Capitalist Investor

Dow Losing Streak, P.O.T.U.S. Coal, Holiday Festivities, Ep. 303

• Strategic Wealth Partners

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In the latest episode of the Capitalist Investor, hosts Diamond Hands D and Tony delved into a myriad of pressing economic and political issues, shining a light on the intricate dynamics shaping today's financial landscape. Here are the five hot topics they discussed:

1. The Dow’s Eight-Day Losing Streak

The hosts kicked off the episode by discussing the Dow's recent eight-day losing streak, which saw a 3.5% drop. A significant contributor to this downturn was UnitedHealthcare's challenges, notably compounded by the tragic assassination of their CEO. Additionally, proposed policy changes from Trump, aiming to cut the middleman out of Medicare, have put further pressure on the healthcare sector. Tony and Diamond Hands D speculated on the potential impacts of these developments on the broader market, particularly how investors might shift their focus to riskier, high-reward investments like Bitcoin and AI.

2. Jerome Powell's Interest Rate Strategy

Federal Reserve Chairman Jerome Powell's interest rate strategies were another focal point of discussion. The market is abuzz with anticipation of a potential 25 basis point cut. While some cheer this move, others warn of potential stagflation - a blend of stubborn inflation and stagnant growth. Tony emphasized the challenges in maintaining downward pressure on inflation, hinting at possible short-term upticks, while both hosts pondered the broader economic implications of Powell’s policies.

3. Biden Administration’s Controversial End-of-Term Decisions

Diamond Hands D and Tony outlined several contentious moves by the Biden administration as it nears the end of its term. These include extending the work-from-home mandate for government employees until 2029, the liquidation of border wall materials at a fraction of their cost, and discussions around allowing full Social Security benefits for government pensioners. The hosts expressed concerns over these decisions, highlighting the potential long-term economic strains and perceived inefficiencies they introduce.

4. Bitcoin and the Crypto Market Outlook

The future of cryptocurrencies, especially Bitcoin, was another hot topic. With Trump’s administration planning to engage more with crypto, including the establishment of a crypto reserve, questions abound about the government's role in crypto markets. Tony mused on the secure management of government-held crypto assets, while Diamond Hands D pointed to the sustained allure of cryptocurrency investments amidst traditional market dips.

5. 2025 Market Projections and CEO Confidence

As 2024 nears its end, attention turns to 2025 forecasts. The hosts discussed the potential resurgence of value stocks amidst technological and speculative investments' dominance. Reflecting on prior predictions and market performance, Tony stressed the unpredictability of market movements. The duo agreed on the importance of continuous market engagement, espousing the age-old wisdom that time in the market often trumps timing the market.

Conclusion

This episode of The Capitalist Investor underscored the complexities and uncertainties defining today's financial and political arenas. From interest rate strategies and controversial administrative decisions to the unpredictable crypto landscape and market forecasts, Diamond Hands D and Tony provided listeners with deep insights. As always, they reminded their audience to stay informed, wary of "shiny toy" investments, and to consider the long-term implications of current economic policies. With the holiday season upon us, both hosts encouraged everyone to take a reflective pause and prepare for 2025's opportunities and challenges.

