The Bull is Back (FvF Ep. 184)

In Episode 184 of Facts vs Feelings, Ryan Detrick, Chief Market Strategist at Carson Group, and Sonu Varghese, Chief Macro Strategist at Carson Group, dig into one of the most historic 13-day market rallies ever recorded and ask the question most investors are afraid to answer: Are the lows for 2026 already in?

Ryan and Sonu break down what actually drove the comeback—not just momentum, but a fundamental shift in the earnings picture. Forward EPS estimates are rising sharply across tech, energy, and materials, and margin expansion is now the single biggest contributor to year-to-date S&P 500 returns. They explain why nominal GDP growth of 5% to 6% is fueling corporate profits even as consumer sentiment sits near historic lows, and why that gap between how people feel and how they actually spend tells the real story of this market.

The episode also covers portfolio construction in a structurally inflationary world, why telecom has quietly surged 40%, why hard assets and managed futures are outperforming bonds, and what this bull market's three-and-a-half-year track record says about where things go from here.

Key Takeaways:

• The SP 500's largest 13-day rally in history was driven by fundamentals, not just relief
• Forward EPS estimates are rising across tech, energy, and materials, three sectors making up 40% of the index
• Margin expansion is the single biggest contributor to year-to-date S&P 500 returns
• Consumer spending remains strong in nominal terms even as real income growth is flat
• Telecom has surged 40% and remains one of the most overlooked positions in diversified models
• Bull markets that reach Year 3 have made it to Year 4 seven out of eight times historically
• Ryan believes the 9.1% drawdown in early 2026 marked the lows for the year

Jump to:

0:00 — Welcome and Quick Setup

0:31 — X Account Hack and Security Lessons

3:41 — Livestream Guests and Schedule

8:30 — Ryan's New CNBC Contributor Role

9:58 — New Highs and a Historic Rally

16:08 — Tim Cook's Legacy and Apple's AI Strategy

22:06 — Earnings Growth vs. Valuation Multiples

29:27 — Sector Profits: Energy, Tech, and Materials

37:20 — Consumer Spending Amid Low Confidence

44:15 — Retail Sales and Inflationary Growth

47:16 — Portfolio Positioning for Real Economy Trends

50:09 — Hype Cycles and the Allbirds AI Story

53:34 — Are the Lows In for 2026?

56:15 — Omaha Teaser, Closing, and Disclosures

Connect with Ryan:

• LinkedIn: https://www.linkedin.com/in/ryandetrick/

• X: https://x.com/RyanDetrick

Connect with Sonu:

• LinkedIn: https://www.linkedin.com/in/sonu-varghese-phd/

• X: https://x.com/sonusvarghese?lang=en

Questions about the show? We’d love to hear from you! factsvsfeelings@carsongroup.com

Transcript

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SPEAKER_00 0:02

Welcome to the Facts versus Feelings Podcast. I'm your host, Ryan Dietrich, and I'm joined by my co-host, Sony Varke. Cutting through the noise each week with Ryan Dietrich, Chief Market Strategist, and Sonovarke, Chief Macro Strategist, taking out the boring and helping investors focus on what really matters. And we are back, but Sonu the Bull is back as well. Everyone, welcome to episode 184, Carson's Facts versus Feelings. We've got a ton of stuff to talk about, but I think a lot of the listeners have a very big concern. You are still in ex-jail. Am I correct, sir?

SPEAKER_01 0:46

I am. I am.

SPEAKER_00 0:48

You need a good lawyer. Do you need a good lawyer to get out of ex-jail, apparently?

SPEAKER_01 0:51

I so my suspicion is like looking at motive. Who has the high biggest motive here to shut my ex account down? I think it's my wife.

SPEAKER_02 1:06

Honestly, if she could, she probably would, but you know, she can.

SPEAKER_01 1:10

So it's it's but yeah, no, I'm in ex jail. Like I got hacked. People are sending everybody and their mother like a DM from me. So by the way, if any of you listeners have gotten one, I promise it was not me. I'm sorry. It asked you to vote on some podcast. Yeah, at least if it's facts with his feelings, fine, but it's not, it's some random podcast. Like what voted for the best podcast or something like that. And yeah, turns out Don't click on it. Don't please don't click on it. Yes, PSA. Get two-factor authorization. So, what's weird, Ryan, is that I could change my password. So I but I don't have access to the account because it asked me for multi-factor author authentication. That's always a hard word for me to say, too. Like authentication. Yeah, there you go. So last week, X restored that, it took that multi-factor thing out because I had no multi-factor authentication. It's a one one of my one of the few accounts that I have that don't have that. My Gmail has it, you know, work emails, everything has that. So they took that off. I was able to use X for another three days, and then I couldn't. And by then I'd set up multi-factor authentic authentication with a backup code, and suddenly that stopped working. So I'm like, oh my god, I'm back in this. And then I sent you a screenshot, right? X told me you have to wait a week to verify. We need to verify this is actually you. In the meantime, everyone's getting a DM. I'm getting emails from everyone. So many people I see. Right. Sonic, do you want us to vote for this? I'm like, please don't do that.

SPEAKER_00 2:44

Oh boy. Yeah, I know I got a few messages from some friends saying, uh-oh, looks like Sonu was hacked again. I was like, oh no.

SPEAKER_02 2:50

I said, no, no, he's stalking people, though.

SPEAKER_00 2:52

I said, no, no, he set up double uh two-factor all the I can't even say the word. Two factor, I'll just call it two-factor. I can't say the word anyway. Um, I said, no, it can't be possible, but it was. It was possible. What's also possible, Sonu? Well, I hope you are out of ex jail soon. Now, I just had a ding in my ear. Did you hear that, Sonu? Tell me you didn't. No, I didn't. Perfect. So that's teams. You know, you have to love the do not disturb. You put them on do not disturb and you still hear a ding in your ear, but as long as the listeners and you didn't hear it, we will sort of like the hotel room, and you put the do not disturb and someone's still knocking. Nobody ever does that. Speaking of which, yeah, so to our previous live stream, I did it in Denver, right? We had Sam Rowe join us, um, and Frank Capillary, and I had the cleaning lady come in. Like I had the she was on, she was on. I I should have asked her, ma'am. You're on a podcast. You give permission to be because we physically saw her knock on the door and come on in. I had the do not disturb thing up. I had a 2 p.m. checkout out of Colorado. So anyway, uh let's promote our well, I mean let's put yeah, uh Drew, let's let's promote that. Um this week's live stream. Let's do that real fast. You can put that on the screen. Um, we're we're excited. Who all do we have, Sonu? We have Josh Schaefer from Barron's.

SPEAKER_01 3:53

Barons, yep. Formally, I think. Formerly Yahoo! Yahoo, Yahoo Finance, right? Josh is great. Uh he's got a newsletter, which is fantastic as well. And then we have Talman Smith from uh the New York Times. Talman's writing a book. He's written a lot over the last few years about affordability. Oh, yeah. But also try to think about it within the context of stock markets, which is where we come in. He's talking to you, he's talked to me. You know, he just, you know, I I talked to him just last week about why a crop and maybe that'll be kind of a theme of this episode. Why are stocks back at all-time highs? The profits are going up, and you know, what does that mean in the context of inflation and profit margins? And so Talman's also writing a book on affordability, so yeah, it'll be a cool conversation.

SPEAKER_00 4:37

It'll be a neat conversation, as always. An hour before the close this Friday on all of our social channels. It'll be a live stream. You can watch that. Um, Josh, we've known for a long time also. Josh is uh he's getting pretty big, he's getting pretty big. He said he has a hard stop. He has to go on TV right at the top of the hour. So he might leave a tag early. But okay. I was busted as you know what a little bit. He goes, Oh, you like me, like I'm the guy that's always on TV. So that'll be a lot of fun with Josh and Talman this Friday. So please, please join us. What is it? 3 p.m. Well Eastern time. I just said that's the same.

