1 00:00:00,120 --> 00:00:03,279 So as I say, who knows. I can't tell the future. I'm 2 00:00:03,319 --> 00:00:05,919 not trying to predict it. What I'm saying is, let's be prepared for 3 00:00:06,000 --> 00:00:09,359 the good, the bad, and the un proceed if you have your cash. 4 00:00:09,640 --> 00:00:13,560 One of the things that bupp But is famous for is capturing his cash 5 00:00:13,679 --> 00:00:17,079 and not buying anything, no stock, no house. In fact, he 6 00:00:17,120 --> 00:00:20,280 doesn't he's not really in the real estate at all. But let's understand, 7 00:00:20,399 --> 00:00:24,359 he captures the cash and waits for an opportunity to fall in his lap. 8 00:00:24,399 --> 00:00:27,480 And that's what he studies every day. He suits up to go to the 9 00:00:27,559 --> 00:00:31,440 office, literally suits up and his old Cadillac it was an old truck to 10 00:00:31,600 --> 00:00:37,520 study opportunities. You're listening to Carrie Let's his Financial Survival Network where you get 11 00:00:37,600 --> 00:00:43,159 valuable information you just can't find anywhere else to thrive in today's trying times. 12 00:00:43,439 --> 00:00:49,479 You need the Financial Survival Network now more than ever. Go to Financial Survival 13 00:00:49,600 --> 00:00:55,960 Network dot com and get your free newsletter and gift. Financial Survival Network now 14 00:00:56,479 --> 00:01:04,599 more than ever, and welcome you are listening to watching the Financial Survival Network 15 00:01:04,640 --> 00:01:10,840 on your own's Terry Lutz. Well, we know markets in the US are 16 00:01:10,920 --> 00:01:17,680 in flux right now? Are we becoming another Japan? And hey, perhaps 17 00:01:18,200 --> 00:01:25,519 Japan is where you should be investing. That's where Warren Buffett recently bought a 18 00:01:25,519 --> 00:01:30,599 whole bunch of those stocks. Maybe it's a place to go. John Grace 19 00:01:30,000 --> 00:01:34,000 is with us now. John, it's great to have you back on the 20 00:01:34,000 --> 00:01:40,400 show. And so tell us what can we learn from Japan? Well, 21 00:01:40,439 --> 00:01:44,799 it's a great question, carrying goodness seeing you again. And what we're trying 22 00:01:44,799 --> 00:01:47,480 to do is, you know, people will get lost, I think and 23 00:01:47,599 --> 00:01:49,840 saying well, it has to be positive, you know, Ever, Maiden, 24 00:01:49,879 --> 00:01:53,280 you say something negative. But my best example is, jeez, you 25 00:01:53,400 --> 00:01:57,439 trump probably drive your car with GPS on it right and it tells you objects 26 00:01:57,439 --> 00:02:01,159 on the road ahead or speed trap ahead? Is that bad news? No? 27 00:02:01,319 --> 00:02:04,200 What do you do? You do? What I do? We sit 28 00:02:04,319 --> 00:02:07,359 up, we're more alert and we don't want to hit anything. So what 29 00:02:07,359 --> 00:02:10,000 we're talking about here is maybe we can you know, maybe we now understand 30 00:02:10,080 --> 00:02:15,479 after COVID that we're drinking the same water, we're breathing the same air, 31 00:02:15,560 --> 00:02:20,280 we're flying the same airplanes, and maybe we can turn on our GPS system, 32 00:02:20,400 --> 00:02:23,159 put on the headlights, the high beams and see what's around the road 33 00:02:23,199 --> 00:02:27,840 ahead. So what's so fascinating is I think to a person, we all 34 00:02:27,879 --> 00:02:30,319 agreed back in the late eighties Japan was going to be number one in gross 35 00:02:30,319 --> 00:02:34,120 domestic product. We were okay with that, right, they got the sun 36 00:02:34,159 --> 00:02:38,360 on the flag there, they've owned everything alert by go ahead, but that 37 00:02:38,439 --> 00:02:42,319 did not happen. In fact, what we can see it is approximately twelve 38 00:02:42,360 --> 00:02:46,639 twenty nine eighty nine. That's when first the Japanese stock market he started close 39 00:02:46,680 --> 00:02:51,599 to forty thousand, and then in about eighteen months or so, Carrie, 40 00:02:51,680 --> 00:02:54,240 the Japanese stock market measured by the knee K two two five that would be 41 00:02:54,280 --> 00:03:00,280 the equivalent of the S and P five, but dropped eighty percent eighty set, 42 00:03:00,360 --> 00:03:02,680 so a million dollars went to two hundred thousand. Okay, a year 43 00:03:02,840 --> 00:03:07,759 later, Japanese real estate dropped seventy percent, I mean down. So that 44 00:03:07,800 --> 00:03:12,000 means the ninety dollars went to three hundred thousand, So you used to have 45 00:03:12,080 --> 00:03:15,400 two million. Now I'm at the bottom or so you have a total of 46 00:03:15,479 --> 00:03:20,879 about five hundred thousand. And here's the trick question. And I emphasize carry 47 00:03:20,919 --> 00:03:23,439 it's a trick question because you don't have to study this to get the answer 48 00:03:23,520 --> 00:03:28,520 correct if you follow the formula. When here