 Okay. Hello and welcome to episode 64 of the Market Maker podcast. And as per usual, I am joined by Piers Curran, co-founder of Amplify to tackle some of the major themes of the week. And there's only really one major one. And that is this big sell-off that we've been seeing coming into the tail end of the week and which we'll dive into and basically deconstruct and explain why is this happening? I think that's fundamentally the biggest benefit we can give to you as the audience. But before I do that, as promised from last week, I'm going to continue to give a couple of shout-outs to get the episodes up and running. And first shout-out goes to Daria, who went through the finance accelerator. Piers, I'm not sure if you've seen this. She went through the finance accelerator and has just been offered the role in the sales and training division at Morgan Stanley for next summer. She said, I quote, while the simulation helped me get noticed by Morgan Stanley, the podcast actually helped me secure the internship position. Oh, yes. And she gave quite a lengthy kind of explanation that they grilled her for three and a half hours essentially through lots of different questions about even Elon Musk and how he's financing Twitter down to what's going on with energy prices and the economic cycle. And she said that was a great help. So I'm so pleased to know that A, someone's listening and B, that it's carrying that kind of value. So the podcast changing people's lives one at a time. Love it. And then also Carla and Jolie, they also got accepted onto the MS program for next summer as well. So well done to them. And they came through the finance accelerator as well. And then separately, just a quick one for Nayan Patel, who's been offered a six month internship in Cross Asset UK Solutions at Credit Suisse starting next month. And he was on our summer program last year as well. So yeah, good stuff coming through the community. And if you're a student at Oxford University, Eddie and I are going to be on campus actually next Wednesday. So to make sure you're elsewhere. So look, I mean, definitely part of our mission is to kind of broaden the field. And I know, perhaps that doesn't fit within that mission. But my overall take on this is look, opportunities are for everyone, you know, regardless of where you sit on the spectrum. And certainly, it's going to be a nice change up to, yeah, to go on campus at Oxford. I've never been there. I think I've been to others like Cambridge, but never to Oxford. So yeah, Eddie and I are going to be doing an in-person FA and a Q&A in one of the colleges. So yeah, if you're there, then feel free to get stuck in and come and meet us. But otherwise, look, let's get into the main kind of talking point of the week, which was really I think yesterday was a good summary of where we're at. Because in particular, the NASDAQ was down 5%. The biggest single day moved down since June 2020. The S&P down lower than more than 3% at the margin yesterday. Big swings obviously in the last 48 hours of trading. We've seen an 8% kind of price swing and much of the major stock indices in the US. We haven't really seen that since the real depths of uncertainty when the pandemic first hit, when that kind of ferocious moves that we saw in March of 2020. Now, the main kind of trigger points here, of course, is the Federal Reserve. They raised interest rates by 0.5%, which was kind of as expected. But the problem is, I think, is the markets were kind of leaning on, well, what if we go 75 and what if he starts to hint towards that in subsequent meetings, which is how the market has been pricing itself to get ever increasingly more aggressive. And Powell basically came out and took that off the table, that 75 conversation. Now, I must stress, that's not to say he might bring it back at some point. It's still an option. But he's taking it off for now. And at the time, stocks rallied. I don't know if you saw that on the night in itself, Pierce, it was kind of like the buy everything trade, everything rallied when he came out and he said that comment. What was your initial thought then? My initial thought then was this is the most ridiculous market reaction I have ever seen was my initial thought. Because really, to talk about this week, I know, obviously, yesterday and this morning, it's like, you know, disaster crisis, it's markets plummeted, it's XYZ. But I think you've actually got to step back to Wednesday evening to properly cover this week. So that's when, yeah, big upside in markets following the announcement from the Fed that they're hiking 50 basis points. I think it's insane what's happened. I think that what's happened is the market has, well, it's to an extent, it's Powell's and the Fed's fault, because they have the rate at which they've been getting more hawkish has been quite extraordinary over the last six months, let's say. And I guess markets, they always overextend, right? And I don't just mean price. I mean, people involved in markets always overextend their expectations as well. So there's a direction of travel, which is the Fed are getting progressively more hawkish, more hawkish, more hawkish, but you can't, that direction of travel can't be permanent. At some point, they can't get more hawkish. And I think we got to an inflection point on Wednesday, and then subsequently Thursday, where market expectations had just got to ridiculous levels on how hawkish the Fed might become. So when they hiked 50 basis points, they markets rallied