Bizarro World Podcast,
with Nick and Gerardo
Nov. 29, 2021
Black Friday, the Dow tumbles 900 points for the worst day of the year.
10 year making big moves.
Gold back below 1800.
Oil was down some 13% yesterday.
Omicron, that's what I'm (Gerardo) calling the new variant. An opportunity to buy the dip.
We'll talk about it in this Episode of Bizarro World.
Table of Contents
1:55 Gold Back Below 1800
4:09 Omicron - The New Variant... An Opportunity to Buy the Dip
8:15 Oil Down 13% - Another Opportunity
10:47 Buying the Pullbacks on Cryptos, Oil and More
12:20 Our New Crypto Service with Chris Curl
16:45 Ahmaud Arbery Defendants Found Guilty
27:50 Final Thoughts on Buying Opportunity Right Now
Gerardo Del Real: I am Gerardo Del Real, and this is episode 145 of Bizarro World, live from the field. Mr. Nick Hodge, how are you, sir?
Nick Hodge: I love that you call it the field, Gerardo. I am in a hotel room overlooking the Pacific Ocean and some pools here in Hawaii. I haven't done any site visits to speak of yet, but maybe I'll leave the resort before the week is up. I had to tune in though, because of what you called Black Friday. I knew it was going to quickly get a moniker, and so we'll talk about it. But yes, a buy the dip moment. To answer your question, I'm doing great. How are you doing? How was Thanksgiving?
Gerardo Del Real: I am well. Thanksgiving was phenomenal, great company, great food, great drinks. Everybody's healthy. A lot to be thankful for. So yeah, no, look, firing on all cylinders. Happy that the week went the way that it went. I think it's an interesting end to the week, as far as the markets go, and we'll get into that in just a second. But yeah, no, it was fantastic. I hope everyone out there had an excellent holiday. And to my friends in Canada and elsewhere, I hope that y'all just had a great week in general.
Nick Hodge: Well, they all got their news releases out yesterday afternoon I saw.
Gold Back Below 1800
Gerardo Del Real: Yes, sir. Let's get right into it. Look, I feel like I should be giving gold twenties and singles, because it's being a little tease. Every single time it makes it move higher and I think a breakout might be in the cards, we get the pullback below 1800. Gold closed at 1785 today. The dollar index is still above 96. We had the move to 1850 here earlier in the week. That proved to not be sustainable for now. Gold got as high as 1867. So not prime time for gold yet, but thoughts on the move, Nick? I know it was on pretty good volume. I know the reversal was pretty decisive. Is this kind of the new floor? It's kind of what it looks like to me. These levels seem to be the new floor. Is it all upside from here or do you think we have another breakdown?
Nick Hodge: You're talking about gold specifically.
Gerardo Del Real: Yes, sir.
Nick Hodge: Some of the better names have moved very well. When I woke up this morning and I saw what was happening in the markets, I looked as I always do to see what I could buy on sale, and you couldn't buy some of the quality gold column explorers and developers if you want. I'm thinking specifically of like a Great Bear, for example, which has been going up very nicely. I've been wanting to buy some and I missed my little window there. I thought I was going to have a bit more time.
Nick Hodge: And so is it a new floor? I'm not sure. Is it time for gold to break out? I'm not sure about that either. We saw significant weakness in everything, but you saw a big pullback in the dollar today. The VIX didn't convince me that this is the end of the bull market for stocks. And so I continue to approach gold as I've been approaching gold. Right? Pecking away at the Newmonts (NYSE: NEM) and the Kinrosses (NYSE: KGC), and as I just said, the Great Bears of the world, but not getting much more opportunity even when there's a downside in a lot of other equities and securities and the broader market. And so I think that answers your question.
Omicron - The New Variant... An Opportunity to Buy the Dip
Gerardo Del Real: Absolutely. And I guess a better question is does it matter? I guess the statement to be made is use these pullbacks and use these dips to add in to positions that maybe you feel you missed out on, like your Great Bear example. And I think this week has provided that. We have to talk about this variant. The Dow was down a thousand points at its worst point today, ended up closing down 905 points. The S&P 500 dropped 2%. Coppers back down to 433. And I can't help but just think to myself, we've seen this fear of new variants before and every single time there's a pullback it ends up turning out to be an opportunity, whether it's in the copper names, whether it's in the 10 year treasury, whether it's in the S&P the Dow, the NASDAQ, whatever it may be. So less of a question than a statement. I think this pullback is an absolute gift on all fronts.
