so you were on one of the first shows we ever did in um 2021 it was you and Caleb Silver you remember absolutely he brought Wait does it blow your mind that it was that long ago yeah it does i can't believe Michael's even like four years ago it's crazy we were so young i know i honestly thought it had been a year like ish we were just watching We were just watching the footage and uh it feels like it's a million years ago but it's not i I it's hard to describe the the passage of time is one of these crazy things i don't really know uh I don't really know where I'm going with that but um four years is a long time a lot like I you know how I measure time how old my kids are cuz I So whenever somebody says a year I immediately flash to how old was uh Tara how old was Justin and that's like the way that I process like oh my god that was so long ago yeah yeah i think all parents do that right so in 2021 I had a 15-year-old daughter and a 12-year-old son now my son's a sophomore in high school my daughter's already gone she's in college so sad so wow you know what I was telling a friend this morning you know how I measure my level of anxiety around the market is by if I'm playing spelling be online or not oh if you're like actively looking for distractions no quite the opposite when I have any mental capacity I play spelling bee so I haven't played Spelling Bee since January 20th what's Spelling Bee it's that little thing on the New York Times app oh yeah yeah where it's kind of like boggle you know they give you a bunch of letters but I for the better part of a year played Spelling Bee religiously didn't play it from probably October through Christmas okay around Christmas started playing it again and then I realized recently I've ceased playing Spelling Bee at least since the inauguration there's just been so there's no time there's no time and there's no mental bandwidth left to do anything after this no I was writing a quarterly client letter and um by the way AI is fabulous you know you ask Grock how many executive orders have there been in the last two months and 10 days 102 here they are if you want to read about it is that the AI that you that's your go-to grock interestingly no we're toggling between a lot of different ones we're using Claude Grock Chat GPT um and shoot what's the other oh and Gemini and then my analyst is using one of the um I think it's called deep research okay um so we're we're playing around and seeing what's best for what but 102 executive orders in two months and 10 days and 21 cabinet appointments like there's no room for spelling be it's so sad josh yesterday I was when I was telling how much money that person made i just Googled or googled I chatb excuse me how many shares of XYZ does this person own immediately right because if you Google it you'll get a link and then you get to click the link and maybe it has the answer maybe it doesn't yeah that's over yeah it's over it's so It's so over you know what I used Brock for last week it was amazing um so I started researching microchip right microchip showed up on my screen for the first time mchp i owned this way back showed up last week with a foreign change yield because it got the wind knocked out of it and I'm like look I need to do research on this right off the bat we find out that the week before they did a convertible preferred and I'm always rusty on my convertible preferred math like I can go back I can recreate it but it takes me a while to get back into the groove so I put into Grock you know with the shares trading at with microchip at 40 and microchip preferred P at 43 remind me of the convert math is this a good buy here unbelievable and a full explanation you know there's the summary there's the bottom line what is that so what is that calculation telling you as an investor um it's basically telling you like yeah you're getting a decent price right now at this point it's got close to one for one rat upside ratio with that with if you were to buy the convertible preferred versus buying the common okay and it reminds you of things like on the common you have risk to the dividend on the convertible preferred you don't you know so if you hold it until the until this convert matures I think that was in 2029 you'll get at least this much from the income and you have equity like upside but it was amazing it was like having a $450,000 a year analyst you know sitting at the ready for me to use to do this math and I didn't need to do it myself and you feel confident that it's right ah interestingly not 100% so then I asked my analyst can you double check Grock's work he said hey they're using the it's using the wrong conversion ratio here he went back and said put in the correct conversion ratio you know bam it's done so someday you won't have to double check because you'll just know but we're not there yet you know that's a bigger question do you think there's ever a time where we shouldn't double check shouldn't or need or or not feel the need to is probably two different things i think that's right cuz because there there will come a time where you will have run the same uh the the the same search or or the same calculation there will come a time where you've done it so many times and the answer has been right so many times are you sending physical notes to Josh yes because I didn't want to interrupt the show and say "Can I get the Wi-Fi password?" That's amazing wait Josh knows are you good we're not in no rush you have the Wi-Fi password no no I just got I was like in middle school i'm sorry but Josh knows by the way i write him notes during the Yeah no it's not distracting at all i love it i wish we do that more i meant to say sometimes if he doesn't respond fast enough then I email him and elbow him but yeah I'm a big note passer during the show you are that's That's okay doesn't seem like Scott's distracted but you know what on on that question here's a good point in prepping for this show all right I'll jump to the end but one of the points that I wanted to make was that we've been in such a distorted time for the past five and 10 years with the MAG 7 that it makes it look like there's only one investable index right so I asked Barack I said "Can you please tell me from 1950 until 2015 what did the S&P 500 return what did small cap return what did value return what did midcap return?" And all three came back at just about 12% like 11.2 two for S&P i think it was 12.5 for Midcap for value and then I sent it to my team and said "Can you please sanity check this?" And even with Grock saying "Here are the sources we used." They went um I always say his name wrong but they went to um Demodaran's site on NYU i might as well have to motor in thank you um so they went to his data on NYU and they're like "We can't double check this but it feels right to all of us." Close enough good enough close enough but it's to your point like at what point do you just say "I know that's right." versus hey let's give it a double check yeah we're all reliant on the Crisp database or S&P data or whatever and I don't know I feel I feel like it's not going to be that long before we just say this is probably right you know what and it's the same as having a colleague right when you have a new colleague you double check their work for a year and then you start to say "Hey they're right 99% of the time." I think that's it but it's pretty extraordinary i mean the amount of time it's saving and Josh you know I'm pretty long-winded right yes so so you'll like right that's why we love each other that's right so um birds of a feathers so I've been using it for client writing and I'll say things like "Can you help me explain the midstream energy space in three sentences or less because I can explain the mid-stream energy space?" Not in three sentences not in three sentences that's a good point you're not outsourcing your thinking to it you're using it for uh more a more concise way to say things yeah yeah and I think that's appreciated on the part of the reader like obviously totally yeah i agree how we doing looking good all right we've got 35 pages and a million charts to get to so let's get the show started yeah let's Let's get this thing going the words of Rody Mun let's get this [ __ ] started coming in friends episode 187 [Music] [Applause] today's show is brought to you by Innovator ETFs one of the better calls of my career Josh was in 2018 I believe it was Ben and I had Bruce Bond on Animal Spirits to talk about these new buffered ETFs we immediately identified wo this is going to be a new category unto itself yeah and it turned out that way um so if you're worried about things like tariffs right now political uncertainty Doge market volatility this company Innovator has this suite of ETFs that gives you a little bit I don't want to say more certainty about what will happen but a little bit of more of a defined risk versus return profile they define the range of outcomes and it's super transparent because there there are a lot of moving parts but go to the website you see the dates see the buffers you see the levels go to innovatorfs.com to learn more [Music] innovatorfs.com oh 187 like Snoop Dogg johnny you get that reference or not really no you You didn't grow up in the hip-hop community the way that I did I don't think no I just think I'm pop culturally illiterate and always have been all right ladies and gentlemen welcome to the best investing podcast in the world my name is Downtown Josh Brown for first time listeners viewers with me today as always the co-host of the show Mr michael Batnik hello hello the call's here john's here duncan's here shout out to everybody listening we appreciate you we have royalty in the house today this is a repeat guest on the compound and friends one of the smartest people in all of financial media one of my favorite people I've ever met on Wall Street someone who just absolutely lights it up every time we appear on television together and in person I would add thank you ladies and gentlemen please welcome Jenny Vanluen Harrington jenny is the chief executive officer of Gilman Hill Asset Management an income focused boutique investment management firm jenny serves as portfolio manager of the firm's flagship equity income strategy which she created and has managed since inception prior to joining Gilman Hill in 2006 she was a vice president at Newberger Berman and an associate and analyst in the equities and investment management divisions at Goldman Sachs she is also the AIS to the Van Luen Ice Cream Fortune right is that I mean it's sort of true i don't think so you're not technically an aist no and it's not yet a fortune but it will be it could be yeah why are you working so hard because it's my brothers i know but still that's why I brought you guys 18 years i met you i met you brother you guys are You guys are tight he's the best what if you just said "You know what this is too stressful i've been doing it too long what can I do at the ice cream company?" What like what how would he probably be thrilled i don't know he's so creative i'm so uncreative i'd probably be like I don't know some No but you could be analyzing yourself those people i know but it's you know I'm just saying i know it'd be fun you know what I'd like to be but stop porting yourself or something i'd like to be a taste tester oh well that's my job don't Don't muscle in Don't muscle in on my turf um we love Annlu and Ice Cream and whenever I see it I take a picture of it for you right yep yeah that's the best all right uh let's start off with uh Donald Trump because every conversation everywhere on earth every subject every topic uh inevitably leads to Donald Trump these days kind of unavoidable this was uh this was quite a week for uh for uh Donald Trump this is something special so just to back up the tariffs went on for 13 hours uh as the tariffs were going on Tuesday night they're going to go on Wednesday 12 a.m so as they're about to go on the bond market literally starts to