because it wasn't a 75 basis point hike. And it's like, well, hang on, the Fed have, the Fed have never said 70, I think it's one, the super hawk on the FOMC is the only one who's mentioned 75, right? And so markets kind of, it's such a perverse and almost like self harming market reaction when it's like, relief, it's not 75, let's buy everything. And I think it's the buy, it's the short term buy the dip brigade, who don't get me wrong, have been a very successful brigade in recent years, right? And it's the idea that, well, maybe we should talk about this idea of the Fed put, which is, you might have seen this in a lot of headlines over the last couple of days. And this is the idea where the central bank is propping up stock markets and has done for the last, well, I guess, ever since the financial crisis, actually you go back more because we actually used to call it the green span put. Most people listening to this won't even know who green span is, I expect, but he was the Fed chair back at the turn of the century. And actually it was the green span put. And all that meant was that whenever stock markets go down, don't worry guys, the central bank who got your back, we will be more accommodative with monetary policy in order to restore confidence and pump markets back up. A put is just a reference to a derivative options contract, which pays out if asset prices drop, right? So it's like a, it's a hedge, it's a protection against the downside. So the dip brigade are always, right, if markets have dropped, right, let's buy because the Fed will ride into town and come to our aid and come to our support. And then their mindset had got so extreme that it's now like the idea that the Fed are going to ride in and cover our backs by only hiking 50 basis points. It's like that's how insane it's got. And I think that, so markets bounced, right, big time, 3% up the NASDAQ. When you said the NASDAQ's down 5% on Thursday, it was up 3% Thursday, a Wednesday night. So let's just kind of get that into context. So net net, we've got a 2% decline, really. So when you read the press this morning, they forget about the 3% increase and all it all it is is 5%, you know, biggest sell-off in however long, oh my God, it's crisis, it's disaster. And look, I think it is a crisis, by the way, we'll perhaps get onto that in a minute. But yeah, I think it's just insane that rally on Wednesday and it all got given back and more yesterday. Yeah, I was just looking at the NASDAQ 100 future. And I know not everyone will have access to charts, but where we peaked on that spike, such a technical level there on the high that we had just a few days prior on the 28th, and also up around the highs that we're seeing on the 26th. It was just like, if you had the strong conviction behind your thoughts of this is just a function of ill pricing on behalf of markets and the direction of travel is, as you say, rates are tightening, market conditions are going to tighten, then actually that was an opportune moment if you're of a bearish disposition short term. Yeah, definitely, I'm interested to see how we finished this week, actually, because I guess, behaviorally, what you can see, we've got non-farm payrolls, I should say, coming out this afternoon. And I should also say, I think that's just absolutely redundant. I don't think it detracts at all one bit from what's happening right now. But perhaps a quote here that I can say from the UK equity strategist at InvestTech. And this chap said that this is really the sum of all our fears, growth forecasts are being downgraded, inflation expectations are being upgraded, and interest rates are still going up. Yeah, is that the summary of, in the short of what's happening? And I know there's other elements within explaining this with China and with Russia and Ukraine and other things as well. So here's the thing, that is what's happening. And that view and concern and expectation, that's not just suddenly materialized yesterday. That's been incredibly obvious for weeks, right, that growth is decelerating. We know that, we've had GDP figures that were much worse than expected. We know inflation's going up, and we know interest rates are going up. That's a hell of a recipe. That's such a bad cocktail of factors for an economy. Okay, that is the underlying situation, medium term. Now you layer on top of that this short term noise, which is what happened on Wednesday night, where it's, you know, the overriding irrational sense of relief that it's not a 75%, sorry, 75 basis point hike, kind of gives you that kind of endorphin, adrenaline rush, and people like, they forget about the medium term outlook. And it's just all about that moment. But yeah, it is the worst, it is the sum of all our fears. This is why we've been talking about the fact that we are, I mean, almost certainly going to have a recession. And I think when you look at what Powell said on Wednesday night, then, you know, if you're rationally assessing that meeting, then what he said was really bad news. You know, if you could just get over your obsession that, oh my God, it's not a 75 hike. You know, if you just put that to one side and calmly review what he said, and really this is why Marcus, you know, in the end, behaved properly and sold off yesterday. And what he essentially said is, we're going to hike rates because actually inflation is the big problem. And we're going to hike rates and it's going to cause a recession, but we're going to hike rates anyway. We basically said