Stansberry Research

Doc Eifrig’s COVID-19 Briefing No. 2

April 2, 2020

Editor's note: You can find a full transcript of Doc and Matt's briefing, complete with slides, below the video. If you'd like to view a pdf of the slides, click here.

Dr. David Eifrig: Hi everybody, and welcome to conversation number two.

I'm Dr. David Eifrig and with me, but socially distanced from me, is Matt Weinschenk. Matt – how are ya?

Matt Weinschenk: Hello. Good to see you, Doc.

Doc: Nice to see you.

So, people wrote into us and said they appreciated what we did last week. So we're going to continue that this week and just talk a little bit about what we're seeing the health space and in the finance and wealth space. We're going to try to make this a little shorter than last time.

Matt, again, welcome. Do you want to start us off?

Matt: Yeah, sure.

Even if you haven't seen our last one, I think you'll be able to follow along with this. We'll revisit a few of the indicators we were looking at. Again, like you said, it's sort of – virus, economy, market. That's the way we're looking at it because all of those things play into each other.

If we do this again, if you have any questions you can send them to Maybe next week we can jump onto it. Our publishing schedule doesn't seem to be fast enough these days.

Here's the daily new confirmed deaths…

Now, the reason we look at deaths is because there's a big question as to whether any of this data on new cases and things is any good. Not everybody is reporting. There might be a lot of untested people. But you can't fake deaths.

I've lived in Baltimore for 12 years and when you saw crime rates going down but murder rates staying the same, it meant that they were bumping robberies down to petty thefts and things like that. It's sort of an old Baltimore saying that you can't fake a murder. You can't make a murder disappear.

So anyway, deaths are rising very briskly. This does not look good. This looks like 800 a day, three-day rolling average. I think the number – was that over 1,000 yesterday or today?

Doc: Yeah, exactly… the last couple of days.

Matt: Now Trump is talking 100,000 deaths, which is many multiples of what he was saying before. He's starting to get the picture there. It's not looking better. There's no good news yet to come on the death front.

Doc, what do you think?

Doc: I would say turn to the next slide…

I'm a little bit hope – just so folks see this – this is by country. These dotted lines that fan out are how fast the rate is for doubling. And you can see we just started to turn down and turn away from doubling every two days and heading toward doubling every three days.

It's sounds silly, but I'm optimistic about that because I'm seeing that curve start to go. That's a sign that we're getting closer to a place where the doubling rate increases. And when we head to three or even to four every week – you can see down at the bottom where Japan, Singapore, and Hong Kong have stayed – I'm really optimistic.

Matt: Yeah, and what you're seeing there is essentially two weeks of many people doing the social distancing. And we're starting to move over from two to three. But I think, on the other end, I'd be worried that doubling every three days is still too fast. Especially a country this size, you know, those numbers are going to get astronomical.

These are the new case numbers…

Over 20,000 new cases a day. Again, that's an increase in testing. And these are cases that people got two weeks ago that we're now putting them in the hospital or sending them to the doctor. I know people that have had it that have not been tested and are not in these counts. I know a husband and a wife that got it. The husband worked in a hospital so he was tested and the wife was not, but she clearly had it.

So who knows. There's a lot a noise in here, but –

Doc: I think what we should point out again – and it echoes what we talked about last week – is that the U.S. did not have a bunch of testing kits in spite of claims two weeks ago from leaders that we did and that we would. They've had kits in Asia that can test in 45 minutes. There are chip-testing products that are coming out now, quickly being approved by the FDA. You'll be able to get single tests for coronavirus within about 15 minutes. Other viruses, like influenza, on the same chip will take about 45 minutes.

So that's coming, but that's what's happened is that suddenly you've just seen more and more people being tested.

I've also been reading – I don't know if you've seen this same thing, Matt – I talked to an epidemiologist friend of mine this morning… We'll come back to him in a bit. But the interesting thing is that there are some folks that are now thinking that this has been around longer than we suspected because most of the cases are so mild. Now, it doesn't change the fact that we're compressing it and it's spreading in a naïve population because there's no herd immunity. We haven't had a season of this virus yet.

