When the lumber to gold ratio spikes, it's usually a signal that risk on sentiment will remain strong, said Michael Gayed, portfolio manager at Toroso Investments. Gayed has been tracking the lumber to gold ratio as part of his Lead-Lag report, and his studies have found that peaks and troughs usually lead equity rallies and declines, respectively. However, given the spike in lumber prices, it's only a matter of time before prices mean revert downward, meaning a stock market correction could be on the horizon.
What can the lumber price tell us about equities volatility? Well, it actually quite a lot. The market is a very interesting thing to analyze when you piece together different variables in correlation with each other, and our next guest has done just that. He's looked at the lumber to gold ratio as an indicator of volatility.
Very interesting discussion. We'll be having with Michael Gaya portfolio manager of Toroso investments. Michael, welcome back. Yeah, my pleasure. Thank you, David. We spoke a few, a few months ago, actually, and a, well, a few weeks to a few months, time has been floating in a different dimension for me. Uh, but uh, not too long ago.
And we were talking about equity volatility and the risks. Now you look at the lumber to gold ratio. I'll just let you explain, uh, what this ratio means in terms of predicting volatility and how does it work? Yeah, no, I appreciate it. So, so everything I do is around trying to identify conditions that favor and accidents in the stock market.
I've put out five different white papers that won five different awards. And one of the papers documents the relationship of lumber relative to gold. So what that relationship suggests is that. Generally when Lumber's outperforming gold over a short intermediate term period, you tend to have a better environment for risk assets, meaning you would have a lower stock market volatility tends to coincide with risk on conditions.
And the reason for that is that, uh, is, is the links around housing, right? So we know that housing is a leading indicator of the economy. Most people's wealth is in their homes. And the average home is about 16,000 board feet of lumber. So it stands to reason that if. Housing is a leading indicator. Well then lumber by extension because of the long tail construction must be as well.
So as lumber performs, there's all kinds of implications on again, growth, inflation, credit creation, uh, golden on their hands. More of a safe Haven commodity. Meaning that when you have these high risk periods in the stock market gold for a moment in time tends to do fairly well. So when you compare the lumber to gold, it actually tells you a lot about risk.
So obviously a lumber has been unrelenting in terms of its out-performance against gold, which has been consistent with the risk on environment that we've seen the, uh, the thing, which is kind of curious to me about the relationship is that. Uh, the last time the lumber to gold ratio was at the level it's at today, uh, was in early 2005, just as the housing bubble was about to start getting on a wound, uh, as Alyssa mom and his signs, I think that are happening there, but from a risk on risk off perspective, lumber is, uh, quite telling in terms of broader risks and a tail event, potential inequities, that extension.
Have you looked at a housing price to go ratio or is that.
as the, um, yeah. The nice thing about lumber is that it's real-time pricing, right? Because you can track it based on the continuous contract futures, housing, as you know, you don't really know the real-time pricing is, but speaking of housing, you know, another sort of metric that would sort of suggest we're maybe entering some bubble like territory, essentially.
Yeah. Is the median home price to income a chart, which basically shows that you're, you're not quite at the levels of the peak from Oh five Oh six, but you're kind of trending in that direction and how these getting unequivocal on affordable. Uh, so I think this is going to be sort of a, an interesting thing where the price rise in lumber, which obviously has happened because of soulmate males being shut down, labor shortages, and, and all this.
At some point it prices out, uh, Construction it prices and housing itself, of course, prices out new buyers. And that may actually result in some, have a higher risk period that everyone should be aware of. You've done a study on the relationship between the gold to lumber ratio and the VIX, the volatility index.
So tell us how these two variables play together. So I always say that, um, again, I mean, I know the exact mile marker. I might crash my car, but I know the conditions they favor the accident, the mile markers, the Vicks. Right. Everybody always tends to react off of the VIX. My, my approach is much more around trying to identify what could cause the VIX or the conditions that favor VIX spike, and historically prior to every single major crash correction bear market, prior to almost every single major Vic spike.
The lumber to gold relationship warrant, meaning lung Blumberg, underperformed gold in advance of those VIX spikes happened a month before the 1987 crash happened middle 1990. Before the bear market there happened 2000, 2001, 2002, 2008, two weeks before Lehman brothers, even 2011, the summer crash, where you had a Eurozone crisis, Draghi says.
