Ep 11: Is the Market Overvalued? A Closer Look at Current Trends

Markets are hitting new highs, but is this sustainable? In this episode of The Point Podcast, hosts Landis Wiley and Allen Wallace discuss Bitcoin, asset bubbles, key valuation metrics, and explore what investors should consider in today’s economic landscape. Are we in for a major correction, or is there still room to run? Tune in for expert insights on navigating market uncertainty. 

We hope you’ve gained some valuable insights or maybe even a fresh perspective on our topic today. We would love to hear from you with your questions or specific topics you would like us to cover. Simply email us your questions or suggestions to info@basepointwealth.com and who knows, your topic might be featured next.

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Transcript

The Point Podcast Ep 11 Is the Market Overvalued? A Closer Look at Current Trends

 00:05

Welcome to The Point Podcast. We have informed, intelligent conversations about today's financial topics submitted by viewers like you.

00:14

Let's go ahead and get started. Here are your hosts, Landis Wiley and Allen Wallace.

00:19

Hello, welcome to The Point. I'm your host. Landis Wiley, sitting here as always, with our Chief Investment Officer, Allen Wallace, thanks for joining us.

00:33

Kind of a unique take on podcasts here at The Point, we like to talk about things in the world of finance, but often we have no idea what we're going to talk about. And in fact, that's kind of part of the shtick here, right? Is we get topics sent in from viewers, from staff, from clients here at base point, and we'll go through and try to pick one out that seems timely and relevant and banter on about it. And sometimes we know a lot about it, and sometimes we're kind of learning as we go. So, we thank you for joining us here today, and as always before, we figure out what the special topic is. We always kick things off with a brief segment on something that's really impactful in the world of finance, could be affecting your portfolio. Could just be something that's going on in the headline. So Allen, I'm going to turn this over to you. What's our most important thing that we're dealing with right now? 

The most important thing right now is Bitcoin. That may raise an eyebrow from clients who pay close attention to what we say, but I would counter with the fact that we need to know just as much about something to say no as we do to say yes, Bitcoin has been flirting with $100,000 per coin mark and has crossed back and forth several times. Speculative juices are starting to flow, and people are starting to speak of no price being too high, and that is significantly more risky not to own it. These are the beginning Hallmark signs of an asset bubble. Fear Of Missing Out. No price too high and the future is unlimited. We are starting to see some of the familiar faces from the.com bubble moving to the forefront and looking like geniuses again with every move higher. Keep in mind that some of these people lost billions of dollars in the year 2000 when billions of dollars seemed like a lot of money. I saw an interesting perspective on social media the other day where the poster was postulating How long after colonization of Mars, the Martians would begin mining Bitcoin. Never mind oxygen, water, and food, we must get our hands on the most valuable substance in the universe. The reason we must pay attention to this activity is because when a bubble pops, it is rarely self contained. There's a lot of leverage involved in the cryptocurrency complex, and I've even seen some non bank lenders financing the purchase of Bitcoin in combination with commercial real estate improvement loans. A crash in cryptocurrency would definitely not be limited to crypto losses. The other thing we need to be aware of is that we have no say in the timing of a bubble popping. The tulip mania took three years to resolve in 1637 and the .com bubble raged on for five years. We need to keep our eyes on the risk of contagion and keep the wax in our ears to avoid being lulled into submission by the sound of the siren song.

02:59

The serene sound of a line casting into the water and the thrill of reeling in a fish, your retirement could be filled with peaceful mornings on the lake and the joy of the perfect catch at Basepoint Wealth, we help you plan for a retirement that's as relaxing or adventurous as you desire. Ready to cast your line, visit basepointwealth.com to schedule your initial consultation with one of our Basepoint Wealth Advisors today, because from here you can go anywhere. Basepoint Wealth is a registered investment advisor. Visit basepointwealth.com for important disclosures.

03:30

All right. Well, thanks for that. Allen,

03:32

always fascinating to hear. You know, Bitcoin is in the news every day, it seems like, in the news, but not in the portfolio, right? So perfect. Well, with that, I think we'll go ahead and kind of figure out what our topic is for today. 
 