SPEAKER_02 5:07

Yeah, yeah. Then 2 p.m.

SPEAKER_00 5:09

Central. Okay. Yeah, we'll go for an hour. We'll we'll be quiet. Um, where is my somewhere? There's my Dietrich Whiskey. So I have a new bookshelf behind me. Yeah, you have a new background. Tell us about that. Let me go like this. This silly thing. There, okay. I have this AI um, it's good and bad. I have this AI camera. And when I read over to move, it actually followed me. I thought I had it turned off. But you know what? I'll do the background a second. Let's get into it. I don't think we want this much small talk in the beginning. Um, yeah, new highs are here, Soda. You and I have a ton to talk about. What do you want to start with in this conversation?

SPEAKER_01 5:38

Well, I'm just looking, so I am stalking people on Twitter or X, and I'm on Nick Timorrose's feed right now because Kevin Wars is in front of the Senate today, and Trump, President Trump was on CNBC. It was so funny.

SPEAKER_02 5:56

Sorry, I can't help laughing. I don't have CNBC. He called out Andrew.

SPEAKER_00 5:59

Did you listen to that part when he called out Andrew?

SPEAKER_02 6:01

That was so funny. Anyway, all right. I mean, yeah, whatever else, you know, you think about President Trump. He is funny, you know, like you know, maybe whether he intends it to be funny or not is a different thing.

SPEAKER_00 6:12

I think he does. I don't think he does.

SPEAKER_01 6:13

Yeah, I don't think he does. Sometimes I get the feeling maybe he's not taking it, you know, like he's trying to pull a fast run or something like that. Anyway, he was asked, are you look, he wants to get his guy on the Fed. It's just Kevin Walsh, he's in front of the Senate. What needs to happen? Well, the Department of Justice has a probe, you know, investigating Powell for spending more than he should have spent on the Fed building, and you know, and Trump was given an out saying, hey, look, if you tell the Department of Justice to take that away, stop the investigation, tell Congress to investigate, it's fine, right? Powell will then step down. May 15th is his official last day. I think Powell stepped down, Walsh gets in, and we're all fine. You get you may get your rate cuts. But Powell Trump's like, no, no, no, no, no.

SPEAKER_00 7:03

I want to find out why he spent more money. Yeah. I think at one point he called it 400 billion, but it's actually 4 billion. Um, yeah. What's a few tens of hundreds of billion?

SPEAKER_04 7:15

Yeah.

SPEAKER_01 7:16

Yeah. So anyway, the hearings going on, as long as the investigation, I mean, we'll wrap so as long as the investigation continues into Powell, Powell's not going to step down, but also the Senate committee that is uh you know in charge of the nomination, Walsh's nomination, I think Senate Financial Committee, Tom Tillis, the senator from North Carolina, Republican, he's saying he's going to hold a nomination until the probe is done, which means Kevin Walsh's nomination is not going to go out of committee.

SPEAKER_03 7:44

Right.

SPEAKER_01 7:44

If it gets out of committee, look, there's enough votes to you know confirm him as a Fed chair. But right now, it doesn't look like that's going out of committee. And especially after this morning's you know comments on CNBC, President Trump doesn't seem interested in ending the investigation.

SPEAKER_00 8:01

No, no, I was I was yeah, Joe, Joe was trying to get him to say that. Joe, Joe Kernan tried. He's trying to, you know, and Becky asked some good questions. It was a it was a good conversation. It was long, I think it's only supposed to be on for 20 minutes, and they get to about the 20-minute mark. He's ah, don't worry about it. He's like, I'm president, we can go longer, you know. He said, I know my people told you 20, but so somebody, somebody got bumped after that. But it was um, you know, there's no right. No, it wasn't me. It wasn't me. I was uh yeah, I was on CNBC this morning and I have some news. That's why I have a new different backdrop because CNBC's uh making me change my backdrop a little bit. I was officially named a CNBC contributor. Uh so today's Tuesday, so on Monday, officially on Monday. It's been in the works for a while. Uh so they kind of want a different backdrop. So we're gonna get some Carson backdrop behind me. I'm just I'm just stuff around the house right now. I've ordered some stuff, but I have a nice bookshelf. But it's an honor. I said I've listened to CNBC almost almost every day for 27 years, probably, at least one way or another. I've read the website or I've been on the TV watching it, right? Um, so many friends at work there I've met over the years, and a lot of friends are contributors. And after a while, I said, you know, I want to be a contributor, you know, because they have a rule you can only go on once a week if you if you're just like a regular person. Um, and and I was like, Yeah, I want to go on more because they ask me and I can't do it. They have a rule. They say, ah, sorry, you're already on on Tuesday, you can't come on Friday. And uh went through some hoops and some things, and everything worked out very smoothly. So now I am on CNBC um as a contributor, and I get to go on, you know, maybe a couple times a week now, which is awesome because I'm just in my basement snow. I come downstairs, I push a couple buttons, it takes like 15 minutes. It's really people think it's like, oh my god, it's not that hard. Secret to everybody, it's not that hard. Like talking to Sono for an hour is harder. Like I love CNBC, but it's not for me, it's like I can talk, turn the camera on, I can talk. So so put me on as much as you want. It's an honor. Um, I'm so excited to be a contributor and a big been a big fan of CNBC. I think it's just a that's awesome. Congratulations. Great win personally, but also a great win for Carson to be out there. And I know our advisors are very excited. So many have reached out, so it's uh it's an honor. All right, Sonu. Um, new highs. I'll I'll kind of talk a little bit and then you chime in. Um, listen, seven new highs so far this year. We're back, we've made new highs. We had the 9.1 percent we call it mild uh pullback on the SP 500 soaring back the XLK, the technology ETF, not a recommendation, was up 20 in 13 days. The SP 500 was up like you know, I don't know, like 12 in 13 days. We had one of the largest 10-day rallies ever. Uh, what else do we have? There's a there's a bunch more. I got some other little stats and figures. Um, I'll just put it like this this ripper of a rally caught a lot of people off guard. We've been bullish if you listen to this. Yeah, I mean, I didn't expect this. This is one of the largest 13-day rallies in history, but that sediment was so extreme. Here's my question. So as I talk, I'm coming up with a question. Ask one second. When you look back at some of these previous big bounces, maybe Drew, we can put this up. I sent you the chart of the largest 10-day bounces ever. This one was up like 9.8%. We put this on the screen. Normally, future returns are really good, right? The only time suddenly we've been down a year later was in the tech bubble. A couple times during the tech bubble had some big bounces, then we rolled over. But the other 16 times we had a um, you know, a move like this in 10 days, you were higher a year later, usually by a good point. But as you talked about yesterday when we did our morning call with our advisors, a lot of those times took place like in bear markets. This one's not a bear market. Why did we have a record-breaking bounce, even though we weren't down as much this time?

SPEAKER_01 11:34

Yeah, if you uh look at that chart, almost all of them have come amid bear markets are really steep drop downs, right? Like or recessions, things like that. But interestingly, it's not at the top of the recession, it's close to the end. It's that time when markets are sniffing out the light at the end of the tunnel. Yeah, right. Recensions almost done, boom, things rally, right? Maybe it's a Fed cutting interest rates a lot, maybe it's housing picking up, maybe it's fiscal stimulus coming, whatever it is, right? We saw 2020 is in there, 2009 is in there, I think 2001, 2002 is in there, all of that, right? And you go back to there are a few people, 1982 is in there, right? So all these periods, and now this is different. I think it gets back to the idea, and we've you know, one reason we've been overweight equities throughout this, you know. Well, we've been overweight for a long time, but so coming into the speak for yourself.

SPEAKER_00 12:28

I've lost some weight this year. Decent.