blow up overnight there's talk that the Fed might have to intervene um and there's talk that maybe Japan is selling treasuries maybe China maybe both who else is selling how much higher will the yield go how disorderly is fixed income about to get everyone's completely freaked out the market had just crashed the stock market had just crashed um so the tariffs go on at midnight and by 1:00 the next day they're taken off so it's 13 hours now the Chinese tariffs did not come off so the this is the reciprocal tariffs and they're not off they're baseline to 10% versus significantly more severe but the narrative Jenny is now Trump blinked and I mean it's no one's even other than like Trump people everyone kind of agrees like it was some combination and we'll we'll talk about what you think went on some combination of the bond market and commentary from CEOs and maybe some like gentle uh nudging from uh Scott Bessant and whatever ended up happening he came out and said "All right we're going to lower the reciprocal rate we're going to add more tariffs to China but we're going to make 75 deals with 75 countries." I would point out the USMCA was renegotiated over the course of two years so making 75 deals with 75 countries sounds like it could take I don't know a century but it's fine uh but so that that's where we are and what ended up happening and we're recording this on Thursday afternoon we had the third biggest 1-day return for the S&P 500 since 1990 second biggest NASDAQ day since the invention of the NASDAQ and uh I guess the first question is what do you think happened uh why' he reverse course yeah like what what do you what do you think went on what was like or or was it just this confluence of things where he just realized this is better for me to to pull it back so if you think if you think back you and I were on the show together on Tuesday right um and on Tuesday we were talking you said "Is anyone going to look Trump you know is anyone going to play Chicken with Trump on this?" Yeah and remember I jokingly said "I will." Yeah you know I I feel like when people threaten it almost felt like a parent threatening right and and you're very feisty right right but but you know I'm going to take your car away you're going to be grounded how many times do parents actually make good on that and it feels like that this doesn't feel like a professional grownup serious negotiation it felt very much to me like it was a threat and so my odds were on that something was going to change um because he behaves frankly I think like an outofcrol parent more than you know a strategic tact he's the parent in your metaphor he's not the child no no he's the parent who's threatening who's not going to Who's the child us or the kids oh I see so that's why I was like you know I'm betting on that threat not being there but I think so here's what you know he saw he saw that the longer the carnage went on the more collateral damage was going to be done he knows as well as we do that in a year from now we're going to be heating up on midterm campaign campaigns and the Republicans are going to lose the House and Senate if we're anywhere near where we are today and that collateral damage was piling up fast and then there was this mosaic of noise from from people out there and I think you know when we look at Trump probably the the the strongest thing there is his survival instinct like the dude knows how to survive yeah right and I think survival instinct kicked in it's like I don't think it was just Bessant you know i think it was a whole bunch of stuff where he's you know something in him said "If I'm going to survive this moment has to change." I I totally agree with you i don't I don't think that it's one thing i don't think it was just Bessant i don't think it was just the bomb market i don't think it was just Jamie Diamond but to to extend your analogy I think he said to the child "All right no more food." Yeah no more food you're not eating anymore and the child and the market said "What well you have to feed me what are you talking about it's an empty okay but fine um now maybe you're going to skip lunch." And so there's still there's still going to be damage from the threat but it's obviously not as ridiculous as no food forever right and and I could take that just a little bit more too which is you know as a parent Josh right how we how we start off talking it's easy to threaten it's a real pain in the neck to have your kid grounded at home for two weeks yeah you know it's a punishment for the parent it's a total punishment for the parent so enacting those tariffs would have and today you know Wednesday or whenever whatever day it was it's hard to keep track of to our to our conversation Michael it's hard to keep track of the year much less the day lately so um so I think it was just going to be harder to keep track of all those tariffs harder to manage the noise harder to manage the criticism and like apparently he's like "Yeah right forget it you're not grounded." also harder to negotiate when your own stock market and bond market are both tanking and the dollar is falling yeah you got nothing you're you're like each day you're you're negotiating from a weaker uh place which like like very obviously john can we do this rolling 3-day basis point change in the 10-year Treasury yeah so Trump doesn't care necessarily about the stock market he's he's made that pretty clear but he is a real estate guy he understands borrowing costs he knows that credit and liquidity are the backbone to an entire functioning system and when you see something like this a 3-day uh gain that is almost off the charts that is not healthy right yeah i mean this is just eyeballing it look at other instances of the 10-year smashing through these levels um but hold on but Josh in 2022 like when we did this we went from like half a percent up to 100 basis points this is bad we went from four to four five and so this idea that like Besson said uh he and I had a long talk this was a strategy all along he to your point Jenny he goes on instincts he said to the Wall Street Journal uh he said he had he had been thinking about pausing tariffs over the last few days adding it probably came quote it probably came together early this morning fairly early this morning he said he didn't consult with lawyers for the wording of his announcement and instead relied on input from Bessant Lutnik quote we wrote it up from our hearts we don't want to hurt countries that don't need to be hurt and they they all want to negotiate so I don't know that it was like a master plan but I do believe that this was his like for plan here's the timeline besson flew down on Sunday uh flew down to Mara Lago and Besson's probably really good at this be like "All right you've accomplished so much now let's not snatch uh defeat from the jaws of victory here's how you can really hammer home the point that you made." So that was probably compelling to Trump it's like "Oh I won already all right I like that." And then this this disaster happens Monday and Tuesday and then I think on Wednesday you kind of had this sequence of things that you know got the president's attention you have Jamie Diamond chooses to do an interview with Maria Barto Romo now this interview supposedly was set a long time in advance and I'm sure it was i don't think Jaime Diamond like spur the moment like get me into makeup but Trump definitely watches Maria every morning and that's definitely his like where he gets his stock market news from okay so Jamie basically is not screaming and yelling about tariffs he's just like "Look there are some legitimate trade issues and the president's right but this is going to lead to a recession." Um and Maria nods so okay that's definitely striking a chord then he has a meeting with Gretchen Whitmer who is the mayor of Cart Town right the governor of Michigan you know those people are in her ear screaming um and then he sits with Charles Schwab who is the face of the everyday American investor from a corporate sense like the biggest American brokerage firm and I think like that that sequence of conversations probably puts him over the edge and in the meanwhile he's got Bess and telling him "Dude this will be a huge victory for you." The other funny part about the Wall Street Journal piece is Susan Wild's phone is blowing up right so you know who's on that phone that's Chimath that's Bill Aman it's Brad Gersonner that's uh probably a handful of Wall Street people right uh people that have donated to his campaigns people that truly want him to succeed but you know that phone is ringing off the hook so I think like it was all it all was just enough and then I think he loved the stock market reaction like I think he wants to do it again saw Walter Bloomberg's tweet honestly I said wait a minute if I just go back the market will rally 7% in 15 minutes and it it did better than that it was so but to extend the parent child analogy I think he loved the feeling of seeing the stock market up 3 thou the Dow up 3,000 points because of something that he announced right and then if we get and that's why it's hard to get too bearish here cuz he's going to want to do it again right and if we get into a demented child parent analogy you know it's like all right you're grounded blah blah blah I'm going to save the day i'm your favorite parent you know particular like go to the divorced parents well he's saying that with with G yesterday he's talking nice like now he's talking nice they want to make a deal we want to make a deal they don't know how to make a deal i'm going to save them right but this the execution of this was an unmititigated disaster absolutely i think that a lot of pe normal people would say like yes there are national security interests at heart and there are probably things that we should do to protect ourselves this was not it we have some audio clips right John can we can we can we hit hit what we have do you personally expect a recession i I am going to defer to my economist at this point but I think probably that's a likely outcome mhm okay bond market is very tricky i was watching it but if you look at it now it's uh it's beautiful the bond market right now is beautiful it's very tricky but also beautiful we have one more unless you want to draw you uh yeah yes the stock market might be crashing you know what else crashed the Titanic and that became one of the highest grossing films of all time the president is announcing tariffs now but pretty soon he'll be announcing that those tariffs have been paused and then he'll do the same thing again and again it's called fear-mongering and it's something that this administration uses as a tool very often enough with the dumb questions let me tell you something about President Xi if we allowed pronouns all right we're good on Fat Carrie Bradshaw um everyone seems now to I guess like everyone's cool with this whole thing being a game show and like I just I feel like that's kind of what's starting to sink in is like everybody's cool yeah I was going to say who's cool no I don't think they want it i think that's now the the understanding is like oh okay I got it so today is a bad day but tomorrow might be a great day because it's all a big game and it's all about optics and it's not really about the economy it's more about like everybody dancing to the to the tune that the piper plays i don't like it we just I'm not saying you should like it we just had the fourth most volatile week in 60 years looking at the average true range this is from Sentiment Trader which measures each day's range divides it by the closing price and averages it over a given number of days so it's quantifying all of the ups and the downs intraday and we've got Black Monday global financial crisis CO and the trade war awesome you you mentioned on air on Tuesday that your clientele is like half and half which I think is probably true for all of us um I don't think there's a such thing as a Democratic asset manager