S2 E9: Trading Lessons From the Original Market Wizards

In Episode 9, Greg introduces his new Three Podcast Special Series, "interviews" with a handful of the greatest money managers/traders of all-time, thanks to his colleague of many years, the legendary Jack Schwager, author of the must-read and top-ten all-time financial market book, "Market Wizards".

Yes, Greg has received permission from Jack to share excerpts from this classic book, an abundance of real world blood, sweat and tears lessons from the greatest of all time, several of whom Greg has worked with or for during his long-tenured career. Of course, Greg's color commentary is priceless unto itself, given his status as a tenacious trader and money manager with four decades of hands-on experience.

And there's more, as Greg shares his current macro-monetary view on the latest US economic data, Fed policy, key comments from Fed Chair Jerome Powell, the volatile price action in US stock indexes at the end of the week...and...a preview of his new MASSIVE Special Report on the BRICS currency and its implications for the US Dollar, and most specifically, for Gold and Silver sector, replete with an overview of his top ranked bullish trends among the individual mining shares.

Listen for details on how to get a copy of this landmark report, at the end of today's Podcast. 

Transcript

Speaker 1 0:03

Hi, I'm Greg Weldon and I'm your host for Money Markets and New Age Investing. This is episode number nine. It's going to be a little bit of a departure from what we've done in the past, which is really top-down macro-monetary global overview and then a bottom-up kind of technical, seat-of-the-pants trading slash, investing overview and trying to get all of this to meld together in the middle to come up with, uh, you know, investment strategies and ideas here, uh to uh, in terms of ways to try and keep pace with the debasement and devaluation of the purchasing power of paper currencies, every single one of which on this planet right now is being debased and is devaluing right now as we speak, relative to an ounce of gold. We're going to talk about that in a few minutes. But what we're going to do here for the next three episodes, it's like a little end the summer series here, when I used to be at the beach for july and august, um, at the jersey shore, long beach island. When I was a kid, you know, every summer growing up, we'd be down at the beach Shore, long Beach Island. When I was a kid, you know, every summer growing up, we'd be down at the beach for two months and the first thing I would do and I'd get so excited when I get there and get on my bike and go to the bookstore and buy books. So in this case I just kind of picked up a couple of old books and decided I'm going to do a little summer reading. One new book in particular got me started, but Market Wizards is one I've read so many times, it's not even funny. Chapter after chapter over and over.

Speaker 1 1:29

Market Wizards, written by Jack Schwager, who was at Prue, was at Commodicorp. Brilliant mind, brilliant, absolutely genius mind on Mr Schwager and he started doing interviews with all the great traders. So Market Wizards never heard of it. You must buy it. It's another. There's two versions. There's a whole bunch of versions now, but two original Market Wizards. And then there's also the new Money Masters, I think John Train. Why does that name sound familiar as the author? I'll double check that at some point and post it on Twitter.

Speaker 1 2:00

But this is the thing where you know learning from these great traders and the lessons, because I was on an interview on Thursday and I was asked you know, what do you see as different from the markets back in the 80s and 90s and what do you see as the same and I say, well, there's a lot of differences. The thing that's the same is human nature. You know people hope, fear, the whole kind of dynamic. Now you know human behavior has become more volatile. This is part of the polarization and electronification of the planet, just in terms of you know the celestial astronomy, you know astrophysics going on. But in that context some lessons reverberate and are timeless. And the lessons in this book are must-haves in your toolkit to be successful in investing or trading or whatever kind of melding of those two things you end up doing.

Speaker 1 2:53

And I could talk about the difference between investing and trading for a long time. I call myself a trader but I'm really an investor. We want long-term positions. I'm not in and out, I'm not scalping the market, I want trends. The meat of the money made in markets is in long-term trends and the quick reversal type crashes or spikes on supply-demand imbalances. So, starting with number one today, market Wizard Speak series from the Money Markets and New Age Investing series. Is the Market Wizard Speak series from the Money Markets and New Age Investing series. Is the Market Wizard Speak series, part one of three parts, and today we do.