SPEAKER_02 12:32

Hey, hey, um that's a good thing. That's a good thing.

SPEAKER_00 12:35

You know, to this day, when we you and I joined uh Josh and um Josh Brown and Michael Batnik, and and they they titled it Reasons to stay overweight. I think they were making a jab at us. I I honestly think that that was a little jab at us. I forgot about that. No, I remember now. They're still my boys, but I think that was a little subtle jab when they called the title Reasons to stay overweight, and we they got us on there. Yeah, anyway. Yeah.

SPEAKER_01 12:56

So like we came into this, and this is relevant for what we're gonna talk about ahead. It's like we came in saying we're gonna see a period of inflationary growth. A lot of people I respect when we came into this year, like, oh, the labor market is struggling a little bit. So, you know, nobody's calling for recession, I think, but they were calling for a period of really slow growth. And here's where I think is different. When you say slow growth, do you mean real GDP or nominal GDP? I think most people probably think real GDP, which is yes, that's what you know matters for recession and things like that. But when you talk about markets and you're talking about profits, you're talking about nominal GDP. Okay, that's real GDP plus inflation. And we literally said we're going to see a period of inflationary growth, and I think that's what we are seeing during this last month. Why did stocks rally? I think part of it is over the past month, people are like, Oh my god, gas prices are going to go up to five, six dollars a gallon, oil prices are going to reach $150, $200 a barrel, that's going to lead to demand destruction. People are so the idea was oh, prices are going to go up because of that, prices have to go down, and you'll be in a recession. I was like, no, not quite. And now, fast forward seven weeks since the crisis began, the profit outlooks looks really good. Tech is back, we are back business as usual. Tech is up since the crisis. I'm just looking at 11%. I mean, it's probably through last Friday, right? It's probably up even more, like as of the last two days, but it's up 11%. The SP 500 since the crisis is up four percent, right? Every other sector, other than tech, is underperformed. I mean, there's still several of them are doing fairly well. This last thing, Ryan, since the crisis started, energy is actually negative. Yeah, energy. So, like this sort of confounds everyone's sort of expectations like, oh my god, oil's gone up, and oil is still up despite you know, ceasefire and things like that. But energy prices have, you know, or energy stocks have gone down since the crisis. Now they are still up like 23, 24 to date, right? And let's talk about earnings and things like that. But yeah, no, I think the profit outlook looks good, but the other side of the profit outlook also means you have inflation.

SPEAKER_00 15:13

Okay, so we'll put a pin in that for a second. Um, one thing President Trump said this morning on CNBC, he said he even he was surprised, he was surprised by the market not being down more. He's like, if that thing happened, he thought oil would be up more and the market be down more than that. You think he was thinking I didn't try hard enough? I don't know, I don't know. But I mean it was just interesting to hear him say that because I think I'd be in the same boat. You know, if you tell me all the headlines oil doubles, I think the SPB down more than 9.1%, you know, but it is what it is. A couple other fun ones. Uh SP 500 up three percent, three weeks in a row, Sonu. Only the 82 lows and off of COVID have we seen anything like that. One year after those times, you're up over 30% both times. No, we're not 30% this time, but it's something to think about. And here's a one for the record books. We're up three, three weeks in a row, three percent each time. But each week was up more than the previous week. That's never happened in the history of the stock market until the last three weeks. So those are some interesting things uh from that point of view. So you want to talk about inflation, Fed? We've got more market stuff. I want to take a little curve. Hopefully, you know, I know you you can talk about anything. This is why, you know, we're always training each other, like asking stuff no one sees coming. I was asked this on TV this morning. I didn't see this one coming, so this is why. All right, uh Tim Cook just um just stepped down from Apple. So we're gonna not recognition Apple, but you know, just done an amazing job. I mean, I he did he was at 15 years, I believe it's 105 in CEO years. That's like dog years, you know. The CEOs usually don't last 15 years. And I remember when he took over in August of 2011. First of all August 2011, if you're an old guy like us, that was a U.S. debt downgrade, okay? Market crash. So what a time for him to start a new job with the market crashing, but that's a little different than what he was doing. But still, um, the stock, you know how much of stock was up under him for 15 years? Do you have any guess? You want to guess it was out there. Um uh oh, I I remember seeing it, but I don't remember it.

SPEAKER_01 16:56

15 1500, something like that.

SPEAKER_00 16:58

Yeah, it's 20 20 bagger, it was a 20-bagger, it was a 20-bagger, even more. Um, just amazing, just it truly exactly. I think I speak 100's up 600, give or take. I think so. I saw something like that. Um, but you know, 20 bagger, and it's just amazing because he took over for you know true icon, right? I mean, Steve Jobs, yeah, yeah.

SPEAKER_01 17:13

Big I don't think honestly, like most people probably would have like, who is Tim Cook? I mean, he's not gonna be able to do as good a job as Steve Jobs, right?

SPEAKER_00 17:21

Well, nothing is Tim Cook, but sure, like there's no way, like it's Steve Jobs, but he has to ask yourself if Steve Jobs is there for the past 15 years only up 2000. I don't know, maybe, maybe not. Um, but any any thoughts on him stepping down or just kind of his legacy with Apple? I mean, go out of the top, right?

SPEAKER_01 17:37

Good point, yeah, go out of the top. What was interesting is who he is leaving it to, Joe Turnus, right? And Turnus has been, you know, a mechanical engineer like myself, except he's continued to do mechanical engineering. That's why you liked it.

SPEAKER_00 17:50

That's why you like this move.

SPEAKER_02 17:53

But I quit mechanical engineering.

SPEAKER_01 17:55

Now I'm like a pretend economist, and you know, well, I think I'm more portfolio manager than economists, but along with you. But uh, but yeah, no, Turnus is interesting because he's been involved in all their products. And what's interesting over the last decade is everyone's like, oh, we need something new, you need something flashy, which is what the Steve Jobs thing was, right? You know, you got those big amazing, you know, uh what's it, the MacBooks in the late 90s, and then you got the PowerBooks, the laptops, which looked really cool. Yeah, you got the iPods, then the iPhone, and then you got the iPad. And since Cook is here, what is the one pro like there's been no new product except for that VR thing, which nobody's buying, you know. But they've done well. And Joe Turnus has been involved with all of their hardware products. He's in hard, he's a hardware guy, which is interesting because now we are everyone's talking about AI and software, right? And it's like they I I mean, I'm not an analyst and tech analyst, nothing like that, but just on the face of it, it seems like it seems like they want they're still going in the direction of you know, we'll control the platforms, we'll control the hardware, right? You're not getting into the AI business, but probably because you suck at it, because Siri sucks it.

SPEAKER_02 19:13

AI too. So, but it seems like they've sort of thrown in the towel, right? We'll let Google and you know all these guys do the AI stuff, yeah, but we'll control the devices. Well, I don't know.

SPEAKER_00 19:23

Focus on what you're good at, I guess, you know, and then yeah, there could be something there, but yeah, congrats to Tim Cook. I believe he's done it September 1st, I believe. So it'll be officially 15 years, um, give or take. Uh so just incredibly what he's done. And again, filling shoes like that, you know, like we see kind of how things are going. Warren Buff has stepped down, Brookshar is an amazing company. It's tough, it is tough to follow you know someone like that. Um, so anyway, pretty, pretty, pretty cool stuff there. Um, yeah, you gave a pretty good answer, Sonny, for not seeing that one coming. That was impressive. That was that was impressive. I don't know. I can I've learned a lot from you hanging out with you for three years. All right, so I'm in a couple things. Oh, oh, here we go. Put the other chart up, Drew, that I shared. The uh this is along large cap tech. We can talk large cap tech earnings if you want, kind of a segue. Uh the NASDAQ 100, as we're sharing on the YouTube channel, was just up 13. The lucky 13. The lucky 13, 13 days in a row, longest win streak since 2013. What I think is fascinating, so no, only seven times we've seen a 12-day win streak. Looking at those 12 times, the SP 500 was higher a year later, seven out of seven times, after a super duper long win streak like we just saw. And you can see the average return go by memory here. It's ballpark 19 or 20 percent, I believe. Um, so strong, strong performance. You know, large cap tech was just thrown out. I I one more for me, then I'll go to you. I love looking at market sentiment. I talk about all the time. Traded options for a while, so did you. I was shocked this time, let's call it five weeks ago, when people were dumping tech hand over fist to go buy staples at 25 times early. I remember talking about it, probably talking about this podcast. Everybody said, What's going on here? Like people are buying, and nothing wrong with the staple stocks, but they were very pricey, and people were throwing out the company, sort of growing fast. You're gonna talk about earnings and growth here in a second.

