PODCAST EPISODE 289 – UPDATE: Jim Cramer’s 2023 Predictions

——————————————————————————————————————————-

0:11

Hello, and welcome to the sound finance group podcast. My name is Paul Adams. I’m your host, I’m the CEO and founder of sound financial group. I’m joined, as I am most of the time by Corey Shepard, but today he is in an undisclosed location in the Pacific Northwest. Cory, can you hear us clearly from your location?

0:29

Loud and clear coming in from the field here, Paul? You know, I was thinking we should have, we should have a little contest. Like, if any listener, any viewer, you probably have to be a viewer for this one. The podcast only is not going to work.

0:44

Unless somebody didn’t recognize that bird. I hear a

0:47

bird right? Well, that’s one of the clues. Whether it really is a bird or it’s a soundtrack that we’ve placed to further fee escape the truth. But I think anyone who was watching that could pinpoint my location within I don’t know, let’s say 10 miles, they get a prize. Right into the comments.

1:08

I love it. I love the idea. Although, have you posted to Facebook at all where you are? I don’t want this to be a lay down for one of your clients. That’s like just goes to your Facebook and sees it. You’re so we’re good on that. I say we’ve been making it interesting. Yeah. First person to guess it in the comments. I will.

1:31

It doesn’t already know like that. I didn’t already tell us. Yes. Or has been here. Yes. Yes. So I’m talking to you, mom.

1:41

So what we will do is we will send them $100 amazon gift card. Somebody gets that correct? Yeah.

1:51

Send a location and it’s within. I think 10 Miles is a good 10 Miles fair. Yeah.

1:56

I like it. I like it. Cory doing the first giveaway. Impromptu didn’t prepare me for it. I am rubbing off on your quarry.

2:07

I’m feeling all runaway right now. It’s great. I love being a renegade one. It’s exciting.

2:13

Speaking of runaway, and Renegade, we have a fun episode for you guys today.

2:19

It’s a really great segue. Well, we’ll, we are going to look at some of the stock predictions or performance predictions that were done earlier in the year. Now for those of you that maybe didn’t get a chance to watch these episodes, I think they’re hoot if you guys aren’t checking it out on the regular. We sure do have a lot of back episodes to share with you guys. You can see, you could just scroll it, you could get carpal tunnel just scrolling through our channel. I’d encourage you guys to give it a shot. But this. This is right from one of our episodes earlier this year where we looked at Dave Ramsey’s stock advice. Again. It was a January episode lot of big beard on me. I’m not sure what was going on. But I will tell you, my back was stronger than Yeah,

3:13

I am ready to go. I think you look happy. If I move forward five seconds, 10 seconds, eventually you look happy again. I don’t maybe you’re not happy at all, because I this is the episode I also showed you memes. But anyway, we looked at the Jim Cramer recommendations that were made back in January. And there were five major stocks that he said these were big. And we kind of joked about at the time, these are big losers from 2022 that are going to come back in 2023. And, and there’s some rationale to that, right. Like if a stock has a negative year, it may be more likely to have a positive year, the next year. But here is the big point about any of these stock recommendations before we get into how did these actually do this year. And then we get to have more fun that come January will encapsulate the full year of these prior recommendations. But what we’re going to talk about today that your guru could have won, and you could still lose, meaning their stock recommendations could have been on point. And you might not have made the purchases at the right time. Or right your stock guru could be dead on but because you exited the positions too soon, or you held them for a year and the return was so good. Like I’m sticking with it. And then you’re there for the next year when that individual stock has a significant downfall. So that’s one end of the gurus those are the gurus that are making recommendations to then you have the right

4:50

because they don’t tell you they say here’s the stocks you should buy this year but they’re not always telling you when exactly to sell I think that’s one of the things we’ll get into in just a few minutes that I’m excited about, as you know, we’re we’re not all the way through the year. And we’re just say like, what’s it like to be checking in on this trade that you made earlier in the year and see, is this one up? Is this one down? What should What should I do about how the year is going with these? It’s a really tricky equation.