03:48

So again, as always, format here. We get topics from you, our viewers out there and our listeners, from clients, from employees here, at Basepoint, things that are on people's mind about the world of finance, and obviously there's been a lot going on, you know, we've talked recently about the election potential impacts that that may have to the economy, to markets, and certainly there's been an increase maybe in some volatility that we've seen. So, there's a lot going on in the world of finance. A lot of topics to cover. We did get one that I think is kind of timely, just given sort of market dynamics lately, and maybe isn't completely unrelated to your most important thing, either.

04:30

So the question that came in today, that'll be our topic, the stock market has increased dramatically, really, over the past two years,

04:38

getting to the point where I think a lot of people would find it overvalued, and that's kind of the premise of the question here. And so the question that's being posed is, number one, do we feel as though the market is overvalued, like I think more people are talking about? And then number two, alongside of that, is, how do we navigate investment and.

05:00

Portfolio construction in a period when the market is overvalued. Okay, so that's our topic,

05:06

I guess. You know, maybe tying us into the most important thing in the conversation around Bitcoin. You know, a lot of what people probably hear when markets get to maybe extremes, right? So whether that's everything's really expensive or maybe things have sold off a lot, is you start to hear a lot about, well, why aren't we in that thing, right? Right?

05:30

You know, whether it's Bitcoin, whether it's tech stocks, whatever it may be, you know, prices have gone up a lot,

05:39

why aren't we in it, right? It's kind of how that gets expressed. And I know from my career, and I think you probably talked to most people in the world of finance, oftentimes, when we start to hear those questions increasing with frequency, it can be kind of an indicator, but, yeah, maybe, maybe there is something going on. So

05:58

start off, you know, what's your two cents? You know, as Chief Investment Officer, as somebody who sits in, you know, and is looking at markets and looking at valuations frequently, you know, maybe start off with, what's your assessment? Are things overvalued? 

Sure, well, overvaluation is a mathematical exercise, but a mania or a bubble is a psychological exercise. So you can be overvalued and not be in a bubble. Or

06:23

sometimes you can even be in a bubble and not be that overvalued, right? The bubble aspect of it is, is people's psychology, their emotions, like, you know, when you're afraid your neighbor is going to buy this thing and get rich, and you're not, you know, you're getting into bubble economics there, right over valuation, you have to think about whether it's absolutely overvalued or relatively overvalued, right? So there's a universe that includes every single investment, and each of those things are priced in relation to each other. And there can be times where something is relatively overvalued compared to everything else, but maybe not absolutely overvalued. And then there may be times where everything is just completely overvalued, right? So we really need to dig down into what the definition is. We're trying to trying to talk about here. In this case, we're talking specifically about the stock market, right? So on a relative basis, is it overvalued? Well, you're getting 4.7%

07:18

on a 10-year treasury, and you're getting something like 3.59%

07:22

that's an earnings yield, right? So the total earnings divided by the stock price of the entire S&P500. So you know, you're getting almost 100 basis points more on a 10-year treasury than you are on an equity. I would say that that's relatively overvalued. Equities are riskier than bonds over longer periods of time, and I'm using risk in terms of fluctuation, not in terms of loss. And so therefore, you should get paid more to hold a stock than you do to hold the bond. And it's sort of been that way for hundreds of years, right? And probably the average person out there would understand that and assume that to always be true, right, that they should earn more on stock than on bonds. And so, you know, for people that maybe don't understand the technical, speak, essentially, what you're saying right now is forward returns, likely, or very possibly could be better with bonds and stock. Sure, yeah. So if we look at like the next 10 years return,

