Stock Market About To Get ‘Robbed’: Mania Is Breaking | Bill Smead

They cut rates 200 basis points. That's what will happen. That's what will happen when the mania breaks. We're in the point of the market now. All anybody wants is AI related stocks or space stocks. They tightened credit and the market peaked October 2587 and then it fell until the 19th of October and then it went down 22% in one day. What else do you not like right now? Bill Smead, founder and CIO of Smead Capital Management is back. When rates rise at this kind of a pace to this kind of a level, history has shown that something usually breaks. We're going to find out what that thing is today and how investors can prepare. Importantly, we're going to find out where oil is headed next. We all want, by we I mean regular consumers, not oil investors. We want lower gas prices, not higher. But will we get that anytime soon? Spoiler alert. No, we won't. And this is why. Bill's also going to talk about why the tech sector is going to blow up any minute now. And I'd like to thank U.S. Gold Mining for disseminating this video. But more on that later. Bill, welcome back. Good to see you. Thanks very much for having me. Appreciate your attendance today. And thank you for enlightening us on what's going on. A lot of people are wondering why the global bond selloff has been happening even now. And I think this is a separate question, whether or not the Treasury has been successful in their intervention. Clearly, the bond yields have kept going up since August 19th. But to Scott Besson's point during the House Financial Committee testimony, the counterfactual is, had they done nothing, yields would have been higher. Now, that's a separate issue. Let's just talk about why you think bonds are selling off right now. I've shown this chart and I'll leave this on the screen as I get your answer. I've shown this chart to a lot of people, which is the 10-year yield, the U.S. 10-year versus the oil price. Now, I will stress that this correlation that we're about to see here has been stronger in recent months versus historically, like many years before. But it still stands to reason there is a correlation. Some people said this is nothing more than a coincidence. What do you think? Well, I love the way you've postured the question. It's a great way to posture the question. First of all, the biggest mistake that I think most people make in investing is they forget about the fact that there are four main academic disciplines, history, economics, math, and psychology. And so, what you have to look at when it comes to interest rates, first of all, is the economics. The economics are that the federal government of the United States is borrowing money like drunken sailors on leave. The hyperscalers are borrowing money like drunken sailors on leave. And capital is being demanded intensely to fund a CapEx mania associated with AI. So, the demand for money is coming from those sources, and that's why it's going up. And that is going to crowd out other borrowers in the process who are competing for that money. So, there's way more demand for money than there is money. And that problem always relieves itself the way a fever relieves itself. I remember one of my high school buddies, his dad was a teacher and our football coach. He served in the engine room of a ship in the Pacific in World War II, and he said it would get really hot down there. So, what did they do to cool off when it got really hot down there? They drank hot coffee. And why did they drink hot coffee? Because it caused you to sweat. If you drank cold water, it actually reduces the sweating that your body does. But if you drank hot water, it would cool things off because you'd sweat like a Comanche. So, here's the deal. The deal is this has pushed us way into the same kind of circumstances that all other CapEx phases have pushed us, which is there's not enough money to go around for everything that people want to do. And it's going to have to come out of somewhere. And historically, the first place it comes out of is the common stock market because most of the money, you know, Willie Sutton robbed banks because that's where the money was. Most of the money in the United States is in 20 companies that make up 45% of the S&P 500. So, when it comes time to rob the bank, that's what's going to get robbed. Now, the backdrop of all this is normally 55 to 80-year-old investors usually provide a lot of the money to people that want to borrow, right? Because they're older, they want income normally. But they've trained to love stocks since the bottom in 2009. They've completely been trained on stocks. So, for example, Bank of America shows that in the entire history of owning Merrill Lynch and having investment customers that their customers own the most equity as a percentage of their portfolio they've ever had, which is incredibly odd because their best customers, for the most part, are 55 to 80-year-old people either getting ready to retire or already retired. Okay, so what does that mean? That means that these interest rates are going to go up until the fever breaks and the two places, the two things that will