it's a tricks question, that's 49 00:03:28,560 --> 00:03:31,840 a clue. Right, So here's the trick question. Which do you think 50 00:03:31,879 --> 00:03:36,479 has come back to even has it been? In the Japanese stock market or 51 00:03:36,479 --> 00:03:42,360 the Japanese real estate market. Either neither go to the head of the class 52 00:03:42,360 --> 00:03:47,639 like Antel survival. Neither imagine gets over thirty years later, and neither your 53 00:03:47,759 --> 00:03:53,599 stocks nor your real estate you had thirty thirty four years ago are back to 54 00:03:53,759 --> 00:03:58,599 their highs. And now you're thirty four years older. Just imagine that for 55 00:03:58,680 --> 00:04:01,120 a minute. Now, the NIK has recovered to some extent. Last I 56 00:04:01,159 --> 00:04:04,120 looked, it was around thirty three thousand, but the peak was at thirty 57 00:04:04,199 --> 00:04:08,840 nine thousand. What does that mean? You're still about what five ten percent 58 00:04:08,919 --> 00:04:14,759 below the high water mark? And that's assuming what you didn't sell one share, 59 00:04:15,039 --> 00:04:17,879 You didn't need any money over the last thirty three thirty four years. 60 00:04:18,759 --> 00:04:23,839 Oh, where is that true for anyone? Okay? And then now we 61 00:04:23,920 --> 00:04:27,600 see with real estate, no, neither the real estate market nor the stock 62 00:04:27,639 --> 00:04:30,560 market has come back to their high water marks. In fact, now we 63 00:04:30,600 --> 00:04:36,000 can see evidence that there are eleven million homes in Japan that are completely vacant. 64 00:04:36,319 --> 00:04:40,439 That's hard to imagine, but that's the way it is. And from 65 00:04:40,480 --> 00:04:45,120 the source that I bound suggests that the Japanese could be on the trajectory of 66 00:04:45,399 --> 00:04:48,720 tripling that number to thirty three million, and they could all be vacant out 67 00:04:48,759 --> 00:04:53,839 of the total of sixty two million homes for a population of about one hundred 68 00:04:53,839 --> 00:04:57,920 and twenty seven million people. And let's understand what's interesting. Part of what's 69 00:04:57,959 --> 00:05:00,560 interesting about Japan. They work hard, they're known to be very intelligent, 70 00:05:00,759 --> 00:05:05,839 they're fastidious, they typically tend to be polite, and they have the highest 71 00:05:06,120 --> 00:05:10,720 life expectancy at eight four point eight. By the way, we're at seventy 72 00:05:10,759 --> 00:05:14,240 seven. That's an interesting number for us to watch. Why is it interesting 73 00:05:14,319 --> 00:05:18,879 because I would submit that the real estate boom that we've so enjoyed here this 74 00:05:18,920 --> 00:05:24,399 time with upon is primarily due to baby bloombers seventy six million people strong on 75 00:05:24,439 --> 00:05:30,319 born between nineteen forty six nineteen sixty four. But seventy seven is important because 76 00:05:30,439 --> 00:05:34,279 seventy seven is the average age of death of America for most of US, 77 00:05:34,279 --> 00:05:41,199 seventy seven almost eighty five in Japan, higher than eighty in the UK and 78 00:05:41,360 --> 00:05:45,959 Canada much lower than eighty four the US of A. So here comes seventy 79 00:05:46,000 --> 00:05:49,920 six million people that came into the equation called the United States of America. 80 00:05:50,000 --> 00:05:54,519 And I don't know if it was irrational exuberance or what it was, but 81 00:05:54,759 --> 00:05:58,319 when you have seventy six million people come into the equation, it stands a 82 00:05:58,360 --> 00:06:00,480 reason you have a lot of demand for a lot of things. So here's 83 00:06:00,480 --> 00:06:05,560 the question, what happens when seventy six million people go to heaven? Well 84 00:06:06,240 --> 00:06:10,600 look at Japan, and we looked at what happened after the Great Digression here 85 00:06:10,600 --> 00:06:15,800 in the United States of America, where New York real estate took four decades 86 00:06:15,879 --> 00:06:19,120 to come back to even the life expectancy if we were adults at that time. 87 00:06:19,240 --> 00:06:23,279 Kerrie was at think fifty seven. So what was that? Say, 88 00:06:23,519 --> 00:06:27,519 your real estate went down seventy percent, your stocks went down eight percent. 89 00:06:27,839 --> 00:06:30,360 Stocks took twenty five years to get back to even New York real estate always 90 00:06:30,360 --> 00:06:33,839 the capital capitalism right, took four decades to get back to. Ever, 91 00:06:34,839 --> 00:06:40,040 neither the real estate holdings nor the stock market came back to their high water 92 00:06:40,120 --> 00:06:43,439 mark while you were still here. So I suspect a lot of people died 93 00:06:43,439 --> 00:06:46,600 with regret, and now we see this pattern playing off in real life right 94 00:06:46,680 --> 00:06:50,000 before our eyes and Japan. Could it be that we're going to follow their 95 00:06:50,000 --> 00:06:56,319 example? Well, I think that is very possible. Again, why seventy 96 00:06:56,319 --> 00:07:00,240 seven, We've been told what it's about location, inventory in interest rates. 