Speaker 1 3:30

Ed Sakoda Probably never heard of him. Most people listening I would bet 90% if not 95% do not know who Ed Sakoda is. He is the original. He developed the very first program trading algorithm. He went to MIT where he graduated with an electrical engineering degree. He went on to go to the Sloan School. He then ended up at Payne Weber where he met Michael Marcus from Commodity Corp. Thus the link to Commodity Corp.

Speaker 1 4:00

Commodity Corp was a place started in the 70s by a couple of gentlemen. Kamadi Corp was a place started in the 70s by a couple of gentlemen Helmut Amos Hustetter and Helmut Weimer, I think, are the names but in the context of this was a think tank, slash money management place that, would you know, basically promote trading as like an art, because it is. You know, it's not something. You know you have talent, have talent for, but you got to develop that talent and that's what this place was designed to do, in addition to, you know, being a think tank of great minds, and they only hired the best guys you know in terms of commodity corp michael marcus, ed sakota those are the first two names, but this is where people got their start such as bruce kovner, okay, grenville, craig paul, tudor jones and then my boss, lewis Bacon from Moore Capital Management. Now I met Lewis when he was a broker at Lehman Brothers and he had money from Kamadi Corp.

Speaker 1 4:55

Lewis, tudor Jones, had money from Kamadi Corp. They basically kind of grew up together. This also kind of goes hand in hand with oh gosh, who's the other? Oh, I can't remember the name One of the other big hitters in New York. They're all kind of uncles and cousins and so on and so forth from North Carolina. You know, tudor Jones, of course, came up in the cotton trade. If you don't know the story, if you don't know who, tudor Jones is perhaps the greatest trader of all time, although I would rank Lewis maybe up there with him, if not a slight a bit above him. In terms of more recent performance, lewis shut his fund down, I believe in 2018, maybe earlier. Tudor Jones is still going, but this was a place of great minds.

Speaker 1 5:37

When I was at Commodity Corp, I was there for two years. I had a 62% after-fee return over that two-year period with an 11% max drawdown, and was ranked second top risk-adjusted trader in the program. While I was there, they brought in Ed Sakota to coach us and it's really interesting because how he is in this book is exactly how he was in person. I mean, you know intelligence beyond almost an ability to have a regular conversation with the guy, even though he was very humble, down-to-earth and funny. You know he had a great sense of humor too, so he was kind of easy to talk to and yet really hard to talk to, if you know what I mean. So I want to read and I did.

Speaker 1 6:25

I contacted Jack last weekend. I said Jack, do you mind if I read your book on the air, as if I'm interviewing these people? He said go right ahead. I'm also hoping and I haven't asked him yet that he can come on at the end and maybe we'll do a little quick interview. I'm not one on interviewing people. This is more about me sharing my views, my thoughts and my experiences.

Speaker 1 6:45

But I think this really is something that will be valuable, because we started this to give you the macro idea, but also to try and help people learn how to do this themselves. And you really can become your own hedge fund, your own CTA With ETFs. Now we do the portfolio playbook. That works there and I'm not trying to sell you, but there are instruments out there that can help you do this. But it really is up to you and you have to devote the time, you have to have the passion for it, you have to learn. You're going to have to make mistakes. So let's get to Ed Sakoda.

Speaker 1 7:15

Here's the questions and answers between Jack Schwager and Ed Sakoda in Market Wizards. Jack Schwager asks what are the elements of good trading? Now, ed Sakota was the master of simplifying his answers. I mean, he really was. What are the elements of good trading? Well, the elements of good trading are cutting losses, cutting losses and cutting losses. If you follow these three rules, you might, just might, have a chance to be successful. That is 100% true. I could not agree more. Cutting losses the biggest, single, most important thing and, frankly, one of the easiest things to do, as you'll see as we go forward in this Q&A All right.

Speaker 1 7:57

Jack Swagger asks how do you handle a losing streak? Q&a All right. Jack Swagger asks how do you handle a losing streak? Ed replies I handle losing streaks by trimming down my activity. I wait it out. Trying to trade during a losing streak is emotionally devastating. Trying to play catch up is lethal. 100% from experience can tell you this is exactly what I do. When you have a losing streak, it's not working.

