A Market Panorama – Live with Mish Schneider

Published on
October 21st, 2020
Duration
73 minutes

The Global Macro Litmus Test — Live with Paul Hodges


A Market Panorama – Live with Mish Schneider

Live ·
Featuring Mish Schneider 

Published on: October 21st, 2020 • Duration: 73 minutes

Real Vision editor, Max Wiethe, joins Mish Schneider, direct of trading, education, and research at marketgauge.com, to discuss what the remainder of 2020 holds for markets. Schneider revisits her thoughts on stagflation and how that is currently playing out in the markets as well as the several sectors she has her eye on through the lens of her economic modern family and beyond. She also speculates on how the markets may react to the U.S. presidential election outcome and reveals a stock pick whose future performance may come as a surprise. To access Mish's charts, go here: https://rvtv.io/31OBYyX.

Comments

Transcript

  • gm
    george m.
    31 October 2020 @ 16:57
    Pretty terrible way to think if you only incorporate views that resonates with you. Oh wait there is a term for this...
  • gh
    graham h.
    27 October 2020 @ 13:53
    I always learn something actionable or watchable from Mish! Thanks for sharing Mish.
    • MM
      Michele M. | Contributor
      27 October 2020 @ 14:10
      Thanks Graham!!
  • RG
    Rob G.
    27 October 2020 @ 08:07
    Great session thanks Mish...what's your lookback period for the Momentum indicator you mentioned in the DBA section?
    • MM
      Michele M. | Contributor
      27 October 2020 @ 13:29
      Thanks Rob! 50 and 200 days
  • JG
    James G.
    27 October 2020 @ 12:46
    She seems to be her own cheerleader. She don't need a fan section. LOL
    • MM
      Michele M. | Contributor
      27 October 2020 @ 13:28
      And why not? I share the confidence with you all-isnt that what it's al about?
  • MH
    Michael H.
    25 October 2020 @ 23:33
    Value added...great discussion. Easy to understand, logical, and dynamite ideas. Wonder if Mish Schneider knows Mike Mish Shedlock who if i recall has also been on RV.?? anyway please have Mish back.
    • MM
      Michele M. | Contributor
      26 October 2020 @ 13:15
      Thank you Michael-appreciate that-and I know of Mike Mish but never have formally met him...
  • JB
    Jamie B.
    25 October 2020 @ 09:57
    Great interview. Always love listening to Mish & Max. Is it possible RV could add your guest's socials in the description. That would be greatly appreciated.
    • MW
      Max W. | Real Vision
      25 October 2020 @ 13:39
      @marketminute
    • MM
      Michele M. | Contributor
      25 October 2020 @ 22:54
      Thank you Jamie!
  • TW
    Todd W.
    23 October 2020 @ 15:48
    You know when you are playing call of duty. You throw a grenade, the person you were aiming for moves but all the sudden 2 people turn the corner the corner and BOOM. There's always that one friend who acts like they meant that to happen? Thats what this interview feels like. Good on her for getting lucky but it wasn't like she knew COVID would come and everything she lightly predicted would happen BUT damn does she act like its because she's just so ahead of the game lol
    • MW
      Max W. | Real Vision
      23 October 2020 @ 17:38
      Yes, but if you know that on a percentage basis that people tend to come around that corner, and you can manage the risk of not having the grenades and you have determined your kills over time will be higher throwing that grenade at that corner in the map than if you held them you are now thinking like Mish. You tried to dunk on Mish with your gamer analogy but all you've done is provide a perfect parallel. Mish has never claimed to be right 100% of the time or to know the future. She claims to know what a good risk adjusted set up looks like and how to size positions to be able take advantage of these over time in a profitable manner.
    • MW
      Max W. | Real Vision
      23 October 2020 @ 17:41
      If your scenario is someone who just played Call of Duty for the first time than so be it. But imagine Call of Duty never put out a new game and people had been playing the same map for years and years and Mish has been studying player behavior looking for the places where other players tend to congregate. Thats what she does. She has been trading these instruments since before my parents met. Thats the difference.
    • AB
      Alastair B.
      23 October 2020 @ 17:53