97 00:07:00,279 --> 00:07:03,480 Well, if it was so important about interest rates, why were baby boomers 98 00:07:03,480 --> 00:07:06,399 standing in line in the year ladies to buy a house at sixteen percent? 99 00:07:06,720 --> 00:07:11,879 Maybe it's not so much about interest rates, it's about studying something we'd all 100 00:07:11,920 --> 00:07:15,839 do, the buying and selling behavior based on age. So seventy seven is 101 00:07:15,839 --> 00:07:19,519 the average age of death in America. Seventy eight happens to be the average 102 00:07:19,560 --> 00:07:25,000 age most Americans sell, and if you look at any block across the country, 103 00:07:25,279 --> 00:07:29,279 probably four to five homes on each block or owned by boomers. I'm 104 00:07:29,319 --> 00:07:32,399 just saying something. Let's get ready for something we have not seen before. 105 00:07:32,399 --> 00:07:38,160 It is completely unprecedented, but it would not surprise me in the environment where 106 00:07:38,240 --> 00:07:44,720 people dying outpace people buying, that prices and reds do what you've not seen 107 00:07:44,759 --> 00:07:47,879 them do before they go down, and they may stay down. So this 108 00:07:48,000 --> 00:07:51,639 might be a good time to look for bargains as Buppet is famous for. 109 00:07:53,040 --> 00:07:56,639 It also might be a good time to take some chips off the table, 110 00:07:57,079 --> 00:08:01,199 right because you count equity is cash, but it really doesn't count as cash 111 00:08:01,279 --> 00:08:03,959 until what you cash the checks. Kind of like going fishing. If I 112 00:08:05,040 --> 00:08:07,120 tell you about the fish that got await, you don't want to hear it. 113 00:08:07,240 --> 00:08:09,519 Show me the bish eat the fish. That's a better story than telling 114 00:08:09,519 --> 00:08:13,199 me about the one that got away. So, yeah, these are interesting 115 00:08:13,240 --> 00:08:18,279 times, and they were completely unpreceded. So is it strictly demographic here or 116 00:08:18,519 --> 00:08:24,399 is it it is there more at played here? It was probably more in 117 00:08:24,519 --> 00:08:30,279 place. Yeah, but I would say that the majority of us. When 118 00:08:30,279 --> 00:08:33,879 we have a friend of mine who runs a big real estate company says John, 119 00:08:33,879 --> 00:08:35,120 I've been in the business forty years. I've seen everything, and I'm 120 00:08:35,159 --> 00:08:39,279 like, what you have seen is what we've all participated. It. That's 121 00:08:39,320 --> 00:08:43,519 boomers coming at the equation, driving vices to new highs. You have not 122 00:08:43,759 --> 00:08:48,840 ever seen seventy six million people go to helld it. That's a whole new 123 00:08:48,960 --> 00:08:52,279 environment. So do not tell me like you did about COVID. Oh, 124 00:08:52,320 --> 00:08:54,960 we'll be back to normal justin a couple of months. Now, we're not. 125 00:08:56,480 --> 00:08:58,480 Don't tell me that it's got to do what it's done because we're in 126 00:08:58,519 --> 00:09:05,879 complete, the uncharted, unprecedented territory. Again, if the demand seventy six 127 00:09:05,000 --> 00:09:09,879 million people out of what three hundred thirty million or so in the country go 128 00:09:09,039 --> 00:09:13,600 to heaven and the supply of homes across the country remained the same, they're 129 00:09:13,639 --> 00:09:16,360 not going anywhere. What do you think prices or rents are going to do? 130 00:09:16,639 --> 00:09:20,080 I submit that they're going to do what they did after the Great Depression. 131 00:09:20,360 --> 00:09:26,039 Prices and rents went down after the Great Depression. So as I say, 132 00:09:26,240 --> 00:09:28,159 who knows. I can't tell the future. I'm not trying to predict 133 00:09:28,159 --> 00:09:31,519 it. What I'm saying is, let's be prepared for the good, the 134 00:09:31,559 --> 00:09:33,960 bad, and the un proceed if you have your cash. One of the 135 00:09:35,000 --> 00:09:39,200 things that Buffa is famous for is capturing his cash and not buying anything, 136 00:09:39,559 --> 00:09:43,120 no stock, no house. In fact, he doesn't he's not really in 137 00:09:43,159 --> 00:09:46,039 the real estate at all. But let's understand. He captures the cash and 138 00:09:46,240 --> 00:09:50,600 waits for an opportunity to fall in his lap. And that's where he studies. 