Gold & Crypto & Lithium - Bizarro World 196

Gerardo Del Real: I am mining investor and editor of Resource Stock Digest, Gerardo Del Real, here with my partner Nick Hodge, who's also an investor and publisher of Daily Profit Cycle. This is our weekly therapy session number 196, investing in Bizarro World —  where we talk about the markets. We'll talk about what we're investing in. We'll talk about what we're watching this week, and of course, we're going to talk about all the crazy stuff that's going on all around us.

1:17 Fed Still Hiking
4:33 An Update on Recession, Yields, and Gold
12:34 Crypto Investment Update
16:02 SBF & FTX Used Pay-for-Play Sytem to Buy Leniency
25:40 Kanye Likes Hitler

28:50 Idaho College Murder & Colorado Mass Shooting
34:19 Dispelling Battery and Lithium Marketing Myths

What's going on around us this week, Nick? It's a lot. Jerome has spoken. We'll talk about gold maybe bottoming, silver maybe bottoming, copper maybe bottoming. Trump, Kanye and Nick Fuentes walking into a bar. But before we get into all of that, how are you doing Mr. Nick Hodge?

Nick Hodge: I'm doing wonderful. Fresh off of the Thanksgiving break, which I told you I enjoyed and looking to get into the end of the year here. Excited about Christmas and doing some more traveling and the company Christmas party that we have coming up. So busy, busy as we get into the end of the year.

Gerardo Del Real: Busy, busy is right. I'm also well. Thanksgiving was fantastic. I hope everybody had a good Thanksgiving, a good holiday, a good end to their November.

Fed Still Hiking

Let's jump right into it. Look, there's a lot going on this week, some of it that's funny, not funny, like the Kanye-Trump-Nick Fuentes stuff. Some of it that I think is very symbolic of the time we live in, with this whole crypto scandal and the gentleman at the head of this scam getting rounds of applause from the media for not being in prison, I guess. We'll get into that a little bit. He did an interview that I guess was well received by the media. I can't imagine why.

But let's get into the markets. It was a really, really interesting week. Jerome has spoken once again, and despite what Jerome said, which if you read the text of it, would lead you to believe that we are still in a hawkish environment where fighting inflation is clearly the hill that the Fed wants to die on, right? It's not cutting rates anytime soon. But there was a part in that speech where he mentioned possibly slowing down the pace of the rate hikes, so maybe 50 basis points in December as opposed to the 75 that was kind of programmed in. The markets rallied, gold rallied, silver rallied, copper rallied — everything pretty much rallied. Even crypto caught a bounce.

But before we get into that, thoughts on Powell's statement, and then let's talk about the dollar.

Nick Hodge: I honestly couldn't tell you what he said because they're going to continue to hike and that's what I know to be true. So whether it's 50 or 75 basis points as I've been saying for months, it's still a hiking, hawkish environment. 50 points as opposed to 75 is not a pivot. It's still higher rates.

Inflation is still sticky high. GDP is going to be low. You're in a recession. You're in the middle of another bounce. We've seen two or three of them now. And the market's going to realize that definitely in January when the next round of earnings start rolling in, and they're even worse than they were last quarter, which sent stocks, specifically the Nasdaq, to the lowest it's been in a year, which was only a couple of weeks ago. People start to forget.

So yeah, I don't know what Powell said, but what I do know is that they're going to continue to hike rates because like you said, they got to battle this inflation.

And what's interesting to me is the metals, which I'm sure we'll get into, but I think that has to do more with, and I've explained this as well, just it's a time function. You're getting deeper into that economic contraction. You're getting deeper into that hiking cycle. And so by definition, you're getting close to exiting it. Not close, but closer. Every day that passes, you get closer to end of the recession.

And so I think we're starting to see late stage recession things happening, specifically gold going up, but we can talk about that more. As far as the Fed, they got to hike, man. I mean, you're going to see inflation stay 5%, 6%, 7% for quarters to come. And so with relatively full employment, two more hikes ahead before they stop. And even stopping hiking is not a pivot, it's just stopping hiking.

An Update on Recession, Yields, and Gold

Gerardo Del Real: We've seen ... Look, for the first time in a very long time, I've seen FedEx (NYSE: FDX) and (NYSE: UPS) not hire workers, actually laying some off. We've seen layoffs throughout the space, whether it's Amazon (NASDAQ: AMZN), whether it's Apple (NASDAQ: AAPL), whether it's Meta (NASDAQ: META). That's going to have an impact come Q1 of 2023 for earnings. It's not going to be pretty. They're not laying people off because things are rosy and there's unicorns and butterflies behind the curtain.

