Episode #460: Louisa Nicola – How To Perform At Your Best Physically & Mentally – Meb Faber Research – Stock Market and Investing Blog


Episode #460: Louisa Nicola – How To Perform At Your Best Physically & Mentally

 

Guest: Louisa Nicola is a neurophysiologist and human performance coach. She founded Neuro Athletics, a multi-enterprise consulting firm, to provide scientific strategies to help athletes and investors achieve peak performance. Louisa was a world championship triathlete and raced both nationally and internationally for Australia and competed at London, Beijing and Auckland. After retiring in 2012 Louisa followed her dreams and went to Sydney Medical school and graduated with a particular interest in neurophysiology.

Date Recorded: 12/14/2022     |     Run-Time: 1:13:37


Summary: In today’s episode, Louisa is helping all of us become better investors by giving a masterclass on peak performance. She walks through the three pillars she focuses on: sleep, exercise and nutrition. She gives some tips and tricks to improve in each category and how all three improve cognitive performance.

Louisa also touches on some of her favorite supplements, common tests she recommends to her clients, and why alcohol is probably hurting you more than you realize.


Sponsor: AcreTrader – AcreTrader is an investment platform that makes it simple to own shares of farmland and earn passive income, and you can start investing in just minutes online.  If you’re interested in a deeper understanding, and for more information on how to become a farmland investor through their platform, please visit acretrader.com/meb.


Comments or suggestions? Interested in sponsoring an episode? Email us [email protected]

Links from the Episode:

  • 0:39 – Sponsor: AcreTrader
  • 1:54 – Intro
  • 2:40 – Welcome to our guest, Louisa Nicola
  • 4:04 – Louisa’s background as a triathlete
  • 5:54 – How an athletic injury made her pivot to a career in science and medicine
  • 9:36 – Applying sports psychology and physiology to investors
  • 20:57 – A noteworthy difference between athletes and investors
  • 23:31 – Three core pillars for coaching athletes and investors: sleep. nutrition, and exercise
  • 26:49 – Sponsor: The Idea Farm
  • 27:32 – Louisa’s best practices for getting high quality sleep
  • 39:17 – The role of alcohol consumption on brain health
  • 42:54 – A variety of factors that affect sleep quality and wakefulness
  • 47:27 – Louisa’s best practices for exercise and how it helps your brain function
  • 54:36 – Nutrition basics for brain performance
  • 1:01:10 – How Louisa works with clients
  • 1:04:37 – Common misconceptions and questions she gets asked
  • 1:06:13 – A pro tip for alcohol risk mitigation
  • 1:06:35 – Samuel Adams founder story
  • 1:07:18 – What she’s most excited about for 2023
  • 1:08:16 – Learn more about Louisa; Twitter; website
  • 1:08:57 – Some final supplement recommendations
  • 1:10:02 – Intermittent fasting versus feeding windows

 

Transcript:

Welcome Message: Welcome to “The Meb Faber Show” where the focus is on helping you grow and preserve your wealth. Join us as we discuss the craft of investing and uncover new and profitable ideas, all to help you grow wealthier and wiser. Better investing starts here.

 

Disclaimer: Meb Faber is the co-founder and chief investment officer at Cambria Investment Management. Due to the industry regulations, he will not discuss any of Cambria’s funds on this podcast. All opinions expressed by podcast participants are solely their own opinions and do not reflect the opinion of Cambria Investment Management or its affiliates. For more information, visit cambriainvestments.com.

 

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Meb: What is up, everybody. We’ve got an awesome show for you today. Our guest is Louisa Nicola, a neurophysiologist and human-performance coach and the founder of Neuro Athletics, which provides scientific strategies to help athletes and investors achieve peak performance. In today’s episode, Louisa is helping us all become better investors by giving a master class on peak performance. She walks through the three pillars she focuses on: sleep, exercise, and nutrition. She gives some real-world tips and tricks to improve in each category and how all three improve cognitive performance. Louisa also touches on some of her favorite supplements, common tests she recommends to her clients, and why alcohol is probably hurting you more than you realize. Please, enjoy this episode with Neuro Athletics’ Louisa Nicola. Louisa, welcome to the show.

 

Louisa: Meb, I’m so happy to be here. So excited to speak with you finally.

 

Meb: Tell us where you are, because it’s somewhere a little different than normal, I guess.

 

Louisa: So, I live in Manhattan, in New York, but right now I’m down under in Sydney, Australia, visiting the parents, the family for Christmas.

 

Meb: Amazing accent replication for somebody who lives in New York. You’re an Aussie native?

 

Louisa: I’m an Aussie native. I moved to New York in 2017.

 

Meb: Love it down there, I’ve spent a fair amount of time thinking about launching funds there, mainly as an excuse to come to Australia. It’s like a California cousin it feels like in many ways. Love some of the towns. A little sharky for me, a lot of critters I think I would struggle with, spiders maybe perhaps. But awesome spot. You there for the holidays, what’s the plan? Do you do a fair amount of travel in your normal day-to-day?

 

Louisa: Unfortunately, I go against everything I believe in and I’m travelling far too often now just because of my job. I work with elite athletes and also investors and portfolio managers, so, I am in New York, then I’m in LA, then, you know, I mean, Dubai, it’s just…now I’m in Australia. And I really need to settle myself down because this jet lag is really eating away at me.

 

Meb: Well, can you get to the point now where you can just kind of narrow it down to places you want to go, I feel like? That’s the fun part about it. So, I can fall into one of those categories, and most of our listeners probably fall into the one, not the other, so, investors, not necessarily elite athletes, but maybe athletes in general, but you got started…if we wind back your career, you were a triathlete. I have one triathlon to my name and it was the Malibu Triathlon. Which is a lot of fun, it’s kind of a scene if you’re in LA, I highly recommend doing it. But I made a very fatal mistake which was I tend to be a little last minute on some things in my personal life and I didn’t have a road bike, so, I did it on a mountain bike. So, I finished the swim, like, near the front of the pack and, man, I said, “This is going to be amazing,” and then I spent the next hour, or whatever it was, just watching people just blow by me on the bike.

 

Now, one upside to this was they had a separate mountain-bike division for the idiots like myself. And so, I finished, like, third. So, when my friends would ask me, “So, how’d you do?” I said, “I finished third in my division.” “No way, it’s incredible.” Now, I think there was only five mountain bikers in the division, because it was on road, it was not off-trail. So, it’s my claim to fame, my only triathlon I finished third. So you’re a little more competitive than that, right?

 

Louisa: Just a bit. I had a road bike, I didn’t have a triathlon bike, I don’t like them. I had a road bike but, no, yeah, I was doing around 20 to 25 triathlons a year.

 

Meb: What’s the difference for the people who don’t know, a road bike, triathlon bike? Triathlon bike…

 

Louisa: It’s all about the handlebars. So, there’s a time trial bike where, depending on the position that you’re in, you’re in this aerodynamic position. If anybody’s watching on YouTube, I don’t know, if you post this on YouTube, you’re really huddled down like this, so, you get more of a streamlined zip through the air. Whereas if you’re on a road bike, it’s more generally used for people who are doing, you know, 30-mile, 40-mile rides at a time. So, you’re in a better position.

 

Meb: And so, like a lot of people you had sort of a path in life that, you know, unexpectedly started to take a left turn. I say this because we spend most time talking about what you’re doing now but for some people, their origin story informs kind of their path. So, I would love to hear a little bit about what got you to here today.

 

Louisa: Yeah, I know, and it really does define where I’m at today. So, I was a competitive triathlete. I did go to the World Championship series, I qualified twice. So, it was my entire life, and I thought that that was going to be my life. I thought, “You know what, I’m just going to be a world champion triathlete and maybe I’ll be a triathlon coach later on in my life.” However, unfortunately, I was hit by a car. Which, on the plus side, they say that you’re not a true triathlete till you get hit by a car.

 

Meb: Yeah. It doesn’t happen all too infrequently. Like, my nightmare about road bikes is that situation. Was it during the race or training or what?

 

Louisa: So, it was two weeks before Beijing. So, I was out with two of my teammates and we were time trialing each other. So, every one mile, let’s just say, we’d go to the back and there was just three of us. And no, we were travelling… I’m going to talk in the metric system because that’s what I know. We were travelling at around 40 kilometers per hour and this 83-year-old man who had been driving for like 6 hours without a break, he mustn’t have seen us and he just crashed right into the back of my wheel and it hit me up against a guard rail.

 

So, I was taken out, I wasn’t able to compete. So, that was a huge turning point in my life. And I had already done my undergraduate degree, which was in teaching and exercise physiology. And so, that’s when I had to question everything. I wasn’t able to train. And then, even when I did get back on the bike, I did and I re-qualified for the World Championship series the following year. Things were just not the same. My leg was never the same. My ribs were broken, so, they were never the same. So, I had to really reconsider what I was doing in my life.

 

Meb: All right. So, you started studying up, walk us forward, let’s hear.

 

Louisa: So, I then went and studied science and medicine, and I realized the importance of the brain. Did you know, Meb, that the brain is actually the control center of everything that we do? You know, when I was a triathlete, we used to think it was all about the body. You’ve got to train, you’ve got to just keep training harder to get better. We weren’t taught things such as sleep. We weren’t taught things such as proper nutrition. And we didn’t really know anything about the brain. And this is back in like 2012, that’s when I had my last race. So, I’m talking 2010-2011. We didn’t really know too much about the brain. And then, when I started studying it and realizing, “Holy crap, the brain is this powerful little machine that sits in our head that can really control the rest of our bodies,” so, I decided to really study it and understand more about it. And I wanted to work with elite athletes. So, once I graduated from the University of Sydney, I was like, “You know what, let’s just start working with athletes.”

 

And I started working in Australia. I started working with elite soccer players. We’ve got rugby league here, I was working with rugby league players. And it just wasn’t enough for me, I wanted to be around the world’s best athletes. So, in 2016, I flew to Malibu, actually Red Bull was having a conference and they invited me there. And it was a three-day event with all of their number-one athletes. So, I flew there and I thought, “Oh my god, this is what true high performance is. This is where the athletes, the real athletes are.” So, I made the move and I thought, 2017 onwards, I thought I’m just going to work with the world’s best athletes and teach them and coach them about best practices when it comes to, you know, how can they better their game-day performance by working on their brain.

 

Meb: Yeah. So, the cool part is a lot of what you talk about, and you’ve got a podcast, I’ve heard you on some friends as well, even got some direct recommendation from some podcast alums, so, “You got to talk to this person, Meb, she really knows what she’s talking about.” And the funny thing, you know, I have a son, he’s five, and I look back…and this isn’t judging my parents, so, Mum, if you’re listening, this isn’t about you. But I look back at, for example, what our generation ate as kids. I mean, Frosted Flakes was considered a totally reasonable breakfast. We did a investing article about this that looked back at, say, in the U.S., we had the food pyramid, right, where, 50 years ago, it’s not only totally rearranged of what was considered to be standard good advice for what you should be eating, it’s almost, like, totally inverted. Right? In just a few decades, I feel like this world has changed quite a bit, and even in the decade plus you’ve been kind of at it. So, let’s begin kind of as we think about an athlete or just an investor starting to come in, and say, “Look, I want to be the best version of myself,” where do you begin with these people? And where, as you onboard someone who’s already at a high level, what’s a traditional sort of onboarding experience pathway that you talk to them about?

 

Louisa: Well, I just told you how I actually started working with investors…because a lot of people say to me, you know, “How did you go into the finance space when you’re working with athletes?” And it was because there was one portfolio manager in the audience, when I spoke to around 500 athletes, and he came up to me at the end and said, “Do you work with,” you know, “the finance world?” like, “could you work with me?” And pretty much my answer back then was, “Well, you know, if you’ve got a brain then I can.” And that’s pretty much how it started.

 

And I call everybody “athletes.” I think that we all have a nervous system, we all have a brain, and that means that we have the power to optimize it and upgrade it. And, therefore, you can become better. It doesn’t mean that you’re going to become the best in the world or you could be but it just means that, if you can become 1% better than what you are today, then that might mean the difference between $100,000 or $10 million. So, when it comes to anybody, I treat everybody the same, whether you’re an MBA player who I work with right now or whether you are an investor.

 

And the first thing that we need to understand, we need to really start from scratch…so, really, if you understand a pyramid, you mentioned the food pyramid, we have a pyramid as well at Neuro Athletics and we start from the ground up. The only way to do that is to have a look within. So, we do a complete DNA test. So, we will assess your DNA to really find out what’s happening there. There are over 25,000 genes in the human genome, we want to understand what’s going on there. The second thing we do is we do a complete blood panel. So, I want to understand what you’re depleted in, what’s not working well, what you need to be supplementing with. Thirdly, we do an EEG scan. Do you know what an EEG is?

 

Meb: I do, but tell our listeners.

 

Louisa: So, an EEG is an electroencephalogram. So, I’m a neurophysiologist, that’s, you know, my primary modality of use. So, it’s one of those caps that you put on your head and it assesses all your brain waves. And you generally use this in a hospital setting when you’re looking at epilepsy or someone who’s had a seizure. So, we’ll look at that. But the wonderful thing that we can get from this is we can figure out how well your brain is functioning. So, you may think, “Oh, you know, I’m feeling good, I’m feeling at my highest,” but I can assess your brain and think, “well, not really. You’ve got dysfunctions in the frontal lobe, you’ve got dysfunctions in the parietal lobe.” So, we do a complete EEG test. And then from there we start to optimize. So, we really understand where you’re at and then we move up from there.

 

Meb: Where are we in sort of this journey of analytics and biomarkers? Because I’m someone…I mean, look, I’ve got an Oura Ring, I have a lot of the tracking and follow a fair amount of the literature. I was, once upon a time, a biotech guy, and I graduated college in 2000. So, right when the genome was getting sequenced and everyone was ready for this to be a total revolution in how we treat healthcare…and it has been but, you know, as with everything, it takes time. Where do you think we kind of sit on the spectrum of knowledge of how useful these various DNA blood-based panels are? Is it something that’s increased a ton in the past decade, is it, like, sort of useful, or is it all, like, very actually pinpoint precise accurate on some of the benefits now?

 

Louisa: Well, I think, when it comes to genome testing, you can get your genome tested but then it’s about the algorithm that really generates the report. And there are many different glitches in those, I believe. You know, you can go and get a 23andMe test or you can go to another company. You know, we outsource ours, obviously, and we get a wonderful report. And so, what you can find from this report is you can just find out insights about yourself. For example, I don’t know if you’ve just seen the Chris Hemsworth documentary…

 

Meb: It’s in the queue.

 

Louisa: It’s in the queue. So, you’ll see on there that he got his genome tested, and they found that he has the genes responsible for Alzheimer’s disease, which is the APOE 4. Now, with every gene…this is just a bit of an anatomy course. For every gene, there are two alleles, you get one from mum and one from dad. And these two make up one gene. And he has not 1 allele but he has 2, which gives him a 15-fold higher risk of developing Alzheimer’s disease.

 

So, I think that that is super important to know. You know, for women, for example, there are genes responsible for breast cancer, and for men as well. But it’s really nice to know. It’s not the be-all and end-all, however, it’s really nice to know that, when you are at that level, maybe if you’re in your 40s or 50s, you may want to know how to slow the progression and onset of some of these detrimental diseases, right, you know, I would want to know and a lot of my athletes want to know. But then let’s talk about what this means for a 25-year-old.

 

Meb: And by the way, not to interrupt you, but, like, there was such two great examples because they’re, like, the opposite ends of the spectrum on the, like, the BRCA genes with the breast cancer, which was one of the first, I feel like, genetic markers that really pointed people towards a very kind of definitive future probability, right, but one you could act on. Alzheimer’s, you know, I think is, and it’s getting clearer, but, like, is one of the harder ones because there’s not as much standard of care of treatment at this point, like, so, a lot of people…I talk to friends, they’re like, “I don’t want to know.” I’m like, “Well, everyone in my family loses their marbles when they hit their 90s anyway.” So, like, I don’t know which one you describe it as but I’m sure it’s going to be one of them. But they’re kind of like two categories in my mind, and I could be wrong, [inaudible 00:16:39] data and literature where there’s, like, very definitive precise pathways and outcomes, you can do something about it and others where it’s, like, not as much, and…do you want to know?

 

Louisa: Yeah. So many people actually say that to me, like, “Why would you even want to know?” And that’s great, you can operate however you want. For me, if I knew now, you know, I’m in my early 30s, if I knew, “Oh, Louisa, you’re going to have a 15% risk of developing Alzheimer’s disease, you’ve got two alleles,” I would start right now in terms of getting onto those lifestyle interventions to really slow the progression of me getting that disease. Even if it’s, at the end of the day, you may well and truly get it. However, your genes are not your destiny. So, there are people in different countries who have got these two alleles but they never develop Alzheimer’s disease. And that’s just because where they live and what they eat and how they exercise. So, it’s like a seesaw, you’re in the middle and you’re just always trying to balance what you’re doing. So, I always think that there’s power in knowing.

 

Meb: I’m the same way. My favorite description, when it came to genetics, I remember hearing was like, “Your genes sort of determine what musical instrument you are, right, if you’re a tuba or clarinet, it doesn’t determine necessarily what song you’re going to play but it’s, like, you have the potential range of notes.” You’re a seven footer, you’re not a seven footer. You’re predisposed to being a good athlete. But, in many of these cases, I’m like you, like, I would much prefer as much analytics as you can give me. All right. So, I interrupted you, sorry, keep going.

 

Louisa: No, that’s completely true. And then let’s see it from a 25-year-old’s perspective. Like, our brain starts to atrophy at the age of 30, no matter who you are. So, at around 25-26, our brain is fully developed. Then, at the age of 30, we start to lose brain cells, it’s just a natural ageing process, it’s called “the brain ageing process.” And it just starts to atrophy. So, we already know that we need to start implementing these strategies as soon as possible. And for athletes, don’t even get me started on the NFL, I don’t work with NFL players right now…and I don’t think I ever will again because I just see the trauma that they are undergoing and I really feel like it’s against everything I believe in to coach them because I’m like, “The only way to really coach you is by you quitting the sport.” And they don’t like to hear that. So, I don’t work with them.

 

Meb: I mean, I look back as, like, a kid who played a lot of contact sports. I was talking to a buddy the other day, I said, you know, “How many concussions do you think you had that you can identify?” For me, we also grew up skiing pre-helmet, right, and the number of times my head smashed like a hard ice pack, I back then didn’t think it was called a concussion, I said like, “Got my belt wrong,” and just sat there seeing stars for 20 minutes. But there are a lot of sports like that. I mean, like, is rugby in the same category? Not as bad as football but it’s got to be up there, right?

 

Louisa: It’s definitely up there. You know, any type of collision sport, if you’re running into another person or running into a wall, even head-butting in soccer can cause little micro damages, depending on how hard you get hit, falling to the ground…you know, your brain is not meant to be thrown around inside your skull, it’s just not. It’s soft, it’s fatty, and it just wants to just sit there and do its job, it’s not meant to be thrashing into things. Even in a car accident, let’s just say, even if you don’t smash your head, you’re still getting this velocity of going forwards and backwards. And that’s what’s causing the concussion. It’s not so much just getting smashed to the head, like, it’s just even going forwards and backwards is really, you know, detrimental to the brain. So, I try and stay away from those sports.

 

Meb: Yeah, you got to wonder…I mean, there’s, obviously, like, a lot of mental health issues with current and former NFL players’ suicide, looking at how much of that has a legit origin and some of the trauma they’ve been exposed to, you know, for many of them 20 years. Right?

 

Louisa: Twenty years. And I see it, I see it. So, I’m out of that sport. So, I’m more so now just in the nice sports, which is the NBA players, soccer players. I really love ball sports, so, tennis players as well. And then, obviously, the finance space, we work with a lot of hedge fund and portfolio managers.

 

Meb: You know, obviously, there’s a very distinct difference between the two. Athletes operate at a very high level physically. A lot of investors, if you look at the general physical profile, for many, it may not be your picture of physical optimal specimen. But how much of kind of what you coach and talk about is, like, the Venn diagram overlap with the two? Is it like, “No, athletes I got to treat totally differently than investors,” or you’re like, “no, 80% is sort of similar regardless…”

 

Louisa: It’s similar. However, the thing that’s different is the timing. So, first and foremost, a lot of my athletes are not drinking the same amount as what some of my investors are drinking, and I really hate that. For some reason, at around 4:00, 4:30, they just feel as though that they can just start drinking as much as possible, when we really understand the detriments from a decision-making perspective, a cognitive-function perspective, but also a brain-structure perspective of alcohol intake. It doesn’t matter whether it’s one drink a day or whether it’s 14, even small amounts can have a detrimental effect. So, that’s the difference there.

 

Meb: At my first job, my PM would often crack a Budweiser at the market close every day. Like, he wasn’t I don’t think drinking a lot of them but it was kind of like a ritual almost. Like, market close, time for Budweiser. And I feel like, on the athlete side, it’s certainly more appreciated. I feel like that subset of knowledge has been much more quickly adopted in the athlete community over the past 10-20 years. And you look back, obviously, to the old pictures of athletes smoking on the sidelines or Michael Jordan going out all night and drinking before playoff game or something, but I feel like that is certainly not the base case today. But I agree, like, on the culture, particularly of Wall Street, I mean, if you’re in your town, in New York or Boston, it’s not so much here in LA because you can’t walk anywhere, but the day is over, every other bar is packed. Happy hour, dinners. You know, every night, particularly for the younger cohort. But it is very much a part of the cultural norm there.

 

Okay. So, more alcohol use, which, obviously, has a negative impact. Why don’t we get into some of the generalities of the two? So, you onboard people, and so ignoring some of the, like, very specific things that may pop out of the DNA test, the blood work, generally speaking, let’s say someone comes in, what are sort of some of the main outputs and levers for people that want to be their best that you kind of talk about with most of these investors and athletes?

