Still Searching For Buffett (FvF Ep. 185)

In Episode 185 of Facts vs Feelings, Ryan Detrick, Chief Market Strategist at Carson Group, and Sonu Varghese, Chief Macro Strategist at Carson Group, are recording live from Omaha at PodPony's studio during Carson's Q2 board meeting. They make a pilgrimage to the McDonald's on 40th and Dodge that Warren Buffett reportedly frequents. They got the scoop on his usual order, but did Buffett himself show up? You'll have to listen to find out!

On the markets side, Ryan breaks down why the current secular bull market started in 2013 and what history says happens after you're up 100%, which is exactly where this bull market now stands from the October 2022 lows. The S&P just hit its 10th all-time high of the year, forward profit margins just reached a record 15.2%, and the data on "sell in May" may surprise you. Ryan's numbers show May has been up 12 of the last 13 years.

The episode also covers the oil picture with WTI back near $100 and the Strait of Hormuz situation still unresolved, the consumer sentiment disconnect between how people feel and what retail sales are actually showing, and the Fed outlook heading into tomorrow's decision. Sonu explains why Kevin Walsh is leaning on trimmed mean PCE to justify rate cuts, and Ryan calls him out for putting everyone to sleep. Gold gets a candid look too, still in a long-term bull market but stretched after a massive run, with real rate pressure creating some short-term headwinds.

Key Takeaways:

• The S&P 500 just hit its 10th all-time high of the year, and the bull market has officially crossed the 100% gain mark from the October 2022 lows.
• Forward profit margins just reached a record 15.2%, the highest ever recorded.
• Ryan makes the case that the current secular bull market began in 2013 and explains what history says comes next.
• Sell in May is largely a myth. May has been up 12 of the last 13 years.
• WTI is back near $100 and the Strait of Hormuz situation has not resolved the way markets hoped.
• Consumer sentiment remains near historic lows, but retail sales tell a very different story.
• Gold is still in a long-term bull market but faces short-term headwinds from real rate pressure after an extended run.

Jump to:

0:00 - Live from Omaha Setup 

1:59 - All-Time Highs and Oil Shock 

6:10 - Why Sentiment Feels So Low 

11:27 - Board Meeting and Real Money 

13:22 - Will AI Kill Investing Alpha? 

16:09 - When Secular Bull Markets Start 

21:00 - Global Breakouts and Gold Debate 

22:36 - Rates, Inflation, and the Fed Shift 

26:49 - Trimmed Mean PCE Explained 

29:49 - Sell in May: Stats Check 

32:58 - Bull Market Up 100% — Now What? 

36:22 - McDonald's Hunt for Buffett 

41:33 - Wrap-Up 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_03 0:02

Welcome to the Facts versus Feelings Podcast. I'm your host, Ryan Dietrich, and I'm joined by my co-host, Sonovarge. Cutting through the noise each week with Ryan Dietrich, Chief Market Strategist, and Sonovarge, Chief Macro Strategist, taking out the boring and helping investors focus on what really matters. Live from Omaha, Sonu, episode 185 of Facts versus Feelings. Still searching for Buffett. We've already done it. So you're gonna have to wait. But we have something special coming at the end of the podcast. What do we just do without giving it away, of course?

SPEAKER_00 0:49

Well, we were searching for somebody. Well, I guess we were searching for Buffett because that's in the title. That's in the title. But I should say howdy because we are at our producer's studio.

SPEAKER_03 0:59

Yes, we are. I don't know. Where what do you call this area? Omaha. Downtown. Just downtown. Oh, downtown Omaha. Okay, I thought it had like a specific name. The old market, I guess you can call the old market of Omaha. Omaha. We'll call this the old market area of downtown Omaha. Podpony, they've been our producer for a while now. Uh we're in their studio. It's awesome, so it's uh it's a neat opportunity. But I know Sony, you and I have a plane, at least I have a plane to catch. Maybe you don't have a plane to catch. I have a plane to catch. So we need to get into it. But at the end of this, we will go to the McDonald's that Warren Buffett goes to all the time as we are still searching. And if longtime listeners, this podcast, now we've done this before, probably G two years ago, three years ago.

SPEAKER_00 1:36

I think it was three years, three and a half years ago.

SPEAKER_03 1:38

It was cold. I know that. It was cold when we did it. It's 2022. Okay. Okay. Fall. Yep. So it was cold. Yeah. We we didn't find them then, but hey, maybe we found them this time. So there's so much to talk about. Um, where do you want to start? I mean, you and I have been busy, we run around Omaha. Where do we we we've prepared less for this one than we've ever prepared for a podcast, but that's okay. We know how to wing these. I what do you want to do?

SPEAKER_00 1:58

I think the biggest question we've been getting, we'll just start with that, is markets are close to you know all-time highs. Today there's been a bit of a pullback.

SPEAKER_03 2:07

As of yesterday hit 10 album for the year on the SP.

SPEAKER_00 2:09

There you go. So today we're recording this April 28th. Yep. We get half percent pullback in the SP 500. The Nasdaq's down more. I think the big part of uh the story over the last month, really, is that one ceasefire right in the Middle East. We'll come back to that. But tech is back, right? It's almost business as usual. It seems like the focus is more on earnings. It obviously is earnings season, but uh you know, profit estimates, we've been talking about that. That's been drive going up and to the right. Profit margins are going up and to the right. 15.2% forward-looking profit margins. That's the highest ever we've seen, you know, since we started tracking this stuff. And yeah, that's essentially why the market's at all-time highs. But at the same time, today especially, I think there's a realization that you know, I was joking about this to you earlier. There's no war in the Middle East now. There's no peace, but there's no oil either. No war, no peace, but no oil. And as a result, oil prices have been going up. WTI is at I'm very by the way, I'm very excited to have my screens up now. WTI is up close to $100 a barrel. Yes. Brent is up to $111 a barrel. So we're back to where we were before the announce. Remember the big announcement from both Trump and I think Iran's foreign minister said the straight is open. Well, I guess the strait is closed. A couple Fridays ago we heard that. And oil prices have been creeping up, bond yields have been creeping up. And I think Mark is like, wait a minute, you know, it's like that conversation we had with Rory. Every additional day the strait is closed, every additional day oil is not flowing, more barrels are lost, right? That's the consequence.