5:21

Yeah, you’re exactly right. Because for every buy recommendation a guru makes, they don’t exactly accompany it with a sell prediction, if you think about just in some ways, poor Kramer. And what I mean by that is every night, he’s got to get together, put together a show. And then he’s got to talk about companies. He’s got to say, this is one to buy, this is one to sell. This is one to keep if you got it, but don’t buy it. If you don’t. And you do that five nights a week, it’s pretty tough to then circle back he talked about, I don’t know even for stocks to show, that’s 800 stocks, you’d have to keep track of to then be able to come back, give the sell recommendation, etc. So the thing is that the guru could even have most of their predictions, right? But if you didn’t buy all those recommendations, or you missed one of their recommendations, or you missed one of their sell recommendations, or they never made the sell recommendation, then you would miss out so they could win and you could still lose. So let’s look at some of Jim’s mix. Shack call Mr. Cramer Jim seems so familiar. So here are the big ones Qualcomm Lam research micron Airbnb, and I Lou Mina. alumina, alumina, aluminum. I don’t know. To me, it sounds like they make aluminum cans. Okay, let’s take Qualcomm first. That sounds about right,

6:57

Corey.

7:00

I don’t think you saw any of these before I flashed them very quickly. So let’s hit our first one. Qualcomm year to date. It started out the year at CES is January one opening $107 a share? Was it close on opening day started at 111. And it’s currently a 115.

7:24

But it was way higher. Early in the year, it’s almost like the Kramer wave. Yeah, literally, if you look at February, it went through the roof. It is entirely possible that a bunch of people listening to Cramer and buying it caused that initial,

7:44

yeah, let’s see what the date of this article was. That was a January article. But you’re right. And those articles propagate the internet. We didn’t I don’t think find it till later in January. But you’re right there, it could have gone up now. Your quote-unquote better return might have been if you bought it right at the beginning and then sold it here. And for all we know, he might have told people to sell it there. That’s one look, though, maybe we’re going to create the Cramer momentum index, where you buy everything he says to buy and sell it one month later. And how would you have liked

8:23

Cramer momentum index, sound financial group TM, so but you get you get a sense of it. And so you could have sold higher but more you might have missed his sell recommendation. We certainly aren’t listening to Cramer four hours a day five days a week to find out. But that’s what you’d have to do. Now, by the way, just think about that. If your aim is okay, I’m going to manage my own money. Huge. And I’m going to trade individual stocks. Cory wooden wouldn’t you think let’s say somebody was going to do that? When do you think that an hour a day minimum would be the study time you should put in if you’re going to manage your own portfolio all in individual stocks. The minimum you should be doing is an hour a day.

9:13

I I think the minimum could be more than that. But I’ll go with it for definitely at least so less

9:25

200 hours a year and insert your what you’re worth an hour in the marketplace. Like that could be a really expensive portfolio management job. And we know from all the academic research, that there is no evidence that any managers consistently or predictably even beat the market. So there you would be an active manager competing with people in great big towers with eight screens in front of them trading every day. Only looking at maybe even a limited set of stocks versus you list Your Cramer in the evening for an hour, really digesting it and then executing the following day would not only be a lot of work, but it probably wouldn’t work because you would a for it to have worked, you would have needed Kramer to have said sell here or sell here, which would have been greater gains than before. But even then you need to be watching that next day to figure out where you put the money at and Qualcomm when he sold it.

10:29

Alright, let’s see, you know, from a financial entertainer standpoint, it’s actually a beautiful system. If you’ve told folks what to buy, and then they are waiting around to see if you’re gonna say to sell it against they have to tune in pretty much every day to see it like that actually is a really great model for TV ratings or a podcast or a newsletter. Absolutely.

10:51

Reminds me of the new newsletter I was going to tell you we should release just kidding. Alright, so now we’ve got lamb research now got it the Kramer momentum index Kramer moment Cmaj. Well, here is so this one, crew rushed it, Cory crushed it, this one is up. A total of Gosh knows how 75% ish. So it’s about $400 a share. Now it’s $700 a share. So Cramer, you crush it on this one. Now, in less guys in less. Now, remember it says these are the stocks that are going to crush it in 2023. But let’s say there was a sell recommendation for Kramer like right here on this, for some reason, lamb fell out of his liking. And it may not have traded may not have worked out. Next on the list.