SPEAKER_04 21:06

Yeah.

SPEAKER_00 21:06

And sure enough, once again, you can talk about algorithms, you can talk about computer trading, you can talk about hedge funds and all the AI, all that stuff. What never changes when it comes to markets is emotion. Fear and greed, fear and greed. There was a lot of greed at kind of slow growing stocks at 25 times earnings, and a lot of fear on the fastest growing stocks that were getting beat up for a lot of right reasons because of AI, software concerns, all that stuff. And now you fast forward and you see what's happened. If you dump tech six weeks ago to go in staples, you are missing your benchmarks, you're missing your peers, you're in trouble. Fortunately, we didn't do that. We we never, you know, that was not our case. Talk to me about tech, large cap tech, why um you could keep going, earnings. Where do you where are you gonna go with this?

SPEAKER_01 21:48

The irony of that is um up until what a couple of months ago, everyone's like tech is so pricey and stuff like that. And then you you get a pullback and then it gets cheap and nobody wants it.

SPEAKER_02 21:58

It it gets cheap, and then people go out and buy the more expensive thing with the staples.

SPEAKER_00 22:02

Let me jump in. Just my old one, I've used it a lot. You know, the stock market's the only place that things go on sale and everyone runs out of the store screaming. That is exactly what happened to tech this time about five or six weeks ago. That's that's crazy.

SPEAKER_01 22:14

And and and actually, even the SP five hundred and This will dive into maybe we'll sag into what I'm going to talk about. I mean, connecting to year-to-date returns, all-time highs. The forward PE for forward price earnings ratio multiples for the SP 500 is about 21.321x, 21 times. And that's down at the end of last year, it's actually 22. But at the lowest point of the pullback, which is March 30th, right? That was a peak drawdown, 9%, 9.1% down for the SP 500. That PE had fallen as low as 19.3x. Right? It gets to your point, it's tech. I mean, tech is 35% of the index. It got really cheap. Right. And what was interesting is things got cheaper this time in this drawdown, which is actually much smaller than the post-liberation day drawdown. Last year we went down like I think 18, 19%. But stocks didn't quite get as cheap, quote unquote cheap, from a forward PE basis than they did this time.

SPEAKER_04 23:13

Okay.

SPEAKER_01 23:13

Right. This time it actually became a lot cheap, and that gets to the fact that earnings kept going up, right? Right. If you look at return drivers, and we've talked about this concept before, like what drives the stock market, like returns, right? It's three things earnings growth. And here I and I like looking at forward growth, right? For forward EPS estimates. Earnings growth, multiple expansion or contraction, and dividends. Now the SP 500 has gained four and a half percent year to date, right? Not bad. If you annualize that, you get to close to something like 15% or so, by the way, which is sort of in the ballpark of our outlook, right? So anyway, out of that four and a half percent, eight point seven percentage points came from profit growth. Dividends added another 0.4 percentage points. So let's say about nine percentage points or so. Total from earnings growth and dividends. Dividends is basically what you know, profits that are returned to shareholders, right? So nine percentage points, but then the year to date returns four and a half. So what was the drag? Multiple contraction. Multiples drag by about four and a half percentage points, right? And that gets to like, and now you think about earnings growth. What's happened with earnings growth? If you look at the next 12 month EPS, uh, that's right now at close to $336 a share. Okay. $336 a share. Now, next 12-month EPS is a combination of 2026 EPS and 2027 EPS. Right now, it's like one third 2027, two-thirds 2026. You look at 2026 EPS, that's gone up, right? Several months ago, it it I think it's up like 4% or so, 2026 EPS. 2027 EPS is about five percent higher than where we started at the start of the year. So during this entire period, people have gotten more optimistic about future profits. And I think that's why the stock market is up. Now you think about what makes up profit growth. It's two things sales growth and margin expansion. And this is where the inflation picture comes in, right? So everything's like, oh, look at inflation, inflation's high. Because of that, the Fed's got a cut, uh, Fed's got to hike rates, and you know, that means that's not good for stocks, fair enough. But then before you get to Fed hikes to control inflation, and it's an open question, I don't think the Fed's going to hike, right? Especially if Kevin Walsh comes in and maybe live and get a cut, right? That's even more dovish. But sales growth is dependent on nominal GDP growth, right? Nominal GDP growth, going back to something we talked at the top of this episode, that's running at five to six percent. That's solid for sales growth. And then you have margin expansion. The biggest contributor, like I said, earnings growth contribution to year-to-date returns is about four and a half percent. Out of that, sales growth contributed about 3.8 percentage points, margin expansion, another five percentage points. Margin expansion is the biggest contributor to the SP 500's year-to-date return. That is incredible. That hasn't, I mean, we've had strong margin expansion over the last few years. Yep. This year it's even better than that, right? You talked about it in the Outlook, remember you said like your those two charts that you like, yeah, profits going up and margin expansion continuing as before.

SPEAKER_00 26:29

Keep it simple. Yeah. The uh I call those the dual tailwinds, right? The dual tailwinds of the bull market, higher profit margins, higher corporate profits. If those keep hitting new highs, like they were this time four weeks ago, and on this very podcast, we said, listen, they it was pretty uncomfortable what was happening out there, but there were a lot of positives. Now, what a couple more, Sona, and I mentioned this this morning on CNBC. Just want to uh fun little stats. I think it's fun stats. So April's usually a good month. Yes, I get it. Last year wasn't a good month. This isn't gospel, right? I mean, it's but still. Um, normally April's pretty solid. We were down the last two, looking like we're probably gonna be up this April. Let's be very clear. Up over nine percent approximately time we're doing this. But Sono, you don't hit that many new all-time highs in April. I thought this was interesting. I looked at all these new, all this stuff. But when you hit an all-time high in the month of April, like we clearly have this time, the full year is up 18 out of 19 times. Okay, that's pretty good. Now here's one more. Here's one more. We just had a seven-day win streak. We probably talked about the seven-day win streak last week on the podcast, but we just had a seven-day win streak. Any random year that has a seven-day win streak, any point period during the 12 months, that full year is higher. Are you ready for this? 19 out of 20 times. Now, here's where I thought it was real interesting. The average return for both of those times when you are up in April all-time high and you're up to have a seven-day win streak, the same number is a full year return. 18.8%. So listen, it's fun with numbers. I get it. I mean, people say, Oh, you're bullish because of that. No, no, I'm not because everything we just laid out is why I bullish. But then you stack on top just a couple little nuggets I threw out there. These are reasons to think that, you know, episode what is it, episode 184? Episode 184, the bowl is back because of things like that. One more on from me, that's what I was interested in soon, and then go to you. We can talk about everyone talk about. We've talked a lot about how Thursday and we just had a nine-week loser streak on Thursday. Okay, it wasn't that long ago. Uh, Friday's been pretty weak too. Fridays and Thursdays have been terrible this year. Monday's been pretty good. We've talked before. Good news over the weekend. Maybe the war's over. And then as the week goes on by Thursday, no, no, it's not over. Well, people asked me a couple weeks ago, what do you want to see to think the lows are in? I said two things I was looking for: a weekly close above the 200 day moving average, two weeks in a row. Check mark, we just got it. Okay, we just got that. That's good. Want to stay above that 200 day? Bad things happen below the 200 days. How I learned it, and that is true. I mean, the greatest one-day rallies ever, Sonu, they don't happen your all time highs. They happen you know below the 200 day, but the worst days also happen in an oversold market. So we're not oversold anymore. We're above 200 day. That's good. The other thing, Sonu, we were just higher Thursday and Friday last week, those two days in a row for the first time in three months. For three months, we were not higher those two days combined. Maybe you're higher one and not the other. So again, these are just little clues, little things I was looking for to say, okay, you know, we were in a bearish phase, not bearish, bearish is the wrong way to put it, but clearly a untimen phase. Sentiment was poor, and the market sure felt pretty darn darn volatile, especially if you're in tech and some of those areas that were getting lit up. But now we're starting to see some good things. I mean, even on Monday, yesterday, we you know, we futures popped, there's trouble with you know the war, there's the straight is closed again. Um, and then by like 30 minutes in, we're flat on the day. I mean, the market has almost gone. Look past what's going on in the Middle East. And maybe it's famous last words because it's not over yet. Um, but the market's looking past it. So do I said some stuff. What do you what else you want to hit on um this week in the Facts Force Feelings podcast?