139 00:09:50,600 --> 00:09:54,159 Every day he suits up to go to the office, literally suits up 140 00:09:54,399 --> 00:09:58,679 and his old Cadillac it was an old truck to study opportunities. And I 141 00:09:58,759 --> 00:10:05,639 loved his line that the bad news is an investor's best friend. Bad news 142 00:10:05,679 --> 00:10:09,200 is an investor's best friend. So again, if we're trying to hold onto 143 00:10:09,200 --> 00:10:11,120 the equity, if prices are going down and they may not recover while you're 144 00:10:11,159 --> 00:10:15,600 still here, you're wish you had gotten your cash, like going to Vegas, 145 00:10:15,720 --> 00:10:18,879 take the chips off the table and come back for another game. Let's 146 00:10:18,879 --> 00:10:22,960 catch the next way, no, no doubt. So you're basically telling your 147 00:10:22,960 --> 00:10:26,759 clients sell. Well, I'm saying, here's what we think is going to 148 00:10:26,799 --> 00:10:31,159 happen. Here's what we think is happening right now. And for those who 149 00:10:31,159 --> 00:10:33,120 have excess real estate, you know what we're saying is if you don't love 150 00:10:33,159 --> 00:10:35,799 it, lead it's all right. If you don't love it and have to 151 00:10:35,840 --> 00:10:39,360 have it, get your cash. I've got a friend of mine with twelve 152 00:10:39,360 --> 00:10:41,480 properties. I said this, just tore over the weekend. Sell half of 153 00:10:41,519 --> 00:10:45,600 them. I don't know what's going to happen, but you know you've got 154 00:10:45,639 --> 00:10:48,679 no less than twelve million dollars sit lined up in twelve different properties. Right. 155 00:10:48,799 --> 00:10:52,399 They're all in southern California. It's called earthquake country. If you have 156 00:10:52,519 --> 00:10:56,519 twelve million dollars in Amgen, which is right up the street here, I 157 00:10:56,559 --> 00:11:00,840 would say the same thing. Take some chips off the table, don't leave 158 00:11:00,879 --> 00:11:05,360 it all in one spot. That is not diversification. The asset type is 159 00:11:05,399 --> 00:11:09,720 the same. All right, twelve million dollars and that probably a modest estimate, 160 00:11:11,000 --> 00:11:13,639 is a whole lot of money. Take six million up the table. 161 00:11:13,639 --> 00:11:18,240 While you can't at these high water marks and figure out what you're gonna do 162 00:11:18,320 --> 00:11:20,440 with the cash sometime in the future. But I would submit say it, 163 00:11:20,480 --> 00:11:24,799 let's look at it this way. Don't sell high and buy high, right, 164 00:11:24,120 --> 00:11:30,159 keep your capital. I'm talking to young people and they say, look, 165 00:11:30,159 --> 00:11:33,159 we've got the down payment, we want to buy a house. I'll 166 00:11:33,200 --> 00:11:37,320 say, look, well, with God, if you're okay with prices dropping 167 00:11:37,360 --> 00:11:41,799 fifty percent. Our research team suggests that real estate prices in the US of 168 00:11:41,879 --> 00:11:46,360 A will revert back to their values in twenty twelve. So on average that 169 00:11:46,519 --> 00:11:48,799 might be as low as working person in Nashville, as high as seventy percent 170 00:11:48,879 --> 00:11:52,960 in Phoenix, but on average across a country, a reduction of about fifty 171 00:11:52,960 --> 00:11:58,279 percent. From here. Again, no one can tell the future, but 172 00:11:58,360 --> 00:12:01,279 if you've got your cash, you don't really give so much. You know, 173 00:12:01,399 --> 00:12:05,480 you don't give a hoot what happens to that value because your cash is 174 00:12:05,519 --> 00:12:09,240 in your pocket where you can watch the movie and you can, as I 175 00:12:09,320 --> 00:12:13,480 say, catch the next way as it shows itself up. But once you 176 00:12:13,559 --> 00:12:16,159 have the equity and you see the decline and you don't see the recovery, 177 00:12:16,360 --> 00:12:22,840 it's depressing. His Hell yeah, it could definitely ruin your day or even 178 00:12:22,879 --> 00:12:26,360 your retirement job percent it could ruin the rest of your life. A sumit. 179 00:12:26,440 --> 00:12:31,799 That's part of what drives me studying what happened during the depression. As 180 00:12:31,799 --> 00:12:33,559 I say, age of death was fifty eight. You had to be an 181 00:12:33,559 --> 00:12:37,679 adult to have a million dollars anywhere, right, but not the stocks and 182 00:12:37,799 --> 00:12:43,799 the real estate in New York didn't come back while you were sheer. No, 183 00:12:43,120 --> 00:12:46,679 I want you to have the money in your pocket, not on a 184 00:12:46,840 --> 00:12:50,840 state that as you think, it's couch and then as I say, you 185 00:12:50,879 --> 00:12:54,720 can catch the next way. When it comes to real estate, were suggesting 186 00:12:54,759 --> 00:13:00,480 that people look outside of residential look at warehouses, look at medical pertes. 