Navigating the November Surge: Tim Urbanowicz Unveils Market Insights & Innovations | Buy Hold Sell

[00:00:00] The S&P 500 is up over 10% in the month of November.

[00:00:09] But if you were one of the sad sacks that stayed on the sidelines, well,

[00:00:12] basically the solution for you to get you back into the market and help you prepare for 2024.

[00:00:19] Welcome everyone to Buy Hold So.

[00:00:20] I am your trader Todd Schoenberger and I am joined by my friend and co-host,

[00:00:24] Tobin Smith out in sunny and warm Scottsdale, Arizona. just really evaluate where we are at in this cycle. We are at a point now where we believe you've seen the last hike. I think that is the consensus that the market is coming around to, that that hike cycle is over. And if that continues to be the case, like we think it is, that's a very good time to be inequities.

[00:01:40] If you look at the last eight hike cycles,

[00:01:43] at the point where we done that, no, I know what happens. I tell Todd all the time. I go back and I save those daily highs versus lows. And when we had six new highs on October 23rd, I think, 655 new lows. That pretty much the other hand, the people have just completely missed the whole idea of why the American economy is so strong at the consumer level. And the number I got out yesterday, Todd, was 42% of single-fandom homes in the United States are owned for cash. If you set number before, because if you live in California,

[00:04:23] Arizona, New York, Connecticut if that doesn't tell you that consumers

[00:05:41] are still strong and they don't have some gas left in the tank, I don't know what else

[00:05:45] will tell you that that's the case. And God bless them because they scared the hell of a lot of people out of games. They're sitting on a lot of cash. And then finally, the FOMO at some point comes in and maybe they'll go into some of your funds which we'll talk about because I'm looking at the name the Buff Ladderd Allocation Power Buffer ETF.

[00:07:00] You got to work on that name, son.

[00:07:03] The...

[00:07:04] Without the hashtag.

[00:07:05] Yeah.

[00:07:06] The Power Buffer Step Up Strategy. They made it a little bit bigger. They're not going to want to make it again next year. So the transition to get there is going to take a little bit longer. And I think valuations are going to need to adjust to reflect that. So we do see valuations coming down slightly from where they're at now. That said, we do still think earnings can grow in the environment. And again, it's going to be an environment of slow growth, but not negative growth, like

[00:08:23] so many anticipates.

[00:08:24] And when you say coming down, are you necessarily negative growth. But there is, I think there's a lot of implications that we need to be paying attention to. I look out there and you see the consensus bottom up saying, you know, 10 to 12% earnings

[00:09:40] growth next year.

[00:09:41] We don't see that as necessarily realistic for the environment that we're in.

[00:09:45] You have to look at this from a couple of reasons.

[00:09:47] You look at margins.

[00:09:48] Right? already has 200,000 plus in household income plus has a million bucks in a 401k and you know Other things they're spending is not going away and at the margin if you remember back to your master's degree in finance It's the marginal buyer that sets the price and right now the marginal buyer in the consumer economy

[00:11:02] 76 percent of our GDP is doing great

[00:11:07] So what that means when Todd always shakes his head when I say this and from a pure mathematical standpoint Yes or no is not a question. And you know if every ACH payment from your whatever comes in and it's you know 15 grand 25 grand 30 grand it doesn't change your spending now if you've got three wives that's a whole not a story XY but. And I certainly a friend's in that camp. And then you take the 30 grand you divided by three so that's a different story but thankfully that's not the dominant part not anywhere near that situation. So. OK. Yeah, I'm with you there. OK. Well, let's leave it there on this block, guys, because coming up after the break, we're going to ask Tim his thoughts on small caps. I think he'll be shocked to hear his his. Oh, that may be interesting, you. But I'm going to ask him about buff ladder allocation,

[00:13:40] power buff BTS.

[00:13:42] And we will find outcome ETS.

[00:13:44] If you don't mind.

[00:13:45] Yes, Toby, we will our podcasts will be tremendous. As a token of our appreciation, we'll randomly select one lucky participant each month to win an exclusive merchandise package from Evergreen Podcasts. Head to Evergreenpodcast.com slash listener survey to help a show and

[00:15:03] possibly get some free stuff for doing so. We can't thank you enough for the support,

[00:15:07] now back to roar higher. But with this today, we have never fanned a win. Tim, I gotta go to you because on this one, because what you gave in your nose, you which really kind of surprised me, was your optimistic view of the small cap sector. And you're really trying to tell investors to start increasing that position for small caps.

[00:16:22] What's your take on it?

