| Gerardo Del Real: It's been an interesting week. I'm buying more stock. You and I had a conversation off air and, yeah, definitely not looking to sell on this pullback. That's most people's natural inclination.
There's a lot going on. Let's get right to it.
Let's start with the markets. Gold closed below $1,700 at $1,699 — just to mess with the gold bugs. Silver closed the week at $25.16. Copper closed right at that $4.00 per pound mark. Bitcoin is at $48,000 as we speak.
I would love to hear your thoughts on the markets this week, Mr. Hodge. I know that you and I are both pretty tuned in to the one indicator that let us know that the selloff from Thursday probably wouldn't continue, which is exactly what happened.
You want to talk about what that indicator is?
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| Nick Hodge: I think you're going to talk about the VIX. We talked about last week, too, right? We had talked about it being “episodic and not trending.” And you said that that meant it was noise.
And the noise got a lot louder this week. The point sheds on the Dow got a lot bigger, but that's going to happen when the Dow's up around 30,000 points. It has more points to shed like I have more pounds to shed.
So those point numbers can get bigger, but nonetheless, the volatility index (VIX) was saying that it wasn't going to last and this isn't what, in earthquake parlance, we would call “the big one.”
While, yes, we're in a bubble... and, yes, things are overvalued... and, yes, non-fungible tokens (NFTs) are stupid. and I don't know whether Bitcoin's worth $50,000. I'm not the one in charge of that. And I don't make the rules. I'm just telling you what's going on.
And stocks are back up.
Concerning you could go a little bit lower still. I think to the $1,660s or something and still be totally fine. I know we keep saying that, but you've got sort of a lot of support right here where, where it's at now.
And if you pull back a chart to a year, new highs came after that.
I’m still watching rates of course to see when gold might turn around.
You’ve got a new stimulus on the way...
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Gerardo Del Real: Mmmmmmm... stimulus.
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| Nick Hodge: Right. Exactly. A little back of the taint.
And then they're going to build a bridge — speaking of taints — to all sorts of new infrastructure, which is already being discussed.
We're already looking beyond stimulus to the infrastructure bill now officially. You and I have talked about that for a while... how it was going to be “relief” and then “stimulus” and then “infrastructure”. Now that's here.
Still nothing major broken in the markets, is what I would say, as far as the trends that everything was already in.
I think that this inflation narrative is starting to gain traction. It's sort of old hat to us, right? We've been pointing to lumber prices and copper prices and lithium prices.
And they’re starting to see it materialize in rates.
And furthermore, I think the fear was that it could have some demand backing now. Before it was sort of like we were in this economic stagnation with the virus and people not working and economic indicators depressed...
...Now, with resorts opening back up and people traveling again, I was reading that more people are getting bikini waxes. Isn't that funny? More people getting bikini wax to get ready to show their summer bodies...
Inflation could have some demand behind it, right? Where not only are all these dollars out there chasing the goods, but now there are actually some good economics driving it.
So anyway, that's what scared the market, I think.
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Nick Hodge is the co-owner and publisher of Daily Profit Cycle and Resource Stock Digest. He's also the founder of Hodge Family Office, the umbrella organization for his three premium services: Hodge Family Office, Family Office Advantage, and Foundational Profits. He specializes in private placements and speculations in early stage ventures, and has raised tens of millions of dollars of investment capital for resource, energy, cannabis, and medical technology companies. Co-author of two best-selling investment books, including Energy Investing for Dummies, his insights have been shared on news programs and in magazines and newspapers around the world.
*Follow Nick on Twitter.
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