Anatomy of A Bust: Banks Go First
A special presentation by Addison Wiggin
Are you concerned about the real danger of banks collapsing and its impact on your financial decisions? In this live presentation at Wealth365 Summit, Addison Wiggin, founder of The Wiggin Sessions, who has been studying banking crises and financial markets for over 30 years, shares his insights on this important topic.
Addison Wiggin is an American writer, publisher, and filmmaker. He was the founder of Agora Financial and publisher for 18 years. An acclaimed New York Times best-selling author, his books include: Financial Reckoning Day, Empire of Debt, The Demise of the Dollar, and The Little Book of the Shrinking Dollar. Addison is also the writer and executive producer of the documentary I.O.U.S.A., an exposé on the national debt, shortlisted for an Academy Award in 2008. He lives in Baltimore, Maryland with his family. Addison started his latest project, The Wiggin Sessions, powered by The Essential Investor, in March 2020. He films from a homegrown studio in his basement.
All right, let’s go ahead and get over to our next speaker. We have another first time speaker right now coming up, and we’re really happy to welcome Addison Wiggin to the Wealth365 Summit. Addison is a bestselling writer, publisher, and filmmaker. He also has his own podcast called The Wiggin Sessions, so it’s really exciting to have him here today to discuss the bank collapse. And I’m not sure, Rob, are you here as well?
Yeah, exactly. Super excited with… He’s a bestselling author and a wealth known figure in our industry as a whole. So, with him talking about some of these issues that we’re all seeing in the news lately, a lot of you have a lot of misinformation and a lack of information, partial information. So, excited to hear his perspective on how he sees the current banking situation impacting the economy as a whole. So, this is great. And again, he is a bestselling author. He’s really well known in our space, and so somebody you should definitely take a listen to. So, Addison, without further ado, looking forward to your presentation this afternoon.
Yeah, so thank you, Rob, first of all, for having me. It’s been great. We’ve been trying to put this program together for several weeks. Marissa, you’ve been great. So, I just want to say thank you, to both of you, for the work that we put in and just the attention to detail that you put into it, because it means a lot to me. Especially the topic that we’re talking about today, that I’m talking about today, it’s an evolving thing. The banking crisis could impact a lot of people. And I really want readers to understand, I want viewers to understand, that it’s just beginning, and that’s really the point that that brings me here today. So, I believe I need to share my screen. Sorry about that. Here we go.
So, I’ve been studying banking crisis and crises and the financial markets for over 30 years. I have a long history of talking about this, meeting with people and actually trying to understand how the credit cycle actually works with respect to the way people invest and speculate in the markets. And I think that that is… That’s important because we’ve lived through… Now, we have lived through… In my lifetime, we have lived through one, two, three, four, five, six busts that most people don’t even really recognize. Some of them get headlines like the 2008 crash of the mortgage bust or mortgage backed securities, and how that impacted the market.
But there have been other cycles, which are really important to me because it shows how people invest in the markets, but it also impacts the way that you make financial decisions in your life. So, if you’re going to send your kids to school or if you’re going to pay for healthcare, if you’re going to get mortgage to buy a house, or you’re going to buy a second house, or if you’re going to go on vacation, all of those things are dependent on how much the money costs you.
Hey, Addison, sorry to interrupt, but is there a way you can go full screen with your slideshow?
Down in the lower right-hand corner, Addison? There’ll be a little button.
[inaudible 00:04:08]. Sorry.
Yeah, just a little bit further to the left. Oh, one more to the right. One more to the right. Nope, not that one. One… Go over to the… Just… There you go. The next one to the right. There, that one. There you go.
Sorry. All right, [Marissa 00:04:38], Rob, sorry. Continuing on. So, what we’re covering tonight is the real reason that banks are in danger of collapse. I actually don’t believe that they’re in danger of collapse, but there is a real danger out there, and we’re going to talk about that in depth because I think the real danger is that the government is going to come in and they’re going to spend a lot of money to prevent regional banks from going under, and that is even more dangerous than the banks themselves collapsing. So, we’re going to talk about that a little bit. And what it means for people who are trying to invest through this process. So, if you’re a speculator, I was listening to the previous speaker a little bit, and there’s a lot of speculative gains that can happen if we’re paying attention and you want to invest quickly, if you want to trade these markets.