11:53

And for the end of year, we’re going to go back and look at some of those things. Say like, did you know well, for the end of year encapsulation, we’re going to kind of cover back to the whole but you know, here’s the the other problem is, so far, we’ve looked at two picks. One that kind of did okay, but took you on a roller coaster ride and one that was just a ramp up through the year. So like how much of each of these? Did he say to buy? Like, are you buying the same amount of what? Because he just says better buys money? This one?

12:26

Yeah, that was me certainly as well. Well, here’s the funny thing. So I just decided to do this on lamb research. Now, if you were a long term investor in lamb research, and let’s say you started at the beginning of 2022. I don’t know what lamb research does, but let’s say that somebody’s impassioned about it and they decided they want to invest in it

13:11

Lamb research just broke even from where it would have been at the beginning of 2022. Now that I know of he didn’t recommend it back in January 2022. But here’s the thing we would have all of you guys think about. If there was an individual stock trader who is absolutely crushing it, then what they would have I would imagine on their website is a chronicle of every single recommendation they’ve made both the buy and the sell and what your return would be. Or at least if they had an absolutely stellar record, nothing would drive ratings better for them. But if their record, isn’t that stellar, yeah, now the one I have seen, but it’s about congressional representatives, because they have to disclose within I think 45 days, many of their trades, and then you can go back and look at their purchase and sale dates and see their returns. Listen, there are some people in Congress that are making Warren Buffett look like an amateur on both parties. So they get a chance i i somebody does all of them. But if you go if you go on Twitter, I think it look for Pelosi stock picks. There’s a guy that updates like the top 10 net worth people in Congress and the rate of returns

14:44

and it’s not insider trading. Using any of their knowledge from everything that they’re doing running.

14:54

That is what they say. But the funny thing is the returns haven’t dropped because technically they’re not supposed to do insider Trading, but the gradual representatives have a very low likelihood of incriminating one another. And so they just kind of overlook the late trades or give them a small fine or whatever. So since they passed that insider trading, but four years ago, there still seems to be something like that happening. But here’s the point. That is a history of congressional stock trades that looks real, real profitable, and somebody has assembled it and shown it all. And that’s what we haven’t seen from these gurus. And that’s why they could win. Just because lots of people listen to their recommendation there recommend. None of Jim’s recommendations actually have to Mr. Kramer, sorry, too familiar. None of Mr. Kramer’s actual selections need to work. If he keeps people listening to his show, then the broadcast company will continue to write him large checks, period, he can win. And the stocks he recommends to you or any guru recommends to you can lose and they can still win. Alright, let’s get the next one micron, micron year to date is up from about 50 to 70. Now, almost every single one of these is a growth oriented company. And it again, it makes sense that if they had a bad year last year, and as the environment improves over the fear of last year and the sell off, they’re going to tend to do better and we’ll see if it holds up between now and year end. Next up is Airbnb. Now, Airbnb, despite all the news about the rent pocalypse that is happening, especially around certain parts of the United States, the southern United States, bookings are way down, Airbnb is faring quite well. Because keep in mind, even the movement of these stocks is random. There could be some random piece of news that doesn’t have to do with the fundamentals of their business that impacts their stock price. And then last but not least, the most fun to say one Lumia in a new luminaria any case, they have a hardly moved at all this year. Oh my gosh. Well, something bad happened today. Whoa. Holy mackerel, Is there news on this? Market fall at midday? Amid oil and interest rate? Can

17:36

you do it battles with investors?

17:40

Oh, is that was that down there?

17:43

Yeah, three hours ago?

17:45

I see it. Yeah.

17:47

Wow. Wow. So I mean, this week versus last week? Yeah. Goodness gracious.

17:54

But what I mean, now that’s a $7 price movement. And keeping in mind, guys, like everything with your money is being marketed. You look at this chart, the chart starts at 161 on the vertical. So if it moved up by $7, it would look like an enormous game instead of dropping by $7.

18:14

Right? So he’s like it went to zero. If you just look at it pretty quickly, it’s like, yes.

