Listen: Morgan, Gary Kaltbaum And Proctor discussed on Investor's Edge
"Investor's edge. The last bastion of deprogramming with Gary kaltbaum, it doesn't get better than this. Yeah. Yeah. Welcome. Once again to investor's edge. Thanks for being with us today. All right. Well, we had a jobs number jobs are up one hundred fifty five less than expected, blah, blah, blah, blah, blah, blah, economies fine. But it's not gonna be fine. This market is not doing what it's doing. If the economy is going to be fine. So you need to know that that's number one. So the first thing you need to know. The bad news on why we went into the bear market. Does not show up. For a while. You got that? The bad news on why the market goes into a bear market does not show up for wild. That's why everybody's saying. But the earnings are God and the economy strong. Well, they've never studied markets. And how they work. Simple as that. In bear markets. Surprises happen to the downside. Like today. I'm surprised who went down five fifty today. I'm not surprised we went down. But wow. In bear markets surprises happen to the downside. Just like in bull markets surprises happened to the upside as I stated in bear markets. You get tons of stocks just blowing up. By the way. Federal express. In the past three days. From two twenty eight to two zero one. On a downgrade. Two new yearly lows on heavy volume. Not aunt Mary and uncle Bob selling. Surprises happen to the downside. Blowups happen. In bear markets. Good news is bad news. Bad news gets destroyed. Just like in bull markets. Bad. News is good news and good news explodes to the upside. In bear markets margin contracts. That's the leverage to buy more stock. You got a two hundred thousand dollar account, but you bought two hundred eighty thousand dollars worth of stock. The eighty thousand bucks has the be sold. First before you even get into the real selling. The contracting of margin. Escalates. The issue. Like in bull markets Morgan is your best friends because that two hundred thousand you put two eighty into it going up ten percent. You don't make twenty grand you make twenty eight thousand so instead of making ten percent on your money. You're making fourteen percent because you borrowed money. And margins contracting markedly now. In bear markets. And I coined this phrase, by the way. Rallies a sharp. They're quick. They make you feel good. Get every one talking about them. And everyone bullish. They suck you in. And berry you soon after. Got that interesting enough. Guess what just happened? The Dow rallied from. Twenty four to six eight. The twenty five nine eight zero. In six days. Bear market rally. Before that the market rallied from twenty four one to two to twenty six to seven seven. In seven days. And was still back to the lows. In bear markets. The defensive areas. The most defensive areas will hold up best. As money. Gets parked into the lowest beta largest mega cap names possible. As the markets predicting recession, so guess what's bought up best, recession resistant, what's recession resistant? What do I mean by that? Well, you gotta get drugs. If you. Coca Cola Coca Cola? You guys will drink the coke. No matter what you'll spend your last time on Coca Cola won't you? Your macaroni and cheese. Your food. Used to be tobacco. But they got big problems. You gotta get soap and detergent. So the Proctor and gamble of the world. What else right now real estate investment trust? Why why would we will state investment trust go up if the markets predicting a recession why because interest rates come down in the interest rate sensitive? Did mention utilities, right? In bear markets. The business losers. Typically will be the names that had the strongest runs during the bull market. Why how can that be? Well, because first love all the moron. Pundits on TV. Keep coming up and saying oh. That one's down twenty percent what cheap value, then it's down thirty percents cheek value. Forty percent, cheap value, fifty percents sheep value. The problem is. They become the most over loved overvalued and over leverage stocks out there. What do we buy leverage margin? So if they're over owned. And there are these beta names that had the strongest moves. What do you think? The big boys are doing get me the hell out. Now, I'm gonna give you a number that I'm told I haven't done this study. I'm told in bear markets on average the previous previous bowl beta names, go down like seventy percent from the highest allows. I will tell you that happened the two thousand to three and I will tell you a lot of them did that in two thousand seven two thousand and eight. Just telling you. There's some of your bear market rules. And what you need to understand bear markets. A completely different than bull markets, complexion changes.."