happen is they will go get money from where it is and that is the 20 largest stocks in the S&P 500, which will ruin the S&P index trade and it will ruin the trade in those stocks and then the people that do that selling will turn around and buy interest-bearing securities probably at the shorter end, zero to five years, and that will begin to bring rates down. It will be fear that drives bond investments. And I could tell you more stories than you want to take time on this podcast, but I can tell you when we were at the opposite end of this spectrum, right? Because I've been in the investment business for 40 years. So think about this, David. My first stock pitch was Coca-Cola at six times earnings paying a 5% dividend in 1981. So I pitched it about 100 times. My dad bought 200 shares. My cousin Gary bought 200 shares. The other 98 people said, Bill, what's the money market fund paying? And the answer to that was 14%. So let me get this right, Bill. You want me to buy this stock and you want me to give up 9% a year in interest to own this stock? And I said, yeah, that's what I'm asking. They said, find me some bonds. They said, no. Okay, now think about it. Buffett paid five times that price in 88, 89, and then nine bagged the stock from there, from when he called them the inevitables, Gillette and Coke, the inevitables in what, 96 or 97? So he nine bagged from 88, 89 to 97 on a stock that I would have 45 bagged from 1981, okay? That was one extreme. People hated stocks the most at any time in my lifetime at the time I started as a broker, okay? So therefore, we are at the complete antithesis. The people that should be earning the 5% interest aren't earning the 5% interest. They're owning the 20 largest stocks in the S&P 500, and most of their portfolio is centered on the index that is way overweighted in them. Before we continue with the video, I'd like to bring to your attention a gold copper exploration and mine development opportunity on U.S. soil. Now, gold and copper and silver are all trading at or near historic highs, and at the same time, Washington is pushing to increase domestic mineral production. President Trump issued an executive order on day one of his presidency called Unleashing Alaska's Extraordinary Resource Potential. The administration followed that with another executive order called Immediate Measures to Increase American Mineral Production, directing government agencies to facilitate domestic mineral production, including copper and gold. Alaska is clearly important for Trump's administration. So that brings me to today's sponsor, U.S. Gold Mining Inc., ticker symbol USGO on the Nasdaq. U.S. Gold Mining owns the large Whistler Gold Copper Project, located approximately 100 miles from Anchorage in south-central Alaska. And one of the biggest recent developments is the project's first economic assessment. U.S. Gold Mining recently announced the results of an initial preliminary economic assessment, or PEA, for Whistler. According to the PEA, Whistler is estimated to produce approximately 2.7 million ounces of gold, almost 600 million pounds of copper, and nearly 6.6 million ounces of silver over an initial mine life of almost 15 years. Combine those metals on a gold-equivalent basis, and the PEA models almost 3.6 million gold-equivalent ounces of total life of mine production, averaging approximately 246,000 gold-equivalent ounces per year. And importantly, the PEA envisions mining beginning with a higher grade, near-surface starter pit. That could drive production of approximately 345,000 gold-equivalent ounces per year during the first three years. The PEA uses consensus metal prices of $3,200 gold, $4.50 copper, and $3,750 silver, below the spot prices today. Under those assumptions, the project has an estimated 2.1-year capital payback period. And here's another important part of the story. The PEA incorporated just one of three existing gold-copper deposits on the Whistler property. U.S. Gold Mining has also just completed its summer exploration programs, giving the company additional exploration potential beyond the deposit modeled in the PEA. Then there are the political and infrastructure tailwinds. In addition to the Trump administration's push for mineral development in Alaska, Governor Mike Dunleavy has been a strong proponent of mining and infrastructure development in the state and has personally visited the Whistler project. Alaska is also advancing the planned West Susitna Access project, a road system that would connect the Whistler area with Anchorage. The project has also been visited by members of Alaska's congressional delegation, including Senator Lisa Murkowski and Representative Nick Begich. And Whistler isn't simply a gold project. Its 2026 mineral resource also contains copper and silver, two metals that were added to the U.S. critical minerals list in 2025. Finally, take a look at the ownership structure. Approximately 71% of the company's outstanding shares are held by its parent company, while another 4.3% are held by management and insiders. That means more than 75% of the company's outstanding shares are held by the parent company, management and insiders combined. So let's recap the story. The recent completed PEA provides an initial economic assessment of a large U.S.