But again, I'm optimistic that it's been around longer than we suspected, maybe even into early winter last year. I'm even hearing people talking about October, November, or December.

That's kind of an interesting thing. I'm also hopeful that – if we can turn to the next chart – that shows us where a lot of the stuff is happening in the United States…

You can see that New York and New Jersey are heavily populated and on top of each other. So it's harder for them to socially isolate.

You can see that the shapes of these curves are pretty similar. And we have the doubling – so New York City, New Jersey, and Michigan are all on top of this two-day doubling rate. So we're still not to the end of it. There will still be many, many more deaths because of a lack of supply of ICUs with ventilators.

Matt: When I look at this chart… When you aggregate data, you hide what's going on. So what I see here is New York is up there at doubling every two days. Everyone else is heading toward three, but many of these states are still a week or two weeks behind New York, which is in bad shape, and New Jersey, which is going to be in bad shape.

So I see that there's still a lot more to come when I look at this on the other states that just haven't gotten there yet.

Doc: California – you can see is the bottom red – that's just below three day. And because it's so populace the total absolute numbers are going to increase rapidly as well, from that state… Even though the rate of doubling is lower. So still more to come.

Matt: And thinking about that… This is from a study of the Spanish Flu…

This is what I found interesting… Where thinking about what's happening in New York. And we're thinking about California, which was actually pretty early. But Washington got hit hard. New York got hit hard.

But this is a chart of the Spanish Flu which, when it came, moved from the East Coast to the West Coast. And the size of the dots are the size of the NPI, which is non-pharmaceutical intervention. So basically, this was the social distancing of the time – like closing schools. The larger dot means larger response.

What you can see is that as it moved from East to West, states and municipalities learned… "okay, we can't do what New York and Philadelphia did." By the time it got over to L.A. and Seattle, they were really shutting things down quickly.

So ideally, the states that have been lucky so far will learn from the ones that were too slow to act.

Doc: Right.

Matt: And this – I don't think we want to get too much into this, Doc.

I think there are a lot of people saying what we should do, what we have to do. I mean, there's just a lot of noise on that. We're just trying to figure out what is going to happen. But this is from the same Spanish Flu data…

There's a question now… What's the cost? Oh, we shouldn't shut down the economy because it's too much of a cost. But what has happened in past epidemics is that if you have a broad and intense shutdown, it will be a shorter epidemic and that turns out to be better for the economy. At least in the Spanish Flu. Manufacturing came back quicker when they had larger shutdowns.

So, that's what I think we should do, but let's not get too far into that. Let's figure out what we should do with our investment accounts, right?

Doc: Just stay on this slide so people can understand it. The blue is another way of representing, what? The cities that did, and stuck with non-pharmaceutical interventions? The NPIs? And they had lower mortality rates. They were more to the left. Is that an accurate way –

Matt: Yes. So the blue cities shut down more, they shut down bigger, and they made a bigger effort to choke off the virus. There's more blue on the left than the right, which means they had fewer deaths, which is obviously good. But there's more blue up at the top than at the bottom. That shows the rebound in manufacturing employment, which was much more important in 1918, was faster.

So the economy came back quicker if you did a better job of shutting it down, even if you had a bigger impact from the shutdown initially.

Doc:  The bottom line is, we want to encourage people to continue the social distancing and isolating, if only because we can maybe get back. You might substitute the service sector into this – into the idea that if we can slow and stop the virus, we'll be able to get back on track faster. I think that's the message we would send out.

Matt: Exactly.

And this just goes to what you were talking about.

This is another sign of optimism. This is starting to look like the Manhattan Project of biology. There's a really impressive, mostly private sector, advances being made and resources being thrown at it. 