      PC or console Max?
    • MW
      Max W. | Real Vision
      23 October 2020 @ 18:01
      @Alastair Xbox. I'm a recovering CoD Mod 2 addict. I haven't played since high school and a brief relapse in college. Todd's comment made me think back to my college relapse and how myself and other people who had been playing the same old game for years and knew the spawns could chuck random grenades with surprising efficiency. We didn't know someone would be there but we knew that our probabilities of success relative to the chance of failure later in that life from not having a grenade were high enough to chuck away. It clicked instantly that this was a great analogy for many technical traders.
    • AB
      Alastair B.
      23 October 2020 @ 18:18
      What you said made me playing Unreal Tournament 2004 in college. I haven’t played for years either, but I always remember how predictable people were - but it was the structure of the map that made them that way. You are right, it is a perfect analogy.
    • MM
      Michele M. | Contributor
      23 October 2020 @ 20:29
      I have never played call of duty. And I will say though, it wasn't an act-I was ahead of the game-and the transparency of going live on these interviews (right or wrong) only proves it. However, if I came off as immodest, forgive me. This is not about ego, rather about sharing insights and experience that goes way way back. My bigger point is that I have received many comments from RV listeners who have made good money this year in gold, silver, bonds, shorting the dollar and in food commodities-and the bigger point still, is that now that covid has revealed itself to be the missing link we had no idea about at the time, the opportunity in the areas I covered is only just beginning . Best to you Todd.
    • TW
      Todd W.
      24 October 2020 @ 20:16
      Lol this was taken a bit harsher than I planned. My point is that a lot of investing this year was more luck than people care to admit. I think any prediction pre February and the related result this year are illusory correlations more than people care to admit. If I sat down and told you that the entire economy was going to go to shit, that the safe haven would be Apple stock in Jan... y'all would've laughed. If theres deflation next month, and government cant stop it... Is it because Im a genius investor sitting on cash? Thats more my point. I agree that she does have great planning and is a great investor. She found correlations like sugar that in a normal time seem like reasonable causation factors. I forget how harsh something comes off across a keyboard. I apologize for coming off so rude.
    • DF
      Denis F.
      25 October 2020 @ 08:37
      If you play watch pro-CounterStrike, you will see them throwing nads and smoke in certain spots as it is a high probability to hit an opponent or cover/delay the opponent. No-one can predict the future, but we should take a high probability outcome or when risk/reward is heavily skewed to your side, with a good risk management process (e.g. sizing, stop loss, etc).
  • RM
    Richard M.
    23 October 2020 @ 14:24
    Question - at about the 31 minute remaining mark, Mish states that people don't like to trade DBA because of tax implications on their IRA accounts. I think she meant on their regular (non-IRA) accounts, as DBA is a K-1 reporting instrument (which is a paperwork hassle at tax time). In an IRA it's a non-event as K-1 reporting doesn't affect IRA accounts (at least as far as I know - please correct me if I'm wrong!!!!).
    • MM
      Michele M. | Contributor
      23 October 2020 @ 20:31
      I always get the tax implications mixed up-you are right-it is a K-1 thing. Thanks for correcting
    • CE
      Carl E.
      24 October 2020 @ 03:34
      I am not a fan of DBA. Last time I checked, DBA had around 35% of its holdings in treasury related securities.
  • AI
    Andras I.
    23 October 2020 @ 02:48
