You become less rational when you're when you're
really stressed and fear is a big 1.
And markets tend to produce fear. Right? Stock
markets can be very scary. Things are going
down. It generates a stress response. And what
do you do? You
can you you skip the logic center. Sacrifice
accuracy, mh for speed because of fear.
Alright. It is there. I'm of the weekend.
Welcome back to the true. Well, Radio show
on this the best Tuesday you've had all
week.
I'm your host Dave Little John back from
beyond. Yeah. You are gone there for a
minute. Yeah. I think at least 2 shows
I was gone. 3 3. Yeah. They they
a lot... Yeah. They're not gonna let me
that live that down. The best 3 shows
That there's that's ever been, and and I
wasn't part of it.
Well. Yeah. For June. How about that? The
3 shows in June. Yeah.
Fine.
What july.
Whole new month, laundry
content that we're ready to start pushing out.
Are. It's time to launch.
Let's go straight into the fun. Matt, did
you watch the debate? Yeah.
So Yeah. I have only seen clips. I
haven't watched this start clear on the road.
No I actually need to watch I can't
claim that I've seen the whole thing. I...
When I caught about 25 percent of it,
and then I had other stuff that was
more pressing, and so I stepped out. But
then I caught the highlights on the other
75 percent. And
the highlights seemed to have been enough that
the Yeah. The fumble were pretty significant. It's
on big time.
Here's why do I bring it up?
Right? Well, we keep getting asked the question
you know, what does this mean for the
stock market? Right. And we've been getting this
question a lot? And so I really think
it's worth unpacking? You know,
what if we get a Republican in an
office? What if we get a democrat in
office? How is that gonna change things? And
I think a lot of people are under
the impression that it's gonna have a radical
change to the market. And so we need
to unpack that. And I think 1 of
the best ways to do that is to
look
to history. Right? There's been a lot of
elections in our past.
What has happened, not that it's gonna pertain
to the future, but it's a decent indicator
as to maybe what we can kind of
expect. Right. The as the joke goes, History
doesn't repeat itself, but it arrives. It's Nah,
there you go. Yeah. So,
yeah. It's really not partisan today. Believe it
or not,
that's not to say that we're not inherently
partisan. Everybody brings their own opinions to this
1.
This is where in the interest of disclosure,
like, I'm just a total loss. Right? Mh.
Quiet English Saxon accent protestant.
Yep, got, you know, 3 kids at home
and a nuclear family and we're still doing
that stuff. And you know, for some people
that makes me like, hey, right on. And
for other people are like, oh my gosh.
You're an press
And to those people, I just say, I
don't know. Pants sound. It's ridiculous?
Like, you know, show me where the oppression
occurs and, you don't know your privilege that
Suddenly other Man, we're gonna really stretch for
that aren't we. Mh. Are you. We're gonna
do that?
Because to me,
the idea that you're... What you put in,
has no bearing on the outcome is just
nausea. Mh. Right? In this environment where we're
supposed to have
freedom of opportunity and so forth. Then it's
not to say,
here... Here's... In fact, I'm gonna make a
comment about this for a sec. Right? There
was this video circulating around the internet at
1 point. Where they line a whole bunch
of people up on a line on a
field. And they start saying, you know if
you have this in your life, take 2
steps forward. Right? But if you have this
in your life, take 2 steps backwards.
And they ask a series of questions. And
when they're all done, they say, this is
what your privilege looks like. And I did
a face
as I thought about it for a second.
I said, you know, there's 2 things wrong
with this. Mean, 1, what it illustrates is
we start from different points. Right?
But it assumes we're all running the same
race.
And I think, well, that's awfully pre that
we're all trying to run to the same
place. Yeah. Beauty of America is that we
still enjoy a great deal of Freedom
to run where we'd like to. Right?
That's a good point. And so that just
kinda sat with me Yeah. Because the ideal
life for 1 person might just be, I
wanna
you know? Right. We don't share the same
passions. It's like some be like, look, I
I love doing this stuff on the radio.
There's some people that are mortified by it.
I mean, they would not wanna do this
at, oh. No,
I've talked to a lot of people saying,
hey, would you like to join on their
radio? All the thought is... Speaking to that
many people just makes me. Yeah. Yeah. And
I'm like, I enjoy it. Yeah. And so
just those little things like, we're we're not
built the same and that's is awesome. Mh.
Right? It's great that we all have these
different passions and different talents, and, you, that
forms a society. That and it forms an
economy. And I think that
some natural divisions of labor that are great,
but,
it it just frustrate me, to to suggest
that it can be distilled down to, like,
class identities as to whether or not somebody
succeed or not. Mh
Jeez. Yeah. Let's measure everyone the exact same
way. No. So so anyway, that's just a
little aside to this 1, but why? Because
I guess when it comes to... Political debate,
you know, people are gonna make their assumptions.
