Lead-Lag Live
Welcome to the Lead-Lag Live podcast, where we bring you live unscripted conversations with thought leaders in the world of finance, economics, and investing. Hosted through X Spaces by Michael A. Gayed, CFA, Publisher of The Lead-Lag Report (@leadlagreport), each episode dives deep into the minds of industry experts to discuss current market trends, investment strategies, and the global economic landscape.
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Lead-Lag Live
Walter Deemer on Small Cap Potential, Historical Market Parallels, and Navigating Speculative Trends
Walter Deemer joins us to unravel the fascinating dynamics of small caps versus large caps in today's stock market, sparking the question: Are small caps the unsung heroes poised to lead future market trends? Together, we examine historical market parallels, particularly the early 1970s, and discuss whether we're witnessing a repeat of those cycles or something entirely new. Key insights are shared on sector weight differences and the potential impact of speculative behavior among younger traders, raising the possibility of small caps rallying independently in a healthier market environment.
Listeners will gain a deeper understanding of market trends and investing strategies as we dissect historical behaviors, using McDonald's performance in the 1970s as a case study. We explore the implications of buying during market dips and how the post-quantitative easing era has redefined investor mentality. The conversation also addresses the potential for a "lost decade" of market stagnation and the importance of adapting to changing conditions with a long-term perspective. Insights into the current relevance of the bond market and the unique challenges faced by different generations round out this comprehensive discussion.
With crypto assets lacking traditional fundamentals, we delve into their suitability for technical analysis and compare the current tech dominance to historical patterns like the Nifty 50. Personal trading strategies, including inverse ETFs and shorting, are discussed alongside a pragmatic approach to technical analysis, stressing simplicity and practical wisdom over complexity. We close with an exploration of small-cap stocks' potential risks and rewards, drawing upon historical comparisons and encouraging listeners to stay informed through social media channels. Join us for a rich conversation filled with market insights and trading strategies that promise to enhance your investing acumen.
The content in this program is for informational purposes only. You should not construe any information or other material as investment, financial, tax, or other advice. The views expressed by the participants are solely their own. A participant may have taken or recommended any investment position discussed, but may close such position or alter its recommendation at any time without notice. Nothing contained in this program constitutes a solicitation, recommendation, endorsement, or offer to buy or sell any securities or other financial instruments in any jurisdiction. Please consult your own investment or financial advisor for advice related to all investment decisions.
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All right, everybody Appreciate those that are starting to watch this on all the various platforms. I am excited for this conversation with Walter Deamer who, by the way, has actually been one of the guys that has defended me in the past against some of the trolls and haters, which I appreciate. I had a space a while ago if you remember, walter, maybe like a year and a half, two years ago, although it feels like it's yesterday because trolls and haters never go away, because trolls and haters never go away.
Speaker 2:No, all I have to do is make a post, and I got four people telling me how they turned $3,000 into $72,000 in five days.
Speaker 1:Are you telling me they're lying? Is that breaking news here?
Speaker 2:No, that's the reply on Twitter.
Speaker 1:Yeah, exactly, exactly.
Speaker 2:Every once in a while I have a picture of $100 trillion Zimbabwe note and I send it. I reply to him. I said yeah, I know, I just cashed out.
Speaker 1:Yeah, exactly so. I reached out to you, walter, because I'm a fan of your work, obviously, and I saw a whole post you have put out about the MAX 7 and small caps. I have been on this thesis for a while about small caps being the key to so many of the future dynamics of the market. It's like to the point where I keep saying small caps hold the key. Some people seemingly understand what I'm trying to get at, other people don't, but I think you kind of encapsulated it very well. First, I want to get your big picture thoughts on the way markets have behaved the last couple of years, and by markets I'm really just addressing large caps because, let's face it, it's been a weird dynamic beneath the surface.