Speaker 1 8:24

And the way I trade it's both bottom-up technical. I want to execute it technically and mathematically, but the idea for the trade comes from the fundamentals, from the macro, from the monetary, from whatever it might be psychological imbalances, demand side dynamics, whatever might be the theme. I trade it technically, get the theme, wait for the technicals to confirm the trend and then trade it mathematically. And in this sense I always put a stop in the second. I place a market order to buy or sell something. And I always use market orders to buy and sell something almost 98% of the time. All right, maybe in a thin market I might use a limit order. That's dangerous. I don't do it often. And sometimes I'll use a stop order to get into a position in case I'm out of the office or sleeping or whatever it might be in the four hours of sleep a night I get. So in that context, almost by definition, if you're in a drawdown, you should be having less and less leverage because you're wrong and you're getting out of losing trades and you're waiting for a higher degree of confidence, because what you do find and this happens to everybody, it certainly happens to me and I'm aware of it, so I'm able to rein it in real quickly now.

Speaker 1 9:37

All right, which is when you're on a winning streak, all right. I hate those terms winning and losing. This is not about winning and losing. It's about making money and not losing money. Okay, so that's two different things from you know, winning and losing, because you're conditioned to have to win at all costs and that gets people in trouble. The conditioning here is like a baseball player If you hit the ball three out of ten times, can be a superstar, make millions of dollars. Same thing here you can be right four or five out of ten times. And if you're making two and a half to four or five times as much as you're in your winners as your losers, you're going to be wildly successful. Then how you measure leverage and your per trade risk against your starting capital will determine your risk of ruin.

Speaker 1 10:16

All right, so I always a stop. My stop is re-engineered the backwards. In other words, I want to risk our managed accounts, our million dollar minimum, and it's because these markets are so huge. I mean, we had a $50 move in gold the other day. That's half of 1% on a million dollars. My per trade risk is 0.4, 0.5. I can't have a per trade risk in a single day. So you know, some of this volatility dynamic has really widened the stops. So we have to have a large minimum to make sure the risk overlay works, because it's the most important thing. Without the risk overlay and the math and following it in the most disciplined way.

Speaker 1 10:54

Where I actually have little cards that's just me from the old commodities exchange floor where we used to write up tickets and I had a big book of tickets and paper flying everywhere. It's kind of like my desk I use index cards. Every position has an index card that tells me when I did it, what I did it, when the stop was, what it's moved to and what the risk is. I figure out the risk right away to my stop. So here's where I'm buying it, here's my stop, how much money is that? And then I fit it into the position size defined by the amount of money I'm willing to lose, which is defined on where the technical stop is. That tells me I'm wrong. Not, I'm willing to lose this much money. So that's apply the position size accordingly to meet your minimum, uh, or rather your maximum per trade risk.

Speaker 1 11:48

So we'll say that again, I handle losing streaks this is at sakota by trimming down my activity. I wait it out, you do. You wait it out and I'll tell you. Now I tend to be, which means I know my drawdowns tend to be in the beginning of bigger trends that ultimately play out, and so our recovery time tends to be really fast and that works into my per trade risk. I'm going to give myself enough rope to potentially be in a position three or four times. If it's really three, then that's pretty much I got to be wrong instead of early, because those are two different things. Being early doesn't mean you're wrong, but it could mean you lose enough money where it doesn't matter whether you're right or wrong. Again, it's not about being right or wrong, it's about making money and not losing money.

Navigating Trading Psychology and Rules

Speaker 1 12:30

All right, so let's get back to the uh, to my interview here with ed sakota vis-a-vis jack schwager. I'm talking about two of the greats in this industry here. I'm really honored that Jack has allowed me to do this. So talking about if you're a systems trader okay, since you're primarily a systems trader wouldn't following a system imply no changes in trading activity during losing periods? Well then, he answers.

