• The government shutdown appears to be ending, and despite it being the longest on record, the markets barely reacted.

• Markets often “look ahead,” and because investors saw the shutdown coming, stocks continued rising throughout the entire period.

• There were follow-ups to last week’s discussion on Michael Burry, who has now deregistered his hedge fund and returned capital to investors.

• There’s speculation on whether Burry is stepping away because he feels out of sync with the market or because operating privately gives him more flexibility to invest without public disclosure.

• Large short positions in Nvidia and Palantir may reflect concerns about their valuations rather than a bearish view of the entire market.

• Some investors asked whether we should react to people like Burry or Warren Buffett raising cash or shorting certain companies.

• Buffett’s elevated cash levels may simply reflect fewer attractive opportunities for his style of investing and not a call that markets are about to drop.

• Our Invest and Protect Strategy allows us to avoid making early or speculative moves; we react only when the prevailing trend changes.

• We remain positioned to participate in continued market strength but also prepared to act if a larger correction develops.

• Recent study of legendary investors like Stanley Druckenmiller and Howard Marks reinforces a common theme: risk management in down years matters more than maximizing gains in up years.

• A notable lesson from top managers is that being “good enough” in strong markets and disciplined in weak markets can place investors in the top tier over long periods.

• The idea of potential 50-year mortgages is emerging as a topic worth watching, with many unknowns around rates, risks, and the impact on buyers vs. investors.

• Earnings season is nearly complete, with roughly 90% of companies reporting and over 80% delivering positive earnings surprises.

• Strong earnings continue to support current valuations and have helped push the market to new highs.

• Fundamentals remain healthy for now, and we are staying the course while remaining ready to act quickly if market conditions shift.

Transcript:

Jordan Roach

Hello everybody. This is our Weekly Market Alert Video for Friday November 14. I’m Jordan Roach, Chief Investment Officer Retirement Planners of America, and we have quite a bit to get through this week. Not a lot of news, but some interesting stories, some interesting learnings that I’ve been going through this week. We’ll talk a little about some lessons learned from studying historic money managers and some commonalities that we’re finding there. And maybe we’ll talk a little bit about, are we moving to a world where 50 year mortgages or something? So a lot to get into. We’ll start going here.

Finally, it looks like, after the longest government shutdown in history. Looks like the government’s about to reopen, and did the markets care at all? Doesn’t appear. So. In fact, despite the fact that we’ve had the longest shutdown in history, the markets during a shutdown had almost one of their best periods we’ve ever seen. So again, we’ve talked about this. This is why Ken and I didn’t spend much time on it. You know, if the market has enough time to see something’s coming, generally speaking, it’s going to plan right through it. And we saw that, so not much to cover there, but this is good for a lot of people that we’re reopening, so that’s good get some of that anxiety behind us. Now. We have some good follow ups from last week. We talked about Dr Michael bury he runs a hedge fund called Scion asset management, and he became legendary for shorting one of the first ones to short the housing market to the tune of $8.3 billion in late 2006 all the way through parts of 2009 and we talked about some big behe’s looking at all the noise and he makes these big plays, has he just been wrong enough to say, look, I made enough money in my career, I’m done. Or could it be something where, you know, as a Registered Investment Company, he’s got to disclose his positions, and because he’s so well tracked, the market can position against him. And so maybe it’s something where he is still going to be in the business, but he just wants to be able to make moves privately, because just an individual or family office, he might not have to do that. So that’s really interesting. Just a nice follow up from last week. Again, still some pretty big bets against Nvidia and Palantir. Now, actually a follow up to last week that I actually got from some of our clients and prospects was if somebody like he is going to be shorting the market, or if, let’s say, Warren Buffett, if they’re raising all this capital or net sellers. What are we doing against that? Well, a couple important things here. Michael Burry, taking large positions againstsome good questions. Now the next thing I want to go through is. You know, obviously, with our Investment Committee, we’re big, you know, students of market history, different cycles, credit cycles, market cycles, economic cycles. The other thing we always want to be studying is other legendary investors. And so I’ve been reading, following, watching interviews with several very important figureheads historically. And a few of those names would be Stanley drunken Miller. So again, I encourage everyone to go find anything you can on Stanley Druckenmiller. He made compounded 30 plus percent returns for 30 years. Pretty unbelievable. Another guy is Howard Marks, who runs a firm called Oak Tree Capital Management, and he puts out incredible memos every quarter that, again, you can go find their public and I’ve been studying them because, again, they’ve both been very good at navigating across market cycles, not just good years, but also bad years. And the common thing both of them preach is being good at the up years matters far less than being able to navigate the down years. And again, that’s something we’ve talked about as well, obviously over the years. Now, of course, they are also good in the up years, but they’ve always stressed their number one philosophy is risk management is the most important thing. You know? What Stanley Druckenmiller recently said is, you can be making 15 or 20% compounded returns, but if you get one or 230, 40, 50% loss years, your compounded returns are going to get cut in half, certainly probably cut in by a third. So you can go from being the darling of the show and the best manager to very average to sub average very quickly, even if you’re really good at up years, right? That’s how problematic those down years are, which is obviously something that we agree with. The other thing I found very interesting on Howard Marks side, who is more in the credit space and the equity side? But again, he’s a he is very good to study on both. He always has musings about markets, stocks and bonds. Is he was talking about one of his friends that’s been it was a fund manager for 30 years. And the interesting statistic about this fund manager was, if you look about all of his peer group, okay, relative and relative the index itself, he was usually in up years only in the top 40% of his peer group. So again, better than average, but

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