Confronting Legendary Hedge Fund Trader on Coming Crash | Bob Kendall

you're about to watch a fascinating

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interview hey everyone welcome back to

another episode of the meet Kevin show

today we are with a Bob Kendall of the

Kendall report a welcome aboard thank

you so much for being here tell us about

yourself what what do you do who are you

and and let us know and how can people

follow you great I'll try not to get too

involved I have a lot of different hats

I wear so I'm a software developer I'm a

former Trader on

on Pacific Stock Exchange also the

Chicago Board of Trade I also have

been the head financial analyst for a

major firm I worked Merrill Lynch at

research for a while managed money at uh

lots of big big places consulted about

36 banks of the largest banks actually I

can remember three of them aren't in

business anymore bear Stearns credit

Suites and uh and

um

I forgot the other one right now so

anyway but yeah so done a lot of those

kind of things with uh with been in the

markets I started in Chicago Board trade

in 1979

lost all my money should I tell that

story absolutely yeah it was a year

Volker was nominated yeah I got stuck

limit down in four days and when I woke

up they didn't have it there was all the

money was gone so

um it was a good experience though

because it made me focus on two things

the emotions of the event as well as the

I guess

understanding how to develop risk

strategies and things of that sort and

that was big so you know Capital

preservation was everything and it

always is but yeah so one of the

software platforms that I have I

developed something called Advanced and

protect so if you Google advance and

protect you'll see a bunch of investment

advisors out there they're most likely

even current clients old clients but I

taught the whole industry how to how to

basically protect their assets on the

downside by going to cash what a concept

right yeah right and uh and then also

participating uh when the markets are

going up so trending so a lot of the

stuff I do or Trend analysis those type

of wow so I'm a technician I could go on

and on it's incredible I remember I was

in my 40s one guy said you're not old

enough to have that resume so sorry I

did all these things so wow that's very

impressive and now so one of the things

that you mentioned is you have a big

opinion about what's going on with the

banking crisis because obviously for the

last month that's been a big deal when's

the next Bank going to fall Jamie

Diamond says the hurricane is on the

horizon from JP Morgan the next banks

are coming and the next failures are

coming what's that you

um I don't see it uh very isolated there

are a few banks that have problems and

uh a lot has been made of all the cash

flow going the money funds and all this

stuff it's not really going to uh matter

to the banks at all I even saw somebody

sent me a a text earlier this morning

telling me how the Federal Reserve has

those losses on their books and they do

but they have something unique they can

print money

they have a direct direct connection

with the legislature so they can change

rules and I heard actually

um

regards say something that really woke

me up now just on a clip that I watched

yesterday and she said one of the things

that we're going to be talking about is

restructuring debt and I thought wow

never thought about that so like in a

commercial real estate world right

they're just going to restructure data

that's why they're all defaulting that's

yeah but no one cares because these guys

just trade off like Okay Kevin you owe

me money it's due next week but don't

worry about it pay me two years from now

we'll see what it looks like and I'll

give you a break on interest and so in

other words default so you can negotiate

to restructure exactly yeah but but

think about restructuring the entire

debt of the world to all the central

banks because that you know she's with

the uh ECB now but you know what happens

if they restructured all the debt let's

just change so tell me about that do you

mean I don't like treasury's outstanding

yeah just everything so why would they

be talking about restructuring debt

who's that are they talking about

restructuring I have no idea it was just

a comment right interesting and she's

been kind of reviewing a lot of things

with CB DC and all the other stuff

that's out there and now does that make

you nervous as an investor in Market I

don't I don't know how to interpret it

okay the debt restructure yeah I mean

number one we don't know what it is was

a comment we're going to talk about

restructuring debt and I thought wow

that's that's a very interesting thing

to do huh yeah absolutely because you

know it makes sense in commercial real

estate and I think one of the things

we're seeing is a lot of people are very

concerned about commercial real estate

understandably so office vacancy is 50

60 in many cities and they're very

difficult to convert to housing

especially the 1960s office it's

impossible yeah they're not enough

window spaces egress everything so there

are legitimate reasons to be concerned

about commercial real estate but when we

hear about for example the wework

default that just happened or some of

the other defaults that are happening

are these concerning signals for regular

investors or is that just a normal

process of the business would say from a

macro economic it's not going to matter

the people if there's empty Office

Buildings I was telling somebody that

we're you know here in L.A accounting

you count the buildings in La go one two

three empty one two three you know out

of every ten right you've got and then

you've got three of them are empty right

you get to ten three of those are empty

wow not physically obviously but

cumulatively so you know I don't think

it's going to affect the average Joe

it's not going to keep anybody from

going into Walmart buying anything they

don't know what's happening huh because

that's the big Catalyst that people are

saying is the cause of the next

recession now it's going to be the

banking crisis tightening credit

standards and Commercial Real Estate

we're all screwed it's gonna be worse

than 2008 they say what say you yeah and

I've talked about this on my channel

quite extensively it's just it's just

not physically going to happen ever you

don't see it happening no I mean because

you know if you look at at what's

happened even if you went back to uh to

GFC right and go to go to the whole

restructuring that was a restructuring

of debt 2008 then 2008 yeah yeah so and

so during that time you know you just

saw everything get uh the banking system

was restructured it was

to start over kind of do an extra sketch

uh if they would have taken uh you know

there's a couple of situations that

would have happened they would have

taken down the whole system if they

didn't do what they were doing credit

cards were an hour away from shutting

off yeah yeah I mean everything you know

if the money starts coming out of the

the machine it's Panic time right that's

for sure if the ATM stopped working yeah

exactly and so and you saw that like in

um uh what was it that was in the

increase it was another country right

there where they only could get x amount

of dollars 300 hours a day or whatever

it was I mean it's brutal quotas or

rations rather in terms of how much cash

yeah so once you start that game you're

you're in trouble then it's really

panicking restate with that question

yeah so do you think that uh we've got

the banking crisis we've got these

recessionary fears about commercial real

estate uh you're saying maybe the

banking crisis isn't that big of a deal

but are you're still seeing a recession

though right I mean everybody's

predicting recessions

zero recession so one of the things I I

won't I won't mention any names but I

watched a video on the way over here and

it's just to know exactly what wasn't

going to happen I won't mention the name

that wasn't going to happen okay all

right because whatever anyway so but uh

one of the things I've been everybody's

talking about M2 collapsing okay money

supply Falls nobody is talking about the

velocity it is going vertical really

okay so take a look at those charts the

velocity is screaming and it's uh that's

the turnover of money yeah and we've

been talking about velocity just

collapsing for years yeah we have been

exactly yeah that's been the dialogue

I'm actually surprised it's already

inflected when did it inflect now I feel

behind yeah well recently yeah just

recently yeah during sbv during the

banking crisis oh this is very recent

yeah yeah that's a big deal and and uh

so some people are calling a little

bounce and yeah you know some kind of

reaction but it's so on the banking

crisis let me try to unpack something

because the reason why I'm not saying

there aren't issues in the banking uh

industry there's always issues

everybody's talking about on

um you know deposits that aren't insured

right they've never been insured

something's changed yeah that's true

they've never been so all of a sudden

that's the dialogue for the Bears to try

to get you to go oh no they're not

insured yeah I mean what bank has ever

been insured it's always been based on

trust yeah you know I started on on a

trading floor where I was yelling and

screaming at my friends trying to make

money and everything if you and I were

trading and we agreed to a trade well

next morning you forgot to turn your

card in because it's old paper days and

come in and go Hey Kevin I bought

so-and-so from you and like I don't I

didn't buy anything from you I didn't

sell anything and then it's called a DK

and but now guess what I don't trust you

anymore yeah I'm like dude I watched a

guy one day in a trading pit for a half

hour try to do a market order at the

market to buy something because nobody

trusted him nobody trusted him oh he was

done so you just get that black but the

same thing here with the you know with

anything it's trust you know us Tower

it's trust right interesting yeah so and

that's a big thing now too is people are

talking about this dedolarization thanks

to Saudi Arabia now partnering with Iran

and maybe denominating some oil and

natural gas trades and Renminbi instead

of dollars what's your take on that I

mean is dollar Gonna Die Tomorrow

Dollar's not going to die tomorrow there

are some downside risk in the dollar but

it's not going but think about it how

long did it take him to put the year all

together oh my gosh well yeah I mean

that was a very long period of time they

were talking about that ever since I can

remember in the early 90s yeah it didn't

come together in 1999 I told everybody

said well they were they were going to

have it there but it wasn't going to be

floated until the next year right sure

and I think it's still 1203 you

basically have doubled the the currency

on the planet the Euro has to go down

everybody I don't know it's like no it

has to go down if you look at when the

Euro came out it just went down ah

interesting it went down like 12 15 like

boom because because you had doubled the

amount of currency available okay

there's more of it it's not going to go

up until they eliminate one of the two

components that just made sense to me

and so

um and so relating to the dollar then

yeah so to the uh the dollar

um I think what we're saying is

bifurcation of people making

transactions it's kind of already always

happened right but it's never been

acknowledged once again now all of a

sudden it's a thing because and and

there have been some substantial deals I

mean with uh macron going over to China

and saying some of the things he said

the other day was like okay what's this

about you know okay I need to diversify