Speaker 1 12:58

Well, psychologically, I alter my activity depending on performance. I tend to be more aggressive after I've been winning and less so after losses. These tendencies have worked out okay. By contrast, a costly tendency is to get emotional over a loss and then try and get even with a bigger position. And man, I've seen people do that and I've seen great traders do that. This is almost a lesson like you have to learn for yourself, but it's true. I mean, it is by nature okay. The performance makes you less aggressive. I mean, of course it does. But at the same time, understanding your methodology can't be called into question because of a losing streak.

Speaker 1 13:37

And then you start to wonder is something changed in the markets that's fundamentally affecting my technical indicators or the way I'm looking at this from a macro monetary perspective? What am I missing? This is what I do every day. I don't sit there and pontificate. I sit there. The first thing I do is what are the reasons I could be wrong? Show me all the reasons I could be wrong. Then show me all the reasons why I think I'm right and I'll make a judgment. That's a day-by-day thing. Here's another question Do you decide?

Speaker 1 14:05

In the first part, we talked about cutting your losses. Then we talked about having a drawdown, then we talked about the risk management of your stops. We're going to keep going. In terms of losses, how do you decide where you're getting out? Before you get in on a trade?

Speaker 1 14:25

And Ed Sakota says I set the protective stops the same time I enter the trade. I normally move the stops to lock in a profit as the trend continues. Sometimes I take a profit when the market gets wild. This usually doesn't get me out any better than waiting for my stops to close into the price, but it cuts down on the volatility of the portfolio. Now I know exactly what he's talking about. I mean, trailing stops is the way to go, but getting out of a winning position, of a profitable position again I hate that phrase winning of a profitable position is the hardest single thing to do in this endeavor and by far. Every trader I've ever spoken to has agreed with that. Getting out of a profitable position is the hardest decision to make because there's no hard and fast rules.

Speaker 1 15:14

I do it a lot by discretion, based on patterns I've seen in terms of the psychology of the market when it gets frothy, when it gets chaotic, when it gets really greedy and out of control and all of a sudden you might snap away all those profits from somebody and you see the psychology you know in the markets play out very quickly. I've seen it so many times that I tend to recognize it early again. I've said before in this podcast, one of my just natural talents is pattern recognition and connecting the dots of little things that don't seem to matter it. It's what helps me play poker too. Plus having a mathematical and scientifically skewed mind, math to me just comes naturally.

Speaker 1 15:54

But to whatever extent Ed Sakota puts his protective stops in the same time he enters the trade, I know where my stop is before I even put the trade in, because I have to figure out how many contracts I can buy by determining where the stop is and then reengineering backwards the math to find out how many contracts I can buy by determining where the stop is and then re-engineering backwards the math to find out how many contracts I can buy. If it's a $100 stop, then I can buy 15 contracts. If it's a $200 stop, I can buy seven and a half. Let's round it down, always round down. If you follow what I'm saying, all right.

Speaker 1 16:23

So in terms of kind of what's really important here too is like breaking the rules. Okay, what are the trading rules you live by, says Jack Swagger asking the question. Ed Sakota replies cut losses, ride winners, keep bets small, follow the rules without question, but know when to break the rules. So Jack presses him on this. All right, your last two rules are cute because they're contradictory. Seriously now, which do you believe, follow the rules or know when to break the rules? And I could not agree more with his answer. I believe both. Mostly I follow the rules, but I find a new rule which breaks and then replaces the previous rule. And sometimes I get to a personal break point too, and when that happens I just get out of the markets altogether and take a day, and I've done that too. I mean, that's sometimes. You know it's on both sides, you could be losing. You get frustrated and think you know what's going on and it's not playing out in the prices, and you think that you know people in the market are, you know, insane, for you know, taking the positions they. You've got to step back sometimes and just get out of everything and take a fresh approach the next day.

Speaker 1 17:31

This is a psychological war. We talk about things that people do for a living, that are journeys of self-knowledge. That's what this is. That's what this is and that comes down to our next point. Because bottom line is this is you I mean you're facing your own psychology and I think that a lot of people aren't honest with themselves about their own psychology. They won't admit their own faults, their own flaws, they won't admit the things that traumatized them when they were younger, out of shame or whatever ego or macho-chism or this macho-chism or you know, macho, you know when you're this macho ego sometimes. So, to whatever extent, you know, you have to battle those things when you're a trader, because you know you have to devoid yourself of these emotions and be disciplined, follow the methodology, and most methodologies, I know, don't include emotions. I mean, they just don't All right. So let's get to the personality question, all right.