And welcome to this week's episode of the Capitalist Investor. As always, you have me, diamond hands D and back and better than ever. Tony the Tiger. What's going on? It is the season. Luke is on assignment in the Caribbean somewhere. Yep. Still on his honeymoon. Yeah. So this will be our, our last show for the year, right? Yeah, yeah. I think we'll take a two week hiatus. We got Christmas and New Year's. They kind of fall right when we record the show and skeleton crew for those and stuff in the office. So yeah, we're just gonna take a pause, hit the ground running sometime in the first week of January. Oh yeah. So I was asking our engineer Isaac over here what he was gonna get for. For Christmas and I. He said, socks and money. I love it. There's nothing wrong with any of that. Absolutely. How about you, D? What do you. Would you put anything on the list or is it just like I just gotta buy stuff for the kids. Yeah. You know, they still, still make us do a list. So I send some, some things out mainly just like I like Peter Millar, like golf stuff shirts. Yeah. Zip ups and stuff like that. Yeah. I have socks on there too. And I guess maybe the. The big thing I did ask for was one of those iRobot the Roomba vacuum cleaners. Okay. You didn't have one. I definitely have one. Yeah. I asked for the new one that does the mopping and the vacuuming. Okay. Oh yeah. Okay. Okay. So I don't know if I'll get that. That was like 600 bucks. That's a, that's a you Christmas present. You have to buy that for yourself. I might give that to myself if there's a good, good sale after, after the holidays. Yeah, it's like golf balls in cologne on this side. That's all I, you know, and I'm. And I'm like, just get me the golf balls from like lost golf ball. But they got these like pristine golf balls. They have a new layer, five A's or whatever. Yeah, they're nice. Like they're. They feel like they're right out of the box. There's not a scuff or anything. And yeah, my game still sucks, so maybe it's the ball. I don't know. Yeah, I got golf balls last year and I did some inventory and I still have a lot. I like it. All right, man. Today we're going to talk about the. The Dow is on a. It was on an eight day losing streak pre market this week or today. Could end that streak. Jerome Powell is talking about interest rates. They're expecting to make another 25 basis cut. And you got some of the people cheering and then you got some of the people out there saying you're going to cause stagflation. I'm seeing all kinds of crazy stuff. I mean, I can't see them just continually to coast down on inflation. There's, there's got to be some, you know, like an uptick, you know, I don't know how much, but I mean if it goes up 1%, it's better than 9% we've experienced in the past, but we'll talk about that. And then we also. So I don't know, man, I just had this like over the last week or two, you know, ever since the, the election, I feel like the current, the POTUS is leaving Trump a, a sack of coal on their way out with multiple things going on. And it just makes me scratch my head. Like why would you make all these moves when you're leaving? Right, yeah, it's just very strange. And we'll get into that. So first and foremost, like the Dow, it's an eight day losing streak. In that time though, the Dow's down three and a half percent. And one of the biggest things is it comes from UnitedHealthcare. They're having a pretty rough month. Obviously the assassination of their CEO. Yeah, I mean that's just crazy to begin with. And then you got Trump out there saying I'm gonna cut the middleman out of Medicare or medical stuff. And that's not good for that industry that I think they're at a 16 or 25 year lower. It was something ridiculous like their, their valuation is so historically low right now and the way things are shaping up, man, it could go lower. I would argue that the Dow, that's definitely one of the headwinds right there. But I also feel that right now there is so many shiny objects for people to invest in right now. And we love shiny objects. And what I mean by that, like Bitcoin, AI, Tesla. Tesla's up 100% since the election, isn't it? Oh yeah, absolutely. It's something crazy. I call those shiny toys, shiny toy investments and ultimate risk investments. Right. So when you got all that stuff and people are making 5, 10% in a week, why would I invest in Procter and Gamble when I, when I'm gonna make 3% this year or get a 3% dividend? Like, it's just not sexy. So what's your, what's your take? Yeah, that's, that's a super interesting spin on things. Honestly, the. I feel like you can't get away from the crypto market these days. It's everywhere. Everyone's talking about it. You know, if my dogecoin gets to a dollar, you know, I'll be riding in Lambos and private jets and things. What is it at right now? Oh, I don't even know, like 30 cents or something. Okay. Okay. So. So, yeah, you know, it's, It's. It's a very interesting comment because, yeah, investing in Procter and gamble in 20 and 2024 seems like a boring move, right? It really does. You know, and if you look at, you know, how investors. The. The investor mindset, right, Say like from, you know, 30 years ago. So like the, the mid. The mid-90s, right. Right before the Internet boom, that. That's how people were investing, right? You know, safe companies, dividend stocks, you know, slow and steady. And the mindset has almost completely flipped around to, you