 

Louisa: So, there are three core pillars that we operate from, and anybody listening to this can really optimize and upgrade their performance if they implement these three things. And this is all we really talk about at Neuro Athletics, it is sleep, nutrition, and exercise. These three things, which were gifted to us by mother nature, are really undermined and underrated. So, let’s go into these three things. And this is, honestly, when you look at Alzheimer’s-disease patients, even if they are in the late stages of Alzheimer’s disease, nothing is better, not even a pharmacological-grade agent is better than exercise. So, these three things, we look at them and think, “Well, yeah. I mean, whatever, I’ve been sleeping, eating, and exercising since I was born.” It’s like, “Well, but are you doing it right?”

 

Meb: The statement you made on the exercise, and then I’ll let you go, but I was just reflecting, I live very close to the ocean, and I would say, it’s not 100% but maybe it’s like 95% of the time I go surf, ecstatic to have done it. Like, I’m happy, I feel better the rest of the day, it’s just shining. It doesn’t have to be surf but surf is my example because it’s so close and easy. But the Meb that is waiting to go surf, considering to go surf, who’s having his coffee, looking at the ocean, checking emails, there’s a huge disconnect between the two. Where, like, I know I’m going to feel better, I know I’m going to have a blast and it’s going to improve my mood, my well-being, everything, but I’m like, you know, “The water, it just looks cold today.” Like, “It’s too small. It’s too big. I just got to do these emails.” There’s a weird disconnect. I don’t know if you can solve it for me but it seems like that should be a very simple equation that should lead to an obvious answer at every juncture, but it doesn’t.

 

Louisa: Let me ask you something, does this happen later on, like, in life? Like, let’s go 20 years ago, were you more inclined to just jump in the water without having to decide?

 

Meb: This is me specifically, I’m very active but I’m very impressionable. So, if someone is like, “Hey, Meb, let’s go play pickleball today,” “hey, man, let’s go golf,” “let’s go play volleyball,” I’m definitely in. Particularly in mornings for me, I’m less self-motivated because, you know, also being a founder and CEO of a company, like, there are other pulls. So, if I have friends that are particularly in town that surf that drag me out at 7 a.m., I have, like, a 100% hit rate. Just the self-motivation of going alone is a little lower.

 

Louisa: Yeah. And we find that. And that’s just all got to do with, you know, you making a decision based on prior experiences. And I just find that, as people get older…so, I’ve got some guys who have been with me for many years, and I’ve got one investor who came to me in 2019 and he’s still with me. Now his motivation has increased dramatically just because we’re now speaking at least, you know, once every two weeks. But when it comes to exercising in the morning and going out into the surf, I think you’re onto something there, it’s probably the best time for you to be activating your circadian rhythm and getting in the exercise. So, you’re definitely onto something there.

 

Meb: After the drubbing in Chinese stocks, are they finally cheap? What about the U.S. stock market? Cheap, fair, expensive? We’re almost at the end of the quarter, so, you know what that means. Time for subscribers of The Idea Farm to receive updated global stock market country valuations. Not only do we send out a comprehensive list, we even provide a few great resources for global stock market valuations for you to look at yourself. Visit theideafarm.com today to subscribe for free. Any links to third-party websites are offered only for use at your own discretion. The Idea Farm, LP, and its affiliates are separate and unaffiliated from any third parties listed herein and is not responsible for their product, services, policies, or the content of their website. So, I interrupted you. I think the lead-in, you were going to talk about sleep, is that right?

 

Louisa: Yeah. So, let’s talk about sleep. So, and let’s go back and forth with this, because you probably answered this, how many hours of sleep do you think generally most people in your field is getting, averaging?

 

Meb: The default answer I think of it being 8, but in my field, all these megalomaniac, very anxious, type-A, hard-working, overworked…probably 6.

 

Louisa: Yeah, and 6 is what I was going to say, and that is so scary, 6 hours of sleep for anybody. And it’s not even the timing of sleep, you’ve got to look at, when we’re talking about sleep performance, we’ve got to look at quantity and quality. Now, sleep we know now is not just a function of our daily lives, it is a part of the day where our brain and body repairs itself. And if we’re not getting adequate hours of sleep, we’re not going to be performing nearly at our pick, not even at, you know, what we maybe 80% or 60%, you’re really going to be giving yourself a disadvantage if you’re not getting those hours of sleep.

 

And I’ll tell you why. Let’s first talk about quantity, 6 hours of sleep versus 8 hours. Is there really a big difference? Well, there is. We now have evidence in clinical human studies to show that 6 hours of sleep per night can disrupt your genome by 3%. So, you can get a 3% change in your genetics by sleeping 6 hours per night. That’s a pretty big number, right?

 

Meb: Yeah. You know, but it’s funny to think about because…and, obviously, societal beliefs change slowly, sometimes faster, but for the majority of our lives there’s two ingrained beliefs, and COVID has helped with this, but one, to work harder. Right? Particularly my industry, you know, very competitive, banking, finance, investing. The two-year, you know, program right out of college. I remember all my friends, Morgan and Goldman, working all night. I mean, 100-hour weeks, right? And it was a badge of honor to not sleep. You know, a ton of coffee, amphetamines, whatever it is, like, that was seen as, like, an ideal to ascribe to. I feel like that’s slowly changing, like, it’s starting to become a little more accepted, what you’re talking about, but it’s not there yet.

 

Louisa: Slowly. It’s not there yet. And this is why I do a lot of what I call public education to really pinpoint the detriments of not getting good sleep. So, let’s talk about the two stages of sleep that are really important. We’ve got four stages of sleep and they’re characterized by you falling asleep, that are Stage 1. Stage 2 is light sleep. Stage 3 is deep sleep. And this happens within, you know, 2 hours of falling asleep. And then Stage 4 is REM sleep. So, let’s concentrate on deep sleep and REM sleep because they’re the two of the most important stages.

 

During deep sleep, your brain and body repairs itself. And it does this by, first and foremost, during this stage of sleep, you get a lot of hormones that are secreted. For you, you’re a man, you get most of your testosterone secreted during that time. I’m a woman, I get a lot of my estrogen secreted during that time. You also get growth hormone. So, growth hormone is responsible for protein synthesis, muscle repair, just repair of bodily tissues. So, if we are not optimizing for deep sleep, we’re not going to be getting the amount of testosterone that we need…well, men are not going to be getting the amount of testosterone that they need. And testosterone is an extremely important hormone, you guys definitely need this, especially in your world. You know, I’m seeing now so many men who are coming to me with…I always say “man boobs.” You’re seeing these men who are just, you know, gaining fat in different areas, and it’s because of the disruption in these hormones. Maybe they’ve got more estrogen that’s getting released and not enough testosterone.

 

But then you’ve also got growth hormone. You know, maybe they’re trying to go to the gym but they’re not getting any gains, and it’s because it’s just your hormones are just all out of whack. So, we can really correct this, first and foremost, by proper sleep hygiene. But another thing that’s important during deep sleep is we go through this self-cleaning process. Our lymphatic system, which is like the lymphatic system in your body but is a lymphatic system, so, it happens in the brain, and it’s like a sewage system, it gets activated during deep sleep. And what happens is the cells of your brain, they shrink, and the cerebral spinal fluid, which is just the fluid in your brain and spinal cord, it gets washed out, it goes through and it clears all of the debris, all of the toxins that are built up during the day, it washes them out.

 

So, if we’re not getting into deep sleep and if we’re not getting into deep sleep for at least 2 or 3 hours a night, you can imagine waking up feeling lethargic, kind of brain fog. A lot of my guys are like, “Louisa, why do I have brain fog every day?” it’s like, “well, you spend 40 minutes in deep sleep, that’s not enough to activate the system, this lymphatic system.” And not just that, we know now that one of the biggest hallmarks of Alzheimer’s disease is a toxic protein called beta amyloid. And this accumulates and builds up in the brains of Alzheimer’s-disease patients. That is one of the proteins that is washed out during deep sleep.

 

So, imagine. You’re probably a fan of compound interest, I know I am and I know a lot of your listeners probably are too, one night of sleep deprivation, which is characterized by 6 hours of sleep per night, just say 1 night of sleep of 6 hours, it might not do anything, but imagine doing 6 hours of sleep every single night for 5 years, 6 years, 10 years. It compounds and accumulates. And then you wake up in your your mid-40s or early 50s and you’re like, “I can’t remember a god damn thing. I’m fat, I don’t like myself, and I’m losing concentration. I’m not making decisions like I was in my early 30s. And, oh shit, I’ve got an increased risk of stroke, Alzheimer’s disease, neurodegeneration. Like, where did this all come from?” It came from 20 years ago. So, that’s what I’m trying to get about, sleep is not just something that we do, it is an important process that we should all really fall in love with if we want to improve our performance even by 1%.

 

Meb: So, well, two of the best practices, I think some are obvious, some are not necessarily as intuitive, but for the people listening who say, “Okay, I’ve got a flexible schedule,” meaning, “I don’t have to wake up at 2:00 a.m.,” “I want to get the best out of my sleep. What do you got for me? What should I be doing?”

 

Louisa: Okay. First thing you do when you wake up, assess your sleep out of 10. Did you sleep well? Did you have frequent wake-ups? What went wrong? Because if you do that, then you can start to understand your sleep patterns.

 

Second thing is you want to be getting to sleep at a decent time. Now, lights out at Neuro Athletics is 10 p.m. I know that’s really hard to achieve in your field, and also I’ve got a lot of people who have got kids and I know that that’s hard to do, but sleeping at a decent hour, which is before midnight, is really going to help you. The second thing is you have to find out whether you’re having trouble falling asleep or staying asleep. And if you’re having trouble falling asleep, it’s generally because you’ve got a racing mind and you’re stressed. So, you might want to adapt some strategies to help lower the stress threshold so you can have a peaceful mind. And a supplement that works really well for that is called GABA, gamma-aminobutyric acid, and I actually use that almost every night.

 

Meb: So, the consistent early bedtime. You know, I mentioned I have an Oura Ring, which helps track…the sort of wearables and trackables. And I wish I had been doing this for the past two years, in retrospect, but the self-grading before I see the score, like, how accurate for, like, a lot of the wearables do you think…do you think they’re pretty good, on average, on tracking the sleep stages and sleep score or do you think it’s not that accurate yet?

 

Louisa: So, I think we’re 70% accuracy. I wear an Oura Ring, and I actually have access to the back end of Oura which gives me the ability to put all of these Oura rings on my athletes and I can track everything that they can but even more. So, for example, with the Oura Ring, so, if you’re wearing one, if you gave me access to your data, I can have a look minute by minute what is happening during your sleep. So, I can really pinpoint, “Oh my gosh, this is where you’re going wrong in your sleep.” So, I think the Oura Ring is much more accurate than the Whoop. I mean, that’s just, you know, my opinion just from the studies that have been done, but yeah, we’re around 75% accurate. You’re never going to get anything that’s going to replace a sleep study, which is when you go in…and I don’t know if you’ve seen it but this ring is trying to replace something that you have electrodes all over your body, so, you’re not really going to be able to achieve that. But 75% accuracy is pretty good.

 

Meb: And I feel like, in general mind, it’s pretty on-point. And, in general, I sleep just fine. And I used to be a total night owl. Now that I have a kid, that’s skewed earlier probably for good benefit. But the single best night of sleep I’ve had this year was camping outside and sleeping on the ground, which, you know, I never have predicted that it was going to be so good but it’s probably because I went to bed early. It was cold and it was dark, I imagine those three combinations probably contributed to it being a good setup for that. But [inaudible 00:37:10]…

 

Louisa: Yeah. No, I mean, dropping your core body temperature by at least 2 degrees is phenomenal because, in order to fall asleep and stay asleep, our core body temperature needs to drop 2 degrees. So, that’s the first thing. The second thing is being in absolute darkness helps with the secretion of the sleepiness hormone, which is melatonin, so, you’ve got that as well. And then I guess the other thing would be the fact that there was no distractions. You know, nowadays we’ve got TVs, we’ve got laptops, we’ve got our phone that keeps us up at night. So, that’s probably another thing. So, that’s the first thing, you need to understand, like, you know, falling asleep and staying asleep.

 

And then, so, if you can get to bed at a consistent sleep time every night you can work on, you know, blacking out. You know, I use blackout curtains, a lot of people, you know, are not using that. You can use a sleep mask to sleep in a completely pitch-black room. You can try, try your hardest to sleep 8 hours. Like, so, if you’re going to sleep 8 hours, you generally want to be in bed for 9 hours because maybe an hour of that is you not being in complete sleep.

 

Meb: Yeah, that’s actually an important point, one of the things I learned that I didn’t know. In my head I’m like, “All right, go to bed at 10:00, wake up at 6:00, 8 hours. Boom.” But then you look at sort of a lot of the metrics that come out a lot of these wearables and they’re like, “No, you were in bed for 8 hours but you only slept for 6,” or whatever it may be, and I said, “oh, that’s interesting because I was not ever computing that side of it, I was computing the total time in my head, which is not at all the same thing.”

 

Louisa: Yeah, absolutely.

 

Meb: All right, we talked about consistent time, darkness. Darkness is funny because, before I had thought about it, you don’t notice how many little lights you have in your room. And I went around, you know, and put a little black electrical tape over everything, and now I notice it always I. go to a, you know, hotel room or whatever and it drives me crazy, you just notice how much light pollution there is all over the place. Your fan, your clock, your device, whatever it is. And now, if I go stay in a hotel and have blackout curtains and, like, don’t set an alarm, I could easily post, like, a 12-hour sleep. It’s like being in paradise.

 

One that’s obvious I think now, probably was always obvious but is becoming more in the vernacular, is the role of both food but also, of course, booze. Talk to us a little bit about alcohol, which you mentioned, you know, in the lead-in how much more prevalent that is on the investor and finance cohort than necessarily the athletes. How big of a deal is that and how can we think about making that be less of a negative impact?

 

Louisa: First of all, there is no benefit whatsoever to having alcohol. I think the only positive of it, you know, if I can glean on anything, would be the fact that it, you know, lowers our inhibitions and maybe settles us down, that’s all it is. It doesn’t help you fall asleep. So, it actually blocks you from REM sleep. So, if you’re thinking that, “Sleep is helping me,” if you think that alcohol is helping you sleep, it’s actually not what it’s doing, it’s sedating you. And that’s what it is, it’s a sedative. It’s a sedative, so, it’s knocking you out. It’s not putting you into sleep, it’s just knocking you out. So, that’s the first thing, so, it really disrupts sleep patterns.

 

The second thing is it really has detrimental effects on the brain. Now, I actually just posted about this in a reel on Instagram, and I pulled up a wonderful study that was done in March this year and it was produced or published in the journal “Nature.” And what they did was they took over 35,000 healthy adults in the UK and what they found was those who were drinking moderate amounts of alcohol, which is characterized by 1 or 2 drinks per night or at least 7 drinks per week, what they found was that they had thinning of the gray matter cortex. These are the outer layers of their brain. So, people who are drinking are getting thinning of the gray matter and they’re also getting changes in different areas of the brain. We saw frontal-lobe damage, there was damage in the parietal lobes. And this is just due to an average and moderate amount of alcohol. So, you’re actually killing off neurons, you’re killing the cell bodies of your brain cells, the cell bodies are the gray matter, when you drink.

 

So, what does that mean? Well, this means that we’re going to have a diminished ability to think properly, to make sound decisions. You know, if your whole job is reliant on you making decisions, then I’ve got to tell you, stay away from alcohol. It’s just not doing you any benefits. And I always get asked, “Okay, just how much can I drink?” If you had to, it would probably be one drink a week. If you had to.

 

Meb: That is going to be a probably outlier cohort that’s going to listen to that advice. But, in general, you would say “less is better.”

 

Louisa: Dramatically less is better.

 

Meb: And if you’re going to, is it better, like, I assume, earlier in the day or is it, like, late night? Does it even matter at that point?

 

Louisa: Well, no. If you’re going to, then yes, earlier in the day is better because it gives you time for it to just get out of your system and maybe help you fall asleep. So, I’m not promoting day drinking but around 12 p.m. will probably be the best time. But then there’s also other things that you can take to offset the detriments of alcohol, things such as an acetylcysteine has been shown to help clear out the ethanol. So, there are ways to combat it, yes. How many people are really going to do that? I’m not sure, it takes a lot of, you know, willpower. So, my general bet is just to stay away from it. And I understand that people can’t do that.

 

Meb: There is an app that I think is probably worthy listeners if you are someone who enjoys the occasional or regular drink. I want to say it’s “Sunny Side,” I can’t remember. We’ll put it in the show note links. But basically it’s like a way to track, you just log how many drinks you had or when. But I think it would probably be an interesting experiment for most, and probably not that surprising with the results, to line those up with the sleep metrics, you know, and say, “Okay, well, on the nights that I did have that four glasses of wine, how did I sleep versus the nights that I didn’t?” I need to work on that and try it myself but I think it’s going to be an obvious answer for most. Are there any other sort of things we should be talking about, either best practices or things that we should be avoiding that we haven’t mentioned so far?

 

Louisa: Light exposure should really be minimized. So, we know that. But then there’s also this other thing is, when you first wake up, it’s really important that you get access to natural sunlight. So, part of the protocols that we set in place is, as soon as you wake up, depending on what time you wake up, but if you’re waking up generally with the sun, we advise you to go out and get at least 10 minutes of sunlight. You can go for a walk. But this is going to activate your circadian rhythm, which is going to help you fall asleep throughout the night. So, getting that is really healthy for brain and body.

 

And then other practice is don’t eat too close to bedtime, maybe an 1.5 to 2 hours away from bedtime. I don’t like to go any more than that because most people get hungry. So, there’s a balance effect there. And then you can start incorporating supplements, if you need to. Supplements such as GABA, which I mentioned earlier, and you can get this from any health food shop. And I like apigenin and I also have glycine every night. So, that helps me relax and fall asleep as well.

 

Meb: For the people who are listening who are the 4-hour crew and they’re like, “You know what, I just can’t,” for whatever reason. Is nap a substitute, afternoon nap? Is that sort of a band-aid or is it not that useful?

 

Louisa: It’s a band-aid but it also takes away from your sleep pressure. So, obviously, during the day, you build up sleep pressure which makes you sleepy at night. So, if you have a nap, it’s going to take away from that. But if you are getting 4 hours of sleep per night, then I would say, “Wherever you can, just try and sleep.” That’s really considered as the same as shift workers or polyphasic sleeping, you’re just getting little amounts of sleep, so, you’re really not going to be getting into deep sleep and REM sleep for long enough to get the restoration that you need. And I’d be quite scared. I’m sorry to scare you, folks.

 

Meb: All right, so, while we are on sleep, anything else we talked about…you know, I love a good cold frigid room, we haven’t really touched on that much, is that considered to be a base case scenario at this point or…

 

Louisa: Yeah. So, the thing about temperature is our core body temperature, in order to fall asleep and stay asleep, our core body temperature needs to drop two degrees. Now, what happens is we are sleeping a bit hotter, and this may be due to just your natural sleeping…you know, I’ve slept next to a hot sleeper and I know that some people can be just hot. So, you can cool down the ambient temperature of the room with an air conditioner. I sleep on a temperature-controlled mattress. My entire apartment in New York City is set up like a lab, it’s a bit crazy, but I sleep on a temperature-controlled mattress. Which can actually be split in half, so, I can sleep at a certain temperature and, if you’re sleeping with somebody else, they can sleep at a certain temperature.

 

What happens is throughout the night it detects, “Oh, Louisa, you’re in deep sleep, so, we’re going to drop the core body temperature down a bit. You’re in REM sleep, we’re going to drop it down a bit more.” And then, in order to wake us up, the reason why we wake up during the day is because our core body temperature has risen. And that’s just normal and we need it to rise in order to get us up out of bed in order to wake us up. So, my mattress actually…if you set it to wake me up at 6 a.m., at around 5:45 it starts to heat up. So, I sleep on that. But for the other people who are like, “I don’t have one of those,” you can just try and sleep with your feet outside of the sheets, that’s a really good one, and your hands outside of the sheets. Or just put the thermostat down two degrees. That’s it from sleep. And if I had to leave anybody with anything, it is sleep is the most underrated high-performance tool that we have. If you are looking at becoming a better leader, a better wife, a better husband, a better father, and, essentially, a better investor, you should look, first and foremost, at, you know, getting more sleep and getting better sleep.

 

Meb: All right. So, get to bed, listeners. What else? As we kind of talk about these elite performers that you kind of see is that the big muscle movements…I mean, sleep, we could probably spend a few podcasts on the topic alone, but what else you talk to people about the most?

 

Louisa: The second pillar is exercise. So, when we look at exercise, we’ve got both aerobic, which is like your long runs, your long cardio outputs, then we’ve got resistance training. And I think we’re on to something with the resistance training, Meb, and I think that that’s something that we need to be speaking about. We all know that we can go out and do aerobic training, even walking is really great. And when we first started to do the first studies on the effects of exercise on brain health, we were looking at endurance sports or were looking at rats, getting them on a wheel and getting them to run for, you know, 3 or 4 hours a week. So, we knew that, “Hey, aerobic exercise is good for the brain.” And what it does is it enables the expression of growth factors, BDNF is one of them. So, when we do aerobic physical activity around 150 minutes to 200 minutes per week, we get a lot of this growth factor. And so, we knew that. And there’s BDNF, brain-derived neurotropic factor, helps with the creation of new neurons in the hippocampus.

 

We knew that, so, we were like, “This is great,” but now…and this is something that I study as well and publish about, and this is the effects of resistance training on the brain. And my god, I think that everybody should be doing some form of resistance training. And this is like doing actual weights at least three times a week. It changes the function of your brain and it changes the structure of your brain, literally. So, 80% of your gray matter can be modified by physical activity.

 

Meb: I feel like, of the things we’ve talked about thus far, probably the most well-established for a really long time, as far as, you know, exercise being great for you…what’s the resistance at this part? Or what is the part that most people really struggle with? Is it the sort of, quote, “I don’t have time” aspect? People know that it’s good for them, they always feel better afterwards. Like, what is the main issue when you talk to a lot of the…I mean, we can exclude the athletes, of course, but, on the investor side, for example, like, why wouldn’t they be doing this for the most part?

 

Louisa: Time. So, first of all, “Louisa, how am I going to do that? I have to rush to the office and be there by 8 a.m. I’ve also got a wife and three kids, and my wife has to do x, y, z. I have to get the kids ready for school.” So, that’s the first thing. The second thing is, at 4 p.m., they are so mentally drained that they could not think of anything worse than going to the gym, they would rather drink. So, that’s another battle that I have with my investors.