Speaker 1 18:32

Jack Swagger asks Ed Sakota oh, and this is a response to, again, the rules. Okay, so, talking about the rules, one more quick comment from Ed on the rules. So he says I don't think traders can follow rules for very long unless the rules reflect their own style. Eventually a breaking point is reached and a trader has to quit or change or find a new set of rules he can follow. This seems to be part of the process of evolution and growth of a trader. I couldn't agree more.

Speaker 1 19:01

What kind of trader are you? How attached do you want to be? What are your talents in doing this? What are your strengths? What are your talents in doing this? What are your strengths, what are your weaknesses? And putting yourself in a position where your methodology plays on your strengths Because you have to believe in it the most during a drawdown and the second you abandon your methodology because of one drawdown. You're not built for this business. I mean there's drawdowns, it's ebb and flow, it's a probability curve. You're not getting all these profits without drawdowns and most of the drawdowns take place when you're taking profits. So it's a natural kind of flow. So here we get to kind of psychology.

Speaker 1 19:34

Jack Schwager asks how important is gut feel? Great question, especially when you're at the poker table. Let me tell you that's a good reply. Gut feel is important. If ignored, it can come out in subtle ways by coloring your logic. Man, that's psychology, you know at a higher level for sure. I mean that's what kind of everyone does with their triggers. They don't deal with their issues, their trauma, whatever, and it comes out in unhealthy ways. Uh, when you're triggered, I mean, I know this, I did a lot of work on this myself. I mean it's you know, I think everyone needs to do that because everyone has trauma. Uh, anyway, it can be dealt with through meditation and reflection. Determine what's behind it. If it persists, it might be valuable to have subconscious analysis, otherwise it's dangerous. It becomes a dangerous sublimation of inner desires for excitement and not and does not reflect market conditions. Be sensitive to the subtle differences between intuition and into wishing, and Ed Sakota used to love to come up with these little quips like that. Okay, be careful about you know, follow your intuition, not your into wishing. W-i-s-h-i-n-g.

Speaker 1 20:49

Now, this is an interesting dynamic here. They ask him what's your worst year? And he says 1980. And he's talking about having a big decline in the markets. And then he thought it would keep going and it didn't. And I had the same experience in 2009. I was shocked that they came in and I wrote that they were going to bail out. You know, whatever you have when you have a debt deflation, but the way they did it and the quickness with which they did it and the force with which they did it did catch me off guard. So we kept trying to kind of sell the market, you know, into April, maybe even early May in 2009, which you know was the trend. The trend had extended so far that it reversed before we really kind of realized it. And so you learn from these things too, and that really was a big help for me in terms of being short during the pandemic in the stock market and getting out early and really well because of my experience in 2009.

Talent, Luck, and Market Analysis

Speaker 1 21:42

Now here's a good one, because this is so. Ed Sakoda, jack Swagger, asks what's the most important advice you can give your average trader. The average trader should find a superior trader and give his money to him to do his trading for him and then go find something he really loves to do. You might want to listen up on that one. That's really good advice, because this is hard to do and you have to be passionate. I mean, I'm just so happy I still have passion to do this after 40 years. There's not a lot of people still left in the business that I knew when I started. I mean, they dropped out or went on and did something else, or went bankrupt or who knows. Now talking about, I've talked about the bad year. So in terms of kind of talent, all right, this is a great question.

Speaker 1 22:29

Jack Swagger asks do great traders have a special talent for trading and what's the difference between talent and work in trading success? Now, first of all, he says the difference between talent and work is I don't know where one starts and the other stops, so they're connected. But when you talk about do great traders have special talent for trading, ed Sakota answers good traders have a special talent for trading, just as good musicians and athletes have talents for their fields. Great traders are the ones absorbed by the talent. They don't have the talent, the talent has them. And that's really interesting developing that talent, knowing you have it without being egotistical about it.