Whatever it takes. And guess what? Lumber gold also warn them even with COVID, uh, prior to the enormous Vic spite, the 80 level that we saw last year, lumber to gold warrant. Now it's important to note by the way that just because lumber to gold has tended to get ahead of major VIX spikes. It doesn't mean that every time you see weakness in lumber to gold, you have a Vic spike.
Just because it's raining doesn't mean you'll crash just because it's sunny doesn't mean you won't, this is a game about conditions and probabilities leading to outcome. My, my point here is that the move with which lumber has, has, uh, has occurred the speed with which it's occurred makes it actually more vulnerable for mean reversion, meaning a sell-off in lumber, outperformance in gold, and potentially then another sort of stormy environment, whether or not stocks crash, you don't know until after the fact.
But you know, I do think that investors should be wary that there might be some, some interesting. Uh, juncture is to buy a lower leader down the line. Sorry, just to clarify, you said whenever there's weakness in the lumber to gold ratio, uh, that usually leads a spike in the VIX by weakness. Do you mean when the lumber prices low relative to gold?
Because that's the reverse of what's happening right now. Right? Right, exactly. Right. Right. And so to your point on the reverse, that's why equity markets have been quite strong, right? Everything we've seen actually pretty consistent it's it's when you have a reversal of that performance, meaning lumber is underperforming.
Uh, you know, we should be down more or less against that's where there might be a high risk juncture. So Ashley we're in a very bullish environment right now for, for, for, for the foreseeable future. Is that what you're trying to tell us? Yeah. So, so certainly it's been justified because of the way Lumber's behaved, right?
Everything that's happened so far, this year is consistent with history as far as lumber as a leading indicator of risk. On my point though, is that the move has happened so quickly. And I always used to say on the road, when I was presenting at CFA chapters, that the one thing you can bet on in markets, the one thing you can maybe say as a guarantee is mean inversion and eversion is a concept that's as old as the Bible, right?
He was first shall be last and last first. Is by its very definition, mean version, given the speed with which lumber has moved and especially relative to gold, I think there's going to be a mean reversion moment in lumber prices that could result in a crash in lumber, just sort of, uh, uh, taking out a lot of this froth that's happened in the space.
Uh, and that might be your warning sign for a crash then to follow where some, at least high risk, high volatility period for equities afterwards, with a lag consistent with history. That's very interesting. Let's talk about, uh, the two variables, lumbering, golden, what can move either one of those, and then we'll talk about the timeline for this potential mean reversion that you're talking about.
So lumber, as you know, has skywalk it over the last year, it's gone up more than 220% last I checked since 12 months ago. What was the cause? Where were some of the main causes? Of this price rally. Yeah. I mean, you have some, two dynamics, obviously clearly the, the shutdown and keep my morning talking our lumber, we're talking about, you know, sort of finished lumber, right.
Which is what's sold in home Depot. Right. It's what goes into the houses. So it's really more on the sawmill side, you know, there's plenty of trees out there. It's just a matter of sort of getting it in a form that can be used in construction. So, you know, th the, the fact that you had these shutdown supply disruptions, you had a tariffs with Canada, all this, you can argue sort of created a.
A perfect storm for a lumber to do what it's doing. And of course everyone's staying home, resulted in everybody wanting to do more work on their homes. Um, but again, you know, it it's, I think it's getting to a point where it's getting to be more of a problem. I put a tweet out on at lead lag report, my Twitter account a couple of weeks ago.
And the question was, how many of you were thinking about remodeling your or delaying remodeling of your homes? Because the price of lumber. You know, just kind of holding off. And I got a lot of comms, almost a hundred comments. And if you go through the comments, you'll see somebody saying, uh, you know, I was going to replace my wooden fence and, uh, now I'm not going to.
Or a lot of people seeing their contractors were supposed to do work for them, but they're slow playing them on actually starting work because they're hoping that commodity prices go down. So I do think a lot of this is going to result in some, some kind of slow down. Um, and that could itself also cure price because I think if you have a slow down as, as a supply is ramping up because saw mills are coming back online and more people are getting hired to do that work.
You know, that's another reason for why I think that ratio could collapse. Yeah. And, you know, I've read your work on this. And, and you've written that lumber also is in itself an indicator of economic growth. And so that, that makes perfect sense to me. Last year, we've had a period of recovery since the pandemic and, you know, you've given lumber has risen for all the reasons that you've stayed at.
If, if lumber, the price of lumber were to mean revert what to come down, would that not in itself, be an indicator of a slow down in the yeah. Economy. Um, uh, that's that I'm, I'm, I'm actually, I'm, I'm, I'm asking. I don't have an answer to that. Okay. I've observed a few, uh, indicators for Canada. For example, the unemployment rate just actually went up.