Mh. I'm like, yeah, It turns out, I
start on the conservative side of a lot
of analysis,
find myself to the middle pretty quick a
lot. Mh. But not everything I do starts
on the conservative side either. Right? I tend
to be fairly
socially agnostic. I don't particularly like the government
to be involved in social policy.
Okay, Ron Swanson. Yeah.
There's a lot of things that are reflect
their landing small government is the best government.
Yep. You know,
provided that it's not hurting yourself or others
around you and it's not to you know,
creating chaos that's in stark violation of our
social contract. And I think there's some liability
there. Because not every social contract. Is right.
I also, like giving... I mean, re in
agreement with what you just said, but I
also, like when we tend to give states
more control. Than a federal, like, over reaching
suite. Yeah. Where it's like, hey, you know,
let the states figure out the the bulk
majority to that stuff. What do we need
the federal government for? Defense. Right? Like, regulation
of basic commerce, you'll standardized currency. Yep. I
mean there's are certain things that we like
to have standardized across State.
Not I I'm in agreement that essentially, the
more localized the control the better.
I... I'm quite certain the needs of Rose
Oregon where we're broadcasting from. Look different than
need the needs of La. Yep. Absolutely. You
know, we have different top.
We have different,
not just personality, But I mean, it's just
the demographic so they are very different. We
don't have the population density. We don't have
a lot of things that they have. I
think you're setting a good stage though for
the show where it's like, hey, we're just
gonna throw some... Backs out there, and we're
gonna talk about what has happened in the
past and
whether you lean left, lean right or none
of the above.
Let's just have an honest Frank conversation about
the stock market and how that's related to
let me And I'm gonna I'm gonna summarize
the show before even gets going. Right? Sure.
Here's the dirty secret. We're gonna talk a
whole bunch about this. If you're looking for
a cheat code that's gonna somehow unlock the
market and ain't happen. Nope.
Right? It's not. We... We're yet to discover
a cheat code that unlocks this thing and
guarantees an outcome. I've not seen it. Mh.
K. But I think there's some some takeaways
that we can we can extract today that
give you sort of an indication of how
things are trending. Mh. And some things to
consider
when we're looking at this. But that I
don't think we can say, like, well, based
on the debate,
the stock market's is gonna do this? No.
No No. That is such a for, like
based on the debate. We can project the
outcome of the elect.
The outcome give a a hint to the
ending of the show or the summary of
the show.
I think that we need to at the
end of the day. Not let
emotional
behaviors
in regards to elections
drive our decision making. Right? Like, at the
end of the day, we need to keep
a good head on our shoulders and try
and separate ourselves from our emotion. Because for
most people,
we're gonna be emotional about how we feel
politically. And sometimes I think that can roll
over into making bad financial decisions. 0II would
say most of the time,
oftentimes. Right?
You could probably summarize this really simply. There's...
I'm... I've been listening to a book, often
on. It's kinda a long 1. Called thinking
fast and slow. And Don't recall the author's
name off the top of my head, but
really talks about the 2 different thinking systems
that are mind has. And it's really important
to understand. I actually gave a ted talk
about this years ago.
The
idea that your conscious brain is only capable
of handling so much at a time. Right
You forget
that when you're standing,
A good portion of brain power is just
helping you maintain balance.
But you never think about that. It's automated,
and that's a system that is
subconscious. Right? Below your conscious thoughts, all of
those things are being processed and handled, but
your conscious thoughts are juggling
conversation and the things that are happening right
now. Mean, if you're if you listen for
a second, do you know what your left
foot feels like?
Ting. Too much right your now. But maybe
now. Right? But if you weren't thinking about
it until I said something. That's an example
of how the system was running without you
paying attention to right. K? And why is
it relevant? Will the 2 systems do different
things. K?
They also consider the conscious system,
while tied to the subconscious system,
oftentimes has to make decisions without complete data.
K? Mh. Fight or flight responses,
Hey. If you have a fight flight response,
I think it's 3. Right? It's so it's
freeze flight or fight.
When do you tend to freeze or fight?
I tend to
fight.
I feel like you were gonna say that
because of your story recently on your vacation
about the mountain lion. Oh, that walking through
the campground. Like, who experiences that? Like, you're
just sitting there at a picnic table or
something in a mountain light it wasn't the
dark so you couldn't see it Oh, really.
We were... Yeah. It's it's okay. The... For
our listeners. I'll I'll share the story and
then and and I had more up for
this song. Yeah. That this was not part
of show prep by the way. No. But
it was a strange experience? And then we
did... Then we did pull some data on
it, which made it even more interesting. So
we're in... We're outside of Yosemite at a
campground. Right on vacation. Alright? And so the
family's there, we've got our motor home. All
of my kids and my wife are actually
in the motor home. I'm out at by
the campfire fire pit, and I'm talking to
the neighbor. And I I take that back.
My youngest daughter was with the neighbor's kids.
You're playing a car game right next door.
They were, like, main friends and so Okay.
Was talking with the neighbor. Nice guy. Right?
And we're chi chatting, and it's coming out
at about 10:00,
and his wife had come out. We were
just also chatting a little bit. I and
all of a sudden everything is real nervous.