Speaker 1 23:13

And then, finally, how much of a role does luck play in trading success? Luck plays an enormous role in trading success. Some people were lucky enough to be born smart, where others were even smarter and got born lucky. So, ed sakoda, it's classic, I mean, you know, again, luck plays a role. Some people lucky enough to be born smart, others are even smarter by being born lucky. In other words, yeah, luck matters to some degree, you know. But what's interesting is, you know, lux or smarts or a gift are words that indicate an attitudinal proclivity for mastery. That's from etsukota. In other words, I think most good traders have a little extra spark about trading. Some people are natural musicians, painters or salesmen. I think it's difficult to acquire talent for trading. However, if it's already there, it can be discovered and developed and I think that that really, you know, says a lot. So I think that that's really, you know, says a lot. So I think that that's an interesting, you know, insight. I agree with every single thing that he says in this book and, again, I think the book is great.

Speaker 1 24:21

We're going to do some more interviews over the next couple of podcasts, but to talk about where we are right now with this week all right, what we had over the last two weeks, pretty much what we said the last podcast, I mean the economy continues to crumble. We see the labor market is now under bigger pressure. The unemployment rate's up. The U6, which is the total unemployment rate, is at 7.7. It rose six-tenths of 1% in June alone, from 7.1% to 7.7%. The number of unemployed is huge. The jobs are part-time. Okay, you can whittle it down, they're government jobs or they're part-time jobs. Full-time jobs are down 1.5 million over the last year. All right wages have not gone up, savings are still depleted. You know consumer delinquencies on consumer credit cards is through the roof again, I mean. So nothing's changed except for the negative. Ism service data last week was horrible, horrible. New orders, backlog of orders and new export orders all crashed and this is a really bad number. Then you get the employment report. You have a new high two weeks ago in the number of people receiving unemployment benefits.

Speaker 1 25:31

The CPI comes out. It was actually below 3. You know they're talking about 3%, 3%, 3%. Well, you know they take this out to the 1,000th of a point. The actual CPI 2.975. So it was below 3.

Speaker 1 25:47

So, of course, with a 5.5 Fed funds rate and a CPI below 3 and a PCE below 2.5, the Fed should be cutting rates just to stay tight instead of becoming even tighter, which is happening. The decline in inflation is making Fed policy tighter because it leaves a higher real rate, the inflation-adjusted rate. You take the Fed funds rate minus inflation, that's your real interest rate. A real interest rate of 2.5% to 3%, which is what it is right now, is punitively tight. It will continue to strangle the economy. And Powell finally says on Capitol Hill this was the biggest thing we've seen in months when he equated risk in the labor market is just as much as risk of higher inflation. That's key. Everyone rushes to believe. Now we're going to get an interest rate cut, which we will. We've already probably priced in too much to the futures market, but that's okay.

Speaker 1 26:40

But what's interesting here is the action in the stock market, because what you've had is this seven stocks responsible for all the gains. I mean those seven stocks up 48% year to date, while the rest of the 500, 493 stocks up 7%. The Russell was actually down for the year at one point a week ago. Since Powell spoke and the CPI number came out, the equal weight S&P soared, meaning they're taking out of the big cap tech mag seven magnificent seven and rotating it down into small cap, into some growth, into some value. It's coming back into the market. But this is a bad sign. When this happens, it's not the kind of rotation that would normally be what you might call healthy. So this is number one, because you're not going to get the profit growth there and it's going to cause a bigger liquidation.

Speaker 1 27:37

Is the fear here? Certainly, it's something I've been talking about for a while. I mean, in the research I've been talking. This is a liquidation setup. This is a long liquidation setup. This is a profit-taking setup and that's what you got Taking profits, putting it into safer, underperforming dynamics. So that's interesting One.

Speaker 1 27:53

I'll give you from our portfolio playbook that we've been waiting for, waiting for, waiting for and I talked about it on the show the XLRE, the real estate ETF. I said, when the Fed does give us the telegraph point that they're going to be moving at some point probably September that the MBB, which is the mortgage bond ETF, and the XLRE, the real estate ETF, would probably explode. That happened this week in both of them. The XLRE exploded. Most of the stocks in there are now flashing bullish signs. Real estate is already on fire within a week.