or Republican asset manager you might h somebody might have a skewed balance in one direction the other maybe geographically because of where they live but Okay so when you talk to your clients this week what did you just say the most volatile week in 60 years covid Black Monday got great financial crit right here look at this let me say who likes this so but like nobody likes this so even the people who agree about trade and Trump's point they're not enjoying this either obviously no but to to the people who agree with Trump and think that this is the way to make America great again they they're in the camp of I will endure some short-term pain for long-term gain what a [ __ ] joke yeah this idea that it's Main Street's turn and Wall Street had their fund banks if we are in a recession and a stock market crash they're not going to be lending to Main Street it It's so comical so but like you're still hearing people say "This is what we we have to take our medicine this is what we have to go through right?" And then on the other side you've got like this is disastrous my portfolio is derailed so you really have the two but nobody likes it right nobody likes seeing their portfolio down 10% in a week i mean it's horrible so I want to show you something uh Navigator Research put out a poll on Tuesday it's a very highly regarded um uh pollster and the thing that jumped out at me John we're going to slide through a couple of these trump has never had a lower rating from uh the electorate on his handling of the economy like even during the darkest times for Trump um in the first term he still always had this like impromater of like well I'm the guy that understands business and that's the part that I think uh that's the part here uh let's go back uh after last week's tariff announcement Trump's economic approval has dropped precipitously now tied for his worst ever since 2018 um so overall approval down obviously you know amongst independents and Democrats more than amongst um GOP but like the economic approval rating was really interesting let's let's just go through a couple more of these this is too much for me to read next all right so this is his economic approval rating it's it's negative 13 it was plus one and this is not just among Republicans as recently as February 3rd and uh and and falling fast let's let's go to the next and then here here's here's the thing they asked the question are you confident or uneasy um about your personal financial situation and the growth from the middle of March is oh my god like look I mean it's it so even Republicans 42% are now uneasy about their own financial situation independent 68% but wait Josh listen so so for independence it was - 255 in de on December 8th uh it's now -41 so it's measuring the difference between uneasy and confident and that's going the wrong direction big time yeah and one of the biggest one of the biggest aspects of his victory uh last fall was amongst independents right so I think that this this this poll is probably like the the most substantial political calculus uh or the most substantial piece of evidence that from a political standpoint what he's doing is not helping him at all it's economic not political because I mean of course it's political but it's economic in the sense that when people feel uneasy and not confident they pull back they wait they're not going to do the spending corporate CFO COS how do they plan with with such uncertainty and of course oh yeah we can get these resolutions but there will be a slowdown right and we will see it we will see the manifestation of that in the upcoming earnings calls oh I agree i can't wait to get it over with but I can't wait because I don't think there's a CEO in America who has the spine or probably the stupidity right now to go out and offer a rosy view and I don't know politically where all the CEOs stand but I'm going to bet that's pretty mixed too so that's where you're going to see the confluence of like the real economy part right hitting hitting just the businesses yeah they also won't go hard the other way no one will give his attention right but there's no No I don't think that at all i just think they'll say we can't offer future guidance you know we can't offer forward guidance we're in a very uncertain time i think there were fingerpointing but I think there were CEOs who were really happy to criticize Biden era uh policies publicly on their calls i think yeah who cares it's just It's just Joe Biden nobody wants to do that with Trump fair enough but I don't think you need to my point is only I don't think we're going to see regardless of party any CEO regardless of geography regardless of business I don't think any CEO is going to have the the guts right now to go out and offer a rosy view there's simply too much uncertainty and you know how the market it's been for the past what year the actual numbers from the current quarterly report don't matter it's all about the forward guidance it's all about the forward guidance we're about to get jacked in terms of forward guidance yeah I agree i think that's the the next big risk for the market is pulled forecasts um John put up Jenny's poly market chart so this stuff's really interesting to me because this these prediction markets weren't meaningful up until the last year or so and I think since the election we're giving them way more credence than we used to um is this the one no I have this as US recession uh chart two John here we go so according to Poly Market and this is not a ton of money but it's also not zero dollars uh 61% chance now of a recession and notably that's up 42% from the start of the year right but more importantly what's so interesting is seeing it spike basically on April 3rd right which we knew because we're sitting out there and and I was about to once again go to AI and say "Hey can you remind me of which strategists um increased their recession expectations yesterday?" And then I thought "No this might actually be more interesting because this is going to encapsulate that." So rather than rather than saying and Goldman increased it to 60% and JP Morgan increased it to 60% so it's pretty wild to see it follow the market right here where you saw it jump um plunge yesterday for that those few minutes when the market was up 10% and then go right back let me ask you is this basically an inverse mood ring for the stock market is that like what are these people making bets on if not just watching the markets um I don't think it's sophisticated look how small the dollar amount is i don't think Yeah yeah yeah no I just think directionally it's interesting even even in the like even in the presidential election like the numbers weren't huge at all you know there was that one French trader who traded this but directionally you could watch it and kind of see see it mimic what we were hearing in terms of es and flows to me it just consolidates what we're hearing so I could have given you a really boring chart of Goldman was at 25% a week and a half ago now they're at 60 goldman was at 25 or JP Morgan was at 25% a week and a half ago now they're at 60 or you can just look at this and this is just reflective of what we're hearing broadly i had this thought that the bond market is really powerful and that's not an original thought i think everyone there's a famous James Carville quote uh about how much more powerful the bond market is than anybody else um do you believe in that yeah I think so like after this week you kind of have to right you kind of have to i think what's been hard is that for what a decade the bond market's been kind of quiet and in the background it hasn't had a heavy impact rates have been so low and so now we're adjusting again to just what that power is and how it works um Yeah especially the Treasury market like in in particular and the fact that it's so globalized and when you're taking on opponents from other countries they have levers to pull right because one of the things that Bessant was saying is we're not worried about the stock market stock markets had a good run watch the bond market see us making progress on things like cutting costs and lowering deficits well the the bond market stuck up the middle finger to all of that right and uh and it got everyone's attention and I thought it was interesting because the rhetoric that I heard today was oh we had this wildly successful bond auction yesterday all these people showed up it was so successful and I'm thinking to myself well yesterday wasn't the tenure at 440 you know wouldn't you have wanted to do that auction on Friday when the tenure actually touched 390 i wouldn't consider selling debt at 440 when you could have sold it 10 plus% less 5 days ago successful you know there's um there's research that shows that every what is it i might mess this up but like every basis point in bond yields is equivalent to $5 billion of additional interest payments that year yeah that year right crazy yeah so if you can cut the 10-year by 50 basis points you save 500 billion i think these are the numbers or maybe I've got it a little bit messed up but but what it was was basically if you could cut 50 basis points out of the 10-year and you're issuing debt there you're saving 500 billion a year in interest payments so so what happened this we went the other way right and then we're calling it a victory because like foreigners showed up to buy added 500 billion of interest payments by that successful would have been you know sell the debt on Friday yeah let's talk about yesterday's reaction where were you when when the Yeah where where you in front of the screen yeah no I was on a call and I looked up and I'm like "What just happened?" Oh my god who you Who are you on the phone with a client just a client but it was like down three call's like half an hour i got to go put put on some hagging trades i mean what do you do what do you do all right so you did you believe it so you see it go crazy and then what do you do you go to Twitter immediately um I went to Twitter immediately that's what everyone did yeah and do you know what I wrote oh you you had a tweet Ready yeah of No ready this is what I wrote can I swear on the show or do I need to believe it myself i don't give a [ __ ] you said I wrote I just wrote on Twitter batshit cray cray that's your big That's your big swear what could you I don't know i thought you couldn't swear i thought you were about to drop an MF all right so like I think uh there was like seven stocks that were down on the day john throw this i had all seven of them in my portfolio no just kidding so the biggest winners on the day were microchip you just spoke about which I was looking at right which was up 27% what why did it go up 27% why is that the biggest winner of the day i'll tell you what it was down a ton probably 40 or 50% in the past few days because it has both recession risk and tariff risk but it's both you were buying it that morning no no no i wasn't i was researching it i've been researching it for three years throw that out too late now no no it's down 15 or 16% today it's exactly to where it was when I told you I first put the information into Grock and said you know the preferred or the committal preferred trading at 43ish and the stocks at 40 so United uh and Delta were both up a billion points look at Warner so Warner Brothers is interesting warner Brothers was the 10th biggest gain up 20% on the day i think today it's down like a lot 20% again it's down 13 it's down 13% why well I'll tell you why because China just announced that they are going to stop a certain number of films from being shown there warner Brothers needs Superman to open big in China to justify the level of of expense of making some of their 10 pole films for this year and so that's the answer why but that's the interesting and hard thing about this so what we did right off the bat right um was go back through the entire portfolio starting on Thursday and Friday and reassessing where where