Tom welcomes Portfolio Manager Michael Gayed, author and publisher of the Lead Lag Report, back to the show.

Michael highlights the current market situation and why it is challenging to make accurate predictions about the near future. There is overconfidence amongst investors that the economy will avoid a recession, despite increasing default risks. Additionally, most believe that stocks will continue to outperform, even though the charts are not indicative of a new bull market.

Michael also shares his concerns about Treasuries and the rising possibility of bank failures. He believes that the Fed is more reactionary and less anticipatory, and they will most likely take a longer time to respond to the current economic situation. We are approaching a crucial turning point, and something must be done to address the mounting issues.

Michael explains the importance of the Gold to Lumber ratio, which acts as a leading indicator for the housing market. He has faith in this ratio as it has proven to be an accurate indicator of market trends.

Finally, Michael discusses the irrationality in markets and its possible outcomes. He believes that the market is in a state of euphoria, which may lead to a severe downturn in the future. He also highlights the need for more rationality.

Time Stamp References:
0:00 – Introduction
0:45 – Complacency Risks
3:54 – Market Concentration
7:00 – Irrational Melt Ups
9:02 – Crypto Thoughts
11:15 – Treasury Concerns
15:42 – Bank Failure Risk
17:42 – Central Bank Reactions
24:43 – Refinancing
26:10 – Housing Concerns
28:34 – Consumers & Oil Prices
30:10 – Japan & Oil Imports
33:29 – Japan Treasury Holdings
35:03 – Gold/Lumber Ratio
38:18 – FOMO & Equity Bubbles
41:30 – Anxiety & Confusion
44:15 – Safe Haven Trades
45:40 – Wrap Up

Talking Points From This Weeks Episode

• Market overconfidence despite increasing default risks and absence of new bull market indicators.
  
• Concerns about treasuries, bank failures, and Fed’s reactionary approach.
  
• Importance of Gold to Lumber ratio as leading indicator and irrationality in markets leading to a future downturn.
  

Guest Links:
Website: https://www.leadlagreport.com/
Website: https://www.tidalfinancialgroup.com
Twitter: https://twitter.com/leadlagreport
YouTube: https://www.youtube.com/theleadlagreport

Michael A. Gayed, CFA, is Portfolio Manager at Toroso Asset Management, an award-winning author and publisher of The Lead-Lag Report.

Michael is a well-respected results-oriented Investment Manager showcasing 15 years of successfully executing initiatives that result in significant revenue growth. In addition, he is known for identifying and implementing various investment strategies to capture market anomalies while maintaining a business mindset beyond portfolio management.

Michael offers a proven track record of evaluating business/investment opportunities, quickly understanding market dynamics and relationships. He is also an out-of-the-box thinker committed to strengthening organizations’ financial performance through dedicated hard work and a passion for investing.

He is a graduate of (Cum Laude) NYU Stern School of Business with a Double Major in Finance & Management and has a Bachelor of Science in Finance & Management. In addition, he is a Chartered Financial Analyst from the CFA Institute.