Commentary, Podcasts June 21, 2020

Straight Talk (Video) With Guy Adami & Sven Henrich

by Dan

Friday on our seventh weekly episode of Straight Talk, I discuss markets and macro with my good friend Guy Adami and my good virtual friend Sven Henrich aka The Northman Trader, hosted on Sven’s YouTube channel.

In this week’s episode, we discuss the difference between a stock market bubble (think liquidity-driven valuation expansion) and a stock market mania, which obviously is in many ways connected to the bubble, but largely driven by entirely different motivations. In my MorningWord on Thursday (Those Aren’t Pillows) discussed the current stock market mania with a certain level of creativity by some its “captains”:

if the current environment and its most fervent active participants are telling me anything it’s that short-term swing trading is a young man’s game, for the highly emotional, where less knowledge leads to more confidence. I am not knocking these guys, that was me in 1998-99, but I can tell you that I am still in the business some 24 years later because I had to evolve, markets change and if the participants don’t adapt, they go the way of the dodo. I have no problems with Davy Day Trader aka Dave Portnoy, what he’s doing is pure gold (gold Jerry!), and a genius stroke from a media company founder whose product has been shelved for the time being.

I suspect Davy Day Trader is going to drop the mic as soon as the NBA restarts in July and his timing of riding the momentum of the hardest hit “pandemic stocks” off of the March lows will allow him to claim the title as the “new captain” until the next time he is either bored with sports coverage or gets the trading itch again. Maybe I am one of those suits he rails against on Wall Street (I only have two and only wear them at Weddings and Funerals), the old school guys who are missing out on the fabulous gains to be reaped on a daily basis in the planes, trains and automobiles trade, but as someone who has traded through three massive bull markets, and three subsequent crashes in less than 25 years I am here to tell you that the last few months of money-filled pillows are not what you think they are, and this environment is not likely to last too much longer.

We also discuss the trump administration’s very curious and ever-evolving relationship with China and the new revelations in the former trump National Security Advisor John Bolton’s contentions in his upcoming book that once again the president put his own personal political interests before those of our nation’s foreign and economic policy towards China. The book drops Tuesday, the admin calls it lies but also they call him a traitor for releasing so-called classified information that the government had already cleared, I am hard-pressed to think they can be both lies and state secrets. And if you don’t like my point of view, UNFOLLOW or UNSUBSCRIBE, I am sorry to see you go, but for the next 5 months, it is not likely to get much better on this front.

OH and we talk stocks, mega-cap tech like Apple (AAPL), Northy has some great charts and we hit the Bank stocks, again, as the narrative and the price action there does not exactly jive with that of the Nasdaq.

HAPPY FATHER’S DAY to all of the dads out there. I hope you have been as fortunate as me to have an amazing dad who has been a teacher, a non-stop supporter, a leader, a role model, a great husband to my fabulous mom, and most importantly since I have been a dad, a friend. I am also very fortunate to have a great father-in-law, bonus! And, a very special HFD to Guy and Sven who I know take great care in being great dads and we all agree it is the most important job we have in life.