we are going to guys, we're going to cause a recession heads up. And he's trying to use this terminology soft landing. So he's talking about how we're going to engineer a soft landing, we need to get inflation under control. That's the priority. We need to hike rates fast to do that. It's going to cause a recession, but that's fine. Because actually a mild recession is basically our best case scenario. And he talked to, and in the meeting, he changed the soft landing. He said it will be incredibly challenging to engineer a soft landing. He said it actually, and I'm quoting word for word here, depends on events that are not under our control. And he said that actually it may be so difficult that it might be rather than soft, it might be a softish landing. Now, I know that doesn't sound particularly dramatic, soft or softish, but I was reading one guy's kind of interpretation on that, which I thought was quite a good analogy, which was imagine if you're in an airplane and you're coming into land and the pilot gets on the mic and says, guys, look, this is going to be a really difficult landing. I'm not sure it's going to be soft. It might be softish. And you're like, oh my God, panic ensues, right? Because then you assume the worst because it's softish is so unquantifiable. Basically, it means he doesn't really know. And he doesn't. And I tell you what, that's concerning. So aside from any, as you're explaining that, aside from any investors who might be feeling some pain this week, the person that I can't help but think when you're explaining this is Joe Biden. Because it's just gone from pretty bad to an epic fail, surely, because the timing with this, the midterms in November, and then the way Elon's heading with his freedom of speech brigade. And I don't care what Trump says about, he's not going to come back on Twitter, even if invited, he'll be back. Mark my words in this episode. Surely it is the worst presidency in history. Right. But it will go down as that from a technical perspective. If you're looking at actual rating numbers, you probably will end up being that he'll be the worst president in history. Yeah, which is a sobering realization given the not to open Pandora's box here and deviate too much off of peace. But just given what I know we're going to discuss in a moment about house prices and and general wealth division and the fact that people's savings and the cost of living is going up, that's going to create even more social division, which makes it even more prime time for a Trump type candidate, surely. Yeah. Yeah. I couldn't agree more. Yeah, it's the end of this year is going to be a really challenging one. And the other thing I just want to mention about specifically about what Powell said on Wednesday that should cause us a lot of concern. He said that I've got tremendous admiration for a guy called Paul Volcker, who was a predecessor of his. He was the Fed chair back in the 70s and sorry in the 80s. And that should worry people a lot because what Volcker did was aggressively hyped rates to finally overcome an inflation crisis. And in doing so, crash the economy forced a recession and knew he would force a recession. But actually that was the best case scenario in his mind. So no, this is what's coming. The Fed are going to carry on hiking even if growth continues to weaken because the bigger fish to control in the medium to long term is inflation. So that's the reality. Now, obviously markets have in the end woken up. Well, they haven't woken up to that. Look, markets have been trending lower for the whole year, right? We talk about these swings up and down, but look, the bare facts are the NASDAQ's 23% off its high now, off the high back at the start of the year. So the NASDAQ's 23% down. It made a new low yesterday and actually quite significantly from a kind of technical point of view took out the March low, which was the low that we had off the kind of onset of the Ukraine-Russia crisis. So the NASDAQ is right now. We haven't seen these levels for more than a year now. And I tell you what, there's not many times you can tell me that the NASDAQ is down at lows that we haven't seen in more than a year. I mean, it was just off the pandemic. You couldn't even say that off the COVID pandemic in March 2020. Couldn't even make that claim. So this is a significant correction and that's the right term here. So, well, sorry, no, a correction technically, a correction is 10% down. A bare market is more than 20% down off the recent peak. So we're bare market territory here. And is this the bottom? I definitely would say not in my opinion. I definitely don't think we're at the bottom here. So markets are trending lower. And that's across the piece. But within that, there are, of course, from an investor's point of view, if you're trying to look ahead and look behind you in the last, let's just take 2022, what's already happened and what's going to happen. And for investors, this is going to be a phenomenally challenging year. I think it's been too easy for too long. There was, you know, we often talk about investors often talk about this thing about a rising tide lifts all boats. So like in 2021, everything went up. So actually, from an investor's point of view, it didn't matter what you bought, made money. And that's because there's $11 trillion worth of stimulus that got pumped into the system during COVID. And so everything goes up. You literally can't get it wrong. It's just in 2022, well, everything's going