Investor's Edge with Gary Kaltbaum - Recession Time

Episode Date: June 30, 2022

More Info At: http://garykaltbaum.comMore

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eBay, things people love. Investor's Edge with Gary Cultbaum, straight talk about you and your money. Now from the BizTalk Studios, here is Gary Cultbaum. And welcome once again to Investors Edge. I'm Gary Kalbaum, your host. A thanks of being with us today. Glad you here, ladies and gentlemen, happy that you are listening. It is, what day is it?

Thursday, June 30th, 2022. Hope you're having a good day. As you know, we are here in Dubrovnik, Croatia, having a blast. All I can tell you is, we recommend it highly. As my thought process of every day that goes by, you don't get back, so see the world. is in full bloom. That's all I can tell you. And the best part about it is I've said to you,

I have three screens sitting in front of me. It's the same three screens with about 12 pages of stocks that I have in my office. They travel with me. And the market opens here at 3.30. It's currently 10 p.m. Croatia time. I just had a big double espresso to keep myself up, because I must tell you the heat here is wow. Today, we kayak around the walls of Dubrovnik,

went up the cable car to the top, posted some stuff on Twitter if you check out our Twitter feed. Again, if you have the opportunity, see the world. There's so much. And by the way, a ton of it's in the United States. I've been to 48 states. There's two states I have never been in. Maine, I have never been in. And New Hampshire, I have never been in.

Everything, oh, 47, I've never been in Alaska. Well, wait a minute. I stopped in Alaska once. I did. So I guess I'm kind of sort of in Alaska. I think it was on the way to Japan or something. Whatever. So, as you know,

we've been whining and complaining to you as we always do because the whining and complaining is meaningful, it's substantive, and it's pretty much right on the money. And we hope you've been listening. We are dead serious about every dime right now because the dimes are now a nickel, if not less. Some of the dimes are a penny. If you've been in, the what we call bubble blowups and really nothing changed today of note let's backtrack and we can go short term we dropped 3,600 down points on the leg to the downside in seven days we rallied up sixteen hundred points in five days we gapped open on the supposed fed stress test for the banks.

We reversed the whole 500, finished down almost 500. That bad in itself. Yesterday, though, something else happened. Dow was up 80, but the advanced declines on the market with two and a half to one to the negative. On top of that new yearly lows skyrocketed yesterday.

What does that mean? While the indices are not at new yearly lows, a bunch of stocks are, and you know that's one of our big warning shots. It has been the big warning shot on every top of any counter-tren rally in this bear market, and it, ladies and gentlemen, signified the top back in October of last year when we told you the NASDAQ and NASDAQ 100 hit new yearly highs, but 500 stocks in the NASDAQ hit new yearly lows. greatest divergence ever, which led into today. And as we always leave you and tell you every day, we don't know what tomorrow brings.

That's the short term. That's the trees. The forest is the big picture and that's all we want to get right. The main trend, the big picture, don't deviate from that because if you do, you get carved up. And we're pretty proud of ourselves this go round because we've stayed very, very disciplined and in tons of cash. And we mean tons, we mean tons. We walked into today. Futures down 400 or 500.

At one time today, I think we were down 570 on the Dow, 300 on the NASDAQ, and then rallied to be almost flat before selling off again. And just whip it all over the place in the final minutes. We went from down 380, back to only down 180, back to 300. back to 200, back to 300, and then we'll give you out the final numbers in a minute. But that's not the story today. We will get into the markets in a minute before anybody else. And we take pride in saying this.

We told you inflation was a common. It had to happen. Printing up to $9 trillion, creating massive bubbles. and what we called artificial wealth, the payments from COVID, which were a necessity, but then they came out and sent another $1.6 trillion, and Wood could say wasn't such a necessity. We warned you of all this.

We also told you months ago that the inflation will lead to recession. We warned you. We did whole shows on the worry of the economy months ago. And it's very simple. If everything you're buying is going up in price, but everything you're investing in is going down in price, that's a worry.

Savings rates, plunging, credit card usage skyrocketing, 30 trillion of global wealth evaporated bubbles bursting all over the place and we'll get into that in a little bit there's this thing called the Atlanta Fed it's one of the regional Fed

places where they come up and tell you what they think GDP's going to be like a couple of months ago they were I think a 2.5 or 3 when we said we're going into recession. They lowered it a few weeks ago to 1%. We told you we were going into recession. They lowered it to zero.