Speaker 2:Well, large caps, especially the very, very, very large caps, have been doing very well. The rest of the market not quite as good, the market not quite as good. The thing that struck me was that it reminded me of what happened in the 1972 and 1973. 1968, 69, you had a big wave of speculation and that big bear market in 1970. Then you had a recovery. The broad market averages rallied to new highs. The average stock measured by indicator digester value line only had a 50% retracement and from the beginning of 72 to the beginning of 73, they really went nowhere, while the big cap stocks were taking the averages up. And my problem with that, michael, is that it didn't end well. Now, whether history is rhyming or not rhyming, I don't know, but I would like small caps to get going, to take that analogy off the table. I mean, that's my point. Is this 1973 again repeating itself or can we get out of that analogy?
Speaker 1:How much of that do you think depends on the surrounding dynamics around inflation? I mean, is there anything to the idea that the parallel to the 70s around the second wave of inflation has to do with concentration in a certain slight number of stocks?
Speaker 2:has to do with concentration in a certain slight number of stocks. Well, that was the argument of the 50-50 in the 70s, that these were the strongest companies in the world and they were like moats in an angry sea. They could withstand the ravages of high interest rates and inflation more than anything else. But inflation then was a lot worse than it is now. So inflation is sort of a factor, but it's not a major drawback. I don't think like it was then. I mean then you had double digit inflation. That was the beginning of the gas lines. You probably read about that in history books.
Speaker 1:Yes, I was not born at that point to experience that clearly well, well, us elders see, they ran out of gas.
Speaker 2:So we had to, uh, wait in gas lines and we started calling each other about what gas station is open and who you could get gas gas any every other day, and everything like that. So that was inflation. That's when oil went from 3 to 30 $3.
Speaker 1:There's a great quote I'm forgetting by whom, since you used the word elders. The quote is I'm not young enough to know everything. I'm curious if you think we're at a part of the cycle which is sort of classic in terms of what you normally see at tops in terms of overconfidence, younger traders thinking that they can outperform the elders. I mean, let's talk about sort of the way demographics are behaving and interacting with markets.
Speaker 2:Well, that's the thing that concerns me. If these little stocks don't get going because you've got pockets of speculation, you've got. You know, we all, we all know that there's pockets of speculation. We all know that there's pockets of speculation. The question is, is the market strong enough to correct that and go have little stocks go up? Now I don't care, this may be sacrilegious, I don't care if the MAG-7 stocks don't go up or don't go up. If the small cap stocks go up, it would not bother me in the least if the MAG-7 went sideways and the small caps went up for a while. I think that would be healthy. Whether they can do that or not remains to be seen. It's a tough ask.
Speaker 1:Yeah, I think also the challenge of this is that the small caps are being held by the higher for longer fears, right, the zombie company refinancing risk and the fact that there aren't that many tech stocks in small cap indices right, I mean, I guess it's really to me more a question of and I'm curious to hear your thoughts on this Is it a large cap concentration versus small cap market cap divergence, or is it really just a sector divergence?
Speaker 2:A little bit of both. Dave Keller pointed out in a video yesterday that the former director of technical analysis at Fidelity pointed out that the small cap indexes, the big cap, large cap indexes are obviously weighted by tech. Small caps are weighted, have their heaviest weight in industrials and regional banks. So you know that might be the key as far as sectors. But you know the thing is people like the Russell 2000 because a lot of money losing companies in there. But you can use other small cap indexes or mid cap indexes with a lot less lower percentage of money losing companies and usually they look a little better. And you know that would be. That would be fine. For me it's not the. The Russell 2k is what everybody follows. But you know probably the S&P small cap index or the S&P mid cap index might be better. S&p small cap index is doing better than the Russell and the S&P mid cap index is doing better than the S&P small cap index. I don't care where it rotates, just so it rotates.
Speaker 1:No, I agree with you and I've made this point many times before, especially to other financial advisors, asset allocators it's like this environment is actually horrible because you can't stand out if the S&P is the only game in town. Exactly, I always go back to this point that, at a very core level, there's really only two ways to, in quotes, beat the market. If you're going to be long on the equities, you either tilt smaller mid caps, small caps, or you tilt international, neither of which have worked. So it's like well, everyone's thinking, well, if you can't beat them, just join them.