know, ultimate risk. And, and. And it's really been a high valuations. Exactly. Ultimate risk, like unprove. You know, I'll call it maybe unproven technology. AI. Right. You know, like, yeah, it does some cool things, but it's still not perfect. But I. I mean, 23 and 24 were these years of, you know, hyperbolic growth by a handful of names that have carried the entire index, essentially. And continues to do so. Continues to do so. So it'll be interesting to see what 25 brings us. You know, will it be the return of value stocks? You know, we'll have to have our. It'll be after the first of the year, but we'll have to have our. Our Nostradamus hats on me, you and Luke on what's going to happen in 2025, what we see. Because, man, I just. I always dread digging up what we said in the beginning of every year because it is just always wrong. But even this year, a lot of Wall street was saying anywhere between a negative 5 and plus 5 market returns in 24, and the S&P's encroaching 30%. Yeah. Right. Like, I mean, holy cow. So even Wall street, they mostly get it wrong, too. Y. It's crazy. So the. The old saying, you know, you know, time in the market's better than timing the market. Yep. Right. So, you know, and again, be careful of those shiny toys. They're. They're. They're highly valued right now. Exactly. You know, Bitcoin's interesting, though, because, yeah, it's had its run up, but it all depends on, I think, what the Trump administration really does with, you know, with their crypto reserve and all that stuff. It'll, it'll be interesting to see. And then when they start buying it, what's their wallet look like? What's their, what's their crypto wallet look like? Right. You know, like how, how, how, how safe is that money? That's an excellent point. Right. I mean, if you buy a coin, you should get a, what they call a ledger. Right. Basically a high profile thumb drive. Right. Put it on there. You know, I'd like to be in charge of that thumb drive. Right. All right. Anyway, I digress. So we got that. So again, you know, as we kick off the new year in a few weeks, we'll probably have our, our hot takes for, for the market. We'll have to work on that in next couple of weeks. Yeah, we'll have to review last year too. I, to be honest with you, I don't even remember what we picked. I know to start, we got to do that. Why don't, why don't you get with, with Chris and dig that up? We'll have to figure that out. Yeah, that, that's your homework assignment. The next thing is, is that, you know, as I was talking to Derek a little bit, know, before the show and a couple days, you know, like, I don't know, man. There's some crazy things that are being reported by the Biden administration on their way out. Yep. You know, ideally, you know, some of the things that I saw were, you know, work from home. Right. You know, I think they think they extended the work from home for nearly every, you know, government. Yep. You know, employee until like 2029 or something. Ridiculous. Like, why would you do that? Like, that's not on your way out. That's an excellent question. Why would you do that? Why would you do that? I mean, let the next president do that. He's got to deal with it for the next four years. You've got four weeks. Yeah, I'm not sure. Go ahead. Yeah, I'm not sure exactly what in that entails and if it can be undone and things like that. But, but yeah, the, the numbers that I've seen, it's a ridiculous amount of like nearly 100% of government employees are essentially working from home. If you take out like the custodial staff and people that just absolutely have to be there, almost everyone is working from home. So basically unsupervised. Right. Just a huge, huge waste of money. And the, the current administration on the Way out basically makes it harder to undo all of that. Yeah, well, I mean, I was just talking to somebody in the office, and he goes, yeah, like, my. My brother works for the. The government, and I think they have them coming in like one or. One or two days a week or something along them lines. And now they're talking about coming in full time. He's like, that's gonna ruin my life. Like, I have my life structured around working from home, like kids and balances and all this stuff. And I'm like, tough cookies, dude. I haven't stopped coming into work since COVID Like, we took a week off and got back into it. Like, this is Covid's over, man. Like, working from home is not. Yeah. I mean, some people can be efficient, but I don't believe it. Right? You kind of. Not for extended periods of time. I don't think so. You know, I can do. I can do like a day and maybe like, be more efficient because, you know, no one's popping in, you know, water cooler talk or whatever. Right. But, you know, like a whole week or something like that, you know, it's. By the end, it's. I'm the same way. I'm the same way. I feel like I'm just not productive. Border wall, they're selling it 5 cents on the dollar, you know, and then you hear the reports that, like, Texas is going to buy it. So, I mean, thanks. You're going to sell it to the one state, and then the state's going to sell it back to the government. Like, way to put your money from your left hand pocket to your right. And again, it's just a. Another stab wound, you know, Like, I don't know it. That. That boggles my mind. So I saw this. I. This thing and now. Now here's the interesting part on this. This was a bipartisan kind of approval, but Social Security