-based copper gold project. The project has additional exploration upside, with the PEA incorporating only one of three existing deposits, and Whistler is positioned alongside political and infrastructure initiatives aimed at expanding mineral development in Alaska. Now, none of these outcomes are guaranteed, and advancing Whistler will require further studies permitting financing development and successful execution. So do your own extensive research on U.S. gold mining ticker symbol USGO on the Nasdaq today, and make sure you review the company's March 2026 PEA announcement, annual report, technical reports, SEC filings, and all relevant disclosures below. I think the narrative has kind of changed back then. What was, I haven't looked at it, but Coca-Cola's, I don't know what Coca-Cola's cake was at the time, but now the discussion is why own a 5% bond or even an 8% bond if it's a corporate, when I can own NVIDIA that's been up what 1,400% or something in the last two years, something like that? I don't ever remember investing in the rearview mirror. It isn't what they do the last five years that matters to today, it's what they do the next five years. So what's going to happen is, and you don't get to know when, but there's a lot of signs right now that the fever is starting to break. Because let me give you an example. A week ago, I think, the S&P made a new high, and there were more 52-week lows in the 500 stocks than there was highs. So again, I'm an old school guy, and I can remember a lot of great sayings that I was taught in the 1980s. One of them was, when the generals are marching forward and the troops aren't following, the generals are going to be in a lot of trouble. And that's where we are right now. The generals are marching forward and the troops aren't following along with them. Normally in a rising rate environment, both in the long end and as well in the short end, when the Fed funds rate is going up, stocks are strained, especially high beta tech stocks. It's not happening now currently. And today, for example, we're speaking on Friday the 25th. Stocks are up. The Nasdaq's up about 30 basis points, while the Treasury, the long end of the Treasury yield, the 30-year is up 1.2% today. It's now at 5.53. The point I'm making is, Bill, a lot of people in the comments have been saying something, some variation of this following statement. Given how far yields have already run, if stocks wanted to correct, it would have already done so. The market would have already done so. The fact that it hasn't is a bullish signal. What do you think? Well, that exact same thing was said in 98-99. Alan Greenspan tightened credit and they just kept going, buying the dotcoms just like mad, letting Lucent. Lucent got 45% of its income in 99 by loaning the money to tech startups to buy their equipment. Now, how much different is that in all this inner dealing that's being done in AI, where, okay, I'll invest $50 billion in you and then I'll agree to buy your product for the next five years. The accounting chicanery that's starting to go on is, in scale, it's way bigger. I mean, let's face it, Amazon and eBay and Lucent and Deutsche Telekom and the dotcom wonders, they weren't anywhere near the size or consequence of what's going on right now. The magnitude of this mania is way bigger. It's probably fivefold because it reminds me a lot of the nifty-fifty market of 1972 because in 2022, we slaughtered the Beyond Meat market and we slaughtered the Peloton market, the meme trades, we slaughtered Cathy Ark, we slaughtered all the woogie stuff, right, just got slaughtered. And that's what happened in the 69-70 bear market. The market went down 40% and the worst declines were in the go-go stocks and that was the go-go stocks that got slaughtered in 2022. Then, in the following, after 70, in 71 and 72, they put the bull market back together on 24 stocks that were in the two nifty-fifty lists, Morgan Guarantee and Kidder Peabody's nifty-fifty list, 24 stocks. Disney at 90 times earnings, Coke at 60 times earnings. Let me say that again. Coke at 60 times earnings at the top in 1972 was trading at six times earnings and Coke made a lot more money in 1981 than they did when it was trading at 60 times earnings in 1972. Okay, so were they right about the underlying corporation? Yes. Is it stupid to pay 60 times earnings for a large growth company? Yes. Is it stupid to pay 90 times earnings for Disney? Disney was so debilitated by that decline that they ended up being fought over. I think the Bass family ended up rescuing them by investing a bunch of money. So what's the point? The point is you do not invest in a rearview mirror. Anyone that is stepping into the S&P 500 right now, the statistical likelihood, and I can show you this in like the 10 or 12 most respected set of statistics that preclude returns in the index, the chance of the S&P being higher 10 years from now than it is right now is almost zero from a mathematical probability standpoint. And you can use almost any valuation you want to