Speaker 2:Yeah, which eventually they do. I will go back into my old fogey mode. In the 1970s I worked at Putnam. Putnam was a great big growth stock investing. In the 50s Carl Hathaway at JP Morgan got all the press because he was in New York and we were in Boston. We were every bit as big of players as they were.
Speaker 2:The money management people, the advisory people kept getting new accounts because the pension fund consultants who are the greatest behind the ball hitters ever known in the game finally wise enough that growth stocks were doing well and you might want to switch your account to a growth stock investor and we'll interview a bunch of them for you and you can select one.
Speaker 2:And all this takes 18 months and finally they come in in 1973, and they're going to buy growth stocks. So Putnam comes in and they dump all the crap from the incoming account that made it underperform like US Steel, and they buy all the good stuff that's made Putnam work so well like McDonald's. One day one of the fund managers says can I ask you, why do you ever wonder whether US Steel, if you're selling at five times earnings, might be a better buy than McDonald's at 75 times earnings? And the answer was no. We were sold to the client as a growth stock investor, and a growth stock investor we shall be. But the point is, at some point even the best stocks run out of money. Where that point is, I do not know, but at some point the MAG-7 will get ahead of themselves.
Speaker 1:I often hear the rebuttal to that, by the way, is that it's a feature, not a bug, that the indices end up resulting in just a select number of stocks leading it on the way up, as if that doesn't increase risk. Right? Diversified portfolio is no longer diversified if a big driver of it is just a select number of companies. Is there validity to that idea?
Speaker 2:It comes along every once in a while Back in the day, for a while, energy stocks were really overweighted and the question was do you participate in energy stocks? They're not weighted so much anymore for any number of reasons, one of them being the same force and their infinite wisdom At one point kicked Exxon and Mobil and those guys out of the S&P 500, because the S&P 500 was supposed to be the US market and these things were international companies. But at one point, I think energy stocks were 21% of the S&P.
Speaker 1:Yeah, I guess, and that's sort of the question it's like at what point is it? Are we vulnerable to a very severe tech driven sell off and people then suddenly realizing that they were never as diversified as I thought?
Speaker 2:Yeah, it will happen, I do not know when.
Speaker 1:Correct me if I'm wrong on this, but I mean a lot of the data I've seen around. Small caps outperforming shows that they tend to outperform more in bear markets relative to large caps. Yeah, I get it this time around. Maybe small caps can lead the bull market side of things, but I don't know. It just seems to me it's hard to see that happening unless rates drop substantially to give a fundamental reason for small caps to lead on the upside, dropped substantially to give a fundamental reason for small caps to lead on the upside.
Speaker 2:Well, I've been a technician for a long time, but I never learned anything about fundamentals, so I can't help you there. I'm still trying to master technical analysis. When I do that, I'll move on to fundamentals.
Speaker 1:Okay, so that's a good direction to go. Still trying to master. So you're telling me the elder statesman has not yet mastered the field, despite it being something you've lived in for a long time.
Speaker 2:Why do you say that the thing is the way you learn in this business is every time you make a mistake you say I'm not going to do that again and unfortunately I keep running out of. I haven't run out of mistakes yet.
Speaker 1:What are some of the mistakes that you've done in the past, that you kind of kick yourself and be like I really that was like that was just a big oopsie okay, the biggest oopsie in my life is I came up with the concept of breakaway momentum in the early 70s.
Speaker 2:Breakaway momentum the breadth thrust that people follow now is the extremely high momentum, the powerful upside momentum that occurs only at the beginning of a bull market. Okay, so this works real well. And in the year of our Lord, 2009, the market had gone through the great financial crisis and the market then generated break of momentum in March and I was convinced that this time was different. And the market then generated breakaway momentum in March and I was convinced that this time was different. Somebody happened to go back and we had breakaway momentum figures going back to 1945. Somebody did it for me in the 1930s and there were a lot of full signals. So I said, oh, this is like 1930s, it's not going to work. So we got breakaway momentum again in June. I said this is like the 1930s, it's not going to work. And then we got breakaway momentum again in the fall. I said, geez, it's still not going to work. This happened all during the 1930s. This time is different. It wasn't the most costly four words in investing. This time is different.