The dogs are kinda starting to bark. And
I hear the
the neighbors say, she his wife says to,
like, that's a mountain lion.
She just kinda grabs the kids and just
usher him into the trailer, and then my
kid goes, okay. And know, they're okay. And
so in she goes, and I'm standing there
with
the
this other fella. I don't see him, but
she's like, I just walked right by.
And so for whatever reason, I reached down
and there was like, a long
it's not a stick. It's actually like a
like a 2 by 2 board. Kinda like
like a like a stick. Like, it was
a heavy duty stick, like a baseball that
kind of thing It was partially burned on
the end, but it was, you know, 3
4 feet long.
And so I reached down and picked this
thing up,
and sure enough, right across me and it's
probably 35 feet away. This mountain lion walks
up and I see it silhouette and it
turns and stares at me for a second.
And I don't have a panic response at
all. I look at this thing and think,
do you really want a tango?
Cool.
That it was a... This is the part
that it shouldn't when you talk about what
is it a fight or flight response. I
shoulda have, like, freaked out or how my
heart accelerate.
Instead, I was like,
mountain lions. You're supposed to get big and
make a lot of noise and that's how
you drive them away. And I'm holding this
stick, and I thought to myself I need
to go beat this cat. Right? Like,
it's
you need to do what?
I said I wanna abuse animals. Right? But
I'm like, we're in a campground grab. Full
of kids and stuff. Somebody better scare this
thing away. Mh. I'm the most reasonable guy
to do it. And I was just like,
I better approach this cat. And and
it just kept walking, and I went I
look at ford and never saw it.
But, you know, I walked out, kinda carrying
my club, like, a caveman or something. So
I don't think that makes me more intelligent
by the way. I think... It... But it
is interesting to see how we processes. My
logic center was working with fight flight saying,
you better
drive this thing out of camp? It's inch...
It would be interesting to kinda like, parallel
that too. How does your mind work in
regards to the market when things are really
stressed. And really going ride? It's like, how
does that fight or flight relate to the
markets?
So super interesting. We're super not prep for
this? But because I've done some research in
the past. Okay. Let's come back to this.
We're running long first segment. Okay. Give me
a favor.
Let's stick around. We'll grab a break, When
we come back, I wanna talk a little
bit about the fight flight response or what
we call the stress response and how it
can adversely affect investment. Decision. Let's do that.
Alright. Stick around will be right back. I'm
Dave Little john, Am semantics and... And you
got true wealth. On news radio 93 9
fm fam and 12:40. K.
Alright. I guess we're back, Matt. Hey,
just reminder, grabbed the podcast, there's gonna be
a gap too. I just realized, like, we're
were, like, some our video may be off
that segment. But
because you'd get the rest of the story
about the Mountain lion.
The audio will be there. Yeah. But
the and the weird end of of the
stories is. I'm you know, out there looking
for it, but the dogs at Gone hit
it it had left. We did some research
in office. Right? And what we find. Like,
in the last
Hundred years. There's only been like 20 Mountain
lion attacks. It's something really low. Really uncommon.
Yeah.
It it it really... Or or, like, maybe
it wasn't that low. Like a hundred attacks
in the last 20 years. Total. Yeah. It's
an extremely low incidents that almost always the
mountain lion. You should be more terrified of
being in a car act. Accident. Oh way
more. Yeah. I mean, you're probably more likely
to have a shark attack. And that's, like
you're more likely to be struck by lightning
than be but by a shark. Mh. Like
just crazy stats like that. But whatever.
What
when we... You asked me to had a
question for you. Online. You know, you've got
this fight flight response. And in your instance,
more often than not, your
initial reaction is the fight response. But how
does that you know, kinda correlate some maybe
behavior regarding the stock market? Like, you know,
for the person who has more of that
bite response. How does that kinda correlate to
your behavior? Sure. And maybe we need to
expand on the response just a little bit
too. Not everything's a fight or flight in
the traditional sense. Right Mh.
What I tend to become is very, very
clinical
under high stress. Okay. Right K? And so
a lot of the motions that make me
seem kind of, you know, friendly or more
engaging, kind of disappear and I become a
drill sergeant. So you would have been a
good surgeon.
Possibly. Right? I'm just thinking about the the
examples I have are usually things like, you,
you're driving on the freeway you hit black
ice
and, you know, do you freak out and
start yank the car around. Mh. I I
do not. I get really, really,
like, like, I dialed Super super focused. Everything
goes into slow motion. All the moves become
very, very sensitive. So there's very little over
correction and such in that case.
And and I have, like, actual thoughts about
physics and so forth. Like, oh, you're sliding
well you need to make sure that you
stay on the direction or the that you're
already in until you gain traction because you're
not gonna have adequate
friction in order to establish grip in order
to get course credit. And like thinking this
while it's happening?
I go, like this, like, super
detailed problem solve mode.