08:14

we're in the top 10th decile, most expensive markets on a price to earnings basis, right? And we're in the range. So if you run a regression analysis on this, which just means, throw them all into a chart, we're in the range where you would expect a somewhere between a positive two and negative 2% rate of return over the next decade. Okay, so let's just call it zero. So if you buy stocks right now, your anticipated return over the next decade, and this is the S&P 500, not any random stock. So if you own the S&P 500, right now, your expected return over the next 10 years is zero. Okay, and this isn't you saying this. This is, this is the numbers are saying this. It could be 10% it could be negative 10% right? But the anticipated, the expected rate of return, given where we're at on a valuation basis, is that sort of 0% rate of return. Now that doesn't mean we sell all of our stocks and sit in cash, but it does mean that we need to be careful, and we need to have some mechanism for determining what the stocks that we own are worth, and we typically use what's called earnings yield for that. So in other words, for every dollar of earnings, how much are we paying for the share price, right? And so, you know, we're trying to get,

09:21

at minimum the 10-year treasury yield, and hopefully one and a half to two times the 10-year treasury yield. So we'd be looking to get somewhere between 7% to 9% on an earnings basis, right? So, rather than going out and buying the whole S&P where to your point, the earnings yield on that is in the, you know, threes right? Maybe, you know the argument is, is be more selective, right? Try, try to go find those opportunities for individual securities, whether you're picking and choosing them or using a fund or what have you. But somebody is trying to pick and choose the maybe, the few in that basket, right? That would outperform. Yeah, exactly. I mean, so the.

10:00

Are times where you should be highly diversified. There are times where you should be concentrated. And when things are expensive, it usually pays off to be more concentrated, more selective about the securities that you purchase. And if the if the S&P was at a price to earnings ratio of five, why not just buy that right? How much? How much work can you put into it in order to outperform that, but when the S&P is at 27 times earnings, you're going to want to find things that are in the 10 to 15 times earnings range instead, and hold those over that decade period of time, right? So it's you have to know when it's best to be widely diversified. When is it best to be more selective or more concentrated? And I'd say we're in one of those environments where we want to be more selective. Now, the issue with that is that as the market sort of evolves and gets more and more expensive, what's called breadth, not breath that you breathe, but breadth with a D starts to contract, in other words, and what that's telling you is the number of decliners is higher than the number of advancers, and that breadth begins to decline as you get close to the end of a market cycle. And so when you say that, you know, how would clients see that unfold? So you would so if we don't own let's say The Magnificent Seven right and breadth starts to decline.

11:19

So let's say 490 of the stocks in the S&P 500 are going down, and just the, just those seven or 10 stocks are going up, that's, that's a very, very narrow breadth, right? So what you would see is, you would see yourself capturing the downside, but then you're not capturing the upside, right? And that's temporary phenomenon, and it almost always happens when we're ending, when we're getting towards the end of a market cycle. That doesn't mean next week, that could be months, that could be a year, but at the end of December of last year, we were in one of the longest periods of low market breadth since, I believe, the 70s and before that, since the 1920s so we're at some pretty epic points when we do comparisons of where we're at, I mean, we're, you know, in the, like I said, we're in the top 10/10, decile, most expensive markets. So you're going to start comparing yourself to early 2000s and early 70s and, you know, late 1920s which you're hearing more of that, right? You're hearing more comparisons. In many cases, I think, a lot of headlines I've seen it, you know, started to talk about the tech bubble, right? Comparing things in 1988,1989 right? Which, it's not always exactly the same, but yeah. And again, valuation wise, we're beyond that. Euphoria wise, psychology wise, we're not quite there yet. So that tells you maybe we have further to run, because it really is the emotions or the psychology that cause a, you know, if you're in a bubble to pop. I'm not a bubble scientist, so I'm not going to say whether we are or whether we're not what. What I will do is tell you which, you know of the symptoms we're facing and which ones we're not facing. And I do think, you know, we're not quite now Bitcoin, I think, is in the, you know, euphoria stage, and I'm basing that on social media. So maybe that's not a very good sample size, you know, because those people that feel that way are going to sort of, you know, sort of gravitate towards that area. I don't think you know. It's not telling you how the average person on the street feels. It's telling you how the most extreme people feel. But the most extreme people feel like, you know, this thing's going to a million dollars a coin, and, you know, they're going to be mining it on Mars. And, you know, like all these other things, and you know that, to me, those are the signs of speculative mania starting to now again, valuation is not a good predictor of timing, right? So the timing can go on much longer. There's a famous quote by John Maynard Keynes, the market can remain irrational far longer than you can remain solvent, right? So that's, that's why you don't just go short the S&P 500 right here, because, you know, it could go, it could go up, you know, unreasonable amount before this thing sort of changes. But what it tells us is, we expect over the next decade the returns to be flat.