How does that play out? You mentioned something that's really interesting to me. You talked about the cyclicality of things and we often talk about that on this podcast about Fourth Turnings, not just social ones or political ones, but economic ones. Where we are in the cycle is important. Why, Nick?

Nick Hodge: Well, for lots of reasons. One, the market looks forward. Two, it takes time to work through these cycles. I've shown a chart a couple times about how recessions start with orders declining and then housing prices going down and then profits going down, and then ultimately employment going down or unemployment going up. And those cycles take 12 to 24 months.

As we start to work through this, we're seeing different parts of the economy and the market being affected. People just have less money. Even the haves have less money because the wealth effect has been dissipating. Whether that's the money from the paycheck protection checks being spent, or the fact that housing prices are now falling faster than they did ever in the 2008 housing crisis.

Those things affect the market. And like I said, the market starts to look ahead. So I'm not sure what specific answer you were looking for there, but what I see is the yield curve remains inverted, the 2s and the 10s. What's interesting, what I was writing about this week, is that earlier this year when it first started to invert in late March and April, the first time we got a little sniff of an inverted yield curve and a recession coming, it was because the two-year was going up so fast. That's because we were beginning to have a Fed hiking cycle. They hike the short end of the curve. 

Now seven, eight months later,, we're starting to see that the yield curve is inverted the most it's been in 35 or 40 years. But now it's inverted, not because the US two-year is going up so fast, but because the 10-year is falling off and the two-year has held up.

And so what I see when the 10-year falls off like that, it's pricing in almost economic reality. It's pricing in this recession metastasizing. And that means you're getting closer to it. You're getting closer to this economic reality that we've been saying was coming. 

But the other thing that allows for is the metals to rise, the precious metals.

Gerardo Del Real: There you go. That's the answer I wanted.

Nick Hodge: You know, gold’s a “pet rock” that doesn't yield anything. Well, that doesn't mean as much when the 10-year yields are falling because investors look on a long term basis. At least they say, "Oh, well, I'm getting less yield on the 10-year. It makes gold look more attractive, relatively."

And then the last thing that's changed in the past couple of weeks is the correlation of gold to the dollar. So it was basically inverse one-to-one for the past 12 months. Dollar went up, gold went down. The exact opposite, like I say, one to one inverse correlation.

Now that correlation has softened a little bit. And so you're getting to a place, and this is what I see, where the dollar can remain strong. Maybe not 115 strong, but 103, 104, 105, 107 strong, flat line there, still be in a dollar bull market. But the precious metals are rising because you're getting closer to the end of the recession and the bond yields are coming down.

And we know that on the backside of a recession, the metal’s do well, you just have to look back to 2008 when gold screened to nearly $2,000 an ounce. 

So time is just elapsing is what's happening. It's not a pivot, as I've been saying. It's just we're getting deeper into that cycle.

Gerardo Del Real: The answer that I wanted was the one that you provided, by the way, especially towards the end as it relates to the metals. Look, we have gold that surged past the $1,800 level. That was a really, really impressive move.

We talked two weeks ago prior to the week off about how important it was for gold to breach that $1784 technical level and hold that right on a closing basis. It absolutely did that, not only did that, but closed today, this being Thursday, the 1st of December at the $1802 level. 

Silver looks fantastic now $22.75. We had talked before about it being an industrial metal, but it does trade more like a precious metal in the environment that we're walking into. Would you agree with that?

Nick Hodge: I think so, yes. More conviction on silver than copper at the moment.

Gerardo Del Real: Completely agree, and for obvious reasons. In early parts of the recession, you're going to see silver trade more like an industrial metal — the industrial metal that it is. As we get closer to the end of this current cycle, as you mentioned, that's when you get the speculative dollars coming back in sector rotations and it's starting to catch some capital.

I also don't think it hurts that the crypto space, though it's rebounded a bit, hasn't really, I don't believe it's put in a bottom. I'm no crypto expert. I know our crypto expert doesn't believe it's put in a bottom. And so look, there's a lot of cash on the sidelines that hasn't gone to money heaven, that's just kind of waiting to redeploy. And it's encouraging to me to see gold and silver trading with the conviction that it's trading at.

Nick Hodge: You know what's interesting is I said a long time ago that crypto soldiers were training for the gold army. And I think you're starting to see that materialize as these exchanges continue to go bye-bye, as the scandals continue to unfold, as these altcoins continue to lose significant value.

And you've got this entire generation or entire group of traders that just saw a lot of wealth evaporate, saw what cycles really can do. And bitcoin and gold have a similar backstory or similar reasons why people buy them, right? Independence from the system, decentralization, inflation and recession hedge.

