Cash is Trash ... Until it Isn't

Never, ever forget that cash is trash until it isn't.

Yes, folks, read an article by Edward Dowd talking about the fact that cash is trash until

it isn't, which is obviously something I have been thinking about a lot.

If you are a follower of this channel, you know that about a week or two before the Iran

conflict, I went out and raised a million bucks, and I understand it was obviously very

good timing, but I'm already starting to see some stress because, again, buyers have disappeared.

Sellers are getting anxious, and I'm getting, you know, a little spider tingly about some

opportunities coming down the pipeline.

Again, according to Edward Dowd, he is actually sitting with zero equity exposure.

Now he is a Wall Street guy, so zero equity exposure is quite unique and quite extreme.

He is actually sitting in cash, gold and long bonds.

As I was reading this article, I was thinking one of two things, one A, this is going to be

a spectacular failure because what happens if the war ends and, you know, stocks rip.

The other side of me said, is this a Joe Kennedy moment?

If you don't know, Joe Kennedy is the patriarch of the Kennedy family.

He famously was getting his shoes shined when the shoe shine boy gave him stock tips.

He then, according to lore, went ahead and sold everything and went to cash right before

the Great Depression started in the stock market and really was the key to the Kennedy wealth.

So again, something I'm thinking a lot about, lots of people say cash is trash.

I got to tell you, lots of people would hope they were sitting on a pile of dry powder.

So again, never forget that.

Looks like President Trump is indicating that Iran wants a peace treaty.

Again, I think the president is talking tonight at six o'clock Pacific.

Is it six Pacific?

I think six Pacific, nine Eastern.

It'll be interesting to see what he has to say there.

But hey, I've been rooting for this to be over sooner rather than later.

So I will take anything.

Obviously, we've got to figure out the straight.

You can't just leave it as is.

It needs to be open, but hopefully we will get some positive momentum there.

But again, things could always get worse before they get better.

So we should all be hoping for the best, but cautious as well.

Jamie Dimons talking about AI enabling our kids in 30 years.

Maybe our grandkids in 30 years to probably only work three and a half days a week.

Yes, three and a half days on, three and a half days off.

Sounds pretty good to me.

Lots of fed speak the last 24 hours.

We got fed president Muslim saying, take away from tariffs.

If you take away tariffs, inflation would still be a problem at two and a half percent.

Holding rates likely appropriate for some time.

Again, we are seeing more and more people talk about higher for longer.

Perhaps no cuts, no raises, all of 2026 is how I take Muslim comments.

How about fed president Barkin?

Goods firms.

So people producing goods have limited pricing power.

However, flip side services firms feel they have more power.

This is important.

We actually saw this inside PCE on the last report.

Again, goods inflation was flat to down.

I will highlight the goods inflation, aka tariffs, so not really there.

But services are still inflating services, wage inflation, things of that nature.

So again, we need to watch services.

Obviously, as you recall, the U.S. economy is mainly a service-based economy.

So definitely something to watch out for.

Fed president Schmidt said, the real risks is inflation gets stuck closer to 3%.

That would be a problem.

We've obviously been above the 2% target for five years now, six years.

Man, it's been a long time since we've been below 2%.

Fed president Williams, last one, talking about the war could increase inflation.

And depressed growth, aka stagflation.

Yes, we've been talking about that for quite a while.

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I've heard rumors that these accountability calls tonight have gone hours.

I heard last week or the week before it actually went six hours.

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What else do we got?

Another page of notes.

We did get some economic numbers today.

We'll go through those first.

We got retail sales.

Again, every economic number I give you for the next three weeks, you really need to

ask yourself was this before or after the war?

We got February, February, February retail sales.

So that would be code for it before the Iran conflict.

Actuals were up 0.6 expectations for 0.5.

So retail sales, the consumer is still spending, still growing.

ADP report for March, so again, this is the month.

For the month of March, ADP said that 62,000 jobs were created in the private economy.

Expectations were only 40,000, so this is a pretty solid beat.

Also they raised last month.

So at least on the ADP report, we're not getting negative revisions.

But buckle up, we get BLS on Friday, and they have been all kinds of negative.

So we'll see what happens there.

Warren Buffett was on CNBC yesterday talking about his investing and his history and all

of that.

I took away a couple of things.

First and foremost, Berkshire is sitting on $373 billion in cash.

That is a record.

Second, he doesn't see the 6, 7, 8% discount in the market today is anything interesting.

He would want something far more significant before he went shopping.

And then the Buffett indicator, something that he has talked about a lot is currently

sitting at 220%.

Anytime over 200%, he says you are playing with fire.

On top of that, we did get Morgan's demand.

It's always on Wednesdays.

We got the totally weekly Morgan's purchase and refi down 10.4% week on week.

Just down 3% week on week, refi demand down 17% week on week.

If you want to see the dent in higher rates, look at refi demand for the month, refi demand

for the month is down 40%.

Never forget these week on week numbers are interesting, but if you look year on year,

refis are still up 33%.

And actually, purchase is actually up 1% year on year.

So an interesting take.

Goldman Sachs says the unemployment rate is going to rise to 4.6.

Why?

Because the economy is not creating jobs is what Goldman says.

Nike released earnings yesterday, and if you go woke, you go broke, continues.

Their turnaround is taking longer than he'd like.

That is a quote from the CEO, warns of more falling sales.

Ouch.

Nike is like the same price it was like nine years ago or something crazy like that.

So talk about dead money for a decade.

Don't know if you saw it yesterday, but the Dow was up 1100 points.

Was this a relief while?

Was this the war is over?

We shall see.

Oracle announced massive cuts.

I've heard people range from 12 to 17%.

What I didn't know is Oracle actually has 162,000 employees.

How did Oracle get so big?

I guess when you buy Sun Micro and PeopleSoft and all these other players, you get a lot

of a headcount.

Oracle, it's interesting to note that Oracle and their last earnings said they increased

net income by 95%.

That is nearly a double.

But yet, they are going to lay off 20 to 30,000 employees, pretty crazy.

Last thing to note, yesterday President Trump said he plans to leave Iran in two to

three weeks.

We shall see.

We've heard things like that before, but let's just hope it's peace and we can move on.

Lastly, let's congratulate Brad.

Brad got your next deal.

Your card will be going out in the mail today.

Congratulations.

Folks, don't forget to check out steadily.

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Peace.