down, actually, including bonds, right? It's stocks and bonds about a shocking year. And I think this is where you, this is where the reality hits home. And I guess you sift the weak from the chaff in terms of proper investors who really know what they're doing to make money this year is going to be super challenging. And you're going to have to be much more selective. You're going to have to do much more work in terms of your kind of due diligence on these companies, for example. And, you know, it's going to be a bit of a minefield to navigate through it. One example before I hand it back to you is, you know, thinking about inflation and how do you deal with that as a company because your input costs go up, right? Your raw material costs are increasing. So how do you deal with that when you pass it on to the consumer? So your prices rise. But some companies can do that much, much more easily than others. So, you know, examples like if you take companies that have got a kind of rock solid brand and sort of unassailable market shares, so I'm thinking about people like Coca Cola, they can raise prices and they have done and actually that doesn't have too much of a dent on their revenues, you know, because they've got such a solid brand. But their Netflix would be a good example of a company that actually tried to raise prices and it's just spectacularly kind of negatively impacted their market cap and their share price. So look, yeah, it's going to be super challenging. It's already been a challenging year and it's definitely going to continue to be so. So just from, obviously there's no definitive answer here, but just given the things that we've discussed, the way of which we foresee then the economy developing over the next nine months or so, eight months for the rest of the year, and given the fact then that markets are forward-looking. So now we're going through this readjustment episode. Yes, the market overstepped the mark, as you said. Now, Powell's kind of switched. He's like, Volcker fanboy, this is what we're doing. So we're kind of aware of the fact that tightening is going to happen at that pace. This is the ramification playing out right now. So in terms of the most, I guess I'm just trying to say peak fear, when can we anticipate that? Because then when is it that we've reprised for the peak fear? And I know that the parameters could change and I guess the one threat I see is still China and a very disruptive scenario there takes us into well double-digit inflation in Western Europe and in the US. If that materializes, the disruption impact obviously still exists on the energy front. However, I'd say that's much lower than where we were. But kind of like that peak pricing, if you like, which is the key culprit to weigh down these equity markets. Time-wise, do you have any kind of feelings about that? So it's like the billion dollar question. Basically, what you're asking is when's the bottom? There's a good saying, I don't know if I should talk about that saying, but there's a saying on the trading floor back in the day. But if you try and pick bottoms, you get smelly fingers. Anyway, what I would say is uncertainty is the killer for market confidence, for market sentiment, for risk, the crisis of risk assets. Uncertainty is the biggest fear. And when you've got clarity on how bad the bad is going to be, then actually that's better. That's a better position to be in than the uncertainty because the human nature is always kind of, there's uncertainty, you kind of always think about what the worst case scenario, right? And that's fueled by the media. Just have a look at what's going on in the media this morning, my lord. So I'd say there's unknowns that's fueling the uncertainty. Powell pointed to those in his press conference. It depends on events that are not under our control. So there he's talking about China for sure. He's talking about, fine, the Russia-Ukraine crisis and for how long will that sustain this massive spike in commodity pricing? So of course, they're out of his control. And so there's some massive unknowns. But then I'd say that the other big thing we haven't mentioned yet, which we need to, is quantitative tightening because it's not just about interest rates here. It's also that it's a double whammy. So this is aggressive tightening. It's not just hiking rates at a pace we've never seen for like 20 years. It's also starting to reduce the Fed's balance sheet. It's unwinding all of that stimulus money they pumped into the system during COVID. And it's the speed at which it's going to be unwound. And I think that was one of the key negative takeaways on Wednesday. It was the speed and the rate at which they're going to do that. Have you got the stats on that? Yeah, if you give me one second, I do. So on their balance sheet, they hold both treasuries and mortgage-backed securities. And so they're going to start to taper. And they did this back in 2018 and into 2019. But this time around, the speed is going to be much faster. So the Fed are going to begin allowing its holdings of treasuries and mortgage-backed securities to decline in June. That's an initial combined monthly pace of $47.5 billion, stepping up over three months to $95 billion. Yeah, I mean, that's a run rate. So when we get to $95 billion a month, that's a run rate of more than a trillion dollars per year. So for me, this is the one of the big unknowns. How does that impact the treasury market? And really, the treasury market, the US bond market is one of the