Investor's Edge with Gary Kaltbaum - Bear Market Holiday Episode PART1 [07.03.2024 JULY 4 holiday]

Episode Date: July 2, 2024

https://garykaltbaum.com/

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Fear, that's the other guy's problem. Biz Talk Radio is proud to bring you. Investors Edge with Gary Colpom. Straight talk about you and your money. You can reach Gary now at 877-747-Eadge. That's 877-7-47-33-43-43. Here is your... host, Gary Coltbaum.

And welcome once again to Investors Edge. I'm Gary Colbom, your host. A thanks for being with us today. Always glad you're here. Happy with your presence. Normally, when we do a holiday show like today or an educational show, we do not give you a date. But since we're being specific on the type of show, and it may be or may get quite a timely in the next year we're giving you the date we are taping the show on Saturday August 17th 2019 and we are going to talk about the markets for the whole show we are going to talk specifically on this show conditioning of markets markets conditioning your psyche

and condition you to not act in kind and what we mean by that is if you have listened to this show forever we care about one little thing staying lockstep or one step ahead of the markets you always hear me say things like markets setting up to do this markets are setting up to do that that sentence is not happenstance in the study of 100 years of markets markets set up to go bullish markets set up to go bearish

sectors set up to go bullish sectors set up to go bearish stocks do the same now since we've had 10 years not uninterrupted but where we've never had what we call a decent amount of bare market pain. The classic bare markets. Today's show is about bare markets. And it's simple. Simple reason why we're doing this today.

Because everybody is conditioned that we will never, ever, ever go through another serious bear market again because nobody can even remember one even though just 10 years ago we had a monstrous global bear market everybody's conditioned for the central banks around the globe to save the day and till this day they're still at it just this week our president jawboning our fed to lower rates which they're going to do we've had to had 750 rate cuts since Lehman Brothers. We have negative rates in Europe, and they are coming out in September to lower them

even more, even though, let me repeat, rates are negative. There will be more printing of money, and there's been about 20 trillion of that around the globe, so we worry. The last two bare markets were gargantuan. Why? Because we believe central banks intervened with easy money for too long, causing bubbles. And you know what happens to bubbles? They do pop. And now this one, we have never seen in our history what our central banks have done. Create money out of thin air.

Europe is now talking about using money out of thin air to buy up the stock market. Where is the logic in any of this? I don't know. But that's not our point today. Our main point today is on how to prepare for it. What you will see at the outset of it and will wind your way through how bare markets work. Knowing when we ever we go into one again, we will not know at the outset how long it lasts. or how far it goes. But we do know by precedent certain things will occur. So first off, let me state the worry is everybody's condition that the central banks will be there to stop any problems. And they happen. We get it. We had a 20% three-month drop in the fourth quarter of 18.

Central Bank came in, changed their stance, market bottom immediately. We had a 10% correction just about three months ago, came in, changed their stance again, market bottomed again. The real question is how long it's going to last, where markets listen to these people. So number one on the hit parade, bull markets condition people into believing nothing bad will ever happen. The longer the bull market, the more conditioning there is. The more the bull market and longer the bull market, the thought processes, no worries. That's what markets do. So to start off, how will we ever know if we are reverting from a bull market to a bear market?

Well, it's pretty simple. Back last year, before the market dumped 20%, and then the central bank saved it, Every day, we, and we don't expect you to, but there are places to find these numbers. But every day we scan 1,500 stocks, 200 sectors, just about every country. And every day, we're able to keep lists of things that are in uptrends, things that are in downtrends, things that are not trending. And we keep numbers on this, not just on how many, but. where? You've heard me for the last year talk about avoid energy, and energy remains in a bare market. Avoid most foreign markets. Most foreign markets remain bearish. Avoid most

commodities. Remain bearish. We had bearish in gold and silver, but in the last few months we reverted to a new bull. That'll be for the next time. So we watch old. We watch old and silver. We're all these stocks and all these sectors, and we have a list, and we add them up, and we see what sectors are leading, what are already bearish. And it's pretty simple at that point. The more names that break support and turn into downtrends, the fewer and fewer names that hold up tells us something's amiss. be just a correction. As we stated earlier, we don't know. We don't know how long something lasts