 

Thirdly is, this is something that’s not spoken about, they just don’t know what to do. Like, sometimes, you know, some of my investors are that bougie, I had to use that word, that they hire me to go to the gym with them. And that’s not something I do, I’m like, “Can you just go and get a personal trainer?” They’re like, “No, no. I need you.” And I’m like, “Okay, this is a great experiment because I can actually go and see what the hell they’re doing.” And some guys and women…I want to caveat this by saying that 100% of my clients in the investing space are men.

 

Meb: Well, I mean, look, 95% of the listeners of this pod, it’s very depressing, this podcast are men, 90% of my Twitter followers, 3% of the VC dollars go to women. Like, it’s the percent breakdown. So, not surprising, it’s sad, but…

 

Louisa: I didn’t want the fellas to think that I was picking on them but that’s my athletes, so, that’s my clients. So yeah, these guys are just like not doing what they need to be doing to get the effects. So, first of all, let’s just take the biggest things that are going to push you towards getting these brain effects, and they are your compound movements. Learn how to squat. Just learn it. Because if you learn it, you’re going to be happier because you’re going to be like, “Well, you’re going to tell your brain, ‘I know how to do this and I’m doing it well and it’s having an effect,’” and that’s going to push you and motivate you to go to the gym a bit more. So, that’s the first thing.

 

And then the second thing is, if you’re doing the exercises correctly, and that’s in terms of weight, movement, you’re going to have a lower probability of getting injured and you’re going to have a higher probability of changing the way that your body looks. And if you change the way that your body looks, you’re going to feel more inclined to keep going back to the gym. These guys are saying to me, “Louisa, I went to the gym, I’m just getting no benefit from it.” It’s like, “Well, you did it for two weeks and you were pushing these tiny little prissy weights that not even my mother, you know, is lifting.” So, fellas, let’s talk about this. You’ve got to be pushing heavy. So, if you’re not pushing heavy and you’re not fatiguing, you’re not getting the benefits. And if you’re not doing it three or four times a week, you’re not going to get the changes that you need. So, there is a time component, Meb, but there’s also an education component.

 

Meb: I heard a great Muhammad Ali quote the other day, I don’t know who said it, but it was, basically, he said he didn’t count the reps until they started to hurt. So, everything that became before that he, like, didn’t count, he started counting when he got to there. I mean, exercise is such an obvious one. I think for so many it’s about prioritizing it, it’s about routine, you know, scheduling for this cohort. Particularly, you know, the masters of the universe, these guys, these billionaires that kind of has the world at their beck and call. I mean, I think for many it’s, like, you need to consciously make a time for it, right, or put it in your schedule, and that way you can’t get out of it. I love the old, you know, concepts of, like, “Look, you got to pay for it.” Which is why for many a personal trainer works is because they’re paying for it if they show up or not. And for a lot of the value-minded folks that’s a painful reminder that they’re wasting money.

 

All right. So, anything left on the exercise…I mean, the exercise one seems to me like the most, like, universal…like, there’s not even anything to argue about on that one.

 

Louisa: I just want to point out that the benefits that you get from resistance training is, when you perform a muscle contraction and you’re doing it with resistance, so, let’s just say a bicep curl, you are releasing hormones and muscle-based proteins. And when they’re released from the skeletal muscle, they go into the bloodstream, they go up to your brain, and they have an effect on cognitive performance. Cognitive performance is information processing speed, reaction time, decision making. They enhance those functions, and you can’t get those through anywhere else.

 

Irisin is one of the biggest ones spoken about, it gets released in tenfold when you do resistance training. You can’t get this release in any other way. So, I just want to leave people with that if they’re thinking, “Well, I’ve got no time.” Do what you can.

 

Meb: Which is also funny. Like, I mean, I played sports my whole life and I don’t think I actually learned a proper squat technique until I was like in my 30s, you know, done some Cross Fit where I was like, “Wait a minute, that’s how you’re supposed to squat?” My gym teacher back in North Carolina, I don’t think he knew what he was doing. Anyway. Okay, so, sleep, we did exercise. What was number three?

 

Louisa: Nutrition.

 

Meb: And so, this is one that I think, for me, if I had to just on the outside looking in, there’s been the most argument, disagreement…I mean, if you just look at the best sellers probably by year in the food space, I mean, there’s I don’t know how many thousands of diets and what used to be healthy, you know, from my childhood. I remember I had a post…god, was it on Twitter, where I was talking about the three biggest lies of, like, my childhood, like, accepted beliefs. One was, you know, the war on drugs, two was the food pyramid. Basically, like sugar is good, fat’s bad. Three I think is, like, if you were going to have sex, it’s going to…oh, AIDS. Like, everything’s wrong about it. Anyway. But nutrition has been one that’s probably seen the most revolution in actual, like, science-based insight. But even then I feel like you hear so many commentators that give obviously advice that is directly contradictory, whatever. What’s the status of the science and what should we be doing?

 

Louisa: Well, let’s start with what you shouldn’t be doing. And that’s the obvious, I don’t go into too much detail, I just talk about just, yes, we know that sugar is not good, we know that that’s bad for the brain. I don’t subscribe to any type of diet, I eat everything, I do eat a lot of organ meals, I do eat a lot of red meat. So, that’s something that I love too. And I eat a lot of fruits and vegetables, etc. One thing that I do speak about is what the brain’s made of. Now, the brain is made around 60% of fat. Now, one of the best things you can be feeding your brain is omega-3 fatty acids, and this comes from fatty fish. Nowhere, nothing can replace that. And I truly mean that. So, if you’re looking at getting just a little bit of an edge when it comes to nutrition, try adding in omega-3 fatty acids. If you can’t get it from fatty fish, because it’d be really hard to actually get that from fatty fish, and we’re looking at 4 grams per day, look at supplementation. I supplement with 4 grams a day of EPA and DHA. It helps with all cause mortality, it helps with cell membrane fluidity, and it helps feed your brain what it needs. And it also helps lower inflammation. We know that inflammation is detrimental to decision making. So, supplementing with omega-3 fatty acids, which is EPA/DHA, is going to help your brain immensely.

 

Meb: The funny thing you mentioned about the sugar, like, I casually now just kind of glance at labels, and to me it’s still shocking, like, how much sugar gets added to things that I would never ever expect it to be…

 

Louisa: Oh, yeah.

 

Meb: You know, like, I look at the label and I’m like, “Wait, why does my milk have so much sugar in it?” like, why are you putting a bunch of sugar in the milk? Come on, like, [inaudible 00:57:22] even needs it.

 

Louisa: Do you want to know something scary…

 

Meb: I do.

 

Louisa: …and really interesting? The FDA has a law that states that you can skew the results of food labels by 20%. So, that means, if you take a can of Coke and you have a look and it says it’s got a 176 calories, because I really believe that’s what it has, just off the top of my head, and just, say, it has 20 grams of sugar, that is not true. They skew the results and they’re not breaking any labeling laws because the FDA says that you don’t have to put the right amount of sugar in. So, just add 20% to that 20 grams of sugar and add 20% to that 176 calories, and that’s what you’re really consuming. Nobody knows that. They look at a can of Coke and they’re like, “Oh, okay, 20 grams of sugar,” but they’re really having a lot more than that. So, I think that that is wild, right?

 

Meb: Yeah, it’s enlightening and depressing at the same time. And so, kind of the basics of food advice that seems very obvious, less processed, less junk, less fried foods, you know, more whole sort of stuff. Like, that doesn’t seem that complicated. And probably eating less, for most of us, I imagine.

 

Louisa: Getting protein, an adequate amount of protein, which is around 1.8 grams per kilogram of body mass. And also if I had to pick two supplements for you guys to be taking, it would be omega-3 fatty acids and creatine. Creatine is extremely important.

 

Meb: Creatine was one that probably many men, and particularly men who were athletes, at some point, had some experience with as a pure muscle building supplement in their younger years perhaps. But are you saying this is something they should consider on an ongoing basis even in their older years?

 

Louisa: Oh, 100%, 5 grams a day. You know, you can load this by doing a two-week load. But I generally would say that it’s one of the safest supplements out there, one of the most widely researched, and one that, you know, everyone should be taking.

 

Meb: And this is women too?

 

Louisa: Women too, yeah. I take it, yeah.

 

Meb: Okay. All right, so, we got a pretty good overview so far. We have the three mains: sleep, exercise, nutrition. Which none of that should sound too crazy, I think, to most. How often are you, like, getting an athlete or a high-performing investor and you’re like, “Huh, you know, you’re good.” Like, “This looks like you’re doing everything you should be doing.” You know, because for when you get those type of people, what tends to be the things that are missing or that they can…you know, they’re like, “Look, I know I’m probably good. I eat well, exercise, I get good sleep, but I really am crazy obsessed. I want to be, like, you know, best of my ability, top 1%.” For those, like, is it a different onboarding prescription or is it just kind of more the same of what we talked about?

 

Louisa: No, it’s definitely a little bit different. So, for example, if an MBA player…and this happens often. I’m now working with major-league baseballers, some of them who have just signed a 300-million-dollar deal, and they’re already at the top of their game, they’re like, “But I just want to get better.” And then I really fine tune it. And this comes down to information-processing speed, so, can we get that faster? Can we decrease reaction time and can we increase your visual acuity? And you think for, like, these ball players, if I can increase their visual acuity by, you know, 1% that means they’re going to see the ball faster and quicker, so, they’re going to be able to react to it faster. So, that’s the fine tuning, really looking at the visual cortex and how can we manipulate that but also looking at different brain regions and how can we upgrade those. But, unfortunately, for my investors, I’ve never seen somebody that came in and said to them, “Oh, you’re incredible, I don’t need to work with you.”

 

Meb: So, for the people listening who aren’t going to sign that 300-million-dollar contract or may be, you know, managing 20 billion, do you have any offerings tailored to them? Is it, “Hey, listen to my podcast, read my writings. You can get, you know, part of the freebies.”? But, like, what is sort of the funnel for clients? You have a consulting practice, do you do any online coaching as well? What’s the funnel?

 

Louisa: So, we do have a part where you can work with me online. Hopefully, if you’re in New York City, I can see you in person. One of the biggest things that we do is we actually form partnerships with companies that have got even 20%, if they’ve got 20% portfolio managers, 20% investors, we can do something with them as well. So, I never say, “This is our one-stop shop,” or, “this is the one size fits all,” we cater everything. But what I’m thinking that’s becoming more popular now is a lot of companies are like, “Hey, Louisa, we’re reaching the end of financial year but we want to do a lot of learning for our company. Can you come in and give a talk?” or can you come in and do maybe a three or four-week seminar with them. So, we do that as well.

 

Meb: Yeah, it’s smart. I mean, it’s an obvious…as someone, you know, thinking of the CEO, like, what you want to maximize productivity, health, well-being, focus, drive, all that…why would you not, right? Like, all the other things we think about as perks. “Hey, we’re going to put in a Ping-Pong table,” or, you know, whatever it may be. It seems like getting all these in line is obvious, right?

 

Louisa: Well, can I ask you a question?

 

Meb: Yeah.

 

Louisa: If I said to you, giving your current position right now, exactly the same, if I said to you, “We can work on these 3 pillars and you can be operating at least 10% better than what you are now?” what does that mean for your portfolio, financially speaking? You don’t have to give numbers, evidently, you can just tell me… Yeah.

 

Meb: I’m complicated, Louisa, because I’m a quant. So, the beauty of being a quant…

 

Louisa: Oh, the amount of quants I…

 

Meb: The beauty of being a quant is I don’t know that my output, if I was 50% better, is going to impact anything we do currently. However, my output on research, writing, all the other things I want to be doing, thinking of new crazy ideas, launching new funds, there’s no question. And there’s no question that so many of the stuff that you’ve talked about…and the most obvious one for me, glaring. I have a pretty good diet, I exercise decently. If I could go teleport back to the 20-year-old Meb or the 30-year-old Meb and say, “Look, man. Beer is delicious. Wine, hey, great. Go have some cocktails with friends but let’s create a mindfulness around it,” right, where I say, “okay, let’s center it around, you know, dinners with family, holidays, certain events, and make it less of a part of your cultural day-to-day,” you know, “less part of your identity with your entire life.” There’s no question you wake up hungover, like, that’s an obvious after effect of a poison that, in many ways, still can be wonderful but has its downsides. So, yes, I would sign up for that. And so, next time you’re in LA, let’s talk. I certainly could use the help. But I would take it, right. It’s an obvious, for the listeners, expected value equation. Right? SBF who’s I just got announced today, he was taking like, god, like, Adderall every 2 hours or something, I imagine that could help the crew at FTX. So, yes, I hear you.

 

We’ve hit a lot of wide-ranging things, let’s go a little off script for a little bit. What are some of the, like, whether it’s urban myths, misconceptions you talk to people about that come up a lot or just conversations you’re like, “Oh, you know, this question again?” or, “wow,” like, “I hear this a lot, let me address this.”? Are there any that, like, particularly come up all the time that you think are, you know, particularly opinionated on?

 

Louisa: Yeah, well, it is…look, alcohol, like, I put out an Instagram story saying, “Hit me up, you know, through a DM with your number-one question related to brain health.” And I would say I got 900 messages and a third of them were around alcohol. So, I think people are just looking for ways to say that alcohol is good for you. That’s the first thing.

 

The second thing is I don’t think that we’re talking enough about hydration. I think that that’s another myth. You know, a lot of guys are like, “Yeah, you know, I drink a bit of water but I’m fine.” It’s like, “Well, your brain actually is made of water as well. It is 60% fat, the other 40% is water. If you are not hydrating, your brain’s just not going to be functioning optimally.” So, we need to talk about hydration, both through electrolytes and water. And then, yeah, it’s just you can’t get past those three pillars.

 

And then I think we’re not just recognizing that there’s just a natural decline in performance as we get older. We all know that we performed better in our late 20s than what we do now, you know, in our late 40s. So, we have to look at ways to address that, to optimize it, and slow the progression of these brain-related disorders.

 

Meb: You mentioned a supplement that people could take with alcohol or after the fact, what’s it called?

 

Louisa: NAC, so, N-acetyl cysteine. It’s also called NAC. I can see that people are just going to go out and purchase these.

 

Meb: I remember…you know, I mean, look, the market for hangover cures is probably billion dollars and nutraceuticals, whatever they may be, but I remember this reminds me that the Sam Adams’ founder, the beer company, I remember reading interview once with him. And it was the strangest thing because, like, the journalist is sitting there, they’re having beers, and, like, he opened a package of yeast and ate a package of yeast while they’re talking. He’s like, “What are you doing?” he’s like, you know, “this actually, like, dulls the effects of all the beers.” I’m like, “I have never heard that ever in my entire life and here we have this founder just casually just, you know, ripping into a packet of yeast. I’ll add it to the show note, listeners, but…Jim Koch I think is his name, I can’t remember, but one of the strangest recommendations for that. Never heard it before or since, but…

 

Louisa: No, me neither. And I don’t think it tastes very nice, yeah…

 

Meb: What are you excited about going forward? We’re winding down the year, end of 2022, you look out to the horizon, you got a lot going on, Louisa, what’s on your mind? What are you excited about? What are you worried about? What are you thinking about? What do you got on the to-do list for yourself next year?

 

Louisa: Very exciting. So, in all of January, I’m going on a podcast tour. Actually on the West Coast, so, I’m going to LA, Sacramento, San Diego, Vegas. So, I’m going to be on many podcasts just to spread the word of Neuro Athletics and that a high-performing brain is something that we can all achieve. I’m excited about that. I do have a goal to have every person on Wall Street…and by “Wall Street” I mean, you know, any investor working in the financial-services space in the U.S., to know my name. So, I don’t know how we’re going to achieve that, Meb. I don’t know, I’ve got to get in contact with “Forbes” or something and just get that out there. So, that’s going to be the goal for next year.

 

Meb: And then for those who are interested what you’re up to, if they do want to hear more, they want to sign up, I told them, “Louisa signs you up as a client, say Meb sent you, you’ll get 5% off, 10% off?”

 

Louisa: Yeah, why don’t we do 10%?

 

Meb: Tell her Meb sent you. But for those who are interested, who want to chat more with you, where do they go? What’s the best spot?

 

Louisa: So, my website is neuroathletics.com.au. So, you can put your details in there. But if you just go on to Twitter, I’m Louisa Nicola, I do a lot of education on there, both on Instagram, but, if you go on Twitter, I have a link in my bio that’ll take you to my podcast, newsletter, and everything else that you need to know.

 

Meb: Yeah, I just bought some supplements through one of your recommendations. So…

 

Louisa: Good. Momentous?

 

Meb: Yeah.

 

Louisa: Good.

 

Meb: Use the code “neuro” so you save me some money.

 

Louisa: Yes.

 

Meb: Report back how it goes. Any other things you want to leave the listeners with? And it could be resources on books, it could be things…you mentioned the Hemsworth documentary, I’m definitely going to check that out. Anything else you’re consuming or recommend, as the holidays approach?

 

Louisa: Actually, it’s another supplement…it’s not much a supplement but something that I’m finding that is working really well for my investors is exogenous ketones, just reminded me. And this is something that’s going to help with fuelling your brain so it can endure longer periods of time. So, if anyone has heard about ketones, I think that’s a really great thing to get onto. The one I have is linked in my bio as well, it’s Ketone-IQ And I’ve been having that, so, that’s something I’m consuming.

 

Meb: The only things that I know about ketones it’s usually surrounded by two topics, one that they taste terrible, and two that it’s usually around the topic of fasting. We didn’t mention fasting at all today. Does that come up in the conversations and something you experiment with or, you know, curious about?

 

Louisa: Yeah, I do feeding windows. So, instead of saying to someone, “Okay, you need to fast until 2 p.m.,” it’s just get all of your nutrition, your macros in a small amount of time and try and leave yourself room to be hungry and to not eat. Because, when you’re doing that, you’re repairing your cells. So, ketones are fantastic for that. For me, they curb my appetite and they also feel like I’ve had something to eat. So, they’re like fuelling my brain as well so I don’t feel that starvation and hunger.

 

Meb: Cool. Well, I’ll try it out. Louisa, it was a blessing to have you today. Thanks so much for joining us.

 

Louisa: Thank you so much, Meb, it was amazing talking to you.

 

Meb: Podcast listeners, we’ll post show notes to today’s conversation at mebfaber.com/podcast. If you love the show, if you hate it, shoot us feedback at themebfabershow.com, we love to read the reviews. Please, review us on iTunes. And subscribe the show anywhere good podcasts are found. Thanks for listening, friends, and good investing.

 



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Elin Electronics IPO Review, Financials, Date & Details

Elin Electronics IPO Review: Elin Electronics Limited is coming up with its Initial Public Offering. The IPO will open for subscription on December 20th, 2022, and close on December 22nd, 2022. It is looking to raise Rs. ₹475.00 Crores. In this article, we will look at the Elin Electronics IPO Review 2022 and analyze its strengths and weaknesses. Keep reading to find out! 

Elin Electronics IPO Review – About The Company

Founded in 1969, Elin Electronics Ltd. is a leading electronics manufacturing services provider. The company is India’s largest fractional horsepower motors manufacturer in India. The company also offers end-to-end product solutions and provides its manufacturing services both as an original equipment manufacturer (OEM) and an original design manufacturer (ODM).

It has 3 manufacturing facilities located in Uttar Pradesh(Ghaziabad), Himachal Pradesh (Baddi), and Goa(Verna). In Ghaziabad, the company also has its centralized R&D center. Here they focus on the R&D of all aspects of OEM and ODM models including concept sketching, design refinement, generating optional features, and testing.

Services Provided by the company:

Elin Electronics Ltd has a diversified products portfolio which includes:

● Lighting products (LED), fans (ceiling, fresh air, and TWP fans), modular switches, and sockets.

● Small appliances like dry and steam irons, toasters, hand blenders, mixer grinders, hair dryers, and hair straighteners.

● Fractional Motors ( These are used in mixer grinder, hand blender, wet grinder, chimney, air conditioner, heat convector, TPW fans etc.)

Elin Electronics IPO Review – Financial Highlights

If we look at the financials of Elin Electronics Ltd. we find out that their assets have grown from Rs. 397.73 crores in March 2019 to Rs. 532.61 crore in March 2022. Their revenues also follow a similar trend despite suffering a drop in March 2020. Their revenues have grown at a CAGR of 5.7% from Rs. 829.74 crores in March 2019 to Rs. 1,094.67 crores in March 2022. Their profits grew at a CAGR of 6.13% from Rs. 29.07 crores in March 2019 to Rs. 39.15 crore in March 2022. It is also important to note that the company’s borrowing also increased during this period from Rs. 86.64 crores to Rs. 102.33 crores.

Balance Sheet of the company 

Elin Electronics IPO Review - finacials

(Source: DRHP of the company)

Profit and loss Statement of the company

Profit and Loss Chart

(Source: DRHP of the company)

Strengths

Following are the competitors of the company in each of its product verticals:

  • Small appliances: Smile Electronics, PG Electroplast and Indic.
  • Fractional horsepower motors: Marathon and Amber (PICL).
  • LED lighting and flashlights: Dixon and RK Lighting.
  • Fans: Yash Electronics, Tiberwala and KKG Industries.
  • Sheet metal: JBM Auto, Panse Auto, Autoline Stamping, SM Auto and Delco Industries.
  • Plastic moulding: Varroc Engineering, Plastic Opium, Motherson Sumi, Magna Styr, Prakash Plastics, Affy India, SSI Moulds, BDI Group, Multitek, and Ashuman Auto.
  • The company is the leading electronics manufacturing services (“EMS”) manufacturer of end-to-end product solutions for India’s top brands of lighting, fans, and small/ kitchen appliances.
  • The company has diversified products, product verticals, and customer base which enables the company to balance out any impact or risk incurred with respect to any single product, product vertical, or customer.
  • The company has an established customer base with well-known domestic and multi-national customers which include Philips, Bosch, and Panasonic
  • High levels of backward integration lead to higher efficiencies, enhanced quality of products, and customer retention capability
  • The company has been able to maintain a consistent and strong track record of financial performance

Weaknesses

  • A substantial portion of companies revenue is generated from some of its key customers, any loss in the relationship with these customers can have an adverse effect on the revenues of the company.
  • The company’s operations may fluctuate from time to time due to seasonality which can have an impact on its financial performance.
  • The company employs contract labor to carry out certain functions of its business operations. Any failure by the agencies to make payments to the laborers could disrupt business operations.
  • As the company buys its raw materials on a purchase order basis, any discrepancies relating to raw materials can impact the operations of the business.
  • The company’s finances can be negatively impacted by any defaults or payment delays made by a significant portion of its clients.