13:58

Now people think, well, that's fine. I can just sit in there and earn one or 2% for the next 10 years, but that's not how it materializes. It materializes in a 50 or 60% drop and then a 7% return from there, right? And so by being careful and avoiding that large drop, then our returns over that 10 year period could be significantly higher. And you know, our clients saw that with bonds, right? We, you know, we were in cash instead of long term bonds and the 2020, 2021, area, we missed that big correction in bonds, and then the cash went from zero to 5% so, you know, we not only missed the 25 to 50, in some cases, percent drop in the bond prices, but our yield automatically adjusted to three times what we would have been getting in those bonds for the two or three years where we were out. So it's a similar thing here with stocks. But the problem is we need people to be patient, right? We're trying to it's very hard.

14:57

There's nothing more maddening than watching your neighbor get rich.

15:00

Yeah, right, and that's not my quote. My kids would call that FOMO, yeah, fear of missing out, right? And so it's the most dangerous emotion and investing, yeah, because it causes us to do stupid things, and we need to think about what is our goal here. If the goal is to just be richer than our neighbor, be patient, because there are things that they're doing that inevitably lead to declines in asset values. It's just you have to sort of, you know, I always tell people, you get to, you get to choose whether you look like an idiot before, the market goes down or after. And if you choose before, then you have to watch your neighbor get richer than you for a while. If you choose after, then you lose half your money. So which one, which one of those, you know, do you want to be and one is probably far more impactful to people's livelihoods and lifestyle than the other, right? I mean, we know how much return someone needs in order to have their money last for the rest of their life, right? So you're choosing between, all right, if I do these simple things, I can almost guarantee that my money is going to last the rest of my life, or I can stretch and try to get an extra 2% and have a 50% probability that it's not going to and to me, that doesn't seem like a close comparison right now, at the end of the day, the client is the boss, and if they say, Hey, I want you to pull all the risks out. And I always want to ride, you know, ride this thing. We can do that for you, but you know, we're going to ask you not to, right? Or, you know, if you've got a couple extra million than what you need, then you can definitely take more risk with that money. But I still think your return is going to be higher over the next decade by being patient and waiting for better prices. So you talked some there, quite a bit there, about stocks and kind of their price point, you know, profitability, earnings,

16:44

how, how do bonds and the current interest rate environment, bond yields, presently? How does that kind of fit into this conversation? Because that's, that's sort of the other side of the narrative that a lot of folks are seeing out there,

16:57

you know. And I obviously, you know, bonds generally, interest rates tend to be one of the most powerful factors in finance. You look like gravity. It's like the law of gravity, right? So, you know, right now headlines are, you know, the 10-year treasury has crossed over 4.6, 4.7%

17:15

you know, it's up well over a percentage point since the Fed started cutting rates in September, which I think confuses people, yep, um, how does market valuation and the argument that the stock market may be overvalued,