Well, Bitcoin just lost 70% of its value from peak to trough. And gold has held up relatively well, another two bucks, and it'll be back up to positive for the year. I think it started the year at $1806 or something like that.

Gerardo Del Real: We have a month left. There's a lot of month left.

Nick Hodge: That's right. And so that, coupled with the fact that there are really a lot of momentum traders, momentum investors in this market now, which we've seen throughout the entire Reddit saga, jumping on the flavor of the day, the AMCs, the GameStops, et cetera — things that are moving, chasing charts.

And so if you get a situation where the fundamentals are lined up for gold, which they are, and then you get a place where the charts start to look good and money starts coming back into the sector, I think it's going to suck in a lot of capital, including from those people who were in the Reddit group or the WallStreetBets or chasing those dogecoin and things like that. They're going to say, "Oh, here's the hot new sector that money's coming into.” Just because money hasn't come into the precious metals in the junior space for so long. So that could get really exciting.

Crypto Investment Update

Gerardo Del Real: Let's talk crypto a bit. I mentioned Chris Curl, who's our in-house expert on cryptos. Correct me if I'm wrong, but I believe his last forecast was for kind of a January, February bottoming in the crypto space, and then more specifically Bitcoin and a few of the other coins that he's really, really excited to allocate more capital towards.

I read some of his stuff and he was talking about the potential for not just tenfold returns, but hundred fold returns in some of the names where some of those dollars that were allocated to that account, that $50,000 war chest that he was provided are going to go in the coming month or two. Have you dabbled anymore in the crypto space, Nick? I know you have some bitcoin, I know you keep it safe. I know it's by the bullets, but have you dabbled at all?

Nick Hodge: So my answer is going to be interesting. No, I haven't bought any more bitcoin. That's the only one I own now. The term is a bitcoin maximalist, I mentioned on this podcast before. I think that bitcoin is the one true religion, and at least for me, my personal appetite and my personal outlook, that's the only one that I need or want to own.

And I do that on a hard wallet, not on any exchange, which I mentioned before. It's stored in a safe place. And I do want to buy more Bitcoin, but I think I'm going to get to do it with a $14,000 handle. And so when I see that, then I will buy more bitcoin.

In the interim, however, I'm currently short bitcoin via equities, and so-

Gerardo Del Real: That is interesting. Enlighten me.

Nick Hodge: Well, so you mentioned at the end of the month, Bitcoin rose into the end of the month, got back over $17,000. Nasdaq went up a bit, headed into the end of November. I think that was a paint the end of the month type deal. And we're in the bear market bounce that has seen some of the pressure come off tech stocks and bitcoin.

So, re-shorted the Nasdaq earlier this week. It will be last week by the time people see this. And the same thing with Bitcoin. Now, that's not to say I'm still short by the time you see this. I mean shorts sometimes I only have for a couple of days. But at the time we're recording this, Thursday, December 1st, I'll be short to Nasdaq, and I'm short Bitcoin.

Gerardo Del Real: I like it. I like it. You touched on copper a bit, and I think we're both in the mid and long term, wildly bullish about the copper fundamentals. In the near term, you sounded a bit bearish. You want to tell me a bit about your copper take?

Nick Hodge: I think we still have a recession to go through. I think that Dr. Copper will sniff that back out. You had some dollar softness that allowed the entire metals complex to rise up a little bit. You had a China reopening narrative that is now being completely deconstructed. I mean, not only are they not reopening, but they're relocking down. There's protests in the street over there.

It seems like money's going into the precious metals for the reasons we've already discussed. And again, while I'm a long term bull on copper, I think the commodity sector continues to face some headwinds here, at least for the next couple of months. So I know the chart looks okay. It's not back to $4 yet, is it?

Gerardo Del Real: No, $3.76-ish?

Nick Hodge: Yeah, so I mean those are the reasons, recessionary headwinds.

SBF & FTX Used Pay-for-Play Sytem to Buy Leniency

Gerardo Del Real: All right. We touched on cryptos a little bit, kind of hard not to talk about SBF when we talk crypto. There was an interview this week, it'll be last week, by the time you find, folks, get to watch this or read this or listen to this. He did an interview with CNBC in which he said he didn't try to commit fraud, and they fucking applauded him.

And so I contrast that with Mark Cuban's take who said, "You should be afraid of going to jail." And I contrast that with Keith McCullough, who's done a wonderful job on Twitter, really laying it to everybody that was on the take. And by being on the take, I mean being financially compensated by FTX without even the most basic level of due diligence before allowing a platform like CNBC and others to be used for promoting FTX.