Speaker 1:I mean, just to play counter to that, couldn't you argue that the structure of the market clearly is different? I mean, look at the zero DTE stuff, look at the availability of different levered funds, look at all the ways that people can YOLO and take on crazy risks.
Speaker 2:Yeah and zero option. Yes, there are a lot of new vehicles and stuff, but, as my mentor, Bob Farrell from Merrill Lynch observed, and I'm going to have to paraphrase although markets may change, human nature doesn't Okay so it seems, it sounds to me like the base case for you is that.
Speaker 1:You know, like I said, small caps hold the key. Whatever comes next is dependent upon that part of the marketplace. But again, I've said that for a while and it hasn't really mattered because large caps have kept on going. There's a time aspect to this. Isn't there Meaning? For all we know, we could still be in this continuation of what has worked the last two years. Right, it's just still magazine and all that.
Speaker 2:Yeah, all we know is it's going to end. We don't know when. Maybe you do, I know oh, I clearly don't.
Speaker 1:I've been way off my friend on on that um, but I'm with you on the end.
Speaker 2:Point is the same the path matters but you know, uh, my my favorite chart of all time is mcdonald's in the the 1970s, when we bought it at 75 times earnings and in the next seven years its earnings grew at 25% per year, compounded right through the period. No misses, never a quarterly miss, and the stock went from 75 times earnings to eight times earnings. And the stock went from 75 times earnings to eight times earnings. And if you want to see my favorite stock of all time, all you have to do is go on Amazon on Kindle. Look up the Kindle version of.
Speaker 2:When the time comes to buy you won't want to they give you a free look and, as luck would have it, the McDonald's chart is on the last couple of pages. They're doing free looks, so you don't even have to pay any money to look at the best chart. What I think the point being is fundamentals were great, but the stock overreacted and it went from 75 times earnings to eight times earnings. So you thought it was crazy paying 75 times earnings for the stock. It was probably crazy to sell it at eight times earnings, but Putnam did.
Speaker 1:I've always loved that quote. When the time comes to buy, you won't want to. It does seem, though, to me that this whole buy to dip mentality is incredibly ingrained in investors and mine and a lot of it's because of the post-qe era, right and fed, constant intervention and all this stuff, right. Um, what would it take to break that mentality for a large amount of the investing public to say I don't want to buy because it doesn't? I don't even think a crash would do that at this point, because every single crash has resulted in the same response by the.
Speaker 2:Fed A bear market or a market that goes sideways for an extended?
Speaker 1:period. Sideways is the argument. Yeah.
Speaker 2:Yeah, I haven't made any money in my socks for the last five years, type of thing. What would you handicap that I?
Speaker 1:mean as a possibility, just sort of a lost decade argument, More than zero and less than 100.
Speaker 2:That's a very specific type of range.
Speaker 1:Well, I listened to a lot of economists back in the day, so I learned some of that stuff. Yeah, it is interesting to me that people do seemingly forget that lost decades are fairly common and fairly healthy, actually if you have a long enough time frame.
Speaker 2:Yeah, I mean, if you go back in history, the market, essentially the 1970s and early 80s, were sideways market for a lot of stocks. Speaking of that, I mean it can go sideways, it doesn't have to go up all the time. There's no law, right.
Speaker 1:Speaking of that, sideways and lost decade. You can argue that certainly duration treasuries have gone through that with the way yields have behaved. At what point is the bond market interesting? As a technician you shouldn't care about what asset class you're looking at, right? So presumably long-duration treasuries have the same technical tells as stocks.