It didn't ramp up as fast as it needed to or as fast as they said it would, but I've seen something about 60,000 tests a day now, and that's before the Abbott five-minute test. It looks like vaccine production time… There's approval and there's production. And everybody's worried about production. They're pouring money into that. It looks good. Treatments… I mean there is a lot of be optimistic about on the medical science front.

Doc: Great. Next slide is going to show us – we showed this to folks last week – on experts and all the experts' opinions.

It looks like a lot of them have already missed stuff, wouldn't you say?

Matt: Yeah, that's what we said last time. We said that there are all these non-experts trying to product what will happen. So how do the experts do? And we showed the range that they had.

This chart is kind of now updated. The average prediction from an epidemiological expert was that there would be 20,000 cases by the end of March. Some of them put a pretty tight range and some of them put a big range. The actual number was six times that.

It's just unpredictable. It's very unpredictable. As investment analysts, we're trying to decide what to do when you don't know what's going to happen. You want to have a portfolio that's robust for several different scenarios.

The goal here isn't to call the virus right. It's to understand it. And it's to understand what may happen and position yourself accordingly.

Doc: I think you're being kind. I think, for me, the message from this is that you have all this noise out there… You've got all of these people, presumably the dots on the left here, that aren't even close to the correct number of cases.

Be careful who you're listening to. Be careful what you're paying attention to. It's why we spend time researching this and thinking about it.

If my recollection is correct, we were pretty close on our estimates of by month end. Even through April we could make an estimate. I would describe us as less expert and more students of probability, students of math.

This makes the point that there are a lot of people out there saying stuff that is just garbage and gobbledygook. We'll come to that at the end because I do have some comments, but –

Matt: Sure.

So this is sort of an update to what we were looking at last time:

Basically, last time, Doc, I think you were more optimistic about the virus spread than I was. But you were less optimistic about the economy's ability to recover from some of these shutdowns. And I find myself moving a little bit towards you. I think that the virus is about the same as I was expecting so far, but I am a little more concerned with what's happening to small businesses. And I think a two to three months – if this peaks in two or three months, I'm more worried about how, especially, small businesses are going to handle that.

I think our next step here is the economy. But what do you think, Doc? Are we, virus-wise, two to three months to the peak? Do you think we'll keep the fatality rate as good as some of these better countries or are you more worried about the virus? Where do you fall these?

Doc: I'm probably a two to three week out peak. So I'm in between "Best Case" and "Baseline." That's just for peaking. Mainly because I think a lot of folks are doing the social isolation. In terms of fatality rate, my guess is that when we look back at this that the fatality rate will be much lower than this… under 1%. Again, looking at some numbers and reading some stuff this morning, the analysis out of China. That virus has sort of gone away for them and they're discovering that there's a whole bunch of people that have been infected for a lot longer.

We're going to have some tests – I've already talked to a couple of buddies of mine – where you can look at your antibodies in your blood to see if you have had it and check for that. And those tests will be coming out. There will be people researching it and reporting on it.

But my guess is that the fatality will be much lower than it is.

The problem is that if it all comes at once into the naïve group and everyone continues to be together, then everyone gets the virus at once. If you're talking about 100 million, 300 million, or a billion, and less than 1% of them all get sick and need to be on a ventilator, there's going to be a lot of people that die.

Matt: Yeah. And when I talk about fatality rate here, there is the issue that undiagnosed people might make it a lot less problematic. But I was more thinking of if we can keep the hospital system working, it might be around 1%. And if it doesn't, it might be around 5%.

Those are totally ballpark numbers. But, I guess, the question I have here is how do you see the medical system handling this? Obviously, it's terrible for the people working for it and it's heavily taxed. Do you think it's going to be people in hallways? An Italy-type scenario where it's just completely overwhelmed?

This is very hard to predict and there are a lot of parts to it. But are you optimistic? Are the doctors you know optimistic? Are they extremely worried?

