Joey Loss 00:14
Adam Van Wie, welcome back to the podcast.

Adam Van Wie 00:15
Hey, Joey, thanks for having me again.

Joey Loss 00:18
Are we looking at some good news right now. Man,

Adam Van Wie 00:22
it's been almost nothing but good news for the last couple of weeks, since the last time we recorded. I mean, I was just, just real quick, went back and checked the chart of the S, P, since we last recorded up over eight and a half percent. That's insane. It really is. And last, last time we recorded, I had my red shirt on because everything was in the red.

Joey Loss 00:48
I was joking on the radio show last week. You usually let me go on there only when there's bad news and you slipped up and let me tell some good news last Yeah,

Adam Van Wie 00:55
I really messed that one up. But I'm taking it back over this week. So I get to, get to deliver the good news tomorrow. Okay,

Joey Loss 01:03
all right, yeah. So I think this puts us at what, 10 days in a row up market. Yeah,

Adam Van Wie 01:09
I think if we close up today, that's 10 days up in a row on the Dow. So

Joey Loss 01:14
are we looking at a bull market or, as they say, Is everybody getting all bowled up well? So

Adam Van Wie 01:20
the thing is, I think technically, if we hit a new all time high, we never actually got into the bear market. The NASDAQ definitely did. But if you look at the s, p, I believe that the lowest close was down just over 19% so I know it's a minor detail, but I think we are still in a bull market. Technically,

Joey Loss 01:43
wow. Well, I remember, like last month, we were looking at charts that was talking about the third year of a bull market, which is people can remember 2022 was not a fun year for investors. That was truly a bear market and that we had. 2020 3s, P up over 20% 2020 4s, p up over 20% historic back to back returns. And then this puts us in year three of a bull market, which, if I'm remembering correctly, isn't this kind of how that goes historically.

Adam Van Wie 02:12
Yeah, it's your right. You're spot on. It's usually the third year of the bull market is, is sideways at best. And the real returns then come in year four. So this would put this very much along the lines of a historic average bull market, which is actually great news, because if you can sit through a year with low returns, we might see some really good returns next year and the year after. Yeah,

Joey Loss 02:41
well, I certainly hope so. You know, it never works out perfectly when looking back at historical data and trying to predict the future, but it is kind of comforting to see that there are some patterns. Maybe it's telling us something. Maybe not.

Adam Van Wie 02:53
Yeah, there's no better guide than history, although it's very imperfect, there are things that you can look back on and say, Wow, this is a very strong correlation to the current year, and this is what happened next. You can't rely on it, you can't make bets on it, you can't trade on it, but you can just feel, maybe even a little comforted by the fact that we've seen this before. Every time that's happened, then this has happened. Hopefully that's the case here. Yeah.

Joey Loss 03:23
Well, you came in this morning, you mentioned the jobs report, so maybe can you give us a little bit of a wrap of some of what's under the hood and maybe supporting what we're seeing in the market the last 10 days? Yeah,

Adam Van Wie 03:34
the jobs report came out because it comes out the first Friday of every month, and that's the government report, and it looks pretty strong. I mean, unemployment rate stayed the same. The headline number was, I believe, 177,000 new jobs created last month. That's pretty much in line after revisions with last month, which was revised down from 220 something down to about 185,000 so really, I mean, you're within spitting distance of the of the last month's report, which was considered pretty strong. So yeah, we're just not seeing the hit on jobs that everyone predicted between Doge and the downturn in the economy that everyone was saying was going to happen. Clearly, everything isn't great right now, but also probably not as bad as the media is portraying it, which I feel like I say that every month, yeah?

Joey Loss 04:28
And I think that's just the theme of this era, right? Regardless of who's in power, it's going to be bad news, because bad news keeps you locked in. Yeah?

Adam Van Wie 04:36
That's right. It's, that's what gets the clicks and the views,

Joey Loss 04:41
yeah. How about the breakdown of like, are we seeing breadth? Is this a widespread rise the last 10 days, or is it concentrated in certain areas? No,

Adam Van Wie 04:51
the breath has remained fairly, fairly good. It's not a mag seven type of recovery, although we did see a couple of the mag seven stocks report. And do really well. One I wanted to point out was apple that was a lot of front loading. People buying iPhones before the they thought the tariffs might hit and and really make those phones way more expensive. I know you, you did a really nice piece on that and put it out on Instagram about a month ago. But then we saw the the Microsoft and the alphabet, Google reports were really good, and it wasn't based on anything like that. So, so there might be some signs of life in the economy, after all, yeah.