    Thanks Mish and Max, the Muse for the presentation! Few smaller things with China: 1, CNY is pronounced yû-an (like "you" but with mouth forward, long sound) 2, The virus didn't "hit" China in December (as of what relates to consumer behaviour), not until near the end of January really (other than localised to Wuhan) - if anything, there was considerable hoarding of ag. commodities in households from what I could tell (mostly rice and flour but also longer expiration consumables) 3, When you calculate food price inflation in China, in my opinion pork, the dominant protein source in China should not be included as an indicator of the general trend as it had a Swine-flu related supply shock pre-COVID. Also, food price inflation topped out in April (driven to a large percent by pork's 60%+ move at some point) and has been trending down/normalizing to the historical 8% range ever since with a few local peaks. (4, Some say that restocking the pork population could have a positive effect on CORN demand again. This sounds like a bit too indirect to be a major driver though.) --- And then some unrelated things: KRE long idea: 1, How do you see the performance of GS, JPM...etcwith businesses that have very little to do with regional banks like First Republic, Fifth Group, Region Financial Corp, Keycorp (major constituents of KRE) transfer to these names? Other than very short term "Robinhood" misunderstanding based spike. 2, Their businesses are entirely different and are holding a ton of toxic debt and suffering a negative effect from low yields/yield curve control...and potentially targeted by the FED with more direct lending in the medium/longer term but probably a lot of hype on the short term if the conversation picks up. What do you think about these? 3, Also, there have been a few conversations on RV and elsewhere that the US is on the path originally set by Japan, first followed by Europe then the US - which has left European banks especially suffering.
    • MM
      Michele M. | Contributor
      23 October 2020 @ 20:41
      All great points and questions. I have KRE in the Modern Family because of the holdings that are different from the big banks-so you are right in your conjecture that the regional banks measure more of the toxic debt and exposure to low energy prices as well.by the way. Regional Banks are a better reflection of rural areas or smaller communities and as such, a reliable indicator of the true economic picture in the US. Perhaps it is more technical in nature, or perhaps it is the rotation towards value over growth. A concern does exist that the path Japan set is not a good one for the US. But for now, they (IYT IWM XRT KRE) are playing catchup -this is something I have not seen in years as stated. Why is there so much hope? This is where my real vision gets a bit blurry-but I suspect the legitimacy of that hope will reveal itself as true or false soon enough. Thank you!
    • AI
      Andras I.
      23 October 2020 @ 23:40
      Thanks Mish for the clarification! The indicator aspect of KRE made perfect sense, also well explained. Maybe I misunderstood your stance in the video but your update is giving KRE a more balanced, less optimistic view. Certainly all of us hope the Modern Family will be a happy family soon :)
  • je
    james e.
    23 October 2020 @ 15:41
    Max (and Mish): you said you don't own BTC directly but you own it through GBTC. At today's GBTC share price and its BTC to share, you are paying the equivalent of $15,118/BTC versus being able to buy them directly at $12,954. So, GBTC represents a 17% premium to the BTC price. Am I missing something or do you consider the ease and liquidity of owning shares in GBTC to be worth the premium?
    • MW
      Max W. | Real Vision
      23 October 2020 @ 17:32
      It's a trading vehicle. Arguably I'm getting it at a discount to mean and median premium of 38.89% and 32.89% respectively. If it always trades at premium and generally at a higher premium I don't really care. What will be the catalyst for it to no longer trade at a premium? If Bitcoin runs, people will buy GBTC and push the premium up towards that higher level and I'll get the benefit of BTC appreciation and the premium widening. I'm not a believer that the financial system will collapse and I'll be glad I have my BTC in cold storage. If you take any period since GBTC has been a liquid vehicle and look at GBTC performance compared to BTC performance you will see certain periods it outperforms slightly and in other periods it underperforms but its relatively close and highly correlated. Generally when the premium tightens is the worst time to sell and when it widens is the best time to sell. The recent low of around 6% premium happened right before it broke out most recently. https://ycharts.com/companies/GBTC/discount_or_premium_to_nav. My broker treats it like an equity and I pay zero fees and as Mish said you can own it in an IRA.
    • MM
      Michele M. | Contributor
