May 1, 2023
This week's episode of Stanberry Investor Hour features John Netto, author of investing book The Global Macro Edge.
Dan and Corey start the episode by examining the recent failure of
First Republic Bank – the second-largest U.S. bank failure to date
– and its acquisition by JPMorgan Chase. They raise concerns about
the ongoing banking crisis and the role the government plays in
backing "too big to fail" banks. With three of the four largest
bank failures in U.S. history happening in the past two months,
there's growing uncertainty heading into this week's Federal
Reserve meetings.
Then, John joins the conversation and shares insights from his
book, including the concept of how emotions act as the lubricant
for decision-making. He says that traders often make the mistake of
analyzing their success based solely on the results rather than how
well they executed their process. To combat this phenomenon, John
created the "Netto number." He explains how it can help investors
recognize when their strategy begins to decay and how they can use
it to maximize returns.
The discussion then shifts to central banks and monetary policy,
with John describing his four factors for analyzing Fed events.
Based on his analysis, John argues that the Fed will not be cutting
rates this year and will instead be keeping them near a 4.5% to
5.5% pace until the second quarter of 2024...
"Because we have interest rates at 7%, it's going to take a long
time for this housing inventory to roll over."
He asserts that if we go into a recession, it will be a very mild
one. You can hear his full reasoning in today's Investor Hour.
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