This week’s Market Alert covers rising caution among major investors, new client security enhancements, and what current market behavior could signal for the months ahead.
Chief Investment Officer Jordan Roach and Chief Compliance Officer Bill Frye discuss what’s happening behind the scenes to protect both your accounts and your portfolio:
· RPOA is introducing an extra identity confirmation step for all service requests to protect against AI voice spoofing and digital impersonation scams.
· When you call in, our team will ask brief security questions using nonpublic information to ensure we’re truly speaking with you.
· This new step adds security without sacrificing the personal connection you’ve come to expect from RPOA.
· These measures safeguard your assets against increasingly sophisticated fraud attempts while keeping your information private and secure.
· While innovation brings efficiency, it also gives cybercriminals new tools—RPOA continues to stay ahead of those risks on your behalf.
· Renowned investor Michael Burry, of The Big Short fame, has placed large bets against major AI stocks, including Nvidia and Palantir—moves that have caught Wall Street’s attention.
· Warren Buffett’s Berkshire Hathaway has raised record levels of cash, signaling a preference for flexibility amid potential market shifts.
· These actions may reflect broader caution after an extended market rally, as investors weigh whether valuations have stretched too far.
· Recent modest declines in technology and small-cap stocks suggest the market is pausing to catch its breath, not breaking down.
· After months of strong performance, short-term fluctuations are both normal and healthy for long-term market balance.
We continue to monitor these trends closely through our Invest and Protect Strategy, ensuring your portfolio remains positioned for both opportunity and defense. Whether markets rise or pause, your plan is designed to help you stay focused on what matters most—living your Second Childhood Without Parental Supervision.

Transcript:

Jordan Roach
Hello everyone. Welcome to the Weekly Market Alert video for Friday, November 7, a ton to talk about. As always, we have a very famous investor who’s making big moves, maybe showing signs that things could start coming down again. We have Berkshire Hathaway raising historic amounts of cash again. We have markets moving up and down a lot to get through, so we’ll get into that boring financial stuff here in a second. But before we do this is our Chief Compliance Officer, Bill fry. I was feeling a little lonely today because Ken is out, so I invited bill to come in for his first time here. How we feeling?

Bill Frye
We’re excited to be here. Ready to go. Awesome. And you look very

Jordan Roach
nice. I’m a big soccer guy, and I noticed your tie there. Aston Villa, West Ham colors you follow Premier League Soccer, any No, I do not know. Okay, well, fair enough, what looks very good. Well, everyone knows here. You know, when we have the compliance guy in with the investment guy, this can mean a bunch of different things. It can right? So is it good news, or is it bad

Bill Frye
news? This is, this is good news today. Excellent. Everyone can rest easy. Okay,

Jordan Roach
good. So tell me a little bit about things. You know, we always talking about with the investment side, protection and security. But obviously, you know, your side of the house is doing its own

Bill Frye
work, correct, right? You and the Investment Committee are always focused on invest and protect. Well, behind the scenes, my department and various other departments are also doing our part to protect our clients. And so I’m here today because we, you know, we have core value of being proactive, and if the client calls us, we’ve lost. And so we want to introduce the clients to a new procedure that we’re going to instill and put into place, and we just want them aware of it before, you know, before they start asking questions and

wondering what’s happening when it goes on. Okay, so tell me a little bit more about what that’s going to look like, right?

Well, with the well, with the with the explosion of AI and technology and all of the positive uses of it, well, criminals and bad actors, of course, are also utilizing those tools, right? And we’ve been a firm who have always really tried to have personal relationships with our clients, and as such, when people call in, we recognize their voice, right? We know them well. With the use of the AI technology these days now, bad actors are able to, very quickly, with not a lot of work, imitate voices, right? So we need to protect against that to make sure that when a client calls in and requests service on their accounts or has questions that we know who we’re speaking to, and we actually are speaking to our clients.

Jordan Roach
Yeah, that’s great. It’s just really interesting. When I joined the firm in 2018 this is something we weren’t even worried about, right? You know, I think a lot of our clients, one, we were meeting more face to face, yeah, so requests were coming in person, correct? And then post covid and AI, all this is changing quickly,

Bill Frye
exactly, right, right? So many, many of our interactions with clients are now through the computer or through the phone, and not always directly here in the office. You know, I’ve been with the firm a long time as well, right? So we’ve always been that face to face Udemy, eye to eye conversation and even even on the phone, right? But when back in the day, we were able to trust that when someone called in and we recognize their voice, that it was actually them, sure today we can no longer rely upon that.