17:28

how is that fit in alongside what you're seeing right now in interest rates? Sure. And how is that a warning sign for the stock market, or is it signaling that, you know, maybe there's more potential to come. I mean, what, how do we interpret this? Because those are so I mean, the bond market and the stock market are sort of competing forces, right? Because they're competing for assets you get to, you have to pick one or the other. Now you can put 50% in each of them, but each dollar, you have to decide, am I going to put this in a fixed income asset, or am I going to put in an equity asset. And the bond market has historically been sort of the sober, you know, nerds of the of the finance world, and the equity side is more like the frat boy, you know, partying side that you know, don't worry about the risk until, you know, three in the morning, and you know you've got class at eight o'clock. So when the bond market disagrees with the stock market historically, not every time, but historically, you would have been served well to side with the bond market. Okay? And in this case, what's happening is with yields going up, the bond market is disagreeing with the stock market, because when stock prices go up, if earnings haven't adjusted, that means that their yield is going down, right? So you've got equities saying, hey, everything's great. Inflation is tamed, the economy is wonderful. And you've got the bond market saying, No, it's not, as a matter of fact, now that the Fed's cutting rates, they just sort of sealed the fact that inflation is, you know, going to pick back up. I'm not saying that, right, but that's what they're telling you. Then you also have gold disagreeing when real rates went positive, gold should have dropped, and it didn't. So you've got gold and you've got bonds saying inflation is coming back.

19:11

And I know I don't have a bet on whether they're right, but I can tell you that over history, it's typically been the bond market that wins these sort of arguments. So inflation picking back up, should, you know, cause equity prices to decline? And the issue is, we can lay out all the risks, and we can put them on a piece of paper, and we can compare them side to side, and it's almost never one of the things that we write down on the paper that's going to cause a change in the market, right? It's the thing that we didn't think about, right? It's the unknown, unknowns and rum spell to speak, right? You know that that get us it's, you know, a terrorist attack or a war or a pandemic, or, you know,

19:52

a famine, or, you know, those sort of things that sort of, that cause these things to bust the overvaluation

20:00

itself doesn't cause the problem. The overvaluation is sort of, you know, like a powder keg, and you need a match in order for that thing to go off. And so,

20:10

and that's why earlier you made the point about, you know, markets can remain irrational far longer, and you can remain solvent, right? Really, the danger in trying to time this right, and the danger in somebody saying, well, if everything's so overvalued, why don't we just pull the cash and then we'll jump back in, right? You know when it when it pops. And what you're kind of saying is you don't know when that's going to be, because most likely that the match, if you will, on the powder keg, we don't know what that is or when it may show up. But the issue is, you know, you look around and say, Well, how many potential matches are there? And the more potential matches there are, the more likely it is that one of them is going to get struck, right? Even though you may not know the exact one that and with, you know, the yield curve just uninverted, we had one of the longest yield curve inversions. And I've saying for a couple years now, it's not the yield curve inversion that causes that tells you a recession is coming. It's the uninversion, right? So we just had that happen. You know, you're starting to get some really weird signals from the job market, right where, you know, the number of jobs is starting to drop, and there's been a lot of corrections from last year, and you've got these forces that Trump is going to try to implement in his new administration with, you know, deporting immigrants and you know, and tariffs, and, you know, firing government workers and all these things are recessionary, right? So when the market is as overvalued as it is right now, it's either a recession that causes it to go down, or the market going down, that causes the recession. But it can go either way. So, you know, it may very well simply be that it's a recession that causes this, you know, causes a correction to happen. We just, we don't know. But the whole point is we need to avoid trying to predict the future. What we're doing right now is just being careful. I mean, I think on average, we're about 50% equity. That's not, you know, it's sort of the Goldilocks zone. It's not too hot, not too cold. I wouldn't want to go much below that over a longer period of time. I'd rather be in the 65 to 70% range. So I mean, it, it's on the low side, but we still have exposure. And if the market continues to go up, we will continue to get decent returns. But if there's a big drop, then we shouldn't suffer as much as these stocks that are extremely overvalued, really, on two fronts. I mean, number one, if you know, on average, you're sitting at 50% exposure in a portfolio, you should be somewhat, you know, reduced risk of a of a big decline, just because you don't have that much exposure. And then number two, which I think is probably the most important thing you mentioned earlier, when you get into these valuation strain periods, which is just making being more careful about the things that you do. All right, don't buy at all. Make sure you're buying things that are reasonably priced. Yeah, it's, you know, our security selection is highly selective. We own very little of the Magnificent Seven. We've been adding more international exposure. So, you know, the PE ratio of the international stock is in the 14 to 15 range, whereas the, you know, domestic stocks are in the 25 to 27 range. That's a significant difference in return, right? That's the difference between a 4% return and a 7% or 8% return. One of those has to be wrong, right? Yeah, yeah. You can't have that much of a divergence. Well, you could in the fact that, you know, Germany's economy is starting to go down, China's economy is starting to go down. And so, you know, the US is sort of the cleanest dirty shirt in the laundry right now. But that doesn't always last right? So, but the point is that if you buy those equities at 14 times earnings, again, I'm looking at the next 10 years return, even if that's a bumpy ride, you know, I'd rather have a 7% or 8% return over the next decade, even if it's bumpy than, you know, almost guaranteeing myself a 0% rate of return, right? You know. And the more this thing sort of blows off, the more that risk is going to be, the harder it's going to be for clients to weather the storm. So we just need to keep our eye on what the goal is, what the need is, and do our best to get there. And we don't do that by chasing returns, right? Well, Warren Buffett has often talked about, you know, one of the worst things that's happened to corporate America and the stock market writ large has been the shift to quarterly reporting sure, you know, and the focus on, you know, inner day, prices on stock, and everything is instantaneous right now. And, you know, I think that kind of ties into what you're talking about, is it's very easy to sort of get sucked into the immediacy of what happened today, or what happened with this stock, or what happened in my portfolio, you know, this afternoon, whereas, you know, the prudent approach is keeping the eye on the ball, which is, well, where do we need to be in five or 10 years, right? And how do you position to get there? And you know, as you mentioned earlier, taking a 50 or 60% decline in your portfolio on the front end of that probably isn't the easiest way to what's catastrophic, especially if you're early in retirement. Sequence of returns matter. So if you're