or how far it goes. Just want to stay in lock, step, or a step ahead. There's no way of knowing six months out, 12 months out, regardless what Wall Street and all the pundits tell you. So what you will see and what you will hear from us is there goes another 30 stocks, broke support. support what do you mean by support gary well the 50 day moving averages for starters and without having to be too technical all the 50 day moving averages is price add up the last 50 days the closes and divide by 50 and you have a smoothed outline throughout a hundred years of history that was the first important point Why? Because nothing good could happen if you're trading below this line.

Impossible to have an uptrend when you're trading below. Impossible. Now it doesn't mean you're going to crash. It does not mean the world's going to end. It may just stay below the line and turn back up eventually. But for starters, trading below the 50 day, that's your first line because your up trend

for that second is over for that second we've seen plenty of time stocks go up 50% break the 50 days sit around for three months and then resume but that's number one and may I state

about as important a point we will make to you as we go through these educational series up next what next I'll have that and more. This is the one only Investor's Edge.

Hi, I'm Gary Kalbaum, hosted a nationally syndicated radio show Investors Edge. We're not just handsome radio people. We manage investors' money for a living, specializing in fee-based discretionary money management. No big commissions, just a fee on the assets that's managed. We also provide a full range of personalized services, including retirement planning, fixed income, and educational needs,

all to assist you in achieving, your financial goals. Understanding not all individuals have the same needs, we'll carefully evaluate your personal goals to determine a proper investment strategy. If your current approach to investing is not getting you to where you would like to be, call us to make an appointment for a complementary portfolio review.

The number to call is 888-4-22-559. That's 8-8-5-9. That's 888-4-2-2-5-9. Investment Advisory Services offered through Colbaum Capital Management. Guys, it's no use putting it off. The best time for an underwear refresh is now. Tommy John underwear is designed for a perfect fit that stays put all day. Their zero-chafe thanks to four times more stretch than competing brands,

and their innovative horizontal quick-draw fly is a game changer. With over 30 million pairs sold, there are thousands of men out there more comfortable than you. Don't settle for less. Go to Tommyjohn.com today for 25% off your first order with Code Comfort. That's Tommyjohn.com code comfort. Tommy John. Comfort perfected. This message is brought to you by the Capital One VentureX card. VentureX offers the premium benefits you expect, like a $300 annual Capital One travel credit for less than you expect. Elevate your earn with unlimited double miles on every purchase, bringing you one step closer to your next dream destination.

Plus, enjoy access to over 1,000 airport lounges worldwide. The Capital One Venture X card. What's in your wallet? Terms apply. Lounge access is subject to change. See Capital One.com for details. This episode is brought to you by Sprecker. The platform responsible for a rapidly spreading condition known as podcast brain.

Symptoms include buying microphones you don't need, explaining RSS feeds to confused relatives, and saying things like, sorry, I can't talk right now, I'm editing audio. If this sounds familiar, you're probably already a podcaster. The good news is Spreaker makes the whole process simple. You record your show, upload it once, and Spreaker distributes it everywhere people listen. Apple Podcasts, Spotify, and about a dozen apps your cousin swears are the next big thing. Even better, Spreaker helps you monetize your show with ads, meaning your podcast might someday pay for, well, more microphones. Start your show today at spreeker.com.

Sprinker, because if you're going to talk to yourself for an hour, you might as well publish it. It's time to switch on the integrator units and get the brain cells working. You're listening to. Hey, this promises to be fun. Investors Edge. The last bastion of quality programming. With Gary Coltbaum. It doesn't get better than this.