Speaker 2:Probably, and I really don't follow that closely. I live in a senior retirement community and everybody here follows the bond market, so I don't get involved with them, cause they're going to be in the bond market no matter what. Yeah, of course, I mean that's that's what they may complain about it, they may like it, but they're in.
Speaker 1:Yeah, yeah, I think that that's. That's a valid point.
Speaker 2:I mean, we all know the horror stories about the fact that you know that at some point the treasury is going to print too much debt and we're going to run out of buyers for it, and you know. But that's for another generation.
Speaker 1:You I'm not that young. Uh, I'm getting up there. I mean, I did a whole health transformation thing to try to live longer, but uh, yeah, the, the other, the generation that's younger than me, I think are the two generations are probably in deep trouble.
Speaker 2:Well, I would think. Well, the way the best tip on living longer is is to try to find out somehow from some fortune teller where you were going to get die, and then just don't go there.
Speaker 1:I agree that, and fasting, which has been a big thing for me as I talk about publicly. Okay, so talk to me about. So what do you do when you have these concerns? So you said it correctly, right, the timing is the question mark. It can take a while, but you see this as a possible endpoint. Higher likelihood than zero. Less than 100 on the odds. I pay attention, I listen. I guess the question is what do you do about that from a portfolio perspective? How do you create a trading thesis around that?
Speaker 2:That I don't know, because I don't trade at all. I don't really look for risk at my age. I mean, one of my fun things is that I post something on Twitter and somebody comes back and says you know, if you take a 20-year perspective, you know the market has never gone down over any 20-year period in history. And I said that is fine. If you can tell me I am going to live another hundred years, 20 years, I will listen to you. Since I am now 83, that looks unlikely.
Speaker 1:As you've just given your many years of experience, as you've gotten older and watched markets, has anything you mentioned the point that human behavior doesn't change, but is there anything that's been surprising to you? You know that that, going back to your point about constantly learning that in this environment is different at all.
Speaker 2:Oh well, yeah, it is because the zero, the zero day options or whatever, however, the zero DTs, and then all the crypto, which I have a friend who was enthusiastic about crypto way, way back in the day and he said I am so enthusiastic, I will create an account with a wallet and put a Bitcoin in it for you, just to get you started. And regrettably, I did not listen to him then or subsequently, but I could have retired a lot earlier if I had. So I mean, that's obviously changed. And the question is not as crypto affects the monetary system, but is it soaking up some of the specular money? I mean, have some of the gunslingers deserted Wall Street for the crypto? I suspect they have.
Speaker 1:Yeah, I think there's very little doubt. I think also, maybe up until recently, if you were a Wall Street analyst or whatever and you had restrictions on buying stocks, you could buy crypto, which resulted in sort of this interesting dynamic where compliance was not catching up to that side of things. I've heard arguments being made that, speaking about crypto, that it's almost like the perfect asset class for technical analysis.
Speaker 2:Yes, I've heard that too.
Speaker 1:What's your response?
Speaker 2:to that. I think they're right. There are no fundamentals to get in the way.
Speaker 1:Yeah, it's just pure momentum.
Speaker 2:Pure technical. Yes, there's a little fundamental. I have not figured out the fundamentals behind Fartcoin yet.
Speaker 1:I can tell you all about Fartcoin. I mean, I post about it quite a bit on Linux. It's a store of value. I think is the way to think about Fartcoin. But okay, so going back to the tech analysis side of things, do you have certain, certain things that you look at that like go to signals or indicators that you just find yourself constantly gravitating towards?
Speaker 2:Not really. I just sort of look at everything. I'm sort of like a sport, a sports announcer watching a football game. You know, I'm not particularly concerned about which team is winning, I just point out interesting things on the field. It may be somebody catching a pass, it may be somebody causing a fumble, it may be somebody I don't know what it is. But when I say it it kind of said something to me. And right now, as I say, the thing that seems to be catching my eye is that the MAG-7 are obviously leading the market and creating all the strength in the quote broad market averages, unquote. And I look at myself and I say I've seen this before. And the reason I go back to the Nifty 50 is the dot-com stocks didn't have earnings and the Nifty 50 had earnings past, present and future.