away from the dollar it sounds like that

was maybe a line that came out of uh

some somebody else's script yeah yeah

Xi Jinping script exactly yeah so yeah I

I don't think the dower is going to like

just go away that's not going to happen

because once again it's trust yeah so do

you actually want to be in the Yuan do

you want to do that yeah you know maybe

not but if whether you're you know some

of these countries secondary countries I

saw actually Larry Summers made it an

interesting comment on a on a Bloomberg

uh interview a few days ago and he said

when when the China offers money to some

of these small countries they offer like

we'll build infrastructure how about an

airport okay yeah we'll take an airport

and some money and yeah we'll get

infrastructure he said they call the U.S

they get a lecture on how good the U.S

is and how you want to use our dollar

they don't get any anything in return

except for a lunch a lecture which you

think about it you know it's the old uh

you're going to give me something I'm

going to probably pay more attention to

you yeah exactly yeah absolutely so uh

this this idea of uh D dollarization is

that do you think maybe just now being

blown up a little bit in the mainstream

media to maybe bag on the current

Administration or something combination

of all that but the I think the

um the realities are it's not going to

happen yeah uh it's not not that it

couldn't you couldn't see a shift in a

bifurcation of the planet where there's

two worlds there kind of already is yeah

if you look at it and it's been like

that for a long time they just decided I

think the current uh Administration has

isolated themselves so bad and

especially over the Russia's uh

sanctions and all that they've just you

know they forced this thing that looked

like it is sure and of course and you

know um I was thinking about kim.com if

you followed him at all he's just going

crazy on this the Dollar's done and all

this stuff you know and uh and he's a

very smart guy in that but I don't think

that's that's going to happen no is that

it seems like maybe because I'm American

oh well that might have something to do

with it I see a lot of people who are

super anti-dollar or often really into

gold and they're they're selling gold do

you think there's just a bias in that

then potentially or because I think

going back to what you said about trust

of the paper money

the dollar has the most trust it might

all paper money might suck but it's the

best of the worst so to speak right

yeah you know so

um yeah I like I said I I don't see it

going away I don't see that um really

playing out real good so no banking

crisis no dog crisis so let me qualify

the banking prices because there are

issues in the banking yeah industry yes

are there one they're going to be

thousands of banks fail no why because

and if you go back to 2008 everybody had

the same trade on okay everybody had the

same crud they had assets on the books

that were worthless

okay they got treasuries they're not

worthless right okay and by the way by

what's happening in the 10-year and all

the the rates yeah those most of the

problems worth more yeah exactly it's

already and in fact if the right things

would have been done with this uh BB so

I think there was a conflict of interest

because uh Becker was on the San

Francisco fed board

all they had to do and this is what I

said when you and I met let that one

fail well no they all they had to do is

do open up the discount window oh right

they said Oh Mr SBB you've got a

liquidity problem no problem how much

money you need which they did I filled

the Gap yeah they could have filled the

Gap and guess what by filling that Gap

it probably would have seen the same

reaction in treasuries and some portion

20 30 40 or more the issue would have

went away immediately immediately right

and by the by Monday morning after SBB

it had already they didn't even have a

problem if they just left the doors open

wow and and the state Regulators in

Florida in California California yeah

shut it down they shut it down Monday

morning LTC or the FED has no ability

which to close the bank only the state

regulates oh really interesting okay so

the state had to pull the trigger so

somebody panicked they pulled the rip

cord and it was over you know and there

were others there were but I felt like

there must must have been some kind of

conflict that was laying there like oh

he's on the board and now his bank's in

trouble I work for a firm that uh our

the chairman of the Chicago Board of

Trade was also our chairman we were the

largest uh commodity Traders on the

planet at the time okay so what happened

we got we had calculation a

capitalization issues with with our firm

our chairman is the chairman of Chicago

Board of Trade first thing he's

resigning from the cbot

everything starts to implode nobody

wants to be our friends anymore uh

capitalization uh 14 days to go on a

liquidation so there were other firms uh

man man uh Futures uh refco if you look

at the history of the Futures markets

there's been we were the first one to go

and then there were similar type events

so wow things do repeat themselves and

you know Industries change a lot but uh

just back to uh this whole thing and

what I what I said on that stream that

we were on was you know all they had to

do is open up the discount window

literally as I was saying it the FED

announced they were opening up the

discount window doing a special I don't

know if you recall that oh yeah funding

facility I was really frustrated for an

hour I was trying to tell everybody this

is all they got to do yeah yeah

they are you know and of course we got

the rally and the treasuries and bubble

oh yeah it's so yeah so um but yeah I

think so the banking back to

looking at what it was like in 08

compared to now there are no systemic

issues everybody has treasuries they're

not worthless assets as opposed to cdos

from away exactly which we're getting

worthless because of a real estate cycle

for those watching in other words those

assets were going to zero were today

everybody's got treasuries you know and

on the subject where we're you know uh

just talking about

probably what the markets the bond

markets everybody's Bond markets pricing

and stuff it's not pricing in anything

what it's doing is there's less Demand

on the back end of the market so it's

going to be lower interesting just think

about real estate you're a real estate

guy yeah there's not you know try to do

a re no one's going to do a refi right

now right repives are gone okay you

gotta you got a two percent why am I

going to go to a six yeah yeah of course

you know so so all of the demand on the

back end of the curve is gone and what

you're going to see is the curve is

going to start it's already in a u-shape

if you look at it it's already the 30 is

starting to tick up aha so everything's

gonna do a u and then it's just going to

rise a little bit interesting so so how

would you explain that to someone

watching so who's not super familiar

with bonds maybe yeah so we were talking

about the sea change thing right yeah so

um I picked up something comment that

that

Paul said and it just wow it was like he

just drunk yeah so he said he said that

we're doing something right now with uh

with the interest rate structure that is

going to last for decades and it's going

to change how how things operate going

forward so I heard that it's a one

little it was in a press conference eh

it was at a press conference okay and so

when I heard that I thought this is and

and I've uh I've talked to a number of

other friends of mine they're very

knowledgeable

and this is what I believe is happening

rates are never going down for a very

long time oh wow they're going to stay

between uh down would be where they are

now three and a half maybe a print of

three but they're going to range three

to six on maybe as and mortgages are

going to be somewhere between

so uh why is that because the FED wants

out of the game of QE they're not going

to play the game they've got themselves

so far in all you got to do is look at

Japan that's a whole nother uh hour we

could spend talking about that but they

don't want that they don't be in that

game so what they want to do is the mark

this is what I grew up in uh last if

you've been around the markets for 20

years you think that the FED runs

everything and they adjust the rates and

everybody that they're the Puppeteer

right if you go back previous to that

the Market's always the FED if you go

back into the 60s 70s and Beyond the FED

just adjusted rates to the market

and they want to be back into that game

yeah they don't want to they want rather

than creating the market so yeah so what

is interest rate right it's a some kind

of assessment of risk for me giving you

money I need to get paid back so right

think about this depositors will

actually get money they you can actually

put money in you know in a money fund

that's what everybody's doing money

markets right now four and a half

percent

of course you're going to do that right

and that's healthy actually it's not a

negative because now people are you know

they're talking about inflation with us

you know some of it's getting offset

just by doing that and then but if if

you start to look at some of the

I guess ramifications of this higher

interest rates it's not there so I I

bought a house here in California in

1990 so yeah 19

it would have been

1986. okay my my mortgage was 13 and a

quarter oh wow didn't even Flinch just

that's what the market was yeah housing

prices if you go back and look at

housing market it was fine yeah 13 yeah

you know there were people prior to that

paying 15 and 16 and there was a market

it's crazy it was like buying it's

credit card markets and people were

buying houses and you know I wouldn't

say money was necessarily easy you had

to qualify yeah yeah but it wasn't like

you know it was in the crazy days and

you know over six oh six where dead

people yeah yeah can you can you sign a

piece of paper exactly or the ninja

loans but you know I just feel like uh

yeah it's they're gonna restructure this

thing and it's going to look a lot

different okay so I want to unpackage

that a little bit so so you're thinking

we're not looking at a recession we're

looking at just higher that what they're

what they keep saying the higher for

longer they mean it yeah so that's what

I've been saying so so is the so the

bond market isn't necessarily wrong it's

just not not maybe understanding that

we're actually going to have this higher

for longer Christ and it's a bond market

yeah foreign

price Discovery it's just price

Discovery because you were a market

maker yeah because people keep saying oh

the bond market knows all the inversion

of the yield curve signals a guaranteed

recession and that what's a utility okay

you can look at your curves and they're

not very accurate oh interesting which

one would you look at to see the

inaccuracy I don't know one right that's

right but they've happened a lot and

this particular one if you think about

it the the yields have been all jacked

up because they had them at zero they

were never supposed to be at zero they

were always supposed to be where they

are now by the way okay okay all the FED

is doing is normalizing the yields to to

what how they should be priced in a

normal account so this could be a

normalization that's what I'm calling it

interesting yeah so it's not you know I

don't see that um uh like I said I don't

see that the bond market is pricing

anything other than demand if you look

at true Demand on especially on the back

end you know 10 years and even into five

and the the spread they look at I don't

care anything about two tens they're re

so I spent from 19

uh let's see 1992 through 98 I had a