Elin Electronics IPO Review – Key IPO Information

Particulars Details
IPO Size ₹475.00 Cr
Fresh Issue ₹175.00 Cr
Offer for Sale (OFS) ₹300.00 Cr
Opening date Dec 20, 2022
Closing date Dec 22, 2022
Face Value ₹5 per share
Price Band ₹234 to ₹247 per share
Lot Size 60 Shares
Minimum Lot Size 1 (60 Shares)
Maximum Lot Size 13 (780 Shares)
Listing Date Dec 30, 2022

Promoters: Mangi Lall Sethia, Kamal Sethia, Kishore Sethia, Gaurav Sethia, Sanjeev Sethia, Sumit Sethia, Suman Sethia, Vasudha Sethia And Vinay Kumar Sethia

Book Running Lead Manager: Axis Capital Limited, JM Financial Limited

Registrar to the Offer: KFin Technologies Limited

The Objective of the Issue

The net proceeds from this issue will be utilized for the following purposes:

  • Repayment/ prepayment of certain borrowings availed by the company in full or in part
  • Financing capital expenditure for upgrading and expanding the company’s existing facilities at (i) Ghaziabad, Uttar Pradesh, and (ii) Verna, Goa
  • General corporate purposes

In Closing

In this article, we looked at the details of Elin Electronics IPO Review 2022. Analysts remain divided on the IPO and its potential gains. This is a good opportunity for investors to look into the company and analyze its strengths and weaknesses. That’s it for this post.

Are you applying for the IPO? Let us know in the comments below.

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Hawkish vs. Dovish: Understanding Doves & Hawks in the Fed

Hawkish vs. dovish refers to the policy stance of the Federal Reserve governors. Hawks are prepared to swoop down to restrict growth in an overheating economy. Doves want the economy to fly by reducing interest rates to boost investment, employment, and growth. 

But what exactly do these terms mean? And why do they matter to investors? Here’s a quick rundown on each side.

Hawkish vs. Dovish: Understanding Doves & Hawks in the Fed and the impact on business, the economy and stocks.

When deciphering the actions and statements of the Fed, a good place to start is by understanding the difference between hawks and doves. Hawks tend to be more worried about inflationary pressures, while doves are more concerned with ensuring economic growth. This hawk-dove split can explain how the Fed may act in any given situation.

In this blog post, we’ll explore what each group tends to advocate for and look at some examples of recent events that this division has influenced. By better understanding hawks and doves within the Fed, investors can gain a clearer picture of what might lie ahead for monetary policy.

Key Takeaways

  • The Federal Reserve has been a key player in the American economy since its inception
  • The Fed is made up of influential doves and hawks who have shaped its policies over the years
  • Doves favor loose monetary policy, while hawks prefer tighter conditions
  • The goal of the Federal Reserve is economic stability and growth
  • Hawks are concerned about inflationary pressures and stopping asset bubbles that impact stability.
  • Doves focus on improving economic growth and employment.

Hawkish vs. Dovish in the Federal Reserve

Dovish and hawkish are terms used to describe the monetary policies of the United States Federal Reserve and other central banks. A dovish stance means that the Federal Reserve leans towards lower interest rates and is more willing to engage in quantitative easing. In contrast, a hawkish stance indicates that the Fed may raise interest rates or tighten monetary policy to control inflation. A dovish position may also be characterized by rhetoric from central bankers suggesting an expansionary fiscal agenda, such as growth spending on infrastructure and clean energy. In contrast, a hawkish outlook may include high-level actions such as raising taxes or reducing government spending to bridge budget deficits. Regardless of which stance is taken, both have important implications for national economic performance and, thus, should not be taken lightly.

In short, a dovish stance by the Fed seeks to maintain low interest rates and a steady economy. Conversely, a hawkish stance seeks to raise interest rates to control inflation and slow economic growth. 

The tools used by doves & hawks to affect the economy

The primary tools used by the Federal Reserve to implement either a dovish or hawkish policy is open market operations and interest rate changes. 

Open market operations involve buying and selling US Treasury notes, sometimes with the intention of changing the money supply. By altering these parameters, the Federal Reserve can affect macroeconomic indicators such as GDP growth, inflation, unemployment rates, and consumer spending.

How The Economy & Business Cycle Dictates The Feds Hawkish or Dovish Policy

In 2008 during the global financial crisis, the bubble burst in the property market, causing homelessness, increased unemployment, a stock crash, and consumer panic. These factors forced Central Banks into a strong dovish policy of injecting capital into the economy through stimulus, fiscal policy, and reduction in interest rates.

Infographic - Hawkish vs. Dovish: How the economy and business cycle dictates the Federal Reserve's policy stance.
Infographic – Hawkish vs. Dovish: How the economy and business cycle dictates the Federal Reserve’s policy stance.

While this dovish policy saved the economy, many argue it caused an overheated economy, leading to the 2022 crash.

In 2022/23, the economy is running too hot; high inflation, labor shortages, and asset bubbles in cryptocurrency, property, and stocks affect economic stability. To counter overheating, the Federal Reserve and other central banks need to adopt hawkish policies to slow down growth and cool the economy.

What is Hawkish vs. Dovish related to the business cycle?

Hawkish and dovish refer to the monetary policies of the Federal Reserve, which are used to influence the business cycle. A hawkish stance indicates that the Fed may raise interest rates or tighten monetary policy to control inflation and economic growth. This type of policy is often used during periods of economic prosperity when GDP growth is high and inflationary pressures are rising. A hawkish stance aims to keep inflation in check by controlling wages and reducing consumer spending.

Conversely, a dovish stance means that the Federal Reserve is biased towards lower interest rates and is more willing to engage in quantitative easing. This policy is usually adopted at the bottom of the business cycle, during economic downturns when GDP growth slows, and unemployment rises. Its goal is to encourage investment and stimulate job growth by making it easier for businesses to borrow money at lower interest rates. By lowering interest rates, the Fed hopes to incentivize consumers to spend more and businesses to invest more in their operations.

How do Hawkish and Dovish Policies Affect the Stock Market?

Hawkish and dovish policies can have a significant impact on the stock market. When interest rates rise, monetary policy tightens, restricting business access to credit, and stifling profits and the capital needed for expansion and innovation. This can cause stock prices to fall as investors look to other investments with less risk.

Conversely, when the Federal Reserve adopts a dovish stance and lowers interest rates, it makes borrowing more affordable for businesses and individuals. This can lead to increased demand for certain stocks as businesses have more access to credit, and investors look for companies with strong fundamentals. When a dovish policy is in place, it can lead to increased stock prices as companies are able to expand and grow more easily.

Why does the Fed change its stance between hawkish and dovish?

The Federal Reserve might sometimes adopt a combination of hawkish and dovish policies depending on how different macroeconomic indicators develop over time. For instance, if inflation starts increasing while GDP growth remains low, then a combination of both policies could be adopted to rein in inflation without stifling economic recovery efforts. Similarly, if GDP growth accelerates while inflation remains low, then dovish policies could be implemented to avoid any potential overheating without stifling economic activity too much.

Why understanding dovish and hawkish policy is important for investors?

Ultimately, understanding the differences between hawkish and dovish stances will help investors determine what type of monetary policy may be adopted by the Federal Reserve at various points during an economic/business cycle. This can be beneficial for making smart investment decisions as it will provide clues as to whether it’s better to invest in stocks or bonds depending on what type of environment may exist within each business cycle phase.

The Pros of Hawkish Federal Policy

The primary pro of a hawkish Federal policy is that it can help to mitigate the risk of inflation or let the air out of asset bubbles. The Federal Reserve can limit spending and reduce aggregate economic demand by raising interest rates and tightening the money supply. This will create an environment where goods, services, and wages become cheaper by decreasing consumer spending.

The Cons of Hawkish Federal Policy

A hawkish Federal policy can have some negative consequences, as increasing interest rates makes it more difficult for businesses to borrow money and invest in new projects. This can lead to decreased investment spending, which may slow economic growth and lead to job losses. Additionally, higher interest rates can negatively affect consumer spending as people must pay higher interest rates to borrow money or buy property, which reduces their disposable income. This can lead to a decrease in consumption and slow economic growth even further.

The Pros of Dovish Federal Policy

The pros of a dovish Federal policy are that it is designed to help stimulate economic growth. By lowering interest rates and increasing the money supply, businesses can more easily borrow money and invest in new projects. This will lead to job creation and increased consumer spending, which can help to stimulate economic growth.

The Cons of Dovish Federal Policy

The cons of a dovish Federal policy are that it can lead to an increase in inflation. Increasing the money supply makes it easier for businesses and consumers to borrow money and spend more. This can cause a surge in aggregate demand, driving up the prices of goods and services. Additionally, if too much money is pumped into the economy, it can lead to an imbalance between supply and demand, which can cause asset bubbles.

Overall, understanding the differences between hawkish and dovish policies can benefit investors as it will provide clues as to what type of environment may exist within each business cycle phase. This can help them make more informed investment decisions and potentially capitalize on opportunities created by shifts in Federal policy.

Examples of how being dovish or hawkish can affect economic decisions.

There are two distinct attitudes when it comes to economic decisions: being dovish or hawkish. In a dovish scenario, the government, or other decision-makers, intend to keep inflation rates low and focus on reducing unemployment. To achieve this end, they are typically willing to use expansionary policies such as monetary easing and tax cuts.

A hawkish attitude is one in which the decision makers take a more restrictive approach towards the economy; for example, by increasing interest rates and keeping tight control of the budget. This can be beneficial in controlling inflation and preventing financial instability but can come at the cost of reduced economic growth.

Ultimately, dovish or hawkish decision-makers use a wide range of economic tactics to foster growth and stability.

Why are there different opinions on whether being dovish or hawkish is better for the economy?

Opinions vary on when it is best for economic policy to be dovish or hawkish. Those who lean toward a more dovish approach often argue that monetary policy should be more flexible and forgiving when shocks occur in the financial system. To combat weak growth, they believe that a central bank should use low interest rates and other forms of quantitative easing as a way to stimulate the economy.

On the other side, hawks stress the importance of fiscal or monetary discipline during economic booms and view inflationary pressure as an immediate threat to economic stability. Therefore, they advocate for higher interest rates and less government interference to keep inflation in check. Ultimately, whether an economy benefits from an explicitly dovish or hawkish stance will depend on its unique circumstances at any given time.

The most famous doves and hawks in the Fed’s history

Throughout its history, the Federal Reserve System has seen its share of policy debate between those advocating for a “dovish” approach, such as easing economic conditions to place downward pressure on inflation and growth, and those who hold a more “hawkish” set of views, including raising interest rates to put an end to high levels of spending and inflation.

Perhaps the most famous dove was then-Fed Chairman Alan Greenspan, who assumed office from 1987 until 2006 and is credited with keeping the economy on track during some of the toughest economic times in US history. However, Greenspan’s dovish approach and vast deregulation ultimately led to the 2008 financial crisis.

On the flip side, current Fed Chair Jerome Powell is considered hawkish for his risk-averse policymaking approach and emphasis on fiscal responsibility. Regardless of where they fall on the spectrum of opinion, these prominent individuals have all played a part in furthering our understanding of how monetary policy affects the American economy.

Doves vs. Hawks Summary

Regarding the Federal Reserve, there are two main camps: doves and hawks. Doves tend to prioritize economic growth and job creation, while hawks emphasize keeping inflation in check. Both approaches have pros and cons, which is why there is often debate about which is better for the economy. Some of the most famous members of the Fed have been doves or hawks, depending on their views at the time. Today, several members of the Fed Board lean either way.

In short, doves favor easier monetary policy, while hawks prefer tighter conditions. Both have pros and cons, which is why there are different views on whether being dovish or hawkish is better for the economy. Some of the most famous doves and hawks in the Fed’s history include Marriner Eccles, William McChesney Martin Jr., Alan Greenspan, and Janet Yellen. At present, it seems that most members of the Fed Board lean towards being dove-ish in their approach to monetary policy. If you want to learn more about economics and fundamental analysis, sign up for our professional investing training course today.

As you continue your investing journey, it’s important to learn more about economics and fundamental analysis so that you can make informed decisions about where to invest your money. With our professional investing training course, you’ll be well on your way to becoming a successful investor.

 


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Divergence EA MT5

The main purpose of this blog is to describe and explain the input parameters of my Divergence Expert Advisor for MT5 (free version / paid version).

Please check out my other divergence products for MT5:
Divergence indicatorDouble divergence scannerDivergence dashboard

This is an out-of-the-box product which will normally not be modified based on request from a single customer. Please therefore first read this blog to the end and/or download a demo and test the EA in the strategy tester in order to understand what it can and cannot do.

Whenever there is an available update of the EA I recommend you to wait with updating until all open positions by the EA have been closed. You can update it without removing the previous version from the chart. Before updating I also recomend to turn off AutoTrading and after the update please control that the input parameters have not changed on each chart where the EA is loaded. Then you can turn on AutoTrading again.

I strongly recommend you to do your own backtesting and fine tuning in the strategy tester before starting to trade on a live account. This is valid also if you decide to use the .set (preset) files which you can download at the end of this blog. You must use the ‘Every tick based on real ticks’ modelling option in MT5 if you are using settings where intracandle activities are involved, such as trailing stop. If not then it is enough with ‘1 minute OHLC’ modelling. Please remember that past performance is not a guarantee of future profitability and that the optimized backtest results cannot provide a realistic prediction of future profitability. Signal monitoring here.

Input parameters

Parameters marked with an asterix (*) in the beginning are only available in the free version and two asterisks (**) means available only in the paid version.

  • GENERAL SETTINGS
    • * Send alert instead of opening trade – When set to ‘true’ an alert will be sent instead of opening a trade.
    • ** EA mode – List box with the following selections:
      • Trade normally
      • Send alert instead of opening trade – Will alert about a trade oppurtunity instead of opening the trade.
      • Pause EA – Will totally pause the EA. Existing orders will not be modified in case break even, trailing stop etc. has been enabled.
    • ** Multi symbol mode – List box with the following selections:
      • Disabled – The EA will only trade the current chart symbol.
      • Market Watch – All visible symbols in the Market Watch window.
      • Symbols from input parameter – Symbols given in the ‘Symbols to trade’ input parameter below.
      • Presets from folder – Symbols from preset files selected in a dialog box. These presets must exist directly under the Files folder, or in a subfolder to Files. Each preset file must contain the name of the symbol according to how it is written in the Market Watch window. Parameters marked with blue text are parameters which will be used from preset files when you have selected this option. The other parameters vill be taken from the EA.
      • Presets by selection – Symbols from all existing preset files in a predefined folder (given in the ‘Preset files folder…’ input parameter below). These presets must exist directly under the Files folder, or in a subfolder to Files. Each preset file must contain the name of the symbol according to how it is written in the Market Watch window. Parameters marked with blue text are parameters which will be used from preset files when you have selected this option. The other parameters vill be taken from the EA.
    • ** Symbols to trade – These symbols will be used when the ‘Symbols from input parameter’ Multi symbol mode has been selected above. The symbols must be comma separated and visible in the Market Watch window.
    • ** Preset files folder (must be subfolder under Files) – All preset files in this folder will be loaded when the ‘Presets from folder’ Multi symbol mode has been selected above.
    • ADR period (days) – Average daily range over the past xx days. Default is 60.
    • ** Event handler on minute candle instead of tick –  ‘true’ or ‘false’. If set to True then the testing will be quicker in the strategy tester but less accurate in case you are using settings which involved intracandle activities. For instance trailing stop.
  • TREND FILTER SETTINGS
    • Trend filter to use – List box from where you can select RSI, Bollinger or Stochastics. The trend filter will be used with reversal logic, hence the price must have reached for example RSI 70, or the bollinger upper bands in order for a short (bearish) trade to be opened.
    • Measure trend filter on first extremum  – True or False.
    • Stochastics/RSI overbought level – The divergence candle must form above this level in order to be valid.
    • Stochastics/RSI oversold level – The divergence candle must form below this level in order to be valid.
    • Bollinger shift
    • Bollinger deviation
    • Trend period (default 20 for Bollinger)
    • ADX level
    • ADX period
    • Price type
    • Time frame – if set to ‘current’ then the chart time frame will be used. Otherwise the selected time frame will be used for calculating the the trend indicator values.
  • GENERAL DIVERGENCE SETTINGS
    • Main oscillator
    • Enable divergences – a list of 5 oscillators/indicators which you can select from if you have set Main oscillator to Multi mode.
    • Amount of concurrent divergences to look for (if Multi mode)
    • Time frame for next divergence(s) – Default is current. This setting will be used if Amount of concurrent divergences above is set to > 1. If for instance you trade on a M30 chart and change this setting from current to H1 then the next divergence(s) must occur on the H1 time frame. *** for the next version this will also apply if single mode and the value is set to something else than current. Example: the EA is setup to trade MACD divergences. The chart time frame is H1 and the value here is H4. In this case there must be a MACD divergence on H1 and H4 at the same time.
    • Divergence candle shift – Set to 2 or higher for a stronger confirmation of the possible reversal/trend continuation (confirmed divergence). By having it set to 1 you will catch the possible movement earlier (unconfirmed/pending divergence). On the other hand, the signal is less reliable. You can also set it to 0 for catching “early” divergences. This means that the alert will come directly upon candle open instead of waiting for the slope in the indicator to change direction (candle shift 1 or 2), which means that the price must show at least some sign of reversal. Please be aware though that this will lead to more false signals.
    • Bars to check (divergence depth) – Bars back in time to check for divergence.
    • Min. bars to check (0=disabled) 
    • Ignore wicks on divergence candles –  Divergence will be based on open/close price instead of high/low price.
  • REGULAR DIVERGENCE SETTINGS (trend reversal)
    • Trade regular – True or False.
    • Use trend filter – True or False.
    • Use ADX – The ADX value must be below the level you have set.
    • Use moving average filter –  When enabled then the price must be above/below the MA value for the period you have set in the input parameter under the ‘MOVING AVERAGE (MA) FILTER SETTINGS’ section.
  • HIDDEN DIVERGENCE SETTINGS (trend continuation)
    • Trade hidden – True or False.
    • Use trend filter – True or False.
    • Use ADX – The ADX value must be above the level you have set.
    • Use moving average filter – When enabled then the price must be above/below the MA value for the period you have set in the input parameter under the ‘MOVING AVERAGE (MA) FILTER SETTINGS’ section.
  • TRADING FILTERS
    • Open buy order – True or False.
    • Open sell order – True or False.
    • Maximum allowed slippage in points – Please note that not all brokers/account types support slippage control.
    • Maximum allowed open/close spread in points (0 = not used) – Can be set to avoid taking trades with high spread directly after midnight market opening or at news releases. Useful for those with variable spreads. The default settings of 50 is for currencies. 
    • Bars to wait for next trade – Default is 1 which means that the EA can trade again (if no open orders) on the bar following the bar where the last trade was closed. Setting it to 0 means that a new trade will be opened directly after the previous has been closed (if there is still a valid signal). Let us take the example that we have this setting set to 1. If we for instance had an order on a H1 chart which was closed at 13:10 then, in case there is a new divergence signal, a new order will not be opened directly at 13:10 but at 14:00. If you had it set to 2 then at 15:00 and so on. The original idea with this setting was when using the EA for scalping (small and quick profits). In this case it will very often come to the scenario that the EA will open and close (with profit) the order on the same bar. We might then like to avoid opening another order again on the same bar.
    • * Enable trade time filter (your broker’s server time) – Time filter for opening trades.
    • * Trade from/to time – Hour and minutes from/to.
    • * Stop time Friday (hh:MM, 00:00=disabled) – Hour and minut when to stop trade on a Friday.
    • ** Start hour [0-23]
    • ** Start minute [0-59]
    • ** Stop hour [0-23]
    • ** Stop minute [0-59]
    • ** Stop time Friday (-1=disabled)
    • Volume average period (0=volume filter disabled) 
    • Volume over average (percent) 
  • MONEY MANAGEMENT (levels are in points)
    • Risk in percentage (>0 = auto lot) – If set to 0 the Manual lots value will be used. If set to > 0 then the EA will use money management if combined with a stop loss. The account free margin (in the deposit currency) is used for the risk calculation. The risk calculation might not work properly with metals and indices. Please use a manual lot if you are experience problems.
    • Manual lots – Will be used if Risk above is set to 0.
    • ** Allow only one order per symbol and direction – Set to True and you will never risk that for instance that a second sell order will be opened for the chart symbol. Useful if you are trading the same symbol on several charts and with different magic numbers.  It is possible to enable this on a global level by changing it on one place only. It will then be valid for all charts in a Metatrader instance where the EA has been loaded. Hit F3 on the keyboard and change the value of the ‘TripleMA-OneOrder’ global variable from 0 to 1. In order for this to work the order comment must contain the word ‘Triple’.
    • ** Max. open positions (0=disabled) –  Set to for instance 5 and you will never risk that the EA will have more than 5 active trades. Useful if you have the EA running on several charts and would like to reduce the risk. It is possible to enable this on a global level by changing it on one place only. It will then be valid for all charts in a Metatrader instance where the EA has been loaded. Hit F3 on the keyboard and change the value of the ‘TripleMA-MaxOrders’ global variable from 0 to a hihger value. In order for this to work the order comment must contain the word ‘Triple’.
    • ** Stop trading when Equity decreased (0=disabled) – will not open any new orders if the equity is decreased by this number. If you put for instance 1000 and your current balance is 4000 then the EA will not open new trades if your equity goes below 3000.
    • ** Stop trading when Free margin below (0=disabled) –  will not open any new orders if the free margin goes below this number.
    • ** Orders with this Magic number (0=all) – With the default value (67) the EA will only check open order where the Magic number starts with 67. So if you have other EAs running with open orders then they will not be taken into consideration.
    • ** Close orders – If set to True then all orders, where the magic number starts with the value you have set above, will be closed immediately when the max value has been reached.
  • POSITION MANAGEMENT (levels are in points)
    • Type of stop loss/exit – List box with the following selections:
      • Fixed
      • At divergence candle high/low – Stop loss will be set at candle high/low + the amount of points that you have specified in the ‘ Offset in points…’ parameter.
      • ATR SL – The current (close price of divergence candle) ATR level multiplied with the value you have set below in the ‘Multiplier for stop loss’ parameter under the ATR SETTINGS section.
    • Fixed stop loss (<0 = ADR %)  When a negative (minus) value will be put here then the ADR% logic will be used.
    • Take profit method – List box with the following selections:
      • Fixed take profit
      • Trailing stop – starts to trail when profit>=0
      • ATR trailing stop
      • ATR TP
      • Risk/Reward (based on SL)
    • Fixed take profit (<0 = ADR %) – When a negative (minus) value will be put here then the ADR% logic will be used. Values which work for most pairs are -15 for H1, -25 for H4 and -40 for D1.
    • Trailing stop  (<0 = ADR %) – Will trail the stop loss constantly with the distance you have set as soon as the trade is in profit. When a negative (minus) value will be put here then the ADR% logic will be used. Traling stop will not work properly when using the Close half option.
    • Trailing step – If the trailing step is set to 0 then the trailing stop will be adjusted each 2nd second. Else the trailing stop will be adjusted every time the price has moved the amount of points you have set here.
    • Risk/Reward ratio – You need to set the “Take profit method” parameter to Risk/Reward in order for this value to have any effect. You need also to set “Type of stop loss/exit” to Fixed and a fixed stop loss value. A stop loss value of 200 points and a R/R ratio of 1.5 would mean that the take profit level would be automatically set to 300 points when an order is opened.
    • Break-even (0 = disabled)
    • Break-even trigger – The price has to reach this level (calculated from the opening price) in order for the break-even to be set.
    • Offset (<0=ADR%, >0=points, 0=disabled) – Additional distance for for the stop loss (if it has been set to ‘At divergence candle high/low’).
  • CLOSE HALF SETTINGS
    • Close half position – Combo box with the selections below. Please make sure that your account supports part close of orders before you use this option.
      • Disabled – Default value.
      • ATR – The current (close price of divergence candle) ATR level multiplied with the value you have set below in the ‘Multiplier for close half’ parameter under the ATR SETTINGS section. When you have set this option then a line showing the level will be drawn on the chart.
      • At first TP level – If you select this option you will also have to adjust the value in the ‘First TP level…’ parameter below.
    • Move to break-even after close half – True or False.
    • First TP level for Close half (<0 = ADR %)
  • ATR SETTINGS
    • Period
    • Price type – Select from High/low, Median or Close.
    • Multiplier for take profit and close half
    • Multiplier for stop loss
  • MACD AND OsMA SETTINGS
    • Fast MA – Default is 12
    • Slow MA – Default is 26
    • Signal MA – Default is 9
  • STOCHASTIC SETTINGS
    • K
    • D
    • Slowing
    • MA methodDefault is ‘Simple’ (SMA).
    • Price type
    • ** Overbought/oversold filter offset (0=disabled) – Set to for instace 10 means that the divergence must occur if the stochastics value is above 90 for sell trade or below 10 for a buy trade to be valid.
  • CCI AND RSI SETTINGS
  • MOVING AVERAGE (MA) FILTER SETTINGS
    • Slow MA 
    • Fast MA (0 = disabled)
    • Slow/fast MA method – Default is Simple (SMA).
    • Slow/fast MA price type – Default is Close.
    • MA time frame – It is recommended to set this to one time frame higher than the divergence time frame.
  • ** HULL MOVING AVERAGE (HMA) FILTER SETTINGS
    • Period – Moving average period.
    • Speed –  Smoothening ratio.
    • Candle shift –  Default is 1. Can be set to 0 to catch the color change one candle earlier (unconfirmed signal).
  • OBJECTS
    • Draw divergence lines on main chart – True or False. When set to True the EA will draw the divergence lines on the main (price) chart.
    • Draw TP1 levels on chart
    • Show divergence indicator window – True or False. When set to True the EA add the currently used divergence oscillator as an indicator window on the chart. Please note though that the divergence lines will not be drawn in this window.
    • Show info panel on chart
    • Various color settings for the information panel
    • TP1 line color
    • TP1 line thickness
    • Clear objects – True or False. When set to True the EA will delete the divergence lines on the chart each time the EA is reinitilized.
  • ALERTS (if alert instead of trade is enabled)
    • Set to ‘true’ for each alert type you would like to activate.
  • Magic number – If using the EA on the same symbol on multiple charts (typically with different time frames, or same time frame but one chart trading Hidden only and another trading Regular only) then it is important that the Magic number parameter has a different value. If not then trades on the same symbol will interfere with eachother.
  • Order comment – This parameter is not used. The comment will be set automatically. For instance “Reg [divergence indicator] M30” or “Reg [first indicator]/[second indicator]/[third indicator] M30” if you have set ‘Amount of concurrent divergences to look for’ higher than 1. The amount of characters in the order comment is by design limited to 32. So if you have set this to a value higher than for instance 4 then the text in the order comment will be cut at 32 characters. By some brokers it might even come be empty.