18:21

And it wouldn’t look like it went to the moon had it gone the other way. Now, when when you guys see this, and you see like this stock drop, just think about that for a moment. Now maybe this stock is going to end 30% higher this year, maybe whatever that article is that we pointed out at the bottom about the CEO and a battle with all of their investors. Maybe that actually turns out and the investors feel appreciated and a ton more people pile into the stock and it ends at 200. We don’t know. Because that’s the problem with buying individual stocks. When you buy an individual stock, now you’re stuck making the decision or offloading that decision to somebody else. And the thing is that, you know, we just talked about earlier, if you’re just going to manage your own individual stock portfolio, an hour of concentrated study is the minimum every day you should be willing to invest. And that only increases the likelihood that you won’t be to bar far below the market. But we have no evidence that you as an individual investor could beat the market just like we have no evidence that Morgan Stanley could, or Edward Jones could. Right. I mean that that’s the part that I think gets lost Korean people all the time. Is they think the discount trading firm and the Morgan Stanley’s of the world. Or you know full service brokerages are fighting one another one is saying And you can’t outperform, but our managers can so use us. And then the E trades of the world are saying, basically, you don’t need all that expensive and advisor, you can beat the market. But they’re both operating under the same supposition that people, whether that’s an expert in a building somewhere, or you personally can beat the market, right? All you need is more information is kind of how they market look at these charts and research and, but the people that are making 10s of millions of dollars every year, only looking at stocks, in either Mac making recommendations like Jim Cramer, or managing the money like an investment manager, which we’re going to look at Ark investments here in a moment for Cathy wood. And you don’t know which one is going to work out, make all the decisions yourself, no academic evidence that’s going to work, listen to the gurus, no academic evidence that will work, or blindly put it in the hands of a guru, which is what I mean, if you’re investing in, I would say just a heavily personality anchored fund like Ark investments, you’re offloading it to what their knowledge workers would say, would you? Is that, okay? Summation of like the three ways people would go, and what we’re saying is, can’t beat the market, you need to own almost all of the market, ie to rebalance consistently. And to operate with your money like an endowment. Well, frankly, here’s how we should be operating with our investment money. We should be managing it. Like we’re managing it for somebody else. Like Cory, have you seen? The statistics on like the like, like the amount of compliance if you have somebody you’re responsible for their health, whether that’s a dog, or a relative? And the compliance with medications versus if it’s my medication?

22:01

Yeah, yeah. Let’s see, we got a clue here flying by, it’ll help anybody who’s looking for where I

22:07

got that Amazon gift card.

22:10

I think they cut the internet off on me for a second, as they were clearing the flight path. i One of the other things. Well, I’ll give you another one, Paul, which is, in the film industry, generally, the rule is, you don’t make a movie with your own money. Like someone’s got a great script or director wants, he has this idea. They want to develop this project. They they don’t, most of the time, very rare exception, they don’t use their own money, they go and get investors not that they couldn’t afford it. But it proves to the marketplace that this is a good idea. Like you prove to yourself that enough. Other people would want to invest in this project, that it’s a good one. It’s not just your because you’re too close, emotionally. So with our money, it helps to Yeah, act like it’s for someone else. That’s it. Yeah.

23:04

And then think about that. So what they’ve shown is like, even if you as an individual, the average individual gets something like an organ transplant. I’m sorry, I don’t remember the total numbers, but some, like only 60, like you will, you just got a new insert Oregon here. And if you don’t take these pills, that Oregon will die, then you’ll die after 60% compliance. If it’s your dog, it’s 100% compliance. It’s your child or a parent that you help care for, it’s almost 100% compliant. So what we need to think about with our money is less about, oh, this my money, I can take the risk i i want that gain, I want to chase those big returns. Instead, what if you’re investing that money for your mom, or your dad, or retired? They’re 70 years old. That is who you are managing your money for right now as the 65 or seven year old, that you have a promise to that you’ve said to yourself someday in the past, I am going to have enough money to retire one day. And then like we all do, we make decisions in the short term that don’t line up with that because we’re not relating to it like this is a different person. It is a different person. I’m a different person I was 10 years ago, I fully like God ain’t done working on me. I’m gonna have a lot of work done between now and 65. And I need to be managing for that man I’ve not met yet. Who absolutely needs to have that money in the future. Because I and many of you listening have a promise not only to yourself that you’ll be financially independent one day but that at a minimum, our children will not have to work to support us during their prime years when they’ve got children. That is a commitment. I am after keeping but who has to live with me Keeping that commitment or not is not me. It’s that 65 year old version of me I haven’t met yet. And I may not have that much more in common with than the average Rando. I meet on the street. We’ll find out, I hope. Right? Right. But so let’s talk about that idea of let’s say you just handed it off and you went with one of the gurus, in this case, Ark investments. Here is the performance your day. Wow, something happened today. Oh, Ark investments, got some good got some good news. On Friday, it looks like a sea we are update today. Let me just give her a little refresh to see if anything happens. Went back to one day, let’s go all out. So it looks like now year to date. So Ark started at about 30 and is now at 43. So great, great for my money is up like almost 50% 40 plus percent this year, crushing it way to go Ark. Now, do I just stay there? Because had I been there, since the beginning of time. This is the part that’s a little more sobering. That’s pretty good return year to date. But if I go back, that’s basically the same pricing, I could have bought it for in March of 2018. And I would have started with $40. I would have written that all the way up to 150. And I’d be back at 40. So if we put that in perspective, Cory, that might be like, I started with 100,000. And then I ended up at like, three, like, a gesture to four out of bounds, like maybe 370 If I’m doing in my head, right? And then you’d be back down to 100,000.