consulting firm and we consulted about

36 of the biggest banks I mentioned

earlier that some of them aren't around

anymore and uh basically

if you look at the pricing where banks

are it's it's the five the five thirties

are the big spread and the five tens

okay okay not the twos the twos forget

about it they're not lending money into

lorettes sure they're lending money at

fives to tens and sometimes on the 30s

so if you like a typical yield that uh

bank if I work with banks in on their

risk management side in their Gap

analysis and if a bank Banks don't take

they're not supposed to take a risk okay

they lend money they do Services they

they take margins right okay so you know

if you if you look at a yield on a

duration yield in their book if they got

the seven years that is so bullish on

bonds it's crazy so they normally

operate between three and a half and

five and a half okay okay and everybody

did get pretty short here but the FED

kind of said okay so you can you can do

you know uh you know hold forever

strategy right sure sure it's maturity

hide it over there yeah you know do that

and don't even bother with um you know

we won't we don't care what the prices

are right and that works but the second

you sell one of those or do anything in

that bucket yeah it now becomes Mark to

market right right so you move them over

to yeah that's available for sale

so okay so your thinking is

um

and the bond duration where are we

sitting now I I don't know that exactly

okay that's okay yeah that would be

interesting yeah but I think it's still

pretty short because of the way it's

been and you think we've got bullish

foreign

so for for a normal investor right now

uh if you're not seeing a banking crisis

you're not seeing a big fear out of the

dollar crisis

um maybe a remaining question or fear

would be inflation I mean are we gonna

have three waves of inflation again like

we did in the 70s or I think we're

probably seeing everything pretty stable

I mean my title for my video for uh

Friday morning was uh negative uh PP or

on Thursday negative PPI everybody

thought it was crazy you got a negative

number yeah we did yeah big time you

know and and you can see what the August

did trading that day they had a lot of

fun yeah yeah they you know Friday was

different sure but yeah that was kind of

a backfilling but

um yeah as far as inflation I think

that's another hire forever I think

there's a lot of oh it'll stay sticky

you think yeah I don't know if they get

to you know there was a 2-7 print the

other day so it's kind of hard to say

you can't get the two five and they

printed two seven yeah but I think that

was a one-off report that we saw I think

we'll see things kind of come back in

that three and a half three and a half

that four and a half is just going to

stay there rates are going to be four to

five all this stuff is going to

normalize because it's got to be priced

like it is interesting maybe they fix

inflation maybe they don't maybe

inflation just stays because there's so

many uh things because of restructuring

after covid and everything how things

operate there's a higher cost of

everything so I mean that sounds uh that

sounds somewhat bearish though if if

inflation stays sticky and rates stay

higher we don't go back to the era of

say easy money policy wouldn't that be a

potential drag on equities who might be

expecting that pivot so to speak 1983

through almost 1990 inflation was

greater than five and a half six percent

that was one of the biggest bull markets

we ever had that was when Proctor was

predicting 3 600 right so if you look at

the markets and so yields only matter as

when they really truly are not

participating in the economy in a

structure okay so let me explain what I

mean by that is the way we're structured

right now the economy can just scream it

can just keep going and going there's

not it's not getting I know everybody's

talking about the credit crunch yeah

yeah all that I you know I think people

people are just going to keep doing

business so you just look and go okay

the rate's five percent now I'm just

going to keep doing no exactly right

what else are you going to do you're

going to stop living okay I'm going to

stop living if you have the money you're

going to do those transactions and it

does seem like people have more money

now than the question for you what do

you see in real estate right now I know

it's I mean the beginning of the year

popped up a little bit yeah you know I

mean we had uh we had a fall from May to

December but January Feb March have been

great on so far prices have been going

up and partly because there's people are

just buying what there is there isn't

much people aren't really selling yeah

no I mean maybe we'll get Blackstone or

some of these larger institutions or

REITs liquidating but so far it doesn't

seem like people the cre gets to them

enough they might want to sell some

residential that's actually a thought

that I've had and I'd be curious to know

your thought on that because my thinking

is if if commercial real estate plummets

now all of a sudden the cap rates

Skyrocket on on Commercial Real Estate

why would anybody buy residential as an

investment those investors move to

commercial you get prices then of

residential down commercial up you get

an equalization so commercial tanking

should drive real estate residential

down I'm arguing the commercial taking

if I had a lot of money I'd be buying

these properties I don't know what I'm

going to do with them but they you'll be

buying commercial yeah as the prices are

going down yeah okay into the fear or

now but would you wait if you did that

in 089 oh God yeah which I did yeah okay

uh it was the best trade you're ever

gonna make so you you know if you're

going to buy low sell High you it looks

like they're setting up the low it

doesn't mean it's going to bounce

tomorrow sure but you know where do you

think the low is I have no idea it's not

my not my market sure uh my brother's a

multi-family and he was telling me that

it's worse right now in multi-family

than it was in oh wait wait what tell me

more about this meaning that uh the only

deals are happening in deals that happen

somebody's got you know for uh what is

it the 403 exchange oh 1031. yeah it

used to be called so you said your

brother's in multi-family real estate

okay so and he was just saying there's

no loans going on the only deals were

Happening Here somebody that sold out of

something and they got them they got a

trade sure so there was like a property

the other day there was like 60 bids on

it oh my gosh on one property wait but

how is it worse than 08 then it sounds

good there's no there's no financing the

cap rates haven't changed uh nothing's

adjusted so you can't you can't put it

deal together he goes there's no way to

put a deal together and make it work

yeah yeah exactly it's all overpriced in

other words yeah so is he forecasting a

fall most of most of the uh multi-family

is me trading with you it's Jacob and I

bought this property four years ago you

paid this and they just kind of trade

amongst them create a fool yeah I mean I

mean there's a lot of a lot of these

things have I mean these guys have

rolled when the zero money was going up

um you know they've rolled you know 50

million to two three four hundred five

hundred oh yeah oh absolutely yeah yeah

they're buying you know 12 unit

properties and 36 unit not the big

you're not buying 2 000 units sure you

don't need to yeah you know there's so

much opportunity in real estate and I

think we'll go through that again like

here there's all that is everywhere

right yeah and um

so yeah I think I guess to summarize

what we're at here is I just think that

we're going to see

everything's this is the sea change

normalize the sea change was when

volcker came in when I started right so

we went through these crazy rates trying

to kill inflation right okay restoring

that fed credibility yeah we got to uh

the 21 discount with a four percent uh

uh penalty if you showed up the discount

window too often but everybody was so it

was literally 25 I mean today I think

it's 25-bit penalty yeah I have three

plus I have to quote uh Dr Baker on this

because he was he was running uh the

Penn Square Bank thing I was telling you

about yeah well the guy that was running

Penn Square Bank was bragging the baker

he goes hey I'm I'm doing all these

loans uh and I'm getting 25 and Baker's

laps and he goes I'm buying treasuries

and getting paid 17. with no risk and

I'm and I'm my my loans are are

guaranteed by the US government and

you're never going to see a penny on

those 25 sure because they're going to

refinance someone they're not even going

to refinance it's just going to default

and that's what happened no way are you

serious yeah if you look at the Penn

Square Bank they didn't get paid on all

these aggressive ones they were doing it

was just the massive defaults oh wow

there was also an oil thing in there too

because that was if you go back there in

that time crude oil is like under 10

bucks oh yeah yeah and so what happened

is a lot of the oil patch stuff in

Denver and Oklahoma they were financing

this stuff at these crazy rates I see so

it just blew up of course yeah so well

sure price of oil goes down they can't

make their payments anyway right so okay

so first sea change it was volcker 79

yeah it was when he was appointed so

early 80s first season and that's

normalizing fed credibility pretty much

okay yeah okay and and again actually

really attacking in inflation okay you

know because everybody said you know who

who raises rates during you know

recession

yeah yeah and he raised them

aggressively because Burns before that

was under the impression that we'd

rather tolerate higher inflation than

have people lose their jobs bulk or flip

that you bring up Burns he's on my list

as the worst

fed Governor prior to yelling but that's

another thing

so tell her but I didn't know yelling I

used to say that back when in my early

days in the markets but I'll have to

show you my pictures of Halloween two

years ago I dressed up as drone Powell

my father in law was Janet Yellen no

that was funny and we gave away money

with candy that's awesome because

inflation was transitory that was our

argument yeah it was then anyway okay

first C change volcker the second sea

change seat

uh.com.com bubble okay everything was

restructured again uh over what was uh

what was Greens fans were

exuberant something irrational

irrational exuberance okay yeah okay and

so that happened and then of course

0808 and real estate now now we're here

the sea changes aren't necessarily

crisis they are the restructuring of of

how rates are working and the FED has a

lot to do with that sure of course right

but what like I said earlier what

they're really trying to do is they're

just trying to they want the mark Market

to be the rate structure what's a demand

what kind of risk is that civility yeah

yeah I mean that's why and I think what

what you're seeing like even in the uh

in the tenure

that's why we printed down and you know

down to low threes it's amazing I mean

three three I was on my channel one

night going I'm going I'm getting

projections to go to three and a quarter

that's nuts and they went to three and a

quarter yeah they did and I thought it

was just completely you know I have to

my work in my quantitative work I do

what I do and that's that's what I was

saying you know and now it's saying uh

three

probably 365 370 it'll stabilize in

between where we are now interesting so

it looks like we're just going to

flatten out for a while how long that

lasts now I mean it so inflation what if

it turns out to be transitory and

inflation does end up going back to one

and a half percent