SPEAKER_01 29:44

Actually, let's take off that. I I mean, obviously, there's momentum, and we had momentum coming into this year, we lost a little bit of that, but you know, momentum is a powerful thing, and I think the bias is for people to buy, yeah, right. Uh that's essentially what momentum is. You you want this thing to go up, and it's almost like we have to clear these obstacles in a bear market, it's different, especially as a sustained bear market. But even the fundamentals, I mean, and here I mean the macro fundamentals. I'm not okay, but even let's look at bottom up. You're talking about I I actually think the markets are actually pricing in the crisis in a way, okay, are pricing in the fact that we have inflation, right? Let's go back to EPS. Like and Drew, we can put this chart up showing SP 500 sectors, EPS estimates. Like you mentioned, look, 2026 EPS estimates for the SP 500 up four percent from the start of the year. 2027, which also matters, that's up five percent here today. So, what's driven that? Three sectors now. Obviously, tech is a big one. Tech is 35% of the index, and that's seen 2026 EPS expectations grow 11%, Ryan. 11% since the start of the year. You thought we were optimistic coming into this year? Wait, three and a half months later. It's grown 11%.

SPEAKER_00 30:58

And to give us a little uh pat on the back, we called our outlook ride the wave, right? We think it's a blah blah blah blah blah bull market still bullish. But one of the waves was AI, AI spending, capex. We were all over that, and that has not slowed down at all.

SPEAKER_01 31:09

Right. And it's not just 2026, it's not like oh, we're getting pull forward growth from 2027. No, 2027 is up even more. 2027 EPS estimates are up 15%. So that's tech, that's 35%. So by itself, if everything else is sort of flattish, we would see the SP 500 EPS estimates, forward profit expectations grow. Now, then you get to energy. This is what gets to like, oh, we are pricing in the crisis. Energy was like, yeah, whatever, let's forget about energy coming into this year. It's 2% of the index, right? 2-3% of the index. Well, fast forward three and a half months later, this rate of hormones is closed. That's having an impact. It's good for energy stocks. Energy stocks have seen 2026 EPS expectations grow by 37%. Wow. I mean, it's only two, three percent of the index, but 37% matters. 2027 EPS is up 13 percent profit expectations. Then you think about everything downstream of the Strait of Hormuz. What you need, you know, you need oil for refineries, but what do the refineries do? Petroleum products, plastics, everything you need for packaging, things like that. Who benefits? Materials companies, right? Materials have seen 2026 EPS expectations grow by eight percent, 2027 is up even more, it's up by 10. Like I said, these three sectors make up 40% of the index. They've seen EPS expectations for this year and next year surge. What's on the other side of this? It's inflation. Okay. I'm not saying these guys are profiteers or anything, they just happen to be in the right place at the right time. You know, the energy companies are not the ones who you know, you know, cause the war or anything like that. They were in a good idea.

SPEAKER_00 32:51

Let's just jump in just for a second and you pick up on energy companies because uh in November, I remember talking about this on our team and probably on this podcast. Uh, that Bank of America um Global Fund Manager Survey. I love that one. Looking for extremes. I mean, they showed literally October, November last year, people allocated to energy and energy stocks was like the lowest it'd ever been. Like, like ever. Nobody in their right mind wanted to own energy stocks. Like I said, they've been in bare markets, they've been struggling, crude oil is at 60 bucks every time you turn around. Um, and then boom, like the top sector clearly, you know, none of us come back some, but you know, that's how this works. But and on our team, I was like, Oh, look at energy, look at energy. We talked about it. We're not technically overweight energy, but we have constructed our models. We have managed futures, right? We have oil, we have oil, we have real assets, we have hard assets, we we're benefiting from what we we've been saying for a while, is more of a commodity super cycle boom. And I said it a lot, and I wish I would have been a little louder about it to myself personally. But crude was at 60 all last year. I said crude's gonna play catch up this year, and then it literally doubled a couple months after that. Now it's come back. But um, anyway, those are some things that we think about. But what I cut you off, where were you? No, no, no.

SPEAKER_01 33:56

I mean, talking about inflation, that like like the others, when you talk about oh my god, inflation's hurting, the other side is that well, the person selling you these goods for higher prices, they're benefiting. Yep, that's the stock market, that's reflected in stock markets, like higher prices for items related to the AI build-out, like chips, right? That benefits your tech infrastructure companies, including telecom, by the way. We've been overweight telecom. Yes, pull up a chart of telecom, not a recommendation or anything like that. It's just been going straight up. Forget the crisis, it didn't affect it.

SPEAKER_00 34:28

You and I have managed money together for three years. That might be our best tactical trade. Like we did telecom late last year, and it I mean, telecom's just gone vertical. Like, like in the world, other than gold.

SPEAKER_02 34:36

Well, it was a partial gold. You're right. Gold, gold, proof. It wasn't a tactical player, right?

SPEAKER_00 34:42

We were like renting some safety in technology. That's how we kind of viewed telecom. Little did we know it was going to go up, I don't know, what is it, 25%? Something like that. No, it's about 40%.

SPEAKER_02 34:49

Oh, 40%. Oh my goodness. Okay, even I think it's 40%. I'm not even looking at it. I don't want to jinx it.

SPEAKER_00 34:55

I don't even look at it. It's like every day. We look at Barry Gilbert, our team does incredible work with the models. Like, we manage billions of dollars, right? And Barry sends it in slice and dice it. It's like, you know, the that particular ETF, not gonna say it. It's like, wow, it's up again. Of course it's up again. It's always up. It's um no one's talking about that. No one's talking about, I mean, Verizon, like that's like the hottest stock out there, ATT. Like, these are the hottest stocks out there, and no one's talking about it. I kind of like that. I kind of like that.

SPEAKER_01 35:17

But a lot of and it's a very diversified place. Like, there's a lot of stuff related to the AI build out, but coming back to the inflation story, the other side is inflation, yeah, right? This stuff is expensive, uh, expensive, and it's not just a US story, by the way. Look at Taiwan and South Korea surplus, their trade surplus. It's gone up as much as the gas price shock across the entire world, to put it in perspective. Just these two little countries. I mean, they're not little, but they what do they make? They make chips, they make chips that everyone else needs. They make chips that we need for the AI build-out. And then you have higher energy prices. We just talked about how that's good for energy companies, but that also means we are paying more at the pump. Then you have higher prices for all sorts of goods downstream, like I mentioned, of oil and gas, right? Lipsticks, plastics, packaging material for any sort of like photoshops and medicines and things like that.