Um, so I don't know. Oh, if you think that the economic growth that people aren't expecting is actually as robust and as strong as it could be. Well, and, and to that point, I've been writing about this quite a bit in the lead lag report itself. So, you know, I'm a big believer in intermarket relationships, right?
How does one part of the marketplace react to others? What's curious to me is that when you'll get 10 year treasury yields, okay. You look at bond yields. They pretty much peaked out mid-March despite commodities lumber, all kinds of other industrial plays, continuing to surge higher. Now commodities are supposed to be form of cost.
Push inflation. I, as commodity prices rise, you would expect yields to rise because it means inflation expectations have to get priced in. Well, the bond market stopped doing that even though commodities are still running higher. So it could very well be that the bond market is now sniffing out. The idea that the speed with which commodities have run higher.
May actually be damaging to the economy may slow down economic growth, which again, makes sense. You know, it's funny. Cause when people talk about commodities, they always think it's automatically inflationary. If prices go up, it depends on the speed with which it happens. If commodities move up gradually, the argument is that that's inflationary because companies start believing that trend is entrenched.
They start passing down those higher commodity prices to consumers. Well, now what happens if the moving commodities is too sharp? What if it's spiky? What if they don't have time to pass down those costs? Well, now it impacts company margins, which means it's actually not inflationary. It's actually deflationary for a moment in time.
Right. And that goes to your point that they could actually suggest if you have this sort of broadened universe in the space led by lumber. They, yes, it probably is going to be more an indication of a, uh, a break in demand. And that should probably mean the economic activity itself is going to be going at a slower pace than what everyone thinks.
It will. Let me ask you the question in a different way. Uh, if lumber were to fall down, if the price of lumber were to come back down and mean revert, what would cause that correction, would it be a slow down in housing and housing stars, economic growth and demand. Or is it just a technical correction from, let's say a, a price supply demand, equilibrium perspective.
It's just going up too much. It has to correct a little bit. What do you think? I think probably a little bit of both. I mean, I think the reality is there are technical aspects to what's happened here. It's funny. If you look at the chart of lumber since 1980, it looks like a black Swan. I mean, it looks like Bitcoin, it's not justified.
Right? So , you're listening. So you go back and you lumber crashes to what the level it should be. That's not necessarily an indicator for stocks to crash. That could be absolutely true. But again, I go back to the bond market. Doesn't quite, uh, is not reacting on the sort of economic growth narrative that's being pushed out there.
And, you know, and I say this from a perspective of somebody who's running an ETF, I'm a portfolio manager of the railroad. Risk-on risk-off ETFE. I track lumber to gold because that's the trigger to go risk on risk off. Um, I'm actually looking forward to lumber collapsing so that the ETF can go risk off into treasuries.
And I hope there is an actual risk off period because. Uh, you know, as I always say, if you want to kill it in the stock market, you have to not get killed. If you can avoid the major clients in love vertical, maybe a warning about that down the line. That's a big thing. Well, if you're, if you're anticipating the lumber price to collapse, would you not go risk off now and in anticipation or is that too soon?
Yeah, no very good point. So when you're doing a rules-based approach, you have to kind of follow it to its logical conclusion, which means you don't try to front run it. So right now, the momentum clearly on the side of Lumberton golden, you know, these things seem to go out longer or go continue longer and further than most think my point is, this is a juncture where, unless you have like a systematic approach like I'm doing with the, the rural ETF, you, you might want to be very careful about taking too much excess risk.
Given that this could reverse it at a moment's notice. Okay. Good, good point. What about the gold side now? It is a ratio after all, there are two variables involved. If lumber were to fall down, um, in spite of, or perhaps despite all the other, uh, economic variables that we've discussed, what would that mean for gold?
What gold S w w w would lower economic activity mean? Gold could go up, hence the ratio would, you know, and Maura, where could gold fall because of a risk offset? Uh, walk us through your rationale here. Yeah. So there's a golden, I think, in a, in a really interesting juncture. So if you think about it, right, you only have really three major risk off assets that benefit from.
Stock market volatility, historically it's treasuries the dollar and then gold meaning gold tends to benefit when you have these kind of draw downs or corrections. Well, if you have a, a collapsing lumber and that precedes some kind of a corrective or collapsed type of juncture and equities, I think a lot of people will be probably aware of treasuries.