187 00:13:00,679 --> 00:13:05,799 Okay, look at infrastructure, look at these places that the man's not you 188 00:13:05,960 --> 00:13:09,960 gotta you know, I said my wife or Christmas yept. I counted all 189 00:13:09,000 --> 00:13:13,720 the little stickers from the different places where it was warehoused from China. I 190 00:13:13,799 --> 00:13:18,399 counted over twenty. Well, I would sitting to you that's a good place 191 00:13:18,440 --> 00:13:22,240 to look at it. Desmon opportunities where there's always something coming through this. 192 00:13:22,480 --> 00:13:26,200 Somebody's paying for it to be shipped to, own the warehouse where they own 193 00:13:26,279 --> 00:13:31,639 the distributed, best facility, own the medical facility where we're standing in line 194 00:13:31,919 --> 00:13:35,759 waiting to see a doctor. You know, thirty or everybody's ten thousand people 195 00:13:35,799 --> 00:13:39,279 a day of turning sixty five through twenty thirty. So let's look at where 196 00:13:39,279 --> 00:13:43,799 the wave is headed as opposed to where the wave is crested. H all 197 00:13:43,919 --> 00:13:50,360 right, So, and how confident do you feel about this? Well, 198 00:13:50,519 --> 00:13:54,919 you know that I love the question. It's close to the question where people 199 00:13:54,960 --> 00:13:56,519 say, well, when's this going to happen? I'm like, I can't. 200 00:13:56,559 --> 00:14:01,039 It's not about the prediction. It's all about of preparation. And I'm 201 00:14:01,080 --> 00:14:05,200 going back again to the research team because that's what they do. And in 202 00:14:05,600 --> 00:14:09,360 six o seven they suggested that real estate prices were likely to drop by in 203 00:14:09,399 --> 00:14:13,200 this country. No like making that forecast. From what I can see, 204 00:14:13,240 --> 00:14:18,759 on average the decline was about thirty or percent across the country. That's pretty 205 00:14:18,759 --> 00:14:22,240 close to forty. They're the ones who are saying dead. Research said, 206 00:14:22,320 --> 00:14:28,279 right now, be not surprised to see prices drop fifty percent. And I 207 00:14:28,320 --> 00:14:31,600 don't know how we're going to miss this. As I say, we've only 208 00:14:31,639 --> 00:14:37,039 seen seventy six million people show up. What happens when seventy six million disappear? 209 00:14:39,519 --> 00:14:46,600 Fly got a lot of illegal aliens who are openly going to take their 210 00:14:46,639 --> 00:14:50,759 place right Well, you know when it comes to that subject, and this 211 00:14:50,840 --> 00:14:54,360 comes from the research team, and understand that the majority of the folks in 212 00:14:54,399 --> 00:14:58,200 the road financial advisors really from around the world. The ones who are from 213 00:14:58,240 --> 00:15:05,320 the US are generally Republican. And the research team looked at that situation and 214 00:15:05,759 --> 00:15:09,679 what they look at many people were surprised for them to not look at it 215 00:15:09,720 --> 00:15:13,639 from an emotional standpoint, but look at it from a standpoint of it is 216 00:15:13,679 --> 00:15:18,759 it a net gain or get a net loss? And what they found was 217 00:15:18,840 --> 00:15:20,840 it was a net gain. In other words, whether you were legal or 218 00:15:20,960 --> 00:15:26,399 illegal, when you come here, you put a lot of money into social 219 00:15:26,399 --> 00:15:33,519 security and into you know the taxes, property taxes, sales taxes. Then 220 00:15:33,600 --> 00:15:35,759 you get married and you have kids, where are you going to go? 221 00:15:35,120 --> 00:15:41,159 So what we're saying we don't have enough people. No country is replicating itself 222 00:15:41,320 --> 00:15:46,080 outside of India, which means we have more people dying than we have children 223 00:15:46,240 --> 00:15:50,879 being born. And that was happening before COVID, it got exasperated by COVID. 224 00:15:52,159 --> 00:15:54,720 So I'm saying that, you know, if you look at Canada as 225 00:15:54,720 --> 00:15:58,360 an example, I believe they brought in over a million immigrants last year. 226 00:15:58,480 --> 00:16:03,600 They're the only ones with an open door and they'll take everybody, but and 227 00:16:03,799 --> 00:16:07,799 and understand they often get the best and the brightest. But when you have 228 00:16:07,799 --> 00:16:10,960 an attitude that you know, we're just fine and we all need anybody, 229 00:16:11,000 --> 00:16:14,279 well, you're gonna, you're gonna. That's when you find that you what 230 00:16:14,399 --> 00:16:18,480 do I just hear a star brand new Starbucks closed in northern California. Just 231 00:16:18,519 --> 00:16:22,039 heard this this morning from a real estate group. And it closed because they 232 00:16:22,039 --> 00:16:25,600 couldn't find people to pay twenty bucks an hour. We don't have enough people 233 00:16:25,639 --> 00:16:29,440 here. So whether you like them or not, remember the reason that we're 234 00:16:29,480 --> 00:16:33,679 younger than Japan is because of our immigrants they send to have more children. 