is Social Security, and. And in government pensions, okay, when I say government pension, like, it could be postal service, it could be schools, STRs per S. You know, those are popular here in Ohio. Right. And elsewhere. When you. When you pay into a government pension, you're really not paying into Social Security. So what they have is this, like, wep, you know, windfall, you know, protection against taking Social Security and a pension. Right, Right. So they are looking to pass a bill again before the end of the year on the way out of having Social Security, full benefits for pensioners. Like. Like the windfall stuff where the, like all that stuff is going to now be unleashed. And we're Already running a deficit in the trust fund for these programs. And like the double dip, I mean, like, I don't know, like that's you and I paying for that. I know that people have paid into the program and they do get a windfall, but I don't know, man. Like, this is going to be another strain on, you know, on the, on the system. Yeah. Giving away free money is, is not politics. Like, I don't, I don't know who needs to hear that. But it seems like this administration has just come up with different ways to try to give people free money. And I've seen pensions, don't get me wrong, I've seen people that are in that opers, strs, per S, all those different pension funds who have worked in the private sector and have. I'm okay with those. And again, there wasn't a lot of visibility on what they're actually going to pass. Imagine that. But if it's for those people, I can understand like, hey, you, you actually have your credits in, you know, why should you be dinged because you paid into a different pension? If you, they have, they set the rules. And if that's the case, then I understand. Right. It's for the people that have never paid into it that are planning on getting it. Right. That's a big problem. So we'll see how that plays out. You know, so that, that's another thing. Drones pardons, those are conspiracy theories. But those pardons are not a conspiracy. Well, they're, they're happening. But you, but you got to sit there and wonder why they're happening. Yeah, that's like a horrific list of people that have been pardoned. Who did I see? Some Chinese spy. Oh, nice. Yeah, it was. Yeah. Every, everything that pops up as I'm scrolling through it doesn't seem to, it seems to be a blatant abuse of the pardon system. Yeah, I saw, I saw another political person. Not, not a D.C. kind of political. Was more like on the, the regional side. Whether it was like a county or state or city or something has been pegged for what? Embezzle? Embezzling like $30 million over the course of like 35 years. Pardoned. Yep, that's the one I'm looking at right now. Yeah, like how does that happen? Right. So we got all those fun things and now one other thing to add to the list is there's a 15 page bill to avoid a government shutdown. They got three days. Who wrote a 1500 page thing and then dumped it on the, you know, Congress desk and said, hey, you got three days to read this thing. Yeah, I saw a picture of it. It's, you know, a stack of paper probably, you know who, 10 inches off. Who writes that? AI. I don't know. Talk to text. Come on, man. Like, I don't know. That's just. And then to have three days to pass it. Like, what is buried in those pages? Another Lord only knows. They, they, they said like inside of there there's $100 billion like disaster relief. I don't know if that's for the people in North Carolina that are, are washed out. 30 billion to FEMA, 10 billion to farmers. And you know, and it's only extends the government till March. You got Vivek and Elon saying don't pass. You know, like they're screaming from the mountaintops like, don't patch this thing. Right? Let it, let it, let it, let it go. Right. And so, I don't know, we'll see what happens on that side, but there's a bunch of like, weird nonsense like they're selling the border wall. You know that dude, you know, Trump's going to get back in there and wanted, like this is that, that's how. That' the main issue Trump won on is border security. Right. And they're going to come in and sell that. I mean, I, I'm, it blows my, I'm just losing my mind. I, I can't understand this. You. Government waste at its finest. Just to spite. Yeah, just, you know, one man. Yeah. They're supposed to be working for us. And all they do is wasting our money. Is unbelievable. I know, man. What else? What do you got? D. You know, they just kind of tied in. I saw a nice poll on CEO confidence, so I do remember talking about that quite a bit, especially during like the, the pandemic. So, you know, I think that was just mainly a comment on obviously the market is, is super highly valued right now. I think the, the forward PE is up to like almost 23. Yeah, I was thinking about, yeah, the 4Ps like 23 or 24, but like, you know, and then people say like, what happened to Santa Claus rally? And be like, it's been Santa Claus for eleven and a half months. Like, chill out. Like, you're, you're fine. You, you have done just fine this year. Right. But yeah, the Santa Claus rally is really not doing its part. But again, the market ran up probably 20, you know, 20% more than the closest analyst has would have predicted this year. There were supposed to be recessions and I Don't know, they're like, you know, you read again, you can read through a lot of things. You know, I keep on hearing