Doc: Look, I don't want to dump on other countries… But one of the things that the United States is probably the best in the world at is acute care. You can make the case that other folks, other countries, European countries, or lesser developed countries, maybe their health care is as good as ours in terms of chronic care or in terms of lifestyle stuff. We could have that discussion another time.

But for acute care, there's no doubt that the United States is best.

I think part of the problem in Italy is that there's a lot of co-morbidity. It's an older population than China by, I think, 10- or 11-years median age. Don't quote me on that. That's just my memory from a couple of weeks ago when first looking at it and thinking why is the Italian community so worried. And it's because they're older. Smoking is much more common in that age group.

So I don't it's going to be like Italy. I don't. I just – I read something… I have to verify it, but someone was maybe suggesting that New York has gotten control of the situation there a little bit better. This friend of mine, who is an epidemiologist in another major U.S. city, thinks – like I do – that it's two to three weeks out. And it hasn't gotten crazy there yet.

I'm more of an optimist about this just because I think that it's deadly, but it's deadly to a few young people, a few middle-age people, but a lot of older folks. And part of that is just the lack of an immune system that can clear stuff well.

Economics? I'm still worried about the dislocation of the service sector. You can turn to that, the unemployment piece.

Matt: This is moving onto the economy…

We could spend an hour just looking at this chart and going, "Wow, it's wild." And you can go through all them. But this is definitely the craziest.

Initial jobless claims, you can see, the worst recession of our lifetime – 2008. And we are – I can even do the math – many multiples… Just a huge surge in layoffs. You just don't see anything like that. And as a guy who sometimes – my background is in economics – trying to build models and things like that, and then you look at something like this and you're like, "Why are you even trying to forecast numbers like these?"

It's just crazy.

But the wild thing was the market was completely fine with this. We've had some down days, but it was still rallying when this happened.

Doc: Matt, I mean, you, you're being humble about it. You studied econometrics, you're an econometrician, you're a student of this, a scientist of economics, I would describe you as. Yeah, how do you even think about it? I just saw Goldman just came out revisions of their stuff and I laughed at that. I laughed at Goldman's – I laughed at all of Wall Street's economic guys. You know the joke is they say this and then they say "on the other hand" so they've got their bases covered. I think I even teased you earlier in the week through hedging yourself on some call –

Matt: Oh yeah.

Doc: I don't remember what it was. You had it hedged both ways. No matter what happened, you could point to the…

Matt: Yeah.

Doc:  … to being accurate. And I don't… I've thought about this a lot and it makes me uncomfortable, it makes me nervous, someone who has saved much of my money much of my life and a little bit frugal on things. I… My heart goes out to folks that – like these people on the right. What do you do? What's going to happen?

And here's a thing about this and I don't know what to do about this: My brother, who is in Orange County, has described… maybe I shouldn't call him out. Let's just say there's somebody that I know who's… a couple of folks working for them. The unemployment they'll get under this new program is more than they're getting paid by the hour. And so there's a chance that some folks won't even come back to work for awhile because a) it's better than their job was before – that's strange to me.

But what's really important is the dislocations of that. Because my brother and others are going – if they're going to get that going, they're going to have to hire folks and some folks won't want to go back to work for awhile, partly because of the anger of being laid off with their bosses and with their businesses, there are a whole bunch of things that go into this. It's social, it's financial, it's personal. I don't know where you come down on this. I'm kind of going off track here.

Matt: No, it's… so we're going to talk about some market stuff and we'll say, "well, in the past," but there is no past for this. I mean, there's never been – that's what this chart shows – never been this many people…

Doc: Right.

Matt: Laid off at once. There's never been businesses where revenue goes – drops 100%. There's never been – here's an interesting note, so I saw this guy who covers the auto industry and he points out that usually in a recession, for like repair and auto parts and things like that, it's just a demand shift. Right, so you're in a recession, some people lose their job, so they ride their tires a little longer, and they jump their battery from a friend's car and stuff. But in this case, the car's sitting in the driveway. Right so now it's all – it's lost revenue. It's not made up down the line. So it's just completely different.