use and it's all going to bring you to the same exact conclusion. Just one note on tech stocks and I want to move on to the energy sector and other assets, Bill. I've noticed, this is just my personal observation, that in current times, I'm talking about the last 10 years, the market has rewarded companies that promise hope. And what I mean by that is take Tesla, for example. They haven't been profitable for the better half of the first couple of years of their existence, or at least when they were listed publicly. Take Anthropic and OpenAI, not currently profitable, but multi-trillion dollar valuations. Cisco, on the other hand, I just looked this up, its revenues went from, in the 12 months ending July 2026, revenue was $63 billion. In 2000, revenue was $19 billion. They were doing $50 billion in 2021. So they've been doing better financially in the last 20 years since the dot-com bubble, but the stock never recovered. The market doesn't reward old technology, it rewards the promise of transformational technology, even if the underlying fundamentals of the company aren't there. What would you say to that? I got the best answer for this. I just saw an interview with Charlie Munger about a week ago. Charlie Munger said, never underestimate a man that overestimates himself. And he was talking about Elon Musk. Never underestimate a man that overestimates himself. So the point is, Munger says things like that to help us. He gave us wisdom, is what he was giving us. So let's just think of all the greatest investors of all time. What was John Templeton's favorite saying? Bull markets follow bear markets, and bear markets follow bull markets. Okay, so what's going to follow this? A bear market. It's not a question of whether there will be. The question is when. But the longer we go without it, what's the magnitude going to be? The longer you go without cleaning up the chicanery, the false statements, the tricky accounting. I mean, people are depreciating six-year depreciation on things they're buying from Nvidia that are going to last two years. And they're depreciating them over the six years, not two years. It's bizarre. I mean, we own Merck and Amgen, and we love those companies because they have the most conservative accounting of any major corporations. What do I mean by that? They spend 18 to 20 percent of their revenue each year on R&D. And expensive. Upfront. Expensive. They don't depreciate. It's the most important long-term investment they make. So their income statement, they are actually much more profitable as compared to other corporations because of how conservative their accounting is. It's just the opposite with what's going on now. Why are the hyperscalers borrowing money off balance sheet? Why are they doing that? Why are they calling the depreciation schedule much longer than it really is? Because you're right. Somebody's going to invent a better chip about every year. So how can you depreciate over six years something that might only last its usefulness in a year? So anyway, the bottom line, some of this is way past my pay grade. But again, history, math, economics, and psychology. The psychology is terrible right now for future success in tech and AI. Because everyone loves it. The psychology is terrible. The math is terrible because almost every valuation methodology is at all-time records. Wellster 5000 trades at 240 percent of GDP. Buffett thought it looked interesting to buy at 80 percent of GDP. And then everybody says, well, GDP doesn't matter anymore because these companies are so much more today's age. Nah. You can see what I was talking about there. This peak and the most recent peak, the most recent peak was end of 21. And it isn't going to be pretty. But in the meantime, there's a lot of money to be made because when the fever breaks in that and 55 to 80-year-old investors buy bonds like they've never bought them since the rates were higher in earlier eras, then what's going to happen is mortgage rates are going to go down. And when mortgage rates go down and people are losing money on stocks, they'd much rather own a house than own a stock. By the way, what does this chart, margin debt as a percentage of annual GDP that's been rising in the last 30 years, what does this chart tell you about the demographics of people in the markets, institutional versus retail age, I guess, profile, risk tolerance, so on and so forth now versus 30 years ago? Boy, you're going to wish you hadn't got me on this subject. I wrote a piece recently and my handlers made me adjust what I said. It is a total disaster for 25 to 40-year-old males to spend a long time single. It's a total disaster. There's absolutely nothing good can come from it. Why? Because first of all, they need to be civilized by a woman. Number two, they need somebody to say, get off of Cal-She, get off of PolyMarket, get rid of BetMGM and your other sports betting apps, and get a life. Stop trading short-term options and buying stocks on margin and using leverage in a boom when it craters will crush you. Again, it's a complete disaster. Here in the United States, we're just totally feeling the effects of it. We're closing schools