We've now found out that assets were co-mingled. We found out there were, I don't know, 28, 30 houses that were bought with FTX funds. I mean, it's a scam top to bottom, like we said a couple of weeks ago that it was. And the fact that the mainstream media, and I hate calling it that. When Sarah Palin used to say it, I would just kind of chuckle, then Donald Trump started saying it.

But CNBC is as mainstream as it gets in the financial world. And when I see the mainstream media provide a platform at this level, at this level, once we know it's out in the open, everybody knows kind of what went on, how negligent — at the very least, I would say fraudulent but at least negligent — the company, the board, the CEO all were.

For them to bring them on the network for rating's sake and provide a platform for him to appear sympathetic while there's people that have lost their entire life's earnings… Good gracious the times that we're living in, Nick, it pisses me off. It pisses me off and I hate to use that language. I'm trying to be better about it. But God, this one gets me hot.

I would love an evening segment on CNBC that provides the same kind of platform and time to some of the victims, some of the people that fell victim to Mr. SBF and FTX, and have him come on during that segment and explain to them what happened.

Now that would be some quality accountable television that I think any organization could be proud of, because at least you're leaving the viewer with some sort of an informed dialogue and debate as opposed to just bringing on the guy that should be in prison right now by my take. And he’s just running around giving off whatever bullshit answer he can think of at the moment to sound good.

And so anyhow, that's my rant. I'd love your take on it. I haven't even seen the full interview. I just read the recap of it. And again, I did find it highly irresponsible of the network. Not surprised by the way, but highly irresponsible.

Nick Hodge: There's a lot to say, and there's a lot that's already been said. I mean, it seems to be consuming most every media outlet I see. And I can't open the Twitter or the news without seeing his Sideshow Bob 'fro and his image. So lot's already been said and I fear kicking a dead horse.

But I obviously agree with you that he should be arrested and in prison and not parading around doing interviews with Andrew Ross Sorkin. And you can thoroughly equate it to Madoff who ended up going to prison and dying in prison. The sort of difference is the people that Madoff was ripping off were the highly affluent, and the people that SBF ripped were your blue collar nine-to-fivers, not wealthy crowd. And so they're not getting the justice in the media and they're not getting the justice from the government, at least, not yet that we've seen for that reason.

And we've talked a lot about the ... And you even just touched on it, the people who were on the payroll. The media outlets that were taking advertising dollars, sponsors, mouthpieces, the Kevin O'Learys, the Tom Bradys, celebrities of the world. They were all talking this up and sucking people into it. We've talked about the Superbowl ads and we've talked about the government as well, which he was a huge donor to.

He was donating $40 or $50 million in this most recent cycle, which I know we've said that whether you want to believe it or not, it buys you, literally, buys you either time or it buys you complacency or it buys you the soft reception that he's received in the media. The week this went down, the New York Times wrote a big piece about it. I mentioned this before and nowhere mentioned in the entire piece was the word crime or the word fraud or anything like that.

And then you mentioned a couple of weeks ago, The Washington Post piece, I believe it was, where-

Gerardo Del Real: The hopes of his philanthropic endeavors to cure world hunger have been dashed, is what the headline was. It almost made me puke. I said, "What? We're talking about the same guy here. Who are you talking to?"

Nick Hodge: Talking about his failed altruism instead of the fraud and the crimes that have been committed and the wealth that has been sent to money heaven. And so there's continued fallout. Other exchanges have gone under BlockFi filed for bankruptcy this week. The whole fallout is not over yet. 

Banks were involved, other exchanges are holding questionable altcoins on their balance sheets. It remains to see how that's all going to shake out. And I guess one of the last thing worth mentioning is that this stuff doesn't happen in bear markets or in recessions because everyone's cautious about their money. This sort of stuff happens in bubbles when there's money sloshing around where everything's hunky dory.

If you remember, Madoff didn't get caught swimming naked until the tide started going out. And so the tide is going out and we're going to see who's swimming naked. And Mr. SBF was one of those who was, and I don't think he's going to be the last one. You mentioned the tech layoffs earlier. I mean, we're seeing a lot of these companies lose trillions of dollars in market cap.

It's worth noting again that the FAANGS of the world, and if you throw Microsoft (NASDAQ: MSFT) in there, have lost over $3 trillion in market cap. And some of these former high-flying tech companies have seen hundreds of billions of dollars erased from their market cap down 40%, 50%, 60% as CNBC continues to shill for them.

The example this week was Salesforce (NYSE: CRM), who Kramer always talks up. That was a couple of hundred dollars stock that's lost significant value over the past year. And so that's the environment we're in. This is a bottoming process. This sort of stuff happens on the way down and we'll continue to monitor it. Those are my thoughts though. That guy was an absolute scamster.