And then once it's over, the flood of
adrenaline hit. And then it's, like, you know,
you become kind of a jelly mess afterwards.
But in the moment, super hyper focused. Yeah.
So...
But not everybody has that response. Some people
they have rebooted just, like scream
and lose it. Right? And it just... There's
a spectrum and you don't necessarily know until
you've experienced it. Mh. So I bet you've
seen investors who are the type that just
freak out wig out or, like, an emotional
puddle. And then people who are like, we
gotta do something.
Do you know talk about, like, a little
bit of a comparison there. Yeah. It's... Funny
2 because you you look at the time
horizon
too. Right? Mh Some decisions have to be
made in an instant.
Yeah. And those... There's not a whole lot
of time too things. So sometimes it's just
a reaction.
At this is where I would say, are...
Biological systems are designed for shortcuts.
Right? If you touch a hot stove, you
don't think about pulling your hand back, that's
too slow. There's an immediate reaction to pull
away from pain.
And
sometimes you can step into something else that
hurts also, which is not good, but it's
a programmed
response to get your hand off the hot
stove as quickly as possible to minimize damage.
Mh You're sacrificing
accuracy in the decision for speed.
Okay? And so our system has a biology
to do that. To sacrifice
accuracy for speed.
The problem lies in slower paced decisions that
happen under really high stress k? Now, I'm
not a biologist, but I stayed at a
high like a holiday express.
These hormone that's generated when you're under stress
over time is something called cortisol.
Right? K?
And
long term stress
has lots of biological effects. But in the
intermediate like, when you're under stress and you're
trying to make a decision, it can become
biologically
improbable.
I mean, notice that term, right? Improbable, not
impossible, but improbable,
to use the logic function of your brain.
Right. Because the cortisol in your system is
causing you to that well stress response is
essentially keeping you in a fight flight, and
you're doing the best you can to maintain
stability in an stable environment. Mh. And long
term stress like that wears on the body,
and but it it makes decision making very
difficult. Right? When you're scared, it's hard to
make good decisions. Right? You become less rational
when you're when you're really stressed and fear
is a big 1. And markets tend to
produce fears. Right? Stock markets can be very
scary. Things are going down. It generates a
stress response. And what do you do? You
can you you skip the logic center. Sacrifice
accuracy, Mh. For speed because of fear.
Right?
That with investors can create all kinds of
havoc because like, a panic selling moment Example.
Panic selling is is the example. Right? I'm
doing the opposite of what I should be
doing because I can't use the rational parts
of my brain right now.
I just need
resolution and this pain to stop.
Mh. K?
That's a challenge
because oftentimes the opportunities are in the highest
stress. Mh. K?
Now...
Let me give you another example. Talked about
this on the show before. If you've been
a long listener. You've heard this.
Firefighters.
K.
So, Matt, if you were,
had our house on fire, and we decided
to grab the garden hose and run inside.
What happens?
Well,
we're probably not gonna make it out of
the house because we're either gonna get smoke
inhalation and fall on the floor or the
heat or flame is gonna get us and
we're toast. Yes. Right? Probability of success extremely
low. Despite what the movies would have you
believe, you can't run it and save your
pet or something like, you died with them.
Yep.
Firefighter shows up and knows the same thing.
What happens? They're gonna most likely walk out
just fine because they've got the suit to
protect them from the flame. They know at
what temperature they can be in there for
the, you know, a certain amount of time.
They've got a watch. They've got people watching
the fire from the outside.
They have an oxygen tank, so they're not
breathing of smoke. They have way more advantages
than you do. So... And what you just
described is they have a whole bunch of
tools. Mh. But you know what else they
have? Training,
training.
Yep. That is huge
because they...
Can go into a high stress response environment,
still experience the same stress that the rest
of us would, but their training is able
to take over. Mh. And it helps them
they have trained to make the right decisions
in that environment.
I like is 1 of the huge differences.
Yeah. And I feel like that really translates
over into our field of work. Right? Like,
you have seen
the dot com bubble. You have seen the,
you know,
housing collapse in o 8. You have seen
Covid. You've seen a lot of these different
pullback in the market, And, you know, if
we happen to get another 1, it's probably
not gonna phase you the same way that
someone has only seen it 1 time.
Well, and, you know what I mean? I
think that's true and to layer further into
this
illustration. K?
So Matt, you don't have as many years
scenario experience. However,
k?
There's another example. Let's not talk about fires
for minute. For for the moment. Let's talk
about surgeons. Mh.
There's typically a rule that says, a surgeon
cannot operate on their own family members Right?
Why do you think that is?
You're too emotionally involved in the process. Right.
Yeah. Right. Your judgment gets compromised because you're
too close. Mh. Right? And so there needs
to be some clinical detachment
where Matthew with... You may not have the
same... Just I made it I call Mad
all the time. Even then, like, all of
his stuff everywhere Matthew. Right? This makes it
sound like I'm being all paid, you know,
patronizing her No. I'll take it. I'll take
I... So Matt. Yeah. When
you you consider as a professional. Mh. The
advantage that you have... Is that you're looking
at this all of the time, it's not...