kind of underpinning markets of the entire global system. I'm not exaggerating. So if we find that the Fed's quite rapid unwinding of its balance sheet, if we find that that creates a lot of turmoil in the treasury market, then that's for me, the biggest unknown here. I think it's quite easy to see that inflation is going to stay high, that the Fed are going to be hawkish, that certain stocks are going to get really hurt by that. But what happens in the bond market is my concern because bond markets have rallied for 30 years. And there's a lot of people, there's a lot of really prominent bond investors that are calling this as this is the end of the 30-year bond rally. And so that means that now yields are rising. And like to put it into context, it's quite extraordinary because it's not just the COVID constate of easing. It's also the financial crisis QE programs. And so actually, right now, the Fed, they have $5.8 trillion worth of treasuries on their balance sheet, which is actually one quarter of the entire market of all of the treasuries out there that the U.S. government have issued. The Fed own 25 percent and they're about to start selling. And if they're shrinking at $95 billion a month, so yeah, as I said, that's a trillion a year. And what's happening is yields are climbing. And so one of the big moves this week, yeah, fine, Nasdaq's down 5%, fine, but the biggest moves have been in the bond markets and you've seen big spikes in yields and everything's kind of through the roof. So and that's been happening this year though, right? So that's the direction of travel on yields. For example, in January, the two-year treasury yield was 0.8%. It's now 2.7%. And if we get just a little bit more upside on some of these yields, which I think we're going to have, then we're going to start to see yields we haven't seen for a decade. And this is borrowing costs, right? It's the cost of borrowing. And that's tightening. We talk about the Fed changing interest rates, but really what has a more powerful day-to-day impact is the cost of borrowing, which is dictated by the treasury market. And if that continues to climb at the rate at which it's climbing, then we're going to really start to see some breaks being put on consumption. And that's where you get your recession. So I've quite skillfully spoken. I was just about to say you sound like my local MP running in the local elections when I asked him about what are you going to do about this? And he gives me a long-winded answer but doesn't pick any bottoms. It's so long-winded that everyone has forgotten the question by the time you finish. I'm like, yeah, he gets my vote. Sounded good. Not yet is the short answer. All right. Well, look, I saw this guy on LinkedIn yesterday, in fact. And he popped up on my feed and he said that the UK is so going to take this bit close to the home. This guy said UK recession is coming. The Bank of England are unable to prevent it. He went on to say the Bank of England only hikes by 0.25%. There will be no quantitative tightening, which we just talked about, until August at the earliest. Inflation will spike to over 10% by Q4, with now a forecasted contraction of 1% GDP contraction in that quarter. What are the Bank of England going to do? Nothing. He sounds like he knows what he's talking about. This guy looks remarkably like you on LinkedIn. Come on, explain this to yourself. You said the Bank of England are going to do nothing about it. Well, firstly, I thought it's a bit unusual for me to be getting involved on the social media side. I'm changing my spots. I'm actually going to start to do it more often. I think the Bank of England, again, it was one of the most remarkable monetary policy events, I think. I'll talk about the Reserve Bank of New Zealand in a minute as well. But every central bank's got the same problem, every single one. It's our worst fears. It's growth is slowing, inflation is crazy high. Actually, we've got to a moment in time that we haven't seen since the 80s, where it's the slowing growth that's not the biggest problem. Therefore, these banks have got to step up and they've got to contain inflation. That's what I meant when we're going to have a recession at the end of this year and the central bank's going to do nothing about it. What I mean is, they're not going to play to the rulebook that we've seen of the last decade, which is the put. It's the central bank put. It's any hint of slowing growth. Let's stimulate. Let's cut rates. Let's cut rates. Well, sorry, but rates are on the floor. You can't cut rates anymore. All right, let's pump in QE, more QE, more QE, more QE. We've got your back. But unfortunately, they can't do that now either because the big elephant in the room is inflation and more QE will just fuel more inflation. I think we have got to the end of the journey, the end of the highway, the end of the stimulus highway. We've got to turn around. There'll be a recession and we will not get monetary stimulus. That's why we're so worried and that's why the uncertainty is there because, well, how long will inflation remain high? Is it by the end of this year actually a slowing economy? Does the dampening effect on inflation for us or worst case scenario it doesn't? Then we've got serious stagnation. We're in a new era here and it's actually one I've never traded in and I've been trading for 20 years. The rule books out and that's why markets are panicking. Talking about the timing, the Bank of England did say that energy prices