stagflation where we have inflation, no growth, high energy costs. You know, that's going to be a little, could be a little bit of a stretch, but it's definitely in the cards. But just maybe a low probability. Tough word to throw around though. Yeah. Because then when you hear that you're thinking 70s where high gas and you know, all that, you know, just high expenses and 20 interest rates for homes and stuff. Yeah, we don't want that. Right. But yeah, you know, I think, you know, I think we're just going to kind of keep, keep banging around in this area until after inauguration day on the 20th. And I think it's going to be kind of like a balance between like the, the growth oriented policies and then obviously the cutting. You know, if you start slashing government jobs, that's going to affect the economy too. So it's going to be kind of a balancing act to start. So. But all that said, I do think there is a pretty, there is a potential for kind of a nice outcome next year. Well, you know what, like, and I'm thinking about something that Mark has said in the past, you know, and with the government being so bloated, it actually hurts the private sector. Oh yeah. Because it is absorbing. What's the word I want to use? Quality jobs or quality, you know, high profile people who just happen to be working for the government which the government needs. Right, right. But like if there are cuts, there's a probability that like the talent pool for. Bless you. That the, the talent pool for the private sector could become good. Right. So and with that, you know, private sector is what's going to drive productivity and GDP and you know, growth. Not the government. The government does not promote growth. Growth. We, we have to pay the government to employ these people. So. All right, man. Well, what's, what's your favorite Christmas movie? You guys been, been watching any? Hit me with yours. I got to think about that one. You hit me with that one. So, you know, so my kids are getting to the age where they can actually like consume and enjoy movies. So other five and seven now we, in the past we had watched like a lot of the, like the 30 minute specials, like, like the Frosty the Snowman was a big one. But this year they're, they can make it longer. So we watched the Polar Express. Have you ever seen that movie? I don't think so. Is that, is that the One with the animation with Tom Hanks. Yeah. I had never seen it before. It's. It's kind of weird. Okay. It is long too. It's like two hours. So we watched it over like three, four, three sittings. But if you take out Die Hard. I do watch Die Hard every Christmas. Yeah. Usually, you know, by myself after all. The presents are out. Die Hard. Oh, yeah. Is it A Christmas Story? I think so. You know, it's a movie that's set during Christmas time. So yeah, I saw something on Facebook and they were just sitting there talking about like it has like all the things that go along with being a good hearted Christmas story. Like family reunion. You know, family gets busted up and now at the end they're all loving each other. There's Christmas songs, there's, you know, Christmas, you know, just Christmas is constantly everywhere in the movie, which is true. So. Okay. I was going to touch on Die Hard, obviously watching. I got to watch Christmas Story once. Oh, yeah, Yeah. I can't. I don't know if I'm going to sit there for the whole re, you know, the 24 hours of the Christmas Story, but National. National Lampoon's Chris Christmas vacation fan or not a fan. So, you know, I think I'm definitely a fan. But I don't rewatch it that often. I don't either. Like, there's great funny parts in it, but like, I'm also the same way. I'm like maybe once a year and bits and pieces. Like, it's just. I'd rather watch Vegas Vacation. That's funny. Yeah. If, you know, if it's Christmas morning and they're replaying a bunch of Christmas movies on. Yeah, I will definitely stop for A Christmas Story. Yeah, I don't usually stop for, For Christmas Vacation. Yeah, I'm with you, but I'm forced to do that. Actually. Somebody's some people's favorite movie and I'm like, all right, I guess I'm watching this. I do want one of those Griswold, like Blackhawks jerseys though. I'm a, I'm a Blackhawks fan. Have you seen the people decorate their house? And it has like the guy hanging on the side of the house. I have, I have. I think a few years ago that went like viral. Like some dude thought the guy was actually like hanging from the roof. He called the police and fire truck showed up. Everything. So. All right, man. Well, you know, happy holidays to everybody out there. Thanks for listening this year. Feedback is always a great thing. Any ideas to go into the new year. We got a couple weeks. You can always email us@what, infowpconnect.com but you know, Derek, have a happy holiday. Isaac, our engineer. Happy holidays, brother. Hope you get that sock, socks and money, man. I like that. I like that. Just make sure it's not a sock full of quarters. Yep. All right, guys, have a great holiday, and we'll see you after the New year. All right, Sounds good. The Opinions the opinions expressed in the podcast are for general informational purposes only and are not intended to provide specific advice or recommendations for any investment, legal, financial or tax strategy. It is only intended to provide education about the financial industry. Please consult a qualified professional about your individual needs.