235 00:16:33,759 --> 00:16:37,159 They tend to have children. The rest of us not so much. So 236 00:16:37,360 --> 00:16:40,679 we just need more people. And again it doesn't matter as far as I'm 237 00:16:40,720 --> 00:16:42,879 concerned. We prefer people to be legal. But at the end of the 238 00:16:42,960 --> 00:16:47,799 day, it's a netbitit to the country, legal or illing. And I 239 00:16:47,799 --> 00:16:51,799 don't disagree with you at all. I just think it needs to be more 240 00:16:51,919 --> 00:17:00,080 controlled. Yeah, idulated a process, yeah, cross ends reft exactly, 241 00:17:00,519 --> 00:17:06,359 free for all over the border just doesn't work. You know, bad things 242 00:17:06,359 --> 00:17:11,319 can happen as a result, and it's got to be orderly, much like 243 00:17:11,400 --> 00:17:15,000 it was the turn of the century. No one in the country since the 244 00:17:15,720 --> 00:17:21,119 since the Native Americans are here at the Mayflower hold up, nobody's ever been 245 00:17:21,200 --> 00:17:27,079 thrilled about immigration, right, Um, very few. A lot of Well 246 00:17:27,079 --> 00:17:32,119 we usually my group got here, so raise the drawbridge. Right, that's 247 00:17:32,119 --> 00:17:36,920 how bad? Right, that's it. But the fact is, when it's 248 00:17:36,920 --> 00:17:41,640 done correctly and not with ulterior motives. But actually, if it's a good 249 00:17:41,640 --> 00:17:45,720 of the country and the good of the people coming here, it's always been 250 00:17:45,880 --> 00:17:52,839 a net positive, everybody wins. Yeah, So let's go back to those 251 00:17:52,920 --> 00:18:00,160 days, all right. So after the demographic cliff coming and you know it's 252 00:18:00,200 --> 00:18:08,680 got all sorts of unintended consequences. Is AI and is robotics gonna get us 253 00:18:08,680 --> 00:18:12,480 oute of this job? Well, that's the wild card. I mean, 254 00:18:12,480 --> 00:18:15,880 we'd all normally we know most of us don't really quite understand kind of like 255 00:18:15,880 --> 00:18:18,759 the Internet when becknees when that was new, that is this, how does 256 00:18:18,759 --> 00:18:23,839 it work? Well? Same story here. Yeah, But you know, 257 00:18:23,960 --> 00:18:29,519 as a friend of mine was saying again just this morning and another business call, 258 00:18:30,319 --> 00:18:33,319 this gentleman said he used to have eighteen people work for him, and 259 00:18:33,359 --> 00:18:37,519 now he can do him with with technology and his own if he's eighty five 260 00:18:37,880 --> 00:18:41,720 his own capabilities, he doesn't need those eighteen people. He can get it 261 00:18:41,759 --> 00:18:45,279 all done himself. So yeah, it's gonna be very interesting how this h 262 00:18:45,400 --> 00:18:48,839 this plays out. But that's also why we want to keep our eyes to 263 00:18:48,359 --> 00:18:52,279 the on the ball in terms of let's see where opportunity can present itself and 264 00:18:52,440 --> 00:19:03,559 insert that opportunity. Totallyted ring on that the implication of AI are just really 265 00:19:03,880 --> 00:19:10,960 completely not understood and appreciated it this point. So, like you said, 266 00:19:11,119 --> 00:19:15,759 there are sectors that you do like sectors that you don't. What as you're 267 00:19:15,799 --> 00:19:22,599 like number one sector looking ahead that you think, regardless what happens demographically, 268 00:19:22,359 --> 00:19:29,079 it's going to be a winner. Well, okay, for investors outside of 269 00:19:29,119 --> 00:19:33,920 real estate, we like first and foremost that all the positions are actively managed. 270 00:19:34,359 --> 00:19:38,240 If we look at most mutual funds, particularly in two thousand and eight, 271 00:19:38,559 --> 00:19:42,119 where the mark was off thirty seven percent, the majority of mutual funds 272 00:19:42,119 --> 00:19:45,599 stayed passage. That means they were bi percent cash and I get five percent 273 00:19:45,640 --> 00:19:49,279 invested. And when the market was off thirty seven percent, a lot of 274 00:19:49,279 --> 00:19:52,640 the no load funds that so many of so many experts that said, put 275 00:19:52,640 --> 00:19:56,599 all your money in it and forget it. We're offull with forty percent, 276 00:19:56,640 --> 00:19:59,559 and by the way, they often took four to five years to get back 277 00:19:59,559 --> 00:20:03,920 to even as opposed to a passive POSI should we like acted bench, which 278 00:20:04,279 --> 00:20:08,319 for some clients the portfolio for them, if that was great for them, 279 00:20:08,640 --> 00:20:12,759 started at five percent and may have ended eight up to one hundred percent cash. 280 00:20:12,839 --> 00:20:17,119 So think of a karate kid wax on wax off in O eight. 