You don't experience the same level stress because
you have this high degree of familiarity. Mh.
Even though you haven't been through the same
cycles that I have you studied them. Yeah.
Right It's true. You have other
teammates that you can turn to to check
your thinking. Mh. Right?
And and you are clinically
detached.
True. Right? And so Yeah. It gives you
the ability or or the higher probability of
getting back into that logic
decision matrix as opposed to the fight flight
response. Yeah. Right? Even if you are stressed
out in another area of your life,
this area that you're trained for in clinical
it, you can do really well in. Right?
Right? And so therein lies the challenge for,
I think all of our listeners out there
and everybody that's an investor
is especially, like, especially the person who's doing
it themselves. They only have themselves to listen
to. They don't have another opinion, and they
are super personally
invested because it's your money. Right. It's it's
all of the things. Right? If you Yeah.
If you lack lots of training,
and you are emotionally close to it, then
you are...
Less likely
to be objective in all decisions. Yes. That
does not mean you can't be. Right? And
their personality comes into play for all of
this and aptitude and skill level and so.
So there's... There's a lot of things to
consider in this 1. Right? You. You'll notice
on this show Rarely, am are you gonna
hear me say, you know what? You guys
better gotten in higher pro because you're incompetent.
Hey. That's a fear tactic. Sure. Yeah I'm
not interested in that. Right? That's that's not
what we do here. We're about educating on
how to do this, but you do need
to know
where the potential chin in the armor are.
So that you can prep yourself properly. Right?
Get better trained if you're gonna do this
yourself. Right? Mh. Find ways to step back
and make sure that the, you know, give
yourself an opportunity to pump the brakes on
decisions and try to bring logic back in
as much as possible and not be emotionally
reactive. Right? Right? And so I think that's
the step. So all of this frame up
now, we can go back to our original
question.
Which is should you be afraid and fearful
about What happened after this
debate. Mh. What
what is the market got it been do
now. Right?
And to me,
it's a fun and interesting question because
more questions were created than were answered? Yeah.
So...
But can we answer them?
Maybe, maybe.
Maybe. I think we're gonna take a stab
at it. Okay. As I look at the
clock, I realize we gotta take another break
first.
So stick around,
again, we're not here to throw rocks at
any of the candidates today, we're just gonna
talk about. Now that everything's up in the
air.
What might the market be looking. And we're
ready for it. That more. Stick will be
back. I'm Dave Little John Matt dixon, and
he got true wealth. On this radio 92
9 fm them. And 12:40. K. We yeah.
Alright welcome back to the true I'll show.
You're you're getting tail into this conversation. We're
sorry.
Not sorry, Actually. Yeah when you're miss out
Matt was asking about nuclear energy. Yeah. You
know, we're really talking about... I,
it was kind of a
well, it talked about, like, our brain processing
power and how little our brain uses and
it's like, but look at how much Ai
still uses. Yeah. Like energy wise. Yeah. And
so it's like, great. If Ai is gonna
change the world, but it needs all these
power whereas are gonna come from. And then
it's like, well, should it be nuclear at
some point. Mh. And
I think yes, is my answer. Right. But
I'm like, but the the politics behind that
are so,
messy when it's like, nobody wants to deal
with the leftovers of nuclear,
and it's always not in my backyard kind
of thing. See will then then wear. Mh.
Yeah. Even would be interesting because the Us
is needing more and more and more energy
all the time. Like, California's grid is, like,
desperate for more energy. They're buying it from
other places. Yeah. And well like where is
it gonna come from?
I think there's multiple parts of this. I'm
no expert in the energy component,
but
there are a few things that just seem
intuitive to me. Right? 1 is we have
this aging
delivery infrastructure. Right? So Mh. Power is delivered
over lines above ground or underground and so
forth.
And
we don't have a lot of better alternatives
to that right now. But what we can
do is distribute where power is created, so
it has to be delivered. Over shorter distances.
Mh. And what that does is it reduces
the burden,
of transfer around the grid and the loss
of power during the transfer. Mh. And by
distributing where the power is captured or created.
So, like, when you put solar on the
roof of every house in California.
Then
you're really generating a lot of electricity that
way, and it's a distributed
right back into well. The you... What you're
do is your load down the grid. Right?
Rather than, like, creating the energy at a
dam somewhere and then sending it 200 miles
away. You're sending it 30 feet down bouncing
power cords storing it into the battery until
it gets used. Yeah. And so that what
that does is it reduces the requirements on
the grid to be able to move power
around.
So that load balancing is useful.
Yeah. Right? And so that that's part of
extending the life of the existing infrastructure.
So I I see some benefits to that.
But
then you have to look at the cost
of producing solar,
and is there a net gain or not?
Right. I only that's a 0 sum game.
Mh right? Because well, I'm I'm know... Like,
I'm not really a hardcore
environmental conspiracy that believes that the world's ending
tomorrow because of what we're doing. But I
do think that
when given the choice between do we put
more carbon in the atmosphere don't we?