and then none of the governments want to share the venereal disease statistics. Did you see this Bloomberg article from August? Young men who trade stocks daily feel like failures. This is a psychological study that I've done. I did read that. Remember, four disciplines, history, math, economics, and psychology. Yeah, of course they do, because people don't make money trading. They ultimately lose. In fact, the worst thing that has happened to you is to do well in your first few trades. Look, I was a young stockbroker. I was on commissions. What did that incentivize me to do? Trade. So the good news is I opened an account with one of my college buddy's moms. Her dad was the manager of a major brokerage office in Seattle and had put some stocks into his daughter's account like 50, 60 years before that. She had like $3 3M that was trading at $100. I looked at that and I said, now that's what you want to do. That was the definition of success. Now, what I wanted to do is I wanted to buy a stock at $30 and have it go to $45 and sell it and then find another stock at $35 that could go up to $45 or $30 that could go up to $45. What's wrong with that? Well, in a bull market, you start at the bottom and there's quite a few stocks you could do that with. But the market's been going up since 2009. We really like the things that we own, but even there, they're not. For example, 40% of the market in 99 was cheap as all get out because rates had moved high and no one wanted anything other than tech related stocks. We're in the point of the market now, all anybody wants is AI related stocks or space stocks or some segment of that. It's getting really narrow. Again, you have to have been there when you're just the opposite. For example, I thought about this the other day. In 87, they tightened credit and the market peaked October 25, 87. Then it fell until the 19th of October and then it went down 22% in one day. Now, the week before that, the Fed funds rate was 10 and they lowered the Fed funds rate 200 basis points the afternoon of the 22% decline. A lot of really smart people like Bill Gross and other people said, oh, we're going to have a depression, oh, we're going to have a depression. Well, they cut rates 200 basis points. That's what will happen when the mania breaks. I'm going to show you one more thing. Just to make the point of how the investing landscape has changed. This is from the Federal Reserve of St. Louis. Households and nonprofit organizations, equities as a percentage of financial assets over time, all time high. Given that more retail investors are piling in and more of our household and financial wealth is based on equities than let's say 30 or 40 years ago, what does that tell you about how people trade and what drives markets ultimately? The psychology of markets is what I'm getting at. How is it different now than 40 years ago? You should be shorting the new homes are being built up on the hill above me in Paradise Valley, Arizona, because they're all going to be out there for sale at some point at way lower prices than what they spent. By the way, the luxury spending by people who have gotten wealthy in the stock market is legendary right now. Notice that American Express has not been making new highs even though their customers are getting richer and richer and richer. Not a good sign. You're just showing me a reinforcement. By the way, that chart comes from, where'd you get the chart? Who's the originator? Oh, this is St. Louis Fed. Oh, perfect. That's going into our, we have our... I'm glad I brought this to your attention. Quarterly Mutual Fund Chalk Talk. And I'm putting together slides for that. That's a beautiful slide. Okay. Well, I'm glad I brought that to you. What is going on with oil? I think not everybody watching the show trades oil futures and not all of us own oil stocks, but oil affects everything that we have and do. So people are really looking forward to $60 oil again. Is that happening soon? That is delusional. So it's a great question. At times in my career, I've been very bearish on oil. When the brick trade was at its height in 2011 and 2012, we got very bearish on oil. By the way, in 2010, what was it? I think seven of the 10 largest cap companies in the world were directly tied to the brick trade. Petrobras was the largest cap company in the world at the beginning of 2010. So what happened was the oil industry poked too many holes in the ground as a result of the emergence of Brazil, Russia, and India, and China. So they poked holes, and they poked holes, and they poked holes, and then high prices and poked holes lead to lower prices. Very simple. The supply got increased. The Permian got unlocked. A lot of things happen. So what happens is the stocks do terrible, and the price of oil does terrible, and that all culminates on the 1st of April in 2020 when Saudis took the price of oil to zero for one day. Zero. That was unbelievable. The stocks all plummeted and got destroyed. Well, Barry Bannister and Stiefel Nicholas put out a chart right at that time that showed at that point in time, commodities were the cheapest relative to common stocks in the entire 220-year