SPEAKER_03 3:59

And from then from um bring it full circle, from most listeners' points of view, the SP is still hitting all-time highs. Yeah. I mean, the Nasdaq is still in all-time highs. Now, not quite as much, but it'll it'll probably get there. We're still in the bull market as we've been saying for a while. And again, it's earnings, and you've you've updated these numbers before, but from the start of the year to like literally right now, SP 500 forward 12-month earnings are up 10%. I believe it's 6.8 or 6.9% of that since the war started, maybe 6.5%, some close enough of government work. Most of it since the war started, I mean, we hit the question all the time: how in the world are stocks at all-time highs when the when oil's back to 100 or flirting with 100 and everything feels so bad out there. And I've got some really interesting things about feelings. We can go that route next, actually, um, how people feel, but we are at all-time highs. You know, there's a Gallup poll that came out recently. I get it, it's a Gallup poll, but still, um, you know, like 80% of the people they surveyed Sony said they felt you know kind of bad about the economy. I mean, like that's a reality. We just had uh Michigan consumer confidence, one of the lowest numbers in history. I know oh, what's the other consumer confidence? The conference work came out a little bit better than expected this morning. Listen, it's still really, really low. So most people feel pretty darn bad out there, but we look at the economy, and it's not all terrible, and the stock market's up a lot. I mean, this is another popular question that you and I get. How in the world are we hitting all-time highs? It's because earnings are strong, profit margins are strong, and maybe the feds maybe gonna be a tad more dovish, at least than we were pricing in this time five weeks ago. Um, which way you want to take it now?

SPEAKER_00 5:24

I think the way I square that circle, I think it's two sides of the same coin that we're seeing. By the way, timeouts on it. Yeah, there you go.

SPEAKER_03 5:31

Could we see both of us on the camera at the same time? Do we do that on YouTube? Or how's this work? Or do we look at two different cameras? Okay, because what frustrates me, I don't know if you can do a split screen right now, but like you're as tall as me sitting here. No, you are not like he's sitting, pull it out, pull it up, pull it, pull it. He's sitting on like a pillow, like what do we call it? What do we call he's sitting on the pillow? The pillow, the booster seat. He's sitting on a booster seat. I we've never seen eye to eye before. This is very frustrating to me that we're sitting someone who's literally on a booster seat. I know, yeah. You like it, though. It's kind of nice, isn't it? It's kind of nice. Maybe I'll be smart. You've come down to my level. I'll be smart like you for a day. Like you figure out to be like a rocket scientist and you can be tall for a day. There you go. Uh, where were we? I totally saw that.

SPEAKER_00 6:10

No, look, we're talking about consumer sentiment. I think consumers are upset. We talked about this with Talman the other day and uh Josh Schaefer.

SPEAKER_03 6:18

On the live stream, hopefully everyone had a chance to listen to that.

SPEAKER_00 6:21

If you haven't checked it out, definitely check that out. We talked about affordability, and affordability's been in the news for you know years now. People have been complaining about inflation. But the other side of inflation is that you know prices are going up. Look, somebody is making money on the other side. Now the winners and losers change. You talked about earnings estimates going up. 2026 estimates are up four and a half, five percent. 2027 earnings estimates for the SP 500 is up over 5%. What's driving this? Tech. We know the AI is talking about.

SPEAKER_03 6:52

Let me jump in just a second on the YouTube channel. We can actually put up, I put the JP Morgan uh chart, I sent it that shows again how normally earnings kind of drift a little bit lower throughout the year. This year has been anything but that. So shout out to our friends at JP Morgan. We're showing that chart right now. Just the incredible jump in earnings this year.

SPEAKER_00 7:07

Right. And estimates are going up. Three sectors driving it tech, but that also relates to you know AI bottlenecks. Yeah. Chip prices are going up. You know, the I I know I brought this up before. CPI for computer software, this is part of core goods inflation. That's up 59% annualized pay. It's 59% in Q1.

SPEAKER_03 7:29

And okay, Q1, so first quarter. First quarter. Okay.

SPEAKER_00 7:31

59%, three-month annualized pay. That's math. And but on the other side of that, who's benefiting? Well, the firm's selling those chips, right? And that's a that's why you know earnings estimates are going up. And then energy and materials. Energy, we know what the story is. That's driving EPS, you know, earnings estimates higher. Materials, same thing. You know, energy estimates are up like 39%, 40%, 45%. Yeah. And even materials earnings per share estimates are up, I think, you know, something like eight, nine percent, both for 2026 and 2027. But the other side of all this is inflation, right? It's the same, and and it gets back to this week we'll get GDP growth numbers. GDP is going to fall. You know, last year GDP wasn't bad, but it was below trend. That's what we were predicting. Real GDP growth was 2%. So this is where I think people sort of uh where the disconnect is, right? When you talk real GDP growth, you know, that's usually, oh, that's the speed for the economy. How fast is the economy growing? But what matters for revenue and profits is nominal GDP growth. Okay. Real GDP growth plus inflation. And right now, when you get the Q1 GDP number, nominal GDP growth is going to be running about five, six percent. That's very good for companies, revenues, profits, all of that. But real GDP growth is going to be below trend once again. I don't know that he'll be negative, but don't be surprised if it's below 1%.