SPEAKER_00 36:06

CNBC is gonna mail me a packet for makeup. I've never worn makeup. So this isn't lipstick. I don't as you said lipstick, that reminded me of. I don't think there's gonna be lipstick, but I didn't I need some help. So if any listeners out there on YouTube channel have videos on how to apply like simple foundation, I don't know. I said, I said, you can't fix me. Like you know, I have a face radio, okay? Like, like so anyway, we'll we'll see. Now that I'm a contributor, they want me to look a little cleaned up on there, so you know, I'll do I'll do it, I'll do it.

SPEAKER_01 36:31

So yeah, no, I and you know, so that's one side of the index, that's an inflation story, also, but it's also a profit story. I think that's the markets are pricing all this in, okay, right? I I think that's why we are at all-time highs. Now, what could upset the proverbial Apple card if suddenly you get someone like Paul Volker coming in and saying, you know what, I'm gonna take interest rates. I've I really want to get inflation back to two percent. And for that, I'm gonna take interest rates. Not we don't need to go to 16, 20 like we did in the early 80s, but I'm gonna take it to six percent.

SPEAKER_04 37:03

Oh, yeah.

SPEAKER_01 37:04

You guess what stocks will do, right? I mean, we'll see multiple contraction, all of that. Forget profits, right? But if we're not in that environment, you're literally talking about the president of the United States coming this morning and telling us that, yeah, my guy is going to provide a rate cut.

SPEAKER_00 37:19

If Warsh did that, I mean, I don't, it wouldn't be good for investors and this now, but like the drama out of Washington would be entertaining. We'll just leave it there. Oh my god. Yes, yes, yeah, can you imagine? Um, all right. Um, let's see here. So something else here. Oh, you know what? I'm gonna do some reading. So you talk for a while. Give me a second. We had some big bank CEOs last week, and our good buddy Sam Rowe over ticker uh kind of compiled some of this stuff. I'm just gonna read what some of the CEOs said about the consumer. That can oh, by the way, retail sales just came out strong. Maybe you can talk about it. We'll tie that in. Yeah, we'll tie that in. We'll tie that in. Anyway, uh Jamie Diamond, CEO of JP Morgan Chase, sometimes can be a little more dour, is what we'll say. Uh, he said the U.S. economy we'll just leave it there. Yeah, yeah. Those types of things. Uh he said this the U.S. economy remained resilient. Um, I've got like four of them. So give me a second there. Charlie Scarf, I believe is how you pronounce his name, CEO at Wells Fargo. We still see continued resiliency in the underlying economy and the financial health of the consumers and businesses we serve remain strong. There you go. That's kind of nice. Uh Jane Fraser, CEO at Citigroup, which by the way, Citigroup just had a 52-week high, kind of quietly, not a recommendation. Uh um Frank Capillary pointed that out. Um, American consumers remained resilient. There you go. That sounds nice. Uh, I got I think one more here. Um, Brian Monahan, CEO of Bank of America. We've seen solid consumer spending and stable asset quality, indicating a resilient American economy. Let me make sure that's the last one. So a lot of banks reported early. There's a lot more earnings coming. We get it, but so do we we literally are seeing, and you've talked about this, I talked about it probably last week, but we'll talk about it again. Lowest consumer confidence in history in a Michigan consumer sentiment poll. Maybe some politics and different things playing part of that. But people say one thing, then these CEOs say they're doing another, and then the days retail sales came in once again, better than expected. Uh square that circle for me.

SPEAKER_01 39:10

Uh inflation and nominal nominal growth. When all these CEOs, and we'll talk about retail sales because it comes into that, right? When all these CEOs say the consumer is doing fine, spending is strong, they mean they're you know, referring to nominal spending. That and that's important because, like you already talked about, that's where profits and revenues come from, right? So if you're getting nominal GDP growth, which is probably what we'll see five to six percent this year, that's what we got last year as well. That's good for profits. That's good for all these, you know, furns. Thing is, then you take now a big chunk of that. The problem is three to four percent of that is inflation, yeah, which doesn't leave a lot of room for real GDP growth or real income growth. And I think that's why consumers are like upset. I I I wrote a piece on this Carsonggroup.com slash research, it's even in a weekly commentary. Like, wait a minute, it doesn't make sense. The stock market's at all-time highs, consumer spending is strong. Why are consumer sentiment is lower than it was, you know, even in the stagflationary 70s or GFC or COVID? And I think it has to do with the fact that prices went up a lot over the last several years. Okay, they're continuing to go, just as we are getting a bit of a break from inflation in 2024, it was coming back to let's say two and a half percent. Boom, 2025 happened, the price of goods and lipsticks, foundation, all of that went up. That's going up even more.

SPEAKER_00 40:35

I'll know more soon enough how much all that stuff costs.

unknown 40:37

Right.

SPEAKER_02 40:38

Or CNBC is paying for that.

SPEAKER_00 40:40

So that's true. That's better than that. Maybe the first one is paying for it.

SPEAKER_01 40:42

But it gets to like, I think consumers are still spending, but they have less to keep beyond inflation. Real growth, real income growth as ease. If real income income growth is flat to slightly negative over the last year, last three months, however, you you know, whatever look back period you look at over the last few months, real income growth is sort of flat. Yeah, but people spend, we all live in a nominal world. We spend nominal dollars, right? We get nominal wages. They're like, okay, the price of a burger has gone to $25. Maybe I should go buy a $25 burger right now. We'll talk about that.

SPEAKER_00 41:18

Oh, by the way, speaking of burgers, Thurmans, our favorite burger joint in uh in uh Columbus had a fire. I don't know if they're open yet, but if you have a Thurman burger, you know in Germantown. It's devastating. Yeah, I I don't think that the I don't know. I guess I can look it up, maybe we can look. But they they had a terrible fire, so shout out to Thurmons. Uh we hope you come back soon because we want to buy a $25 burger from you. You're worth it. I know Sodo comes to uh you come to uh Columbus in a couple months, right? So yeah, hopefully I can hop up and see you.

SPEAKER_01 41:44

I was hoping to catch you in Columbus, but it turns out now we're going to Omaha. I'm coming to Columbus.

SPEAKER_02 41:50

We'll buy a burger in Omaha then. Um yeah, they'll find a $25 burger in Omaha.

SPEAKER_01 41:54

But you know, but yeah, no, it gets to like you know, prices have gone up. You and I were eating maybe $10 burgers, $15 like a gourmet thing, right? Set aside McDonald's. I mean, but then you look at McDonald's stock, and you know, it's not done great. But yeah, no, look, instead of spending $15 on a burger, no, we're spending $20, $25, and we're still spending.

SPEAKER_00 42:12

Yeah, you know, a pulp fiction. Remember, great, you know, wild movie, great movie from 1994, 95. There's a scene um with John Travolta, and I guess it's Uma Thurman, uh, and they're talking about the $5 milkshake. And John Travolta is having this big conniption over a $5 milkshake. And at the time, I remember hearing like, oh, a five-dollar milkshake. Now, I get it, that's 30 years ago, and we're sounding like old, old, old guys on the on the bench kind of yelling at the at the the uh clouds here. But yes, a five dollar milkshake is perfectly normal now. And anyway, just dude.

SPEAKER_01 42:38

I swear I spent like $12 on a milkshake over the weekend at Kilwins or something like that. I swear it was not it was not Killwinds.

SPEAKER_02 42:45

You have Killwinds in Chicago? Yeah, they just opened up up the road, dude.

SPEAKER_00 42:48

So there's one of those. When I lived in South Carolina, there's one in Blowing Rock, love Blowing Rock. Um, I know they're recovering from the terrible hurricane that came through a couple Septembers ago, and there's a Killwinds in Blowing Rock, and I'll say, Oh, that is like that chocolate peanut butter. That may be my favorite ice cream in the world. Killwinds, oh, you are such a buckeye. Yeah, I know. I know.