Joey Loss 05:32
And I think, you know, as as is always the case, companies figure out how to make money, you know. And Apple, I think, announced that a lot of their iPhones are going to start coming out of India. Said about China, you instead of out of China. You know, people just survey the land and try and figure out, okay, how do we get back to doing what we do? Well, as soon as we can

Adam Van Wie 05:50
absolutely, that's that's why. That's why the stock market is a rigged game. But it's ranked in your favor, because over time, the incentive structure is for companies to increase their profits. What is the stock market based on how is it priced? It's based on what the outlook for long term profits are. So if that's constantly going up, the market will constantly go up. And now it doesn't get there in a straight line, as we all know, but it is. It is one of the few rig games that's in your favor.

Joey Loss 06:18
So we've seen some good company earnings. We've seen arguably a calmer 10 days of news than we've seen the 30 days before. That. All of that seems to be supporting some short term optimism. What else is on the list of things that are Hey, I know we talked about trade. It seems like some trade deals. We're getting a little bit more clarity from the White House. My understanding is that they're doing six meetings a week with countries to on a rolling basis, to try and get trade deals moving along, which would be an impressive pace, because historically, trade deals with other nations or small groups of nations, can take one to five years. And I know that Trump, Trump likes to move a lot faster than the typical political animal, but that's a pretty impressive pace. And I think if they're really sticking to that, that's probably due optimism. Yeah,

Adam Van Wie 07:05
I think you are seeing some of that priced in the market right now. I think, Well, you saw the opposite when, when the tariffs went in place and everything just went straight down, took took the elevator down, and now we're now we're kind of taking the escalator up based on the tidbits of information we're getting from Washington, and it's mostly positive. I would say, I think that the big question mark is still China, and what the goal is with China? I still it's still not clear. What is he trying to decouple from China completely, or just hurt them enough that they play fair with us, or, I'm not exactly sure, but outside of that, you've got other countries like Vietnam offering to go to zero tariffs, and that's a that's a net positive for the United States. So I do think that there is some optimism that some of these will, some of these deals will start getting done, and anytime you can get fair trade along with free trade, I think that's a big win for both sides, but in this case, mostly for the US, because we historically have been light on tariffs, where some of these countries have very high tariffs, especially in developing nations, where you actually kind of need A tariff to keep things made in house and but once you reach the not once you've developed and your economy has grown, the problem is the tariffs never come off, and that's part of what Trump is trying to accomplish, I believe,

Joey Loss 08:34
yeah, and for some history for listeners, I think we've touched on this in other episodes. But you know, post World War Two, United States emerged as by far the most developed economy, even in the west. It was just our golden age and countries like Germany and Japan who were decimated in World War Two working with new governments. You know, we learned from post World War One that you can't just treat a Versailles a country and expect them to play nice for very long. That type of misery lends its way to the regime we saw going into World War Two. So we took a different approach. We allowed these countries to tariff, you know, US and other nations, and we happily paid the tariffs, and it helped support the building of infrastructure and meaningful economies. Well, both Japan and Germany are now top five economies globally. So that system worked. And the challenge with China and some other countries is they really kind of matured beyond the point at which the tariffs are fair, but they stayed on in large part. You know, the the ability for American companies to do conduct business freely in those countries may not be the same. I'm speaking specifically about China and other examples like China, Japan and Germany are not as bad offenders as China at all, but there's different amounts of density for these types of issues in different countries around the world, and I think that's what's being reassessed right now. And so that's the best. Background that brought us into this situation where we're looking at the tariffs, we're looking at new trade policies and trying to change and level the playing field, really, especially with bigger developed nations. And the main factor there is China. Is that a fair summary? Yeah.

Adam Van Wie 10:13
I mean, I think if you look at China, I believe they still have developing nation status according to the WTO, and they are the world's other major superpower right now. I mean, you how can you say that they're developing? They're developed. I mean, they may have a little ways to go compared to the US, but compared to almost any other country, they have the infrastructure, they have the economy, they have the GDP. It just doesn't make sense to continue to label them as developing when they're clearly well past that status.