27:01

Now, this brings up another point, which is whatever guru or your guru you’re following. What magnitude are you investing in each of those funds? Because if you’re, if you’re talking that you put 100,000 in the arc or into micron, or something like that, well, now that’s intriguing. But if you’re putting $500 into each one of these pigs, it’s literally not worth your time to go for 100% growth. It’s just, it’s just not so you’re either not putting enough in to make that big of a difference. Or putting enough in that if you’re wrong. It could ruin you.

27:39

Yes. I think that’s a great point Korea, because it does happen that people relate to it, like, look at how good X Y or Z did. I’m just gonna pick one of these, which one of them that did really good? Was lamb that did really good. They go, Where do I get my year to date? Again? There it is. So lamb crushed it up, like huge percentages. But now the question is, to your point, Cory, let’s say if these were $100,000 each, then that lamb growth looks amazingly attractive. But then the problem is, after January, I put in $500,000. Now, and let’s say that was my investment capital, well, I can’t track the rest of his recommendations he makes, he might make better ones in February, I can’t buy him until he recommends I sell these ones. Right. And so but now, you’re still investing all this time, energy, opportunity cost watching the show. And if there’s $1,000 in each of these, it doesn’t matter. You can’t you’re not getting paid enough for the amount of time you’re investing on this very, like almost everybody out there. If you’re studying the markets and wanting to beat the markets, you’d be way better off studying tax strategies. Because that’s something not everybody has access to. That’s something where you could actually have a premium on your balance sheet, studying real estate investing something else where there’s imperfect pricing. The problem is the stock market, like we just saw big jumps that just happened today because of information. It just happened today, information that nobody watching the stock knew that that news, which means new information was coming out. Therefore they couldn’t trade it on it either.

29:30

Oh, and don’t forget that if you are, you know, making a sell and another buy, within a year, you’re you’ve got to outperform the 30% hurdle rate that the IRS imposes on making gains in less than a year because that’s short term capital gains, and that’s income rates. So you made a 50% growth while you’re giving 30% of that back if you’re trading inside the year.

 

 

This Material is Intended for General Public Use. By providing this material, we are not undertaking to provide investment advice for any specific individual or situation, or to otherwise act in a fiduciary capacity. Please contact one of our financial professionals for guidance and information specific to your individual situation.

Sound Financial Inc. dba Sound Financial Group is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance. Insurance products and services are offered and sold through Sound Financial Inc. dba Sound Financial Group and individually licensed and appointed agents in all appropriate jurisdictions.

This podcast is meant for general informational purposes and is not to be construed as tax, legal, or investment advice. You should consult a financial professional regarding your individual situation. Guest speakers are not affiliated with Sound Financial Inc. dba Sound Financial Group unless otherwise stated, and their opinions are their own. Opinions, estimates, forecasts, and statements of financial market trends are based on current market conditions and are subject to change without notice. Past performance is not a guarantee of future results.

Each week, the Your Business Your Wealth podcast helps you Design and Build a Good Life™. No one has a Good Life by default, only by design. Visit us here for more details:

yourbusinessyourwealth.com

© 2020 Sound Financial Inc. yourbusinessyourwealth.com

———————————————————————————————————————————