Doc: Right.

Matt: There's been nothing like this and you can go Industry after industry and see things like that.

And so, like you said, we don't put a ton of credit into these quarter-by-quarter GDP forecasts, but they're… I think you, we look at the numbers and get a sense for 1) what people are expecting and just maybe what magnitude we're looking at. And some of these are ridiculous but I wanted to point this out because people see headlines, so let's say here, Goldman Sachs predicts GDP will be down 34% in the next quarter, but that's a – an annualized rate of a quarterly decline. So capital economics predicts 40% decline, that's easier math.

If the economy goes down 10% this quarter, that would be a 40% annual rate, right? Cause four quarters times 10%. So, just to put these in perspective, they're talking about the economy dropping in one quarter somewhere between 10% and 2%. 

So, even if any of those numbers are phenomenally large, but we don't know how long it'll be down and we don't know what it's going to be like to come back. But these projections keep getting turned down as a bigger decline sort of day-by-day and bank by bank, it's just getting larger and larger and even when no one was surprised by that $3 million initial unemployment claim number, these things just keep bumping down. So it's like nothing we've seen before.

Doc: Yeah, I mean… where do you think that… you know, you're the econometrician, where do you think it's going to show up?

Matt: You know…

Doc: Or end up.

Matt: Right, so we are going to see at least I think 5% quarter over quarter when we go into Q3. But the real question for all that is what's Q4 and the next Q1 and the Q2 – it's really… I don't care how. I don't care. I don't know and I'm not particularly concerned with whether it's a 3, 5, to 8% decline. I'm more concerned with how it's going to come back, and that's a much harder question to answer. And again, now we get back to the virus. If we shut everything down, if we make it quick, I think it would rebound quick. And if we have the right insurance sort of programs to help people.

You know, people call it a stimulus program, but it's really just an aid package from Congress, right? If we can just get people in a holding pattern, and we keep that time short enough, I think it could rebound quickly. But I don't know if that's going to happen. I don't know if there's going to be a few more bullets coming from Congress. So, it's all about the rebound. I think we're going to see 5% quarter over quarter decline going into 3.

And then we'll just have to… the other thing about these projections, Doc, is that if you are looking at your portfolio and you're deciding what to do, you don't need to say, "okay, it's going to be…" you just need to know that things are going to get worse. You don't need to decide now "well, I predict it's going to bottom in five months or eight months." All you need to know is it's not now. You don't… you know if you're at home, you don't have to publish some grand prediction, just hold on. Right, so that's kind of where we are now. I don't know when it will turn around. But I think… but I don't think we've seen the worst of it.

Doc: Yeah, I mean for me the question becomes how much of assets – that would be bonds and or financial assets, fixed income, stocks – do people have to tap into to continue whatever cash flow was required and needed. I know there's talk of people going on strike – rent strikes in April and May. So that's a question that comes to mind and is in play. And then how does that affect the real estate markets? You know, to me… Do you know if this Goldman number, the -34, is that before this morning that I saw the headline flash that they've lowered their number, do you know?

Matt: Yeah, this would be from yesterday. So if they lowered it today, yeah.

Doc: Okay. Yep.

Matt: So there ya go.

Doc: Yeah I think if they're… if you say that the service sector is 66 and a third, or two thirds percent of the U.S. economy, and that's collapsed, that's got to be at least 40, 50%, 60% drop. I know the math doesn't quite…

Matt: Right right.

Doc: Fit into this scheme here. But yeah, I'm worried that it'll be, like I said last week, uglier than this suggests. So. Anyway.

Matt: Alright, so.

The economy is certainly in flux, but let's move on to the markets. We'll check in last – our last webcast, whatever you want to call it, we talked about a couple indicators that we usually see come down before the market bottoms. And one of those was the high-yield spread.

You can go back and I think you can go see those charts without watching the whole thing. So the high-yield spread we expect has to come down before the market bottoms. And if it's starting to come down here finally, and that would suggest – to me that suggests there's more room to the downside. But it's good to see it coming down.