And what once again to Investors Edge. Thanks for being with us today. Educational show today. Bull markets turning into bare markets. So the first things first, the more names break the 50 day, the tougher the market's going to be. And every day we have these legal pads and we write them up and we can really tell the market by where the major indices are

in relation to the 50 day and average stock. Now here's a very important point. the major indices will hold up while so many stocks break below this very important area and break support. Why would that be? Because when the market turns defensive, it buys up defensive. And you know what defensive is? The biggest, the big names, the most liquid names, the down names. So those major indices stay up. But as more and more, stocks and more and more sectors start breaking eventually under the weight of all those stocks breaking the major indices come down now right now there's some issues

all the major indices are below the 50 day but guess what happened before that we've been talking to you about how the Russell 2000 the midcap 400 transports foreign markets, we're all very barest, so a lot of things underneath the surface at this juncture not working. That's how markets top. But again, we don't know how much. So if 80% of the market's trading above the 50 day, and then it turns into 70, it's a sign, 60 a bigger sign, 50 a bit, you get the point. So it is that point in time where it's the uh-oh moment again does not have to turn into the end of the world but we know by precedent that's how tops occur and it just so happened in the fourth quarter which

we nailed for you of 2018 because it was a classic top central banks came in to save the day towards late December but what happens when markets get in trouble like this. More and more names. More and more leading names. Currently, as we get towards late August 2019 right now, there's about 50 maybe even more names, leading growth names that have broken support and even worse. So few and fewer the leading growth names, another sign of trouble, are occurring right now. That's another part of the equation. But how do we people feel? Market, the major indices are down 6%, small caps down about 10, transports 11. How do people feel right now? How do people feel when markets do top from the get-go off of a

bear, a bull market that's lasted a long time? How do they feel? They're cool. Do you know why? conditioning. They are conditioned into believing. It's a correction. No worries. We're good. It's just a correction. But mind you, those that are heavy into energy stocks were saying that 12 months ago and a lot of energy names are down 50, 60%, if not more. Just remember that. There are a whole host of names. U.S. Steel is down 70-80% in the last year as I speak in late August 2019. U.S. Steel. An owner of U.S. Steel a year ago, I bet you they thought it was just a correction. Guess what?

And that's why we always say when something breaks the 50-day, it's at that point. You must have it up on review and watch it more closely because it's a potential start of a top of content. consequence. So it's at this point where most people are cool. That's a correction. We've had a good bull market. It's normal. Everything's fine. And what are the pundits saying on TV? It's just the correction. Don't worry. Everything's okay. Market's cheap. It's a value. We're good. And I get it and we get it. It is just a correction at that point in time. But we measure underneath the surface. And again, as we speak to you now in August 2019, we can tell you that the major indices is down 5, 6% from the highs. Small and midcaps are down 10, transports then,

but there are some things down 20, 30 and 40, and there's some foreign markets down in the 30s. So we know underneath the surface, not as healthy as some would believe when they just see the bigger indices down 40s. five or six percent, but that's how we go into bear markets. Again, doesn't mean we will, but that's the start of the bear. Nobody believing it's a bear.

Everybody telling you it's just a correction. And the reality is at that point in time, that's all it is. But just for the sake of this show, we're going into a bear market. And we want to describe for you the things that happen next. Because everybody thinking the correct. correction, uh-oh. See, part of bull markets of the conditioning is a margin. People are borrowing money to buy stocks, so you have a lot of leverage in the system. B, I'm not selling. It's just the correction. Get where I'm going with this. And then C happens. C. Another leg down.

the major indices are down 10, 11%, the big guys. The small and mid-cap indices are down 15%. A bunch of leading stocks are in the 20s. How did the masses feel then? The same way. Why? Well, for the past 10 years, we've had a bunch of 15% corrections. So they're good.

And the pundits and the people on Wall Street are out. telling you the same thing. We're good. Up next. The next leg down. And some facts to consider. I'm Gary. This is the one only investor's edge. Guys, it's no use putting it off.

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Tommy John. Comfort perfected. This message is brought to you by the Capital One Venture X card. Venture X offers the premium benefits you expect, like a $300 annual Capital One travel credit for less than you expect. Elevate your earn with unlimited double miles on every purchase, bringing you one step closer to your next dream destination. Plus, enjoy access to over 1,000 airport lounges worldwide. The Capital One Venture X card. What's in your wallet? Terms apply, lounge access is subject to change.

