'The Future Drives the Present' - Controlling Risk to Outperform Tomorrow's Markets

Stansberry Investor Hour

Stansberry Research

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4.4 • 677 Ratings

🗓️ 3 April 2023

⏱️ 56 minutes

🔗️ Recording | iTunes | RSS

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Summary

Dan and Corey delve into the Personal Consumption Expenditures (PCE) index and its latest release from last week. They discuss the significance of this development and how it could affect the Federal Reserve's decision to raise interest rates.

The two also point out that recent behavior in the bond market suggests that the end of the Federal Reserve's rate-hike plans may be near. While this move may contribute to future CPI and PCE numbers, Dan and Corey are not entirely convinced that it will solve the other issues in the economy.

Then, Dan introduces Michael Harris, a renowned quantitative trader who is credited with developing the first program to identify anomalies in price action and generate automatic code for popular platforms. Michael is also a prolific author, having written four books on price recognition and his market analysis blog, Price Action Lab.

Michael explains his approach to trading and notes that while there are no barriers to entry in trading, the biggest challenge is maintaining discipline and effectively managing risk.

Michael goes on to express his surprise at the inability of most active managers to outperform the market and makes the case that as long as the US dollar remains the world's reserve currency, the US will continue to dominate in the technology sector.

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Transcript

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0:00.0	Hello and welcome to the Stansberry Investor Hour.
0:09.4	I'm your host, Dan Ferris.
0:10.8	I'm also the editor of Extreme Value and The Ferris Report, both published by Stansberry
0:16.1	Research.
0:16.9	And I'm Corey McLaughman, editor of the Stansberry Daily Digest.
0:20.2	Today, Dan interviews Michael Harris, author and former hedge fund trader.
0:25.5	And in our rant today, we'll talk about PCE inflation, the Fed, of course, and meme stocks and whatever else is on our minds.
0:34.1	And remember, if you want to tell us what's on your mind, email us at Feedback and InvestorHour.com and let us know. That and more right now on the Stansberry
0:43.3	Investor Hour.
0:52.4	Well, we can't not talk about personal consumption expenditures numbers that just came in.
0:59.5	So we may as well do that first.
1:02.1	All right.
1:03.0	What are they?
1:04.5	Yeah.
1:06.0	All right.
1:06.8	The PCE index, of course, is personal consumption expenditures. It's just a way to gauge
1:11.9	inflation. It's the Fed's favorite way. We're one of their favorite ways to think about inflation.
1:18.7	And the, it's done monthly, just like the CPI. And it just came out, and the yearly increase in
1:27.3	prices declined from what, 5.3% in the prior month,
1:37.1	year over year, right, annualized to 5%. So, you know, lowest level in like a year and a half or so. And, you know, the narrative
1:49.0	is the same, right? Inflation is peaking. Inflation has peaked. I'm not sure if I'm comfortable
1:54.5	saying that, but yes, the rate of year-over-year changes in CPI and PCE has been falling. And so you can't ignore that.
	...

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