281 00:20:17,200 --> 00:20:19,519 You wanted to wax off, you wanted to get out of shares into cash, 282 00:20:19,880 --> 00:20:25,680 and you need some one or some system that can systematically pull that punk 283 00:20:25,920 --> 00:20:30,279 or you you know, just let it move. Not in a balk necessarily, 284 00:20:30,319 --> 00:20:33,720 but looking at your account every day asking the question, is a risk 285 00:20:33,799 --> 00:20:37,480 on a risk in O eight you wanted risk off? Starting March nine, 286 00:20:37,519 --> 00:20:41,119 two thousand and nine, you wanted risk on because we're off to the races, 287 00:20:41,279 --> 00:20:45,759 right, So that way you maybe the account, as I say, 288 00:20:45,839 --> 00:20:48,839 started O eight, five percent cash went to forty fifty in some cases got 289 00:20:48,880 --> 00:20:53,039 to one hundred percent cash. In those scenarios, you can see the evidence 290 00:20:53,079 --> 00:20:57,319 that those accounts that work like that might have been off less than twenty percent. 291 00:20:57,720 --> 00:21:03,440 Well that's better than thirty seven or forty or more, okay, and 292 00:21:03,559 --> 00:21:07,799 burns the coast became clear that it's off to the races again. Maybe you 293 00:21:08,000 --> 00:21:12,720 have the system designed to move your money on your behat out of cash back 294 00:21:12,759 --> 00:21:17,960 into shares, risky assets, so that now you're ninety five percent invested five 295 00:21:17,960 --> 00:21:22,960 percent cash. That's the combination that we like that we think what we've seed 296 00:21:22,960 --> 00:21:26,720 it hold up better at O eight in in twenty twenty two, as opposed 297 00:21:26,720 --> 00:21:30,319 to the markets just last year being off twenty to thirty. If your account 298 00:21:30,359 --> 00:21:32,759 was off let's say ten or less, you can go, well, I 299 00:21:32,759 --> 00:21:36,920 don't like losing a hundred thousand dollars on one million two percent of a billion, 300 00:21:37,200 --> 00:21:41,039 but I'd rather it'd be one hundred thousand as opposed to be the market 301 00:21:41,079 --> 00:21:44,279 at twenty percent or thirty percent. That would be a minus of what two 302 00:21:44,359 --> 00:21:47,640 to three hundred thousand. So let's what do they say when you find yourself 303 00:21:47,680 --> 00:21:51,160 in the ditch, stop DIGGI let's stop digging your ten percent as opposed to 304 00:21:51,200 --> 00:21:53,839 watching the account prop twenty thirty percent, because then we don't need any hell 305 00:21:53,920 --> 00:21:59,559 married mass just to get back to either what else we like our private equity 306 00:21:59,680 --> 00:22:06,200 and private credit positions, and for retail investors, that's relatively new. Those 307 00:22:06,279 --> 00:22:11,839 kind of areas of investing. The institutions and endowments have been in for over 308 00:22:11,920 --> 00:22:15,640 forty years, and up until recently, the only folks who had the ability 309 00:22:15,759 --> 00:22:19,519 to take a position had to be They had to be accredited, had to 310 00:22:19,599 --> 00:22:22,160 have a million dollars outside of the house to be a willing to talk to 311 00:22:22,200 --> 00:22:27,240 them about such a position. But those those those rules are changing and some 312 00:22:27,279 --> 00:22:32,720 of these positions that as I say, the institutions and endowments have been about 313 00:22:33,079 --> 00:22:37,880 opening up to retail investors, so that you can you know, you mentioned 314 00:22:37,880 --> 00:22:41,839 more Bopa. He's famous for taking huge positions in public companies. There's far 315 00:22:42,119 --> 00:22:47,480 more private companies, and there are public companies in the USA Bay. And 316 00:22:47,559 --> 00:22:49,960 if it is the case that there's a pool where you can invest in all 317 00:22:51,039 --> 00:22:56,359 the twelve or fourteen different private companies that are trying to do well and have 318 00:22:56,559 --> 00:23:02,839 done well, we find, for example that two thousand and twenty two those 319 00:23:02,880 --> 00:23:07,359 positions, the ones that we've been monitoring and recommending, had pretty good yields 320 00:23:07,440 --> 00:23:12,400 and load amid double digit returns. We think that will continue. We called 321 00:23:12,400 --> 00:23:15,599 these positions back in twenty eighteen, twenty nineteen, we thought they would be 322 00:23:15,640 --> 00:23:22,720 recession resistant, was using black men, and then so far that's exactly what 323 00:23:22,759 --> 00:23:26,759 they've proven to be recession resistant. And that's the point. We want to 324 00:23:26,839 --> 00:23:32,000 limit our losses where we can't and see some gains in other positions. But 325 00:23:32,079 --> 00:23:37,359 that means we have to be diversified in more things than the securities industry has 326 00:23:37,400 --> 00:23:41,000 told everybody. You know, you're diversified, carries sixty forties old biic stocks, 327 00:23:41,000 --> 00:23:45,559 bonds, bond stocks, You're well diversified. But we look at nail 328 00:23:45,599 --> 00:23:49,720 as an example, I count seven