Speaker 1 28:28

The other thing to look at is gold. I just did a massive special on gold. If you want a copy, shoot me an email. Gregweldon W-E-L-D-O-N at weldononlinecom. I mean, you're going to want to see this because it talks about I take it to Seinfeld and I take it to Izzy Mandelbaum. You remember Lloyd Bridges as the 80-year-old trainer that's going to get Jerry into shape.

Speaker 1 28:51

Okay, taking it up a notch. Let's go Cupcake, it's go time, all right. Well, taking it up a notch applies to this idea of a BRICS currency. There's meetings going on about this right now and there's meetings taking place in the Asian nations, the ASEAN Asian Trade Group, nations, about doing something similar and joining this BRICS thing. All right, which would be 40%, this BRICS currency, backed by gold, 30% backed by the Chinese renminbi, 10% by the Indian rupee. It includes Brazil, south Africa, russia, obviously.

Speaker 1 29:27

I mean just, it's very broad already and when you see what happened this week, also, hungary, or ban, the prime PM of Hungary, is pro-Russian. All right, hungary relies for 100 percent of their energy on Russia and they've always been a fear that Hungary would look to leave NATO at some point. Well, hungary and the Czech Republic got together with the far right faction of the Austrian government, which is pretty powerful, almost neo-Nazi-like, to whatever degree, and they are now basically kind of supporting Russia. I mean, you have, orban went to meet Putin, which upset the EU big time. All right, don't forget. I mean, hungary is a member of NATO. And then went to meet Xi, after Xi and Putin both went to North Korea to meet with the leader of North Korea. So I mean, do we not see what's happening here? All right, the BRICS currency would be a big risk to the dollar and what's happened is Chinese have sold over $100 billion of the US securities that they hold.

Speaker 1 30:26

They used to be the largest holder. They aren't anymore. Japan is now and they bought gold. They now have almost as much gold in reserve as the US does. They have bought 1,500 tons of gold in the last 29 months and now they're around 6,000 tons in total. Us has the largest hoard of gold at over 8,000 tons.

Gold and Mining Stock Analysis

Speaker 1 30:44

Why does all this matter? Because it's so bullish for gold, and gold broke out this week. Silver's on the verge, and it it used to be. Can silver get to 50 now? It's like how fast is silver gonna get to 50? Because I think it's going to happen pretty fast. A lot of this.

Speaker 1 31:00

In terms of all the mining shares my favorite picks, I'll give you. Pan-american silver. Paas is the top silver pick right now. Newman mining has come into its own and I have been talking about that too. When the big caps that have underperformed come into play, that's going to be your next level of exuberance in the precious metals. And here's my final point Gold closes above 2336 this month.

Speaker 1 31:26

End of July. It'll mark the first time in history of gold trading since 1971, when they went off the gold standard, that gold has risen for six consecutive months. And if you do the math and equate this to a move that we saw from 1999 to 2011,. The reason being we compare this? Because in 1999, central banks got together and said we're going to stop selling gold. Remember, the BOE dumped all their gold. The Swiss National Bank dumped all their gold. Well, they said we're going to stop selling gold. Remember, the BOE dumped all their gold. The Swiss National Bank dumped all their gold. Well, they said we're going to stop selling gold. Well, now central banks are buying more gold than ever the last two years. And if you get a similar move, just doing just simple math, the upside target for gold in the next 10 years is $4,900. I'm not saying it's going there now, it's not going to happen quickly. I'm just saying it's doubled in yen terms since 2021. Think about that.

Speaker 1 32:15

Get my special, because I look at gold in every pertinent currency as it applies to the bricks, the g7 and all the commodity producing countries. You're going to want to see it, so keep, uh, keep track of us. I am at weldon live on x. We also have at money underscore podcast on X. I'm on YouTube as Gregory underscore Weldon. Don't forget to check out Facebook where we're on as money markets and new age investing, and shoot me an email if you want to get my metals, precious metals, dollar bricks, currency special Greg Weldon, at Weldon online. Thanks,