Gerardo Del Real: I think there's a good case to be made that the hype, which again, not to minimize the potential seriousness of this new variant that's been detected in South Africa, not to minimize that. That obviously can prove very consequential, but I think we know how this ends. We've seen this play out. And the way I've seen it play out is if there are countries and regions that are going to lock down, and there are, we're already starting to see it, then we know what comes behind that and after that. And what comes after that is [muh 00:05:52] stimulus. Right? So either way, you're either going to close down shop and go give people money that you're going to print, a la counterfeiting, and then the market's going to continue higher, or you're not and we're going to deal with this the way that we've dealt with everything else here the past several months, trying to get a vaccine or something to treat this new variant. So I'd love to get your thoughts on Omicron as I'm calling it.
Nick Hodge: I think you said all of that very well. Look, we didn't even get a changing of Jerome. Right? You got Jerome keeping his job, which is something that you and I talked about in recent episodes. So, you know you're going to get more of the same on that front. If this guy is the, whatever, the hawkish guy, or the guy that's going to reign it in, I don't really see that happening. So you sort of know what you're going to get with Mr. Powell. The variants, I would say, exactly the same. We were due for a new variant. You can sort of chart that stuff now. This has been going on for almost two years. We're heading into December here, which is when the first cases showed up in the US two years ago. And you can sort of see the waves of the variants come.
Nick Hodge: And to your point, you can reflect on how the markets acted every time there was a new wave and a spike in cases detected. And so, last week I was saying there was a very real spike in cases. And that was real before we knew that there was a variant or a new variant, I should say. And so, no, look, I think that some of the travel-related names sold off harder than others, but when I looked around today, I didn't see a lot of carnage elsewhere. I didn't, I don't know, see a lot of deep, deep value. And again, I didn't see a lot of fear in the VIX. And so I think you use this as an opportunity, just like you were saying, to continue to get position, to build positions, to reposition. And I guess I'd mentioned oil as well, right? Because you had, I don't even know what day it is Gerardo, but a couple days ago...
Oil Down 13% - Another Opportunity
Gerardo Del Real: It was down 13% today, right? That seemed like an opportunity.
Nick Hodge: Right. But I guess what I was going to say is it didn't go down when they were going to release oil from the strategic reserve, right? So you had deliberate policy actions saying, "Look, we're going to put more oil in the market..." If markets are driven by supply and demand and you say, "Look, we're going to put more supply on," and then the price didn't go to out that sort of tells you that this is inflation driven and the fundamentals are sort of out the window. And so I don't think this variance is going to grind travel to a halt. And so in that respect I think oil continues higher and I'm just using that as one asset class to look at. You literally can't manipulate it lower. It's trading on the machinations of a market.
Gerardo Del Real: Well said, well said. And again, a heck of a buying opportunity, if that is the way it plays out. Down 13% today. Yeah. It's going to be interesting. Look, the UK has temporarily suspended flights from six African countries due to the variant, right? Israel has barred travel to several countries after one case. Two cases have been identified in Hong Kong, and Belgium also has confirmed a case. Here at home, the US has restricted travel from South Africa and seven other or countries. So clearly the powers that be for whatever reason, and we know there's always a power grab to be had, right? Are using this as an opportunity to further whatever their agenda, they were already predisposed to further, right? They're using this potentially are more contagious variant as that excuse.
Gerardo Del Real: But again, just kind of game theorizing this and looking forward, we know the end game. We know what the response is going to be. So either there is more stimulus and this becomes the excuse to not taper as quickly or not raise rates as quickly, or this will pass. And so either way, I find that extremely bullish for oil, extremely bullish for copper, extremely bullish for the major US indices. A lot to like out there. Now is a great time if you keep a nice tidy little cash position on the side. These are the days as Keith McCullough from Hedgeye would say. These weren't the days to not do anything, right?
Buying the Pullbacks on Cryptos, Oil and More
Nick Hodge: Yeah. I mean, I was in there buying this morning. I was tweeting about it, bought some oil stocks, bought some weed stocks, bought a little bit of crypto stuff. And so we haven't mentioned crypto yet, but significant buying opportunity there. And yeah look, either we're all going to die a COVID or we're going to get a new jab for it, right? We're going to get a new... The word's escaping me, Gerardo. I've been on vacation too long, but you're going to get a new supplemental jab for whatever variant it is, which is sort of what I said when I first got the vaccine, right? We were saying that every six months people were going to have to get a somewhat-
Gerardo Del Real: Booster, yeah. Mm-hmm (affirmative).