SPEAKER_03 8:55

And you I'll just chime in. I mean, you follow this way more than I do. I know enough to be dangerous. And every year, I I look at his data and you do too. The first quarter is usually weak, GDP wise. And then we come back. Like every then we're talking about why and there's reasons. Sometimes it's weather. Usually we say because it was cold. Literally last year was because it was cold in the first quarter. That's why that's when data was bad. But then data does come back. The economy comes back. So you're telling me maybe we have a weak-ish first quarter. I'm just saying not so fast, my friends, Lee Corso. Um, real GDP growth. Okay.

SPEAKER_00 9:23

Okay not nominal GDP growth.

SPEAKER_03 9:25

Good point.

SPEAKER_00 9:26

What you and I do, stock prices, things like that. I'm not saying inflation is.

SPEAKER_03 9:29

I thought you were gonna say eat, but yeah. Okay.

SPEAKER_00 9:30

I'm not saying inflation is not a problem or anything like that, certainly, right? I mean, none of us want to pay much more, but as far as profits and revenues are concerned.

SPEAKER_03 9:38

Yeah, let me do something. We've never done this. My son broke his nose. He's literally at the doctor, I'm gonna get the update. Let's do this live. Okay. Hey, buddy, what happened to your nose? You're on a podcast, by the way. What happened?

SPEAKER_02 9:47

Um, they said that it's not terrible.

SPEAKER_03 9:50

It's not terrible. You need surgery. Win surgery, win surgery. Uh huh.

SPEAKER_02 9:54

Within the next like week.

SPEAKER_03 9:56

Within the next week. Two weeks. Two weeks. Okay. So, yeah, you're literally on facts versus feelings right now. I wanted to answer this. Sona and I are hanging out talking, so we'll fit we'll figure it in. So I'll okay. All right, all right, buddy. I'm gonna hang up. I'll call you later. All right, bye. So my son plays basketball, and he was doing a very high-level basketball game on Sunday, and the biggest kid I've ever seen. All of a sudden, my son's on the ground, and then we realize this kid's elbow hit his face, hit his nose, and my son lost, Sebastian lost. So he's I've never seen more blood in my life. I don't like blood. Are you squeamish about blood? So you've got to talk about this. I don't like the needle thing, I don't like the blood thing. And by sudden, he was like drowning because there's so much blood coming out of his nose. It's kind of gross there, but I hope you're not eating right now. I put it on social media, but he's over a um, what was it, a trash can, and it's just pouring out. And I'm like kind of squeamish to begin with, thinking, well, this doesn't look good.

SPEAKER_00 10:42

I'm not a doctor, but I have to ask, did you tell him just get back out there and play?

SPEAKER_03 10:46

Yeah, kind of. So the funny thing, we we we we got them all up, they they stopped the bleeding. This girl came over and said, Oh, I don't think he had a concussion, did the concussion testing, which he totally had a concussion looking back. He went out and played for like 15 seconds because his team only had like five kids. And he goes out there, he started seeing stars. Mama went there, that's why he did it, because I'm there, like, get out there, you know, put some put some put some dirt on it. He goes out there, saw stars, says, Yeah, you're done. So he just just saw the doctor. That's why I answered my phone live on a podcast. I just wanted to hear, but yeah, so he definitely broke his nose, not terrible, but we're gonna have a surgery soon. Um all right, that's a that's a first. Hey, we're we're we're having fun in Omaha, you know. Where where uh where were we so now? I cut you off there. How do you answer that phone call?

SPEAKER_00 11:22

We're you're not trying to put jobs here at Carson.

SPEAKER_03 11:27

Oh, you're on that angle. Yeah, so yeah, show show our shirts on the um on the on the YouTube channel. We made special shirts for Facts versus Feelings live from the board meeting, second quarter board meeting. We just met with the board a little bit ago. And I I I joked the um oh the um what do you call it, the little thing you put out. Um badges. Our badges still work. So apparently we still we we did okay. How'd the board meeting go, you think?

SPEAKER_00 11:48

Uh I think it went well. Look, you know, from our part, I mean look, the company's Carson's doing well. I mean a lot of you probably listening to the podcast have seen the name Carson out there. Carson's growing really fast. And you know, just from you know the risk of being immodest, right? We'll just tout our horn a little bit. If we do that every week for an hour on this podcast, we'll as well continue doing it. Right. We've been we've got some calls right over the last few years. So our models have done well. The investment team has grown and yeah, and the platform's grown. We have our advisors have more choice now. And the biggest thing you and I do, yes, I I think this is where we differ from everyone else, right? We obviously like to talk. We like to talk about what's happening in the world around us, but we manage real money too. Yeah. Right? And everything we talk about, what happens is, you know, like what do we see around us? What do we see in the world right now? How do we convert that to our market views? And most importantly, how do we convert that to portfolio decisions? And I think that's you know, we are taking all of you and all of our advisors and clients on that journey with us.

SPEAKER_03 13:11

Yeah, I say a lot of people with podcasts pontificate, and we do that to a degree too. But what we say, how we look at the world, and a lot of times the sausage is made, literally, you and I kind of discussing on these podcasts, Facts versus Feelings Live, um, when we do these, uh, then actually manage money. You know, research teams do two things they create content, they manage money. I would put our team up literally against anybody else in the industry in terms of those two things. But let's uh let's dive back to the book.

SPEAKER_00 13:36

One question that came up, and it came up twice now over the last two days. We were with our you know founder Omani Carson chairman of the board. Yeah, chairman and founder of Carson yesterday as well. And the question came up, you know, over dinner will AI take away alpha from our edge from investing. I'm curious. I have my own thoughts. I'm curious what you think as well, because that came up during the board meeting, isn't it?