Joey Loss 10:46
Yeah, and with developing comes the ability within the World Trade Organization to levy different types of rules and limitations on other countries than say we're allowed to do to others, and that's why that matters. It does.

Adam Van Wie 10:59
It's a big deal to have that status, and they're going to try and protect that as long as possible when, clearly, there, they've grown well beyond it, right?

Joey Loss 11:09
So looking looking forward, I mean, it seems like we've got some good news to build on. The question I have, and I think, wait and see is the only thing we can do here is, you know how much of this was front loading as we look at q1 reports of profits and things like that, how much was people purchasing in anticipation of potential impacts to tariff, of tariffs and you know, is there sort of a wily coyote moment coming in the future where at some point things are just really going to slow down as more of these elements of the tariffs, kind of like reach deeper and deeper layers of the economy, that part I just don't know enough about. Do you have thoughts or insights on that?

Adam Van Wie 11:49
My only thought is that if the if everyone in the media is saying the same thing, and then they start screaming it, then that is exactly what won't happen. And I say this all the time, and I've never been wrong about it. And they were screaming that we're in a recession. They were screaming, there's a slowdown coming, and look what happened. The market bounces back. Hiring looks stable. It just, it just never works out the way that they want it to work out, and almost like demand that their listeners agree with them that this is what's happening. And so that's how I like to take the opposite approach and just say, Man, whenever, whenever it gets to that point, we're gonna, we're gonna seriously consider the other side. Because this just can't be the case. If it were that easy, everyone would make money all the time, because the world would be predictable, and it's not

Joey Loss 12:43
to counter that. I mean, it does look like the macro data was that there was a slowdown in q1 overall. But it feels like the challenge is the jobs look good. Inflation is not going crazy yet. I mean, we have very isolated tariff impacts, like to things like temu, you know, certain things on Amazon, stuff like that, but broader inflation doesn't seem to be in a bad spot. So you have kind of mixed signals here. Yeah,

Adam Van Wie 13:11
it's true. But so we did see the economy shrink by point 3% but if you dig into that report, there was actually some good news in there that we saw business investment increase dramatically during the quarter. There was, yeah, I spoke with my dad this morning, who also works with us, and he is working on a piece for our radio show tomorrow that's really going to dig into this. And he's he's very good at getting into a report and really figuring out what, what's behind the numbers. And I was talking to him this morning, and he said his quote was, you're going to be shocked at how good this report was for a negative report. So, so underneath the surface, there was some good news. Yes, the headline number was down. Could we be in a recession? Sure, we absolutely. The funny thing about recessions is most people don't know you're in one until it's over, until they make the call when the second quarter is negative in a row. GDP wise, it's it's just funny how that works. Most of the decrease in the GDP last quarter was due to an increase in imports, which counts as a counts against you, as far as GDP goes. And a lot of that was businesses trying to front run the tariffs. So that's where, that's why the number went negative, was that we imported so much more than we know we do in a normal quarter. That makes sense.

Joey Loss 14:30
And kind of related to that, it looks like shipping costs are increasing because volume is down a little bit. So for certain things like temu, you know, Timo, this week, I kept seeing that their prices are going up by the amount of the tariffs. But then there's also an additional shipping charge being tacked on just because volume is down, which means the scalability of profits for shipping is down, so they have to increase price.

Adam Van Wie 14:56
Yep, and there's some I'm not as. Familiar with the temu motto, but isn't there something around an $800 price point where you can ship direct and avoid some additional costs that the government imposes?

Joey Loss 15:10
Yeah, well, they've kind of skirted tariffs, you know, any sort of tariff, for a long time under that $800 rule. And if you can find something worth 800 bucks on teammate, I would love to see it. They, I mean, it's probably gonna be like a Jeep Wrangler or something. Made my team move and but they, they'll, yeah, they could skirt the tariffs. It's just too small. We're not really levying on that, but that has changed. That was an executive order to change that. So that's also playing a role,

Adam Van Wie 15:36
gotcha, that makes sense. Yeah, an $800 team move order, it would be about 10 large boxes showing up at your house. I think. Yeah.