Nick Hodge: A booster, yeah. And I was saying, "Well, you might want to wait until there's a really nasty variant because they'll make a booster for that variant." And so I don't want to sound blase about it, of course it's serious, loss of life, et cetera. But at the same time, I don't think this is going to be what roils markets, I don't think it's going to be the variant that does us in, and I think that we've got a lot of education and time under our belts now, as far as how to deal with these things. And so I don't want to belabor we're the point, but yeah, opportunity out there in the markets, for sure.
Our New Crypto Service with Chris Curl
Gerardo Del Real: Agreed. And as usual, we're going to put our money where our mouth is. I love the pullback in cryptos, right? I specifically didn't mention it because I wanted to touch on it here separately. Bitcoin's down to 54, Ethereum's down to $4,000. Chris Curl who was a guest a couple of weeks ago, he's about to launch his service here at the end of the month that is crypto-focused. And you and I are handing over $50,000 putting it into an account and letting him do what he does best, right? And so, again, for those of you out there, this isn't a theory for us. This isn't something that we look at and just write about. We are in the markets. We put our money where our mouths are.
Gerardo Del Real: We vote with our dollar. And so in this case, I'm hoping that Mr. Curl is able to duplicate even half of the spectacular gains he's been able to provide for himself. Again, this is a gentleman that made 75 times his money in a very, very short period of time. So let's see where that goes. It'll be transparent as everything is, you'll be able to follow what he's purchasing. I hope all of you have the opportunity to subscribe to that service. I think is going to be educational, and I think it's going to be extremely profitable. This pullback is a thing of beauty. The timing could not be better.
Nick Hodge: I was going to say, I think the timing is going to turn out to be very fortunate and very serendipitous. We don't control that of course, but we're itching to get started any day. And so, as you said, we're putting our money where our mouth is. All the paperwork is in to get these accounts open with these exchanges, Coinbase and Kraken. And as you well know, we've had to, resubmit a couple of things, whatever it is, you dot our Is and cross our Ts. And, Chris has been asking me, he was texting me today, "Are these accounts open yet?"
Nick Hodge: Because he's ready to get started. He's obviously bullish on cryptos, thinks that $53,000 on Bitcoin is a heck of an entry point and was talking to me about other alt coins and even some... I'm just going to read his quotes verbatim so you guys get a sense of what he's talking about. But even he's talking about some alt coins that are solid DeFi projects that are on a heavy discount right now. And he's even talking about deploying a little bit of money into decentralized finance projects that are involved in NFTs. And so he was sending me pictures, I'm sure you've seen the monkeys or the apes or whatever by now.
Gerardo Del Real: Mm-hmm (affirmative).
Nick Hodge: And of course, we talked about the rocks a little bit ago, but these are sort of like... What would I say? They're Darth Vader looking things with different color helmets and horns and things. And so space bounty hunter, NFTs they're called. And so he's talking about all the different things that you can buy while they're on sale. And of course we're just waiting for those accounts to get started. And yeah, again, it's funny, it's a bit humorous, but again, that plays into part of it, right? Because I guess we'll mention ELONSBALLS again for the third week in a row, but...
Gerardo Del Real: ELONSBALLS are hot on the street right now.
Nick Hodge: That's it, that's it. They're like "shweaty balls" back in the day. Can't get enough of them. And so yeah, we're ready for these accounts to get started and hopefully this whatever, black Friday, Thanksgiving, off week or whatever it turns out to be, the buying opportunity. We think it is. Because again, we're still looking for six-digit Bitcoin prices in 2022. And that means at least a hundred $100,000, so ready to get started for sure.
Gerardo Del Real: I got to say I am not a fan of the Darth Vader fucking avatars because all the pretty crypto babes have now changed their profile pictures to these stupid fucking monkey masks. I miss you pretty crypto babes. Change it back. I hope that's a passing fad.
Nick Hodge: You need to come up with the crypto babe NFT, Gerardo.
Ahmaud Arbery Defendants Found Guilty
Gerardo Del Real: I have to ask Chris how to make that work. Let's switch gears a little bit. Last week we talked about Kyle Rittenhouse and the not guilty verdict. We got into that pretty in depth. I don't want to do a deep dive into the big case this week, but I do want to touch on it here just a bit. Of course, I'm talking about Mr. Ahmaud Arbery, who was lynched, let's just be absolutely clear. This was a modern day lynching with a shotgun. And so for those of you that aren't familiar with the case, there was a black man jogging in a neighborhood and three white men chased him. And, in their words, "Trapped him like a rat, yelled stop or I'll blow your fucking head off."