25:00

You know, if you're a year or two from retirement, or just retired in the last two years, and you take a 50% loss, I mean, that is catastrophic. You've just, you know, you're increasing your distribution yield by 100% so if you were taking 4% of your portfolio before now, you're taking 8% of your portfolio, which is unsustainable. So, yeah, I mean,

25:19

now we can think about, this is our, my retirement portfolio, and this is my opportunity portfolio, and that's fine, but I still think over a decade, your returns are going to be higher by trying to buy things when you know prices are reasonable. I don't think just because it's excess money, you should try to lose it, right? That doesn't make sense to me. Well, there's certainly, you know, track record out there to support that. I mean, there's some well known names that have, you know, more or less applied that approach consistently for, in many cases, decades. Warren Buffett being who certainly, by the way, has 300 billion in cash right now, right? So, you know, we're in good company. As far as those who say that maybe it's time to be a little bit cautious, right, right? Well, good topic, you know, and I think it's timely, you know, certainly there's going to probably be more volatility going forward than less. And you know, it does feel like when you get into these periods of time, you know, you start hearing more of the FOMO, right, more of the fear of missing out. You know, you see the stock, or you see the sector, or you see the Bitcoin that seems to, you know, defy gravity every day, and you say, you know, I should have been on that. I better get on it now, right? And that, it seems like that fervor always peaks right before the turnover. Well, people sometimes feel like, you know, the next big thing is where you should invest your money. But that's actually a terrible place to invest your money, if you look at, you know, all the way back to the canals in England and the railroads in the United States, and the automobile industry, the airline industry and even the.com

26:50

era, these areas, these advances in technology, soak up a lot of capital, but most of its lost, because there's usually one or two big winners, right? There were something like 3000 auto companies in this country in the 1920s and now there are three left. Think about how much capital was destroyed by trying to advance the auto industry. So