the risk is so in in the equity income strategy for example there's 36 stocks and we carve them into three buckets high tariff risk high recession risk resilient um and one of the challenges is all the knock-ons right the third and fourth derivatives which is Warner Brothers wouldn't you innately say oh there's no there's no tariff risk there oh there's right well there's t I think the only way to assess tariff risk at this point is to say what percentage of this company's revenues come from China but but not in that case yes but for example I own western Union in the portfolio too only 37% of those revenues are here in the US but it's very very low no but I think China specific yes not the whole world fair enough i'm just saying like there's still some crossber transactions that aren't you know if you that aren't um going to be Jenny if we keep 145% tariff on China for two two more weeks some stocks become uninvestable for sure okay okay us casino operators with properties in Macau gooding luck um when Nike will roll back over apple will be awful like Tesla huge China risk actually maybe the most other than Nike and Apple tesla might have the most acute China risk on the board so I I think it's like at this point all right he's negotiate with all these countries Australia Europe that's great but like I think it's now zeroing in on US versus China i think you're right so let me say a few more things about yesterday's rally so just green everywhere john throw this up uh just I mean honestly a day like we like uh we've seen once or twice before josh you said it was what the 10th the 10th largest uh S&P day ever the second largest NASDAQ day ever you had from bespoke the the 14-day RSI had its biggest one-day jump ever um I mean these look fake so So but but here's the thing needless to say needless to say this is not good this does not h happen in a healthy market you got the best days after the worst days so Grant Hawkridge from Allstar Charts has a great table showing well what happens after some of the best days and it's not great like it's really not john chart 112 please uh if you go out uh let's say if you go out one month it's positive 68% of the time you go out 3 months it's 52% wait can I ask you a question positive 68% of the time sounds like just the regular average of any day but but the So my point it's not it's not an all clear signal right right so So you have a the worst loss was 20% like there's been massive losses after massive up days it has not necessarily marked the bottom by any stretch of the imagination so right so it's not a it's not a particularly high hit rate buying after a huge one day rally it's not there's all sorts of technical data that you could look at like well anytime the VIX has been over 50 for a week it's always up a year later like you could pick and choose what you want to look at but in the short term this is not good okay in the short term and that's always an interesting conversation too right which is what term should people be focusing on and you know should should we be focusing on because if you look at this chart one year out it's all green except for September 2008 so that's the point Jenny you're right it's 95% positive one year later which is a very high hit rate because the normal is 75% % But the point the point that I'm making is there has been historically on average a lot of pain between now and a year so you have to survive right like you have to be able to survive yeah i I don't think anyone I don't think anyone would say this is not a good buying opportunity i think the debate and I had this debate on air with Stephanie today it's just like is this is this the is this the bottom nobody nobody knows but nobody thinks so but I also think that's a harder assessment today than it has been in past times and I'll tell you why because there's such a wild divergence right now more than there ever has been I think between where different stocks stand relative to their highs and this goes to the concentration of the MAG 7 you know last year you had what was it mag7 I'm going to totally screw this up but like mag seven up 40% balance of the S&P essentially flat for the year right yeah so as and Josh you said big AI big AI rally but you said this on air the other day you're like there is an unprecedented number of companies that are already down 50% from their highs and because beneath the surface there's such incredible distortion and dispersion I don't think you know if we're if we're looking at that chart all you can talk about is buying the market there's so much else to buy and I well this year the mag sevens look worse than the market arbitary time period this year is 3 months and 10 days that's such a short period what are we really looking at yeah you're right you're 100% right yesterday was the best day ever for the Mag 7 because so much of their revenue comes from abroad but to the b to the point that Josh just made it was at the bottom ramp Capital did a did a a post a poll yesterday 6,369 votes nice so quite a bit of votes 70% of the people said no well though they I mean it's a lot of people it's a lot of people but like when would that ever be when would that ever be everyone saying it's the bottom it would never It would never happen so I I'll never forget when we were with uh Dan Guy and Danny in December 2020 or maybe it was October it was right near the bottom and I said it was it was December of 21 so the market had bottomed five weeks prior 22 the market had bottomed five or six weeks prior and I said "Show of hands who thinks I was a bottom?" Nobody nobody yeah but that's that's right the bias sign when I when I worked for Llo Bini do you guys remember him yeah of course okay so I worked for Lazlo Breeni as an intern in 1996 and um and one of the things he taught us interns was the biggest contrary indicator where the sentiment of um AI American Association of Independent Investors so Michael I put up a Twitter poll too it only got 660 responses or something but I put it up on um Tuesday night and I said it looks like you know we're down 18.9% futures make it look like we'll hit an official bare market tomorrow morning where what do you think the next move is from here plus 10% minus 10% everyone said minus 66% said minus yeah you know and I was going to say that's surprisingly encouraging to me you know so I think we look at these things and I I take them as a contrary indicator but again this is a weird time that we're in i think so i think the pro the problem with those sentiment polls is that like like every it mirrors everything else in society everything has just gone parabolic and sentiment around everything has like the White Lotus just ended people are like like ripping their clothes off it's like all right it was just okay was not a great season yeah but if you're a fan of the White Lotus and you're not disappointed then it's the greatest thing that ever happened and there's like very few people that are down down the middle that are just like "All right it was good it wasn't it wasn't the greatest thing I've ever seen." We like We're If you watch um influencers on Instagram and Tik Tok the restaurant influencers it's the greatest slice of pizza in the world it's the best steak I've ever had because are you going to get eyeballs for saying like okay but so my so what I'm I think what I think is that what sentiment is now period and so stock market sentiment is extreme all the time there is no down the middle it's just like oh my god I'm so bearish it's about to crash or this is the best time ever to be invested and I just don't I don't know if it's as useful as when people in general were more calm and measured with their takes that's a good take I think that's But I think that one of the things that you can measure is are flows so people are like "Oh we need to see retail capitulate." Guess what the Vanguard investors will never capitulate so if you're looking for them you're looking at the wrong place they will never capitulate this is the [ __ ] that we need to see cool off before you could say "Okay it's over." This sort of things this is from Tom Saraphagus seven straight weeks of inflows into leveraged long ETFs that need like that needs to get cooked right you You want to see that go you want to see that go decidedly negative and stay there right that needs to be like 2022 when you saw Arc just finally flush out the riff raff so the the excess speculation that sort of stuff you need to see cool off um all right so wait can we just do some couple stock charts real quick where do you want to go tesla John I think it's five or four uh so that huge rally quote unquote huge rally I think the stock went up 50 points dude it was like 20 something% what do you mean quote unquote it wasn't really but what's but like what's so crazy is it's still contained i'm showing you 5day chart it's still contained within this band of That's how that's how like wild the market overall is that that huge rally is still relatively contained um let's do Apple you see what I mean like it's a huge comeback for Apple yesterday i think it was up 16% on the day which is it's the biggest market cap stock in the world going up 16% i don't know how much money it went up in market cap but it's a enormous number but it's still like relatively contained within the count context of the sell off that we're in so I thought that was I thought that was interesting all right Jenny I know that you are a bottom-up investor you do your research you're an earnings person and I think uh one of the one of the actually you know what no we're going to insider trading question yeah let's put a Sorry all right go ahead put a pin in that pin was yesterday the Super Bowl of insider trading in Washington sure felt like it didn't it it was pretty disappointing he did something so brilliant i'm not going to assume the worst i'm not going to assume he set people up to to to do an insider trade but I acknowledge that it's conceivable and by the way both sides do this [ __ ] and everyone hates it yesterday was really extreme like nobody wants to see Pelosi racking up gains either all right so let me just say that and get that out of the way however he did something really brilliant just in case somebody was going to trade on what he was about to do he tweeted it by so now right and everyone has plausible denial of what the president said to buy stocks mhm look he said it at 9:00 a.m i bought it at 11 right all right so let's put that aside i'm assuming there's going to be a congressional investigation uh I don't know if the Why are you assuming that because they said it oh okay so I don't know if the SEC will cooperate or I I have no idea i'm not a legal uh expert here um but I think that's like part of the problem also is just the fact that everyone is like "Yeah that probably happened." Yeah yeah I don't know if we would have been like that like I think if this had happened under Obama and Obama did famously say on Twitter by the stock market by America in 2009 nobody immediately jumped to the conclusion that he knew something or he did something or his cronies got rich because the market then shot up 40% yeah but then Obama at the point at that time wasn't in the position to move the market single-handedly solely you know with a tweet later in the day that's correct i think the reality is is it's probably not technically insider trading but it sure feels bad you know and there's that famous quote how do you define porn i know when I see it yeah I know it when I see it but there was a spike in option volume like somebody literally somebody knew john do we have that somebody knew but you could have guessed you could have guessed too as soon as you saw that tweet you could have speculated the same way I speculated the day before he wasn't going to carry look what this looks like michael what are we looking at i have no idea okay a line chart going vertical i don't know what's in there okay this is call this is call options on