legs underneath their portfolio stools. So clearly 329 00:23:49,960 --> 00:23:53,160 I submit that we can't do what Yale does, but maybe we can learn 330 00:23:53,200 --> 00:23:56,720 from some of the best and brightest. And by the way, the last 331 00:23:56,720 --> 00:24:00,720 time I look, Yale's endowment exposure to US stocks is all of three percent, 332 00:24:00,920 --> 00:24:04,119 not thirty. Not set them in deeper, set three percent. That's 333 00:24:04,160 --> 00:24:08,960 not a suggestion, it's just man. Notice their exposure to the traditional assets 334 00:24:10,079 --> 00:24:12,960 is a lot less than one would think, and they have, as they 335 00:24:14,000 --> 00:24:18,400 say, more legs underneath their portfolio stool. So maybe we can learn how 336 00:24:18,440 --> 00:24:22,400 to do some of the things that major endowlets have done in our own footboards. 337 00:24:22,640 --> 00:24:26,200 All right, all right, John, really appreciate you coming up talking 338 00:24:26,240 --> 00:24:30,440 about this. I think it's really important. It's not being paid enough attention 339 00:24:30,480 --> 00:24:33,839 to for sure. Hey, where do we find you out these days on 340 00:24:33,880 --> 00:24:38,559 the internet? How do we connect with you? We're at Westlake Financial Advisors 341 00:24:38,599 --> 00:24:45,119 dot com investors Advantage are happy to answer questions and see how some of these 342 00:24:45,119 --> 00:24:48,599 things make sense for folks. And one of the questions that we like to 343 00:24:48,640 --> 00:24:52,319 help people answer is not are you conservative monitor aggressive? I don't understand the 344 00:24:52,400 --> 00:24:56,559 question you don't understand the answer, So what the heck are we talking about? 345 00:24:56,599 --> 00:24:59,960 How about we get deeper and have you answer in a series of ques, 346 00:25:00,359 --> 00:25:03,000 and that includes what kind of loss can you accept? Is it eight 347 00:25:03,039 --> 00:25:07,559 percent? Is it eighty percent? You tell me how bad it gets before 348 00:25:07,599 --> 00:25:11,160 you pull out your hair. But you want to see how your portfolio did. 349 00:25:11,400 --> 00:25:14,119 We're working with the Liberal just last week. This lady has been to 350 00:25:14,160 --> 00:25:18,240 seventy countries. She's well into her mid seventies. And when we back test 351 00:25:18,480 --> 00:25:22,480 to look at her portfolio and oh eight, is she held the same positions 352 00:25:22,480 --> 00:25:25,200 at oh eight? And she did well. We reviewed her portfolio at the 353 00:25:25,200 --> 00:25:29,119 time while the market was off thirty seven percent, her now was off seventy 354 00:25:29,160 --> 00:25:33,440 percent. That's that's huge. So yeah, most people don't look to see 355 00:25:33,440 --> 00:25:37,000 how bad it got, which I submit leads you open to it doing something 356 00:25:37,079 --> 00:25:41,279 like that again or words. So maybe we should learn from the desk, 357 00:25:41,359 --> 00:25:45,079 not just repeat it and see what kind of losses we've experienced. And then 358 00:25:45,079 --> 00:25:48,480 the question becomes what kind of lost are we okay with? And is it 359 00:25:48,559 --> 00:25:52,960 possible to put a portfolio together that might perform within your lost parameters as opposed 360 00:25:52,960 --> 00:25:56,119 to be telling you Hey, it all stops for a long wall, that's 361 00:25:56,160 --> 00:25:59,720 what it does. You got some more money, don't you? Yeah, 362 00:26:00,000 --> 00:26:03,799 exactly exactly. I couldn't agree with you more. And yeah, those one 363 00:26:03,920 --> 00:26:10,880 decision stocks from the nifty fifty during the seventies. We all know that that 364 00:26:11,000 --> 00:26:18,200 to wound up the trail of tears and adapt any of these little investment concepts 365 00:26:18,279 --> 00:26:22,960 to your will eventually look great while they're working, and eventually that will fail. 366 00:26:23,160 --> 00:26:26,680 And that's where you wind up. Hey, if you have a question 367 00:26:26,759 --> 00:26:32,640 for John myself, email k l at Kerry Lutts dot com and make sure 368 00:26:32,640 --> 00:26:37,200 you go over to Financial Survival Network dot com. John site is at the 369 00:26:37,200 --> 00:26:38,920 show notes for this interview. While you're there, sign up for your free 370 00:26:38,920 --> 00:26:42,720 newsletter, John. Great. Having you on is always. Thanks for that 371 00:26:42,799 --> 00:26:49,119 insightful recitation there really opened my eyes my pleasure, Garry, look forward to 372 00:26:49,160 --> 00:26:55,079 seeing you next time. Thanks for listening to carry Letts's Financial Survival Network, 373 00:26:55,279 --> 00:27:00,759 your solution to today's trying times. For the latest, go to Financial Survival 374 00:27:00,839 --> 00:27:04,759 Network dot com. Financial Survival Network now more than ever