The volatility can be vastly… It can be profitable in a very short amount of time. But you also have to know that when you trade, you’re risking your money. So, you got to pay attention. And I’m going to go through some legal disclaimers in a minute. But I’ll also explain how my investment approach is really a three-step approach. It’s much more conservative than you’re likely to hear on Wealth365. But at the same time, I care about my family. I care about the direction that my wife and I are going to go through in… I’m getting a little bit older and I want to retire, and I want to preserve my money. I want to make the investments that I believe will preserve my own legacy, those kinds of things. So, the comments that I’m making tonight are based on actual decisions that I have to make in my own life. So, it’s not just a product, it’s not just a presentation. It’s very personal to me that we get this right. And there are some things that I’m concerned about that I’m going to share with you tonight. So, let’s do that.
Here’s the legal disclaimer. The most important part to convey at this moment, as you know, is that when you make financial decisions in your own life, they are your own. But the advice and the ideas that we share tonight are really… They’re for your benefit. They’re educational, and they’re not necessarily designed to make you buy a product, buy a stock, sell a stock. I’m not doing that. What I’m saying is based on 30 years of reading, writing, understanding, and actually speaking on the financial markets, the economy, and the way that people respond to what I call “popular delusions.” So, it’s important for you to understand that I’m not managing money, I’m not making financial advice. I am suggesting a way to approach the market that would be helpful to you, and that’s what I do.
And then this other one from the CFTC is also important. And it just means that, when you make your financial decisions, you have to make them for yourselves, and it’s best to consult with somebody else. You want to confer with your financial advisor. You can do whatever you want. But the ideas is that we publish here are… They’re important. And that’s what I want to say, is they’re important, but you have to take your own risks. So, here we go. I’ve been doing this for 30 years as you know, I could go through this stuff… I’ve written a bunch of books mostly on the value of the currency that we spend. I’ve produced the documentary that talks about the rise of debt in our society and why we depend on that so much.
This is the credibility part of the discussion, which I do think is important because you should take my word for what it is. But I’ve been doing this for a long time, and in fact, the Demise of the Dollar, this book that is highlighted the most, is being released today. It’s the third edition. And for these kinds of books, making it to a second edition is unusual. So, the fact that it’s a third edition and it’s already in its 20th year of publishing, we updated it through the bailouts, through the pandemic. We put a lot of work into understanding how the credit cycle is impacting, not just the financial markets if you want to trade cryptocurrency or something like that, but it’s impacting the way that people make financial decisions about their kids, their families, their retirement, and stuff like that. It’s an important issue to me, and I just couldn’t do this if I didn’t care about it as much as I did. So, that’s where we are. This is Demise of the Dollar. James Rickards is a friend of mine. He was kind enough to write the forward.
What he is saying about my work is that I bring it down from a difficult academic level to make it understandable for most people. So, I would encourage you to read the book because I’ve been working on it for 20 years. So, you’d do me a favor if you actually have read it. Rob, how’s that? You got to tell me, buddy. All right, here we go. So, here’s the issue that we’re facing right now, and I do believe it comes from the monetary policy that the US government has faced or followed since 1987. So, at that time, Greenspan was… Alan Greenspan was the chairman of the Federal Reserve, and there was a panic, a short panic, in 1987, in the stock market. And he countered that by lowering interest rates very quickly, and then the market kept going. Then they did the same thing in 1993. They did the same thing in 1998. And then when we got to the tech wreck of 2001, they did the same thing.
So, the pattern was established 35 years ago that every time there was some kind of crisis in the market, we would drop rates, and then the risk tolerance for most people just was obliterated. Most people were able to borrow money at cheaper rates and then spend it on speculative events. So, that is the environment that, in my lifetime, we grew up. This is how the economy grew in my lifetime. And then it gets passed down to Ben Bernanke, it gets passed down to Jennie Allen. And the result is that James Powell, who is now the chairman of the Federal Reserve, he has to deal with that. He’s the guy that has to deal with years and years of zero interest rates between 2012 and 2018, especially, there was zero… There was no risk tolerance. I mean, there was no barrier to borrowing money and spending it.