history of the statistics. The other lows were 1825, 1875, and 1930. What's the moral of the story? The moral of the story is we had to get involved in commodity stocks because that was going to be the place to be for the next 15 to 35 years. And then what we looked at was, okay, who is the repeat business person in the room? What industry has the repeat customers in a way that the other commodities don't have as much the repeat customers? And the answer was the gas station. That is the repeat customer. So we got into commodities in a big way by getting into oil and gas in a big way. Now, if you go back and take a look, from the low in 2020 to the end of 23, we wiped the floor with everybody because we were way overweighted in oil and gas. Then in 24 and 25, we only made 5% gain because we didn't reduce that position, right? We stayed with it. And it cost us because they corrected for two years, okay? But the deal is we're in a 15 to 30-year outperformance era for commodities relative to stocks because stocks are the most expensive they've ever been. And in 2020, commodities were the cheapest they've ever been. And it takes quite a while to burn off that cheapness. Now, the second thing that people don't understand is they look and go, oh, diesel's six and gas is five. Well, gas was $1.25 in 1981. So look at the cost of everything else since 1981. Use a house, use a car, use whatever you want. And a four times price increase is low compared to most everything else since 1981. So this idea that $5 gas is destroying everything, is ruining everybody, it's just a complete, that's an urban myth is what it is. And so, yeah. So these stocks have lots of runway. We very possibly will never again see $55 to $60 oil. But the companies we own organize themselves so they could still be very profitable at $60 a barrel. But just think of how much free cash flow they're going to have the next 10 years at oil anywhere from say $70 to $120. It's going to be unbelievable. I'm glad you brought up a more fundamental story for oil because look at this. I just Googled Trump and Iran negotiations because I wanted to know what the latest was on what they were talking about. I knew they were talking. So 23 hours ago, this is literally 23 hours ago, U.S. and Iran discussed phased deal to reopen Hormuz. Four hours ago on CBS, oil back up as Iran and U.S. trade fresh threats to expand seven month war. How do you invest in a sector when within a day it goes 180 several times in terms of geopolitical tensions? Well, remember I said the four investment disciplines, right? Economics, math, history, and psychology. There's nothing Donald Trump can do about this. There's virtually nothing he can do about it. He can't change. Look, just the U.S. strategic reserve, and by the way, the strategic reserves of almost everybody got drained the last six months. Just to replenish normal reserves is going to take years unless people will pay more. We're talking about oil that doesn't even exist yet. So we're in a bull market. We've got people by the throat. The same thing happened in the 70s. We had the Yom Kippur War. One sector of the S&P made a lot of money in the 1970s. Energy. In 1980, six of the eight largest cap companies in the world were mainly U.S. and one international oil company. They were the bomb. They were the hot dot in 1981. And our guys are not the hot dot. They are not putting higher multiples on these stocks because they're all convinced we're going back to 60 bucks. And boy, are they going to get punished. Well, we saw 60 briefly. No, we didn't. What am I saying? It went back down towards 60 during the summertime when there was a bit of a detente, remember? 64, 67 on the WTI. And everyone's saying, well, all we have to do is reopen the Strait of Hormuz. And that's exactly what happened in June, late June, July. It was partially open for less than a week, and the oil price went back down to 67. So this is all we have to do. You know what the old saying is? Fool me once, shame on you. Fool me twice, shame on me. I mean, how many times we've been fooled? Seven, eight, ten times? Look, David, I'm doing a kooky thing right now. I've never read through the Bible straight through, ever. Never cover to cover, from the beginning all the way through. And by reading the Old Testament of the Bible, you've got to realize that descendants of Ishmael, he was born first, believe that they have the birthright, because he was Abraham's first child, by the maidservant. The second child was Isaac, and he was born to Abraham's wife, and he was the promised child that was promised to Abraham. He did a rules violation. His wife said sleep with the maidservant. Now, I don't blame her, because by the way, he'd whored her out twice. When he went to Egypt, he said, this is my sister, and let the Pharaoh marry her and make babies with her. So he whored his wife out twice. She's feeling bad. She tried for 20 years to get pregnant. Said, hey, go into the maidservant. So, what's the moral of the story? Descendants of Ishmael and the descendants of Isaac hate each other. They think that they have the birthright, and the other one is trying to steal their