the triple Q's yeah so the average fill what is that the price so look at the green candle all I want you to do is look at the volume you understand well there was another one there was another one hours earlier that makes that look at Yeah look at the one earlier in the day about 9:00 a.m that's accumulation right after the market and then that is just as it's happening nobody's that fast I don't think so maybe this one's algorithms but the one at 9:30 in the morning I don't know do we unless somebody shows me that every day looks just like this there's a huge burst of call buying at the open i don't know i don't know enough about this but I know people were up in arms i think the problem is is that it breeds distrust in the market you know and and this is not a health it is not healthy unusual Unusual Whale said um Unusual Whale said uh you can see before Trump posted buy on Truth Social Traders opened triple Q's the T triple Q's which is hilarious hilarious so the the triple levered ETF calls and spy calls and right before the news somebody opened 509 calls expiring the same day those calls all went up 2100% in one hour so people don't people don't do that unless they know something so I think I think like that's part of that's part of the problem of this becoming a game show is people not only see it that way but they see it as a rigged game show on top of it which is not great all right so let's talk about how the econ how the stock market affects the economy so Warren Pis has a chart showing that the wealth shock is now equivalent to the to 23% of GDP which is the fourth worst since 1950 there was a quote in the New York Times somebody said uh a friend stopped my stopped by my office today and said well I won't be redoing my kitchen because my entire kitchen budget was wiped out in the stock market in the past three days um it's not just m it's not just Wall Street oh no one of my clients who I love retired this year you know she's got a really great nest egg that she saved up but she's freaking out it's down 10% it's down a little more than 10% that will affect how she spends her money absolutely that's the point absolutely she won't travel she won't buy stuff she's freaking out and so when we look at this too what are we going to do collect you know if let's say tariffs are 23% right now we import $3.3 trillion of goods from overseas let's call it about 700 billion theoretically that we collect on tariffs like what does that do that more than offsets the best case there including capital gains and by the way you know what I'm going to do for my clients soon i'm going to capital loss harvest and I'm going to do that soon to offset to offset tax well the c the cap the the tax gain collection thing was always nonsense because then they're saying we're going to make deals well why are we making deals if it's so great to collect the tariffs then we shouldn't want deals we should want to just You don't get tariffs i I guess I don't understand it yeah but but so you've you've deteriorated wealth given people an opportunity to offset capital gains but at least rates are going up and the dollar is going down have you thought about that as well are you being sexual yes I am put up this put up the Scott put up the Scott Besson uh tile chart 14 so So this is his tweet for the last four decades Wall Street has grown wealthier than ever before true and it can continue to grow and do well but for the next four years it's Main Street's turn it's Main Street's turn to hire workers it's Main Street's turn to drive investment and it's Main Street's turn to restore the American dream okay the employ let me let me help the employers who employ the people who live and work on Main Street have exposure to the stock market either because they own have their own portfolio and they're small business owners and it affects their mood and therefore the knock-on effects are hey I'm watching the stock market crash i don't think now is the best time to expand what I'm doing i thought this I thought Bess was smart is he like is he like I don't remember the exact details but Professor Snape in Harry Potter was like pretending to sort of be bad but like was was like doing it really for for good purposes is that what Besson is doing i have no idea i've been trying to find out figure out his MO all day the [ __ ] that he says is so dumb and he's not dumb so right he has to be playing dumb cuz he's not dumb so he can't but is he like I have to say what's his mo is he like I have to What does he want i think he wants to stay in the job and I think he wants to be the hero i think he wants to be the hero who oversees a situation where the economy is growing but with more manufacturing and with better middle class outcomes i think he believes that he can do it let me give him the extreme benefit of the doubt and say he is an extreme patriot and is willing to humiliate himself and tank his reputation because he needs for the betterment of the country he feels like he's the one that can sort of make the president be quasi rational is that at all possible i mean anything is possible what if he's just a power monger and he's power tripping and he just wants maximum power because that's what makes the guy happy well that's another I don't get that from him i don't get any of it he's not giving those i don't get any of it yeah i I like I get that from I get that from Howard Lnik i don't get that from Scott so what does this do to earnings john throw this chart up from Faxet we're looking at S&P 500 2025 bottomup EPS and it was 280 bucks earlier last year consensus for this year now it's $269 which is definitely not nice and going lower such a shame that this happened from an all-time record high for S&P earnings isn't it yes like we were there we were there we didn't need to screw it up so Goldman's got an estimate out there that it might be 248 to 250 i just wrote my quarterly client letter i said you know it's still at 11 and a half% growth year-over-year our guess is that it'll be flat there's no way right there's no way because don't forget this is forecast right and we just talked about how everyone's going to pull their forecast so people are going to go back to baseline which is going to bring us back to flat so like what's 17 times frog don't don't tell us i don't want to know 17 times you saw me going for my nerd calculator 250 times earnings lower no I understand it's lower than Yeah I just want to do it just a mental exercise so in other words right now the multiple is 18 uh the multiple will come lower as earnings come lower it's 4250 4250 and where are we on the S&P as of as of right now 5,000ish right it'sing gross like it's not good it's not good for It's not that bad i can take a thousand more S&P points but it's 20% from here it's a flesh wound i don't nearly flesh more than a flesh wound sir i know it's bad historically that's very very bad what let's do this um S&P bottoms before the trough earnings during recessions michael before we do that I want to give Dan Dan a quote because this is a good one dan Ies Dan Ives said we have talked over the last week that unleashing this tariff Armageddon was always a negotiation tactic for Trump but the impacts and gamble to the real economy are snowball that once it starts rolling downhill it cannot be just stopped investors will see that during EPS season so all right what What happens during recessions to earnings less AI less yeah way less so all right um the average is down 18% if you take out the Great Depression and the GFC did we debate this the other day yeah you So you were you said 15 I said 20 to 30 so if you take out the GFC and the Great Depression so take the two worst out and it drops from down 18 to down 9 to 10 then that's where we are i know but we're still forecasting 7% for the quarter that we're in like the reality has not yet hit that's the dangerous part about this moment i think that's right and I think that's why you can look at this but I don't think any of these went in to into that period with a multiple trading at an all-time high you know we went into this stretched we went into into this with no room for error yeah so we've corrected a lot of that already though so we So we started the year 21 times earnings now you're 18 mhm you're not 27 it's not 1999 you're not at 40 times earnings or 18 times forward earnings which you and I just agreed are total baloney yeah no I agree it's It's pro It's problematic so if you factor in what are we saying an 18% average decline pulling out the two worst case scenarios eight eight pulling out eight oh I thought you said 18 so X the GFC and X the Great Depression is eight so that seems that seems reasonable there's another great chart from um [ __ ] this shows the year-over-year change in quarterly profits and it's we're looking at red circles and green circles and the bottom line is that when you get a recession the earnings decline is way more significant on average basically than a non-recessionary downdraft and it seems like most people agree if we have a drop in earnings it will be accompanied by a recession what the green circles are when earnings fall but you're not in recession exactly i see so I don't know they look sort of identical to me what am I missing the red the or lower no the green or lower the red or lower the red or lower so here's the bottom line like this is this is what I would consider the coup degrai let's hear it think back to let's leave with chart 21 please John all right so people would say how could you guys even begin to talk positively about stocks when the tariffs went on last night we have not seen any material damage in the economy in the earnings per share why by now i'll tell you exactly why well go ahead let's get Jenny's answer okay so I was debating this with my partner Greg on the on the trip in and he's like I knew we should have had more bonds you know and I'm and I said to him "Okay which would you rather own the 10ear at 430 or Uber?" I'm sorry I didn't say Uber or Docyign you'd rather own Docyign why because it's I can't remember off the top of my head exactly but it's like something like 16 17 times earnings unbelievable growth ahead you know high teens growth little to little to no tariff risk little to no recession risk like which would you rather own well it'll be more volatile than the bond and little to no growth we hope fine but when you fast forward 5 years from now where do you think you're going to have a higher return but see this is But so this is Greg's point but Greg's point is I can't fast forward 5 years gary I have to live partner Greg I have to live through those five years right and if you set up your portfolio in advance and you've got the wherewithal you are better off to just stick with it which is why you know Josh after we arrive we all know that intellectually is true yeah and I think that's our job as advisers right we all agree with that everybody has a painoint where they cry uncle uh I disagree so wait so you don't think so everybody has a painoint where they cry not everyone cries uncle fine not everyone a lot of people yeah and they shouldn't and it's our job to get them through it and someone put up on Twitter the other day after the show they're like "And none of these four told us to sell." Like of course we wouldn't tell you to sell what do you do with the bare market you get through it selling what and let's get back well okay and by the way I did but I don't tell people to sell but um but let's talk about something else like what happens if you miss the 10 best days right yeah well they're always they're always the day after the 10 worst days getting back in is impossible getting back in is impossible which is why you're better off staying in i mean what would happen when was the last time we had one of those 10 best days not the debate though here's the debate you meet somebody well like you're you're in Connecticut so you meet somebody on the equestrian circuit right okay on horseback and