could rise a further 40% in October, which we know of because that's the semi-annual cap increase that will need to factor in the increase in wholesale prices. So timing wise, we've got another 40% to come on the energy price bill. I'm sure everyone's felt that when those bills have come in recently and it's going to get even worse by a quite substantial degree and quite late in the year as well. I think I said that all the central banks have got the same problem. There are subtle differences that each one's got to tackle and I think for the Bank of England particularly, it's the kind of utility bill crisis. It's the cost of living crisis and you could say for the ECB as well and that's perhaps a function where Europe is being more immediately impacted by gas prices rocketing because of the Russia situation. I think for the Fed, they're more sheltered from that. They're more immune to the Russia-Ukraine crisis because they're not as dependent on Russian energy, but the Fed have got a much tighter labor market and that's kind of their big concern to try and tackle. I said I was going to mention the Reserve Bank of New Zealand, which might seem a bit of a random one, but actually history does dictate. They've been a bit of a lead indicator on all of this. They've been a quite a progressive central bank and they were the ones that first actually came out a few decades ago, came out with this idea of inflation targeting as the kind of main policy kind of objective. They were the first ones to start hiking rates last year and this week they got massively aggressive with their language and I've gone further than the Fed have gone where they're now actually directly and openly talking about asset price bubbles. This is something the Fed don't talk about. It's the elephant in the room. They don't talk about asset price bubbles and these bubbles are going to deflate. They talk about inflation and they talk about having to contain inflation. What the Bank of New Zealand said is look, the highest prices are up 45% in two years. It's a bubble. We're going to deflate it. That's straight out and that's something central banks, yeah, that's an unusual one for central banks. They've always been seen as kind of the silent supporter of asset prices and obviously that's fed into this whole thing around inequality because the rich get richer as these big asset prices kind of appreciate and this is feeding into that whole more kind of bipolar, more extreme political environment that we see around the world and so on. I thought the New Zealand central bank getting way more aggressive and just calling it out that asset price bubbles are here and it's not sustainable. We're going to do something about it. Some context then. What's the house price movements that we've seen over these three regions that you've mentioned? New Zealand is what you said 45%. What does it look like in the US and the UK by comparative terms? Yeah, good. 45% does sound like a bubble. Well yeah, right. Again, here's where you have subtle differences that the central banks are going to deal with. New Zealand 45%. The US is actually 34%. That's house prices upside in the last two years. Since COVID, 34%, the UK is actually 20%. So when we specifically look at the housing market, then fine. There's a bigger bubble in New Zealand, but then if you look at the stock market, well then look at the Nasdaq versus, I don't know, the FTSE 100. The FTSE 100 basically hasn't moved. Well, in 10 years, never mind two years, whereas the Nasdaq's up, I don't know, whatever gazillion percent. So for the US, yeah, it's the stock market that's looking bubbly. We're beginning the slow deflation. Okay. All right, well look. To summarize then, how would you suggest? Because I know we do have a bit of a blend of listeners here. We've got students who I think we've kind of addressed a lot of the main points of what we set out to do, which was why is what's happened this week happened. But there are some investors as well and even some of the students who invest. What would be your best advice given your 20 years experience at this juncture in time? Be very careful. I think that there's a mindset that's super dangerous, which is, I think I mentioned it last week, is that kind of relative value mindset where you look at the Nasdaq and you go, my God, it's down 25% or 23% or whatever. Right, I'm buying because I mean, it hasn't dropped that much. And I don't know how long it's got to be a great buying opportunity. And then you start, your eyes get drawn to where it was and you buy because look, it's going to get back to where it was. And that trade has worked for, well, for how long? 13 years. That trade's worked for 13 years since the aftermath of the financial crisis. I don't think that trade's going to work now. I think the left-hand side of the chart showing the peak at the end of 2021, I think that was an overinflated peak. And so just don't get caught into that trap of buying just because we're down 25% and this thing's got to bounce because it always does. I think you've got to get way more selective if you're trading single stocks specifically, then you've got to be way more selective and do some work on actually analyzing what these companies do. Yeah, that idea of just buy whatever you want, you're going to make money as now has now gone. I'd also look at things like currencies as well, which we haven't perhaps mentioned, but I mean, the dollar's been so strong, it's up to 7% the dollar index this year. And it's