I think treasuries would rally meaning yields would fall like they historically do, but, uh, gold probably might even get more attention because people have this sort of inherent, I think bearishness against treasuries as any kind of a trade. Right. So I'm arguing actually the goal could be a, for a moment in time and interesting risk off play.
And I think that you could spark some kind of real momentum in gold. I mean, gold relative to every other commodity has largely lagged and underperformed. There's going to be a mean reversion. I suspect within the commodity space too. Okay, it's interesting. Uh, I, one would suspect that lumber and gold should have an inverse relationship.
Should they? Not yet, if you just look at the price pattern of the two variables over the last year, they clearly moved more or less in the same direction while gold has come off. Since its highs, a lumber has kept going up, but beside that they've, they've more or less moved in the same direction. So right now the ratio has widened because lumber has continued to go up while gold has fallen down.
So the ratio has widened. When do you think this ratio will? Um, well, we'll, we'll, we'll lower down and compress. Can you give us an estimate of the timeline? Has that something, has that been something you considered. Yeah, it's hard to know the exact again or the exact moment you might crash your car. But, so I think that it's so stretched that when you stand, I've seen this many times before, when you have such a relationship, that's the stretched.
It doesn't take much, you know, to, to, to break it. Um, historically speaking, let's say, you know, when. When, uh, uh, the yield curve inverts to a negative territory, it's usually six months before the start of recession. So your indicator, uh, your indicator, historically, whenever the, whenever the, whatever it spikes up and piece of ratio, typically how many months before it comes back down.
Yeah, it was an interesting thing because you've never really had a juncture where you've had a spike like this. So even if there were some sort of flux, but I will say about that, that, you know, historically when lumber is underperforming gold, in the case of the white papers, last 13 weeks ETF, I run railroads a slightly different look back period.
But typically if lumber starts working against gold, it's within two to four weeks, if it's going to be a true signal for the stock market itself to start reacting. Right. And that, so you have some time conceivably of lumber starts breaking. My point is pay attention to it. Okay, perfect. And once this ratio does, uh, compress one's lumber does collapse.
You've got a few more weeks before the equity markets react to the downside. Is that what you're? Is that what you're saying? Okay, perfect. Okay. All right. So we've got some time for, uh, the markets to, uh, to mean revert now, which, which particular markets would be most at risk from this compression of the ratio.
Yeah. I mean, you know, I mean, look, I think there's a few things I would say on Twitter, if you understand this, right? The, um, the, I think there's so much leverage across all risk assets that it's hard to say this we'll get something we'll get hit more than the other. Um, this may sound like a strange concept, but it wouldn't surprise me if, uh, what ends up going down the hardest is the entire cryptocurrency space.
Now, some people are going to laugh when I say that, because like, why am I making the case that if lumber breaks cryptocurrency breaks, it's not that cryptocurrency alone would break. Is that leverage assets would break. Right. Because again, if you have lumber weakness, it would suggest a deflation pulse.
And for the most part what's going on in the cryptocurrency space is just a levered play on equities. I mean, they are ultimately a risk on reflationary type of type of CRE that's happening across the space, not just Bitcoin. So, you know, I suspect that's where you might have some interesting spillover where lumber weakens that suggested there's a liquidity, you know, coming out of the system, you have a deflationary pulse because of that.
Risk assets start responding. Crypto would probably be at the forefront of that. That's not a case against cryptocurrencies. I'm simply arguing that the sequence of returns, it might be more challenging than people think I'm sensing that you think crypto's are slightly overvalued right now that, uh, that somehow their valuations are overstretched.
Uh, please correct me if I'm wrong, but if I'm not please elaborate. Yeah, no, it's what I mean, that, that assumes that anybody knows what the real valuation is. I mean, that's kind of the, the funny thing about cryptocurrency. So look, I've made this point on Twitter, you know, I sympathize and I totally actually understand and recognize the power of, of the space.
You know, the argument is that when you can print an unlimited amount of dollars, uh, you know, it's Ponzi scheme, That's those that people look at, you know, us government debt. That's the argument, right? It's all Ponzi scheme. Well, so you print a limited amount of dollars. It's a Ponzi scheme, but then again, you can make an unlimited number of cryptocurrencies.
Different types. I think there's over 4,000 that are out there. There are things that are going up, which makes zero sense, which are clear Ponzi schemes, even in the way the algorithm algorithms are constructed. So the, the, the entire space has this dilemma where, uh, Bitcoin is the shining star. You have all these alt coins that are getting all kinds of attention, but it creates even more speculative mania, which at some point will again, spill over to other risk assets.