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Getting Started: Common Cancellation Reasons & How to Avoid Them

B-Stock understands that sometimes life happens, and buyers may need to cancel an order from time to time. Since B-Stock wants everyone to walk away from a transaction happy and satisfied, we’ve compiled a guide to ensure the best chance for a successful order. 

The auction title is a snapshot, not the whole story. 

An auction title has limited space, so our listings team only distills the auction’s key elements, such as its main product component, number of units, condition, original retail value, and location. However, to truly evaluate whether the auction will suit your inventory needs, the auction’s manifest will provide all details the seller has available for that specific product. Please review the manifest in its entirety prior to bidding. 

Manifest details

Each seller may have varying levels of details in their manifest. Though B-Stock encourages its sellers to provide as much detail as possible so buyers can make an informed decision, the business of liquidation means that not all sellers are able to provide a minute level of detail. Please bid accordingly. If your business model requires very specific product parameters to run successfully, bidding on an auction with a manifest that does not include those parameters may result in a transaction that is not to your satisfaction. 

Understanding stock imagery

Similarly, relying only on an auction’s included images may also create expectations that do not match the additional details on the auction and its manifest. Due to the nature of liquidation, very few sellers are able to provide actual images of the product due to warehousing, storage, and staffing limitations. Stock images are usually supplied instead. Unless the auction specifically states that the images are of the actual product, please move forward with the understanding that the images are stock photos. 

Original retail value

Each auction title will include an original retail value. This value indicates the worth of the product when it first entered the market, not its current worth. B-Stock recommends you review the current prices prior to placing your bid. 

Overall, it’s important to remember that a bid is a promise to pay with the information currently available on the auction. Please do not place a bid as a “placeholder” with the intent to ask a clarifying question once the auction is over, or with the assumption that more information will become available once the auction is won. B-Stock only wants you to bid on auctions that will work for you based on the information currently available. 

Product Conditions

Though B-Stock is working on standardizing the conditions sellers use to post their product, many sellers may use their own terminology. Each auction and each marketplace will have a definition of the condition in which the product is listed. Please read these conditions carefully prior to placing a bid. 

Shipping Hiccups

While many of our marketplaces offer seller-arranges-shipping where the shipping cost is shown underneath the bidding box, some of our marketplaces require that buyers make their own shipping arrangements, and will not include a ship cost. If there is an estimate available, you will see it underneath the bidding box.

Near the bottom of the auction lot page, you will find a section on “Shipping” where it will outline the requirements for receiving that particular lot.

For more information about  the different shipping terms you will find across B-Stock, visit Buying Basics: Auction Lot Shipping Methods

Residential versus business address

Please also ensure your address is up to date prior to placing a bid. Many people who run businesses out of their homes may be tempted to label their residential address as a business address, but this will cause complications with your delivery down the road. Describing your address as “business” or “residential” is based on how your address is zoned, which will affect whether or not a full length semi truck is able to deliver your truckload of pallets. If you are receiving your product in a residential area, you should label that address as “residential” even if you run your business from that address. 

Liftgate and loading dock requirements

Your address will also have a field for you to request liftgate services if you need them. A liftgate is a little elevator attached to a truck that lowers pallets from the truck to the ground. If you have a forklift or a loading dock at your location, you most likely do not need a liftgate. 

Important: some sellers or auctions may require the receiver to have a loading dock. Please see the shipping details of each auction prior to placing a bid to make sure you are eligible to receive the order.

If you do require a liftgate to safely unload at your delivery location, please make sure your address is properly updated prior to placing a bid, and please understand that truckload auctions do not come with liftgate services. Orders have been canceled due to a buyer’s inability to receive a product. We do not want this to happen to you, as it can be an extremely painful and disappointing process for all involved.

Multiple delivery addresses 

If you have multiple delivery addresses, you will be given the option to choose which address from the live auction. This will allow you to see which ship cost works best for you if the auction utilizes binding shipping. We recommend reviewing all addresses prior to placing a bid. 

Please note that if you place a bid with the auction associated with Address A, but before the auction ends you decide to go with Address B, you must input your bid a second time with Address B selected. This is because you need to accept the new ship costs to the new location via a new bid. 

Though you are able to update the address once you win an auction and it becomes an order, we do not recommend doing so as best practice. All new addresses will incur a new ship cost, and if you are unhappy with the ship cost your new address incurs, the original ship cost for which you won the auction at the original address may no longer be available to you, especially in this economy. Every update to an address (including a request for a liftgate) will incur a new ship rate pull, which will override the original ship cost. People have canceled orders over this. 

Best practice is to ensure your address book is in order with each address properly labeled as residential/business and properly noted with a need for liftgate services. Ensure the correct address is selected on the live auction prior to placing your bid for best results.

Inputting your bid

Sometimes buyers win orders at an amount far greater than they intended due to a mistyped bid (entering $10,000 instead of $1,000, for example). If you mistype a bid, please attempt to contact us via phone or chat so B-Stock can review the situation with you prior to winning the auction. Please note, there are some parameters where an agent cannot cancel a bid, such as when an auction is too close to its end time. 

B-Stock recommends that all bidders utilize the confirmation window to review their bid prior to placing it. Once a bid is input into an auction, a pop up window confirming the bid amount and additional details on the auction will appear on your screen. Please take a moment to review to ensure that this is really the auction you want for the amount you input.  

Note: no bids will be canceled within 15 minutes of the auction closing, or if the auction is in popcorn bidding.

“I still want to cancel my bid or order”

B-Stock gets it. Sometimes no matter how careful you are, circumstances happen and you purchase an order you realize you can’t profit from or you can no longer receive the order due to your warehouse being no longer available. Functionality doesn’t currently exist for a buyer to cancel their order on their own, so all requests need to be submitted to our Customer Service team, who will do their best to work with you. B-Stock does need to ensure that cancellations are avoided if possible. If there is a pattern of cancellation, penalties may be incurred, with negative consequences to your account that can include fines or even suspension.

Please know that each seller reserves the right to cancel an existing order (see the Terms of Purchase for additional detail). B-Stock understands that the platform only functions if orders are successfully purchased, and discourages cancellations from both seller and buyer alike.

For any questions regarding canceling a bid or an order, contact our Customer Service team.

 

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Vantagepoint A.I. Hot Stocks Outlook for December 16, 2022

Register for a Free Live Training

The Hot Stocks Outlook uses VantagePoint’s market forecasts that are up to 87.4% accurate, demonstrating how traders can improve their timing and direction. In this week’s video, VantagePoint Software reviews forecasts for Cummins ($CMI), Keycorp ($KEY), TESLA ($TSLA), Keycorp ($KEY), Lockheed Martin ($LMT), WalMart ($WMT), and SnapOn Tools($SNA)

Hello again traders and welcome back to the Hot Stocks Outlook for December 16th, 2022. Hope y’all are having an excellent week as always out there in the financial markets and plenty to cover here in today’s outlook. So we’ll go ahead and really continue on with a lot of what we looked at last week, seeing a lot of this weakness come into the markets.

Cummins ($CMI)

Cummins ($CMI)

But we can start out with shares of Cummins, which we actually saw this fresh crossover coming through. We’ll explain how this all works, but as we move forward, we’ll look at Lockheed Martin. We’ve got Tesla here, Walmart stores, KeyCorp, and lastly, Snap On. So these are also a couple markets we looked at last week here. So really great example and a really great time if you haven’t already, to go ahead and sign up for a live demonstration. And what you can do is actually get some more specific examples about how this technology can help you as a trader make better trading decisions day in and day out. And so there’s a really great example of how these really predictive indicators update and help traders adapt to changing market conditions.

So starting out here, we have shares of Cummins and a really great example here again of daily price action. So each one of these candles is representing a full and complete trading day, and it’s right up against that price data over the past couple weeks, where we see that there is a black line and also a blue line there. So the black line that you’re seeing there, that is a very common technical indicator. This is actually a simple moving average, and in this case, it’s a ten day simple moving average. So what it does is it looks back over the previous ten days, it’ll add all those days together and then divide by ten. And what that does is smooth out the existing price action for us and let us know where market prices have already been over a given period of time, but traders need to be ahead of that next move in the market.

And so what we’re able to do is compare that black lagging moving average to this blue value, and for that number to get plotted and calculated for the trader each and every evening, this is where that technology of artificial neural networks is coming into play. So rather than just looking back at past prices and really just reconfiguring what’s already occurred in the market, this is where the underlying technology of artificial neural networks perform what’s called intermarket analysis.

So what it understands are other markets that are known to drive and influence the future price of Cummins. Now this can be things like the broader S&P 500, which we can see has had some trouble recently. But this can also be things like the dollar index, which has firmed up and also causes some problems sometimes with stocks, but there’s a lot more subtle relationships happening, right?

There’s relationships between broader ETF groups, there’s relationships between individual stocks, there’s relationships in big commodities, global interest rates. So this is how the software is able to really look at things globally, look at all of those markets that are driving and influencing your portfolio and those individual markets that you’re trading. And that what it does is it takes that information to actually generate price predictions. And that’s where artificial neural networks are exceptional, is taking in huge amounts of data and then generating highly accurate predictions.

But what we do is we take those price predictions and use them to construct these indicators. So rather than having lagging tools that really just reamalgamate what’s already occurred in the market, what we have is forward looking predictive tools that can help traders make better decisions with a very high level of accuracy.

So whenever we see that blue line crossing below the black line, in this case, not just in Cummins, but we’ve seen it pretty widespread in some very important places throughout the broader marketplace, well that informs you how the portfolio should shift. So again, once that blue line crosses below the black line, now we’ve gotten this move that’s gone lower, but we have these other shorter term predictive indicators that can help traders realize what’s going on and make the most of these opportunities.

So if we come to the very bottom of the chart here in Cummins, you see that you have this bar that goes from red to green, back to green, and what this is, is another one of these predictive indicators, but tuned to solve a different problem. And this problem is short-term strength or weakness over the next 48 hours. It’s a very short term within that overall trend. And you see how this works when that neural index is bearish and the overall trend is down. Well, you see that momentum really picks up to the downside.

Now that neural index gets bullish and you see we had that it really boost in the market early on in the week, but is the trend up? Well look at the distance between that blue line and the black line. It’s telling you average prices are still well below that simple moving average and you would therefore want to remain short. And so again, that tool can really help you understand that, okay, well there’s some strength coming into the market, but is that strength you want to buy or actually strength you should use to go ahead and set a short position.

Now, in addition to, you got your predicted moving average, your neural index, to really round out the entirety of these short-term forecasts, you’re also provided a predicted high and a predicted low. So these are intraday levels that traders can be aware of and this is very relevant. So as we look at Cumins and we look at this market moving forward, we can take a look at all of those predicted highs and lows against the actual market data before it occurred.

So here’s the prediction for today. Here’s all these past predictions, and this is why this is so important, is to understand that get those entries on early, go ahead and short the market, take profits on shorts. In this scenario, you see it comes back to your entry, but still, if you have an order, even at the predicted high, you’ll get filled at the limit really much at the open and keep expressing that short position.

So you could see early back here, it’s telling you that strength is likely to come in. But as you’re able to take these tools, especially with the help of things like the vantage point and Telescan, you can see, well how strong is this market? Should that rally that we got early in the week really be a bullish opportunity or should we understand that this is really not bullish at all and the broader markets have shifted to the bearish side?

Lockheed Martin ($LMT)

Lockheed Martin ($LMT)

Here’s Lockheed Martin. I wanted to bring this in just to really highlight the short term indicators. And what we’ll notice is, the blue line below the black line. Now the market has run sideways. Not much of a move, but this is more than a week here. This is going back one, two, three, four, five, six, seven, onto the eighth trading day here. And so what you’ve seen is that even in some of these areas, in the defense areas as far as the stock market, still showing crossovers to the downside. Now you see that neural index that goes from bullish to bearish back to bullish because again, this is only a forty-eight hour forecast and the market is running sideways with no clear direction.

But then, we can bring in those predicted highs and lows and again, get the overall forecast, right? It’s not just one thing here. And understand that the software’s telling you, look up towards these predicted highs. This is an area to go ahead and set short positions, because clearly that directional bias should be set to the short side. And you see about five entries at the very top side of this range. And now we’re seeing a lot of weakness come into the marketplace.

And again, we highlighted things like Arista networks last week is seeing strong markets, still highlighting weakness. And when you combine that with all the things that are in downtrends and have been in downtrends and have been in downtrend for a couple weeks already, like KeyCorp, we may have some problems with the S&P 500 and things like this.

TESLA ($TSLA)

TESLA ($TSLA)

So here’s shares of Tesla. And again, just the past couple of weeks, very clear, you see this crossover, the downside blue line, well below the black line, you get one blip here in the neural index bullish, but you’ve pretty much had, let’s see, one, two, three, four, five, six, seven, eight… Eight days of downtrend, seven of the eight days with that neural index bearish and your predicted highs and lows to let you know, hey, if you want to go ahead and short Tesla, what price levels should you be looking to go ahead and do that?

And you see that we get these predicted highs up here, we get another gap up here. But overall, the trend, very much to the downside. And you getting that information that says, look, this is very skewed to the downside. All your short term indicators keep updating to the downside, your predicted highs and lows keep moving to the downside. And what happens is when you’re doing your analysis with this tool and able to see all these fresh crossover, see how much of the market is in downtrend or uptrend, it can make you a much better index trader, right?

Understanding how strong or weak that S&P or NASDAQ happens to be. And that can really help you hedge or modify your current positions.

WalMart ($WMT)

WalMart ($WMT)

Now here’s Walmart. And so again, just highlighting that there’s some really important areas in the market where we’ve seen weakness and not just weakness today or last week, which we covered, but coming through, coming in across the board. Here, Walmart stores, you have this crossover, the downside, neural index gets bullish and we get our little blip in short term price action. But look at the distance between that predicted moving average and the actual moving average. I mean, this is about as clear as a downtrend as you can get. And again, a very important retail establishment in the market and a place that is going to have a lot of investors paying attention when it starts to fall off.

So here we have, again, a decline of about 4%, but again, more indicative of these very important markets and areas that are starting to turn lower. And so if you’re involved in the markets at all, this is very relevant information that can help you really adjust that portfolio and make money on the downside and certainly not get caught up on some of these really dangerous scenarios where we see markets reversing and heading lower.

Keycorp ($KEY)

Here’s KeyCorp, and this is one of the first markets we looked at last week, just highlighting the broad base weakness that we’ve seen and some places a little bit more advanced than others. And I just wanted to go ahead and highlight the updated forecast here. So we update these every about four or five trading days and move over to the next five trading days. And here in KeyCorp, it’s highlighting that, okay, well this is a very weak market going into this next week, but you’re getting that short term strength from the neural index.

So again, warning you that hey, you may get some higher highs over the next subsequent forty-eight hour periods, but very clearly nothing much has shifted here. If you’ve gotten some short positions on early, well, it’s a great opportunity to potentially add to those positions and keep expressing that bearishness in an area where things are working out.

So shares of KeyCorp, we’ve gotten a continuation of the decline. This is one of these things where we’ve started to see this weakness in financials and then it started to play out in bigger areas like JP Morgan and all this, but shares off about 10% in just the past eighteen trading days. And again, very small share position there. So you could certainly get a larger position in a couple hundred shares, but highlighting the magnitude of these moves, right? 10% in just the past, really not even a month on the calendar here, and things aren’t looking any better out there.

So if you have things in the portfolio that are positioned to the long side, there’s some issues out there and certainly some adjustments, even making over the past couple weeks, it would do you some really help here to get you out of the way as some of these problems.

SnapOn Tools($SNA)

SnapOn Tools($SNA)

Lastly here, Snap On, and again, this is just one of these markets that we brought through with some of these early crossovers. Just want to update these forecasts. So it’s quite obvious we got that big strength in the early part of the week and the market’s responding to inflation reports. But that’s the whole thing, is everyone’s responding to inflation reports in this tiny little window. And what you don’t want to lose is the, really the bigger picture here. And here we see Snap On, a very clear crossover, a lot of separation. And so that neural index gets bullish and letting you know, hey, higher highs over the next forty-eight hours. But it isn’t highlighting that this is an opportunity to buy. And not only has it not been an opportunity to buy and actually winds up being a really great opportunity to get filled to continue that campaign of shorting the market and taking profits on shorts.

So again, Snap On, here again, early days, but this is why over the past couple weeks it’s like, okay, well what’s shifted? What are the indicators picking up on? And how are they skewing bullish or bearish with the help of those predictive indicators, pushing them more and more in the direction of where markets are likely to move. So here again, we have a lot of these things clueing lower very early here, right? Share’s only off about 3%, but we’re seeing things start to pick up and this is exactly where you don’t want to be on the wrong side of things.