See Capital One.com for details. This episode is brought to you by Spreaker. The platform responsible for a rapidly spreading condition known as podcast brain. Symptoms include buying microphones you don't need, explaining RSS feeds to confuse. used relatives, and saying things like, sorry, I can't talk right now, I'm editing audio. If this sounds familiar, you're probably already a podcaster. The good news is Spreaker makes the whole process simple. You record your show, upload it once, and Spreaker distributes it everywhere people listen, Apple Podcasts, Spotify, and about a dozen apps your cousin's

swears are the next big thing. Even better, Spreaker helps you monetize your show with ads, meaning your podcast might someday pay for, well, more microphones. Start your show. You show today at spreeker.com. Spreaker, because if you're going to talk to yourself for an hour, you might as well publish it. You're listening to. America is talking. Investors Edge. He's got to be pleased with that.

The crowd is just on his feet here. He's a Cinderella boy. With Gary Coltbaum. It comes highly recommended. You're going to feel better if you talk to him. And welcome once again to Investors Edge. So we are doing educational shows. this is a two-part two days of bull markets turning into bare markets and all the characteristics.

And we're not calling, we're doing this show in August of 2019, these two days. We're not calling for anything. We're just letting you know we've had 10 years without a real bear market. And we do believe it's the central banks that have prevented it. And we do worry of the next bear market that they can't control is going to be much. bigger because our study of asset bubbles and what happened in 07 and 08 in 2000 but we'll keep our fingers crossed so we've been telling you we just got to the point where well now the major indices the big guys are now down 10 percent they finally got to the areas that are more defensive

as we said earlier when the market goes defensive you know where the money flows out of risk areas doesn't it buys up Procter and gamble? Procter and gambles in the Dow. Holds up the Dow better. So one of the main characteristics is, if you have to be invested, you get as defensive as defensive can be. Typically, but not 100%,

food, beverage, utilities, household products, those type of things. very liquid stuff. Drugs. So we're down 10%, major indices,

but we've seen it plenty of times before in the past 10 years as we do this show in August of 2019. So we're good. And people are on TV, the pundits, not talking about the fact at that point the Russell 2000s in the 20s or the midcaps,

or the foreign markets in the 30s and so many stocks that have been hit so hard, they're talking to Dow S&P, and they're down 10-11. But we know at that point the average stock is 15, 18. So when you see 10 or 11 and you look at your account and it's down 18, you now know why. Of course, unless you own Duke Energy, or a Procter and Gamble type or a Hershey's

though Hershey's had their bare markets in the past but everybody's cool but then something happens remember how we discussed the 50-day moving average that nothing good can happen with an asset price if it's below the

50 day but not necessarily bad all bull markets ride above an sending 50 day. Well, there's something called the 200-day average. And for us, that is what is known as a long-term moving average. You add up the last 200 days and they're closes and you divide by 200, and you have an even more smooth outline. For us, that's the major league point. Because not only are you below the 50-day where nothing good can happen, but not necessarily bad will happen, because so many times we've seen a break of the 50 day

and you drop down to the 200 and you rally up as we speak on this date this past week and we're doing this on August 17th this past week a bunch of things held the 200 day moving average but when you break the 200 day

and you can't get back above it not only can nothing good happen but only bad could happen. And what do we mean by that? Well, if you're trading below, you're in bare territory. That's what we call it. Not necessarily the 20% that they tell you about. And if you stay below it, here's how it works.

And I want you to listen carefully. It's recognized. It's recognized by the big institutional, big money crowd. And it's at that point in time where you get more institutions selling. And then it's this point in time with a 50-day moving average that has been ascending. This line been ascending rolls over and starts heading down. Remember, the 50-day mover, the shorter the moving average, the quicker it can move. And turn, the longer a moving average takes a while.

But once you break that 200-day, not only nothing good, but normally only bad. And the longer you stay below, the worse. So we're at the point where a ton of names have broken the 200. day, but the major indices have not. They're holding up. But the Russell's down 15 below the 200 day, all kinds of stocks. And you know what you're hearing from Wall Street right then and there? Well, we've seen 10 to 15% corrections forever.