I say "Buffy how was your ride?" Yeah so Jenny you're at a croquet match you meet somebody they're like "All right here's the deal i have $5 million i want to send it to you you're the only person I trust but like just don't put it in the market now." Okay so here's So what do you want me to do with it literally this is what I do so and this is this is true in this moment like today so I have a client who sent in about $7 million a couple weeks ago and it's going to be sent it to you not me i know i'm so sorry we can debate that so um so this is a self-directed right and as we said before some of my clients are through adviserss some are just very self-directed people so they sent in and you know they've got another part outside of me but they sent in $7 million and so the the plan all along was we'll lean slowly if the market's terrible which is rational right if the but I'll give you the caveat on it if the market's terrible it'll probably go faster if the market's great it's going to go slower and we're just going to pick off stocks one by one but on the train ride I had a very busy train ride into the city by the way Greg this conversation and so they hit that point where they're kind of crying right and they're just they're scared so I said "Let's do this let's carve out $2 million and we're going to put it in treasuries that mature in three months six months nine months 12 months ladder ladder and we're going to do one of two things when it matures we have a conversation we say "Hey let's be disciplined and go in." Or if the market tanks down 30% more treasuries right or if the market tanks 30% we've got treasuries short-term treasuries sitting there that we can use as a source of cash because what you have to do is stay disciplined and like we all know the math on this the math favors equities however you cut it if you can just stay in the math well this is relevant how old is this particular person this one uh they just retired they're probably like 69 69 i kind of knew you were going to say that oh interesting all right so so let me Can I throw some math at you i think you like these charts john chart 22 okay so to the point of you haven't even seen stocks start to deteriorate in terms of earnings what we're looking at are all of the bare market lows since 1957 and on average what happens with earnings per share and what you can clearly see for those of you who are listening is that on average the price of stocks bottom nine months before earnings yeah if you're waiting for the earnings to first of all here's why you can't wait for earnings to bottom you won't know it's the bottom until a quarter later right that's number one but number two stocks are looking through the the falling earnings and they're already starting to price the recovery things are going to get bad oh you think that's why Nvidia is down 40% genius thanks we know the stock we know so go think rewind back to such a great chart rewind back to 2020 do you guys remember I know you do in 2020 when we bottomed in like 23 days and we skyrocketed and we said this makes no sense earnings are still falling how is this happening in Q3 Carnival reported a 99% decline in revenue from from 10 billion to 30 million or whatever and the stock was flat on the day how because it was down 90% already so look chart uh 2020 please so in 2020 EPS bottomed 13 months after the stock market did 13 months crazy imagine waiting 13 months to buy that and you miss the entire run back up so even worse GDP which of course is backward looking we don't have the data in real time gdp bottom 3 months after in 2020 and normally it bottoms 5 months after the stock market does and we only get that with the benefit of hindsight so this idea that you are going to wait for the dust to settle before you buy stocks it doesn't work that way nobody gets it right yeah you just stay in you right you cannot possibly know that you're at trough earnings if you can't until the following earnings quarter where they start to grow again and then by then there's no way you're buying lower can I tell you guys something that I did recently i taught a class just one class at Baroo College on um behavioral finance my friend teaches it and asked me to come guest teach and it's really fun it's a um it's for their master's program the students are really sophisticated and I gave them a bit of forensic analysis and I showed them oh actually and as you know I wrote a book on dividend investing and there's a chapter in the book that describes this in the chapter it's fake names but their names are Henry and Maryanne in the chapter but it's the same thing that I showed for Baroo and I showed the Baroo students these two client portfolios and they're actual portfolios that I showed them and both of these clients started on the same time i adjusted it so that you know like one started with one amount the other but I adjusted it so it was even and I showed them everything you know here's the starting value here's the um cash flows in and out here's the investment gain here's the income here's the management fees here's the um here's the ending value okay here's the total return one had a total return by the way they started in late 18 has a total return of 1% annualized the other has a return of nine and change percent annualized and I said to the students why do you think this happened you know and it took them a ton of guesses oh one took more money out one did this one did that no you know what happened one of them cried uncle and and they cash freaked out and he was the only client who in March of 2020 when we're talking about that day I couldn't keep in you know and I and I have in my notebook me saying "Don't do this this is the worst idea like you can't sell at a bottom." And him saying "I know sell anyway i can't take it." Yeah and that's how long 5 years later you have an annualized eight and change% difference that is huge money that's a really important message for people to hear right now because that's the question on everyone's mind is saying like "Wait a minute you guys are all describing how chaotic everything is and the bond market and the president." So then why are you saying don't do anything when I could get myself out of this jam right now because you won't get back in at the right time and the client who I call Henry in the book and it's your long-term returns that will suffer as a consequence not just year and that's why I asked you what time frame should people be looking at you know should they be looking at the one week out or two weeks out which is the debate with Stephanie three weeks three weeks minimum okay but that's like you know that's just tactical and am I going to be buying but when you look at that one year out every one of those time periods is favorable when you look at three years and five years and the reality is I know your guys client base is a lot younger than mine all of our clients including my older clients have at least at least a 5year time period ahead and that's why Josh you know on Twitter when the guy's like "Oh and none of you guys told me to sell." Like "No idiot of course we didn't tell you to sell cuz we're not that stupid." Oh I was going to say cuz you're not [ __ ] paying me and I don't give advice on Twitter like a No he was talking about He was talking about like those out he was talking about like those of us on the show like why didn't you tell me to I also don't give advice on TV yes you do that's all we do you know what Jenny if you actually pay attention to me which now I know you don't while you're No while you're busy scribbling notes to people you know what I'm saying i am doing this not you should i don't give a [ __ ] what anyone does listen that's leading by default i know it sounds semantic to you but I go out of my way jim Kramer says "I want you to buy Harley-Davidson." You will never hear me say that i say "This is what I am doing because I don't care what anyone else does." Especially if you're not a client of the firm the hell do I care but you've got to know that people are looking at all of us that's their problem i agree with you i agree with you you're taking advice if you literally like from him you're taking advice primarily from people on TV that don't know you you're not getting financial advice they don't know you i think it's a nuance but I but I get your point and I and this is my opinion this is what I think this is what I am doing not this is what everybody listening should do how could I do that i don't know anybody yeah and I think I give advice but I'll say like "Look this doesn't make sense for everyone but if you Well here's where I here's where I cross over i give behavioral advice right i think what I do is I tell people how they should think about things or what uh aspects of the markets maybe they haven't considered i definitely don't look into a camera and say "Go out there and buy Nvidia today." You'll never hear it cuz I don't do it let me ask you guys this on I tell you to buy Nvidia on this point you I can give advice to so Rob Anderson from Ned Davis Research tweeted "The S&P 500 is off 17% from the high versus an average draw down of 25% for bare markets with no recession and 35% for bears that overlap with a recession." So if you know that and a listener is like "Guys I know a recession's coming you know a recession's coming if we still have 25% or 35% more downside and we're only up 18% I still have time to sell why shouldn't I sell?" Because I don't know that we know a recession is coming well that's a really important point and after a day like yesterday with the DSX Machina of the president removing the proximate cause of everyone's pain you see what could happen if you're like waiting for the all clear it's going to take place while you're on the phone with somebody right and it's also there's such a wide a wide divide right now between the underlying economy and the stock market imagine if for example 2023 the market had been up 12% in 2024 the market had been up 12% went into this trading at 17 times earnings we have a very different draw down right now jenny I want to share something that you wrote um and then we're going to talk about the book and then we're going to get some stock ideas from you um so we're going to try to do we're going to try to do a lot in a few minutes here but you said what's the commonality between all of the best investment quotes of all time behavior they're not about asset allocation they're not about strategy they're not about stock picking all they're all about behavior you and I are 100% on the same page in that regard um all of those other things are important strategy and allocation but like none of them will trump a poorly behaved uh investor they won't save you um and so but you you made this list and I'll let you read it what do Josh and I agree most on i love that because people think that we fight like cats and dogs or like brother and sister on the air and we sort of do we debate yeah but we don't get confused with fighting and debating and you and I on the big things that really matter we're of the same mind 100% so run run down this little mini list that you wrote cuz I think it's great okay so this is what Josh and I agree on most behavior is paramount we both believe in the value of good communication oh yeah this I think you are the you know the best of anyone I've ever met Josh the value of being a market historian and the ability to analogize and when people say to me you call me Investopedia Brown i know i love that so much but but your ability to analogize is above and beyond and there's this really great book called Range by this guy David Epste and he talks about if you can analogize you know all whatever i won't get distracted on that but like all the great things that come from being able to do that you and I both believe in asset allocation yes um we both believe that markets trend up over time that's right we both believe that when we're negative on the market it doesn't