Jordan Roach
So Bill now, if a client was to call in have a service request, whether it’s a beneficiary update, more likely distribution. What is that process going to look like with your

Bill Frye
team? Right? It’s going to be, it’s going to be a simple addition to what’s always happened, right? But before we get into the service and start relaying personal information or acting upon instruction from them. We’re going to just ask a small series of security questions to be able to verify that the client is actually the one speaking right. We’re going to we’re going to use our fields of non public information to be able to verify and feel comfortable that it is actually the client we’re speaking

Jordan Roach
to, okay? And if the client maybe gets the first answer wrong, where do we go from there? Because that always can happen,

Bill Frye
correct, right? The simple answer is, we have enough information about you that’s non public that we will just ask another question. We’ll ask a follow up. Obviously, if we are concerned, then we can take additional steps. But I don’t anticipate that being a problem. But this shouldn’t be overly challenging or troublesome for the client. It really should be just a simple step right before we start talking to them about, you know, their personal information.

Jordan Roach
So really should be a welcome change. I mean, this prevents somebody, when they don’t know it, taking money out of their account and personing themselves. Right? This is really, to me, necessary protection. The firm really

Bill Frye
needs correct. And while this is simple and non technical, and we have all of those, you know, more detailed, and it based solutions behind the scenes as well, this is an effective process to add an effective solution to add on the front end, one more added step of security to help to ensure that we are protecting our clients money and not helping a thief steal it. Yeah.

Jordan Roach
Okay. And so last thing you know, we used to have some of these things kick in based on dollar amounts, but this is going to apply to really any inbound virtual requests coming

Bill Frye
in correct clients may be aware that, you know, at certain thresholds of distributions, the compliance department, my team would. Actually do this and reach out and verify the client identity. And what we’ve decided is that, you know, due to the advancements of AI and the use of those tools by criminals, we need to just institute this policy across the board for all service requests, for all information, certainly for all distributions. So we just want the clients to be aware that when they call in, they’re going to be put through this one additional step before we proceed. So it was on us to make sure we proactively told them. So, you know, that’s why you guys were kind enough to ask

Jordan Roach
me to be here today. Awesome. Well, are you going to stick around with me for the rest of this?

Bill Frye
Then no. You know, the investments is for you and for Ken, so I’m going to let you handle the show today. Fair enough.