Gerardo Del Real: And the video for those of you that haven't watched it, it's widely available. I won't put a link up to it because it's always disheartening obviously to see a human being lose their life in such a heinous way, with such callous and malice. But for those of you that want to see just what that was and what that looked like, these three men jumped in a truck and followed this man, and just blew him up.
Gerardo Del Real: They caught up to him. They all three, I can't even describe it because it's so, it's just ugly, it's nasty. You can read the article, I'll put the link up. All three of the people in that video were found guilty. When these three men spoke to police, they were very honest about that the guy, these are their words, "I don't think the guy has actually stolen anything out of there, or if he did, it was early in the process, but he keeps going back over and over again to this damn house," is what they said. This gentleman lived in this area. This gentleman wasn't doing anything wrong. This gentleman hadn't committed a crime. This gentleman did absolutely nothing wrong, but go for a jog. I'm glad they were found guilty. All three of them were found guilty of murder.
Gerardo Del Real: I want to highlight the fact that despite there being video of this, despite there being overwhelming evidence that this was a lynching via shotgun, they weren't initially charged. It's beyond me how in 2021, three men can chase down a human being, kill him, tell police they didn't think he was doing anything wrong, they just didn't like that he was in the neighborhood, admit to killing him, release the video of them killing him in the way that they did, and how a prosecutor could take all of that and not charge these gentlemen, these assholes. I shouldn't call them gentlemen, these assholes, for as long as they weren't charged is appalling to me, is appalling to me.
Gerardo Del Real: I'm glad they were found guilty. I'd love your take briefly here, Nick, on that. I know that you got sugary drinks to get back to and palm trees and beaches, so I know I don't want to belabor the point too long, but yeah, glad they were found guilty. Very, very, very disheartening that it took the kind of outrage that these people weren't charged in the first place to get even a charge to even get it to the court. And good on the jury for seeing through it, right?
Nick Hodge: You hit all the key points. It's obviously important to talk about. And so, especially coming off the Kyle Rittenhouse last week, and so you obviously have to talk about it through those glasses or through that frame of reference. So I'll just talk off the cuff because you and I are familiar with this case. We talk about it when it first happened, that's often the curse of the podcast and the newsletter writer where we're familiar with this stuff and we've talk about it, and then when it actually makes its way to the news where we don't want to talk about it, because we've been there and done that. And so anyway, it's obviously deserving to be talked about. So the first things I thought were the justice system still works to at least some extent, once there's finally enough pressure applied.
Nick Hodge: We talked about how the verdict in the Rittenhouse jury is, twisted as that whole story in saga was, how he got the gun, the traveling across state lines, that he still had a right to defend himself, and that's likely how the jury was going to conclude. And they did. In this case clearly Mr. Arbery was chased down and gunned down and murdered. And that's how the jury saw it as well. So although you don't want to have to see it, I was glad to see it come out that way. I would echo your sentiments, not only in the three months that it took once the video was out there to get some charges, but also in the language, the initial, let's call them, whatever, a public prosecutor or whatever, the language he used when dismissing it.
Nick Hodge: I don't have it in front of me, and excuse me for not preparing, but I'm pretty sure he referred to him, Mr. Arbery, as a criminal and if not, a suspect. And so he was saying that the three guys acted within their rights to pursue him and that's why he wasn't pursuing criminal charges against them originally. And so that's the bias or racism, or just call it inertia of the current system, right? The white privilege, if you want to take it that far. And so the next thing I thought was I was imagining if Mr. Rittenhouse were black. And I think we might have mentioned this in the podcast last week.
Gerardo Del Real: They would've lit his ass up.
Nick Hodge: Exactly right. Do you think he would've been treated the same way? And so obviously there's still a lot of way to go. I think a lot of people have said that this week. But the jury got this one right. And again, you said it well, so for three guys to have the audacity to do that, to think that it was in their sphere of whatever, rights or their sphere of Liberty to pursue this guy and kill him is a testament to how much work there still is to be done. And so, like you say, I'm not sure what else to add except to say you got a video of this out there on the Internet and it takes three months to get something done about it. So think about that.
Gerardo Del Real: Yeah. Let me add this too, because I think this point is important and it's one that I actually want ...
