sometimes it’s a more difficult time. So, you know, maybe someday but it hasn’t I haven’t done it yet. But that’s something that would be somewhere in the future, maybe but it’s a lot of fun. And by the way, I might as well go there for us. The football coaches in the NFL,
Eric Chemi 36:23
I was I was gonna ask you, you know, you’re stealing my question. I was gonna say, you know, you’re reading my letters and say, Okay, well, there’s some openings. Right now. Alabama’s got an opening, the Seahawks have an opening. The New England Patriots have an opening, right? There’s, these are, these are the great titans of coaching. And all of a sudden boom, in one day, they’re all gone. And I think about them almost like you think of the great investors, right? Oh, this guy beat the market every year for 20 years. Was it luck? Was it skill was their approach? And you see that in a Belicheck or in a Saban for example, and to a slight smaller extent to, you know, to Pete Carroll. So your what’s your perspective on how much does the coach matter? Right, because, and those guys in particular, cause Belicheck . I don’t know if he nodded. Honestly, right. He won nothing without Brady. And Brady won without him. And as soon as Brady left, that team was no good. Yeah. So I don’t know. I don’t know. I don’t know him and his assistants did nothing either.
Pete Najarian 37:21
Yeah, I don’t know, either. But I think it’s, it’s something that’s a great conversation just because of the fact that you know, he’s considered one of the greatest coaches of all time, right? I mean, people will say that, but to your point. How did he do without Tom Brady and that’s obviously an issue because not so good as a matter of fact, not not well at all. I actually a while back a couple months ago, I looked back to see what the numbers were. And they were not very good without Tom Brady. So you just wonder and every time one of the assistant coaches gets a head coaching job because he must be great because he’s there with Belicheck. And he’s doing this and and he goes somewhere was Las Vegas Raiders or whomever? And they all come back to New England because it just didn’t work. So judge
Eric Chemi 38:07
Matt Patricia Romeo, Coronel you go back to the original Charlie Weis Yeah. Yeah,
Pete Najarian 38:15
Charlie’s still getting paid by Notre Dame I think
Eric Chemi 38:19
they make money. But But yeah, big like, do you see a tie in there in terms of like when coaches do a GMs? Do that football strategy? And is there a tie in to how you have to invest? Is there anything similar? Or is it just
Pete Najarian 38:34
No, it’s similar. It is similar because it takes it takes a lot you got to pull the right triggers, you’ve got to you’ve got to buy into the right stocks, these guys have to draft right or at least free agency sign the right guys. And in the case of of Saban, you know, obviously, he’s been a part of this now, this portal that’s been around for a couple of years in the NCAA as well. So he’s had to deal with free agency is what I like to call the portal, so and the NFL with the money and everything else. I mean, it’s, it’s a different purpose.
Eric Chemi 39:03
It’s the pros now. They get paid and they can leave. It’s the pros. Now.
Pete Najarian 39:06
Yeah, I’m with you. It’s no longer amateurs. But, you know, I give all the respect in the world to Nick Saban. Because you’ve you’ve got to figure out a way in college to hold on to these guys and not have them get in the portal, lose some of your great players, and all the rest of it. And he’s done a magnificent job of doing that. And, you know, let’s be honest, he’s 72 years old. He had to do this later on in his career in the last few years and he’s done an amazing job. And it’s it’s actually much tougher than free agency because in football, you know, you get a five year contract, amen. You’re you’re there until that till that’s over for the most part. Every once in a while somebody is able to get out of it, but not very often. So I total tip of the cap to everything Nick Saban did. I got a quickie for that. You’ll like this with Pete Carroll. When I was playing with the Minnesota Vikings, Pete Carroll was the secondary coach, he was the youngest coach in the NFL at the time.
Eric Chemi 40:03
You guys were out there together with him?
Pete Najarian 40:05
Yeah, yeah. And so he was the youngest coach, you know, in, in, in football, and then he goes to the Seattle. Well, first he goes to USC does extremely well. Then he goes up to Seattle, and now he’s one of the oldest coaches of football.
Eric Chemi 40:21
More like the oldest.
Pete Najarian 40:23
Eric Chemi 40:26
But, you know, it’s funny, we talked about Belichick assistants. Actually, Belichick had one assistant named Nick Saban right back when they were on the Cleveland Browns together so that that that’s one example that is a little different, but but none of those patriots assistants ever did much. Without Brady. I liked that you mentioned the draft. And before we lose I think about that a lot. Because to me, that really reminds me of investing that to me more than anything, because it’s we have all these assets, which what are we going to pick? And everyone’s got a consensus view on on who’s going to do well, there’s all this stuff about do you trade up? Do you trade down? Is this guy, a generational talent? Is this guy going to be a bust as he is? Sure thing? And do we need to take games because we need to pick third instead of 10. And you realize when you actually look at who’s in the NFL. Lamar Jackson was the last pick in the first round, right? Yeah. Dak Prescott, fourth rounder. Brock Purdy, a seventh grader, Tom Brady. A six are in Yeah, a lot of these top 10 picks? Do great first number one picks put a lot of them don’t do great. mahomes was at number 10. Overall pick not number one, not top five. And, and that’s where I see a lot of investment correlation where? Yeah, we think these stocks will do well, but a lot of them could turn out to be bust anyway. And there’s some real under the radar ones that you could have had for a lot of good value.
