(SUMMARY OF JOHN’S MARCH 19, 2025, WEBINAR)
March 21, 2025
Hello everyone
TITLE
“Sell First, Ask Questions Later”
THE HIGHLIGHTS
A five-year bull market is over.
Economic growth has turned negative in 2025, and risks have risen.
Weak economy will force the Fed to cut rates but not until year-end.
Stock valuations are just coming off a 26-year high and uncertainty is exploding … a toxic combination.
Cutting government spending by half means a loss of 12% GDP = recession.
Stagflation is most likely outcome = SELL.
Worst case scenario: Government austerity budget in a recession = depression!
TRADE ALERT PERFORMANCE
March MTD = +10.94%
2025 year to date = +17.14%
Since inception = +769.06%
Trailing one year return = +92.10%
17-year average annualised return = +50.59%
PORTFOLIO REVIEW – big bet we don’t go to new highs by April 17.
Risk On
(NVDA) 3/$88-$90 call spread (closed/profits taken)
Risk Off
(GLD) 3/$240-$250 call spread (closed/profits taken)
(SH) 3/$38-$41 call spread
(SH) 4/$40-$43 spread
(GM) 3/$53-$56 put spread
(NVDA) 4/ $140-$145 put spread
(TSLA) 4/$310/$320 put spread
(GM) 4/$52.50-$57.50 put spread
(TLT) 4/ $84-$87 call spread
Total Aggregate Position = 90.00%
THE METHOD TO MY MADNESS
The U.S. economy is now in recession, but it won’t be confirmed by the data until August.
Stocks have given up all gains since September, losing $5 trillion in market cap in a month.
Interest rate plays are back in favour as recession fears drive rates down.
Deregulation plays take the biggest hits as it never showed.
U.S. dollar enters free fall with declining rates cutting it off at the knees.
Big Technology was the most expensive and saw the biggest falls.
Energy sells off on global recession fears with oil hitting four-year lows.
Cash is king - $1 at market top is worth $10 at the bottom.
THE GLOBAL ECONOMY – GLOBAL FEARS
The economy is now solidly moving into recession.
University of Michigan Consumer Confidence Collapses at 57.0 versus an estimated 63.2 – a four-year low.
Consumer Price Index slows - CPI increased 2.8%.
Small Business Confidence falls off a cliff.
Government to change GDP calculations, knocking out government spending.
Nonfarm payroll report comes in weak at 151,000.
Layoffs hit a five-year high.
Germany passes massive $1.3 trillion spending stimulus devoted to defense spending and infrastructure.
STOCKS – WELCOME TO THE BEAR MARKET
Stocks lost 10% in a month and there is another 10% to go.
NASDAQ is down 14%.
The Volatility index peaked at $30, but there are higher highs to come.
Biggest degrossing since the pandemic has taken place, cutting back of total positions longs and short.
Nvidia was the first stock to attract serious institutional buying.
Tesla has become a no-touch on global boycotts and falling sales.
Markets have flipped from FOMO to capital preservation.
The average American now must work seven more years to get his retirement funds back to where they were a month ago.
Any 3% rally should invite heavy selling and new lows.
Sell first and ask questions later.
China is up 36% this year and German DAX is up 30%. Follow stimulus spending -> China and Germany.
If John had to recommend Chinese stocks to buy, it would be the following: Baidu and Alibaba.
What do you buy at the bottom?
John says buy financials, cyber security stocks, NVDA, AMZN, META, GOOGL, etc.
THE ULTIMATE DEFENCE – Defensive stocks only go down at a slower rate. 90-day US Treasury Bills (Warren Buffet owns $300 billion)
Government Guaranteed principal
Endless liquidity, trade like water
100% collateral value for margin
Lock in guaranteed income
Can be sold at any time to earn full interest.
Will survive any bear market.
Ask your broker how to buy.
WORST CASE SCENARIOS
The Bull Case
John says we are now in a recession that will probably cost us -6%, -7% over 2-3 quarters and then ends with a renewal of a $5 trillion tax cut for 2026 (SPY) down 20%-30%, (SPY) multiple drips from 22X to 18X last seen in 2018.
The Bear Case
No tax cut means we enter a depression and lose 25% of GDP over four years. (SPY) down 60%. If (SPY) PE falls from 22X to 9X 240% of stock gains since 2009 have been multiple expansion.
JOHN’S DOWNSIDE TARGETS – S&P500
Depression Worst Case = $250/60% PE 9x.
$535, -12.7% = 1st support
$500, -18.4% = 2nd support
Sell on any rally, add downside protection, and buy outright puts.
SDS – 12%/year = cost of carry, but it is no cost over a 2–3-day period.
BONDS – New Bull Market
Rising recession risks put bonds back in the spotlight.
If the recession happens, the (TLT) easily rises above $100.
During the pandemic recession, the (TLT) rose to $165.
Interest payments on the National Debt already top $1 trillion per year, will become the largest budget item topping Social Security at $1.2 trillion.
Recession risks have suddenly moderated providing more bond support.
Fed will eventually have to cut interest rates, but not now.
Buy (TLT), (JNK), (NLY), (SLRN) and Reits on dips.
FOREIGN CURRENCIES
Prospect of falling interest rates is demolishing the US dollar.
Yen Carry Trade unwind sends Japanese currency soaring.
Expected interest rate differentials are the principal foreign currency driver.
Recession fears are bringing forward Fed interest rate cuts.
The Trump economy is forcing investors to flee all US assets, including stocks and currency.
Massive cash flight is running away from the US and into Europe and China.
Buy (FXA), (FXE), (FXB), (FXC), and (FXY)
ENERGY & COMMODITIES – GLOBAL RECESSION FEARSA
The Oil Market is in turmoil, with crude prices dropping below $66, a four-year low.
A global recession is looming large.
The administration has pulled Chevron out of Venezuela, losing 300,000 barrels a day there.
Tax-subsidized overproduction and increased OPEC quotas are overwhelming demand.
Oil prices have already fallen below 2026 downside targets.
Avoid all energy plays like the plague.
PRECIOUS METALS – NEW HIGH
Falling interest rates have given gold a new lease on life.
The opportunity cost of owning gold has fallen sharply.
Central bank buying never stopped.
Now Silver is starting to play catch-up.
Gold is still the favoured saving means by Chinese who don’t trust their own currency, banks, or government.
That’s why the metals have outperformed the miners which the Chinese don’t buy.
Looking for $5000 by 2028.
Buy (GLD), (SLV), (AGQ), and (WPM) on dips.
REAL ESTATE – STAY AWAY
Pending Home Sales hit an all-time low in January – down 4.6% MOM and 5.2% YOY.
Inventories are rising but affordability is at record lows.
Exceptionally cold weather was a factor.
Homebuilder Sentiment plummeted to 42, a two-year low, amid tariff concerns.
Our drywall comes from Mexico and our lumber comes from Canada.
Avoid all real estate plays like the plague.
TRADE SHEET – THE RECESSION TRADE
Stocks – sell rallies
Bonds – buy dips
Commodities – stand aside
Currencies – buy dips
Precious Metals – buy dips
Energy – stand aside
Volatility – sell over $30
Real Estate – stand aside
NEXT WEBINAR
12:00 EST Wednesday, April 2, 2025, from Incline Village, NV.
Cheers
Jacquie