We told you we were going into recession. Today they announced for this quarter minus 1%. The definition of recession is two down quarters. and guess what if that we're in recession we're in recession we warned months ago

the question is how bad we've lived with recessions before it just means GDP is stalled growth in the economy and actually heading south a little bit we've been there before

I must tell you, recessions are really a no biggie. Of course, unless you lose your job. As we've quoted Ronald Reagan before, a recession is when your neighbor loses his job, a depression is when you lose your job. Why do we have bigger worries now than before? It's simple. Everything we have told you.

since Christmas of 18 has come to fruition. The same people who cause the problems are still in power. And now they're all admitting they've been wrong about everything, yet they're still running the show. I can't begin to tell you how much this worries me because I'm going to follow-up statement from a couple of weeks. ago three weeks ago when we said to you we think inflation is peaked we said that to you what was that based on not opinion price copper lumber wheat corn soybeans oil the big

matzabal as well as many other economies and top commodities had topped out. Up next, further explanation. Today's finish, much more. I'm Gary. 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 888-4-22. 5559. That's 888-422-5-5-9. Investment advisory services offered through Colbomb Capital Management. Enjoying a healthy dinner that tastes great means eating out at a pricey restaurant, right? Wrong. Healthy Choice Simply steamers are delicious and healthy. The tray-and-tray steam technology delivers crisp veggies and tender protein and tasty selections. Like Healthy-Toyce,

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Learn more at APU.APUS.edu. 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. So, let me throw the bow tie on. on this. Yesterday, Jay Powell, the head of the central bank, that's caused a ton of this, now says we understand better how little we know about inflation. This is stunning. It's stunning. It is stunning. And unfortunately, you know who he said it to? Someone who's worse than him. Christine Ligard, who runs the European Central Bank. She still has negative interest rates while inflation's heating up all over Europe. But two weeks ago, we started telling you, inflation is peaked. How did we know? Price action, first and foremost. But how did we know?

Well, when you go into recession, demand drops. It's simple as that. When demand drops for a product or service, that product or service has to take account. If it drops enough, you have to decide just how many and how much you need. Whether it be office space, employees, paper products, computers. And guess what happens? Less. If there is less computers being bought. What happens? Well, all the way down the food.

chain, things get affected. It's simple as that. Simplifying it, if you're a closed store, a one sole proprietorship clothes store in any town USA, and you're doing a certain amount of business with 10 employees and business drops off by 15%, you may just need nine or maybe eight, and you don't want to do it, you'd rather have strong demand, but you have no choice. If you let one person go, that's one person without a job. That one person without the job may go unemployment, which is a lot less, may find another job, but let's say they don't. What is the emotion and the thought process of that person? tighten things up.

The restaurant and the bar you go out to every Friday and Saturday? I'm going to skip that this week. You're catching the drift? And that restaurant loses you. You're only one person. But what if it turns into 10 or 15 or 20? Because this worsens. And the restaurant that feeds 400 people on a Friday night,

it turns out they're only feeding 300. and 40. What does that mean? How many people do you need? How many waiters, bartenders? And therein lies the other side of the cycle. The virtuous cycle is where demand is strong, get stronger. And every day you're thinking, I don't have enough employees. I need more. I need more menus. Well, actually, they're doing the QR codes with the menus now finally. I need this, that, and the other thing, more and more and more. and more. Spend more on other businesses so they can hire more. There's the virtuous cycle. I'm worried about the opposite. And we've been worried about it. We've nailed this for you, and my title is not economists. I didn't go to Wharton. I did not go to Harvard. I did not go to Yale. I am self-taught by just keeping my eyes and ears on the pulse of everything. with no bias. My channel checks are small.

They're simplistic, but damn do they work, as we warned you months ago on all this. And why is inflation coming down? It's simple. Price is coming down. If less is needed, price is coming down. That's all. imagine you sell t-shirts on the street outside the Yankee Stadium

and you're really not supposed to you still do it and you sell them the shirt for 25 bucks and nobody's buying well you got to go to 20 don't you to get rid of them and you got to keep lowering prices until you sell versus the other side housing

the misery at the central bank kept rates at zero making easier, more affordable, creating bubbles. What do people do? When there's no supply, they bid them up and bit them up. Guess what's happening now? The opposite.