mean we're selling out you can you can be negative and not cash out a portfolio and you know and and lastly testify we agree that it's fun to disagree it is fun to disagree you know what when you disagree and when you get a stock wrong that's when you actually learn you know I was thinking about I was thinking about coming into this and and writing that that we that we enjoy disagreeing if you don't agree you end up like that Saturday Night Live skit with those ladies on NPR who like "Yeah yeah." Well also there are people on the show that you can't disagree with because they get really upset they take it personal i might sometimes be one of those people like I might sometimes get personally angry when somebody disagrees with me if I don't like the way they disagreed with me so it's it's it's tough but I think our you and I our back and forth is as good as there is anywhere on financial TV i personally enjoy it you do too i think the viewers end up enlightened no matter which one of us they agree with and um you're coming along like you're get I feel like you're you're you're get you're getting there so Thank you Obi-Wan jenny what's the best dividend stock to buy for next week no I asked you for five dividend stocks okay I'm going to give you five i actually think I came up with a list of seven for you um all right so here we go so the five that I think are appropriate for now we have a table here all right we got this this will help you bristol Myers Kagra Clearway Energy Dominion Energy Ryman Hospitality Syber Healthcare and Verizon and what these all have in common time out how many stocks in your dividend strategy do you currently own 36 okay so these are the seven that you think right now or for the longest term for this for the period that we're in right now i mean the theme here is US revenue 100% and so remember how before I said we segmented the portfolio and we said these eight companies have high tariff risk these three companies have high recession risk these 22 companies in the portfolio have are very very resilient i pulled out seven that I thought were very Let me go one by one with you okay i'm going to I'm going to give you the superlatives and then you tell me why to buy the stock okay okay all right we ready for this you guys excited for this okay who wouldn't be uh Bristol Meyers is a 4.7% dividend yield they've been paying for 92 years uh eight times forward earnings okay so if you look at this it looks like really crummy earnings growth ahead and that's true but um what they have is a huge legacy um drug pipeline about half of their drugs are still in a growth phase about half oncology big like big cancer big cancer yeah but a lot are coming off patent blah blah blah but they are pumping out 10 billion plus of free cash flow a year for the next three years with that they'll be like ABV circa 2018 where they should be able to buy their way back to growth by the end of the next five years acquisitions right whatever it is or internal development but by the next five years they should Oh this goes to your point about buying the market before earnings change do you want to buy the stock before earnings inflect also by the next 5 years earnings should inflectlect and you'll have collected 4.7% from a company that's paid a dividend for 92 years and is just minting free cash kagra brands they own like what Hebrew National what do they own okay they have a lot of frozen a lot of healthy but what you saw over the last nine and then again when uh when RFK Jr was nominated to HHS and we're going to make America healthy again you saw the consumer staples plunge right because there's going to be less calorie consumption they have a healthier on average a healthier portfolio of food brands than their peers what are the brands um Duncan Hines i always I'll tell you right now Slim Jim Duncan Hides Ready Whip Hun Snack Snack Pack or for Venbacher yeah but go frozen there's a lot of like healthier frozen chicken boom chicken is a healthy one bird's bird's eye is vegetable frozen vegetables right david is that sunflower seeds yeah I think so it's like the Yeah healthy choice yeah all right okay so 50 49 years of paying a dividend 10 times earnings 5.6% yield buy right now i think so and it's you know what it's going to do it's going to give you a 5.6% yield and you can see the earnings will grow four or five% so if you if the share price appreciates at the rate of earnings you're going to get four or 5% capital appreciation plus 5.6% this goes back to do you want to own a bond or do you want to own a stock clear Energy i'd rather own this okay clearway Energy they are and this is interesting because they have WN home gamers okay and so this has a 7% yield trades at 12 and a half times limited earnings growth but they basically have clean you know the clean energy right they have wind solar battery if you believe that the world that that America in particular needs more energy production to feed AI to feed the data centers whatever it is we need everything we can get we need coal we need solar we need nuclear we need wind we need geothermal this is wind no they It's solar wind battery energy storage and they just create power and sell it to the grid okay i like it it's so boring dominion is Oh sorry but go back to that zero tariff exposure zero economic exposure everyone's Everyone's using every bit of power that we can okay dominion is utility right dominion is a utility 75% in Virginia a lot in South Carolina 7 to9% earnings growth ahead five unchange yield 92 years of paying that dividend trading at 14 times okay Ryman you explained to me on Tuesday on the air but this is like the Ryman Auditorium in Nashville which I love right grand Opry they have a bunch of other properties right like the National in DC the Palms and You went out of your way to point out that these are non- casino conference centers why is that why is that meaningful that distinction i think because it doesn't because when they're not like they really are conference centers for businesses so they don't when we were talking about the Las Vegas risk before so it's not tourism no something like I've got it down here somewhere but something like 67% of the revenues are corporate are corporate sales and they book out two to five years in advance it's pretty cool on this one you can look back to the GFC and say okay let's say we did have a huge long sustained um recession what would happen to their earnings and if the earnings collapse to the same point they did in the GFC guess what they can still cover that dividend yield because what happens is they have severance fees right so if you cancel your conference you still owe them 21 million bucks all right sabra Health this is 7.3% yield must be a real piece of [ __ ] uh 11 times forward earnings no it's actually a great company 11 times forward earnings but it's FFO because it's a REIT so it's around and find out so they've got 364 properties it's a lot of retirement skilled nursing again very zero tariff yeah some economic risk if there was a huge recession people are like "Oh I need to keep government doge risk or no not really." No zero Doge risk zero because it's skilled nursing homes so it's like Josh you know when you want to check your parents into a home you're going to go use one of their properties um really Sabra is an Israeli uh word why are all the nursing home Why are all the skilled nursing homes owned by uh Israelis i have no idea but but the CEO you know is wonderful and wears his hostage tags proudly and it's really great so I have no idea why they're all Verizon 6.4 so I have never made money in this stock as long as I've been alive this is my take on Verizon tell me why I'm wrong 6.4% yield which looks super juicy nine times forward they have a CEO who's one of the highest paid people in the world the stock price only goes in one direction which is down nobody ever makes money in the stock other than clipping the coupon and I'm not going to say AT&T is materially better but T-Mobile is better than both of those t-mobile's better than Why would I buy this piece of [ __ ] this goes back to what time period are we looking at and your time period is 30 years of stock has not gone up fine what time period are you looking at i'm looking at now to say the next 3 years and this goes back all of a sudden something's going to materially change that makes the stock perform i don't like how he's talking to you Josh no but do you see what I mean can you pull up a chart of Verizon no don't waste your time with the chart let's Total return total return close my eyes like Luke Skywalker and just fire what do you I got to look at the chart josh listen what would you rather own a 10-year Treasury where you get 4.3% and pay ordinary income tax or would for the next 3 years would you rather own Verizon where you're going to get 6.5 i would rather own literally herpes simplex 9 than own this stock i've lost money with it three times it never works okay i think you probably are going "No I'm I'm trying to come up with a comeback." No I'd rather own anything i feel like it's not worth you said I was very skilled at analogies i analogized the stock to literally portfolio disease all right so Jenny you wrote a book yes thank you what a brilliant segue so can I tell you what I love about dividends and then we'll give it back to you please do especially in difficult markets like today I think behaviorally dividend stocks are wonderful because you know that that piece of shift Verizon will pay you your dividend helps all the way down it helps you it's going to be flat it helps you stay invested so I think it's a great behavioral hedge that's exactly right i might buy Verizon actually i think you should but just only if you would rather own a I love your conviction levels thank you i love your All right wait I think Michael makes a really good point i look at we all struggle with talking clients through moments like these but I do think the part where they get dividends into their account each month is probably something that you are able to point to and be like "Yeah I know this sucks but look you got paid on Monday you got paid on Wednesday you got paid like be and you're getting income so you have something to show for the pain that you're living through right?" But let's let's just start off with and say you know first of all there's a difference between dividend growth investing and dividend income investing so when we're having this part of the conversation it's very specific to dividend income investing dividend Oh that's interesting because we had this conversation with Bellski he's the opposite of you right he's looking for dividend growers you're you have a certain target current yield and that's what you're building your portfolio on right is it 5% yes that's your hurdle uh for the whole portfolio 5% or better dividend yield so if you buy something much lower than 5% you have to offset it with a much higher yielder exactly okay and so then let's just So now that we're talking about dividend income let's just acknowledge that it doesn't make sense for everybody it makes sense for people who need the emotional comfort of knowing your point exactly that if they put a million dollars in and they've come to me and they and I say I'm going to give you a minimum of 5% or better yield they're getting 50 grand a year paying out over and over some people say "Well why wouldn't I just invest in growth or or dividend growth or whatever it is and just sell off?" You can absolutely do that is it true that dividend income strategies are lower volatility than dividend growth or not necessarily historically yes no historically huge blowups in the high yielders no no hold on hold on no wait growth is more volatile no it was um sorry it was there was this brief period around the pandemic you know I've managed this strategy since 2001 it was always like a point remember how volatile the MLPS got they were so popular with high income strategies so so Michael