SPEAKER_03 43:04

What can I say?

SPEAKER_01 43:05

But speaking of buckeyes, I do want a greater somewhere here. There's one grater is on the north side of Chicago. So no, I'm getting hungry. We gotta wrap this up.

SPEAKER_00 43:12

Yeah, exactly. One more, uh, here's something cool. Uh a couple things. We've got like five, five, ten minutes or so. We can talk about retail sales as well. Let me just say this and we'll do that. Um, just another market stat I want to point out. So, this bull market that started October 12th, 2022, until the recent peak is up 99.2%. We are almost uh double off those lows. I've I was crunching some numbers already, so when we get there, I'll crunch numbers how much time has been left previous times when we have 100 and things like that. So just save a pin in that one. Uh, but again, now this bull market's officially three and a half years old. It doesn't really continue until it hits new highs. So we're officially three and a half years old, as we've said many times on this podcast. I know I've said it a lot. Uh, bull markets, once they get to their third year, they make it through their fourth year seven out of eight times. Only the 60s they didn't, but the average length once they get to the third year is like eight. All right. So listen, who knows how long this is going to go. But once a bull market gets that third year, they tend to keep going. And the fourth year actually is usually pretty strong. Third year's choppy. Sound familiar with all we had last year, terrorists and everything else. Fourth year is usually strong. And you know, are there lows for the year end? I I don't know. I I think I'd put a above. A 50% chance the lows for the year are in because that over-the-top negative sentiment that we saw just a couple weeks ago tends to resolve higher. Uh, let's talk retail sales, and I've kind of got one more fun one, and maybe we can wrap this up.

SPEAKER_01 44:28

Yeah, look, retail sales. I mean, going back to what you were talking about, the you know, CEOs saying consumers are still spending. Well, we just got retail sales this morning. Maybe we're recording this on 21st of April, Tuesday. We got retail sales for March, it's better than expected. I I mean and I laugh because everyone's been talking about the consumer struggling and things like that, but they're spending. And no, this is not adjusted for inflation. So retail food services sales, it is mostly goods, but there is restaurant sales in there too. Up 1.7% month over month. If you think that is a small number, no. If you annualize 1.7 multiplied by 12, I mean you have to compound it, but it's like 15, 60, you know, like 18 or something like that, right? So that's a lot. That's a big number. Now, a big part of that was gasoline station sales, 1.1%, right? Over the last three months, three months, Q1 basically, retail sales have gone up 10% fine. Now a big chunk of that is inflation. Gas station sales have gone up 71% annualized over the last three months. Now, no surprise, that's because gasoline prices went up. But here's what's interesting, and this gets back to the profit thing, right? Just picking up gasoline stations. Gas prices, the pump average went up from 280, something like that before the crisis, to, and remember, this is March. Right now it's close to $4 a gallon. But when this data was taken, mid-March it was about $360 thereabouts. So you're talking about something like you know, 25%, 25-30% increase in pump prices. But gas station sales went up 70%, which means margins are also going up, right? I mean, but then the other side is you know the stock market, right? And but then you look at control group, take the noise out, take gas station sales out, take auto sales out, take tobacco out. I don't know why tobacco is not constant in this, but you know, it's not, right? So control group, which is the stuff that goes into GDP personal consumption, that's up almost eight percent annualized in Q1. That is really strong. Now, a big chunk of that, probably more than half of that, is inflation. But you know, when companies are receiving that revenue and profits, they don't care, right? Yes, some of their costs go up too on the other side, but that's why this is a time when you have a period of inflationary growth, you have to be careful about you know the winners and losers change, right? And that's something we've mentioned, like have you have a diversified portfolio here too, like tying this into retail sales and the macro and things like that. Look, the consumer's still spending, that's the big picture. Part of that is inflation, there's some real growth, but profits and revenues come from inflation.

SPEAKER_00 47:11

No, uh you're great points for sure. And you think about it, I think what hopefully people like about this podcast, besides our stunning good looks, is um the fact that we we we try to and it's about to get better with makeup. Exactly. Exactly. Uh we'll see. No promises. I don't know that makeup will change anything. I mean, I don't know. I don't know. We'll see what happens with that. I thought I lost what I was talking about. Oh, oh, we try to take what we're doing here and try to talk about portfolios. Like if you actually manage a portfolio, here's how we are thinking about the world. And again, you know, all this volatile inflation world, 3% inflation versus 2% inflation. That's why we said, you know, bonds always have a place in a portfolio, but bonds might not do as well. The other stuff might do better. And that is absolutely happening. People know we've been bullish and we get kudos for kind of you know being bullish, being right during this three-year bull market, three and a half year bull market. But I almost think we've done better on the other stuff side of things, you know, the the way we position shorter duration versus long duration, some year futures, some gold, some cash, some hard assets, some real assets, maybe some other things in there, um, that have done much better than bonds have. Um, so anyway, just it's it's fun to get to do this.

SPEAKER_01 48:11

So no, I've got do you have two or three on that theme of the portfolios and maybe getting into what we are doing in the portfolios? Look, when we talk about markets and things, it's very easy to think, oh, that's all on paper. It's not real, it's not reflecting real activity. Well, we just talk about consumer spending. That's weird, like that's happening, right? Yes, there's inflation too. But look at the industrial production side of the economy, the manufacturing side. Now, manufacturing overall in aggregate has been sort of flat. This also gets to our portfolios. We still like tech, we like things like telecom. We are riding the wave of that AI story. Industrial production for March just came out. You look at high-tech equipment production, and this is production here in the United States, computers, chips, things like that. In Q1, Drew, we can put this chart up industrial production, high-tech equipment. Last three months, Ryan, it's up almost 8% annualized pace. 8%. And this is real. This because this measure real is an inflation adjusted. This measures volumes, right? And this is well above the 2021, like pre-2021 trend, right? Even within that, leaning into that story of telecoms and AI and things like that, electrical equipment production in Q1 is up in 17% annualized. There's something real happening here, something real, like real built, the stuff getting built in the real economy, not just the US, it's global, which is why we think this is the global bull mouth market, right? Electrical equipment production is at the highest levels we've seen since before 2008. Right? These are some of the things they overweight in our portfolios. We like, you know, industrials, we like, you know, tech, that whole riding the wave AI story, but we also like defense. You look at defense production, and you know, one last chart from me industrial production for defense and space equipment, last three months up four and a half percent annualized space. This is real, by the way. It's inflation adjusted. That is really strong, right? Production's still below the last decade's peak. It's peaked in activity, it peaked in like late 2019. It's come down since then. But over the last year, uh actually over the last three years, we've seen some strong momentum. We've liked aerospace and defense for a while too. Oh, yeah, right? Connecting what we are seeing on the macro side to portfolios.

SPEAKER_00 50:30

Yeah, we've had some of those, some of that in our tech tactical models for a while now, and it's just done very, very well. Um, I'll do one more thing, and if you want to wrap up with something, think about it. Uh, Allbirds, you ever heard of Allbirds, the shoes?

SPEAKER_02 50:42

Do you ever use those?

SPEAKER_00 50:43

No, I had it until last week. I never heard of it either, but maybe that tells a lot about Sonu and I. So, Allbirds, they made wool sneakers that were fairly popular. The brand started the struggle. Last week they turned themselves into an AI compute infrastructure play, and now they're known as new bird AI. You can't make this up, Sonu. The stock went up almost 700% initially. It's just pulled back some sense. Um, you know, when I hear stuff like that, it does kind of there was a time when you slow throw dot com on your name and it went up, the stock went up, or um you know when when crypto was really going crazy, you throw like crypto and certain things in your name or or blockchain, you put like blockchain in your name and it would go crazy. So that kind of caught my attention a little bit. But I I looked up um some other companies that started as one thing and moved to another. Did you know that Nintendo started as a play as a playing card company? I had no idea. Yeah, founded anything.