Don't worry. In fact, markets are so much cheaper right now. You got to buy. Buying opportunity. It's a value. But again, for our purposes here, as we are given you the characteristics of bare markets on how they move and how the masses react, bear with it. So things have worsened and there's worry. There is a little good news at this point.

A lot of people are turning bearish. A lot of people are worried. But since you're coming off of a bull market and you're no longer at a bull market, sentiment's different. In a bull market, remember, corrections get everybody worried, and all they do is pull back the market and they go on their merry way again. In bare market, sentiment changes. It does not work as well, so you must recognize that bare market.

All the rules have changed. In the bare market, all the rules have changed. all your rules of bull markets are gone no longer will an upgrade from an analyst turn your stock back up in bull markets bad news is good news

and good news is great news but in bare markets good news is bad news and bad news crumbles you'll see a company announce magnificent earnings and still go down. In other words, the rules have changed, and you're going to have to recognize them, or you will incur some serious losses.

We'll go over those rules in a bit, in the second show covering this, which you will hear on another day. So you now have the big indices, let's call it, down 12%. You got the Russell 2000 and some of the more risky ones down 18 to 20. My goodness. But we had that last year. And we had it in 16.

We've had it during the 10 years. We have not had to worry about going through a real bare mark. the one where we'll bring up to you the real bare market characteristics in a few so what happens next some more uh-oh all the usual things that move markets to the upside are no longer doing it all of a sudden the reason why markets topped out and got bearish we're starting to get some of that news when the market topped you didn't hear any bad news but deeper into this bare market, you're now starting to get some issues. Economic reports not as good, earnings reports not as good. More importantly, reactions not as good. Up next.

I will continue. Don't be depressed. This is all good stuff. Up next on Investors Ed. Guys, it's no use putting it off. The best time for an underwear refresh is now. Tommy John underwear is designed for a perfect fit that stays put all day. Their zero-chafe thanks to four times more stretch than competing brands.

And their innovative horizontal quick-draw fly is a game changer. With over 30 million pairs sold, there are thousands of men out there more comfortable than you. Don't settle for less. Go to Tommyjohn.com today for 25% off your first order with Code Comfort. That's Tommyjohn.com code comfort. Tommy John. Comfort perfected. message is brought to you by the Capital One Venture X card. Venture X offers the premium benefits

you expect, like a $300 annual Capital One travel credit for less than you expect. Elevate your earn with unlimited double miles on every purchase, bringing you one step closer to your next dream destination. Plus, enjoy access to over 1,000 airport lounges worldwide. The Capital One Venture X card. What's in your wallet? Terms apply. Lounge access is subject to change. See Capital One.com for details. This episode is brought to you by Spreaker, the platform responsible for a rapidly spreading condition known as podcast brain. Symptoms include buying microphones you don't need, explaining RSS feeds to confused relatives, and saying things like, sorry, I can't talk right now, I'm editing audio.

If this sounds familiar, you're probably already a podcaster. The good news is Spreaker makes the whole process simple. You record your show, upload it once, and Spreaker distributes it everywhere people listen, Apple Podcasts, Spotify, and about a dozen apps your cousin swears are the next big thing. Even better, Spreaker helps you monetize your show with ads, meaning your podcast might someday pay for, well, more microphones. Start your show today at Spreaker.com. Spreaker, because if you're going to talk to yourself for an hour, you might as well publish it. You're listening to.

What are we waiting for? Well, what are you waiting for? One, two, ready, go. Action! And welcome once again to Investors Edge. Thanks for being with us today. We are doing a two-part special educational show on how bull markets turn into bare markets, characteristics of reactions to.

We've already discussed how price will break below the 50-day moving average, but everybody's cool, don't worry it's happened before, how more and more stocks break down, where 70% are in uptrends, then it turns into 60, 50, 40, 30, 20. Sector by sector, stock by stock goes by the wayside. Reactions, no big deal. Wall Street, no big deal. We've seen it before. You've just got to buy.

What a value here. It's cheap. But we're talking bare markets here. Real ones. Not like we've seen over the last 10 years because of central banks. Not the ones that last three months and come right back up. We're talking about the ones that go through phases, legs, price, time. So get your seatbelts on as we move through the bear market.