SPEAKER_03 14:00

It did. It's a it's a real question. I mean, it's not just our world. Like what is AI going to take away from everybody in one way? And it's gonna give other things on the other side. But I think you probably think like I do, and maybe some of this is you know, career risk. We don't want to say, oh, just let the computers do it. But the honest truth is in the start of 2023, I'm gonna assume AI would have also said, like every other, virtually every other person out there, oh my goodness, did you see the yield curves averted? ISA Manufacturing Sub 45, all the Someral indicator. Bloomberg article. It wasn't Bloomberg's call, it was different people's call. Uh, you know, yeah, there it's gonna maybe take away some alpha, but I think end of the day, if you do things the right way, and and I'm not saying just fade the crowd to fade the crowd, but when the opportunity arises the other side, I'm gonna assume that AI is probably gonna kind of jump in line with everybody else because that's what it's following. It's following all these smart people that say, hey, look how bad it is. Yeah. Well, markets have a funny way of pricing things in, like we've been talking about on this podcast for 185 episodes now. It's not about good or bad. Shout out to Bert, our um Bert White, our um, I guess, CEO at the also at the board meeting. You know, it's not about good or bad, it's about better or worse. And things have gotten better for three years now um than what people expected it to be.

SPEAKER_00 15:16

Yeah, I think about it like in terms of edges, right? Like we don't particularly have an information edge. Like we don't know anything more than everybody else knows. I mean, you and I get the same data that everybody else has.

SPEAKER_01 15:28

True.

SPEAKER_00 15:28

Now, what we make of the data is maybe a little different, but even then, we're putting it out there. You put all the charts out there, and I'm putting my charts in. Even that perspective is similar to what a lot of other people have. But I think the other part, you know, goes back to maybe a behavioral edge, is which is that you know, yes, there's career risk and stuff like that, but it takes a lot to go against the crowd in this business. But if you do, there's potential for alpha, but there's also potential for negative alpha, and then that's when but that's where risk management also comes in, right? Yes, you can take big swings, but you know, make sure you're still in the game at the end of it. And that's where risk management, portfolio management comes in.

SPEAKER_03 16:10

Yeah, I mean, you could say in early 2023, well, I thought there'd be a recession in the bear market. Everybody else did. So hey, you know, I was wrong, but everybody else is wrong. And you know, when you take that road less traveled, it can be rewarding at the same time. If you're wrong and everybody else is right, that doesn't look too good. So one thing, Sonu, talking about AI and people agreeing, disagreeing. I I mentioned this on um what was that? You got dings going on over there, Sonu? Look at you. I have my computer. You ever done one of these before? Um anyway, talking about when bull markets start. I don't, I mean, there's arguments on this because I get it. Like that we've been in a long-term secular bull market for a while. Um now, the big question a lot of people have is a lot of people think it started in March 2009. Okay. I would argue that it did not. I think this long-term secular bull market we've been in for a long time now started in April of 2023 because that is when the SP 500 broke out of a 13-year range for 13 years went nowhere. That's a long-term secular bear market. And I get it, from the lows of March 2009 until the breakout in 2013, you're talking over a, I think it's 140% approximate gain.

SPEAKER_00 17:11

Because that was a recovery.

SPEAKER_03 17:12

That was a recovery just back to the top. I mean, so back to the peak around oh, 1550, 1575 in the SP give or take. Um, and I think that that's something I've talked about for a long time now, these long-term secular bulls. And a lot of people talk about the 82 bull market started because that's when the bear market ended, August of 82. And I would once again, just maybe to be different to argue, this that secular one started after, I don't know, five or six, seven years, something like that, without new highs in 1980. We broke out to new highs in 1980. So you do the clock there from 1980 to 2000, you have a 20-year secular bowl. So you're looking at like when does it break out? When the breakout happens. Because if you're just going sideways in the big old range, which again we call a secular bear, where you go nowhere for years. We went for 13 years. No, I've talked to this podcast before. I started working in late 2000, uh 2001, after 9-11, all that stuff. Literally, I put money in my 401k like every, I guess every two weeks, I guess, for 10 years till 2011. There was the crash into August 2011, U.S. debt downgrade, market went down 19% or something, like four days. I literally was down after 10 years what I put in my 401k. I mean, I don't care who you are, like you can do this for a living. And we say, Oh, long term it goes up. Listen, I don't care. You put money in for 10 years and you're down. That doesn't feel good. But no one wasn't down. Who's that?

SPEAKER_00 18:26

The Oracle of Omaha.

SPEAKER_03 18:27

That's true.

SPEAKER_00 18:28

That wasn't a lost decade for him.

SPEAKER_03 18:30

Well, he's on.

SPEAKER_00 18:31

But for value stocks, and but it it goes to, you know, to your point, that like every other talks about, especially when I show it to the market.

SPEAKER_03 18:38

But when do you think bull markets start too? Maybe let's segue that too.

SPEAKER_00 18:41

I mean, I haven't thought I I always said, you know, I think a breakout makes sense. My perspective on this is because usually when people are in this argument, they'll they're like, oh, the bull market is has already been going on for a long time. Implicitly, they're saying that it has to end sooner rather than later. It see that seems to be the underlying message there. And my thing is why should bull markets end of old age? Like, why can't our uh you know, why can't a bull market go 15 years or 17 or 20? I imagine there's some catalyst at the other side. In the 70s, it was you know, runaway inflation and things like that. In the 2000s, it was, you know, valuations are really stretched, and then we got the housing bubble, and that also collapsed. So we had two bubbles collapsing, and that's what led to a you know pretty flat market lost decade. Yep. But a lost decade for one asset, one asset clause, doesn't mean it has to be a lost decade across the board. Yes, right? You have like like I was saying, Warren Buffett, value. Gold went up, I think it was 12 years in a row. Yeah, 11, 12, something like that.

SPEAKER_03 19:46

During during that lost decade that I was investing, and a lot of people were investing. If you were in gold the whole time, yeah, you were feeling a little different. International stocks were up. Yeah, so I think small caps too, right?