Gerardo Del Real: But hey, we got Kim Kardashian to pay a couple of hundred thousand dollars, right? Regulators are on it.

Nick Hodge: Oh, that's right. Yeah.

Gerardo Del Real: That's who's been targeted, folks. We have Kim Kardashian targeted for promoting a coin that ultimately didn't do so well. And now I think Tom Brady and Stephen Curry and a few other entertainers are being sued. I repeat, where is any sense of accountability from US regulators, regulators around the world and yes, financial media? You all have a little bit of a responsibility I would think to at the very least, at the very least, not provide a platform for this guy to keep lying to people.

Nick Hodge: People talk about elitists and the cabal or that whole sort of the group behind the curtain, I mean SBF was there. He's got two parents who were professors at Stanford who had significant ties to the Democratic Party, significant ties to some of the regulators you mentioned.

We talked about on this podcast how the investment arm of FTX, Alameda, was being run by the girl whose dad was Gary Gensler's former boss. And Gary Gensler is the head of the SEC. And so he was obviously chummy with the Alameda CEO's father. It's all very nepotistic and interconnected, and that's the reason for the softness. So far, there's no other reason for it.

Kanye Likes Hitler

Gerardo Del Real: And I don't even really want to talk about this. I just, again, this is Bizarro World. We covered the markets. I think we did that pretty well. We kind of give an idea there. We'll close out with a very important week for you, Nick, as it is your birthday by the time. It'll be this week by the time people watch this. But you have a birthday coming up and it also happens to be a very important week for a stock that we're both invested in.

I don't want to talk about it, but I do want to just touch on it. What did y'all think was going to happen when Donald Trump, Kanye West and Nick Fuentes get together for dinner folks? Are any of you really surprised that this turned into what people are saying it turned into, which what they're saying is that there were insults and slurs, and Kanye, he's lost his damn mind. He just went on Alex Jones and is doubling down on his anti-Semitic statements and views, which have no place anywhere obviously. He went on Alex Jones and says he loves Nazis.

Nick Hodge: I think he said, “I like Hitler” or something.

Gerardo Del Real: He said Hitler had a lot of good. He likes Hitler, he likes Nazis, he said. And so again, I don't care how great your beats are, Kanye, I could care less. I wish you reciprocity, Kanye. Let's just put it that way.

So the only reason I bring this up is because at some point, we have to start blocking some of the noise out. You do this better than I do. Things get me riled up a little bit more than they get you riled up, Nick. And so you're better at this than I am. But I got to start being more selective on the stuff that I let come through my ears and in front of my eyes, because it's just a clown show with a lot of these people.

And in Kanye's case, it's not funny because it does enable those among us that will use his celebrity and his speech to be emboldened to go do some hateful stuff that isn't just words. Anybody can say a thing. You can say, I've said this repeatedly, tell me you don't like Mexicans. I’ve had people tell me that. That's fine. I don't like that you don't like Mexicans. I might still like you, but you have every right to say it to me. Now if it's a threat, if it's a physical action, that's going to be met with a different response. 

And in Kanye's case, because of his platform, and we talked about the responsibility of the financial media and their platform, because of his platform for him to enable this type of speech, when I know he has people, he's got to have somebody telling them, "The fuck are you doing?" It's intentional, and it's hateful and it can have real world consequences for, not him but for people that are on the receiving side of the hate groups that exist. And so it's disappointing in that sense. But yeah, I got to do a better job of filtering some of this stuff out because it's just getting ridiculous out there.

Nick Hodge: I didn't even know who Nick Fuentes was, so I guess I did an okay job of tuning it out. What we didn't mention, and I actually do ... I want to finish on lithium so we can get there in a second.

Gerardo Del Real: You know I was going there.

Idaho College Murder & Colorado Mass Shooting

Nick Hodge: We didn't talk about, and I don't know if you saw this, there was a shooting in Colorado at a drag show a couple of weeks ago. Did you see the father of the shooter the other week on Twitter? Talking about how ... I mean, dude, this guy was like full Sling Blade. I don't know what kind of drugs he was on.

Gerardo Del Real: We have so many mass shootings in America y'all that since the last podcast, there's been at least three. There was a Walmart one. There was the one at the club. The one at the club, it's a LBGTQ+ club. Horrific, dozens injured. I forget how many dead-

Nick Hodge: Like five or six.

Gerardo Del Real: Yeah, quite a few losses there. But yes. And so the dad of the shooter, to your point ...