Supply. Huge. picking up everywhere. What does that do into price? Stalled. Coming down. What does it do for buyers? Buyers instead of jumping all over each other

are starting to think, you know, if I waded out, I'm going less going forward because, oh, my neighborhood now is 60 houses for sale when there was only one two months ago. Inflation leads to deflation. And this needs to work. be watched closely. Here's why. Jay Powell doesn't know what we're telling you. He's still talking inflation. We're looking at the charts of all these commodities cracking. We're looking at

oil the most important one that has gone down from 120 mid-120s. It closed today, 105. We told you 10 days ago in the next two, three weeks, expect oil prices. the gas prices to be down a good 10%. I'm not in the states right now, but I'm getting emails from people. It's coming down. Of course, price is fleeting. Oil prices are.

It can change, but we're now in recession. And we're worried about it feeding on itself. We think one of the linchpins of economic growth has been the wealth effect brought to you by Mr. Bubble. We are in reverse wealth effect now. Up next. Today, much more. Wish we had better news.

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What having it all tastes like. Success starts with your drive, an American Public University is here to fuel it. With affordable tuition and over 200 flexible online programs, APU helps you gain the skills and confidence to move forward. Whether you're changing careers, starting fresh or pursuing a lifelong passion. Our programs are designed for people who never stop.

You bring the fire, APU will fuel the journey. Learn more at APU.APUS.edu. Online reviews say I'm steep, rocky, and a difficult trail. Next time, I'm going to say, not if you're driving a Toyota truck. We know what we're made of, Toyota Trucks. 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 well, once again, to Investors Edge. So let me just say the market was just all over the map today. Really in the first hour, I think we were down 570 on the down. NASDAQ down 300.

I think in the 2 o'clock hour, only down like 60 and 50. And then before you know it, we would down. down 380 and 200 again. And I can tell you, like in the last minute, we went from down 300 to down 200 and finished down 253 on the down. I mean, it was moving 50 points in 10 seconds. But just remember, when we do this daily stuff,

it's the big picture that counts. The main trend. I'm sure you know by now we're masters of the main trend. And the one thing we've gotten much better on in this bear market is not fall for the countertrends. We played them with the window open ready to jump out. And the first day we saw trouble, bye-bye.

And I think in all our little, not many, counter-trend moves, I think we're flat, give or take, made a little money on a couple of them, lost a little on a couple. We haven't bought any individual names in ages. We don't trust them. The next thing we are worried about, stockwise, is earnings reports. Why? What did I just tell you? Demand throughout the food chain.

And I'm hearing from a bunch of you. I'm getting emails from a bunch of you in differing industries. All given me your facts, but all consistent. Today's market wrap brought to you by Investment-Models.com. That's Jim Moraback, one of the great market timers. No gray areas with the man you're either in or out of the market. It's proprietary indicators. Go check it out.

Investment-mottles.com. Well, I want to start by saying there was 816. new yearly lows on the New York and NASDAQ. Yet the New York and NASDAQ are not at new yearly lows. Neither's the S&P, neither's the Dow. Which means there's a lot of stocks now that are breaking in advance. And most often, it's just a matter of the indices following. Now before today and the open. We dropped 1,500 points since the highs of Tuesday on the open. One would think we're oversold already. Market didn't think so today, though we bounced. Because after being down like 550, we finished only down 253. I guess that's almost a win. The S&P down 33. The NASDAQ down 150.

Was down 300. Nasdaq 100 down 154. The socks down 27. It's tried all day. It was actually up for a while until the, uh, another drop at the close. Transport's down 65. But let me repeat, 816 new yearly lows. You know what the new yearly count is? General Mills. Advanced the clients, not as bad 1527 on New York, 1826 on the NASDAQ, oil stocks. We told you they top. they're really bearish now remember since the first day of the new year all we kept saying to you was

if you had to be invested energy not anymore same goes for commodities and really we are down to one sector that's bullish and it's not the whole group

drug stocks after that I got less than two hands of strength. Seriously. That's it. That's how tough and rough it's been. It's unreal. It's stunning the weakness. Now there's all the reports now, worst half of the beginning the first half of the year, the worst one ever. I didn't realize the NASDAX down like 28% this year. More after today. I have news for you. I'm not even paying attention to that. Let me tell you. else I'm not paying attention to and I want you to listen carefully because we mentioned it before.