The same sort of thing with the VIX.

That's coming down. But still remarkably high, so that would suggest we haven't bottomed yet as far as the stock market goes. The stock market's on the bottom.

Bottom line there. And here's kind of the biggest, the biggest thing. So this is the S&P 500 coming out of the financial crisis.

And the important thing to note here – and you can do this with any market downturn – is that every big downturn in the market has these bear market rallies you would call them. So we had – the market's been pretty much up since last week. It happens all the time. If this were to be the one market that goes down and then goes straight up without you know, without a head fake before it heads back down, it would be the first time in all of financial market history, as far as I can tell. But things do happen for the first time, sometimes, and this is certainly an unprecedented scenario. But it's sort of a simple analysis but markets always come back up and then they go back down. So I don't think we're at the bottom yet. 

Doc: Yeah, and just to highlight this too, that it's a 400 point on starting at 1280 move, that's a lot of, that's a lot of downside. Still, with upward bounces that are sizable, yeah. It would be an unusual – you know it's funny I'm hearing people talk about V-shaped this and U-shaped this, and I think every time is different and I don't think, other than looking back at 1918, like you did earlier with that chart, where manufacturing was a big part of it. The consumer and service sector – man, hard to imagine that not being very fluid and dislocated enough that it's going to take more time than folks might imagine. Anyway.

Matt: Yeah.  

Yeah so we'll have to see. And here's another sign I think that we've haven't gotten there yet. When you get to the bottom, the things that snap back the sharpest are the higher risk things. The high- yield bonds, the small caps.

So here, the market has rallied again. Now we've had two big down days since then too, but the market has rallied, but the S&P 500 has come up 30% off its bottom, which is the green line there. I know this is a little messy. The small caps only rallied 20%. So this would suggest to me – you know, if you break down what's done well in this recent market rally, it is the things that have been supported by the Fed. Right, so the Fed's buying investment-grade bonds, so the big large-caps that might have investment grade ratings on their bonds, their equities have been rallying. The agency mortgages have been doing well where the non-agency mortgages, the ones that the Feds aren't touching, that market is still essentially in complete collapse or lock up. There's… you know, it's very scary there, so.

On one hand, you know you have people who always claim the Fed's manipulating markets and that's why they're going up, but, so you shouldn't buy stocks. But if your job is to figure out which way stocks are going, you can buy them even if they're manipulated by… I think that this shows that we did have a liquidity event, that sort of has passed, people aren't doing the same amount of forced selling, but it's really Fed-fueled and there's not a lot of risk appetite out there in the market, which is what, when the market really starts to rally. So I think that given that the riskiest things like small caps have not rallied so much, that proves to me that we haven't gotten to the bottom yet in stocks.

Doc: Plus, I want to point out what a lot of people don't realize is the mantra from a lot of, I'll just say, inexperienced self-acclaimed experts, is really from the first of March through the bottom, don't sell, don't sell, don't sell. And then when you get algorithmic buying or people wanting to take a flyer and saying, "this is the time" – I won't name names, but there's some people around us that have claimed this.

You get this buying that comes in, but because the people who have been saying "not going to sell, not going to sell, not going to sell" haven't sold, they're not going to sell on this upmove because they're hopeful now that this will go back up. And so that moves up fairly quickly. That, you know, in a couple days to go up like that 21%, 31%. That's because there are no sellers. I mean they're truly is buying and limited buying can move markets really, really quickly. And those people, they have very, very, very, very short term plans. And so if they start, and have to, for whatever reason start to sell capital, calls, leverage, watch how fast this thing drops.

But, it takes awhile to learn that and see that and you have to be long-time student, I might say, of the markets.