SPEAKER_00 19:56

They did well during that period. So if you're diversified, I know it's a cliche to say you should be diversified. Maybe in the 2010s you need not have been diversified because you know, I just put everything into tech. Yeah. Not a recommendation. But maybe we are in a place right now where you have to be more diversified.

SPEAKER_03 20:13

Yeah, I mean, I I think this is still a global, global bull market, still a secular bull market, likely has years left. Hey, you know, could be right, could be wrong. That's an important one. It's a global bull market. And that's the thing, because literally last year, early last year, when Germany broke out, Germany broke out just last year from levels of trade-out in 2007. 2007, Germany just broke out. So you could argue there's a lot of places around the globe that went nowhere. And Japan. Decade plus in Japan. Well, Japan went nowhere from 89 to just recently. So I mean, yeah, exactly. That's a long, I don't know what the math is. It's a long time, it's a lot longer time. Um, but the but it's more of a globable market, and you and I have been like a broken record on this. Yes, we like the U.S. a lot in 23, 24. We kind of, I wouldn't say changed our tune wildly, but one thing you brought up to the board a little bit ago was how we did change. I like the quote. Let's see if I get it right here. Lou Holtz, he says, Life is 90% how you respond to something, 10% what happens to you. We came into last year being 2025. Yes, overwhelmed equities like the US, but around the first quarter, you started seeing signs that this time is different. For most dangerous words, Sir John Templeton, but this time was different because Europe was starting to spend more money in defense, Europe was starting to do things, some policy stuff there, whatever it was. And then Europe has done really well over the past, well, I don't know, 15, 16 months.

SPEAKER_00 21:22

No, absolutely. And I want to take one separate track, especially because people are always asking us, like, oh, you guys always bullish and things like that. And we've one thing we've been open about is how bullish we are on gold. And you and I just talking before this, we were looking at like gold has struggled a little bit. I'm curious what your perspective is. I have my own thoughts about gold, and we still, to be clear, we have gold, we haven't sold it, things like that. But curious what you're thinking about gold right now.

SPEAKER_03 21:48

Unfortunately, gold's added a lot of alpha to those models you were talking about. It's still up a lot. It's still up a lot. I mean, for year to date, it's still up. But technically, it has been starting to weaken a little bit. It's had some long term resistance. I know Jeff DeGraff at Ren Max talked about, you know, potentially that was a blow off top in in January. It's hard to disagree. I mean, gold was up 65% last year. And then next thing you know, it's up like 25% into the end of January. I mean, that was a stretched rubber band. I do think gold is in a long term secular bull market. We talked about these commodities in long term secular markets. Markets, but when you get that stretched, maybe it's due for sideways consolidation, frustration. I think gold peaked 5,400, 5500, something like that. Um around there, around there. I think we're 4600 the time you and I are doing this. So uh, you know, maybe it's it's just simply due for that. I think it makes sense in portfolios to have a little bit of gold exposure, but that big picture thing of there's a lot, I mean, things like wheat, okay? Wheat charts. I mean, shout out to um uh Frank Capillary. The wheat looks pretty good. I mean, other commodities look good. I still think you have some commodity exposure. Gold makes sense, but there's other things that I think make sense in a diversified portfolio uh here and now. What do you think? You're probably going real rates? What uh by the way, it's kind of hard to say. Real rates. Yeah, you know, it's a bit of a couple days in Omaha, yeah.

SPEAKER_00 23:00

Roll your arts. Well, there you go. Real rates. Right. I think with inflation becoming a concern, and we could talk about Kevin Walsh and all of that, bring the Fed in here. But with inflation. Let's bring the Fed in, you know, you might as well. With inflation, you know, being top of mind, you think, and US, you know, ten-year yields, two-year yields, two-year yield is up to like 384, 385. The Fed funds rate is at 363, 3.63.

SPEAKER_03 23:25

And the third year's break it out too, right? I mean, got the short end and the long end breakout.

SPEAKER_00 23:28

Edging closer to 5%, right? So which the two-year rate, if you think about it, it is the average expectation of short-term policy rates over the next two years. Okay. And right now that's above the Fed funds rate, which means what? The market's not expecting rate cuts, right? That puts pressure, upward pressure on real rates, right? Which is nominal rates minus inflation. And I think that puts downward pressure on gold. I mean, that's my reflection. Now, would I sell all the gold we have? Obviously, we have a longer-term secular thinking on gold, which is like it's still a secular bull market for gold. I think over the long term, but short term, yeah, there's some pressure, downside pressure on gold because of what's happening in inflation. But that said, I think the Fed stays pat this year. I don't think they're going to end up. There are folks talking about potential rate hikes. Uh, there are people talking about rate cuts. Even now, I think there are at least four or five members of the board, Federal Reserve Board, plus Kevin Walsh, the Department of Justice, just took off the criminal lawsuit that they filed under, you know, against Powell for cost overruns for you know renovating the Fed building and things like that.

SPEAKER_03 24:39

That's off. I hope he and Trump wear those hard hats again one more time before he makes it. I just want the picture. I loved that.

SPEAKER_00 24:46

That was awesome. Yeah. So I think Walsh's nomination is going to go through. The Fed is probably meeting as we speak. Okay. Right? This is Tuesday, February uh April 28th. So tomorrow they'll come up with a decision. I think they'll hold you know rates steady, no increase, no decrease. But Kevin Walsh will be the Fed chair at their next meeting in June.

SPEAKER_03 25:05

So this is Powell's likely last one. So you think he just does he go screw? Does he go scorched earth, you think? Does he call out some of his haters, you think, for his last time in front of the camera?