Speaker 1:So it was just a question of they got ahead of themselves rather than just fizzling out through over speculation possible that something about the nature of tech and these moats and the speed with which things happen, that those dynamics just don't hold true anymore? It's like how can you possibly compete against NVIDIA at this point? How can you possibly compete against Amazon, against Meta? It seems like they are. I mean, it's a very winner-take-all sector in general tech, but is there anything to the idea that they're that big and nothing can stop them?
Speaker 2:I suppose there is, but again, at some point the stock gets ahead of itself. I don't know where that point is, but at some point it does Again. Going back to McDonald's, it was a great company in 1973. And the stock in the next seven years got cut in half. It was still a great company in 1973 and the stock, you know, in the next seven years got cut in half. It was still a great company. It was a great company for all seven years, but the stock got cut in half. They just get ahead of themselves at some point.
Speaker 1:What's your?
Speaker 2:what's your again, I don't know where that point is. It may be I may not live long enough to see where that point is, but it's out there somewhere.
Speaker 1:Have you taken on active shorts in your I assume you have in your trading career, or has it largely been long only?
Speaker 2:No, every once in a while, being an old fogey, I hedge. I do an inverse ETF to balance off the long positions if I don't get out altogether. But that's all I do.
Speaker 1:Is there any reason for that? Just because you've heard horror stories around shorting?
Speaker 2:No, I think shorting is great. I think shorting is just as good as long. I mean, if you look at a chart, your chart can look really good. So you mean, if you look at a chart, your chart can look really good, so you buy it. You look at another chart, it looks really bad, so you short it. Same deal. I mean, some of the games people play is they take, you know, a chart and they invert it and you know, so that what looks like, you know it used to look like a great chore, now looks like a great bot. And I say, well, what's the difference?
Speaker 1:That's an interesting way to frame it Just literally flip it and see how the mentality changes on the chart.
Speaker 2:Yeah, A chart is a chart. If you're a technical analyst, you look at the chart and it either looks real good or it looks real bad, and then you take action. Yeah, and there's no harm in being both long and short at the same time. You can have a very good stock and very bad stock at the very same day. It's every same time you mentioned.
Speaker 1:Um yeah, crypto kind of is good from a technical perspective because there's no fundamentals. Are there certain sectors that tend to be better for positive technical analysis conclusions? You know I have to assume that different sectors have different whipsaw risk.
Speaker 2:Not really. You know, given time, every group, you know, rotates into the spotlight and rotates back out, again, back out again. So you know, the only thing you know I I think I know about sectors is that financials are usually a leading edge of the market, energy is usually a laggard edge of the market, and now you have both financials and energy strong. So what do you do?
Speaker 1:you do tech. Yeah, you do technology. That seems to be what the market does.
Speaker 2:I mean well, that's the thing I mean. At some point, something is going to outperform technology. I don't know what it is, but sometime, because there's nothing, there's no, there are no one decision stocks, Even the big tech, even the MAG-7.
Speaker 1:Have you ever factored in sentiment at all as part of your way of looking at markets?
Speaker 2:Yeah, very, very big part.
Speaker 1:Okay, so let's talk about that. So, first of all, how do you make Fade the crowd? Yeah, fade the crowd. Okay, so let's talk about it. Because I think one of my pet peeves is is people always show the CNN fear and greed index which, if you actually look at what goes into that, literally nothing is sentiment, yeah Right. So how do you measure sentiment as opposed to? Is it just anecdotal? You're just kind of seeing it, feeling it.
Speaker 2:Well, one of my sayings is if you need an indicator whether speculation is too high, it's not. So no, I mean, you don't need an indicator to know that when NASDAQ volume is running three times the New York volume, which is a lot higher than usual, and then you look at what's driving it, and they're all penny stocks, this is unusual. The games in the crypto market are unusual, but are persistent. The problem is you know it at the time, but you don't know when it's going to end.