So, um, it, to me, it's fascinating to see how this plays out. I don't know if there's a question of valuation. I think it's. Question of speculation and speculation. That's a good point. I have considered that before, which is that, you know, the bigger coins like Bitcoin, for example, have a market market debt limit in terms of the numbers of number of coins in supply.
But there isn't a limit on the number of coins altcoins could create. Um, this, this is a good counter argument, uh, to that, to that, to that, uh, notion here. Uh, which is that if you compare it, if you compare cryptos to let's say equities, for example, right? There's there's no, there's no limit on the number of start-ups in economy could have, uh, doesn't that the number of startups in itself is not an indication of whether or not the crypto space is overspend or that this equity space is over speculated or overvalued, right?
Because not all these startups succeed. Likewise, not all the altcoins will succeed. Not everybody, not all of them would attract capital. Most of them probably just fizzle out in, you know, die anyway. Um, so real quick on that. Cause that's, that's interesting, interesting thing thinker. So unlike the.com era, right where stocks will come in, they put.com after the name, they go up and then they just disappear because of bankruptcies.
These cryptocurrencies are pieces of code. They don't actually disappear. It's not like a company that can no longer exist, right? Because it goes bankrupt. These doge going, if we're going to go back to its old time, Lowe's would still be something that's traded. Right, which is, I think there's an interesting dynamic also there from that standpoint, which is why it's, it's just fascinating to kind of track.
Well, let me ask you this more broadly. Do you think that Bitcoin is at risk from rising altcoins? Do you think that, uh, that, that the whales, so to speak that the Le the larger holders of Bitcoin who occupy a significant portion of the market cap, do you think they would be dumping their holdings into something like, uh, XRP, polka, dots, whatever, have you.
You know, I remember I was at a conference a long time ago and somebody once said that diversification is a luxury for the rich and the implication of course, is that if you want to get very wealthy, you've got to take concentration conviction, bets. So if you've got these kinds of large old lawyers and Bitcoin, um, you know, maybe they will stay to it because they have such a sort of, you can argue almost religious fervor in what they're buying, but you know, it's like you enter this world without Bitcoin.
You exit the full without Bitcoin. Right. So if you think about it from that standpoint, maybe you sit, you see some, some diversification into other altcoins or things like that, who knows? Right. I, there's no way to know, but I do go back to, I think there are a lot of people in this space that are simply buying these cryptocurrencies, just because they're going up in price.
Not because they really understand what they're buying and they're regurgitating a lot of these tweets in lines that are being said by these, you know, gurus on the street. Uh, you know, listen, you know, at the end of the day, if you have a real correction or crash, you know, we'll see how, how, uh, how many diamond hands there really are.
Look, you're a portfolio manager. Um, have you not considered building some sort of algorithm or a strategy? If you want to call it a strategy? Basically some sort of methodology that basically tracks Elon Musk's tweets or whatever other influential figure you have and just buy whatever he tweets because, um, it's, it's been pretty consistent.
He's been, he's been successful at pushing up doge Bitcoin. Um, I can't remember what else. Uh, but. Uh, uh, so far the track records, I'm pretty good. How would you respond to that? Yeah, yeah. Say it's this like, he's, America's favorite fiduciary and he's not supposed to be a fiduciary. I mean, it's like, and you know, it's different.
Cause you know, I feel for the people that, that are like taking real risks in launching real business in the blockchain space that are focused on Bitcoin because it kind of makes a mockery what's going on with doge coin and, and some of these other areas of, of their life's work. And so even like within the, the kind of cryptocurrency community, you have the, the maximalists who are believing that Bitcoin will eat the world, but then there, there there's equally counter argument within the cryptocurrency of other, you know, BEC Bitcoin has dojo and all these other things.
So, yeah. I mean, listen, look, we're, we're in this influencer driven world and I think we're in a world where people are simply just following, uh, following the leader who has the most social proof. Yeah, Musk as an example, but you're absolutely right. It's he's not the only influencer out there to do this.
They all seem to come out at the same time. Uh, but my question is, is a fund manager, would you not, not even a fund manager, but as an investor would, you're not at least consider just following the herd. Is that a good strategy for people? Because for a lot of people who may not have a lot of money to diversify, like you said, maybe they're not privileged enough to diversify.