      23 October 2020 @ 20:30
      What Max says-thanks!
    • AI
      Andras I.
      23 October 2020 @ 23:34
      Luckily it's a better functioning vehicle than ETHE (GrayScale's Ethereum fund)...what a disaster! Btw: one more thing to consider (with somewhat lower relevance now that the volatility is subdued) - during the summer there were some clear patterns where short term trading of BTC was quite lucrative (and holding GBTC nerve wrecking), especially for us folks who are on a flipped timezone. GBTC is only tradeable when NY is open (that's 9.30PM to 4AM on my time). Doesn't matter for HODLing though and matters less and less as GBTC became more liquid and BTC less volatile.
  • JJ
    John J.
    23 October 2020 @ 20:25
    Where are the charts?
    • MM
      Michele M. | Contributor
      23 October 2020 @ 20:42
      https://rvtv.io/31OBYyX.
  • AS
    Arjan S.
    22 October 2020 @ 22:05
    Always great to see Mish back! Mish, you mentioned an alternative to DBA around the 31:30 mark. It sounded like PBDC, but I don’t see that ticker come up on any searches. Is it possible I misheard it?
    • KB
      Kirk B.
      23 October 2020 @ 00:50
      RJA is a good alternative to DBA. It has actually outperformed DBA, and doesn't involve K-1s. It is a ETN, so there is potential counterparty risk.
    • AI
      Andras I.
      23 October 2020 @ 01:24
      It's PDBC - Invesco Optimum Yield Diversified Commodity Strategy ETF, but I wouldn't bother with it. "Invesco Actively Managed Exchange-Traded Commodity Fund Trust- Invesco Optimum Yield Diversified Commodity Strategy No K-1 ETF is an exchange traded fund launched and managed by Invesco Capital Management LLC. It invests in the commodity markets. The fund invests directly, through derivatives, and through other funds in commodities. It invests in derivatives such as futures contracts on commodities, commodity-linked notes and on commodity indices, exchange-traded options on commodities futures, swaps on commodities, and commodity-related forward contracts to create its portfolio. The fund primarily invests in energy, precious metals, industrial metals, and agriculture commodities. It invests through the wholly owned Cayman Islands subsidiary. The fund benchmarks the performance of its portfolio against the DBIQ Optimum Yield Diversified Commodity Index Excess Return index and the DBIQ Optimum Yield Diversified Commodity Index Total Return. Invesco Actively Managed Exchange-Traded Commodity Fund Trust- Invesco Optimum Yield Diversified Commodity Strategy No K-1 ETF was formed on November 5, 2014 and is domiciled in the United States." Security Name Weight CORN FUTURE DEC21 WHEAT FUTURE CBT JUL21 WTI CRUDE FUTURE JUN21 GASOLINE RBOB FUT DEC20 SUGAR #11 WORLD OCT21 POWERSHARES CAYMAN FD 783848 25.62% IVZ MS PDBC TRS 11/09/2020 ASSET LEG 16.22% BRENT CRUDE FUTR JAN21 TREASURY BILL 0 12/17/2020 19.42% IVZ GS PDBC TRS 11/09/2020 ASSET LEG 16.21% IVZ MACQUARIE PDBC TRS 11/09/2020 ASSET LEG 16.20% IVZ RBC PDBC TRS 11/09/2020 ASSET LEG 16.20% IVZ CITI PDBC TRS 11/09/2020 ASSET LEG 14.21% GOLD 100 OZ FUTR DEC20 11.87% NY HARB ULSD FUT JUN21 7.07% SOYBEAN FUTURE NOV21 7.04% TREASURY BILL 0 12/3/2020 11.66% TREASURY BILL 02/21 0.00000 7.77% LME COPPER DEC 20 5.56% GASOLINE RBOB FUT Jun21XBM1 COMB 5.07% NATURAL GAS FUTR JAN21 4.76% IVZ ML PDBC TRS 11/09/2020 ASSET LEG 4.06% SILVER FUTURE DEC20 3.40% NATURAL GAS FUTR Dec20NGZ20 COMB 0.90% LME ZINC DEC 20 4.91% LME PRI ALUM FUTR Jun21LAM21 4.59% TREASURY BILL 3.88% LME PRI ALUM DEC 20
    • MM
      Michele M. | Contributor
      23 October 2020 @ 20:33
      Yes Andras and Kirk both clarify-thank you all!
  • VG
    Viktor G.
    23 October 2020 @ 07:50
    So good! Thank you Mish and Max. Very brief, bringing directly to the point, highlighting new potential market darlings.
    • MM
      Michele M. | Contributor
      23 October 2020 @ 20:31
      Thank you Viktor!
  • PB
    Pieter B.
    23 October 2020 @ 17:33
    Max and Mish, this was wonderful!
    • MW
      Max W. | Real Vision
      23 October 2020 @ 17:42
      Thanks Pieter!
    • MM
      Michele M. | Contributor
      23 October 2020 @ 20:09
      Thank you Pieter!
  • DL
    David L.
    23 October 2020 @ 14:46
    Illuminating, as always. Thanks.
    • MM
      Michele M. | Contributor
      23 October 2020 @ 20:08
      Thank you David!
  • mw
    michael w.
    22 October 2020 @ 22:04
    Gold will climb if equities do.