I don't see a downside to reducing it.
Right. I don't see a downside to reduce.
I don't see a downside that keeping poison
out of the air. Mh. So I'm okay
with that. And I don't see a downside
to renewable energy. It's just at some point,
It has to be cost effective. It can't
cost 5 times more.
Right. For a non discernible benefit. Right? Nobody's
gonna pay 5 times more for the same
thing if you can't discern a benefit.
Yeah. And you can't conjure a benefit.
And that's the thing like you get. Well,
there's a benefit? Is there really?
Maybe if we do the... This sort of
rationalization.
Yeah. That that whole energy trend is very,
very interesting. Yeah. Because because boy, it can
wrap you around the axle too. Yeah. Yeah.
But anyway, I, like, I could say things
like, Tesla's is just a fun car to
drive. Electric cars are super fast, and that's
cool.
The instant power from electricity. This wild is
pretty sweet. Yeah. If you wanna drive a
rocket ship cell phone, that's kinda what they
are. Yeah. So, you know, you gotta like
technology and toys.
It'll be interesting to see where the battery
technology goes because we keep getting what it
seems like more and more breakthroughs and
advancing the batteries, you know? And if if
we can go away from lithium.
I mean,
or even just incorporate
natural gases
to comb combustion with electricity,
that... That's really Just a fascinating,
well multiple thoughts from batteries. I guess, this
is where I like throw my ideas away,
so I can never, like, capture them and
utilize them pretty anything good. But Okay. Whatever.
Someone's gonna take this. May monetize it. The,
you know, the first is, course, you want
batteries that you can charge really rapidly. Right
right? Ideally, you could use common
available elements. Right? So not rare earth stuff,
common elements.
And, you know I understand that it's about
transferring
electrons from 1 gradient to another and then
capturing them and as they move. It's kind
of the idea of, you know, I think
electrons move and that's how you get electricity
to power something. Right?
But it also occurred me that, you know,
you have a battery that you
use, it gets down to a point where
can't deliver enough current. And then you stop
using for a while, and it sort of
heals a little bit. Like, it it stores
up a little bit of a charge that
can use it. So there's a bit of
a capacity nature to the battery at times.
And for I wonder if there isn't,
some kind of
cat style chemical reaction that would allow a
battery that's not being. Actively drawn on to
essentially recharge itself.
You know, And they they've talked about,
you know, whether you have a
the capacitors is different than a battery. Right?
Like, if you get us a high power
source, but you you fill the capacitor drain
it down and then you fill the capacitor
back up. It's not the storage unit. It's
a way to
boost up the amount of amperage or the
amount of voltage in that capacitor. So it
but the idea that you could have a
a chemical process that included a catalyst. Catalyst
doesn't get consumed in the reaction. Right and
it allows the battery to essentially recharge itself
if it's not under load. Mh. And so
what you'd get is an extended life of
battery. Now I don't know the the science
behind it I just know that, you know,
a lot of these things start with the
concept and then somebody gets like well, yeah,
if you did this and this and this.
So... But you gotta have the idea to
throw out there. So. There you go. Yeah.
The silly idea is that show up in
my head. It's like You know. Right?
Matt? Yeah. We gotta get back to Home
base on the show. Okay. Home nuclear, but
this was all about the... I think the
question, now I'm gonna ask you. So
the
the debate that we just saw between Trump
and Biden
was pretty weird Right. And I think the
big shocker was that Biden
had some
significant stumbles that were beyond what was typical.
But he's he's had gas for his career.
Right But this this looks pretty egregious. Well,
and that's
not as picking aside. You look at any
news outlet. No. Yeah. I don't Don't think
that's partisan right
conversation is,
Biden looked disoriented,
tired. He wasn't tracking well. He wasn't actually
answering questions. Higher and so it brought up
the concern. Yeah. Is he fit for another
4 years. And I think that's a really
reasonable question to ask. And that's...
You, you're really...
You took where I was going with it
to where I hoped you would too, which
is let's not... I'm not throwing rocks, Biden
here, but let's just play out what the
market's asking now. Mh. The market's asking itself,
based on this,
how do I handicap particular things. 1 thing
that is now introduced is, Will Biden be
the eventual candidate. Mh. K? And so that's
a yes or no question. Right? And then...
But if the... So the answer is yes,
then will he win?
K? So there's questions. Kind of scenario 1.
Like, and so playing into scenario 1. Scenario
1 is he wins the election. Right? Correct.
Okay. Scenario scenario 2,
he loses the election,
and we're assuming Trump went.
Right. I... But scenario 3 and and 4
in Infinity beyond it. Well, I say let's
just go to scenario 3 and say someone
else runs in his place and wins. And
Biden steps out or is replaced. In candidate
3 wins. Right. And then you say, who's
the candidate? What are the what are the
ongoing policies that show up as a result
and how does the market digest those? Right?