And remember, don't be depressed that we're talking about bear markets. Use this as a weapon for the next time we have real bear markets. which by the way we're doing this show in mid-August we're seeing in many areas around the globe as well as in our markets as mentioned earlier energy stocks classic bear market

so major indices down 12% small and mid-cap indices near 20 the talk on TV is starting to turn a little bit negative though you have the Wall Street never turns negative

ever and then we have some characteristics show up what we call on a technical basis and those are those moving averages what you will see is that 50-day moving average roll over top turn down remember in bull markets the 50-day moving average which is just price ascends all pullbacks are contained price of a stock and a bull market will pull back into the 50 day and rally right off it. Sometimes to the penny, it's so uncanny. But as we move through the weakness, the 50-day moving average rolls over. The 200 day, you're accounting for 200 days. It does not roll over very easy.

It takes time. So it's the 50 day we watch. first and foremost, where price is now below, and now the 50 day starts heading south. From, let's say, 10.30 on a watch down to 4.30. Well, since we have a 50-day moving average and a 200-day moving average, and the 200-day doesn't move, but the 50-day does and is coming down, what's the next thing we look for? the 50-day crossing below the 200-day moving average, a sign of bearish action.

And it's at this point in time you should have taken some action weeks ago. But of course, we've seen this before. And central banks save us. Don't worry, everything's okay. It's just a correction. Markets have 100 years of history. Don't be stupid and sell now. It's already down 18%.

But we're talking to real bare market kids. Amuse us. So the market drifts lower. It's now major indices are below the 200 day. Important sectors are two. two most important sectors, the semiconductors and financials, below.

So many things below, the 50-day break in below. What happens? Well, bare markets are not very nice. One of the main characteristics of bare markets is that the bounces and the rallies in bear markets are a lot stronger than in bull markets. Why? Because of short-covering.

because once you get into bear, short sellers get enamored with themselves, they get emboldened, and they have very quick trigger fingers. So you get really vicious rallies, and what do these rallies do to the masses? And to Wall Street, it gives them hope. Bear market rallies are stronger than bull market rallies, and they're vicious. We coined the phrase. They're sharp. They're quick. They make you feel good.

They get everybody talking about them. They then suck you in and then screw you soon after. One of the main characteristics of a real bear market. We cannot say that. Loud enough, we cannot begin to tell you how many people will get sucked in on bear market rallies because everybody on Wall Street is going to tell you bear market's over. But little do they know. It's just a bear market rally. Up next, on the next show, we'll wind your way through.

the rest of the bear and the bottom of the bear. Thanks for being here. This has been the one and only Investors Ed. Thanks for joining us for another edition of Investors Edge on the Biz Talk Radio Network. If you missed any of today's show or to get in touch with Gary Coltbaum, please go to garykate.com. That's GaryKK.com. To reach Gary Coltbaum at his office, call 1-8-4-22-5559. That's 1-3-8. 4225559. Edge with Gary CultBomb on BizTalk. To listen to past episodes or to get in contact with Gary, go to GaryK.com.

That's GaryK.com. Guys, it's no use putting it off. The best time for an underwear refresh is now. Tommy John underwear is designed for a perfect fit that stays put all day. Their zero-chafe thanks to four times more stretch than competing brands and their innovative horizontal quick draw fly is a game changer. With over 30 million pairs sold, there are thousands of men out there more comfortable than you. Don't settle for less.

Go to Tommyjohn.com today for 25% off your first order with Code Comfort. That's Tommyjohn.com code comfort. Tommy John. Comfort perfected. This message is brought to you by the Capital One Venture X card. Venture X offers the premium benefits you expect, like a $300 annual Capital One travel credit. for less than you expect. Elevate your earn with unlimited double miles on every purchase,

bringing you one step closer to your next dream destination. Plus, enjoy access to over 1,000 airport lounges worldwide. The Capital One Venture X card. What's in your wallet? Terms apply. Lounge access is subject to change. See Capital One.com for details.