27:12

it's one thing to identify a technology that's going to be useful and revolutionize the world. It's quite another to pick one out of 3,000 that's going to be the winner, you know? And if you picked Henry Ford, you would have had to watch him go bankrupt twice before he became successful, right? Most people don't know that. Yeah, right, but so it's almost impossible. I mean, you know, it's often said that during the Gold Rush, it wasn't the miners who got rich, it was the guy selling shovels. So, you know, this AI thing, you've got the seven biggest companies in the world just shoveling money into AI, and they're not all going to be successful, right? You know, one of them will probably be the big winner, and you don't know which one that's going to be in. You don't know if they're going to be able to monetize it. So, I mean, we're better off staying on the sidelines while this plays out and the same was true with the internet, right? I mean, you had these companies building out decades worth of infrastructure that still hasn't been turned on now, 25 years later, level three was a big one that, you know, they were putting fiber under every sidewalk in the country. And you know, most of that's still dark today, so you have to be very careful about trying to profit from technological innovation. It's almost impossible. Well, the reality is, there's lots of individual companies that have experienced substantial price increases that aren't technology, right? So just because those get the headlines, oftentimes, I think people focus on, do I own that, or do I not own that? And they may not necessarily be looking inside their own portfolio. I think William Sonoma is one of those, right? I mean, it's something like 120%

28:41

or furniture, right? Yeah. And, I mean, Outback Steakhouse is another one. I think that's open up a lot. So, yeah, I mean, it's better to make money quietly, I think, than to sort of, it's less fun. But, you know, investing is supposed to be boring. This isn't supposed to be exciting. If you're getting white knuckles, you're doing it wrong, right? You know, this is the sort of thing that should unfold over decades, not over minutes or weeks. So we just have to keep our eye on the goals, make sure the goals haven't changed. Be careful and make sure that we're beating inflation, make sure that we're reaching the level of returns that you need to, you know, have your money last, and then, you know, focus on life, right? Well, and I think that's a good point, because I think for a lot of a lot of us, average Joes out there, right, you know, let's face it, none of us are the you know .001% of you know folks out there that have billions and billions and billions dollars, right? So for all of us that can classify ourselves as average Joes, you know, you look at that and you say, particularly if you've reached the point where you can afford to retire, or you're near to it, you kind of have to at some point step back and say, what's going to change my life more

29:51

participating in the extra 10% that maybe I missed out on by not jumping on the bandwagon while it happened to be hot, or taking a 60%

30:00

Loss. So, you know, that's always just, I think, a perspective, you know, that I've seen unfold over my career, that I think, you know, people would be wise to just sort of keep that in perspective, right? Is your life going to change dramatically if the portfolio had another 10% it'd be cool. Don't get me wrong, right? We all want to see that, and we all want to achieve it. And, you know, I think over, as you said, over time, being disciplined, making sure that you can actually apply a reasonable value to things, and that you don't get caught out in something that does, you know, maybe a bubble. You know, you're likely to experience that, right? It may just not happen today, right alongside your neighbor. So

30:47

it's great topic, you know, I think it's, this is one of those things that, you know, it's probably, as you said, you know, fear of missing out, or however you want to, want to phrase, is probably one of those dangerous emotions for any investor. And so, you know, I think the more that it can be talked about, and just, you know, kind of bring people back to understand what's going on, and keeping the eye on the ball, as you said, is impactful. Sure, perfect. All right, good topic. Well, hopefully this has been useful. You know, certainly this is something that you know isn't going to go away. We're probably going to see a lot more headlines, a lot more news stories. These things always grind on, a lot less. Out a lot longer than you wish they would. It always, always seems to stretch on. And you know, like you said, you can kind of choose, do you want to look like an idiot before the before the crash, or after the crash? So

31:32

with that, we'll kind of wrap up this episode. We thank you again for joining us here on The Point, as always, if there is a topic of interest out there, or a question or a headline that you're just curious about, please send that on in here, and who knows, maybe it'll be a topic of discussion for us to banter about in the future. So, until next time, thank you from everybody here at The Point and at Basepoint Wealth, take care.

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Thank you for joining us for this episode of The Point Podcast, sponsored by Basepoint Wealth, as always, you can submit questions or topics you'd like to hear discussed to info@basepointwealth.com be sure to subscribe so you don't miss any future episodes. Basepoint Wealth LLC is a registered investment advisor. 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 consult with a qualified financial advisor and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.