And if anything can gear up at much lower prices, wait for these crossovers to move to the upside, and then there’ll be much easier trading to take advantage of new opportunities that are opening up. So again, just a really exciting time in the markets. We’re seeing a lot of market movement, but if you don’t really have the right tools, this can seem extremely confusing as far as what’s going on out there, more broadly in the marketplace and where the best places to go ahead and position yourself are. So it’s a really great time to go ahead and get those live demonstrations, learn more about how this technology can help you. Now things are really moving forward as far as technical analysis. So once again, this has been our Hot Stocks Outlook for December 16th, 2022. Thank you all for watching. Best of luck out there and bye for now.



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Insider Ownership Details Of Bios Equity Partners

A venture capital firm called Bios Partners seeks for and develops advanced biotech in underserved and untapped areas in the United States.

Bios Equity Partners II, L.P. Reports on Insider Ownership

According to ownership reports from SEC filings, Lantern Pharma Inc (LTRN), Cognition Therapeutics Inc (CGTX), and IN8bio Inc (INAB) are the three firms that Bios Equity Partners Ii, Lp is the reporting owner of.

What is Lantern Pharma Inc?

A biotechnology business in the clinical stages is Lantern Pharma Inc. Its main goal is to speed up the drug formulation process while also identifying the patients who will profit from targeted oncology therapy by utilising artificial intelligence (A.I. ), machine learning, and genetic data. Four approved drugs and an Antibody Drug Conjugate (ADC) programme targeting eight therapeutic targets are both part of the company’s development pipeline. Its artificial intelligence (AI) platform, RADR, utilises big data analytics and machine learning to quickly uncover biologically active genomic petitions correlated to drug action and then recognise the cancer patients we assume may profit most from our substances. RADR contains over 18 billion data points.

Who is Lantern Pharma Inc.’s top executives?

Lantern Pharma Inc. is 10% owned by Bios Equity Partners II, Lp. Fletcher Aaron G.l., who owns 10% of Lantern Pharma Inc., as well as Bios Capital Management, Lp and Bios Advisors Gp, Llc, each own 10% of the company.

Lantern Pharma Inc (LTRN) Insider Trades Summary

Bios Equity Partners Ii, Lp has not engaged in any insider trading in Lantern Pharma Inc. across the past 18 months (LTRN). A net sell of 356,445 units by Bios Fund I, Lp and a net selling of 356,445 units by Leslie W. Kreis are two further notable insider transactions involving Lantern Pharma Inc (LTRN).

In conclusion, insiders traded 700,000 shares of Lantern Pharma Inc (LTRN) over the course of the last three months while also purchasing 0 shares, resulting in a net sell of 700,000 shares. Insiders released 712,890 shares of Lantern Pharma Inc (LTRN) over the course of the previous 18 months while acquiring 0 shares, for a net sell of 712,890 shares.

The Insider Trading Tracker table contains the complete history of insider trading for Lantern Pharma Inc (LTRN).

Current Portfolio Companies

  • A commercial-stage medical device startup, 410 Medical is committed to creating cutting-edge devices that help front-line healthcare professionals offer better care for very ill patients.
  • A medical device firm called Abilitech Medical develops cutting-edge products that enable persons with upper-limb neuromuscular disorders to function on their own.
  • A clinical-stage pharmaceutical business called Actuate is dedicated to the creation and marketing of cutting-edge treatments for serious inflammatory and cancerous conditions.
  • Azitra is a clinical-stage medical dermatological startup that uses cutting-edge genetic engineering and the power of the microbiome to heal skin diseases.
  • Cognition Therapeutics (NASDAQ: CGTX) is a clinical-stage biotechnology firm with a portfolio of disease-modifying specific molecular therapeutic candidates that is focused on synapse health and repair in neurodegenerative illnesses.
  • The Novartis business Encore Vision is in the trial stages of researching innovative small molecule treatments for the applied topically of presbyopia, a disorder in which vision deteriorates with age.
  • A medical business called i-Lumen Scientific, Inc. is creating a transpalpebral microcurrent electrotherapy tool of the future that is non-invasive and intended to treat people with visual field loss brought on by retinal degeneration.
  • The goal of Immune System Programming (ISPTM), a ground-breaking technology platform developed by Immusoft Corporation (immusoft.com), is to treat diseases. ISPTM modifies a patient’s B cells and directs the cells to produce gene-encoded medications (biologics) for rare genetic diseases.
  • A clinical-stage immune-oncology firm called IN8bio (NASDAQ: INAB) is dedicated to provide an innovative, over-the-counter cell therapy to treat cancer.
  • A clinical-stage biopharmaceutical business called Lantern Pharma (NASDAQ: LTRN) innovates the repurposing, revival, and advancement of precision therapies in oncology. In order to identify patients who are more likely to react to our portfolio of cancer therapies, Lantern uses advancements in machine learning, genetics, and artificial intelligence.
  • Lung Therapeutics is a biopharmaceutical firm in the early stages that was established to take advantage of decades of groundbreaking research in orphan lung areas where there are unfulfilled medical needs.
  • ONL Therapeutics is a firm in the trial stages with a revolutionary strategy for maintaining eyesight and reversing vision loss brought on by a variety of retinal diseases. The business is developing ground-breaking technology that will stop the activation of the Fas pathway from killing important retinal cells.
  • A vast pipeline of uncommon hereditary blindness disorders are being addressed by Opus Genetics, a preclinical startup that is investigating ocular AAV gene treatments.
  • An advanced macrophage cell therapy system is being developed by SIRPant Immunotherapeutics, a preclinical immuno-oncology business, for the cure of different types of solid tumors by facilitating patient immune response activation.
  • A preclinical biotechnology startup called Stream Biomedical is dedicated to using its modified perlecan domain V to create ground-breaking cures for severe neurodegenerative diseases like stroke.
  • Lead prospects for Taysha’s large AAV gene therapy pipeline include treatments for the conditions GM2 gangliosidosis, Rett syndrome, including CLN1.
  • A preclinical biotechnology startup called Trefoil Therapeutics is working to create 1st pharmaceutical treatments for significant corneal endothelium illnesses and epithelial abnormalities using its altered fibroblast growth factor-1 protein (eFGF-1) technology company.

Spiking Race to 100

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Unlimited Currency and a Society at the Precipice of Destruction – Daily Reckoning Australia

In today’s Daily Reckoning Australia, as we end the year, we’ve been documenting and anticipating the demise of The Establishment. Its fiat currency economy and fake news media seek to divide, misguide, and impoverish the people. However, recent events show that their system is running out of track quickly. Its desperation to salvage the economy with rate rises and the release of The Twitter Files will crush its system. We invite you to embrace a new era of a fairer economy and good faith!

One faces a choice when they lie or deceive:

Own up and pay the price now.

Or delay by covering up or doubling down, thereby upping the ante and facing a stiffer penalty when caught.

Human nature shows that people are more likely to own up to a small lie as the price is modest. It’s also more likely that there’s reconciliation in such cases. But a big lie will likely see the need to cover up or double down. After all, the size of your lie is likely correlated to the potential gain you receive if it succeeds. In turn, there is a greater temptation to seize and keep the forbidden fruit.

Today, I want to provoke you to think about something that may blow your mind.

What would you do if you had an infinite amount of money?

Buy a never-ending packet of Tim Tams?

Those who lived in the 1990s would remember this classic ad!

Alright…I’ll be serious.

The correct answer is to buy favour from the people by promising them all sorts of goodies, choose who the people elect to power to change the rules, and eliminate opposition through bribery or eradicating dissenters.

Sounds far-fetched?

I’m sure most of you’d have more sensible ideas…or at least I hope so!

The brutal truth is this is the world we live in now — thanks to the fiat currency system.

Most readers are somewhat familiar with how this system works. Central banks lend to governments to spend while it seeks to maintain the stability of the system by controlling the currency supply and setting the interest rate.

It worked for several decades or appeared as if it had.

Booms and busts, heady bull markets and debilitating crashes.

It’s a cycle of borrowing and spending until the lender asks for payment, whereby the world faces pandemonium. The government comes to the rescue, borrowing from the central banks to ‘save the day’.

Society takes this cycle for granted and does the same thing over again, except for the unfortunate individual who’s screwed over. Then they’re sitting ducks to their lenders, the perfect prey to an unscrupulous politician or bureaucrat who promises them welfare payments in return for their vote.

And so it goes.

He who controls the money writes the rules

Mayer Amschel Rothschild is reputed to have said the infamous quote:

Give me control of a nation’s money and I care not who makes its laws.

Think this way; money can buy resources and power.

In a democratic society, people think they elect their leader and representatives. However, those who join a political party in Australia will soon realise that they select the candidates that appear on the ballot paper. And the successful candidates are usually a result of corporations and lobby group donations.

In short, it’s not your vote that counts; it’s money.

It gets more sinister than that.

If you’ve enough money, you can get your representatives into power, change the rules, and ensure you never lose in an election.

Don’t believe me?

Look at the US 2020 election and the massive money trail!

There were the infamous drop-boxes to collect mail-in ballots, sponsored by Facebook’s Mark Zuckerberg and the Center for Tech and Civic Life

Incumbent state secretaries and district attorneys who turned a blind eye or even launched legal action against people raising concerns over the validity of elections, all of them beneficiaries of George Soros’ Open Society Foundations…

And voting machines that many claimed didn’t count or record votes properly, owned and operated by hedge funds and other financial institutions.

What was deemed a ‘conspiracy theory’ and ‘disinformation’ in 2020 didn’t seem so ridiculous in the 2022 midterm elections.

There’re many Western democracies where the incumbent governments are put into power under the same means.

He who controls the money controls reality

Until recently, it’s easy to get away with buying your government and flipping the finger at the voters.

Most wouldn’t even be aware of it. And you can quash dissenters by painting them as ‘election deniers’ and a ‘threat to our democracy’.

Buy up the media and influential members of society to repeat the same narrative and mission accomplished. After all, circular citation across several media outlets creates the illusion of the accepted official narrative.

The matter is settled.

How many of you are aware that almost 90% of the US media companies are owned by a handful of corporations?

In Australia, it’s probably worse. Packer, Murdoch, or Holmes à Court…you soon realise that it’s a very small club weaving the illusion of diversity.

Take the key issues of the day — economic depression, the pandemic, climate change, racism, sexism, the war in Ukraine…they tell you what to think.

That’s because they build their wealth on our ignorance and division.

The day of reckoning

While those who gave us fake money and peddled fake news think they can get away with it, the reality is starting to catch up to them in a confluence of events.

The fiat currency system is groaning under a staggering amount of debt that’ll implode as the central banks seek to rein it in by raising interest rates. The US Federal Reserve announced another 0.5% rate rise on Wednesday afternoon as it seeks desperately to bring down inflation.

However, this rate rise adds one more straw to the camel that’s about to collapse. The markets can sense it, and hence the bearish sentiment has returned.

As for the false sense of reality that governments, media, and other influential bodies seek to paint, that façade is falling apart with Elon Musk releasing the ‘Twitter Files’ (courtesy of Matt Taibbi and Bari Weiss) that highlight nefarious activities by key figures of such organisations.

There’s more to come, with many whose reputation will suffer irreparable damage, and deservedly so.

They are staring at their day of reckoning.

Stay afloat with real money and real news

The antidote to fiat currency is real money — gold, to be precise.

Central banks have scrambled to buy more of this recently, even as they’d been ridiculing and disparaging this metal for ages — the true embodiment of hypocrisy.

Gold is finally showing signs of a bull run. 2023 could be the year.

Hopes have faded for a soft landing in the global economy as smart investors brace for a crash.

The US dollar is going to lose its shine, leaving gold with virtually no competitors as a place of refuge.

The days of corrupt governments, professional bodies, and the fake news media allowed to cheat, steal, and kill are numbered. They see the writing on the wall and hence the censoring, threats, and ad hominem attacks.

None of us at Fat Tail Investment Research are sitting by idly.

The Daily Reckoning Australia has been documenting the events and crimes as we gleefully watch the Establishment’s demise.

Join us in the coming era of a better society where people can once again interact in good faith.

We want to get you the most prepared for 2023.

Regards,

Brian Chu,
Editor, The Daily Reckoning Australia



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Spinning Top Candlestick Pattern – Get All The Basics

Have you ever wondered in trading what exactly Spinning Top Candlestick represents? Why are more and more traders around the world interested in this, and why is this candlestick pattern crucial for more successful results?

First of all, the Spinning Top Candlestick pattern has become very popular recently thanks to its great help to traders to find certain information in the market as effectively as possible and achieve better success.

If you are interested in the spinning top candlestick pattern meaning, what it really is, and how useful it is not only in Forex trading but also in other markets, let’s find out by giving a detailed definition and explanation of all the basics, shall we?

Definition of Spinning Top Candlestick Pattern 

Spinning Top Candlestick refers to a specific candlestick pattern representing indecision about the assets’ direction in the days to come. In other words, it represents a situation in which both sellers and buyers are able to gain the upper hand. This formation signals indecision with the following trend direction. 

It includes a real short body focused vertically in the middle of long lower and upper shadows. The real body should be small in this case, indicating the main difference between close and open prices. 

The Spinning Top Candlestick pattern is formed once buyers force the price higher in the course of a specific period and sellers force it down in the meantime. Nonetheless, the closing price ends very near the opening price.

Spinning tops signal a likely price reversal.

Once the strong price declines or advances, spinning tops could signal a probable price reversal. That’s a potential situation in which the candle that accompanies confirms. Even though the two prices stick together in all situations, a spinning top includes close below and above the open.

So, since both buyers and sellers push the price without the ability to keep it, the Spinning Top Candlestick pattern manifests that numerous sideways movements are able to follow. It also expresses indecision. 

What does the Spinning Top Candlestick Pattern show? 

As mentioned above, the Spinning Top Candlestick pattern includes the spinning tops representing an asset’s indecision. In this case, both long upper and lower shadows specify there are no price changes in the middle of the open one and the close one.

There are two terms that you need to be aware of regarding the Spinning Top Candlestick pattern:

  • Bulls – they send the price intensely higher
  • Bears – they send the price intensely lower, where in the end, the price closes near where it was open.

In this example, we see indecision, which signals more sideways movement. It’s especially in case the spinning top happens in a chronic range. In addition to that, this could also be an indicator of a probable price reversal if the price declines or advances. 

Signaling a notable trend change 

There are some situations where spinning tops could signal a notable trend change. The bulls lose control, and the trend reversal happens as a result of the spinning top occurring at the top of an uptrend. 

In the same fashion, a spinning top at the bottom of the downtrend usually prompts that bears no longer have their control, leaving it all to the bulls. With the right confirmation, traders could easily understand what the spinning top indicates. 

The confirmation and the spinning top 

It’s crucial to understand regarding the Spinning Top Candlestick that the confirmation results from the following candle. In case a trader believes a spinning top right following an uptrend is able to lead to a reversal to the drawback, the candle next to the spinning top could witness a drop in prices.

On the contrary, the reversal still needs to be confirmed, so traders have to wait for another valid trade signal. Remember that when the range continues, and indecision is still widespread, it’s a sign that a spinning top is happening within a range. The following candle should confirm, i.e., staying within the formed sideways channel. 

Doji and spinning top candlestick pattern – what do you need to know?

Doji and spinning top candlestick pattern - what do you need to know?

Suppose you were wondering what the difference and similarities between the Doji and spinning top candlestick patterns are. In that case, it’s crucial to understand that both dojis and spinning tops represent indecision. However, in the Doji pattern, dogs are smaller. They have small lower and upper shadows and small real bodies in general.

Both Doji and spinning top candlestick patterns happen frequently. In some cases, they’re both used to alert the reversal after a solid price move. Also, both of these patterns depend on confirmation. Remember that a strong move after the Doji or the forex candlestick patterns spinning top shows a new potential price direction.

However, what is the main difference between the Spinning Top and Doji patterns?

The main difference between a Doji and a top-spinning candlestick

Both patterns are part of much larger patterns, like star formations. Each pattern indicates equality in buying and selling pressures and neutrality in price. However, there are differences between Doji and spinning top candlesticks, especially in how numerous professional tech analysts interpret them. 

Regarding Doji candles, they look like a plus sign or a cross. It heavily depends on the shadows’ length. The main doji’s trait is a very narrow body, so open and close prices are nearly identical. The length of this candle’s lower and upper shadows determines the day’s high and low.

Once it is observed gapped above the past hollow candle, it shows a reversal in buying momentum. On the other hand, in case a Doji appears beneath a filled candle, it shows a downward trend reversal.

How are Spinning tops different? 

Spinning tops, even though they’re similar, have larger bodies where the close and the open are very near each other. The biggest difference in the middle of these patterns is that a spinning top, without exception, has longer legs on all sides. It shows a huge variance in the low and high.

Besides that, the spinning top shows the current trend weakness. However, it’s not exactly a reversal. If traders pot a spinning top, they should find other indicators to decide the context and see if they’re indicative of trend reversal or neutrality. 

One of these indicators is Bollinger Bands, a technical analyst’s tool defined by a trendiness set plotting two deviation standards both positively and negatively away from the SMA, the simple moving average’s security price. However, they could be set to users’ preferences. 

How to recognize a bullish spinning top candlestick pattern?

How to recognize a bullish spinning top candlestick pattern?

It’s crucial to know that there are two variations of the Spinning Top Candlestick pattern: 

  • The bullish spinning top candlestick that’s green in color
  • The bearish spinning top is red.

The bullish spinning top candlestick happens once the closing price exceeds the opening price. On the other hand, the bearish spinning top candlestick pattern happens once the opening price is much higher than the closing price. 

The black spinning top candlestick pattern and the candlestick double spinning top pattern

The black spinning top candlestick pattern occurs once the downward price trend. However, the breakout upward. In this case, the pattern is a reversal. The breakout happens once the price closes below or above the top bottom of the candlestick. 

On the other hand, the candlestick double-spinning top pattern refers to a continuation of the previous trend.

How to trade the spinning top candlestick pattern? 

Traders can choose some of the few possible ways of trading when the spinning top candlestick pattern occurs. The primary step is the confirmation of the signal. The majority of professional traders utilize technical indicators that confirm that they believe that the signalization of the spinning top is occurring. 

Due to these indicators, they’re able to have more information and insight into the price trends. For instance, if a trader is convinced that the spinning top of the downtrend’s bottom can indicate the upcoming reversal, a trader can test the signal with the stochastic oscillator. 

In this manner, traders could predict all the price movements since they show the market’s momentum and speed in a particular timeframe. Traders could go long (buy) in the case of the upcoming reversal confirmation. You can utilize derivatives like CFDs or spread bets if they want to trade when they spot the spinning top candlestick pattern. 

Keep in mind that traders don’t own underlying assets with derivatives. They’re speculating on their price movements. It means that traders could trade falling and rising markets in order to take action after bearish and bullish spinning tops. 

Simple steps for trading when the spinning top candlestick pattern occurs are: 

  1. Create your trading account or log in to the existing ones
  2. Enter the right position size for yours
  3. Pick on the deal ticket either the “buy” or “sell” option
  4. Confirm the trade in the end.

Keep in mind that with this type of forex spinning candlestick pattern, you can practice trading with a proper demo account where you can open and close positions risk-free. 

Comment devenir trader indépendant.

Key Takeaways

  • The Spinning Top Candlestick refers to a formation that shows indecision with the succeeding trend direction.
  • It is very similar to the Doji candlestick pattern.
  • A spinning top in this candlestick is known as a neutral pattern, even though numerous of them end in reversed positions.



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Episode #459: Louis-Vincent Gave, Gavekal – Investment Themes for 2023 – Meb Faber Research – Stock Market and Investing Blog


Episode #459: Louis-Vincent Gave, Gavekal – Investment Themes for 2023

 

Guest: Louis-Vincent Gave is the Founding Partner and CEO of GaveKal, a leading independent provider of macro research, and GaveKal Capital, a global asset manager.

Date Recorded: 12/7/2022     |     Run-Time: 55:13


Summary: In today’s episode, Louis kicks it off with the biggest topic in global markets today – the Xi Pivot & reopening of China. He shares his outlook for how it may affect global supply chains, commodity markets, and financial markets. He covers the case for the emerging markets, why he isn’t bullish on the US, and why it may be time to rethink your portfolio construction as we head into a new year.


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Comments or suggestions? Interested in sponsoring an episode? Email us [email protected]

Links from the Episode:

  • 0:39 – Sponsor: Masterworks
  • 1:22 – Intro
  • 2:18 – Welcome to our guest, Louis-Vincent Gave
  • 3:34 – Brief overview of Gavekal Capital
  • 4:16 – The state of the global economy
  • 6:00 – Implications of recent protests in China and the Xi Pivot
  • 13:49 – Increasing attractiveness of emerging markets
  • 25:04 – The state of India’s equity markets
  • 28:36 – The harsh reality of US debt markets
  • 32:52 – Gavekal research piece with chart referenced
  • 35:57 – Parallels to Japan’s economic bubble and fallout in the 1980s
  • 38:42 – Broad allocation strategies for today’s inflationary environment
  • 43:15 – A view he holds that a vast majority of his peers do not
  • 45:32 – Eye-opening implications of inflation around the world and across time; Planet Money: Messi Economics
  • 46:24 – The Stay Rich Portfolio; Meb’s poll on safe money
  • 47:40 – His most memorable investment or position
  • 51:52 – Learn more about Louis; gavekal.com

 

Transcript:

Welcome Message: Welcome to “The Meb Faber Show” where the focus is on helping you grow and preserve your wealth. Join us as we discuss the craft of investing and uncover new and profitable ideas, all to help you grow wealthier and wiser. Better investing starts here.

 

Disclaimer: Meb Faber is the co-founder and chief investment officer at Cambria Investment Management. Due to industry regulations, he will not discuss any of Cambria’s funds on this podcast. All opinions expressed by podcast participants are solely their own opinions and do not reflect the opinion of Cambria Investment Management or its affiliates. For more information, visit cambriainvestments.com.

 

Sponsor Message: Goldman Sachs recently said the days of Tina there is no alternative are over. In fact, 88% of advisors surveyed by RIA Intel contend to increase portfolio allocation to alternatives over the next two years. I’m invested in alternatives myself, including with Masterworks a platform for investing in fine art. The last time inflation was this high from 1977 to 82. The art 100 index appreciated 130% versus 80% inflation, so check out Masterworks they’ve sold five paintings this year, one as recently as last month. I’ve been investing with them for years myself, and they’ve even had the CEO on the podcast. Sometimes paintings on Masterworks have even sold out in minutes, but you can get special access at masterworks.com/meb. That’s masterworks.com/meb see important Regulation A disclosures @masterworks.com/CD. Last time masterworks.com/meb.