we're back down to below you know like below a one beta to the S&P but there was this brief period where it actually spiked up around the between the energy crisis of 2015 to 2016 through the pandemic it was terrible because for all these years I said to people oh yeah if the market What about the REITs what about the REITs during the G the GFC they were the some of the highest yielding stocks in the S&P but some but if you held the big great ones you know you didn't have that kind of generally yes the underlying businesses that we're talking about are way less volatile utilities real estate investment trust companies like Kagra and Verizon and you can pick on Verizon but it just doesn't have the volatility it doesn't you know it just doesn't so so over the long run of history you're correct but over the past 10 years there's been a divergence from that from what I like about your strategy is that you have the guts to own 36 stocks and not 360 stocks you don't look anything like an ETF that is just going to be like "All right it's rules-based we buy the you know we buy the 200 highest yielding stocks in the S&P." Um you're doing something that is it's unique is is diverting itself deliberately from what the benchmarks do and I I have a lot of respect for that start uh that's a good question i don't know and I'll tell you why I say I don't know because when I started the strategy in 2001 there were no other I I came up with the name equity income now it's prolific but nobody used the word equity income before that really and here's why you didn't need to because prior to the dot boom everything paid a dividend right the average dividend yield of the of the S&P 500 was 3.4 then the.com boom happened do you guys remember the term old economy and new economy yeah right when stocks are old economy they were paying a dividend and that was so lame like why would you own an old economy 75% of S&P names currently pay a dividend yes but they're not high the dividend of the S&P on average right now a lot of nominal payouts right um the dividend on the S&P is 1.4% microsoft was the biggest dividend payer last year is $19 billion but it has a very very low yield which goes back to growth versus income but to your point about the emotional comfort in the beginning of my book I tell this story and I've told it a million times but it to me was like my aha moment where I have this client um who you know in 2009 when everything was terrible you're just calling and saying like "Hey you know I don't know what's going to happen now market is down 60% you know we were down I think I 28 or 30% i don't know what's going to happen next everything's terrible." And this one client said to me he's like "Hey Jen is my income safe?" And I go "Yeah yeah yeah your income's fine but I don't know what's going to." And he goes "Then I'm fine like chill you know chill out take a chill." And in that moment I realized that and so if we think about Put him on the phone with the rest of your clients i I always attitude smart you really You really invented equity income as a phrase i think I did i should have pat I should have patented it because I remember coming up with it well you think this is almost as ludicrous as Josh saying he invented Blues Travelers i did no I literally did how so first of all it's Blu Traveler all right whatever he discovered them no it's Blues Traveler you You invented Blues Traveler and actually it comes that comes that comes from a line in Ghostbusters uh yeah I invented them they were they were like a playing dive bars on Second Avenue playing called Night and Gale you tweeted about them no I got their I bought their first I bought their first album as a CD and I made it go viral in upstate New York at all the Jewish sleepway camps are you serious i [ __ ] did and I'm telling you right now I literally invented Blues Traveler there was no internet how did you find out about new new music does Mr popper know about this i actually I met him but I didn't get a chance to tell him this story but uh they played a show at the Paramount a few years ago maybe seven seven years ago and then at the Paramount in Huntington after the show downstairs there's a lounge for members of the Paramount my friends who are members with pool tables and and bars and like waitress service those guys were cool they came down and played pool i was so nervous to talk to them that like I really like I I said a few words while they were shooting pool i didn't want to like be that guy um I was like 39 years old at the time but uh I should have told them I basically invented you guys oh my god like way before you had a number one hit on the radio you should have told them you owned them too you should have said I No I don't feel that way i don't feel that way i don't feel that way um wow very gross very I just want to say my husband believes he invented upside down ketchup too what the hell is upside down ketchup do the ketchup bottles upside down now so it squeezes right out john Harrington invented that insane compared to what I believe that's just crazy all right Jenny you're again one of our favorite people i want to promote your book really quickly and we'll link to it of course what is the name of the book it is called Dividend Investing 50 Shades of Dividends yes dividend Investing: Dependable Income to Navig Market Environments harman House i like the Yeah shout out to Haramman House charlie Ellis yeah Charlie Ellis so do you want to know what How'd you get Charlie Ellis to write the forward charlie Ellis is a close friend and a mentor of mine for a long time he's amazing he's an amazing person but can I tell you what the um graphic is on the front this will go well with I think I figured out it's a $100 bill folded into the shape of a boat okay but here's why so Charlie has an extraordinary ability to an analogize also and it's really his genius he's the best the tennis the tennis so winning the losers game right yeah um but one of the analogies that's always resonated with me that he that he gives is he says "Look if you know if you if you're in a little dinghy fishing off of Long Island Sound for the day it really matters if the tide is coming in or out right you better be back to the dock before the tide's out or you're going to get stuck in the mud." He said "If you're an ocean liner and you're sailing across the ocean and someone says "Oh be careful the tide's out." Not relevant it doesn't matter at all and he said "You want to construct a portfolio so that you're the ocean liner so it doesn't matter if the if there's a bare market or a bull market doesn't matter if the tide's in or out you're fine either way." And I and I've always thought that that's such a brilliant analogy and then when I tell that people say "What amount do I need?" And it doesn't it's different for everyone you know if you're spending $100,000 a year and you're going to get 60 grand a year from social security like you don't need that big an ocean liner m if you live beyond your means and you're spending half a million dollars a year and you have a swanky house in the Hamptons every summer you're going to need a much bigger portfolio so there's not a set number your ocean liner you know it's not one sizefits-all on the ocean liner but psychologically I love that idea that you want to set up your portfolio to be the ocean liner so whether the tide's in or out you don't care really good love that that's a great place to leave it we uh So we're going to tell people that what's the name of the book again dividend investing dependable income to navigate all markets guys go to Amazon buy that book immediately and uh of course we will link to it um I want to I want to end the show the way we usually do which is find out what you're looking forward to and you have a you have a spicy answer here so let's hear it what are you looking forward to it's actually not political even though it sounds like it is that's what I was going to guess i'm looking forward to 2028 what hap what happens you retire i want to be done i just want to be done with all this stuff i don't want this level of noise i want to play spell oh it's gonna be so much worse you think in 2028 it's going to be worse at the end of 2020 Jamie Vance versus Gavin Newsome you think that's going to be a walk in the park it's going to be worse all right it's going to be all insane from here on out both parties all day long how many more executive actions do you think there are going to be between now and 2028 i don't know one a day does that sound about right michael what are you looking forward to buddy should I ask uh not sure what am I I'm looking forward You know what you were right i'm looking forward to Daredevil ending it wasn't a good season yeah so you But you got to finish it the last episode was good but it was trash you said you were culturally pop culturally illiterate completely i have no idea what Daredevil is can you just take my word for it if I give you a TV show to watch yes okay last of Us season 2 is starting on Sunday there no seriously I want you to do this i want you to do this for yourself not for me i'm writing it down so I don't forget this is where I am giving advice i just rewatched season 1 which aired in 2023 i'm telling you that it was the best pilot episode of any HBO show I can think of and I've seen them all that's number one so it immediately sucks you in it's not one of these things where people say to you "No no no give it like six more weeks you're going to love it." I'm telling you if you watch the first episode and you don't like it that's it you're done you're out we shall never speak of it again um but I rewatched nine episodes in the first season and the next season comes out starts this Sunday i honestly think it's like one of the best shows of the decade that we're now halfway through like it could be top five like as good as The Wire because at its core it looks like sci-fi on the surface but that's not what it is at its core it's about people who decide that their mission in life is to defend someone else or take care of someone else that's what the story is really about and um interestingly the official HBO podcast for The Last of Us is actually done by the showrunners so it's not just like some fans geeking out the guys come on immediately following the episode and they explain why they made the creative choices they made um so it's just a it's a great overall user experience uh viewer experience from start to finish and I don't know if season 2 will be as good as season 1 but like it's worth catching up and giving it a shot so you do that for me yes all right i see you nodding it's a got to be a top five show of this decade right duncan do we have you in i I never watched it but but you you will never But hold on as a vegetarian it's about the vegetables taking over the earth i feel like it's like thematically it's very on brand for you yeah it's not for you it's not zombies it's it's it's fungus but the fungus controls the minds of the people and that's how we get into the situation that we get into so it's like a vegetarian feelood story like for all of us a horror story for you it's a romcom so all I'm saying is give it a shot nicole Last of Us last of Us can I tell you one other thing one of the best soundtracks of any show on TV i can agree like how sick is that Spotify playlist so good it's like um all modern interpolations of like your favorite songs from the 80s it's just it's endlessly good all right that's it from us i want to thank our special guest Jenny Vanluen Harrington of Gilman Hill and the new book Dividend Investing thank you so much for being here thanks for having me uh catch her on CNBC how many days a week you doing just one just one day a week okay uh you and I should cross paths more i know i'm going to talk to Kevin about that all right special thanks to the whole Compound crew thank you Michael Batnik thank you to all the listeners thank you to all the viewers we'll talk to you soon