Nick Hodge: I mean just an absolute derelict, this guy. I mean, you could hardly understand what he was saying. If I had to guess, he was on some sort of drugs and/or had some sort of mental issues going on. But was talking about how he was a conservative Republican and was more concerned that his son wasn’t gay, than that he committed a shooting. When I guess he heard he was in a gay club or a drag club, he was worried more about why his son was in the gay club, him being gay potentially than the fact that he committed the mass shooting.

I mean it was just crazy to me. And I mean that took up social media for a whole day I feel like before Thanksgiving. And it was just astonishing to me. And I mean almost comedic, as horrific as it is to watch this guy just be so disconnected from reality. I don't know if you want to add anything there. I just had one more thing to say.

Gerardo Del Real: No, have at it. I agree with everything you just said. Again, it's a Bizarro World, I get it. But man, at some point, it's not funny anymore.

Nick Hodge: The other one was, I think, at the University of Virginia it was. And that involved a former football player and some football players. But the other thing we haven't talked about on this podcast, and we don't have to spend a lot of time, but we had the quadruple homicide in Idaho, which is baffling, unsolved, and is consuming the local media outlets here because I live in Spokane.

And so that's the largest regional city that's closest to where this happened. So the local news channels have been talking about it nonstop because it's just an hour, an hour and a half south of here. There's sort of Lewiston, Idaho and there's Pullman. So in Pullman is Washington State and then they're right on the border of Washington and Idaho, and on the Idaho side is the University of Idaho.

And four kids were murdered in their sleep. Three girls and a guy, I think it was. Stabbed to death while two other people were in the house and didn't realize what was going on, were out until 1:30 in the morning. Two were at a party and then two were at a bar, got something to eat and came back home.

But yeah, like you say, unsolved, no leads. It was like the first murders recorded in this town since I don't even remember, 2009 or 2012 or something. So like a town where murders just simply don't happen. And one of the girls was from right up here near me in Coeur d'Alene and it's sort of fallen off the headlines, which is super interesting to me that in this day and age of cell phones, and ubiquitous cameras on every corner, and in every convenience store that they've got absolutely no leads. And the way that college kids talk and are interrelated, I mean just absolutely nothing. It's so bad that some kids left for the entire semester.

Gerardo Del Real: I don't blame them.

Nick Hodge: They just left town.

Gerardo Del Real: It's an unsolved, quadruple murder and you have the police department telling me there's no leads and nothing to follow up on. Yeah, you're coming home, son.

Nick Hodge: And change their story too. At first, it was a crime of passion and it was specific to this group of friends and that there's no danger to the community. And then two days later, they came out and said, "Well, there might be a danger to the community. We don’t know.” And so anyway, just get it on the record for he Bizarro World podcast because if it's a Bizarro World, that's a truly bizarre one.

Gerardo Del Real: It's a lot going on out there, y'all. I know with the holidays, it tends to be unfortunately, the rates of violence and the rates of homicide, the suicide rates, alcohol use, drug use unfortunately all tend to rise. And so again, I talked a few weeks ago about taking up therapy and just seeing what that's like and just seeing what tools are available and how I was looking forward to that. Just to encourage anybody, if you're going through a thing, man, reach out to somebody. Reach out to somebody, because it's a lot of people having a lot of tough times.

That Idaho case is baffling to me as well. And frankly again, the media response there, given how much time the media allows for stories of zero merit or zero substance, it's interesting to me, ike you said, that they're not camped up there every day and every night trying to get to the bottom of this really grilling anybody that's involved, because there's a serial killer on the loose. You kill four people, you're serial killer, right? I mean, am I wrong about that?

Nick Hodge: Not in serial events but serial in more than one people. The media's too busy camping out to Sam Bankman-Fried interviews.

Dispelling Battery and Lithium Marketing Myths

Gerardo Del Real: Yeah, let's end it on a positive note. Two weeks ago, I got on here and told you all that the quiet period for Patriot Battery Metals (TSX-V: PMET)(OTC: PMETF) was coming to an end soon. And I told you that the December 7th Australian listing was likely going to be met with a lot of enthusiasm. It hasn't happened yet. It'll happen Wednesday, December 7th in Australia. So obviously, the following day should be interesting here in the US, the seventh year in the US.

That was 40% ago. And so the stock today I think closed at a new high of C$8.12, a new all-time high. You and I have chatted privately, Nick, I've told you I think the stock will debut on that Australian exchange listing to the equivalent of $12 Canadian on the low end. And that may be the low end now because man, this thing has legs. I’ll tell you the last four or five days, it's really kicked up from the C$5 level or the C$6 level, to the C$7 level, and right through to $8, there's a few days left before that seventh listing.

