'Stonks,' the Rise of Retail Bros, & Powell's Money Printer | Tony Greer
Hidden Forces
Demetri Kofinas
4.8 • 1.6K Ratings
🗓️ 17 June 2020
⏱️ 51 minutes
🧾️ Download transcript
Summary
In Episode 142 of Hidden Forces, Demetri Kofinas speaks with Tony Greer, editor of the Morning Navigator and founder of TG Macro.
This episode begins with a clip from David Portnoy (a.k.a Barstool Dave or Davey Daytrader), in what is probably the most epic hype video ever created for stock trading.
Portnoy has come to personify not only the recent rip-roaring retracement in equities, but also, the philosophy that the stock market no longer bears any relationship to the real economy. "It took me a while to figure out that the stock market isn't connected to the economy," according to David Portnoy. "I tell people there are two rules to investing: Stocks only go up, and if you have any problems, see rule No. 1."
Extraordinary monetary interventions remain the single most important causal factor for explaining this phenomenon (what we have referred to on this show as "market nihilism"). Whether investment flows are coming from passive funds or "passive people," what's important is that the allocators invest indiscriminately. As the popular fraise goes: "Always buy the fucking dip" (#ABTFD)
In our past episodes with Mike Green, we have explored the role of systematic passive investment vehicles in driving markets higher. With the recent return of the retail investor an additional layer of passivity has been added. Not only are these investors seemingly "price inelastic," but they also exhibit a disturbing level of indifference to fundamentals that is qualitatively different from anything seen in past generations. Unlike the Gen-X and Boomer cohorts of 1999 who felt that they could see a future that others could not yet perceive, this generation of zoomers and millennials seems to feel that they have figured out something far more fundamental about how things work today. In their view, the notion that the stock market has any relationship to economic reality is laughable. Fundamentals can't hold a candle to Jay Powell and his money printer. Along with this realization comes a mocking, self-deprecatory celebration of aberrance. Indeed, going through r/WallStreetBets or wojack images on crypto subreddits exposes you to imagery that is reminiscent of a scene from the Island of Dr. Moreau.
In their 90-minute conversation, Tony and Demetri explore all of these themes. They discuss the recent rip-roaring retracement in equities and how the Federal Reserve, with its relentless money-printing has broken the economy, turned the stock market into a casino, and sown the seeds for a political crisis unlike any we have seen in more than a generation.
You can access the episode overtime, as well as the transcript and rundown to this week's episode through the Hidden Forces Patreon Page. This week's rundown is particularly helpful for anyone trying to follow along or who has not been properly exposed to the subjects discussed in today's episode.
All subscribers gain access to our overtime feed, which can be easily added to your favorite podcast application.
Producer & Host: Demetri Kofinas
Editor & Engineer: Stylianos Nicolaou
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Episode Recorded on 06/15/2020
Transcript
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| 0:00.0 | Today's episode of Hidden Forces is made possible by listeners like you. |
| 0:04.4 | For more information about this week's episode or for easy access to related programming |
| 0:09.7 | visit our website at hidden Forces. I.O. and subscribe to our free email list. |
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| 0:21.5 | Each review helps more people find the show and join our |
| 0:24.9 | amazing community. And with that, please enjoy this week's episode. And the They had a chance to choke me out, but they didn't. So don't warn Buffett's it out on the airlines? |
| 0:59.0 | So don't Warrens it out on the airlines? |
| 1:01.0 | Is that what Warren said? I want to know everything about these |
| 1:04.4 | fucking planes. I'm doing my own research. I don't depend on 94 year old guys who live in |
| 1:09.9 | fucking Nebraska. I want to know everything about these airlines. |
| 1:14.4 | Get me information. I want to work. Penn to paper. |
| 1:19.4 | Penn to paper. I said I like the airlines I said the airlines impressed said Amelia Earhart bang the Wright brothers bang we fly in this country. |
| 1:38.0 | What's up everybody? That was David Portnoy. |
| 1:40.0 | If you don't know who he is, |
| 1:42.0 | don't worry, I'm only a week ahead of you. |
| 1:45.0 | I've been playing that video non-stop since it came out. |
| 1:50.0 | It is literally the most epic hype video I've ever seen for trading stocks. Nothing encapsulates |
| 1:59.0 | the rip-roaring retracement and equities that we've seen in recent months better than that video. |
| 2:05.9 | And I only played you half of it. |
| 2:09.6 | We are in serious trouble. Our markets aren't just totally disconnected from reality that |
| 2:17.4 | happens from time to time it's a normal part of the business cycle. Markets today have no relationship to reality, literally none. |
| 2:27.6 | There's no relationship between this stock market and the real economy. Even the premise that stocks are driven long term by fundamentals and earnings has been totally discredited. |
... |
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