SPEAKER_00 25:15

That that is part of like if he was petty, I suppose, like, you know, screw this. Screw this. I'm gonna raise rates. Of course, you'd have to take the whole committee with you. Yeah. But you know, June 15th, uh, when they have around that week, second week of June, when they have their next Fed meeting, yeah, it looks like Kevin Walsh will be the Fed chair. But I think it's an open question whether Powell stays or not. Sure. Because I don't think this whole mess about cost overruns and and investigation is done yet. And for Powell to sort of protect himself, I think he stays. So I think my money would be. I'm not betting on this to be.

SPEAKER_03 25:50

Correct me if I'm wrong for the.

SPEAKER_00 25:52

No, I was just gonna say my money is on him staying, at least temporarily.

SPEAKER_03 25:54

Trevor Burrus, Jr. So correct me if I'm wrong here, but for the listeners, um, if Powell leaves, that's an open spot. And then President Trump gets to potentially pick someone for that spot. Is that how it works? Stephen Moran stays in. Oh, goodness gracious. Oh my goodness. He stays. Okay. I think that's the way this is settled. So you you you keep Moran. Oh my god. All right. If Powell, well quickly for listeners who probably don't pay nearly as much attention, thank God you don't. You don't need to know Steve Moran, what's his job right now? I mean, he's in there like a kamikaze, right? I mean he is like a bomb in the year.

SPEAKER_00 26:27

But he has uh he thinks we need only three cuts this year. Previously he was in the camp that we need four cuts. Okay. Okay. Now he needs three cuts. So Kevin Walsh obviously thinks we need cuts. But I think, you know, like maybe they get four, five votes in favor of cuts. Okay. Walsh, Miran, assuming Powell leaves as Bauman. Waller, I don't know. He seems to be singing from a different hymn book right now. And yeah, I think it's up to Walsh to convince the rest of the Fed members that we need to cut rates. But inflation's running, you know, three, four percent. I doubt that he's gonna have that.

SPEAKER_03 27:05

You asked me to ask you something. Okay. And you said, Ryan, you're not gonna like this or care about it, but I'm gonna ask you anyway. Trimmed mean PCE. What in the world does that mean? You asked me to ask you this one. You would anybody go that route? Is it too boring for the podcast? Just give it a lot of it.

SPEAKER_00 27:19

No, let's uh no people are gonna hear about it. So let's uh let's spend it.

SPEAKER_03 27:22

Trimmed mean PCE. Don't put us to sleep, Sonu. This sounds horrible.

SPEAKER_00 27:25

So you have PCE, you have CPI, you have core CPI, you have PCE, uh personal consumption expenditures index. We talked about that. It's a Fed's preferred index, but they focus on core PCE. Kevin Walsh has sort of glopped on to trimmed mean PCE because he thinks that is a better measure of you know the future direction of inflation. Essentially what trim mean PC is it basically like let's say you have 177, I think 177, 178 components for the PC index. Okay. Right. And they uh calculate the month over month inflation for all of these components and they rank it lowest to highest. Okay. What trim mean PC is so core PC, what does it do? Get rid of all the food and energy that tells you what the inflation rate is. Okay, right? That's cool. Trim mean keeps everything there, but after it ranks these 177-78 categories from you know lowest to highest, it takes away the bottom 24%. It cuts it off by weight, right? Bottom 24% of the lowest you know, inflationary components. And then it also cuts away the top 31% of inflationary components. And you see, you already said, ooh, wait, okay. So you've taken out 55% of uh components from the index. Okay. And they're doing this month after month. So every month it could be different things in the middle, 45%. And historically, yes, it sort of predicted the direction of inflation, but the one, you know, one of those few times where it really failed quite miserably was 2022. Yep. A lot of stuff did. Yeah. You know, first of all, it you're doing this asymmetrically. You're not taking out an equal weight from either side of the tails. There's something called a 16% trimmed CPI as well, which takes out 16% of the tails. That makes sense. So you're taking out 32% and you're left with 68% of the index here. You're left with 45%.

SPEAKER_03 29:20

I'm 100% bored at this point.

SPEAKER_00 29:22

Right. No. So you're gonna hear more about this. Look, it's trimmed mean PC is running at 2.3%. Okay. Walsh is you know bringing that up because he's like, I want to cut rates. What is a metric that justifies that? Trim mean PC, right? Okay. Until it doesn't, right? So we're going to be in this dance of, oh, let's look at this metric. Let's look at the right.

SPEAKER_03 29:44

Is this the new transitory? Is this the new transitory metric? Well, that's a good one.

SPEAKER_00 29:47

This is maybe that's the title of our next episode. Trim mean PC is the new transitory.

SPEAKER_03 29:52

We're running out of time. I do have a plane to catch here. Again, this is episode 185. Still searching for Buffett. So we're going to finish here in the studio and then everybody jump on the YouTube channel or keep listening, and we're going to um go to McDonald's and look for Warren Buffett. Uh so sell and make go away is almost here. Now, we're not sure yet. Hopefully, next week we'll have a very special guest. We'll see. We've got to cross some T's and dot some I's on sell and maybe I'll just say this much, Sonu. Sell and make away, the worst six months of the year. It's from May to Halloween, those six months. Okay. And historically, yes.

SPEAKER_00 30:23

So it's October two, then.

SPEAKER_03 30:25

It goes through all of October counts, yeah, exactly. Uh, those six months. Last year, we gained over 22% during sell and may, the single greatest sell and may period in the history of the stock market. Now, if you listen to this podcast, we say, I'm not so sure. So nine of the last, and actually, a pod pony we can put this chart up as I'm talking about this. I know I sent it to you guys. Um, nine of the last 10 years, the sell and may period was higher, up over. I've got it somewhere in front of me. So almost 7% on average. So listen, could you have a sell and may go away? Maybe, but we are still bullish. I think we made a pretty significant low recently. Yeah, the market might consolidate some because we've had a heck of a rally as we've talked about. I mean, semiconductors is 18 days in a row, they were finally down. It happens. Um, I think we're probably gonna have another pretty solid sell and may period. We'll probably put a pin in that. Hopefully, next week we're gonna really dive more into the sell and may stuff. I'm looking at my notes.

