Market Moments (with the Marvins)

Peter Atwater (@Peter_Atwater) will join Steve on the show today to break down the Great Financial Crisis of 2007-8. Peter is an author, professor, researcher, and consultant. His work focuses on the study of confidence and how it affects the decisions we make. He recently released the book The Confidence Map, where he deep dives into the subject with the framing of his Confidence Quadrants. Tune in to hear about "Overconfidence Bingo" and what happens to financial terms with cute names.

1:35 Peter’s Beginning in the GFC

5:15 Housing Bubble

8:05 Peter’s Confidence Quadrants

10:25 Comfort Zone and Overconfidence

12:40 Information Flows and What is News

17:10 Underconfidence and Sentiment Lows in the GFC

20:05 Similarities between Bubbles

24:15 Consistent Mindframes

29:20 Launch Pad and Economic Cycles

The Confidence Map:

https://www.amazon.com/Confidence-Map-Charting-Chaos-Clarity/dp/0593539559/ref=sr_1_1?crid=3FR7DV625R0MJ&keywords=the+confidence+map+peter+atwater&qid=1695917229&sprefix=confidence+map%2Caps%2C313&sr=8-1

More of Peter’s work:

https://twitter.com/Peter_Atwater

https://peteratwater.com

Dave will be joined by our first external guest, the legendary market technician Bob Farrell, as they walk through his start in the industry and broad market perspective. Across five decades at Merrill Lynch, Bob helped pioneer their technical analysis department by combining deep quantitative work with market psychology and investor sentiment. His lasting legacy is highlighted by his 10 Rules for Investors, which are still used on the Street. Beyond this, Dave and Bob are great friends who have known each other for decades and love to get together to talk markets. Steel sharpens steel, as they say.

Link to Bob Farrell's 10 Rules for Investors

https://school.stockcharts.com/doku.php?id=overview:bob_farrell_10_rules

1:35 Introduction

2:20 Bob’s Background

4:15 Starting at Merrill Lynch

7:55 Learning Technical Analysis & Focusing on Institutional Clients

11:15 Building a Name

13:50 Taking Over and Hitting the Road

16:20 The Nifty Fifty & Making the Big Call

25:05 Decades of Friendship

Steve discussed his experience covering South Africa Equity Markets in the 1990s following the end of Apartheid.

2:40 Apartheid

5:20 South African Economy and Background

10:00 Rugby

11:20 Local Companies

13:20 Broader EM Bull Market

16:20 Steve’s Takeaways

Dave talks about his first Japanese investment in 1981. Tune in to hear about Japan’s historic rise, comparisons to other long bull markets, and how things have changed (and not) over 40 years!

2:00 World Background

3:20 Japan Background

6:00 Japan’s Rise

7:15 MITI’s role and focus

11:45 Japan, Inc.

14:30 Context for the Japanese Market

18:00 DuPont Pension

19:30 Dave’s First International Investment

22:45 Growing Forever

25:20 Shocks from Visiting

27:30 Comparisons to China

Dave takes Carl through his first trip and investments in Mexico. Highlights include meeting the Finance Minister of Mexico, the experience of investing early in international markets, and an era of hope.

3:30 Cultural Events

4:10 Socio-Economic Backdrop

7:30 Mexican Opportunity and International Hope

11:30 Mexican Equity Market

12:45 Meeting Pedro Aspe- Finance Minister of Mexico

17:30 Privatization of SOE (state-owned enterprises)

20:30 Process of Investing in Mexico

World Cup wins, liberalizing markets, and trips to the zoo! Join us for Steve’s first episode, where he talks about his 1994 experience in Brazil.

3:30 Optimism Around the World

5:30 The State of Brazilian Equity Markets

8:20 Brazilian Historical Context

11:00 1994 in Brazil

14:00 Brazilian Economy

16:15 Visiting Brazil

18:45 Looking Back

23:10 Investor Relations and a Trip to the Zoo

Mondays are the worst!

Dave and Carl discuss Black Monday (1987), the biggest single-day market decline of his nearly 60-year career. Dave recounts how the crash sparked fears of a depression. They also talk about the vast differences in trading throughout his career.

1:00 Background

2:50 Historical Market Context and Presidential Cycles

4:50 The Week Before

7:45 Preparing for Monday

8:40 Reliving Black Monday

9:25 Index Futures

11:15 Portfolio Insurance and Snowballing

14:50 Differences in Trading Overtime

23:25 The Aftermath

28:15 Preparing for a Depression

32:50 Similarities to COVID Market Decline

34:30 Differences as a New Entrepreneur

Dave and Carl discuss the Peso Devaluation in Mexico (1994). Dave recounts this event as one of his most important lessons in the investing world (learned the hard way). They talk about the importance of currency in international investing and keeping your mind at peace.

1:00 Background

1:50 Cultural Events

2:50 Socio-Political Backdrop

5:45 Peso Devaluation

8:45 Currency and International Investing

12:20 Response to Market Sell-Off

15:00 Learning from Mistakes

18:45 Unforcastable Events and Freeing Your Thoughts

21:25 Importance of Currency in International Investing

23:45 Humbling Experience (Have to Do it Yourself)

Dave talks Carl through his first big break in the industry when he successfully navigated the crash of the Nifty Fifty in 1973-4. Dave shares with Carl his promotion to co-Portfolio Manager at IDS, what it’s like making the big call, and more. Their market topics included the Yom Kippur War and the ensuing oil shock, Price Controls, Inflation, and more.

1:00 Personal Background

3:00 Cultural Events

4:00 Socio-Political Backdrop

7:00 Nifty Fifty Market Decline and Oil Shock

11:15 Price Controls and Gas Lines

14:00 Inflation and the Fed

15:00 IDS Promotion and Portfolio Positioning

19:00 Base Period and Price Controls

22:00 Dave’s Basic Industry Bets

23:15 Making the Big Call

Dave discusses the growth of the Nifty Fifty in 1972-3. Carl hears about Dave’s experience as a new father of three, Assistant Portfolio Manager at IDS, and in the Army Reserves. In the markets, Dave covers interest rates, guns and butter, Nixon, inflation, and more.

1:25 Personal Background

3:35 World Background

8:05 Nifty Fifty Background

13:15 Dave’s portfolio positioning

15:25 Going against the Wind

17:15 Guns and Butter

19:25 Vietnam War Sentiment

20:50 Dave’s Army Reserve Experience

22:45: Interest Rates and the Markets