And now let's get to it.
The big story breakdown.
The Dow reclaiming the 50,000 level.
And while the Nasdaq and S&P 500 have seen refreshing record closing yesterday.
And joining me to discuss this and more is Luke Lloyd, President & CEO of the Lloyd Financial Group.
Luke, thank you so much for joining us this morning.
Now let's start right there.
Records across the board.
What do you make of what we're seeing in the market right now?
Quickly, I mean yesterday everything was great and the stocks rallied.
Today it's taken a nice 1.5% dip, uh, pre-market.
We'll see where we end up today.
But I always, it's interesting that one of the, it's so simple, but it seems to be working.
It seems to be part of the conversation, and that's the fact that Bitcoin is holding up so well during these big selloffs.
So like a few days ago when we had a 2% sell-off in the NASDAQ, Bitcoin was barely down.
I think it was down 1%.
Historically, when the NASDAQ was down 2%, Bitcoin would take a 4 or 5%, maybe even a 6% downturn.
It's a higher beta kind of stock or higher beta position.
It's not a stock, it's you know, security, commodity, whatever you want to call it, but it's higher beta and the fact that it's holding up so well during these big drawdowns in technology tells me that these sell-offs in the market are really just going too fast, too quickly, and really the market calming down.
There's nothing really, I don't think, to be worried about.
So anytime we get a 2 or 3% selloff, we've been trying to deploy more cash, and a lot of people say, OK, well how can you deploy more cash if you're already invested?
Well, what we do if we don't have cash.
On the sidelines, which we have about 2 or 3% cash.
We've been deploying all of the past 3 months over about 20% cash position that we had going into the sell-off, but the 2 or 3% cash position, what we do is we deploy some of our more defensive names that aren't as risky and trade them for riskier names because we think this is a truly a risk on environment to add software names and technology because there's so many, so much value out there that's out, you know, historically beaten down.
I mean, 2021.
Um, you know, the IGV index is still at 2021 levels, which is software index.
We've been adding all these software names.
All right, we also saw yields hit new highs over the year this week with increasing chances for the Fed rate hike increasing.
So what is this all impact outlook?
What do you think about this just the overall outlook for the dollar?
A great question.
I think the dollar is going to continue to get devalued.
I think we're past historical measures.
We're past the point of no return when it comes to, you know, a lot of the things happening out there, the inflationary pressure, the currency getting devalued when it comes to printing more money.
I mean, we haven't balanced the budget since Bill Clinton.
That's probably not going to happen ever in my life.
Lifetime again.
So it's very interesting kind of where we're at from a historical measure and a government standpoint, but I call it the government Ponzi scheme.
The government's learned to bail things out.
The Federal Reserve's learned to bail things out.
The government's learned to print more money when things go bad, and all that does is inflate asset prices.
So I think we are truly going through the biggest wealth separation in history, probably over the next 40 or 50 years.
Lifetime and I put my money where my mouth is.
That's why I started Lloyd Financial Group.
You know, I wasn't born into legacy wealth.
I help people manage their money.
I think they're going to make a lot of money over the next 40 years, and I get to take a little chunk off the top.
So that's kind of where I truly think things are going to go over the next 40 years.
But in the short term, at least, Federal Reserve Worsh coming in, it's very interesting.
All right, so it looks like Luke, we lost Luke right now.
Oh, never mind there, Luke, can you hear us?
He wants, yeah, Kevin Warsh wants to get rid of the balance sheet.
He doesn't care about necessarily hiking or lowering interest rates as much, which is very interesting because most Federal Reserve shares only care about interest rates.
Um, so him offloading the balance sheet, we have to be careful because if the economy is on a tilting, uh, kind of a standpoint of, you know, maybe inflationary pressure and the economy slowing down.
If you offload the balance sheet, that, that takes out liquidity in the system, and the system's addicted to liquidity, so we have to be very careful with that, and we have to pay attention to that.
So we have a lot of things happening this morning, just a lot of movement.
So what opportunities do you see in the markets this morning?
Yeah, I think software is great.
We've been deploying a lot of our cash, like I said, in the software.
So, you know, some names that we own like Take-Two Interactive, uh, more of the gaming kind of software side of things.
Uh, we added Cellubrite, which is a, uh, software company that sells defense software to governments.
We have Palantir.
Uh, we've added HubSpot, uh, Sony.
Sony is actually one of my favorite positions, uh, that we've added recently because you not only get software plays, but you also get semiconductors.
So everyone's debating what should you own, semiconductors or software.
Why not own both?
Why not own a company that kind of is in both sectors?
Uh, I think that the software sector that's been beaten down 50%.
A lot of these stocks are down 60%, 70%, 50%.
I think there's so much value out there.
A lot of these stocks are below their 2021 evaluations, and they're growing just as quick, if not quicker than they were in 2021.
So I, I don't understand the whole anger out there that AI is going to replace all these software names.
It's just going to help these software names as they implement this AI technology.
All right, so let's turn over to crypto now.
The Clarity Act advancing out of the Senate Banking Committee yesterday.
How does this impact your outlook for Bitcoin specifically?
Bitcoin's going to a million dollars at some point in my life.
I think probably if I had to guess, somewhere between 10 and 20 years from now.
And in fact, it goes back to my previous kind of first point of my conversation.
We're going through this wealth transition.
The government will never balance the budget.
They'll continue to deficit spend.
The dollar will get devalued, and Bitcoin's a hedge against inflation.
Bitcoin's a hedge against the entire economic system.
At some point, Bitcoin may be the reserve currency at some point because I do believe that.
The dollar at some point in my life or my kids' life might not be the world reserve currency.
So I think that there's a place for this.
I think it's, you know, I see gold, Bitcoin getting close to gold's market cap, or at least the $20 trillion dollar market cap level to at least be a small portion of the world's wealth reserves.
So, you know, long term, I think it's a great buy, and I will say historically Bitcoin has 60 or 70% drawdowns along the way.
I think the high was what, $120,000 so 60% drawdown would probably $45,000.
So I think it's a good trading, uh, in a, in a, in a trading range for the long term, but, uh, over, over the next 1020 years, it's something you want to have a small portion of your portfolio because 1% position can turn into a 20% position as the 20x is hopefully over the next, you know, 20 years.
All right, Luke Lloyd, president and CEO of Lloyd Financial Group, thank you so much for joining us.