That's what they're doing. They're going on Reddit. They're seeing what's hot trending, and they're just following the herd. What's wrong with that? No, listen. Yeah, no, there's nothing wrong with, if you, if you're one of the lucky ones that can get out at the right time, God bless you. My point is, if you don't know when to exit, how do you know when to end, when to enter?
Right. So, so I think that's sort of the view that, you know, look, you can always make money for a moment in time. You know, it's like, we've seen some of these stories with GameStop, with the, the Reddit and everything that happened earlier in the year where people meet a couple of million dollars and then they give it all back.
Right. It's nothing. It's not permanent just because you're making money now. Doesn't mean you make money later because when it breaks, it brings it very quickly. And our bias is to hold because you always want to get back to making the money that you made at the peak. Not, not what it is now. Okay. Fair enough, tying all this together.
Now, final question. How are you positioned given that the lumber ratio is a lever to gold ratio is very high right now. Uh, and given your outlook on the economy and risk position now and potentially down the line, how would you rotate capital? Yeah. So again, the, the, the risk on risk off road ETF is still risk on meaning it's fully equities and, and it should mute it evaluates the trigger every Friday, which means at the end of every week, it potentially could do full on switch.
It's very dynamic from that standpoint. Uh, not very many people can do that. The way that we do this in that ETF, what I will say is that, um, again, I go back to I'm, I'm kind of excited for what's to come look. I have an incentive to want to talk about risk off because. Alpha and outperformance doesn't come from being up more comes from being down less.
It always comes from the tails. Right. So why, so, so few people can the market on the upside because it's not about the upsets, but the downside. So, so I'm simply excited because I do think there are going to be a couple of swings and by the way, maybe it is going to be this tax debate that causes that too.
I mean, you always kind of say to yourself, what's the catalyst, right? For anything to break. Well, you know, if you're going to have increased taxes combined with higher commodity prices, well guess what consumer spending is just about, it's about to get a crushed with that combination. Right. So, so I think there are other things out there that people should just be aware of.
I'm doing it systematically. If you're doing it for yourself, all that means is be wary. Don't get too caught up in the uptrend. And recognize that things can turn on a dime because when you have this much leverage in the system, it doesn't take them any butterflies, flapping their wings to create a hurricane.
Uh, before I let you go, Michael, let's elaborate on the tax impact pact on the equity markets a little more. And also we haven't talked yet about the magnitude of a potential correction should the, a lumber to gold ratio mean revert. So again, if you understand this about taxes, every single round of taxes.
Every single increase in the amount of money that's being paid to the government. It's never used to pay off prior debt. It's used as justification to take on more debt. What I always keep on ranting about on Twitter again at lead lag report is that if you're going to raise taxes, then you should also lower spending at the exact same time.
If you're just going to raise taxes and keep on having a trajectory of the deficit, keep on rising. What's the point. And by the way, just because you're going to tax the very wealthy I made this point before. If you were to take all, or if you were to calculate all the billionaires in the U S and you're going to tax all of them, you can take all their money.
You don't even tax them, just take all their wealth outright. You only fund the government for 11 months. Meanwhile, the real tax that isn't out there, but you know, people see it every day is at the grocery. It's through rising prices of goods. It's through the very inflation we're talking about, uh, which all the spending is going to ultimately create more and more of longer term.
So, uh, you know, it's, it's beyond my understanding how nobody seems to want to address the spending side of the equation. And that again, if debt doesn't matter and I've used this line before, why are we paying taxes? I think at some point, the market's gonna start waking up to that. That'd be another catalyst for that lumber to gold ratio to collapse.
And going back to your point about the magnitude of the correction real quick. There's no way to know. I suspect that just given how far we've come and how aggressive the move has been. It wouldn't surprise me at all to see a 10, 15, 20% easy correction. I don't think you would have, you know, anything near like what we saw last year.
And I'm saying that because it's very clear the federal reserve, you know, is pot committed. Meaning, they're not going to let this thing go down substantially, right. They'll try and put a floor in after a, for a, a decent sized decline because looking at the end of the day, um, they have no choice if they have started buying stocks, just like the bank of Japan as they will.
Michael excellent report as always. Thank you very much for coming on the show. And, uh, let's follow up in a few weeks when maybe things take a turn and, uh, we'll have a different story to tell. I appreciate it. Thank you. Thank you very much. And thank you for watching kiszko news. If you're watching this on YouTube, please, don't forget to subscribe.
I'm David Lynn. .