Speaker 1:But you still play the game. You don't sit in cash.
Speaker 2:No, I sit in widows and orphans stocks areas.
Speaker 1:For newer traders and technicians. Obviously there's a lot more information nowadays than there used to be decades ago, and I assume that a lot of that information is noise related. So let me really know kind of what they're actually looking at. For somebody who's more of an old school technician and trying to impart some wisdom on new technicians, what kind of resources would you say that those new technicians should look at?
Speaker 2:Just keep it simple. You don't need. You don't need 10 indicators at the bottom of your chart to tell you things in market. It's either overbought or oversold. You don't need five indicators to tell you that it's either gaining or losing momentum and you don't need five more indicators to tell you that it's either outperforming the market or it's underperforming. You only need one relative strength. So when I see a chart with you know a dozen lines, indicator lines on it, I just flip by it. Keep it simple, stupid. You can get. If you look at a chart, you can get 80% of the meaning out of it in 20% of the time and then if you spend another 80% of the time, you can squeeze another 20%. But you know it's. It's the basic. Information is very, very. You don't. You don't have to be cute, you get well anyway. No, I think.
Speaker 1:I think it's right. I think people do tend to overcomplicate things.
Speaker 2:Well, confession things right, well, confession I never got a cmt designation because I used to use metastock and metastock had some canned indicators I used to love metastock back then back was yeah, back, and so I used to, and one one day for some reason, yeah, they had a profitability test.
Speaker 2:So I used it on one of the canned indicators that they use that everybody learns, and it lost money and I said, why should I learn this indicator if it doesn't make money? So I never took the CMT examination because I had to learn too many things that didn't work. I mean, I will make only one comment on Elliott Wave, which you also have to learn to take CMT, and that is it works wonderfully in hindsight, but I got turned off by it, particularly when I was at a conference and one of the leading Elliott Wave practitioners came in and he put a chart up and he went through all sorts of ziggy-zaggy lines to make his bullish case. We all nodded after 10 minutes that this was a very fine presentation. And then he said but there is an alternate count that's bearish and the next 10 minutes we're going over the alternate count and I decided that that was not for me.
Speaker 1:I mean in reality, he would argue, he was never wrong.
Speaker 2:then yeah, neither side. Yeah, exactly, I think it works extremely well in hindsight, but looking into the future, I'm not sure it works so well.
Speaker 1:Yeah, exactly right, walter, I think. One more question and then we'll wrap up for the biggest piece of advice for anybody that's worried about markets here and buys into the argument around small caps. What would you tell?
Speaker 2:them. Well, if you want to buy into the small cap argument, I think you have to let them do some proving. They've got a lot of proving to do. Maybe they started to do it, maybe they will start to do it. Maybe they will never start to do it, but it's just there. The thing is, my concern about small caps is that if small caps don't start joining the strength in the market as measured by the broad market averages that are not so broad, if they don't join in, then the 1972 analogy continues to remain on the table, and the thing that bothers me about that is the 1972 analogy did not end up well.
Speaker 1:I think that's a good, and maybe ominous, way to wrap up this conversation. Walter, I assume the best way people can track your thoughts is through X.
Speaker 2:Twitter Twitter.
Speaker 1:That's the elder part saying Twitter I'm with you.
Speaker 2:I'm never going to be an Xer.
Speaker 1:It's a weird thing to say X.
Speaker 2:It is a weird thing, but, um, no, that they. I. I am maintaining an impish presence on twitter and what we discussed today that there was a thread that I started I did at the very end of last year that people can look at because it's got a lot of charts on it and it's free the best things in life are free sometimes.
Speaker 1:Sometimes Exactly. I appreciate those that watch this. This will be an edited podcast under Lead Lag Live, and thank you, walter, for everything and your contributions to the entire field.
Speaker 2:Thank you for having me. I'm honored to be here. Thank you buddy Cheers. Yep.