rates come down

possibly yeah but you don't but the

markets Market's going to determine that

you know because think about that if

that happened uh that would be the case

I can tell you where I live in Arizona

they just went to um

uh SEC the second that they cut oil

production there's one distributor

Just Jack the rates like it's like

there's some guy in headquarters going

oh they just they just did this and they

just jumped at 10 cents we're up over

four bucks I know that would be so you

would like to buy gas before yeah but in

California yeah but so you're saying

OPEC plus Cuts somebody instantly raises

the prices when they when they go down

it's trickle trickle trickle yeah yeah

sure so they're they're just playing the

margin so

um I yeah I just like the way I see the

world right now I've been doing this for

43 years so I've been around a few days

yeah and I've seen I've went through

all every one of those guys starting

with you know with Volker when I started

in the business so I've watched every

fed yeah you know I got to see

helicopter bin up front in my life yeah

yeah I mean you know he's yeah you know

yeah it was uh those are crazy times and

actually yelling I I kind of uh trolled

her a little bit there but Yellen is the

only Fed chair that never had a crisis

under her that's a good point during the

end of the Obama era there yeah she

never had one and my pitch back then was

every one of these guys get a bad

something happens ah except her it's

your stuff for hers it never happened so

I I'm so more women fed Place

yeah I don't know I think really what

was happening then is it was the

stabilization after everything all the

money after being added and there wasn't

really for whatever reason it wasn't in

any crisis I'm a little worried about

her at the treasury well it's very

politicized there it is very politicized

but even then if you look at the

treasury bank account and it's pretty

much tapped out because we got the debt

ceiling that's a whole nother thing but

and that's gonna that's gonna get raised

of course yeah everybody knows that it's

just they're going to have some kind of

drama around to negotiation well you

have to make it look like they put up a

fight exactly no it's true yeah and so

that's not I don't see that as being an

effect in anything that's going out

there I mean so it sounds to me like

you're not terribly worried about uh

recession dollar crisis China this the

really inflation what you're thinking

more is just get used to the numbers

where we are in this economy can keep

going well I would tell you that all of

those things you mentioned any one of

them could rear up and be an issue just

they're not now they're they're talking

points and you know the markets are with

the August trading and they can they can

trigger them very easily so you get a

lot of activity in the markets and you

know when they when they come in the

other thing there's a dynamic that's

happened in the markets I haven't been

around for a long time when I started in

1979 the volume on the New York Stock

Exchange was 40 million in a day that's

a nanosecond yeah on Monday morning

crazy so it's just but the the point is

is that markets have evolved then after

covid we've probably doubled or more the

amount of people that are participating

in the market wow wow yeah so

um and the other thing that's helped

that happen and it wasn't uh just Robin

Hood but it's fractional shares sure so

my favorite line is investing used to be

for someone now it's for everyone ah and

and the reason so that's if and I I have

a little podcast I did in 2019 I went to

Charles Schwab convention for the

institutional convention down in San

Diego and I I was watching and they were

announcing that they're going to do

fractional shares and I said what we're

going to see is we were doing about a

billion shares roughly average per day

yeah and what we're going to see is

we're going to see buy them Co-op now

we're doing 6 billion wow but if you

look at 2020 after all that I mean I was

literally there just weeks before the

pandemic right yeah and but once that

happened everything went crazy you know

but isn't that a good thing though

because yeah very good thing yeah yeah a

very good thing and you know and the

fractional shares is given access to

markets sure to people and unfortunately

21 uh 2020 made it looked like it was

easy yeah yeah of course and it's not so

easy and I remember proclaiming it in 21

uh 2021 that the easy money is over

folks it's kind of it's back to work

back to normal yeah and that's these

higher rates maybe higher inflation you

look at what happened to meme stock you

know yeah all the Kathy Wood stuff you

know which is really bad you know so

um so you're not a fan of Kathy

um

do I say it uh well how about this what

do you think about these Holdings I

think she's one of the worst uh

portfolio managers I've ever seen oh wow

okay why why do I think that it just uh

she's she's just by the dip by the dip

by the dip she has in her documents I

was really thrilled yeah so I rebuilt

Arc in our software platform okay I took

all the stocks and she's so uh she gets

very heavily weighted and then she's

committed to her ideas which is

admirable I guess if you're an

individual investor but when you're

managing other people money you you know

she dropped almost 80 percent off the

peak right so you can't run money like

that she just kept buying more and more

and doubling down and doubling down

doubling down quadruple whatever so from

like an advising point of view yeah I

mean if you're if you're running which I

know I know you've got your fun running

now yeah if you're running money you

want to make sure that you can manage

the the volatility yeah yeah the

volatility is everything and it from you

as a business person trying to grow your

fund to the guy that's investing in it

right so it's you have to you have to

manage that it's a really important it's

not just through diversification if

you're just a real quick comment on ETFs

in general yeah if you look at every ETF

they're heavily weighted and then by

time you get to the bottom there's just

a couple maybe one percent oh yeah a few

BPS if you invert most most of those I

do something called ETF hacking okay so

I'll take all this stuff yeah so it we

go in we we go into our software and

basically for the most part

The Waiting gets flipped upside down wow

so you put the smallest positions as the

largest what happens is most people are

going to invest on what they think is

going to move the most so they

heavyweight that of course of course and

if you're wrong the volatility goes

crazy of course and but

um so the

but it's interesting because some of

their their what they would you would

think was my least likely pick is a

really really good pick if you look at

them so I look at the bottom end of

these funds A lot of times really yeah

especially like like we did an XLE hike

uh heck in 2001 easiest trade on the

planet right by energy right nothing

nothing smart about it uh other than it

was an easy trade okay and it actually

goes back to 2020 uh in November 2020 I

was telling everybody financials and and

oil wow that's where you want to be

that's where you're going to be energy

that's the sector you want to be playing

in and they were obviously you're coming

out of you're going to come out of the

pandane at some stage you're going to

have the oil demand activity but you

know the two very easy trades that

everybody told me I was wrong on so I

was very right on yeah and but the ETF

hack uh was up over 40 percent wow you

know in 21 which is

not a bad bad year but you know it

didn't

um I don't think it was everybody wasn't

going to like concentrate but that's my

other strategy I do like concentrated

strategies wait so but on one hand

you're saying take the smaller ones and

diversify them against these make them

the bigger trades oh you're just saying

literally so almost flip it so you're

just saying so if I put our software on

there and we ran this yeah chances are

the waiting is just completely different

well so but that's just a different

opinion then but what you're saying is

flip the uh the the you look at the ETFs

and you take let's say something that's

a one percent allocation versus

something that's a 10 allocation and you

would flip those potentially based on if

there was if they were trending if they

had a signal that would all based on the

TA yeah ah and then on the Quant stuff

yeah so like we run 10 10 million

calculations every night in our database

oh my gosh every symbol has uh 600

variables that it looked at every day

so and we've been running this uh

process since

1997. and you just refine this software

every day or how do you how do you

adjust it runs it runs every night it's

got allocation process right you know

that's a it's very interesting because

it it basically is rebalancing we built

something called uh Dynamic uh profit

harvesting uh where you like literally

you take stuff off the the stuff that's

growing the most sure when you have a

new idea yeah you take from the the big

guy the winner yeah and then you put it

into the new idea so so the concept is

the one that's growing the most is

probably getting to the end of a cycle

or closer to it the new one has got a

new brand new cycle it's got more

probabilities it's got more

possibilities of growing and so what

happens uh it literally causes an

acceleration of growth of capital wow so

what what would you advise to uh sort of

a regular investor watching now yeah if

if they've got you know

cash and they're let's say if they're 50

cash right now do they stay cash heavy

now do they go into stocks real estate

bonds yeah that's uh

being who I am being a Quant the first

thing I would do is go to my software

and see if I like that like this stuff

yeah and but uh from I think what

I think individual investors have an

opportunity to actually go in and do

some analysis on the stocks that they

like and then find a find some kind

where they're using TA or whatever

they're doing find some kind of concept

that they can back up whether it's

fundamental understand what you're

you're involved in that's simple rule

right everyone everybody should know

that but everybody doesn't know that and

you know probably uh don't watch too

many podcasts and so many different

ideas huh yeah because that goes back to

what we were talking about earlier about

you know be careful what you read you

might believe it right yeah same thing

for sure you know and and I have I do

daily uh streams every day right yeah

I'm in the opposite scope as I told you

I'm on at 9 30 at night so I do

pre-market set up for what's going to

happen next the night before yeah and we

have something called a market grid and

it actually predicts where the range is

going to be nice so we have like it's

really interesting so I'll put out there

like it's going to be S1 support One S

uh R2 yeah and they're crazy Act it and

they're they're developed it looks like

when you look at it maybe like a

Bollinger band when you first look at it

sure but they're not a standard

deviation based okay and um their their

volatility based and they have some

Fibonacci calculations that are going uh

here's where the range is I actually

built that indicator uh for my

institutional accounts when I was

working with banks because we were

working with gap analysis so if you were

banking had long liability you needed to

sell some of it off you would look for

the exact point where you you would

try to

you need to sell something so we

developed here's the best possible price

for you to get sell for that day because

these guys have to do something it's not

something they want to do so because

they're hedging yeah exactly so I've got

new pipeline especially we worked a lot