But if you haven't already established a position, folks, I encourage everybody to at least do some due diligence. It's going to get really interesting from here on out, there's over 50 holes to report. Those assays will likely be reported, I would imagine, the Monday or Tuesday of the following week following the listing. Blackout period will be over. There's a ton of news flow coming down the pipeline. It's the biggest lithium discovery in nearly two decades, definitely in the last decade.

And look, I've said I think it closes the year in the $15-$20 range, I'm sticking by that. I think this time next year it might be in the $50 range, I'm sticking by that. And yeah, I'm hearing triple digit numbers from some people in a couple of years if things go right and we get the lithium market that we think will continue, and the company continues to execute on what looks like to be the discovery of a lifetime out in Quebec, which is quickly becoming a major battery metals manufacturing and exploration hub.

That is my spiel on Patriot Battery Metals. That is what I will be watching this week. And I said it's a special week because it happens to fall on your birthday, Nick. So, happy birthday.

Nick Hodge: I appreciate it. Thank you very much. It's interesting that this year, these lithium stocks are hitting 52-week highs despite the fact that the lithium-ion battery is going to be replaced any second now, if you listen to other “gurus” and newsletter writers talk. So I've been on this trope for a little while and I'm not going to let off because I continue to see this nonsense out there. And that's exactly what it is, is nonsense.

So I've talked about the fact that we can't recycle our way out of this. I've seen some lithium recycling promos. Those are bullshit. I've seen articles and newsletter promotions about self-driving, self-charging lithium cars that have solar panels on the top. Those are absolute bullshit. The company that is being touted in that promotion is down like 70% or 80% since it got de-SPACed. They're not selling cars, they're not being adopted and that's not reality.

And then most recently this week is a double whammy, and they're related, I'm pretty sure. So there's a newsletter guru out there named Nomi Prins who's got a promotion out about liquid energy and this battery that could eat lithium's lunch because it uses only water-based electrolytes that flow between the cathode and the anode, and there's no rare earths and there's no lithium.

And related to that, we had a reader question. This is an actual reader question that someone wrote in with and he said, "Have you heard or read that there's a replacement battery that charges in 15 minutes and lasts for 10 years and it doesn't eat itself every time it charges, it doesn't explode, and it's made 92% from water and uses no environmentally hazardous materials?" And I have to assume that he's talking about that battery that's being pitched in this newsletter promotion from Nomi Prins.

And so I looked up that company, it's a company called ESS Tech. It is also down 80% over the past year. It generated less than $200,000 in sales in the past quarter and just over a half a million in revenue over the past nine months. To put that in perspective, our publishing company generates more revenue than that. And this is supposed to be the company that's taking over the battery sphere that's going to replace lithium and that's going to send lithium into its grave. And it's a common trope because it generates clicks and people are interested in things dying and disruptions.

And for my seat as a newsletter publisher, I know that that's true. Oftentimes the most salacious, sensational promotions that generate the most clicks and sales unfortunately are the ideas that don't work out the best because they're too good to be true. And in this case, this $3 or $4 battery stock that I'm talking about here, well it used to be an $18 company just earlier this year. So I don't care whose venture arm is backing it, right? Bill Gates has a venture arm that invests in all sorts of shit that may or may not work.

The fact of the matter is that lithium stocks continue to hit all-time highs and are breaking out and are in bullish trends while these new black box batteries continue to be in a downtrend and to not attract capital. And so there was an article in the, I believe it was the Financial Times, it was just last week, talking about lithium and how there's simply not enough to go around. So they had quotes from a couple of people, there was a Morningstar analyst and his quote was, "We see no situation where there will be enough lithium to supply all the corners of demand."

Let me say it again. "We see no situation where there will be enough lithium to supply all the corners of demand." 

There's demand for lithium, because lithium is the material that all these batteries are built from, that all these car makers are using, that all these battery makers just built billion dollar gigafactories for it — from Panasonic to LG, to all the way down the line. When you see BMW pony up a billion dollars for a new battery plant in Ohio, or when you see Hyundai to bring two battery manufacturing centers to the US so they can qualify for the tax credits. These are all to make lithium batteries.

And the other quote in that Financial Times article was from McKinsey, the consulting company, that said, "Even if every single lithium project that's under development right now gets built, even if they build every single one, there's still going to be a 15% supply shortfall."

And so when you see these articles and these promotions and this click bait about a new battery eating lithium's lunch or going to make lithium batteries obsolete, it's simply not true. And it's a contrived advertisement to get you to click on it.