Gerardo Del Real: Add this too, because I think this point is important and it's one that I actually wanted to start with. I don't think it's a coincidence that the district attorney that failed to pursue charges, Jackie Johnson, actually used to employ one of the killers, right? And so Gregory McMichael who's 64 years old was a Glynn County Police Department officer from '82 to '89, and he was also an investigator for the Brunswick Judicial Circuit DA's office. And so, the other guy, Travis McMichael, his son was a former US Coast Guard mechanic between 2007 and 2016, also with law enforcement training. And the third guy, William Bryan who is 50 years old was a neighbor of the father and son. I'm glad that District Attorney Jackie Johnson was indicted for showing favor and affection is what the indictment was during the investigation and also for obstructing law enforcement by directing that Travis McMichael not be arrested.
Gerardo Del Real: Think about that. Think about being a black man, a black person, a disenfranchised person, low income white, whatever it is, someone that doesn't have the pool in America, that doesn't have the network to be able to get just fair treatment. Think about just going out for a jog and having to worry that this can happen and then think about having to worry not only that this can happen, but that even if it's videoed, even if it's- These guys recorded this thing on the fucking cell phone and turned it over thinking it would give them a pass, right? For that to not be enough for an indictment, I'm glad the feds got involved. I'm glad the district attorney was charged. But again, the favoritism within the law enforcement community to protect their own, if this doesn't highlight that, then I don't know what will and it has to change.
Gerardo Del Real: And we always talk about the institution that allows for something like this to occur, not just the murder, the lack of charges after the murder. And if it wasn't for video, again, 30 years ago, this would've just been another black kid shot in the middle of the street and nothing would've happened. There would've been no case. There wouldn't have been outrage. There would've been nothing to be outraged about. And it would've just been some sleepy little town in Georgia where everybody knows what it is, nobody really talks about it. But you'd have one dead black kid that essentially got lynched with a shotgun, right? So yeah, glad the jury got it right. I hope that Brunswick District Attorney Jackie Johnson has everything that that district attorney deserves coming and I'll leave that there.
Nick Hodge: And probably worth pointing out the Trayvon Martin and George Zimmerman case as well because it's similar sentiments, right? And that was 10 years ago or at least nine years ago and so, where Mr. Zimmerman pursued that boy that was just walking through the neighborhood and the boy fought back because he was being attacked.
Gerardo Del Real: By a grown man.
Nick Hodge: By someone who followed him through the neighborhood and then he lost his life for that. And so, Mr. Arbery fought back as well. It was documented in this case that he had control of the shotgun and they shot him because they did fear for their lives once he retaliated, which of course he was well within his right to do because he was being pursued and in fear for his life. And I just wonder how that's different from Trayvon Martin and the answer is it's not.
Final Thoughts on Buying Opportunity Right Now
Gerardo Del Real: Exactly, exactly. Yeah, yeah. Good on the jury for getting this one correct. Mr. Hodge, you got a beach to get back to. Carnage in the markets today. There were a lot of things that sold off. You were buying, obviously, I will be looking on Monday for bargains. I will highlight before we leave the uranium stocks have seen a nice little pullback here in the last week or two. Again, we've talked about how these cycles tend to work in these markets. You get big moves higher, then you get 20, 30, 40% pullbacks before new moves higher, so you can bet your behind off that I will be adding to the better uranium names, both personally and in the portfolio for the trading service and for Junior Resource Monthly. Anything else to add to that, Mr. Hodge?
Nick Hodge: No, I did the same. I neglected to say I bought some Denison (NYSE: DNN) as well this morning and we'll see next week. This was an irrational, holiday-driven week and so people will be at their desks next week looking to wrap up for the year, positioned for the new year ahead and I believe will have a different attitude than you saw in the markets on the day after Thanksgiving. And all my trips will be behind me, and you already mentioned the crypto service, but we got some commodity supercycle stuff to put out here at the end of the year as well and I'm just excited to get back to it. I think that markets and timing are in our favor on multiple fronts and looking forward to getting to the end of the year with the holiday and start a brand new one here. So we'll you see again in a couple of days.
Gerardo Del Real: It's going to be a phenomenal end of the year and my God is 2022 going to be a blast. I am Gerardo Del Real along with Mr. Nick Hodge. This was episode 145 of Bizzaro World. You guys take care out there. Be safe.
Nick Hodge: Mahalo.
This transcript is unedited. Please excuse grammatical errors and run-on sentences.