in a huge move and we're seeing some amazing kind of levels being taken out. Certainly, I guess the most extreme being like the dollar yen, for example, which I think now it was a 30-year high, the dollar yen, that's the yen weakening. And the reason for that is it's about central monetary policy divergence. So you've got central banks, you know, who are the most hawkish while the Fed, who are the least while the Bank of Japan, they're doing nothing. So you suddenly get this quite big pronounced divergence, which means it just attracts money into the US, right? So people are buying dollars, which is fueling that upside just so happens the dollar's a bit of a safe haven as well in times of crisis like Russia, Ukraine and so on. So you're getting these big dollar moves and the issue with that is the further the dollar rallies, the more it becomes quite a big negative for emerging markets who hold a lot of dollar denominated debt. So these are companies in places like Turkey, for example, are quite vulnerable where companies have a lot of dollar denominated debt. That means they've got to pay their interest payments in dollars, but they're a company who generate revenue in their domestic currency, the lira. But when the lira is devaluing against the dollar, then in lira terms, their debt mountain is just increasing and increasing, their debt costs are increasing and increasing and it can cause a lot of problems. So yeah, that dollar strengthening thing is also something to keep your eye on. But yeah, just be defensive. I don't think, I mean, this is only my personal opinion and I just want to stress I might be wrong. But yeah, I don't think we've seen the bottom yet in these broader index sell-offs, but we will. And there will be a moment in time. And again, you asked that question, when's the bottom? And the answer is I've got no idea. But I think I will know when we get somewhere around it, just from experience. So I guess my question then would be, I get that conclusion. So I guess the next logical question that might offer more interest to the listeners is what are the flags or what are the signs that you would look for to then give you that feeling of, oh, it's becoming a bit more interesting now where we could be reaching that point? It's hard to explain it. It's a feeling. I mean, I guess it's one where you start getting the big bellwether tech firms, actually, getting hammered. We talked about Apple a lot last week and how there are bellwether and a bit of a safe haven even and their dividend policy and their share buyback policy and their huge market presence and brand strength and XYZ, right? If they start getting hammered, like big time, and look, they got hammered like yesterday, they were down like over 5% yesterday. Amazon were down like 7% or Tesla were down 8%, whatever. But yeah, when you get those big bellwether tech firms into bear market territory and you start getting these big, I think that's kind of when you're coming towards the end because there's not much else to sell. If investors have sold all the other riskier stuff and now they're even selling that stuff as well. Right, because by comparative terms, I was looking at Spotify and it was down like 70% from its peak or 80%. So you hit those real high growth stock names and then you hit, now you're hitting in the more matured but still in the same category of stock sector. But yeah, I see where you're heading with that. It's the high beta, high risk stuff that gets axed first. But then when you got rid of all of that and then you're still kind of bailing out water and you start to actually see those big bellwethers getting hammered, then it's kind of right. Well, we're probably approaching an end of a kind of normal cycle. We do every now and then I should caveat, get very abnormal, multi sort of decade cycles. And when one of those hits will find then even when those bellwethers start to come off, even that's not the end. But yeah, it's too early to call that kind of boom stage scenario. Okay, well, look, to wrap up just to stress the point, legally both Piers and I do not suggest going out picking bottoms. So just putting that caveat out there, if anyone goes out there and starts just trying to pick all kinds of bottoms across the marketplace. But yeah, thank you Piers as ever for kind of breaking that down. Any questions at all? I send out the market maker newsletter daily, Monday through Friday with a weekend edition on Saturday, I'll drop the link into the kind of description of this video if you're not part of that community, then it's a great way if you ever have questions on the back of these podcasts or anything, so me and Piers, you can just reply straight direct to me. As I've said many times before, your reply does come to me. So it's not like a team that takes care of this, it comes straight to me and I'm more than happy to help. So check out some of the links. As Piers said, he's also kind of alive on social media these days. So I'll drop his LinkedIn profile, both to stay on top of his thoughts of what he thinks just during any big episodes of kind of market volatility or breaking news, but more so as well just for any student for your network. Obviously having been around a while, he's got lots of good, strong contacts and your network is not just your direct, but your secondary contacts and so forth can be super beneficial. So with that, I wish everyone a fantastic weekend. I think it's going to be nice and hot and sunny, so enjoy. Cheers, Piers. See ya.