If you look at those stocks that they're advertising, they're going down and to the right while lithium producing and development companies are going up and to the right. There's no other way to say that. And so that's how I'm going to say it. Lithium producers, lithium developers, lithium explorers are a good place to have your capital right now. The world simply cannot get enough lithium. There is no alternative battery.

There might be one that gets developed over the next 10 years, but all the stuff you're reading about — new battery uses sodium, new battery uses no lithium — that's all in the lab on a bench. It hasn't been tested. And certainly those automakers aren't going to overnight insert these new batteries into their supply chains without evaluating the risks over the course of millions of miles of tests and time elapsed. For the next decade, the main battery chemistries are dependent on lithium.

Gerardo Del Real: I'll add one last tidbit to that. Why on earth would you invest or speculate or allocate any amount of capital into something that isn't proven when the clear opposite exists in the lithium space? It's proven. It's got real bipartisan support behind it. It's got real dollars behind it. It boggles my mind.

Listen, everybody is welcome to allocate their dollars however they want to allocate their dollars. Hopefully, what we try to bring you all is some good ideas that you can do your own due diligence on and your research on and make your own decision, because ultimately you have to decide where your money goes. You have to decide what to do with it, just like we have to decide what we do with ours.

But I would encourage anybody who hasn't done any due diligence on a Patriot Battery Metals or a more speculative, very early stage lithium explorer like Nevada Sunrise Metals (TSX-V: NEV)(OTC: NVSGF), or pick your favorite lithium company, but definitely look into the space. This is a trend, folks, that will continue for at least the next decade or two. This is a trend that's going to make fortunes for people that are able to allocate capital into the right stocks. And there are a lot of quality places for you to allocate your capital too.

So that's my public service announcement for lithium. I couldn't be any clearer. Look, you and I talk about the Patriot all the time and how well that's done for the both of us, Nick, and I think it'll continue to do so. And again, for those of you that think you missed the boat because you didn't get in at the 16-cent level or the 34-cent level, I still think it ends the year at the C$20-$25 level. But I think this time next year is C$50. Today, bucks today, folks. That's a good work if you can get ... If you got a better idea, send it in. I'd love to look at it.

Nick Hodge: Well, it's certainly not a battery that's still in the lab.

Gerardo Del Real: Oh, man. Well listen, I could go on for another hour. There's so much going on. Nick, I want to wish you an awesome birthday week. I'll be obviously wishing you all the best from out here in Round Rock, near Austin, Texas. Anything to add to that, Nick? Anything else you want to get off your chest?

Nick Hodge: No, that's it. Be careful of the headlines that are trying to sell you something. I equate those things to sort of back to FTX or Sam Bankman-Fried. Those are all hype that tell a great story, highly believable, but simply not true at the end of the day.

Gerardo Del Real: It's hard enough investing in real stories because things go wrong all the time, right? I'm up 5,000% on Patriot. That's awesome. Guess what? Down some 85%, 90% on Magna, which had one bad quarter fail. The geologic model didn't hold up. Some ounces went missing because they didn't hit any ore. And guess what? They were overextended on some of their liabilities and they just put out an announcement that they have little to no cash. They have negative working capital. And now it’s going to have to scramble to get creative to find some solutions to keep itself solvent.

And while I believe it's a great asset, and I believe Arturo and his team led that company beautifully for all but one quarter, the geology is no one's fault. That happens. Not raising capital at higher prices, that was a strategic mistake, got to own those.

But that's going to happen. We're in the business of picking stocks. We're going to get some right. We're going to get some wrong. The name of the game is to get more right than wrong and to make those gains count. It's hard enough when you invest in real stories, folks. You don't have to invest in bullshit. Send us off, Nick.

Nick Hodge: Liquid energy, if you look at the chart, it's getting less and less liquid.

Gerardo Del Real: I am Gerardo Del Real along with Mr. Nick Hodge. This was our therapy session number 196 that we call investing in Bizarro World. I encourage all of you to subscribe to the channel, like, comment, and question. We like all of it. We have thick skin. Somebody said I got my haircut from Kevin McAllister in an interview that I did recently. It had me in stitches. I was laughing. I'm from Chicago. I'm a big fan of Home Alone. Might not be wrong.

But look, come on with all the comments and the questions, and keep writing in and keep watching and liking and sharing the podcast. We enjoy doing what we do and hopefully you can find some value in it. Anything to add, Nick?

Nick Hodge: No. Just watched a little bit of Home Alone the other day. Love me some John Candy cameos and the Kenosha Kickers.

Gerardo Del Real: Love it. Love it. Y'all have a great, great week, everyone. Be nice to each other. Be kind to each other. And yeah, let's be more prudent with what we let between the ears, right?

Nick Hodge: That’s it. See ya.