Matt: Yeah. So, I think our takeaway being, if you think we're not at the bottom, I think our takeaway is at this point, you want to, you still want to look at quality, you want to look at stocks that you would want to hold, even if there's another 20% or 30% down from  here. We're going to look at dividend payers. I don't think you need to go like defensive sector wise, I don't think you need to go consumer staples, but you do need to stick with quality businesses. And then later on, when you do think we're near a bottom, if this is the type of investing you like to do, if you like to look for opportunities, later on, when we are near a bottom, you can step into riskier things like small-caps and high-yield bonds.

Obviously if you're asset allocated, you're just holding your index funds, which is a wonderful way to invest, we are closer to the bottom than the top and I don't think anybody should be selling out of their 401(k)s now, I think you'd probably be doing yourselves a disservice. But as far as quality goes, this next chart is sort of an indicator of what you need to watch for and what we're going to be working on. This is a chart of the S&P dividends per share.

This is a projection – the dotted blue line is a projection from Goldman Sachs, again, who knows if they're right. But that's at least something to talk about. And it looks like they think S&P dividends per share will drop from 58 to around 40, which is a big drop, before going back up. The lighter blue line is the Swap market, which is – you can sort of buy the stream of dividends, you can separate it from the stocks. But basically that gives a market-implied level of dividends. They expect the dividends will drop even more.

So, it's not the case really for the S&P that all the stocks in the S&P are going to cut their dividends by 20%. It's the case that some of them are going to stop paying dividends and other ones are going to keep paying dividends. So, for income investors, for longtime investors, for retirement investors, this is the work we're going to be doing now, is finding the safe dividends and the ones that look like a good yield but are actually going to pay out that yield. That's really where you want to look now. You can step into risky stuff when the market bottoms.

Doc: Again, forecasts by Goldman Sachs… I don't know anyone at Goldman Sachs that last week was out exchanging breakfast sandwiches, was out buying from a local shop to go hand to their barber to talk with them about how they're doing and their finances and talking with the sandwich shop maker. Look, look at the beauty of these charts. How perfectly aligned they are, one that goes across like this and then at a perfect 45-degree angle. It's fantastic. What a great model –

Matt: I'm sure it'll follow that path exactly. It'll follow that path exactly, Doc.

No, but it's good to have a reference to see what things are looking like and the Swap market is interesting, I mean that's what the market is implying for a dividend drop. So I do find that interesting. But yeah, I think we agree on the forecast.

But that's… I think that's all I have. Things will be very different next week. What about you, Doc? Anything else to say?

Doc: Yeah, so I wanted to read something. Kind of make you laugh. I've shown it to you before, the Stock Market Almanac?

Matt: Oh yeah.

Doc: This is something that an old buddy of mine, from my Goldman days, Steve Koomar, who by the way, writes a really, I think, fascinating and great newsletter. It's an expensive newsletter, but it's called Vigilante Investor. And I love reading it. I've connected with and stayed with him forever and ever and ever. I've been to their kids' graduations, marriages, he's a close buddy. But he turned me on to back, long, long time ago, in the 80's, to Stock Market Almanac, which is a printed… here I can show you, it's this notebook and ring. And I don't get any money for you know, hyping that. But anyways, I was reading through it for this month and what they sort of talk about for the March cycle and, let me read this. It says,

"By mid-2020" and this particular section is on how the government manipulates the economy to stay in power in election years.

Matt: Uh-oh.

Doc: And it just says, I just came across it two hours ago. "By mid-2020, the positive impacts of Trump's tax cuts and job acts of 2017, signed into law December 2017, may be wearing thin as the battle to unseat Trump comes to a boil. But you can bet the negotiator-in-chief will do everything in his power to manipulate the economy to stay in power and keep the stock market propped up by Election Day."

So I find that fascinating. That gives me hope that he's going to try and do everything he can to keep the stock market up. And with that I would say, Matt, thanks. Anything else from you?

Matt: No. I guess maybe next week we'll have some national debt charts that we can show. Some deficit spending. Talk to you soon, Doc.

Doc: Bye, Matt.

Matt: Bye.