Pete Najarian 41:46
Yeah, I think you’re exactly right. It there is a lot of similarity. And it, you can do as much as you want to prepare for everything to give your answers on why this one is the one right? Whether that’s Apple or Tesla or whatever, or in the case of this year, you know, some of those top quarter Caleb Williams, are you gonna go with him? Uh, you know, it’s, so there is no perfect answer to that. But it is very similar because you can, you can add up all the things I mean, oftentimes when you look at these quarterbacks that because they’re mostly quarterbacks, but these quarterbacks that go somewhere in the first round, and this team wants this one, but this team wants that one. It there is a lot that goes into that. But there’s nothing perfect about it. And the same thing can be said for the stocks. You can you obviously could could have an NVIDIA here and an Intel there. And how do you know which one is the one that’s going to really make the bigger move of the two. And by the way, Intel has done far better this last year than I remember them to in a long time. They really struggled. And I just wondered how long were they going to be able to hold on with the struggles that they had. But they’ve actually persevered pretty nicely. And they had a pretty nice year this last year, but in trade like Nvidia in trade like AMD in trade, like micron and some of these other names, but you know, it is similar, because you could get who everybody thinks is the best quarterback in the draft. And you could still be wrong. And you could do the same thing with stocks. So there is a lot of similarities. And I can tell you this, Eric, it’s it’s kind of cool. One of the things that we had in our firm, when we had our trading firm on the trading floors in Chicago, the majority of our guys were not from Harvard, or Yale, which some of the groups had a lot of that, and nothing against those schools. But you know, they had these these ultimate Ivy League guys down there. We wanted people that had experienced failure, and winning, and all of that. And we saw we had a lot of guys that were former athletes that were smart enough to figure it out. But also they had that grit to them that you know, they’ve been slapped down, but gotten back up. Right. And, and sometimes you’ve got to have that. And I think that that was one of the things that helped build our firm even better was the fact that we had different set of people that were smart. But they also played professional hockey, NBA NFL, I mean, you’d be surprised how many people we had from the Olympics and all sorts of other things. Chess clubs, because you know what, that’s competitive, it might not sound like it to some people. But the reality is, as long as you’re in a competition, you want to win.
Eric Chemi 44:21
But you don’t always win. Right? And you don’t always and that’s the key, right? Is, is if you don’t always win, you’re used to losing and you’re used to picking yourself back up and you wonder look, having been to one of those kinds of colleges that you mentioned myself. It’s a lot of people who they did great all along the way, then you get to the workforce. like wait a minute, I’m not used to lose it right? I’m not used to screwing up right? I’m unlike your brother, right? Like I get straight A’s all the time. And now all of a sudden these trades are going against me what what’s going on here? So So I do think there’s a real key personality analysis that you got to do to get there right, but later before we go, where can people find you? You can certainly get the YouTube, The social media the website, you’re in a lot of places so where where can we find everything Najarian?
Pete Najarian 45:05
Well, Market rebellion is our is our company and marketrebellion.com is our website but we educate people we we offer services that allows them to see what we see in the unusual options were old and all of that. And we got a new book out, it’s called, it’s not an option. So that’s we’re excited about that as well. Just came out in the last three or four weeks or so. And so far, so good, seems to be going pretty well. And we’re excited about that. So they can see us there, John, and I do a Show Monday through Thursday called the rebels edge, which is a lot of fun. It’s a it’s a microcosm of what you and I just did, because it’s extremely fast. But it’s like PTI at ESPN over there, you know, pardon the interruption, we do to two things. At the very top, we do the macro minute, fantastic futures, we talked about four different stocks, sometimes they’re related to unusual options that we had seen previously, like in the last days or weeks or something like that. And then we just talked to sports topics. And it’s always kind of fun. And, you know, the two of us collaborate together, we get it together and the whole thing is maybe 20 minutes so it’s not too long, gives people opportunity. And it’s one of those things where we might even add on like a like a rebels edge extra to it at some point in time. And maybe
Eric Chemi 46:15
Pete Najarian 46:15
you know to spread it out a little bit.
Eric Chemi 46:18
Pete Najarian 46:19
we get guys like you on there, you know you we could we could then be questioning you.
Eric Chemi 46:23
They don’t shut up. They keep going. Pete Thank you. Thank you so much. Thanks, everybody, for watching this episode. So good had Pete Najarian on walking us through what he saw in the markets this past week. If you liked this episode, actually click that LIKE button and SUBSCRIBE and SHARE, COMMENT, engage the more of those things that you can do. That helps us it gets the content out there to as many people as possible. And of course, go to wealthion.com for more information. But all of this and if you’re looking for someone to help you figure out your finances, your family’s investments, there’s a short form at wealthion.com You can fill it out. We can connect you with people that we endorse that we vet, no obligation, no commitment. It’s just a free public service that we provide if you’re looking to get this sorted out for yourself again,Pete Najarian, thank you so much for joining me. I’m Eric Chemi. Thanks for joining us here on Wealthion. We’ll see you next time.