SPEAKER_00 31:15

Can you switch it to buy in May?

SPEAKER_03 31:17

Well, yeah, because I think May is up like 12 of the last 13 years. May is up like 12 of the last 13 years. So, you know, uh, it's not gospel as our friend uh Sam Stovall says, but I still would pay attention to it. So streaks, what else do I have here? Retail sales? I had that scribbled down. You want to talk about that, any? Or I mean what else would you do?

SPEAKER_00 31:31

Yeah, look, retail sales, I think it brings about the difference between inflation versus you know margin expansion, uh increasing profit estimates. Yep. Because nominal retail sales, especially core retail sales, taking out gasoline stations, things like that, been running close to 8% in Q1. Annualized. But that's before adjusting for inflation. Once you adjust for inflation, that almost fully goes away. So, but that's you know, companies make money off of it. Gasoline station sales were up 71% over the first you know, quarter. Obviously, we know why, but oil prices weren't up 71%. Maybe they're up 50% or something. So gasoline stations made some money. So they were making some money, which is fine, right? They, you know, I'm not saying profiteering is a bad thing or anything like that. Companies are in the business of making money for themselves. And, you know, they a lot of these companies, whether it's gasoline stations, whether it's energy companies, whether it's ship companies in South Korea or TSMC, our recommendation, they're all in the right place at the right time. Yeah. When the world needs more of the stuff they make, prices go up and they're benefiting.

SPEAKER_03 32:41

Well, the control group was up with 0.7%, expect to be up 0.2 or 3%, which again, that's the one that flows into GDP, and that takes out gasoline, the more volatile gasoline is a little bit more than that.

SPEAKER_00 32:51

It takes out tobacco as well.

SPEAKER_03 32:52

I don't know why, but I don't volunteer that one, but that's all right. Um, the reality is, yeah, you know, people feel a certain way, as we talked about in the very very beginning about sentiment, but then you look at retail sales, people are still spending. I mean, you and I, we get to go travel the country and do things with our amazing Carson advisors, meet their clients, and everywhere's pretty darn crowded. Most airports are still pretty crowded, so that's uh good stuff. Now, one other thing for me. What was it? I had something here. Oh, oh, congrats to the bull market, Sonu. Um, we just are up a hundred percent on the S P 500 since the October 12th, 2022 lows. Just uh a couple, maybe last week on Friday, now we it's maybe selling off today, but we did hit up 100. And it's about three and a half. Exactly, almost to the darn day, three and a half year bull market. So you think to yourself, okay, what's all this mean? So I looked and on YouTube channel, Podpony, we can put this chart up. Now, this is a mini bull market within your long longer secular bull market. Exactly. So you these secular bulls you can have, honestly, you can have a bear market. 87. You had a 34% bear market that was in the middle of almost a 20-year bull run. 34% bear market during what? During COVID, which has been in the middle again of this bull run that I say started in 2013 to right now, which puts about 13 years or so. Um, but the reality on the on the YouTube channel we're sharing, what happens after you hit 100%? Well, as you can see here, bull markets tend to last many, many more years potentially, um, once you're up 100%. Now, yes, the 2002 to 2007 bull market peaked like literally almost to the darn day. It was up 100%, but most of these other times. So this is just fun with numbers. But when you look at the economy, look at more little more dovish fed, record earnings, record corporate profits, um, profit margins, all these things are reasons that we still think this is a bull market that's alive and well. So no, we probably are at the end because again, I need to make sure I get home. Yes. Um apparently Sebastian has uh some surgery coming up. Well, what do you want to finish with this week?

SPEAKER_00 34:41

I think we'll just I'll just close off on that note. Look, uh, momentum, I it sounds like a broken record here. Momentum begets momentum. The market has momentum. Uh whether you think the Fed should raise rates or not is a different thing. You know, in my opinion, there is also probably like, you know, inflation's hard. Maybe they should be raising rates, but we're overweight equities. I'm not complaining that they're not going to raise rates. I don't think they're going to raise rates. Which means as inflation's going up, policy is getting looser. Okay. That's a I think a tailwind for equities. And then you have things like tariff refunds going out. The big tax bill that was passed, that's increasing the deficit. Yep. Increasing deficits, six to seven percent deficits is going to flow into profits. So you have a few tailwinds that we expected actually coming into this year, and here we are. We are in a period of inflationary growth. That's a period that's good for stocks.

SPEAKER_03 35:35

Absolutely. I did find the number here. Uh, when you hit 100% up, I found seven other bull markets that did that on average lasted three more years. So who knows? I mean, who knows? But just again, just because you're up 100%, that doesn't mean that bull market has to end. So, everybody, what has to end is this part of the podcast. And again, honestly, it'd be better to go to the YouTube channel to watch. Yes. Uh, if you're listening, that's fine. We will still play the audio if you're doing that, which is fine. Uh, thanks to everyone who gives likes, gives follows, gives um, you know, all that stuff. Good reviews, bad reviews, fun comments, bad comments. We we we love them all. We love the algorithms just like that stuff. So thank you for all of those things. And again, we are going to transport now to the McDonald's on 40th and Dodge, searching, so still searching for Buffett.

SPEAKER_00 36:21

I just realized we have our red, you know, Fax was his feelings t shirt, red and yellow, which is like a McDonald's color. So we you designed this for Nebraska ride, right?

SPEAKER_03 36:32

I did, but hey, sometimes you get lucky and it does match McDonald's. All right, we're going to McDonald's. See you right there. All right, we are officially at the McDonald's. How about that? That Warren Buffett goes to. His house is like, I think I can see it. I don't know. His house is right over there. This is 40th and Dodge Street. Is it Dodge Street?