Joey Loss 15:44
So this morning, we were talking about how, just like, What a perfect case study the last let's call it six months, because it really started in December. You know, right after the election in November, market rallied on what seems to be positive investor sentiment about how Trump would treat the economy. And then December, things started to change direction a little bit. And it's really been the last six months that have been up and down. We've had moments of US dominance, moments of international dominance. And really it's just been a perfect case study for diversification and staying the course, because we just don't know what headline, or, frankly, you know what a tweet can do to the market in a given day. So I just want to open it up. I mean, you're you keep an eye on all our portfolios here. What? What has this taught you and or help solidify your beliefs about the right way to invest? Yeah, definitely

Adam Van Wie 16:38
nothing's changed about my beliefs, I mean this, if anything, just made them stronger. Because if you tried to trade on the madness that has been the last month or so, you would there's no way you would have gotten it right. During the last month, we saw the s, p drop over 10% and then recover over 10 that that same 10% to end the month, almost flat. That has rarely happened in the history of the stock market, and just to see that happen in real time has been pretty remarkable, because it things really felt bad at the beginning of last month. It was it was pretty awful. Some dark days. We're used to it doing this like we do, but I know some retail investors were getting really, really scared and bearish. We obviously make the commitment to ride things out and knew that it would recover, maybe not as soon as we or maybe a little sooner than what we thought would happen. But this really just solidified my belief that you cannot react to market news, because short term, you just don't know which what's going to happen next. There was a there was a point early last last month, where it looked like international stocks were going to be the new US and and no one was going to invest in the US. Everyone was going to pull their money out and take it elsewhere, into gold and Bitcoin and international stocks, and then nothing really specifically changed, but, but everything changed. I mean, we just saw it completely reverse and go the other direction without a tremendous amount of news to back that up. But as more and more time passes, we get a little more clarity into the strategy behind the trade talks and things like that, and suddenly you're, you might, we might get to a point where we're going to look back on this and say, yeah, actually, that did make sense. The market has an amazing ability to look forward instead of backwards or in real time. And it proves that over and over, my favorite example is in March of 2009 Those were some dark days, but all of a sudden, market turned around and started rebounding off of what had been a 50 plus percent decline. And no one could figure out why, but looking back on that situation, yeah, we did start coming out of that, the that recession, the Great Recession, and in the market called it and got it

Joey Loss 19:05
right. Same thing happened in March 11 years later, too. Yeah, exactly, COVID. You know, I remember being on a drive to go play golf with my dad somewhere, and it was a long drive up to North Carolina from Jacksonville, and the whole time it was like, right? As COVID was hitting hard, right? We planned the vacation a long time. Had no idea COVID was coming. We ended up just staying inside with, like, latex gloves on watching the news. Basically, it's not a great vacation. But right there I was getting texts and talking to friends on the phone or saying, like, Oh, should we sell? Should we sell? None of them were clients. They're just friends that are concerned. And obviously I didn't give specific trading instructions, but I I just said, you know, it's probably a bad idea. You know, these things happen, whether it's a pandemic or a political event or something like this. Stuff happens, and that's, that's where you earn the premium as an equity investor, is by weathering that stuff and letting them play out and just knowing your time. Verizon, knowing your financial plan, what are your cash needs that should not be in equity if it's soon stuff like that, just having good context, a good plan. And you know, when stuff, when headlines are going crazy like that, I was the least interesting conversation they had that day, I promise you, you know, I said everything they thought I was going to say, and then a month later, the market was up. I didn't make that happen. I didn't know that was going to happen. But it's just, these are the rules for a reason, no

Adam Van Wie 20:23
doubt about it. And that was one of the quickest rebounds in history, too, from March of 2009 It was a long, slow ride up the slope. But during COVID, that was like a true V shaped recovery. And if you missed out on that one, if you sold, there's no way you got back in time, got back into the market in time to take full advantage of the recovery. The other thing I want to mention is that we saw during last month one of the top 10 market days of all time. That's incredible. I mean, that's not something you'd necessarily get to see during your the lifetime of being an investor, but a top 10 market days is pretty remarkable.

Joey Loss 21:04
I would love to see what that's called on, like the charts. When we look back and you know, they have the charts that'll like, specify, like Top 10 trading days, and every one of them will have like, five words. They'd say what it was I want to see, like Iran Contra Black Monday. And I'll be like, Trump sent a tweet.