There are things that are still very difficult
to handicap right now? Right. And if you're
wondering were there be going with this we're
we're going so relevant. Right? Well, because because
baked into the data of this is the
market
seems to care less historically. Mh.
About
who wins
then whether or not, it's positively Let me
give you a stat on that. So kinda
thinking along lines of market prediction versus reality.
Right? Like, you go back to 2016
when Trump won the election. That was not
predicted. Right?? Like, they... It was... The prediction
was Trump would lose. Buddy doesn't, he ends
up winning. And so
everyone thought that the markets were gonna have
this sharp decline. Oh, my gosh. Trump won,
here goes the market.
Reality, the S and p ended up almost
12 percent that year. Right? Right. And then
you can even flip flop that.
You know, we were scared back in 20
20 that the election was gonna be contested.
And everyone thought that the market, you know,
would really be bothered by that.
Nope. The S and p 500 rose nearly
11 percent in 2 months. Following Biden victory.
So
maybe it doesn't matter quite as much as
you think that it would
Yeah, My takeaway is that it's less partisan
than we think.
And it's not even necessarily
entirely about policy.
Other than if I could develop a theme
underneath it it's really hard to trade this
by the way. Mh. The theme, and I'm
not saying is accurate.
K? Right. But the underlying theme that develops
when you start to look at regimes.
So that's that's maybe an a a length
of administration, but it could... It's not just
administrations. Like, how long a block in power?
And what are the things that they're advocating
for? Mh. And so you said, oh, and
then I look at the clock and I
realized.
Everybody wants to know what Time. Like, what's
the
observation
about
regimes and where the market goes.
I get something really good for you on
that. Well,
I'm gonna make you stick around for the
next... Through this last spring. Okay. We'll come
back to this.
Here's the hint. Right?
It
has
less to do with policy or less do
with partisan,
then it has to do with
parties related to it. And it's not political
parties.
What do I mean? Stick around and I'll
tell you, Dave Little John. And that Dixon.
Yeah. True well. On news radio 92 9
afib. And 12:40. K. You we in. Alright.
Welcome back to the True well show. Dave
John and Matt Dixon. And just in the
last few minutes here, True We've been talking
today about all kinds of stuff. We talked
about decision making fight flight and using,
not letting emotions wag the dog of our
decisions. Right? And now we're on to, do...
Does the election matter to the stock market.
Right. I it, really came out of the
debate, which left more questions than answers in
terms of,
viability of candidates, replacement of candidates.
Popularity of candidates,
and, you know, there's still a lot of
questions about
what this election brings,
and
what I wanna share with all of our
listeners.
Is an observation I've had. Now I've been
a financial advisor
since about 2000. I actually started the industry
before that insurance in 99. So I've got
I'm I'm, like, somewhere in my 20 fifth
year doing this. So it's not my first
rodeo.
My observation is that markets
tend to go up
when money supply is increasing and government expenditures
are increasing. Mh. Okay. Markets tend to go
up, when there are surprises
in the news
that they didn't expect that are positive.
Positive surprises move markets quickly,
and the expansion of money supply moves market
slowly.
Right. Which is why right now as you
see the money supply contracting
with higher interest rates,
Even though the markets are going higher,
the market air quote is not necessarily going
higher, what we have is the large cap
section of the market. In the S and
p 500, the biggest stocks
all
closely related to artificial intelligence are expanding. And
then the rest of them were actually pretty
flat and the rest of the underlying market
is flat to negative. So we're we're seeing,
like, the s the the the Dow.
Is up, like, 5 6 percent for the
year and the S and p's is up,
like, 16, 17 percent for year. Right. And
most of that has contributed to Nvidia, and
Microsoft Facebook. The magnificent 7 we talk about
has been magnificent.
All of those stocks are mega cap stocks
that are heavily
leveraged to artificial intelligence. Yep. I think that
we're seeing Ai move a lot like we
saw the dot com's move. It Now the
dot cons ended with a pretty abrupt rep
pricing
In 2000. Right? We saw the markets really
slide for a couple years as things were
rev valued.
There will be a point at which we
have peak valued Ai.
Yeah. And but what's interesting is that Ai
is such a large portion of our major
index in the S and p.
So I think it
makes it look like the markets are doing
distant disproportionately better right now and that's more
a circumstance of how the index is composed
than
circumstance of our total economy.
In which case, if we saw a contraction
of the money supply,
we could start to see a that pressure
the markets. Haven't seen it yet, but we
could.
Yeah. Okay. So
you know, look at where the money is
flowing and growing, and that tends to drive
the markets over time, but it's the surprise
news. If we came out tomorrow with surprise.
We're regulating the heck out of Ai ai,
I got some stats that can back you
up there. Oh, okay. Me. So, you know,
typically, Democrats
advocate for more increase in government. Spending. Right?
And Republicans are typically a little bit more,
you know,
leaning on that reducing the government spending, lowering
tax is right? I chuckle because neither of
them. It's like, we wanna spend more. And
then somebody else, well, we wanna spend even
more. Right. Like folks Okay.