on mortgage pipeline pipeline stuff and

you've got mortgages just came in today

do I want to hold these like they are or

do what's what's what kind of risk what

kind of duration do we have so then okay

if I need to sell something we would

developed a price range where these are

your your Target price range for

yourselves is your target ranges for

your buys wow and then we just started

to evolve out to use it for other

Markets started predicting rain for

individual Securities and everything so

uh okay

um

on the market broadly bullish or bearish

s p 525 very bullish very bullish yeah

so uh give you example uh

I have um the database that I'm talking

about right now

um is 63 of all the stocks okay are long

so some people look oh it uh stocks that

might be over the 200-day moving average

that's just

the fact that they're over the 200-day

moving average doesn't mean they're

trending just because they're above the

200-day moving average right so

everything I do is uh Trend base and so

I have right now about 10 000 symbols in

database that are suggesting that

they're going to go up I guess 63 are up

yeah so I have a map on every symbol so

I can tell you how long we normally hold

what the returns are what the deviations

every stat you have forward-looking so

one of the things I talked about on my

channel is what percent bullish are we

yeah so there's some magic numbers I

won't talk about that but it's too

detailed but what a certain level

there's enough Traction in the market

it's not going to go down I told

everybody just the other night I'm not

going to be wrong 9 600 times well okay

that's not going to happen probably 60

plus will work and someone can be

spectacular trades some are going to be

moderate trades but the overall market

so there's a forward-looking component

so we know that on our our intermediate

models the average holding periods like

220 days 230 days that's a year yeah

better part of a year right so all of

this stuff especially if you're talking

trading days yeah yeah they're trading

days yeah yeah so so you're looking out

a year so we started buying first time

we saw anything was in October around

right that's near the Buffaloes but we

were last in 22. we were in cash

for the most part a heavy heavy cash all

year long wow and then we come in the

fourth quarter we start getting buys and

so we have short terms of buys which are

35 to 50 day hold and then we have the

intermediate which are 200 we'll just

say 200 plus yeah so when the 200 pluses

start to come on now these are real

they're material and so right now our

forward-looking there's still I think it

just off the top of my mind right now as

we still have maybe a hundred and twenty

to 150 forward-looking days positive wow

so I'm thinking we're not going to have

any even things to talk about until Q3

maybe middle of Q3 and then you can go

okay let's see what's going on because

that's where everybody keeps saying the

recession is going to be and I and I

understand that so and I can tell you

that's where our models are are

projecting a point but what can happen

is so

with sixteen thousand symbols we're

going to get a rotation so these things

can it can kind of refresh the stats so

some things get sold off they go down

for a while they get bought back in and

so it rotates

so I'm always looking at these stats

what are your favorite sectors now what

are what are they saying

your favorite sectors right now what are

your models

um that's good I wish I had looked at

that a little closer that's all right

but uh but the

yeah

um bearish staples Commodities yeah yeah

I'd have to look at it yeah

I just

um yeah I don't I don't have an answer

for you but there is that I can tell you

this that of all this the sectors that

we follow we built all of our all of our

indexes are custom they're not anything

off the shelf it's all custom built but

right now I believe there are

eight of the 11 sectors are bullish wow

wow there's certainly some favorites

that look better than the others but I

did not

so if you're ready for that let's say

you're you're 25 today and you've got

some cash do you buy a house do you go

all in on the S P 500 the NASDAQ uh do

you get a better job what do you do all

the about to buy a commercial that's an

analog yeah I shouldn't make that joke

oh yeah yeah like I said if you're going

to buy low yeah yeah yeah listen I think

uh

the stocks that I've been talking about

a lot is I think that the the Russell is

going to come into play small caps okay

what are your favorites uh don't have

any okay just Russell in general yeah 2

000 small caps you have to understand

we're looking at stuff we have so many

metrics to to build things with so

um well your ta you don't like the

earnings calls as much eh

yeah I know earnings are are bad uh you

have to understand I worked in two

institutional research departments you

never want to listen to anything they

say is it just all marketing I was

trolling and yardini the other day yeah

well I worked Ed Ed was our head

um in the 80s he was our head Economist

sure and we just faded him he was the

best fade trade that there's ever really

because he's got the yard almost as good

as Kramer stop oh my gosh I'm serious oh

my God somebody said they were quoted Ed

and I go well now I go he's actually

improved he's only mostly wrong not

always wrong oh my gosh so wait that's

typical of economists if economists

could trade they'd be the best manager

in the world they can't punch himself

out of a wet paper bag okay

yeah yeah when I hear that stuff you

know yeah I yeah okay so not a fan of

earnings calls because it's all sales

marketing yeah because think about that

this is I always put this out on

earnings right so what's really going on

are these guys understating so they can

get a pop in the stock sure the

companies are always trying to do that

right it's it's a marketing every

research report you ever see having

worked in two major institutional firms

their marketing reports they are not

have anything to do with what's likely

to happen oh my gosh uh so that was my

opinion do you feel that way about sort

of mainstream media as well absolutely

so what's your favorite New York Times

Wall Street Journal yeah I don't read

papers oh not at all no Bloomberg

anything I'll watch some things once in

a while but I I isolate pretty good yeah

so staying away from sort of that

mainstream instead just focusing on on

your Algos in that end yeah that's it

wow so yeah I think you know just uh I

think too much is trying to read I

actually watched some Kathy on the way

over oh really watching okay and that's

that's who I was trying to true here's

what's not going to happen but one of

the things that everybody she has the

same dialogue everybody has we're coming

in recession the M2 is dropping blah

blah blah these are these are common

type things that are going on and uh I I

have you have to understand I'm an old

Trader a little bit of a contrarian but

if everybody's saying it ain't gonna

work that's not going to work but she

says a million dollar Bitcoin your take

no idea not into compared to boish on

bitcoin right now okay I don't know

about a million dollars okay so this was

like if you could ask me Bob what do you

think the Market's going to be in 27

right yeah who cares yeah it would be my

answer I can't trade it yeah yeah am I

going to put a trade on today thinking

about 27 or so no so uh the bullish

Bitcoin right now yeah I have been yeah

yeah okay well I could I could show you

I think we had a signal it

I want to say 15 000 bin long 16 and

then 15 16 range is where we picked this

thing up

um you know and gut objectives I've been

talking about 31 000 and we're printing

here we are no one thought that you know

I don't know no one thought but you know

I think um yeah everything I do is

really just all up

I'm a very unique guy because I built a

platform think about this I I've monitor

16 000 symbols yeah all of the symbols

are executing my exact models that I

built back in the 90s yeah and I've been

following them for three decades so

where's my confidence come from from

those so how'd you put one of these

together like how does one start making

their own model and in your version like

if you were to start over right now what

would you start with

um yeah I don't know I was very lucky

um I built some

um I've been very lucky with some of the

mentors I had I had an old client that

was a professor at University of

Michigan PhD in physics we get the

sentiment surveys from them yeah they do

and but uh bill came up with the concept

so I I have a PhD Plus in moving

averages I know more about moving

averages than most people will ever want

to know okay and I've used three moving

averages or almost uh since 86

10 21 40. uh I implemented the 200 which

I found to be useful but we do something

unique as we run indicators on the

internal change of the moving average so

this is the big dilemma and this was our

dilemma the derivative of the moving

average yeah we're looking at first

second derivatives of the moving average

okay so and trying to determine and we

built a probability map okay so here's

the big thing that everybody's looking

at

here's a 10 period whatever average and

the Market's coming down to it's going

to hold yeah I don't know we'll see

right I can tell you if it's gonna hold

I can tell you what the probabilities

are if it's going through or if it's

going to bounce because of the three

together and because of the probability

map and and what what the basically what

that percent change in the angle so I

talked about angle of attack yeah angle

of attack is an aviation term sure okay

so but it's the same thing here once the

angle gets to a certain level yeah the

probabilities of going through start to

drop so once you get above a certain

angle it that's when you you see the

steepness and I have three different

versions there's one what's a typical

where we get to some kind of terminal

value and then it comes back there's

another one where we can get extended

patterns are likely to happen and then

the last one is a parabolic curve which

is vertical right so there's there's

numbers in there that set that will tell

you what's going what's going on wow so

those are the the core understanding of

of Trends so when does it go wrong

um I don't know

I mean they're just trades so you know

um I mean not all trades work no no they

don't but uh they when you're okay so

you were talking about building a model

I think it's very difficult because I we

worked we bill and I for years and then

I went on my own the nice thing is I was

probably using a program on dos 2.3 all

the time okay and there weren't very

many programs out there was one called

computrack and compatrack was the very

first program out there and they allowed

you to build your own indicators you

could do custom stuff like you know 2023

kind of stuff yeah uh to a point and so

we we had this dilemma about the moving

averages how are we going to figure out

when it's going to hold and when it's

not we needed that answer everybody

needs that answer so we came up we we

just focused on getting that answer

we're also Elliott wave folks so so

um my do I talk about is wavetech so

wavetech is combination using moving

averages angle of attack to determine

probabilities of change and where

they're likely to go so

um

that is uh the club the Crux of

everything I've done from my entire

literally since 1984. and so does that

mean you're uh I mean I understand

you're trading but when when you believe

that what Kathy Wood is saying let's say

is not going to happen does that make

you anti-innovation or just anti-trade

Innovation is fine I don't have a

problem with that it's just yeah the the

stocks they gotta the signals are wrong