SPEAKER_01 51:31

And is that kind of in the gaming business? Yeah, maybe.

SPEAKER_00 51:35

Kind of, kinda. Play-doh. Play-doh was originally used as wallpaper cleaner. Then they realized every time they'd leave it on the wall, the kids would start playing with it. Then they started changing the color and they started selling it to children. So there you go. Uh, Slack started as an internal chat tool building for a multiplayer online game called Glitch. The game was a total disaster, but they realized people like talking to each other, so Slack grew from that. Uh Spotify launches an online store called Snow Devil to sell to sell snowboards, it turns into that. Netflix, of course. Yeah, yeah. Netflix, of course, started as DVD. I remember using Netflix or DVDs. Started as DVDs. Um, everyone's oh, it's a terrible industry, it's gonna die. Well, yeah, yes, the DVD industry did die, but boy, Netflix has sure worked out. And Instagram launches something called Bourbon, I guess how you pronounce it. A complicated Foursquare style check-in app. The founders noticed no one was using it other than to check in, and that's formed Instagram. So, anyway, some fun stuff there. But now my question, so I'm gonna close that without. I mean, that that that name change, it's a tad of a worry. I think we're you know still optimistic with AI and technology and these things, but when you see people do it, if we see more companies do that, because they say, Oh my goodness, the old what what the heck's their name? New bird AI, whatever the heck their name is. Albert's Albert, sorry, Albert. What up 700?

SPEAKER_02 52:46

What a recommendation, my name.

SPEAKER_00 52:47

We should we should probably call this facts versus feelings AI or something, you know, get some more listens. I don't I don't know. I don't know. Or maybe we just retool or something completely. I didn't want to say that yet. Um, it might be coming though. I don't know. Uh anything you want to add anything there? It's kind of a fun one, or just want to wrap up with something and take it away.

SPEAKER_01 53:05

Actually, uh, one last question for you because you know, our friend Tom Lee has been bullish, safe to say. But I I thought I saw something that he thinks we'll ride this, you know, markets will go up temporarily for the next month, two months, whatever. I'm just putting some, I don't know if these are the right periods here. But then he thinks we see a big drop, like 10-20 or something. I was curious what you're thinking. This is a midterm year, you're thinking back of one of the charts you had, midterm years generally see like a 17% pullback. We saw a nine percent pullback. Yep. Do you think we're done? Not to put you on the spot, but do you think you're done, or do you think there's like there's always like sell in May, go away. You know, it's not worked for the last several years, last decade, something like that. But then that September, October, but what's it? August, September, October period generally being a little dicey, right? So curious what you're thinking.

SPEAKER_00 53:55

No, I don't, yeah. So I mean, obviously, Tom's awesome, our friend Tom, and now we are contributors together on CNBC, apparently. Um, so I I don't think we're gonna, I think the lows are in. I mean, I really think the worst peak to trough correction we might see this year is 9.1%. I mean, that's not quite 10. That's yes, less than the last couple midterm years. And again, this is more from my take on looking at market sentiment. Just the over-the-top largest hedge fund selling in a six-week period since a hundred-year pandemic. We currently have bears above bowls nine weeks in a row. Bowls, just by the way, hit a four-week low in the AAI sentiment poll, yet price at an all-time high. That's never happened in history. And there's more, we've listed on this podcast. I don't need to go through it all. But does the over-the-top worry and negativity we had to me look like a crescendo of um, you know, just negativity, and now the beach ball is going up. And it doesn't mean we're not gonna have maybe a five who we probably might have five or six percent or in fact, I bet we do. You know, you have three to four five percent mile pullbacks a year. Um, but I think the lows are in. I don't think we're gonna see a bear market second half of this year. I mean, Tom's kind of got it covered because the next line, literally on CBC yesterday, he's like, I think the next couple of years are gonna be like some of the best years ever for investors. So he's kind of got it covered, you know, no matter what. But obviously, he's still net bullish. Um, yeah, so it's kind of as are we, and so it warms the heart to see see hear you say that exactly. He tom was actually our 100th guest, or no, no, 100th episode. He was our guest. We did that live. I remember we did that live. Um, where were we? Where were we? We were um We were in Florida, wait. Was it Florida? It was Florida, yeah. Orlando, yeah. Excel Orlando, yeah. It was funny because we were in Florida and we never went outside the whole time. So we had to work the whole time. So yeah, it's because it was hot. Yeah, well, it was hot, that's true. We don't like the heat, we don't like the heat around here. Um, yeah, but we're on the north. Like two 200 is not far away. We need to start that's only if my math is right, 16 weeks away, give or take. So we need to think about something special for episode 200. I don't know. I don't know maybe you'll break up.

SPEAKER_01 55:44

Maybe I should go get some burgers.

SPEAKER_00 55:45

Ooh, well, we can do that. Well, we can do that, we can do that for episode 185 next week, Sono. Which by the way, episode 185 next week is gonna be really cool. We've got some ideas without giving it away. It'll be on location from Omaha. We have some fun ideas. We're hoping knock on wood that our ideas can work out. And there might be burgers. We'll just leave. Yeah, you're right, Sonny. You're right. There might be burgers, if you know what I mean. You know what I'm kidding at. We'll leave it there. So episode 185 should be a lot of fun next week. Um, anything else, Sonda? Let's wrap this up. What else do we want to finish with?

SPEAKER_01 56:11

No, uh, I am going back to watching uh Kevin Walsh's hearings. Seems like that's on the menu for today.

SPEAKER_00 56:18

And I am not, I don't care. That's why I have you. That's why that's some entertainment. Yeah, I know. I hope I get my X account back, honestly. That's what I hope you did. Yeah, well, now that I'm a CBC contributor, I probably need to say, oh yes, I'm gonna watch it too. But uh wink wink, I'm not watching that stuff. I'll I'll I'll get the headlines. Um, yeah, but listen, everybody, thank you so much. Uh Sonu, great conversation as always. Hopefully, everybody enjoyed that. Last week with Roy Johnson, um, what's his uh commodity cycle? Commodity cycle. Commodity context. Sorry, commodity context, my bad, Rory. Uh, that was a great conversation. We had some really good downloads and this and that on the YouTube channel. I actually saw some people on the YouTube channel say something like, This is just a comment. Like, we just want comments, right? Positive, negative, we just we just like the for the algorithm. Oh, we had some we had some people tell us we were cutting Rory off a lot. So sorry, we made people mad apparently. Uh I guess we're cutting Rory off. I don't know. I guess yeah, sorry. Yeah, we'll let them talk next time. But you know what? It made everybody mad we cut them off, but we you know what? They went to the YouTube channel and complained, so we don't care. We just want algorithms. Uh listen, thanks everybody. We'll be back next week from Omaha. It'll be a fun one if everything works the way we want it to. Uh, lots going on. Give us those likes, follows, all that stuff goes a long way with those algorithms, positive, negative, whatever. We like it all. We cut each other off. Let us know we need to wear makeup. We don't care. Just let us know in the YouTube comments. It works. All right, see you by next week. Take care. Thank you. Information provided on facts versus feelings with some of our geeks and Ryan Dietrich are for general information only and are not intended to provide specific advice or recommendations for any individual. The statements and opinions of show guests may not be reflective of CWM LLC or its affiliates. Past performance is no guarantee of future results. All indices are unmanaged and may not be invested in directly. Investing involves risk, including possible loss of principal. No strategy assures success or protects against loss. To determine what may be appropriate for you, consult with your attorney, accountant, financial, or tax advisor prior to investing. Guests on facts versus feelings are not affiliated with CWM L L C.