But, you know, you start looking at it,
the average annual spending growth rate?
Actually backs that up since 19 45 to
20 20.
Democrats have bumped it up about 5.4
percent. Mh. Each year under their spending, whereas
Republicans in office tend to be about 3.2
percent. K. So... But...
But interestingly traditionally to have the market. The
market. So under Democrat presidents since 19 45,
the S and p's been up on average
10.8.
Percent whereas Republican presidents,
only about 5.6 percent. So it backs up
your theory. Right? Someone comes in, they're a
little bit,
more loose on their spending,
markets tend to appreciate that and you see
a rise.
So it's crazy too though because if you
consider when I use the term regimes.
Right?
Going back to 19 45.
You know, you're post world war 2. Right?
And you're seeing that expansion, and then you
go into the seventies.
Right? The the the late sixties through the
seventies and oil embargo and everything else. And
it's a it's a... Kind of a bizarre
inflationary period, then you have the reagan economics
period of the eighties, and then you have
the,
the kind of the the Middle East 1
during the nineties. Yeah. And then you had
the big dot com build up in the
late nineties, the collapse of that, the transition
into real estate from dot com that
imp in 2008.
And then you saw the Fed show up,
and we've had quantitative easing and the troubled
asset relief program. Remember, the tarp program of
o 8 was we looked at about 700000000.
Mh. Or 700000000000 rather. Which it's still billions
a lot of money. But, like, comparatively speaking,
then we just started printing money. All the
way up through Covid where we printed massive
money and now we're raising rates. And have
raised rates. Even though the long end of
the yield curve is still lower. So it's
suggesting that this is temporary.
So it's very interesting to see the dynamic
of money creation,
And how equities have been benefited by that.
And oddly during election years, you know, the
S and P has been... Mh positive during
an election year, almost a little over 7
percent returns during an election year. However, there
has been more volatility.
Sure. And, you know, in the months leading
up to it, But, you know, largely, the
areas that
are the most,
you know, kind of volatile and changing
are more sector based. Rather than the broad
market. Right? Like, there's certain segments of the
market that tend to move more during an
election cycle, typically, technology and health care,
But that's because regulation policy you know, is
expected to come down the... Oh, we got
a new president. Well, what regulation are they
gonna change? And and that's and health care
and technology are the things that they're they're
big in our economy as a incentives to
itself they get kicked around by policy change.
Right.
Yeah. I mean, if I... You know, money
does get created or destroyed. I mean, it
can through the expansion or contraction of money
supply. That's how fractional reserves work. But,
typically, money moves. It's... We don't destroy it
that often, but it tends to move around
in the economy. We we try not to
destroy it because
the system's built on slow and steady inflation.
And when more money comes in, things typically
just rep price.
Correct. Right. I mean, and everything is. Right?
I I still
maintain that, like, a snickers candy bar should
be 40 to 50 cents, and it's like
a dollar 50. Nice inflation. Right? And so
my kids, they'll never have a 40 to
50 cent. Price point. People who were older
than me are like, pretty kidding, It should've
have been 25 or 5 or whatever.
That's just
because the nature of our system is built
to inflation. And you would expect that to
also kind of work its way through the
markets too. If a company was worth a
hundred million dollars maybe that company now is
worth a hundred and 25000000 dollars. But it
takes a while for it to rep price.
Yeah. And plus, you know, if the company
is growing anyway. Not it's growing while.
So... Yeah.
The the takeaway from all of this at
the end of the day is that, partisan
is probably not the way that we need
to worry about how the markets are gonna
behave. The more important thing is by assets
that are appreciating, and if they're appreciating better
than inflation that puts you in an improved
position. Pat yourself on the back. I think
the number 1 thing for... Especially for the
middle classes is, it it doesn't take as
much as you think to participate in the
market. And how about don't get emotional and
make bad decisions Yeah. Don't get emotional, don't
make bad decisions, separate the watch from the
needs and make sure that you are focusing
on buying asses. Sets rather than what fine
someone needs, like a financial counselor where they
need to bounce some ideas off them. Go
call counselor. But if you need an advisor
matt how they headsets 54137
05:08
9 8. Yes. Good good... See, good segue
there. Yeah. Do keep in mind,
even if you don't necessarily become a client
in a firm, we're happy to, at least
help you punch in the right direction, get
you more information. Our goal is simple.
We want everybody that comes in our door
to leaving in a better position than they
entered. So
that is our goal. We wanna spread more
financial literacy. If And if we're the right
fit for you, we would love to hear
more about how we could work together to
help you meet your financial goals. So that's
kind of the story. Sticking to it. Okay.
Check out that website little john f s
dot com. Yep. As a reminder, you can
catch the rest of show if you didn't
already. I'm by going to little china s
dot com under the Educate tab podcast available.
It's until next time. I'm Dave Little. And
Matt Dixon. And you go signature. On news
Radio United N.
And 12:40 k.