no they they have to do something right

you can't just go down forever and keep

talking about this as a good stock I see

so good stocks don't go down so you know

I've never I've never seen uh you know

stocks that collapse you know uh there

there was somebody I was following and I

I get blocked sometimes I can be a

little troll that's all we love it yeah

Twitter is entertaining because it is

and and uh there was a guy on there uh

young guy and he had all Kathy's meme

stocks and all the stuff on there and

when they started to collapse when it

got really ugly and I said you realize

that most of these stocks are never

coming back wow they're not ever I don't

care you can talk about their income you

can talk about everything they're not

going to come back wow and all you have

you can actually get a view of that

world by looking at like crazy penny

stocks like otcs yeah those things they

get that big curve and they collapse

they're done they're never coming

because one think about what happens to

a company when that happens oh they

can't raise Capital they can't raise

Capital they can't Finance they can't do

anything their interest rate goes

through the roof they're screwed it's

done so when you see that collapse good

companies don't do that and I'm not

saying they don't have good ideas they

fell 60 it's absolutely yeah does that

make them a bad company I wish I wish

Elon would have bought Mercedes-Benz

instead of Twitter yeah that would have

been this deal of the century whatever

Tesla falling was mostly because of his

Twitter purchase

um is he sold somewhere on 24 billion in

stock I think Twitter uh Tesla has

always been pretty over over priced yeah

part it's pretty heavy there's some some

risk in uh and tests on that major risk

at this time sure there's some downsides

what about

um so talking on Kathy's um

she's into Roku the snowflake what do

you think of some of these uh if I

brought them up on a screen I could yeah

we had some live live charts I could go

into that's right because you you so

you're not looking at even the cash

flows or the fundamentals it's just the

trends yeah yeah so uh when we're

building portfolios we do look at

fundamentals okay and so we we have a

screening service that we offer as well

we have full service everything because

wow we have institutional clients yeah

sure so we have uh we have a bunch of

screens that you can use wow and so yeah

and fundamentals are important yeah yeah

and none of those companies I don't

think have really good fundamentals

because there's no way these stocks are

going to come you know like I said

there's how do you recover we used to

have a when I was on the Pacific option

exchange we say you know there's don't

ever play with stocks that have trouble

because there's too many good ones so if

they got problems don't try to solve

their problems don't try to play in them

you know some we were trading AMD back

in and back in the day right so what

would happen is Intel would sue AMD

every time they put a new chip out Intel

would Zoom AMD would go from 22 24 to

12. okay so you bought 12s and you sold

24. and they would do that literally

they're going to take about five or six

months that yeah you'd get start to get

reports you know everybody's watching

you know the the lawsuit and then all of

a sudden it gets you know turned over or

dropped or whatever and boom back to 24

so you would we were option Traders so

we just put these big spread straddles

on simple you know and then maybe do two

to one on the long side or two to one on

the downside or depending on which side

maybe even a lot more because we get 90

percent uh ability to you know margin up

to 90 percent as market makers sure so

um wow but yeah so I I think I think

good companies uh reveal themselves and

are pretty easy to follow so you should

you should know what the fundamentals

are absolutely I'm not saying that's not

the it but the technicals and and not

just ta but some of the other Quant

stuff they have so like we if I had my

software here we could bring up a stock

yeah and I could go okay this stock

normally holds for 180 days it normally

makes 32.1 there's standard deviation of

that return here's our the average loss

how many days is it in a losing trade

versus a right a winning we'll have to

play with that sometimes yeah so what

about

um so having been a market maker what

say you about The Citadel and the maybe

the fail to deliver it's and the short

selling and the naked Choice

yeah yeah yeah yeah what do you say to

these it's really listen it's tough I

think I don't know that world very well

but there's lots of wrong there there's

a lot of shenanigans yeah yeah it's not

good yeah you know and uh Citadel is a

monster uh you know there's no doubt but

you couldn't live without them that's a

good point okay and most of the ago

trading that's going on in the markets

people say it was 70 or 80 all the

trades are more most of that is pricing

models meaning bid ask that's what

you're saying that's where most of the

Algos lie they're not all trading the

markets playing long or short sure they

are doing that yeah the biggest Algos

are the pricing all goes okay so there's

an order book in other words to maintain

yeah I can tell you I I once upon a time

uh was able to take a 12 cent stock and

build it and bid it to 22 by using some

Market making tricks that we used to do

um yeah yeah and you know and then

you know because there's certain things

especially when you have level two

screens oh yeah and you can see who's

playing and see if anybody's real out

there somebody's and they can watch as

soon as you start to raise some bids the

offers kind of tail off the same thing

even with e-mini trading like I teach uh

one of the things I talk a lot about in

like trading day trading is watching the

order book the order book tells you

what's going on yeah sure I still hear

the pit in my head so the guy there's

200 to offered I hear the guy screaming

200 at whatever you know it's just like

you can see yeah and say let's see if

this guy's real we get a little close

all of a sudden the 200 goes to 120 it

goes to 80 60. and never traded there

but the the offer disappeared yeah yeah

and then you get the flash offers the

guy somebody throws out you know 300 500

for sale at a price right never go oh

the big sellers out there you know

they're interesting you don't know if

they're big sellers or not actually

right right they're gaming yeah it's

just a it's a game interesting so so in

the past if you were able to do that

with say a 10 cent spread on a penny

stock today it'd probably be easy on a

100 stock to easily manipulate a few

pennies here or there at a large scale

yeah so so price Discovery you want to

talk about prices yeah okay so

um most people think volume moves

markets volume does not move markets

right you have to have volume that's not

to function sure it's yeah the

aggressiveness of the buyer or seller

that moves market so let me explain so

it's bid at a half I'll just do uh at 5

8 right so make it easy okay so I've got

a million to buy you've got a million to

sell right we're not showing our size I

get 200 200 and a half you're 200 at 5 8

right

we're looking at this little pit days

right we're looking at each other and I

go take your 200 raise it to 5 8 for

500. I just raised a bit I just raised

the market by an eighth sure and you go

three quarter buy your three quarters

three quarter bid for 500. because I got

a lot of stuff to buy here I've only

done 400 of my order yeah yeah you still

have a lot of work yeah yeah and I got

these guys running already so that's how

you figure it out but that and you'll

see it like if you watch the level two

like I live in front of a e-mini screen

all day with level two when you when you

look at that you can see this happening

all of a sudden you just like that with

the sorry for the noises but you know it

just kind of just all of a sudden it

just trail goes up right away and you

get uh that it went from

100 points 100 200 points in the in the

future it's just like that wow and then

all the cash spy everybody's got to play

catch-up yeah you know so everybody's

running in there the arbs are trying to

balance everything out and you know most

of it's happening electronically but

it's still a lag wow but what happens is

that exactly that where you're just

taking out the offer and you raise the

bid to the offer take out the offer

raised a bit and you just rotate it

manipulate it and if you've got size

yeah and if you could do that all day

long uh back in the early 90s there was

uh day trading rooms that were out there

and they would they would call them

group trading rooms A buddy of mine ran

a really big room down in Houston and

they would they called it uh what do

they call it team trading they had one

of the guys in the room they called him

WAMU he was the biggest Trader in the

world in that in that room right and

while we would go I'm going into

whatever stock right I'm going in to buy

something and everybody in the room Pile

in just start buying and doing exactly

what I'm talking about and Meanwhile my

movie was the first guy in he's he's

selling out sure yeah of course so well

because I mean really thinking about it

if if let's say

I don't know somebody's selling Lemons

at a lemon stand for 10 bucks a pop or

whatever somebody comes in with a

million bucks and they wanted to

increase the value of lemons you know

they could buy them out at 15 bucks a

lemon or whatever all of a sudden all

the lemons The Lemon Market just went up

yeah and now if they have a bunch of

lemons they can start dumping to all the

people thinking it's running exactly

it's essentially that's it and on an

intraday but that's what's going to

drive it the aggressiveness of the buyer

that we're sure same on the sell side

right so that's why somebody like

Citadel has a lot of money they can be

aggressive as aggressive as they walk so

their augos could be set to be very

aggressive yeah so why would they be

aggressive because they have a lot of a

lot of inventory sure so they get a lot

of stock I need the old days used to

have OTC market NASDAQ would like call

up a guy on a phone and the joke was if

the markets were really bad the phone

would ring and rain and they would never

pick up the phone right and squeamishly

sometimes they'd pick up and go okay

we're at a half or whatever how many you

got you know and you would have those

cameras stations but now the way the

markets are working this this digital

world is way way different yeah much

faster you know I tell everybody if I

tried to do the type of trading I did in

a live pit I would get punched out oh

wow because doing what I just talked

about yeah and people around you losing

money because you've got big size and

you're bidding this stuff up and that

happened yeah wow there was a guy in a

gold pit in 1980

that um he traded

I'm trying to remember who he traded for

um one of the big dealers out of London

right he could control the pit at any

moment everybody would follow him right

but he would get the whole pit bid

everybody's buying right so everybody's

bidding right and he'd come in with this

sell order and just like sell everything

oh wow and everybody's like wait

now there's no there's you know nobody

wants to find anyone yeah they they're

holding they're the bag the bag man the

literal bag holders yeah wow and that

would happen and maybe it was only 50

cents for a dollar but everybody's the

whole pick is like a shock wave wow

the but price Discovery is done by the

aggressor the aggressive without a doubt

and and there could be a lot of volume

of other examples we each have a million

million to buy yeah and I go

um million to buy five eight you go or

buy it a half and you go million at 5 8.

