Markets Face A Double-Threat Today | Jim Iuorio

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Jim Iuorio (0:49)

It does. It does make me more uncomfortable.

I always say that's why God created puts, and I'm carrying more to protect my equity portfolio, even the investment part of it, not just the trading part of it. But I'm trading very cautiously right now. I don't plan on getting out of everything, but if it was just the AI trade going crazy, I'd say, great, let's make some money. But then I see some warning signs like that 10-year-old, and let's hope the 10-year-old is shooting through the roof because there's better investment opportunity elsewhere and people don't want to be buying it, which that's what the economic enthusiasts will be saying, and I think that that belongs in there, but I don't think it's the primary driver.

Adam Taggart (1:33)

Welcome to Thoughtful Money. I'm Thoughtful Money Founder and your host, Adam Taggart, welcoming you here for a first-time discussion, folks. We're going to be talking with author of the Unfiltered Investor Newsletter, Jim Iuorio. Jim, how are you? Very good.

Jim Iuorio (1:45)

Thank you for having me. I've been watching and listening to your show for quite a long time. I'm honored to be on it.

Adam Taggart (1:49)

Well, that's a huge honor to hear, Jim, and I've been following your work, and I think we've even been at a few conferences together. But fortunately, the plans have aligned, and you've agreed to come on the program here, so very excited for it. You were kind enough to send me the latest copy of your Unfiltered Investor newsletter here, and I want to talk about some of the things you mentioned in it, but quickly beforehand if we can. Since it's your first time on the channel, I want to focus better understand to how you see the world before we get into the weeds of things.

At a high level, how do you look at the economy and the markets right now, sort of from an arch of history? If you had to pick a couple of adjectives or a phrase or two to describe both, what would you pick for each?

Jim Iuorio (2:34)

This is a great question. Normally when people say that's a great question, it means they don't have an answer, but I'm not one of those people. That is an excellent question. Because I think when you look at the trade, there's two things that stand out over the last, let's call it, year. One is the relentless rise in 10-year yields, we'll get to that at some point in time, but the other is the AI trade. And that's something that everyone can understand, that the AI trade is this massive, massive driver, not just of economic activity, but of wealth and share price, and it's been somewhat of a mania. So I look at it and said, you and I are of the age where we remember 2001, we remember 2008, we know what a bubble looks like. I argue that this is a bubble, which by the way, that opinion means nothing, because you can identify a bubble as it's inflating, and still be three years too early on when everything hits the rocks. So that means nothing to me. So when I look at this and say, okay, it's mania, how white hot can it get? And I think that's what's driving the economy. And I think the numbers bear that out obviously, but it's certainly what's driving the stock market. The market breath is very poor. The 25% of the stocks are trading over their 50-day moving average is concerning. So the question then becomes, when you look at it broadly, what are you supposed to do?

And there's only one thing I know for certain, and I'm curious to see if you agree with me or not. You can't just pull on out and let everyone else make their money, if it's going to last another three years, nor can you never cover things and let it all ride. Because as we say in markets, bulls can make money, bears can make money, but pigs get slaughtered. And I always take that to mean that people who get greedy on this trade are going to get their asses handed to them at some point in time. Sorry, I apologize for swinging your show, and I will curtail that behavior going forward. But I think you're smart.