birthright. And that fight's been going on for 3,000 years, and Donald Trump has stepped into the middle of that fight. And it's never going to stop. That fight never stops, because it won't stop until, at least in my world, until the Messiah comes. So, what are we saying here? That this seven-month war is going to turn into Iraq? Those people have been fighting each other constantly for 3,000 years, and they will keep – by the way, I got a new nickname for the Hooties. I call them Hooties and the Blowfish. Okay? Because of the band, right? Hootie and the Blowfish. Hooties and the Blowfish. The Hooties have been attacking constantly, and they're getting their support from these people. So, the idea that that is no longer going to be a trouble spot if they do all the right things is ridiculous. When we reach a stalemate like this, let's just think of some hypotheticals, some counterfactuals. Suppose Trump were to pull out of the Middle East, not the Middle East, but just Iran in particular. Tells his navy to go home, ends this tomorrow. Hypothetically, does oil go back down to 65? No. Not even close. Not even close. You know, ending their nuclear threat was a worthy goal from a historical standpoint because we learned our lesson with North Korea. Letting them have a nuclear weapon has been a – especially somebody with such proximity to the United States was a disaster. So, that was a worthy goal, and the problem is that they're not going to solve it if they walk away. So, the whole purpose for going there has not been accomplished. Does the world outside of the U.S. have sufficient reserves to plenish or to withstand whatever is happening right now? No, they're all low in the tank, way low in the tank. You know, we're just reading that Z is still buying black market oil from Iran. Well, within the oil sector, any particular types of companies you would favor? For example, the crack spread, the diesel crack spread has been an all-time high. Some people I've talked to are short the crack spread, thinking it's going to normalize. What do you think? So, the best way to play that is a very conservative way, and that's by Synovus, and that's a very large position in our international fund and a very large position in our U.S. fund. So, they refine. So, our five companies, they're the only one that refines. So, they're refining Canadian oil, and it goes to the United States because their refining is right on the border. We own Apache, which is just a pure play, just no grief, just great reserves, super well set up. Conoco we own, but it's had a good run relative. See, what happens is what little participation the big institutional investors have in the oil and gas business went to Exxon, Chevron, and Conoco. That's where it went. So, they did well because it was easy to get money into them. The other ones were too small a capitalization for large players to stuff money in. And then we bought Diamondback Energy, which is the low-cost provider. They're the Costco of the industry. They have the $35 breakeven. Just imagine how much money they're making in a quarter when on a $35 breakeven, they're getting $90 for their oil. I mean, it's just about enough to make your head explode. So, we own Oxy, which no longer refines. We own Apache, we own Conoco, we own Diamondback, and then we own Synovus. And our largest two positions are Synovus and Apache in the U.S. fund as well. Refiners apparently are operating at 97% utilization in the United States. How do you go long if they're already at pretty much that capacity? We're just not involved in that part of the business. Again, because we want to own these things for 15 years. And so, we already have to go through a certain ups and downs because of the volatility created for the international problems. But the truth of it is, what this has done because of what it's going to take to just replenish normal inventories for everybody, it's going to take two or three years to establish normal inventory. So, I mean, our companies might make six years worth of income in the next two years, six years of owner earnings in two years. How does it work in the oil and gas sector when the underlying resources that are approaching all-time highs and mining, as you know, and resources, whenever there's a huge surge in copper, gold, silver, whatever the case may be, capital is easier to raise. And so, we have increased drilling activity and stocks do well. Does the same logic apply to explorers of oil and gas? Well, it's funny you mentioned that. It's kind of shocking that there hasn't been some consolidation among the top 10 players. For example, we own the homebuilders. Of the 15 largest publicly traded homebuilders, four have been bought out in the last five months, including Berkshire buying Taylor Morrison. So, we won't even be close to a top in the oil stocks until they consolidate the industry. That'll be, and we haven't even started yet. We haven't even started yet. You know, Oxy and Apache would be ideal buyout candidates for anybody that wants to reinforce their, you know, the oil that they own in the ground. What else do you not like right now? Well, I'll tell you what we