There are people that are out there that do their best and they come up with things about, well, in the five times the market did this in the last hundred years, this is what happened the year later. We're getting a lot of that. And it's mostly bullish, meaning, well, every time we've had a first half of year like this, the market was up by average 14% by the end of the year or a year later. Every time this kind of bearishness was into the market, within a year, the market did this. Always higher. Unfortunately, they don't recognize we're in a bare market. We're not in the

bull market. That's number one. Number two, they forgot what we've told you. Price first. everything else second. I say that because all this bearish sentiment has been going on for weeks and didn't stop the market from getting trashed. And remember all this bearish sentiment, there's a reason. They're polling people. You know what a lot of people own? The crypto, the mean stocks.

They've been crushed. Of course they're going to be bearish. Why is that good news? So just pay attention to price. Pay attention to us. If things change, we'll let you know. Remember, the first day of the year, we said oil was emerging. If something else emerges, we'll tell you.

We just had Chinese ADR saying that's the only group that looks to be bottoming, but do we trust it, meaning if there's more legs down in the whole market, of course they're going to bring Chinese stocks down. So we're not sure of duration, but so far they're hanging in there. If we ever get to the point where we can name 50 sectors that are all bottoming, or big indices, all bottoming, will tell you. We haven't even started the first day process. Yeah, there's some stocks stronger than others. Most everything's in a bare market, and we don't want you to argue.

The other part of the equation. and we're not going to mention names. So you have these big brokerage firms out. You know what their job is, right? You know what we tell you. In bear markets, you get no help from Wall Street. Why? They're fully invested vehicles.

They never want you to sell anything. It's amazing. So let me just read one from you. The headline, patient investors may benefit. they're sending this out to all their customers at this big firm. And we're not going to mention who, because they mean well. But the problem is, they're telling you what you need to do in a bare market that they never called in the first place.

So it starts out by saying, we believe the U.S. economy is currently showing signs of a slowing expansion and the risk of the recession occurring in the future may be rising. A little bit late on that. But then here we go. Historically, stocks have rallied soon after entering a bare market and sometimes even after news headlines of highlighted recession risks. So we have not yet moved clients. We have not yet moved client accounts to lower allocations to stocks. So they're admitting their clients are being crushed.

Yet they're now telling you, quote unquote, we believe that staying invested through periods of market volatility, can provide a better opportunity to participate in potential stock and bond recoveries. What do you tell the 74-year-old retiree that has a million bucks with you that's now 700 grand? Stay the course? Isn't your job to do something? Up next. More on this. I'm Gary.

This is one only investor's edge. Enjoying a healthy dinner that tastes great means eating out at a pricey restaurant, right? Wrong. Healthy Choice Simply steamers are delicious and healthy. The tray-and-tray steam technology delivers crisp veggies and tender protein and tasty selections like Healthy Choice Simply Steamers grilled chicken and broccoli alfredo. It's a satisfying meal with 28 grams of protein and nothing artificial. Healthy Choice Simply steamers. What having it all tastes like. Success starts with your drive, and American Public University is here to fuel it. With affordable tuition and over 200 flexible online programs, APU helps you gain the skills and confidence to move forward. Whether

you're changing careers, starting fresh, or pursuing a lifelong passion, our programs are designed for people who never stop. You bring the fire, APU will fuel the journey. Learn more at APU. APUS.edu. With the power and endurance of Toyota trucks, you can go to the most incredible places, like this valley where the echo does different voices. Hello! Hello!

We know what we're made of, Toyota Trucks. You're listening to. What are we waiting for? Well, what are you waiting for? One, two, ready, go. Action! In the Gester's Edge. With Gary Colba. Let me read on a little bit more.

It goes on to say, sustained market volatility and unsettling news headlines can lead to anxiety for many investors. Anxiety? No, they're losing their arse. That's not anxiety. That's real world. So this outfit has said, yeah, we've done nothing. No allocation changes. While people are being murdered. There are stocks down 50, 60, 70, 80, 80. percent, some mainstream Netflix down 75%. No allocation changes. It goes on to say, when we've been through similar market conditions has been common for investors to wonder what might be coming next.