 

Meb: Welcome podcast friends we got a great show as we wind down 2022. Our guest is Louis-Vincent Gave founding partner and CEO of Gavekal, a leading independent provider of macro research in Gavekal Capital a global asset manager. In today’s episode, Louis kicks it off with the biggest topic in global markets today, the chief pivot and reopening of China. He shares his outlook for how it may affect global supply chains, commodity markets, financial markets, he covers the case for emerging markets, why he isn’t bullish on the U.S., and why it may be time to rethink your portfolio construction as we head into a new year. Please enjoy this episode with Gavekal’s Louis-Vincent Gave. Louis, welcome to the show.

 

Louis-Vincent: Thank you very much. Thanks for having me. Good to meet you.

 

Meb: Where do we find you today?

 

Louis-Vincent: I’m on Vancouver Island. About 30 minutes north of Victoria.

 

Meb: I got to see your view out the window. I’m also looking out the window here is a beautiful SoCal day. It’s a little Pacific Northwesty you mentioned you’re a little bit interior, not Victoria waters a little colder. Where are you?

 

Louis-Vincent: Yeah, I’m on a place called Cobble Hill, right on the water as well. So we’re looking, I guess at the same ocean, but you’re probably right. It’s not exactly the same weather it’s dark and gray. Actually, I own a property that used to be owned 100 years ago by Al Capone. He used to run his whiskey from here because we’re right across from the San Juan Islands. So he would load up some small ships and bring whiskey over to the San Juan Islands that are obviously U.S. owned and put the whiskey on to bigger boats that would then go down to LA and San Francisco. I’m basically in the Bahamas of the days.

 

Meb: You find any Capone artifacts, any bottles of whiskey in the basement?

 

Louis-Vincent: No, I was hoping. No old guns, no bottles of whiskey, no hidden stashes of money. Nothing at all, no, been very disappointing. We should have had Ronaldo come and open the basement, but no, nothing like that.

 

Meb: So you spent a pretty good amount of time in Hong Kong as well. A lot of the team there. How do you kind of divvy up the travel these days?

 

Louis-Vincent: So our firm is based in Hong Kong, and I spend most of my career there. I’ve lived in Hong Kong more than I’ve lived anywhere in my life. As you point out Gavekal my company is headquartered in Hong Kong, we have an office in Beijing, we have an office in Singapore. So we’re primarily an Asian firm. Before COVID. I was sort of doing half and half obviously, during COVID. That was impossible. I did go back a few times and dealt with the quarantine and everything else. But since then, I’ve basically been mostly here. I’m starting to go back and forth again. I was just back in Hong Kong for three weeks. Just got back. And now I’m here.

 

Meb: All right. So I’ve been a long-time listener anytime I see you come across my podcast feed or get lucky to read one of your research reports, I jump at it. And I’ve always been a big fan. You certainly have a view that’s global, most U.S. investors, and this is institutions too they love to have the home country bias, as does everyone really, but you have a global perspective. So we’re going to talk about a lot today. And I’m going to let you choose where we begin, whether it’s U.S. or whether it’s China. We’re recording this mid-beginning of December 2022. What’s the world look like as we finish this year?

 

Louis-Vincent: I think the big story is China’s reopening, right? You have the second-largest economy in the world that’s been kept mothballed for three years. Now it’s reopening. And I think that begs a ton of questions. It’s how much pent-up demand is there going to be? How much supply chain dislocations are we going to face? What does the reopening of China tell us for the near-term political health of the country? I mean, there are so many different rabbit holes, we can go down. But for me, that’s the big change. And it’s all the more important change since we know that the U.S. economy is slowing down. If you look at most leading indicators, whether your ISM surveys, your yield curves, your OECD leading indicators, they’re all pointing to some kind of slowdown, same story in Europe, probably worse in Europe. Actually. We also know that each time Chinese growth has really accelerated in 2003, in 2008, in 2015, it sort of triggered a rebound in the global industrial cycle, China reopening is going to lead to a rebound. The question is how much, and is it going to be big enough to trigger a global rebound? That for me is a big question. So I think bottom line, we should start with China.

 

Meb: All right, so I think a lot of listeners investors say, Okay, well, we’ve seen this play before China looks like they’re going to start to reopen and they don’t they shut everything down. One of the different things seems to be an indicator of this last grouping has been the protests, is that something from a Western media perspective is legit and real? And is this causing a real pivot. Or is it something that, you know, is just going to get smashed down and go back to lockdowns?

 

Louis-Vincent: No, I think it is causing a real pivot. And here, that’s perhaps where there’s divergence between the western view of China and the reality on the ground. Most people in the Western world probably don’t realize this. But there are protests all the time in China. They’re not covered by CNN or CNBC or anybody, because the protests are typically about local issues, polluted water, or corrupt officials, or whatever else. So you have a sort of roadmap as to how the Chinese government deals with protests. And the roadmap is they give in as quickly as possible, what they do is they blame middle management. So they’ll fire the local mayor, fire the party official, and then they give in and they give in because fundamentally, the Chinese Communist Party owes its legitimacy from its ability to keep social stability.

 

Now, I know in the Western world, the view is, the Chinese Communist Party owes its legitimacy to its ability to deliver the economic goodies to deliver growth. But that’s actually not true. What the Chinese Communist Party prides itself on is maintaining social harmony, peace, etc. Partly because if you look at China’s own history, from basically 1850, till 1975, it was nothing but anarchy, hyperinflation, famines, foreign invasion, Civil War, it was the most miserable place to live for 125 years. So the bottom line there’s a huge premium to social stability in China massive premium. And I know that in the Western world, when we think Chinese protests, our minds immediately hark back to 1989, right, because those were very powerful images, the guy blocking the tanks the students getting shut down. These are powerful images.

 

So in our minds, we see this, when the protests broke out a couple of weeks ago, everybody thought, oh, my God there’s going to be another Tiananmen, they’re going to send the troops, they’re going to shoot down everybody in the streets. It’s going to be horrible. Not at all. Instead, what we’re seeing is, they’ve turned around, and they’re rapidly reopening, you had an editorial in the Beijing times last week highlighting that, look, when we shut down, it was the right thing to do, because COVID was very deadly, but COVID isn’t very deadly anymore. We’ve had now 5000 cases a day in Beijing for the past week, we’ve had zero deaths. So we can reopen COVID is no longer deadly. And that is now basically, the message being pushed out there.

 

And the only question now is how fast is the reopening going to happen. And what are the consequences? Now the good news is we sort of have a playbook. We’ve seen reopenings. In the U.S., we’ve seen reopenings in Europe, we’ve seen reopenings in Australia, and Brazil, wherever else. And you’ve sort of always seen the same thing, massive pent-up demand, but at the same time, and for me, that’s the big question is when you first reopen, everybody catches COVID. And it doesn’t mean you die, because actually, the death rate is really low. But everybody calls in sick. Do you remember a couple summers ago, when the U.S. reopened? It was the summer of the canceled flights. All the flights were canceled because the pilots were calling in sick because the stewardesses were calling in sick, do you remember you live in LA, you had like 100 ships waiting outside of LA because the dockers were calling in sick the truckers were calling in sick. You had massive supply chain dislocations everywhere, simply because people wouldn’t show up to work for two weeks. China’s now going to experience this. You have to imagine that the virus is going to run through the country, partly because that’s what the virus does. Partly because China is a very, very densely populated country.

 

The landmass of China is roughly the same as the U.S. but it’s four times the population and it’s like everybody lives along the east coast. So it’s super, super densely populated. So bottom line, I think if your business model, let’s say your Apple, and your business model is dependent on having 100,000 workers show up and live in dorms on top of each other, you’re going to have a tough three to six months, because those guys are going to be sick.

 

Meb: Yeah. So your best guess as you look to this, and culturally speaking, accounting for the differences is this something that you feel like China has really planned for? They’re like, all right, we’re going to stock up on materials. We know that this is coming at some point we’re going to prepare for this or is this something that’s just going to be a massive surge in consumer demand that overwhelms everything? Like, what’s the kind of implications that you think as far as markets and economies this is really going to have?

 

Louis-Vincent: I wish I knew. I wish I knew. I do think China was in the path of reopening, you saw Hong Kong already reopened, they already reduced the amount of quarantine to come into China. So it was on this path already. So I think that there was some level of planning. I do believe the demonstrations have brought everything forward and at an accelerated pace, but they were going in that direction anyway. Now, have they stockpiled commodities? Yes, I believe they have. Because if you look at the data, for me, one of the more interesting data points that nobody talks about is pre-COVID, China was importing 4 billion a month worth of commodities from Russia, every month, post-COVID. These past few months, China was importing 11 billion. So almost three times as much. You would look at this and you think, how’s this happening when there’s no construction going on? When the real estate markets been tanking? When obviously, everybody’s stuck at home. It has to be stockpiling.

 

And in that regards, it’s interesting that as China reopens I along with a lot of people expected energy prices to rally hard. It’s like China’s consuming a million and a half barrels less than it otherwise would. But it’s not happening. So on the commodities front, I think that they have stockpiled. But here’s the other question. In the U.S. when people came out of lockdowns, they found out that mortgage rates were 100 basis point below where they were when they’d gone into lockdown. They found out that for the same monthly car payment, instead of getting a Toyota, you could get a BMW or you could get a second car. And everybody did that. It’s like, oh, for the same monthly payments, I can get 50% more house, oh, I’ll upgrade my house. And then everything that goes along with it, I need to buy a new fridge, I need to buy a new oven, then you find out like supply chain dislocations all over the shop. I highlight this because while everywhere in the world mortgage rates have just gone up 200, 300, 400 basis points in China in the past 12 months have gone down 150 basis points.

 

So now people are going to come out of lockdown. And they’re going to find out that oh, my car payment is so much cheaper. I can afford two cars instead of one. Or I can afford 50% more apartment. So the big question is, are they going to do that? Because, yes, they might have stockpiled commodities, but they didn’t stockpile Toyota cars. They didn’t stockpile ovens and fridges. Nobody does that. So if at the same time, the Toyota factory in China, or the Honda factory in China doesn’t get delivered gearbox because the guys at the gearbox factory all have COVID, then of course, you can’t deliver a car. If you have a car without a gearbox, you have a paperweight. And so I think the potential for supply chain dislocation on the consumer goods side is quite high. In essence, why should we expect China to have a different experience than what we had? That’d be my question. When I say we, I mean, France or the U.S. or most of the western world, I think as China reopens, you’re going to get the increase in demand on the one side, and the supply chain dislocations on the other. So it’s going to be potentially the last COVID-linked inflationary shock to the system.

 

Meb: And so as we started to think about China and assets in a portfolio, we tweet a lot about emerging markets. But China in particular being the elephant of emerging markets, you know, the average U.S. investor, if you look at I think global market cap emerging markets is let’s call it 13% ish depends on if you do float-adjusted or whatever, but the average American has about 2%. I think Goldman says in emerging markets, so way underweight in general, but China and particularly on the equity side, if you look at the valuations, it’s either at or near the cheapest it’s ever been going back 30 plus years the market going down 60% has a way of causing that to happen, of course, who are the winners and losers? As we look out Chinese stocks, they look good to you they risky, as we look around the implications of this, what’s the impact?

 

Louis-Vincent: I’d add one more thing. Two months ago, I was doing call after call with clients who were asking, Is China uninvestable, which is of course what you ask before it falls 60%. So I think there’s been like, everybody’s puked out China and there was a sort of cathartic moment with the people’s Congress when they took out Hu Jintao and very publicly humiliated him and Xi Jinping basically monopolized all political power. Everybody decided all right I’m out. For me. That was the final puke. And since then it’s been good news after good news. But you know the luck. The bottom line is China’s reopening. How do you play that you buy China, I mean, let’s not beat around the bush. It’s undervalued, it’s under-owned, and you have a positive catalyst for growth, positive catalysts for earnings. And it has started to outperform. The beauty is it’s a liquid market, it’s decently big. There’s some fast-growing names in there. So that’s the obvious play. But to your point, China, it’s the second biggest economy in the world. And it’s the primary source of growth for most emerging markets. You look at the Indonesias the Thailands, the Saudi Arabias of this world, their growth are increasingly tied to what’s happening in China.

 

And so the fact that China is now rebounding is going to be a great boon for all these guys. Now, it’s also a very important market for Japan and for Europe, if you’re very reluctant to take risk, and you think, I can’t trust emerging market accounting, or this or that you can play through Japan or through Europe, I’ll just highlight one thing if we’d had this chat a year ago. And if I told you look over the coming year, you’re going to see the Fed be much more hawkish than anybody expects. They’re going to raise rates, 400 basis points, or 375. But whatever, while the markets expecting 150, so much more hawkish than anybody expects, number one, number two, the U.S. dollar, as a result is going to rebound very strongly, the DXY is going to go up 22% in six months, which it’s basically only done once before. And number three, China’s going to stay on lockdown, and a much harder lockdown than anybody expects for the next 12 months. If we thought that a year ago, we would have said, “Oh, my God, just avoid emerging markets. It’s going to be a bloodbath,” right? Tied to Fed, strong U.S. dollar, weak China. That was like a recipe for a massive faceplant.

 

Now, interestingly, in the past year, you look at whether on the bond side or the equity side markets like Indonesia, Brazil, South Africa, Mexico, India, they’ve all outperformed the U.S. bond and equity markets in spades. This is highly unusual, because emerging markets in general, they tend to be the redhead stepchildren of financial markets. When things go bad, they’re the first ones to get slapped. In Asia, where I’ve spent most of my career, you take a market like Indonesia, Indonesia is your typical market, you avoid each time there’s a sell-off, it always gets sold hard. And yet this year Indonesian bonds, you barely lose any money on them. And you actually make money on Indonesian equities. I highlight this because for me bear markets as unpleasant as they are out there for a reason. They’re there to transfer the leadership of one group of stock to the next. We’re in the midst of a bear market. It’s not fun. Nobody enjoys it. But while you’re in a bear market, what you need to do is try to look for where are you seeing outperformance? And today, one of the places you’re seeing clear outperformance in spite of massive macro headwinds is emerging markets.

 

Now, let’s fast forward to the coming year. What are going to be the trends next year? Number one, by far the biggest trend, China reopens massive, very important trend. Number two, I think there’s a good chance the Fed is basically done rising pretty soon, they might have one more rate hike and then maybe two, but that’s roughly it. Number three, the U.S. dollar has already started to roll over, identifying that the Fed is getting close to done, the U.S. dollar is rolling over. So those huge three headwinds to emerging markets are now turning into tailwinds because when the U.S. dollar is weak, that’s good for emerging markets. When the Fed doesn’t tighten, it’s good for emerging markets. And when China is booming, that’s good for emerging markets, emerging markets outperformed when they should have underperformed. So what are they going to do now? I think it’s the place to be emerging markets, the markets right now, if you just listen to them, it’s telling you this is the new bull markets. This is where you need to deploy capital. And to your point, everybody’s looking at it and be like, no, I’m not doing this. And Americans have like you point out 2% of their assets in emerging markets. So they’re going to miss that whole first massive leg in the bull market.

 

Meb: One last thing on emerging markets that I think is probably one of the reasons particularly the big institutions had a big pause, and individuals too was the entire Russian securities market becoming essentially paused or uninvestable. Russia is largely a rounding error compared to China, as far as size with these investing markets, even though like 95% of emerging market funds own Russian stocks, they look and say, wait a minute, this is a possible playbook for China, Taiwan. It’s hard to ever come up with odds but is that something that should be a serious concern from the investor standpoint is it likely unlikely consensus non-consensus what do you got?

 

Louis-Vincent: It should but perhaps not for the reason you think. So first, I don’t believe for a second China’s going to invade Taiwan. They can’t pull it off, mounting an amphibious operation of 100 miles of sea. Hitler when he controlled the whole of Europe didn’t even try to invade Britain, and that was just six miles of sea. Mounting and figures, operations is the hardest thing in military and Taiwan is a chain of mountains that fall into the sea. And when you look at the struggles that Russia is having to invade Ukraine, and that’s just sending tanks over fields of wheat, then forget that it’s like Taiwan isn’t going to happen. But the question is, nonetheless important, because it highlights the underlying theme of the day, which is deglobalization. When most people think of deglobalization. They think of the Apple supply chain or the Nike supply chain, and whether that moves back towards the U.S. The much more important deglobalization is the deglobalization of financial flows, the fact that Russians obviously can’t invest in anywhere, but Russia now.

 

And if you are a European investor, if you’re a U.S. investor, all of a sudden, you think, oh, maybe China is a dangerous place for me to deploy capital. But that knife cuts both ways. If you’re Chinese, and you look at this Russian invasion, if you’ve been a rich guy in China, for the past 20 years, each time you made money, you bought a house in Vancouver, or a house in Sydney, or a house in London, you redeployed capital in the Western world, because the greatest comparative advantage of the western world is the rule of law. Its property rights, it’s the fact that if I have a problem whether I’m black, brown, yellow, whether I’m Jewish, Muslim, Christian, Hindu, I go in front of a court of law, in Vancouver, in London, in New York, and I’m treated equally next to the next guy, right? It’s all flat. Except we’ve just added a little asterisk to this. We’ve said except if you’re Russian. If you’re Russian we can take all your stuff, we can take your football club, we can take your house in Saint Tropez, we can take your yachts, we can take your private jets, we can take your house in South Kensington. And we can do this without any court orders. Without any discussion in Parliament. We basically have the G7 world leaders get together over a weekend and they decide to do this.

 

Now, if you’re Chinese, you see this, you think, okay, except if you’re Russian today, it could be except if you’re Chinese tomorrow, this house in Vancouver that I bought on the premise that it was a safe house if in case things went wrong in China I could always move to Vancouver. Well, actually, this house isn’t what I think it was it is because if things do go bad, then it can get confiscated. And so following this Russian invasion, I think we’ve undermined the biggest when I say we I mean the Western world, our biggest comparative advantage, the rule of law and the sanctity of property rights, we’ve torn that up. I don’t think we realize it. When you live in the Western world, you don’t realize we’ve just done that. But from an emerging market, where you’re very attuned to these things. Because you’re always worried that the government is going to come and take your stuff. If you’re rich in China, if you’re rich in Saudi Arabia, you’re worried the government’s going to come and take your stuff. Look at what happened to the Saudi princes, when MBS got to power, right, they all got to be holed up in the Ritz Carlton and basically for a shakedown.

 

So when you come from an emerging market, always worried about this, and the Western world was always the place where you deploy capital. If you were Chinese, and you bought houses in Australia, or the UK, you didn’t do it because you thought this would have good returns, you did it for the safety of the capital, forget the returns, you didn’t care about the return on capital, you cared about the safety of capital. So we undermine that. And since we’ve undermined that, what’s happened, our bond markets have collapsed, bond yields have gone through the roof property is going down. And here you get to the crux of the matter, which is why I thought this deglobalization matters a lot more than people think, but perhaps for the wrong reasons. They’ve got it backwards. You take a country like the U.S., you take a country like my own France, you take the UK, these are countries that have run for 20 years, massive twin deficits, big trade deficits on the one hand, big budget deficits on the other, you need somebody to fund that. And the way we funded that was by selling assets to foreigners.

 

The biggest assets we sold were one government bonds and two real estates. And we sold it to the countries that had constant current account surpluses. The Saudi Arabias of this world, the Burhans the Qatars the Chinas the Bruneis, if you look around the world, most western democracies have big twin deficits. Most emerging markets have big twin surpluses. So we’ve lived in this odd world where poor countries are funding rich countries, and they were doing so because of the security of capital. Now, if you’re China, you think if you’re Chinese, I don’t want to buy any more Vancouver real estate. I don’t want to buy any more London or LA real estate. Now what you’re going to do is you’re going to buy your real estate in Singapore, you’re going to buy it in Dubai, which are really miniscule markets. So it’s going to be a lot of money going into a very, very small place. And for me, this deglobalization of finance is perhaps one of the explanations why emerging markets have outperformed this year when really they shouldn’t have is the savings are no longer going to flow from emerging markets to developed markets. They’re going to stay in emerging markets, begging the question of, okay, how is the U.S. going to fund twin deficits worth 7%, 8%, 9% percent of GDP. How is the UK going to do that? The answer is that they won’t. And so the currencies will have to fall.

 

Meb: So other than shorting Vancouver real estate, I heard you guys mention, India has been having a nice run of it lately in their equity market. They’re one of the most expensive markets that we track, most of the countries around the world we think are pretty reasonable too cheap to screaming cheap, the U.S. is not in that bucket, we think they’re still pretty expensive market cap weighted, but what story with India? Are they going to be a beneficiary or are they going to get hurt by the China reopening?

 

Louis-Vincent: I think in the short term, they get hurt. So first, look, India is always expensive. It’s been expensive, pretty much my entire career. It’s expensive, because it’s an exciting story, it’s an exciting story of a rising middle class of pretty good track record of local entrepreneurs and using capital relative to a lot of emerging markets, it’s got a lot going for it. Now, the one great new advantage for India is, in every cycle India, whenever oil prices rose too much, they would get crushed because they have to import so much of their energy. And so they’d have a deterioration in their current account balances, which would force the central banks to tighten, and you’d enter a bear market, something new is happening in India, in that they’re getting to pay for more and more of their energy in their own currency. They’re buying their oil from not only Russia but also Iran in Indian rupees. So that basically relieves a sort of Damocles sword from over their head or at least a sort of current account constraint that was always there. Having said that, I think one of the reason India’s done quite well, is that if you’re an EM manager, or if you’re a Pan Asian manager, it’s been the only good story this year, that and to some extent, Brazil, but you have some political uncertainty in Brazil.