like, and that kind of tells you what we don't like. Yeah. We don't own any tech. We don't own any AI. We had some Qualcomm, and we sold it maybe in May with a nice gain, and it's still below where it was when we sold all that. They had a nice announcement that Apple is not going to ditch them, which has always been a worry about the stock. So, that was our whole exposure to tech. By the way, we're having a good year in funds. Really good year without owning any of the stuff that you mentioned that's been so hot. And by the way, which also shows that that is very needle and haystack, we're buying the homebuilders. They tend to bottom at about eight-tenths of a percent a book, and that's about where they're trading, which makes sense why a 10-year investor like Berkshire Hathaway would look and say, hey, we'll buy these guys now someday when things have improved. When the S&P gets slaughtered because the mania breaks on everything tech and space, when that mania breaks, and then the 55 to 80-year-olds rush into interest-bearing securities, and mortgage rates go to 5%, it's amazing how many homes will get bought. So, again, we would be betting against the things that are anything tied to the mania. Even vaguely tied to the mania would make us nervous. How do you see financials now versus a few months ago, especially after the Fed started raising rates and raising pretty much all ends of the yield curve? Well, they don't have a tendency to do well when that happens, and I think the worries are accurate. For those of my friends that are registered investment advisors and financial advisors in the United States, I don't mean ill will toward my good friends, but there are way too many financial advisors in the United States, and what's going to happen is the market's worried that the banks that are heavily involved in the investment advice business are going to get their ears pinned back. If 55 to 80-year-olds participating in the stock market need a financial advisor, 55 to 80-year-olds that are buying bonds aren't going to pay as much for financial advice as they used to. What we're describing here is, and let me just close off on this statement here, history. This is from CNBC. This is kind of echoing what you talked about earlier. History shows us that when rates rise rapidly like this, there's financial calamity. Something always breaks, and what you're describing is with higher interest rates, certain sectors do poorly. At a certain point, the government's going to look at this and say, this isn't good for politics. So are we looking at more interventions, or is that a one-and-done before the midterms? Yeah. Politics, I think, has pretty much been voided as having any impact for a while. I love that. By the way, I read that same thing that you put up about the rising rates has a break, and that's where I got the idea for breaking the fever. We are very close to breaking the fever, and that's what a mania is. People just get hot to buy the thing that's gone up a lot, and that's the fever that's going to get broken. But can we expect, let's say, all right, the Treasury said on Wednesday, this is September 10th, buy as much as $6 billion of debt, and it's just increasing. Scott Besson is just trying to increase bond buybacks with each operation. At a certain point, this would have some impact, no? If an alcoholic comes into your tavern drunk, if an alcoholic comes into your tavern drunk, and you're the bartender, what's the risk of you giving them more drinks, and then they drive their car home and get killed? The United States government is the most indebted drunken borrower of all time. They're borrowing money in prosperity. They're not borrowing to come out of a financial crisis. They're borrowing while we're prosperous, and then what happens is, if something happens to the prosperity, there won't be any ability on the part of the federal government to get in the way of what comes after that. No, I thought it was the most ridiculous thing I've ever seen. What you need to do is you need to get 55 to 80-year-olds to want to buy bonds. You need to get the hyperscalers to stop borrowing money. What they're doing is they're crowding out mortgage buyers in borrowing money, right? It's supply and demand. When more people want to borrow money than have it to lend, the price goes up. That's all it is, and the only way to break that is to break the urge of the people that are the ones at the margin that are borrowing the most money, and that's the federal government, and that's the hyperscalers. Fair enough. All right, Bill, great talk. Where do we learn more about you and, importantly, follow your work so we stay up to date on your portfolio asset allocation and your changes and strategies here? Smeetcap.com and go to our advice. It's where we write and where we show resources for people to better understand what we're doing. Okay, excellent. We'll put the link down below, so make sure to follow Smeetcap there. Welcome back to the show, Bill. It's good to see you, and we'll speak again soon. Take care for now. Thank you. Thank you for watching. Please do like and subscribe. Follow Smeetcap. The link's down below.