Jordan Roach
Well, thanks a lot. Bill for that update. Thank you, Jordan. So clients hear that again. Some additional steps. I know it maybe sometimes you want a quick request and you want us to be done. This is going to help layer in that protection I think you all need, because we do care about you. Want to safeguard your assets. So thanks again to Bill. And let’s get into all the financial stuff. Now, there’s a very famous author named Michael Lewis that used to work in the financial space right as a bond trader back in the late 80s. And he’s since become an author. And he’s written very important, very famous books called Flash boys, called liar’s poker, and then, of course, The Big Short about the Great Recession. I read all these books when I used to work at Ernst and Young traveling every single week. And The Big Short in particular, there’s a very famous investor in there named Michael Burry. Now, Michael Burry was very famous because he spotted what he thought was the housing crisis, effectively 18 months before anybody else did. He was a smaller investor running small funds for hedge funds, and he started placing these big bets against the housing crisis, the housing market. And everybody thought he was crazy. Well, of course he was right early, but very, very right. And now, since then, the market, generally speaking, follows what his trades are. Because typically when he comes out, he comes out making big trades, big bets, not small ones. Well, recently he placed a huge one, right? He put basically over a billion dollar bet against Nvidia and Palantir, right, two darlings in the AI space, two huge flyers this year that have both done very, very well. So he plays basically 130 100 $50 million bet against Nvidia, which, again, I think is kind of the proxy for almost all the AI space, right within the major hyperscalers. That’s we keep hearing from his the CEO the most. And again, bury just placed a big bet against Nvidia. Now even bigger, he placed almost a billion dollar bet against Palantir. That’s a huge bet. Palantir is up over 100% this year. It’s been flying and for an investor like bury, who is kind of a fundamental macro economic investor, to place that big of a bet, it made noise, right? And so again, because of how successful he was spotting the distortion that led to the housing crisis, people are looking at this bet saying, Is he right now? Again, the thing about bury is he’s placed a lot of bets in the last 10 years that have not gone his way. But people and the market watch him because he is very smart, and he was so right with things that people didn’t catch. So it’s something to watch out for. I don’t necessarily think it’s ominous in and of itself, but it is something that the market’s gonna have to digest, because typically, he’s spotting things that are interesting. So he’s not betting this the market itself. He’s using two companies specifically that maybe are overvalued. But it’s something to watch. The other thing you know, everybody knows, knows Warren Buffett. Everybody knows his company, Berkshire Hathaway. And the interesting thing about that company is they have been a net seller of equities over the last five quarters. They’re not a buyer. And famously, you know, Warren Buffett’s got a million famous sayings, but he’s, you know, typically, going to be looking for very strategic opportunities to put money in, right? He’s not just throwing the money momentum play across the market. He’s very strategic when he wants to deploy capital. And famously, he says he wants to deploy capital when there’s blood in the street. So there are some people that are looking at, you know, his his record cash holdings. I think he’s got like, $360 billion worth of cash on his balance sheet now, saying, Is he doing this because he’s worried that this is all going to pop similar to bury Is that why he’s continuing to sell equities and hold this massive cash position? Now he could be spotting this. I mean, again, this was activity that was similar, leading to, oh, eight into 2000 for him, where he was in net raise a raiser of cash. So maybe that’s what they’re doing. But the way maybe I’m looking at it as well, that we are looking at it is he’s also about to step down from being CEO of Berkshire. And their own company, Berkshire Hathaway is not growing revenues the way that the market is. And so there could be a time where there’s a leadership change over where there may be holding this capital to actually invest in themselves, maybe more than worrying about the market and deploying it. So again, it’s something that’s always interesting to watch. You know, reading his annual sharehold letter, I would recommend that to everybody, always his musing as the market of fat are fantastic. Yeah, but it’s interesting. Again, two huge players right now that are either raising cash. We don’t know the reason, but we just talked about that, and then again, bury that is absolutely placing bets against the market. So something to watch now, if we just look at how the markets have been behaving this year, certainly over the last week, you know, broadly, I would say we’re probably due for a little bit of a pullback. We’re deep into earning season. We’ve had, generally speaking, a lot of earning expansion, earning growth, beating market expectations. And what’s happening is the market’s not raising, it’s actually taking profit and selling off into that, which we call selling the fact. Right? You buy the news, you just sell the facts. And so I think we might be due for a little bit of a pullback leading into the end of the year. This week alone, we have some of the more growthier areas the market that are leading the drawdown, leading the losses. So you think about discretionary stocks, we think about technology stocks, small cap stocks, those are the things right now that are being sold off. Now again, we’re not talking about major sell offs. We’re talking about just taking some profits off the table, if we look at major parts of the market, right? Big US stocks, small stocks, international stocks, you know, large cap US stocks right now have the most losses for the week. And again, that makes sense, because most of the AI theme is being played out within the technology space, in the big hyperscalers that are in the s, p5, 100. So again, we’re seeing a little bit of pullback, but almost, you know, after almost a straight line run up from the lows of April, I would say this is needed, because the more we stretch this rubber band out, the more when something does go wrong, whether it’s geopolitical risk or the Fed doing something, or a big earner missing their earnings expectations, the pullbacks gonna be that much harder. So I think a little bit of sideways market activity, a little bit of volatility, honestly, is probably a good thing. Now, we’re officially in the longest stage of a government shutdown that we’ve ever seen. Right? We’re north of 35 days now. That does mean we have a lack of certain data the Fed is going to use that the market uses to price in broader economic growth or contraction. But I don’t think that’s necessarily yet an issue. So at some point, you know, can the market go into a complete shutdown for 6090, days? I don’t know, but we are officially in historic territory that is coinciding with a little bit of a pullback that I think has to do more with earnings and expectations than it does the government shutdown and jobs itself. We still think that probably the Fed is on path to cut rates again, but we will see. So as always, we’re watching this stuff. Let us worry about the boring financial stuff. We’ll keep you updated. Please like and subscribe so you get all this information every week, and I look forward to talking to you again here in a week or so. Thanks, everybody. We’ll talk soon.

Please note: transcript has been modified after the time of recording. 

Economic indicators and stock market performance cannot be predicted. Opinions expressed regarding the economy and the stock market belong solely to Ken Moraif on behalf of Retirement Planners of America and may not accurately portray actual future performance of the economy or stock market outcomes. Opinions expressed in this video is intended to be for informational purposes only and is not intended to be used as investment advice for individuals who are not clients of Retirement Planners of America. All content provided is the opinion of Ken Moraif, CEO and Founder of RPOA Advisors, Inc. (d/b/a Retirement Planners of America ) (“Retirement Planners of America”, “RPOA”). ©Copyright 2023