 

So if you’re an EM manager, and you have to go pitch your clients, and you can’t say, well, where are you invested? You want to say India, because then you don’t get nasty questions. If you say, Oh, I’m overweight China, you get all sorts of nasty questions. Oh, but aren’t you worried about Taiwan being invaded, money being frozen, etc, etc. So, the way perhaps, you know, that swing games that kids have where one goes up, the other goes down, and it swings like this, to me, this is how China and India are, when foreign investors decide, can’t be in China, for whatever reason, the money all goes to India, all the EM money, but then when China rebounds, the money has to come from somewhere. And initially, it comes from India. So as you look at China reopening, I think the first adjustment will be every emerging market fund, every Pan Asian fund will have to sell India and buy China. So in the near term, China’s reopening is not great news for India. But I think once you pass that phase of portfolio readjustments which will probably take six to nine months, then India is fine, just like it’s not going to be a great six to nine months that’s it.

 

Meb: This episode is brought to you by Cambria, a global asset manager, unhappy with your portfolio’s performance this year with one of the worst starts ever for traditional U.S. stocks and bonds. Is there a better way? Cambria thinks so. Cambria provides investors with global market exposure and low costs differentiated quantitative-driven strategies like deep value and trend following. Join over 100,000 current Cambria investors today to learn more, email us at the following address [email protected]. Or if you’re a financial professional, check out the contact us page on our website and reach out to your local representative today. Investing involves risk including possible loss of capital past performance is not indicative of future results.

 

Let’s talk a little bit about the U.S. which I’ve heard you describe as for the better part of a while the cleanest dirtiest shirt, which is like my theme for the pandemic I feel like of my wardrobe. What does that mean, when we’re talking about the U.S. economy? I mean, the U.S. dollar is just romping and stopping the U.S. stock market has been the only place to be for a better part of a decade. Is that coming to an end? What do you see?

 

Louis-Vincent: I think it’s already come to an end. And I think it was Bruce Kovner of Caxton who said where he’s made the most money in his career is when everybody he talks to was telling him one thing, but the market was already telling him something else. And today to your point, the general perception out there partly because of the U.S. dollar strength is that the U.S. is the cleanest dirty shirt. It’s the only thing that can be seen in. Everything else, Europe has got potential energy crisis. China is uninvestable. By default, you’re left with the U.S. So the general perception is the U.S. is the place to be but meanwhile, when you look at the performance of markets again, you know you’ve made money in Brazil this year. You’ve made money in India, you’ve made money in Mexico, you’ve made money in Indonesia, there’s so many big markets that did fine. So the market is… everybody tells you oh U.S. is the cleanest dirty shirt. And meanwhile, it’s like well hold on stock market that’s down 20%. And the bond market that’s down 20% does not qualify as a clean, dirty shirt, it’s just a plain dirty shirt. It’s just dirty, and you shouldn’t be seen in it.

 

So the bottom line for me is, if you project yourself to the coming year, what’s going to be the big story, one is China reopening. So we’ve covered that. I think the second story for 2023 will be a lot of U.S. bankruptcies, during the years of easy money, you had a lot of stupid projects that got funded, and companies that are still to this day burning through cash. Now, the reality is, if by now you’re not in a positive cash flow as a business, if you’re not in positive cash flow when you’ve just had quite a few quarters of basically double-digit nominal GDP growth, plus 0% interest rates, if you can’t make money in that environment, that means you’re never going to make money. And in the coming year, investors are going to let you go. So you’re going to see a lot of bankruptcies in the U.S., you’re going to get into a bankruptcy cycle, which will mean wider corporate spreads.

 

And here for me, that’s if you want to be scared about something, for me, the story is pretty simple. In 2007, 2008, you had roughly 600 billion of triple B debt in the U.S., today, you have about 4 trillion of triple B debt. In the U.S., when you get to a recession, anywhere from a fifth to a quarter of that triple B debt typically gets derated to non-investment grade, now the non-investment grade market in the U.S., is around a trillion dollars. If you think that in the coming year through bankruptcies, you’re going to get another trillion added to that, it’s like who’s going to buy this because dead markets are extremely binary, if you’re managing an investment grade fund, if something gets downgraded to non-investment grade, you can no longer hold it. Now historically, what you would do is you would call your friendly broker at Goldman Sachs or your friendly broker at Morgan Stanley, and you say, hey, I need to get rid of this on my book, can you guys take this from me, and you know, Goldman would bid you I don’t know, 55 cents on the dollar. And you’d shout at your broker, but you’d have no choice. And that’s what investment banks did. Their value add was to provide liquidity to the market in times of stress, they can’t do that anymore, since 2008. That ability of them to bring liquidity into a stressed market has been regulated away from them.

 

So you’re going to enter into a period of corporate bond downgrades at a time when the corporate bond market has never been bigger, with no liquidity provider anymore. And this is very specific to the U.S. because you haven’t had that growth of corporate debt elsewhere in the world. So I think the view that the U.S. is the cleanest dirty shirt is going to be severely, severely challenged in the coming year. Because look, you’ve had, again, a massive increase in corporate debt in the U.S. And that’s very specific, again, to the U.S. And a lot of that debt needs to get repriced at much higher rates.

 

Meb: Yeah. As we look at sort of U.S. economy, I mean, obviously, the interest rates ripping up and looking at you have some of my favorite charts, if we can talk you into sharing some of these, we’ll put them in the show notes. Because you do a great job on laying this out with charts. I’m a visual person, but looking at a lot of your topics. As we look out to 2023. It feels like everyone’s obsessed with the Fed. Does Powell pivot, is the bear market over it seems to be that you’re… and I’m putting words in your mouth. But you would say that there’s going to be more pain, as far as it comes to that view of the world. Is that accurate?

 

Louis-Vincent: It is. And perhaps one of the slides you can share, I can bring it up if you want. But I have this table where I look at the top 10 market caps at the end of every decade, in the late ’70s, six of the top 10 market caps in the world were energy stocks late ’80s, eight out of 10 with Japanese stocks, late ’90s eight out of 10 were telecom and Internet stocks 2000s It was all about how China was going to take over the world. And obviously the past decade, it’s all been about how software eats the world and you need to be in U.S. tech, etc. 10 out of the top 10 companies are tech stocks today. This has been the theme now the interesting thing when I show this table to clients they say oh yeah, the ’70s, ’80s, ’90s, 2000s Those were bubbles. But today, that’s not a bubble. These guys generate great cash flows. They have quasi-monopoly situations, which gives them the ability to bully governments. It’s very different this time. There’s this belief to your point, everybody’s talking about the Fed pivot. Everybody you talk to says oh, well, I need to wait for the Fed to cut interest rates again.

 

And then I can go back to buying Amazon and go back to buying Tesla and go back to buying Facebook. As soon as that happens. Forget it. Forget it. That bubble has now imploded. The markets already moving on to something else to me sitting around waiting all day for the Fed to cut interest rates so I can buy Facebook again, makes about as much sense as being in Tokyo in 1992. And thinking oh, when is the BOJ going to cut so I can buy bank of Tokyo Mitsubishi again? You had some great rallies in Japan through the ’90s. And you know, you could trade those rallies, but you want to play the fundamental trends and not a lot of people made money, and even though you had big rallies, not a lot of people made money in Japan in the ’90s because structurally, you were in a bear market. Again, bear markets are there for a reason. We’re in a bear market, bear markets are there to change the leadership, the bear markets 2011, it allowed to change leadership from everything’s about China to everything’s about U.S. tech. For me, the bear markets we’re in now is telling us time to change the leadership.

 

And by the way, when the Fed cuts sure you’ll get a rally in Facebook and in Google and everything else. But it will mark the starting gun for the massive outperformance of emerging markets. From the moment the Fed cuts, the U.S. dollar will really faceplant. This is when it’ll become obvious to people that actually most of the growth in the world over the next decade is going to occur in emerging markets. And this is where you need to be. So the Fed pivot does matter. And I think as you get financial accidents in the U.S. in 2023, you will see that Fed pivot, but to me, it won’t be a sign of oh, let’s go back to the previous winners.

 

Meb: I mean, the illustration of Japan alone, we talked a lot about it on the show, not just because I like to ski in Japan and hopefully get to revisit this year after many years of not going and we’re getting a nice discount on the yen.

 

Louis-Vincent: Very nice discount.

 

Meb: Right. The example you give is so true. I mean, look at the ’80s I mean, it was 30 years on a total return basis before that market got its head back above water. I’ve been trying to tell investors, as much as I love stocks for the long run, it’s going to be a lot longer than you think.

 

Louis-Vincent: Well, so interestingly, in Japan, in the ’80s, a lot of the bubble was around real estate and of course, banks. If you actually strip out the banks from the index, when you got to 1989 10 of the top 10 banks in the world were Japanese. The Japanese banks alone with 25% of the world MSCI just the Japanese banks, Japan was 45% of the world MSCI. I highlight this because yes, once the bubble imploded, everything collapsed, etc. But if you strip out the banks from the index, actually, the index didn’t take 30 years to make a new high, it came back pretty quickly. Because that was really the sort of central point of the bubble, right? So I highlight this because in the U.S., I think where the bubble was in tech funding any business model that was pretended to be tech, the WeWorks, the Beyond Meats, the Pelotons, all this stuff, you strip that part out. And I think the U.S. will come back very fast. It’s just that tech is 30% of the benchmark now, but you strip that part out the rest because the rest of the U.S. will do okay. The one hurdle for the industrials etc. Now is the strong dollar as the strong dollar rolls over, there’s no reason the John Deere’s and the Caterpillars of this world can’t go on going on.

 

Meb: Well, you’re speaking right to the heart of a value investor. But we talk a lot about this, we say look, a lot of the times value investing is fine. And everyone focuses on the value part you’re buying cheap stocks, or you’re buying an asset. But equally as important to that entire strategy is you’re avoiding the really crazy expensive stuff. And the problem with market cap weighting historically has been there’s no tether to value. So when you do have these giant booms, the really expensive stuff goes nuts. So Japan in the ’80s, my favorite bubble U.S. late ’90s. So just avoiding that sitting that out means you hopefully get to survive another day. And we talk a lot about how we think, even within the U.S. right now value or just anything other than the junk at the top can be probably a totally fine place to be. But that’s one of the big weaknesses of market cap weighting. And historically why we say it’s fine, but not optimal for us.

 

Louis-Vincent: And by the way on this, I think the equal cap weighted has been beating the crap out of the market cap weighted right. And that’s in spite of the Apples outperformance if you did it ex Apple, it would really beat the pants out of it.

 

Meb: Yeah, you had a great quote where you were talking basically the era coming up is going to be the return to the mean investor, where you’re starting to have this reversion. As we look out, you had a great slide where you’re talking about various rugby players and how they complement each other Americans we can talk about basketball team point guard, center, or whatever it may be. As we think about, you know, portfolio characteristics. We’re going to probably print one of the worst traditional portfolio years ever for most stock and bond investors in the U.S. We did a poll, we said are you down on the year? And it’s like 90% said, yeah, and it’s like 90% of ETFs are down. And we look out into the future. So we got the China part in emerging markets. Anything else that we didn’t talk about that you think are interesting areas to plug into the portfolio or to avoid as well?

 

Louis-Vincent: Yeah, absolutely. So to your point, I think there’s fundamentally three ways to make money in markets. You either run a return to the mean strategy, you run a momentum strategy, or you run a carry trade strategy. When you put on a trade, it’s very important that you know what that guy is doing for it. To your point. It’s like putting a team together, right? You mentioned basketball. You don’t expect your point guard to be the highest rebounder on your team. You don’t expect your center to shoot a bunch of threes. I mean, if they do, it’s great. But that’s not their job. That’s not why you put them on the court in the first place. And so as you build your portfolio, I think it’s very important to know, okay, if I buy this, what am I buying it for? Is this a return to the mean trade, momentum trade, carry trade, so that you can judge if he’s doing their job or not? Again, you’re not going to judge the point guard on his ability to rebound. I highlight this because for most people, you bought government bonds for their antifragile characteristics, you bought them thinking, well, if my equity is down 20%, then my bonds will be up 10. So that’s their job. And that job has failed massively this year.

 

The big failure in most people’s portfolio, whether you’re a pension fund, an endowment, a private investor, etc, isn’t as much as equities went down 20%, that’s part of the model, I would say, you buy equities, you accept that you might be down 20%, the part that has failed is that bonds haven’t done their job. Now, the fascinating thing to me is that we should acknowledge this, it’d be like a point guard who can’t shoot free throws, who went 0 for 10 at the free throw line. If you’re the coach you’d sub him out, it’s okay, you know what you’re out. You’ve lost it, you don’t have it. But if you show up today, to whatever wealth management firm you want to show up to, they’re going to give you a nice questionnaire, and they’re going to say, oh, you’re a conservative investor. So we’ll put 60% in bond 40% in equity, oh, you’re an aggressive investor, we’ll do 60% in equity, 40% in bonds, and then you tell them hold on. This hasn’t worked for two years now. But people still manage money the same way. Because it’s like, well, it worked for 25 years. So hopefully it goes back to working. What if it never works again? What if bonds and equities are now positively correlated, because we’re now in a structurally inflationary environment, then you need to completely reconsider your portfolio construction.

 

And I don’t think people are doing that yet. I mean, again, you still go to the wealth advisory firms, you still get the same questionnaire you were getting two years ago, and you still get broadly the same asset allocation. And they’re just sitting there crossing their fingers that the past two years were an anomaly. What if it is the new normal? What if this is now the world we live in, then you need to find different assets that are anti-fragile, different assets that protect your equity downside.

 

Now, in an inflationary environment, you need to basically get assets that benefit from inflation, not get assets that get hurt by inflation, assets that benefit from inflation are, of course, commodities, it’s energy, it’s emerging markets, it’s all the things that actually did diversify your portfolio a year ago, and my portfolio, I’m loaded up with energy, I have so much energy, and it’s not been doing well these past few weeks. But I almost don’t care because I’ve other stuff that’s doing well, right now, most notably, all my China stuff, it’s ripping higher. So my China stuff is ripping higher, my energy stuff is doing badly. It’s okay if tomorrow, energy prices go through the roof, my China stuff will sell off, but my energy stuff will do well, again, what would you own bonds for OECD government bonds for? Who’s going to buy these from you at a higher price? For what reason? And why should portfolios still have 40%, 50% built around those? To me, those are the questions investors should be asking themselves.

 

Meb: Yeah, I mean, always like thinking back investors to why you own an asset is such a basic, but also critical insight to work through and thinking about what role they play, and not just assuming that. I mean, bonds are such a great example, if you study history for past 100-plus years, you know, bonds don’t always hedge when stocks do poorly, sometimes they do. But sometimes they show up to the Christmas party, they drink too much. And that’s that, sorry. That’s who you get your crazy cousin showing up this year. As we start to wind down, what’s the view you hold that say 75% plus to the vast majority of the professional investing world does not hold could be right now or it could just be all the time, anything coming to mind?

 

Louis-Vincent: The view I would hold right now that most people don’t hold is how, excuse my French, but how screwed as an asset class the OECD government bonds are and how they’ve benefited from constant inflows from emerging markets. And how that is now structurally finished. A view I hold very dearly is we’ve completely undermined in the Western world, our single biggest comparative advantage, you know what we talked about, and that this is going to be reflected in lower and lower asset prices, especially for the asset prices that are perceived to be safe i.e. bonds in real estate. I think these two asset classes are almost condemned asset classes in the Western world. And we did this to ourselves like this is what’s so infuriating, is we did this to ourselves.

 

So my firm belief, I guess, to sum it up is the assets you think are safe, are far less safe than you think they are and the assets that you think are unsafe, are probably much safer than you think they are. People’s perception of safety is completely wrong. And partly because people equate safety with volatility, and if you look at periods that have countries that have gone through inflation, if you had your money in real estate or in bonds in Argentina, or in Brazil when they had big inflation, or in Zimbabwe or South Africa or wherever else, you got cleaned out, if you held equities, you actually did okay. It was volatile. But over the course of the cycle, you still did okay. So I think the view I hold dearly is actually equities. Today, given the macro environment, equities are much safer than bonds.

 

Meb: There’s a couple comments one was, I listened to a good podcast this week called Messi Economics, but it was talking about the perspective was an Argentine reporter, and I think it was on NPR was the show note links listeners, where an Argentine reporter talked about her childhood in Argentina, and then also kind of overlaid the experience of the soccer player Messi and kind of a lot of lessons about inflation and just moving out of Argentina and the flight from massive inflation. It’s a really eye-opening, I think, for a lot of investors, particularly in the U.S. who haven’t even thought about inflation, even at all in 30-plus years, and the vast majority of investing managers who are managing money today have never really experienced an inflationary environment. If you do, you’re probably 70. And no one’s listening to you anymore anyway. So you’re out playing golf, but we did a post during the pandemic called the Stay Rich Portfolio. And I love to do polls on Twitter to ask people questions, and just to kind of pro-sentiment. One of them is like, what do you do with your safe money? And everyone the assumption is T-bills or bonds, right? And we said, you hit on the examples, so accurate, which is people look at that on a nominal and volatility basis.

 

But after inflation, we say how much do you think T-bills or bonds have declined in the past on a real drawdown basis? Most people say like zero to 10%, few crazy, say 10 to 20, you know, and the answer is over 50, right? And so you can look at, you go through a thought experiment. And what we did is we looked at a global portfolio of global stocks, global real assets, and bonds, and then you mix that in with some cash. And you can’t say prove in our world, but you demonstrate, historically speaking, that’s actually a safer, safe money portfolio than just sitting in T-bills and bonds, which is what everyone does, and every corporation in the world does.

 

So anyway, that’s definitely in my non-consensus views as well. And I don’t know really many people that believe that besides me, but fun thought experiment to go through. Also why there’s so many yachts in Argentina, if you go down there, and various places in Latin America, if you look back on your career, what has been your most memorable investment, it could be good or bad. And you can also say, your most memorable call or position that you’ve had, over the years, there’s going to be thousands of them, I’m sure but anything come to mind?

 

Louis-Vincent: I don’t think thousands I think a career is made of three or four calls, to be honest. And if you get three or four right, you’ve had a pretty good career, for me, in terms of learning curve, both but also, frankly, money-making opportunity after the 2008 mortgage crisis. As a firm, we looked at the financial situation of most European countries, and we thought, the Euro is not going to be sustainable. All these European countries have had to issue massive amounts of debt to backstop their banks. And the market can’t carry that much debt. So they’re going to hit the wall. So I teamed up with a very good friend of mine called Mark Hart, and we set up a fund called the European Divergence Fund. And we did two things. We bought a bunch of CDS, credit default swaps on Greece, Portugal, etc, on the premise that credit spreads would widen.

 

And we bought a bunch of puts on the euro. And the premise said that the euro would tank. What was baffling was, we made a bunch of money on the credit default swaps, and we lost a bunch of money on the Euro puts because few people remember this, but basically between 2009 and 2011, the Euro went from 120 to 150. And it was very visible that Europe was hitting the wall, you know, Greece was going bankrupt, Italy was in dire straits. And as all this was happening, the Euro kept rising. I was like, What the hell is going on? Why am I getting my face ripped off over here being short, the euro, the fun in it, I’m making fine because we made lots of money on the credit default swaps. But we also lost a bunch on the euro. And I was talking about it with my dad who ran a macro firm in the ’80s and ’90s. And he told me, you should have tried being short Japan in the ’90s. Because by 1990, it was obvious that Japan had hit the wall. So he went short, the Nikkei, and he went short, the yen and the short Nikkei worked fine. And the yen went from 150 to 85 in 1994. So that means it’s going up. So the yen rose massively.

 

So in the end, you go through these episodes and you think okay, actually, when countries hit financial stress, you would think the currency would go down, but you can have a period where the currency actually shoots up as pension funds repatriate capital as banks repatriate capital as insurance companies repatriate capital, as everybody brings money back from abroad to plug the holes, and there’s nobody on the other side, then the currency can just go up in a vacuum. That’s what we saw in Europe in 2010, 2011. That’s what we saw in Japan in 91, 92, 93. I highlight this because everybody looks at the U.S. dollar as a sign of strength today. But could it be a consequence of the bear market? The U.S. has just had you lose 20% on equities us 20% on bonds. If you’re a U.S. pension fund if you’re a U.S. insurance company, are you bringing money back to sort of plug the domestic holes and as you do. You get these parabolic moves in the currency. I look at the U.S. dollar and I wonder is this a sign of strength or a sign of weakness with things on the other side.

 

So for me, that was one that European divergence trade was a big thing in my career. The second big thing in my career was China, decided to basically open a bond market in 2011. I saw this as a huge opportunity for our firm, I thought, how often am I going to be in the same starting blocks as Schroeder’s as PIMCO as Fidelity, they have as much of a track record on Chinese printing as I do, which is none because the market didn’t exist. So we built a pretty good Chinese fixed-income franchise. And we did so partly on the premise that if China was going to do this, they wanted to do it well. And our bet was that Chinese bonds would outperform most bond markets over any period. And if you look at the past 10 years, five years, three years, Chinese government bonds have outperformed U.S. Treasuries, JGBs. Because you had massive government support to that markets. And so one of the things I learned is, especially when it comes to bonds, especially when it comes to currencies, you don’t want to underestimate the strength of government. Through the past 10 years, everybody was telling you, the renminbi is going to collapse can’t invest in China can’t invest in Chinese bonds, and it was the best-performing market.

 

Meb: Well said, Louis, where do people find you? They want to read some of your work. Hear some more of your soothing voice, what’s the best place to go?

 

Louis-Vincent: Thank you very much. Well, the best place to go is our website. We have a website. It’s gavekal.com, gavekal.com. And from there, we do different things. We have a private wealth arm, we have an institutional money management arm, we have a research arm, so wherever people want to go, they can direct themselves from there, but that’s probably the best place. We do have a Gavekal Twitter feed, but you can sort of keep up to date with some stuff there. I don’t really post on Twitter or anything. I don’t have much of a social media presence. So the best thing is the website.

 

Meb: Or you can follow his Twitter account for some good charts and get your hands on because they’re great. Louis, thanks so much for joining us today.

 

Louis-Vincent: Absolutely. My pleasure. Thanks for having me.

 

Meb: Podcast listeners. We’ll post show notes to today’s conversation at mebfaber.com/podcast. If you love the show, if you hate it, shoot us feedback at [email protected]. We love to read the reviews please review us on iTunes and subscribe the show anywhere good podcasts are found. Thanks for listening friends and good investing.

 



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