Duh. Or when things will get better. The temptation to react is volatility to volatility, perhaps by avoiding stocks can also be strong. Temptation? No. It's not a temptation. temptation. This is real world crap. You're retired. You're million 600 or 700 and you're being told, stay the course. What? What if in that account there's Netflix or Square or PayPal?

These were big leading stocks. Or even Google and Microsoft that are down 2530. Who wants to down 25 or 30% in the stock. Raise your hands. And here comes the next line, which nauseates. Yet historically, we have found that patient investors who stick with their financial plans through periods of market volatility have often had better success in reaching their financial goals. And you know what? They're right historically. But you didn't do a freaking thing while they're getting smashed in real time. And this boilerplate language is nauseating. It's boilerplate.

This company has funds a high beta that are down 35, 40%. Temptation? I have news for your kids. When we say to you on this show, we treat every dime like it's precious. we mean it when we tell you we have studied thousands of hours of bare markets we mean it

when we have proven to you we know how to sidestep bear markets you know it but these people refuse to work in it because it's too easy just to say think long term everything is going to be a okay by the way just recently this outfit

decided to let crypto go into retirement accounts after the bubbles popped. I rest my case. Ladies and gentlemen do not listen to Wall Street during these times. That's all I can tell you. Our mantra you will get no help rings true. Which takes us to the coins. They can't even bounce on the counter-tren rallies now.

Do you know what we call that? It's called the slow death. and these I'm not going to use the word these people that are touting you have no clue what they're in we've been mentioning this guy who Ryan's micro strategy who went on TV

and the nerve when his stock is down 90% first off where the hell is his board where is his board why aren't they kicking his ass out 90% he took the whole business and put it into crypto that's getting destroyed. He went on TV and said, we're thinking 10 years ahead. But if you bought the

high, you have to have 10-fold to get your money out. If you bought half the high, you've got to make more than five-fold to get your money out. It's insanity. If there's anything we hope you listened to since February of 21 was all the bubbles. We yelled at you on Rivian. Ridiculous IPO. We, we didn't yell. We were blunt on the SPACs that con artistry of money grabbing. We warned you of the no sales that in bare markets, anything with no sales is dropping 90%. We warned you about companies that lose money that have sales, that they're going to be crushed. We warn you that in bare markets, past leaders will drop on average 70%. We warned you about the marijuana stocks, the 3D stocks, the hunks of junk, the no sales anything.

These things are down. Well, let's just say you're never recovering. The meme stocks, we warned you about game stock and AMC and Blackberry and Ciborch and Cibor financial and all these things that run up by the Reddit crowd. We warned you about Dave Portnoy, nothing against them except he said he's never selling his meme stocks and then he went and sold them and then he went and told you. Why? Because greed and fear and emotion, even with tout artists, we warned you and we hope you

listened. This is big stuff, ladies and gentlemen. Rare occasion time, rare moments. And as we told you a year ago on this show, we said it to you. We're now at the moment. You better be listening carefully. Because we're going into one and you're going to get no help from Wall Street. It rang true.

It rings true. We hope for better days. But at the close of the day, the only redeeming, Thought of the day, we're down 570, finished only down 250. Yay. We're heading to London in the morning for Wimbledon on the weekend. We'll be doing the show tomorrow. You have a great evening drive carefully.

I'll be on with Neil Cavuto between noon and two tomorrow and Fox Business from London. You have a great evening when you get home. Very simple. Eat some chocolate and make sure you hug your children. Thanks for joining us today. Peace out all. Bye bye. This has been Investors' Edge with Gary Cult Bomb on BizTalk.

To listen to past episodes or to get in contact with Gary, go to GaryK.com. That's GaryK.com. Success starts with your drive, and American Public University is here to fuel it. With affordable tuition and over 200 flexible online programs, APU helps you gain the skills and confidence to move forward. Whether you're changing careers, starting fresh, or pursuing a lifelong passion, Our programs are designed for people who never stop. You bring the fire, APU will fuel the journey. Learn more at APU.apus.edu.edu.

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