yeah sure we you know back and forth 15

times yeah one of us finally goes I

really want to buy them so it's going to

go one eight and that's going to be it

in a million Shares are going to trade

right where I could the other example

maybe I only use four or five hundred of

them to bid up yeah and maybe raise the

price by quarter yeah and now

everybody's sitting at their little

screens look it's at a quarter and then

the order float shows and that's what

you're trying to bring in right so if

you get outside order flow baiting them

in that's that's what we're all watching

every day right golly I mean think about

it that's all you're saying is

everybody's like oh look you know

everybody's got their chart a trend line

or whatever and that and like I said if

the markets we went from a million

shares a billion a billion shares a day

yeah and 19 to what six yeah average

sometimes eight plus you know so when

you get that kind of volume you get

those that many participants these waves

of buying or selling just keep coming

we've seen those big days where you're

just literally watching okay there's a

wave and it like goes sideways another

wave and another wave and you think it's

over maybe Thursday would have been a

day like that yeah sure but it was only

like 1.3 but we're talking some of those

three percenters yeah those three days

whoa you know like these guys are

serious and you try to short it and try

to play the reverse side because oh it

went up X yeah it just they they just

keep coming it keeps coming yeah okay so

to to summarize that for the individual

investor long-term bullish right now at

least you're bullish at least through Q3

yeah you don't see a recession coming

you don't see a banking crisis you don't

think the dollar the debt ceiling matter

you basically just just invest for the

next I think the dollar and the debt

ceiling does matter but the debt ceiling

will be panned out so that'll be solved

but uh the dollar is is get some

potential oh there's potential what does

that mean then in the next 10 20 years

oh I don't know that yeah I can tell you

about the next 10 20 days okay but you

know so in the short term the the

dollars got some risk in the short term

because here's what we don't know yeah

we got an election coming next year sure

there's going to be a new Administration

there's going to be a new trade

secretary

there'll be a new treasury I could have

Biden again though you could have yeah

yeah

that would be really interesting but

yeah so how about DeSantis versus Trump

uh I don't I'm not a fan of the Sanders

no I don't know what it is it like maybe

too extreme with like Disney or some of

them

just I I don't know it doesn't he

doesn't feel trustworthy we were talking

about trust earlier yeah I don't and and

Trump I think uh for whatever he's he

had his time whether he comes back or

not I'm not sure yeah good bad or

otherwise don't really have an opinion

um I think that

um he he did change uh a lot of things

when he was there from the perspective

of things that he did with NATO and some

of the other stuff sure he made some

pretty pretty decent moves there because

everybody was starting to get their act

a little together and now it's gone

we're just talking about the dower issue

and you know it's what's happened now

bifurcation of you know pushing Russia

imagine this so why would you want to be

a dollar holder when you know us could

decide oh by the way that all the money

in your central bank that you have

deposit with us we're just going to keep

that oh interesting yeah I mean yeah

it's probably unlikely though eh well or

do you mean or Russia oh you're talking

about Russia for example or North Korea

or Iran or whatever or even China or

anybody that gets out of line anybody

who wants uh interesting so because of

the sanctions if you don't agree then

you could be at risk you're talking

countries of course so for example hey

turkey are invading our sanctions we're

going to keep all the money that you

have yes yeah interesting so but so

that's a real risk okay but okay you

know it's probably unlikely just like

that same one will be solved most likely

yeah and maybe there maybe there is a

new poll of assets new currency but like

I said we were talking earlier is that

the

so cbdc don't have to worry about it for

a while I'm a little concerned I think

we that could be coming a lot faster I

think okay okay and you don't like that

uh I don't I don't know what you know if

I look at China say no I don't like it

right uh

Janet

Janet I'm worried about Janet I always

call her Grime or gallon oh so that's

kind of rude I know but uh yeah I I I

just don't think

it's it's actually the incompetence that

she has demonstrated okay uh in her on

her job I is shocking did you like how

they solved the banking crisis or was it

too slow

um no I mean it was what it obviously

what I expected that's true they opened

the discount window yeah open the

discount window okay let everybody get

the money they need fix the liquidity

that's what they're there for that's why

the discount window exists is to fix

liquidity issues and they solved it yes

and and then for everybody to play this

out well they open this and the balance

sheet increase I don't know if you

notice the balance sheets like

collapsing back in sure yeah okay yeah

no one's hitting the window anymore

that's how it works but like I said I I

think the perspective of having watched

markets for 40 years yeah not just 20 or

10. yeah because it's easy to think the

the Bernanke World exists sure it'll

come back yeah yeah and it's yeah

they're going to drop you're gonna

that's not gonna happen I don't think I

think I said funds five percent there

was a crisis of course sure you know

that but since you don't see a recession

you don't see them dropping rates yeah I

don't see where the recession is coming

from I did see you in your stream you

did yes whoever this guy is like he

looks around in the room and there's no

recession this place is busy

we love Ross uh we're always talking we

say our Ross Gerber research is when

we're out at a restaurant all right time

for some roster we're research it's busy

stocks are going up tomorrow this goes

back last last year sometime when

everybody was really screaming even when

we had our two negative quarters yes I

was driving through Scottsdale Arizona

and every parking lot was full it didn't

matter what the store was there was no

it was like there's no recession spots

there right okay so okay what's going on

here why is everything full every

restaurant you're going through is full

what's going on and it goes back to I

think the willing I I think the effects

of the pandemic are so being felt yeah

and that people want to be alive they

want to go out and do stuff have

experiences yeah have joy now I mean

what it took me to get here just now is

proof of that thank you for that by the

way so shout yourself out tell tell you

I mean you've been very generous with

your time tell everybody how can they to

get in touch with you and it sounds like

you have a website where people can go

to to learn about your platform yeah

yeah we we've got a bunch of stuff so

Kendall the Kendall report is the

YouTube channel and you have to have the

no spaces that's that's the link there

Kindle with an a at the end yeah

k-e-n-d-a-o-l yeah and so then we have

uh portfolio expert website which is

where our software is and there's no e

in the expert so it's portfolio just

with an X okay okay and and then uh

we're actually working on a new site

which is just Kindle report which has uh

all of that we also have trading view

indicators we have a whole Suite of

indicators really yeah yeah the trading

view is amazing yeah the trading view is

amazing and so I can get the Bob Kendall

indicator on trading get the wavetech uh

indicator so you get something called

Market grid that predicts the daily

ranges and and then you can you can get

these we call them PP PM indicators

which are price pressure momentum and

they measure the momentum of those

averages I mentioned at 10 2140 and 200

so we are running for second derivatives

and there's a whole probability map

there's videos on how to use them all

that stuff these are indicators that

I've been using since 19 they were

developed in 1984. wow and

we talked about earlier we're just

understanding that angle of attack what

the problem the probabilities are that

sometimes they fail like anything but

literally a lot of these levels are

probably you know depending on on on the

angle there's 60 70 percent we're not

going to go below that and I say this

stuff out loud wow I say the quiet and

the loud part yeah on the channel okay

and this is you know this is uh what

drives me so the other thing is with our

software we've we've got a complete view

of I think it's 15

700 symbols right now and so we we know

whether we're long or short any of those

all of our indexes are custom built

