00:00We've got two sides. At least someone seems to be looking for an off-ramp, depending on the noises and
00:04the signal that we interpret.
00:06So, brace ourselves, there could be a buying opportunity here, Mark.
00:11I actually think how Rick Reader has outlined it there is spot on, but I think it's important to take
00:19it fully in context.
00:20I think that when we're on the other side of this conflict, it will likely be a great buying opportunity.
00:26We talked a month ago on this show about how we had an extraordinarily bullish macro environment for stocks.
00:33That was the setup for the last few months before the conflict.
00:35But the conflict is real and we're not at the other side.
00:38And as you just said, Tom, only one side is really looking for an off-ramp.
00:42I don't know how the conflict is going to play out, but all the news flow would suggest that the
00:47base case assumption,
00:48unless you have some inside loop on the talks, is that there's going to be probably going to get worse
00:52before it gets better.
00:53Which means I don't think we're at that buying opportunity yet because we have a lack of clarity.
00:58And almost always in such scenarios, unless you're a very, very short-term trader,
01:04you're better off waiting until we know the problem is behind us and missing the first part of the bounce
01:10rather than trying to preempt it.
01:11You go back to the GFC 2008-2009.
01:14If you were trying to buy the whole way down in January, February, March 2009, you lost your career.
01:19You lost your job.
01:20You got stopped out.
01:21If you waited until May or June, you may have gone, oh, no, I missed the first 10, 20, 30
01:26percent of the bounce.
01:27Who cares?
01:27You had several hundreds of percent of upside in a one-way trade.
01:31And I think that's the way you've got to look at this.
01:32There is a lot of liquidity on the sidelines, as Rick Peter points out.
01:35When we get to the other side, if we get soon enough, it'll still be good.
01:38The problem is, what if we don't get to the other side of this conflict in the next month or
01:42two?
01:42Then the damage to growth is much more material.
01:44So I think how he's laid it out is right there.
01:46But I think it's important to emphasize not to preempt it.
01:50Mark, as a mark of the risk aversion today, we've got gold down along with stock futures and Asian stocks
01:56already.
01:57What's your thinking on gold as a haven right now?
02:02As you know, I think the gold, bearish gold at the start of the month, as soon as we finish
02:08the invasion, that is an extremely bullish signal for a dollar.
02:12So, you know, what happened at the start of the month, that's bad for gold.
02:17It's extremely inflationary.
02:18That means higher yields.
02:19That's bad for gold.
02:20And if people have bought gold because they're worried about a war in the Middle East, well, you just got
02:26your war in the Middle East.
02:27So you take profit in that trade.
02:28So as we've talked quite a bit, Lizzie, my view this month was to turn bearish gold at the start
02:33of the month.
02:33And I still think it's got more downside because the conflict is not over.
02:37And I don't think it will return to the bullish gold trade until those dynamics change.
02:42And until the conflict is over, we're going to continue to have strengthening dollar.
02:45We're going to continue to have a little bit of upward pressure and yields, at least for the moment, until
02:48we focus on the growth factor.
02:50And it's lost its kind of edge as a growth hedge.
02:53There's an extra dynamic as well.
02:54Central banks around the world, whether it's Poland or Turkey or others, are talking about potentially having to sell down
02:59their gold reserves they've accumulated to provide some kind of fiscal stimulus to their economies in various different ways or
03:05to ameliorate the impact from energy.
03:07So, look, I still think gold's got a chunk more downside and won't turn positive until the conflict's over.
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