Adam Van Wie 21:23
Tariff relief rally, yeah, tariff

Joey Loss 21:25
pause is probably what it'll say. But I thought Trump tweet, okay, so looking forward. I mean, what are the things that are gonna what are the levers that are gonna impact investor reaction, up or down, going forward?

Adam Van Wie 21:38
So I definitely think that a tariffs, whether, if we start, if the US starts announcing some trade deals and eliminating countries from the tariff list, and you can see real progress there on trade talks, negotiations, getting a better deal for the US, being able to open up some economies that weren't previously open for us to sell into. I think that's going to be a tailwind for for the market. I think if you can continue to see companies like alphabet and meta and Nvidia, if you can continue to see them have good quarter after good quarter with this AI related sales boom, I think that would be a tremendous tailwind for the market, because that's what was pushing the market higher last year. If we think, I think that those kind of things, if, if the jobs numbers stay stable or don't crater, if you don't see an first time Unemployment Claims spike, if you can see maybe even a little bit of a increase in the housing department, like if prices come down and we start seeing more buying, or if, if interest rates come down a bit, and that spurs more buying, I think those are the areas that could really help out the market in the in the near term. But the opposite of all those could also be true. If you see, if you see the housing market start to crater, that's a big fear of mine right now. I think if you saw inflation numbers start to go up, that would be a big, a big headwind for the market or job. If the jobs numbers start to fall off a cliff, that would certainly be a big headwind as well. Yeah.

Joey Loss 23:24
What do you think about next week's Fed meeting? Do you think we'll see a cut finally? Or

Adam Van Wie 23:31
I don't know, the market doesn't seem to think so. I think that there's, I think there's plenty of evidence that a cut is warranted at this point, I don't know that they're going to do it. Though it didn't seem like at the last meeting they were biased towards cutting. I actually felt like they were a bit biased against cutting at this meeting, so I would not be surprised if they help firm. But I do think a cut is warranted at this point.

Joey Loss 24:00
Yeah, yeah, I could see both sides, I guess, as your dad would say, they're either going to do it or they want, and he'll take both sides of that

Adam Van Wie 24:06
bet. Yeah, exactly. I I keep hearing inflation being the reason that they're not cutting but the inflation story is gone. I mean, for now it Sure. It could come back with with tariffs and things like that. But as of today, inflation is one of my, my, least of my concerns. I don't want to see it come back, obviously. But is it really a problem today? I don't think it is.

Joey Loss 24:35
Yeah. Well, anything else for listeners for now, other than you know, we'll see him in two weeks with a hopefully continued good news. But that would be great.

Adam Van Wie 24:45
I'd be really happy about that. Yeah, I think, I think the lesson from this week is just stay the course and don't try and trade your way out of this craziness. You're just not going to get it right. I think the day before we saw. The top 10 market day was probably the low point in terms of how we were feeling about the economy and the market. And then everything shifted on a dime. And if we were, if you missed that day, forget about making a positive return in 2025 you're gonna, you're gonna struggle to even get back to zero. So yeah, just stay the course and keep on with your strategy. Obviously, do check ins with your advisor, make sure your strategy is good, but don't try and make drastic changes based on short term news, and especially short term political news. Yeah,

Joey Loss 25:34
I think that's sound advice. All right. Well, we can wrap it there for now. Listeners, thanks for tuning in, and we'll chat with you in two weeks. Thanks, Adam, thank you.

Joey Loss 25:48
Thanks for joining us. If you enjoyed the podcast, please consider sharing it with your friends or family. This is the best way to spread the word, and we want to keep churning out great content for you guys. Show Notes and episode transcripts are available on our website at strivous wealth.com/podcast Special thanks to Bo delicens for the intro outro music and to the podcast man for producing this show. Until next time,

Disclaimer 26:14
The Wealth Unplugged podcast is sponsored by Strivus Wealth Partners, Joey and Adam’s SEC registered investment advisory offering Financial Planning and Investment Management services to clients across the United States. The opinions voiced in this episode are for general informational purposes only. Nothing any host or guest says on the podcast is meant to serve as advice or recommendations for any individual security to determine which investments may be appropriate for you, consult your financial advisor prior to investing. This information is not intended to substitute for individualized tax insurance or estate planning advice. Please consult your tax advisor, insurance agent or estate advisor regarding your specific situation.