SPEAKER_00 36:51

I think Dodge Street. Dodge Street in Omaha.

SPEAKER_03 36:54

Still searching for Buffett, not buffet. Buffett. We're gonna go inside.

SPEAKER_00 36:59

How many absentees are there in Buffett? I don't know. We'll find out.

SPEAKER_03 37:03

It's been a long day, I don't know, but we are hoping we don't get yelled at for bringing a camera in. We didn't really ask for permission. We're gonna ask for forgiveness if we get yelled at for bringing a camera into a restaurant. Let's go this.

SPEAKER_00 37:16

How are you doing?

SPEAKER_03 37:17

Hello? Um, I'd like a medium drink. Maybe like a medium French fry and uh apple pie. We do have a question though. We're in financial services and we know Warren Buffett frequents this often. Has Warren been here today?

SPEAKER_01 37:31

Not today, no.

SPEAKER_03 37:32

But he does come here, right? Does he come here? You're on a live podcast. This is a podcast. Don't tell him we're recording in your I know we're not allowed to do this. Yes. So Warren Buffett does come here. When's the next time you seriously make?

SPEAKER_01 37:41

I'm not quite sure. Maybe a couple weeks ago. Okay.

SPEAKER_03 37:43

She said a couple weeks.

SPEAKER_00 37:44

Does it come from breakfast or lunch? Or is he returned now?

SPEAKER_03 37:47

Like, what does it usually order, if we can ask?

SPEAKER_01 37:48

I think it's the biscuits.

SPEAKER_00 37:50

All right. Biscuits. Ooh, it sounds good. Okay. But you don't sell biscuits in the video. No.

SPEAKER_03 37:55

No, just during the biscuits. She's like, guys, I have a job to do. Stop basically. Okay, yeah, all right. Well, we are still searching for Buffett. The second time we've done it, so he's not here. When's the last time you had a McDonald's apple pie?

SPEAKER_00 38:05

Ooh. It's probably been at least a decade. You know what I remember though? What's that? That it you bite into it and it's really hot.

SPEAKER_03 38:11

That's what I was hoping. I was hoping to burn you live. Okay, right. I'm gonna take a bite. Come on, sir. Let's do it.

SPEAKER_00 38:16

Alright. I'm a little scared now, but I have some cold coffee with me. It's not too hot. Alright. Hmm. Episode 185. He's still searching for Buffett. Apparently he was here, what, two weeks ago? A couple weeks ago, so we're getting closer. We will continue to search until we find him. You know what he's got a lot of? Money. Cash. He actually has a lot of cash. 370 billion, apparently, now. So it seems like he's a little conservative. I'm curious what you make of because Buffett's always like you know, people quote. There's always something in the media about, you know, Warren Buffett has so much of cash. And I've always been in the cash camp that, you know, his cash does is not quite the same thing as, you know, if the rest of the industry, financial professionals, portfolio managers like us are going to cash. But recently there was an interview I was just reading that Buffett is actually holding on to more cash than he normally would because he they're so big that he's not finding a big enough opportunity. But I wonder if there's you know a little bit of, you know what? I'm keeping a lot of powder dry until things get a little less expensive. So you know, for what that's what I mean, we'll see timing-wise. I don't know if Buffett would call himself a market timer.

SPEAKER_03 39:39

No, he wouldn't. Um I'm gonna butcher it totally, but it's I'm gonna paraphrase it. When the skies get dark, it'll rain gold. And when it does, your buckets ready. Pretty close for one buffet closed. I will say, uh, told Connor we're gonna do a 90-second sign-off. It's the longest 90-second sign-off we've ever done. But the truth is, um, if you look at the cash he has, there's a lot, yes. But then you look at it like it's besides the percentage of market caps on his own company or the other assets that he has, it's not nearly as large. I know the media like to run with this. War Buffett has cash. Listen, I've been here now for three years. How's the market done? And believe me, they've buffed it's been successful, the company's been very successful, obviously. So I think I'd be a little careful when you see that one flying around. Yep. Kind of like M2 and certain things when you're and it's a lot of like insurance floats, right?

SPEAKER_00 40:29

And speaking of somebody who just recently got a car and not a recommendation, but I did sign up for Geico insurance because they gave me a nice deal. So, you know, me paying my premiums as part of Buffett's insurance float and the cash that he has.

SPEAKER_02 40:42

Um Geico, uh little uh what's it called? The Geico chameleon? Is it chameleon? What example is that?

SPEAKER_00 40:48

Yeah, chameleon. Yeah, the ge the gecko. The gecko, that's what I was looking for.

SPEAKER_03 40:53

So it's got a long, well, a long two days in Omaha. So we're awesome. How's the pie? Oh, it's good. I'm gonna take one more bite here.

SPEAKER_00 40:58

All right. I'm gonna save mine for, you know. I feel like I have so much of sugar, and I have like the iced coffee, have the you know, the the apple pie, but it's good. Yeah. Well, I think it's time to sign off.

SPEAKER_03 41:10

It's time to sign off. He's here a few weeks ago. We didn't see him. We are still searching for Buffett. And in the meantime, we will just find a buffet to make up for it. There you go. Close enough. Everybody, we'll be back next week with another one, and everything works. Might have a guest next week. Oh yes. And then we'll talk about this. I'm not sure. We gotta go. Fingers crossed. Just special guess. We already talked sell and make away a little bit ago, but there's literally a guy who wrote the book on Cell and Mago Away. I'll leave it there. I hope it works. Um you'll like that. If not, it'll just be Sona and I but it'll still be good. We'll see you right next week. Um odds are we're not eating apple pie next week, but we'll be back. See you right then. Take care. Thank you. Information provided on facts versus feelings with Son of Arge 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.