00:00If you look at it for the past six years, it's been a one-way street down. It made a
00:04nine-year
00:04low in October of 2023 and recovered, but not by much, and now you've got things like the
00:09Treasury interventions to factor in. Is TLT dead money? TLT is not your best bond play. We are big
00:17about this at Tuttle Capital Management because we like to access our bond plays through property
00:24and casualty insurance. The reason is, is they index to zero and TLT indexes to the index of
00:30bonds. So if the index of bonds is down 13% and TLT is down 12%, then they're winning.
00:36And so it's just sort of a different way of accessing actively managed bonds in a portfolio.
00:40And if you look at the chart for property and casualty stocks and TLT in 22, when we had the
00:47correlations between bonds and equities change, you'll see why that is probably a better play.
00:52But the problem with bonds is they're just not always a hedge. And the reason they're not always
00:57a hedge, because obviously since we started the hiking season with Powell, if equities are selling
01:04off because interest rates are moving higher, then obviously TLT sells off. And when they came out with
01:09the original idea behind the 60-40 portfolio and access to things like TLT, people were buying
01:14Treasuries direct. And then you could say, OK, that's guaranteed. But of course, TLT is not guaranteed.
01:20Yeah, no doubt. I will say, in TLT's defense, in 2008, when stocks were down 35%, it went up 35%.
01:27It
01:27fully hedged your sell-off. But it just doesn't do that very often. It's a rare case. Let's talk
01:33about just the government buying things. We've been talking on the show for the past couple months
01:39about just the idea that stocks have this Fed put in them at all times. And the Vanguard investors
01:46seem to know that. I mean, is there any reason to just sell anything? Like, does it make sense to
01:51not be
01:52invested in everything when you have the government basically jumping in this quickly? You imagine if
01:58things went really bad, what they would throw at the market. Just seems like it just doesn't make sense
02:04to be bearish. I don't know. Am I wrong?
02:06No, I think you're right. I mean, there's just a tremendous amount of liquidity in the system. But there are
02:12things that have meaningfully changed after COVID. First of all, the Fed was always sort of the put,
02:17right? And it used to be, okay, the dog would wag the tail, right? And the Fed, it was don't
02:23fight
02:23the Fed. And the Fed was sort of the provider of liquidity via quantitative easing and the balance
02:28sheet, which, you know, increased a lot during COVID. But what really took over the driver's seat
02:32is the fiscal spend. And now you kind of have, you don't have don't fight the Fed anymore. You have
02:38bond vigilantes coming out and trying to front run the Fed based on inflation numbers. And you have
02:42Warsh trying to solve this sort of change in our culture by, you know, getting these task forces
02:48going. And I'm curious to his speech on Friday how that's all going. I think it's a responsible thing
02:54to do to relook at things. The other thing that's meaningfully changed is, you know, how thematic
03:01equities have kind of taken over for the performance in the S&P. So as long as we have such
03:05high liquidity in
03:06the system with the M2 correlating with the S&P, you know, they're going to chase those thematic
03:12themes. But the thing is, is that it's become volatile internally in the AI trade. And so the
03:17way we look at this at total capital management, particularly from the portfolio perspective,
03:21is you kind of have to have your all weather portfolio in place. We have four sleeves. So we
03:26have this different access to bonds. We have tail risk. We have the hard assets, the halo trade.
03:31But also we have such active management around these thematic equities. And of course,
03:36all the active management's happening internally in the ETF. So, you know, you're not getting that
03:40buying and selling going on in someone's retirement account or non-qualified account. But what ends up
03:46happening there is, you know, we can give investors access to zero days to expiration on like the NASDAQ
03:53and things like that, that most people just don't have access to.