[00:16:23] Yeah, I think, Ty, what it really comes down to

[00:16:25] is the risks that are and are not being priced

[00:16:27] into the market right now.

[00:17:42] They haven't participated in the rally and it's gotten beat up, so it's someone want to pay a higher value or a higher price earnings ratio. And the final, they have the answer. Yeah. Well, if interest rates come down and the Fed starts cutting, then those, the present value of those future earnings is going to be worth more and they do grow faster in theory than the S&P. But don't you have to say that interest rates going to be cut before you're going to get a catalyst to get those small caps up in value?

[00:19:01] Well, I think the, the, the thought process here is you may not have time to

[00:19:04] do that once that's the case.

[00:19:06] So that's why you want to just because of the valuations. Yeah. This is, this is, this is stupid ridiculous not to be in, but I have to warn you that because they're small caps, if the Fed doesn't cut these rates, there's a lot of risk. So what if I could put you in the small caps for a year? And even if they went down 15%, you'd still be in zero. And I would then ask the person, are you doing something illegal?

[00:20:21] So how do you do that, Mr. Matt?

[00:20:23] It's a it stops. And then every layer that we've bought so far has a cost to it. So in order to finance everything we've just paid for, what we simply do is we go out and we trade away our upside. So that we go sell a call.

[00:21:40] Option, call option.

[00:21:41] Yeah, so call option at the exact level necessary

[00:21:44] to offset the cost of the options package

[00:21:46] that we just purchased purchased. We're buying those same exact... Oh, okay. You're buying the same because time's certain. So even if those had gone up in value or down in value, you're still buying them? Exactly. And it doesn't change the outcome for the investor who bought it. What does change is the investor who buys it right now. And what's cool about these strategies

[00:23:02] is that no matter if you buy day one or day three hundred, you can always go in with a We don't have a really big market for that right now. There hasn't been a lot of demand for it. Not to see what's happened in the future. I mean, there's a lot of ETFs, especially you look at the big boys like Qs, spy. I mean, there's robust options markets. There's not any strategies right now. But if there's demand and not to say it couldn't develop. Well, I'm moving my newsletter so much bigger publisher and I'll have about 20,000 people that are going to learn about your trip.

[00:24:23] There you go. What I love about it is to have to make that call

[00:25:42] at the right time is nearly impossible.

[00:25:43] Because not only do you have to know when to get out,

[00:25:46] even if you nail that call,

[00:25:47] you also have to figure out when do I get that? quite yet. But the one on the July series is about 16.6%. So somewhere in that range, there are a couple of factors that impact it. But that'll be a really good one to keep an eye on. I think it's really important, timely for whatever. What's the ticker on that one? That one will be AJAN. Okay, the AJAN. Well, just in discovering your company and seeing these,

[00:27:02] you've just given me a new allocation. But I do that now by buying put options on the leveraged underlying stocks, right? So I can create my own, you know, no downside for 2024 with like Tesla with a 55% annualized dividend.&P 500. We're not generating high yield income, but you have a 30% barrier against losses on the S&P. So you look at that. So an example like one is the April series, the APRJ. That is 30% barrier against losses, April to April.

[00:29:42] And then you're getting upside exposure,

[00:29:45] but you're getting an income rate of roughly,

[00:29:48] I think about 7%. Also, I have a description about it for the audience as well. I want to switch topics real quick on the breaking news that came out with the passing of Charlie Munger. He was the vice chairman for Berkshire Hathaway, passed away this morning peacefully in a California hospital. Toby, I know you have some thoughts.

[00:31:00] You have a story that you could share with the audience about Mr. Munger.

[00:31:04] Charlie Munger, first up, for some reason, you know, the mungare snowball effect. And I try to teach as many people that, and the next book I'm doing, are we gonna be doing an homage to Charlie on this? I'd love to also work with you on a snowball effect ETF where it was a, the reinvest, the dividend, you know, you didn't have to go to a restaurant investment advisor

[00:32:21] and pay them 2%.

[00:32:22] He contributed that idea,

[00:32:24] and that one idea over the last 55 years definitely is exceptionally valuable for any compound you time value money. There you go, there you go. Well we're gonna leave it there guys. So on behalf of Tim Urbana-Wits, you can go to innovatoretf.com for all of Tim's, the commentary as well as I'll take a look at the products that they're offering at Innovative. You definitely will be well, it will be well deserved for your portfolio to take a look

[00:33:43] at that's for sure.

[00:33:44] So but with Tim we want to thank you for joining us today on By Hold So.