there's a custom models uh that that are

in there you just have just about it

it's a complete Suite matter of fact

we're actually packaging it with the

trading view the

um with wave Tech we also have what our

Pro side which is called portfolio

expert is is that is a platform and it's

a desktop based so it's it's got a lot

more power because wow you're not all

Cloud yeah yeah all those you would have

to argue uh so like some like we can't

program our models in on tradingview it

does not have capabilities we have to we

built a side program even with

tradestation we had to call other

elements from from tradestation to do

calculations and then feedback sure the

zero one or whatever yeah what the

answer was looking for but yeah so

there's the software is out there the

indicators and I I cover the indicators

every night I go through all the details

and show you how to how to use them I I

did have a trading room but I don't I

closed it down because I've got too much

on my plates spend you know a lot of

hours setting and trading around Fair it

was fun whatever but would you say uh

last as sort of last question percent

allocation to cash for somebody 25 30

today uh I don't know I think I don't I

think everybody has I would tell you

that right now we're probably

20 percent 60 plus and invested right

now okay and you should be that way

based on it's so individualized yeah of

course for the stocks that make it a

general statement but I think we can get

uh it's probably that's where we're at

last year like I told you we were 60

plus in cash sure yeah you know

um we had we had a couple uh strategies

that did really really well but you got

to pick the right stocks you still can't

beat that uh you still got to know uh

know that and the whole process with the

models is knowing it's the old Kenny

Kenny Rogers know when to hold them so

that's what the problem is yeah that's

what the probabilities tell you that's

what the holding what the we have

something we developed called the ER

ratio which is effective so we have self

rating on every model in our system what

about uh just holding the s p

um I don't I don't know I don't know

about just holding anything no comment

so my my old comment would if you if

this was

back in the day but it's it's a little

different now but if I would tell you if

it doesn't expire I probably don't own

it so wow so that's pretty much a

derivative guy yeah clearly so uh buying

and holding don't know anything about

that I'm not trading I'm not sure not

just trading I mean there's um I mean

I'm really not trying to troll Kathy but

I mean you just can't hold stocks

forever and ever and keep saying the

same thing out loud expecting it to

happen so srk short short dark no I I

haven't looked at Art I I mean I I I

mean at some Stage IT bottoms but it

should um the the issues there is you

just I mean stocks go from good to bad

you know Tesla can end up to be a really

bad stock it could end up to continue on

I don't couldn't tell you which right

but so what you have to do the way I

look at things you you evaluate on an

incremental basis and you walk it

forward so you never it doesn't matter

what your long-term opinion is worthless

huh because it's just an opinion right

but what does matter is what the price

is tomorrow what it is the next day and

as you walk forward you need to re so

but Warren would disagree with you yeah

uh Warren couldn't make very much money

if he didn't have government support

let's just get those Goldman bonds you

want to talk about that now

um so anyway his preferred the bonds or

whatever

yeah yeah I mean but the government said

we'll guarantee you yeah I can do that

trade how about you right how much money

could you make if they guaranteed your

trades there were some good people think

of America too he's been doing this

stuff forever and ever he's friends with

every Administration really so okay so I

got to tell you the story okay here we

go real real good story uh 2020. yeah

it's announced that Warren Buffett is

selling all of his Airline stocks

remember that day oh I've watched it he

said that he revealed it on Saturday at

his Berkshire meeting yep uh-huh so you

can go to my channel Monday was bad you

can go to kendallreport.com and there is

a video there how to take advantage of

Warren Buffett's mistake oh we made 110

yeah sure they all doubled yeah we just

put them in our model said just follow

this and 110 percent

and then got out of all of them and yeah

yeah they've done nothing since then

basically yeah but I mean you know but

the the point is it would so I have a

buddy big Trader uh in an institution in

in London it told me that the rumor was

on the street that Buffett was calling

up the administration saying he wanted

he wanted to get bail off bonds and help

Finance all that and he was told to

Pilot sand and so that was him showing

I'm going to get out of all my Airlines

oh so that was so much so whether that

was real or not it was this is so you're

saying potentially he wanted uh you know

a special deal didn't get it so he said

all right then I'll die take my bat home

and my ball so I'll dump your Airline

stocks and they'll suffer and then you

guys will have to bail them out more and

that's what you get for not uh giving

warning a deal and Bob said

they're not going to let the airlines go

out of business it's major

transportation in the United States and

everywhere they're gonna they're not

going anywhere yeah yeah yeah I mean do

you think once again the simplest trade

in the world right I mean do you think

it's possible then one of the reasons he

recently dumped Taiwan semiconductors

had to do with geopolitics rather than

the actual stock possibly yeah I drive

by the new plant that they're building

yeah it's it's a monster it's going to

take them years wow yeah but they're

getting lots of money from the

government for that they are big

stimulus checks yep I like investing

where the stimulus checks are going

that's not there's nothing wrong with

that seriously I mean I've I'm all for

so I always look at what when you're an

investor yeah your job is looking at

cash flow oh yeah so if money's coming

out of something where is it going yeah

yeah it's not always going to bonds that

that you know there's a rotation and

that's why I mentioned the small caps

yeah the mid caps I think there's a lot

of Promise in there the the patterns

that are set up right now in Russell are

um potentially so what we've been seeing

is nasdaq's way outperformed yeah oh

yeah everything yeah right but it's

really bad here in in the Russell right

and so I run like pairs you know on

Russell versus that and it looks like

that's trying to bottom okay and then I

look at the uh the TA and our models and

stuff on Russell and we're getting a lot

of what I call secondary stocks to start

to rotate in so the stuff this goes back

to my ETF hacking account the stuff off

the radar is going to be where the money

is going to get made in the next round

and I don't think necessarily there's

going to be a new ath new all-time high

or anything like that no not anything

there might be but that's not my that's

not my forecast but can I sold

in yellow calls entire portfolio 90-day

call options on Russell 2000 yeah there

we go why not

uh yeah we actually technically do not

have a buy signal in the Russell at the

moment okay but you're waiting for it

yeah but the person I'm saying the the

patterns are setting up are suggesting

that this could be this could be where

the money flows because a couple things

what do you we're just talking about

this what do you do when you're

investing you look for something cheap

yeah sure you're not gonna buy you know

the the techies because they've done so

good they've already done very well yeah

plus you know where you're going to go

with that maybe it goes maybe maybe it

goes 30. that doesn't mean it can't yeah

but I'm saying that what you want to

start looking at is some of the mid mids

and uh the Russell stocks could be

there's some gems in there oh yeah so go

digging yeah I like to do that I'm gonna

go Goldberg fundamental analysis I like

to find you know whatever kind of uh

financial ratios you like just go and

you dig through that stuff yeah we we

have

um

we in our screens we have some metrics

that we look for right everybody has a

little everybody's got something yeah

you know what's your favorite uh yeah

I'd have to bring up Thursday that's

funny yeah you got a bunch of you got so

many yeah yeah if you saw uh you know

I'll show you my my spreadsheet and when

you're back from Singapore I'll come

rate your office there you go check it

out yeah no it'd be fine thank you but

yeah you're welcome this has been

amazing so

um thank you so much we're going to link

everything down below that you mentioned

awesome and uh we'll uh we'll have to do

another video when I check out all your

screens okay awesome thank you so much

you're welcome thank you my pleasure