And the result was… As we all know, the result was massive inflation. So, that’s where we are right now, is we’re dealing with inflation. And the result for most people is that the money that you try to earn, either by investing or by your wages, or just like we’re trying to teach our kids about how the financial system works, the result is, the dollar itself loses value over time, and it’s freaking staggering how quickly it’s happening. And this is a problem for banks. So, we’re talking about the banking crisis of 2023, but the crisis itself is really just a result of many years of monetary policy that allows for people to take risks that in the end they’re not accountable for. And what we saw at Silicon Valley Bank… And I don’t want to pick on those guys too much because I think they were just the result of what actually happened, but they were getting a ton of money from-
… getting a ton of money from tech startups. They were putting their money into Treasuries. And they didn’t have to lend any money out because they were in Silicon Valley, and there was a lot of money flowing around, a lot of tech startup money. There was a lot of private equity money going into the bank. And the bank was like, “All right. We’re going to buy these Treasuries.” And they were doing fine. They grew faster than any other regional bank in the country.
Everything was fine until the Fed started fighting inflation. And so once they started fighting inflation, then the Treasuries… Over half of the bank’s assets were held in Treasuries, and they became less valuable because the Fed was trying to fight inflation. It was just a period of time where everyone expected interest rates to be low for longer than is historically normal. And they built the business practice on the fact, or what they believed, would be low interest rates forever.
So when the Fed started raising rates, the Treasuries that they held, the… This is a hard way to put it, but the deposits didn’t come the way that they had planned for, either, because the tech startups were like, “Wait a minute. This whole environment is changing. The investment picture is changing, so we’re not going to invest as much. We’re not going to save as much. And in fact, we want some of our money back.” And so in order to cover those deposits, Silicon Valley Bank had to actually sell their assets. And they had to sell them worth less, or they had to sell them for less, than they had banked on. It’s a bank, right? They were expecting these things to be worth whatever, and they were worth less. So it’s astounding. If you actually read the reports of what happened, the bank collapsed in 48 hours because they didn’t have the assets at the value that they needed them, nor were they able to sell them at the price that they needed to repay depositors. It’s a very specific situation that was caused by the Fed’s effort to fight inflation.
And I think that it’s really important for us to understand not just as investors, but this is how the economy actually works. So we want to move on from this, but it’s potentially much worse than what we actually imagined. When I’m reading about this, I’m reading about what happened in the bank runs of the 1930s, the banks actually… People lined up at the banks, and they wanted hard currency back. It happens so much faster now because people can just do it over the internet. You can actually just transfer your money from Silicon Valley Bank into Bitcoin, for example. It happens way faster, so the danger is higher than we have experienced in our lifetimes. We don’t know what the result of this is going to be.
I remember when the crypto exchange FTX, when they went bankrupt in November of last year, we were all… When I say we, I’m talking about the editors and the publishers and the people that are involved in the industry. We were worried that the crisis, that that spark, would be a longer duration and more troublesome than what the headlines said. So there was, I don’t know, $37 billion that had to be sold off because of the bankruptcy of FTX. Silvergate was the first bank to go down because of the exposure to cryptocurrencies, and then SVB. And then it goes on. And that’s exactly how a contagion happens.
So what do we do next? That’s really the question, is do we really think that this is going to be a bank crisis? And my answer is no. And the reason my answer is no is because if you can look at these headlines right here, we have 620 billion of unrealized debt on the books. This is a debt crisis. This is not necessarily a banking crisis. No… The Federal Reserve cannot do anything about this, nor can the Treasury. The FDIC is set up to insure deposits up to 250,000. But if they’re going to do anything about it, they’re going to have to print more money. They’re going to have to come up with special-situation bailouts for specific banks.
And my answer to the banking crisis is that they’re not going to say no. They’re going to do everything they can to save the banking system, save retirees, they being… Who am I talking about? Janet Yellen, Jerome Powell. I know Hank Paulson was out in the news today saying that he thinks that the danger is to the US dollar in our dealings with foreign government and stuff like that. They’re all coming out and saying, “We’re not going to let this happen.” But how? That’s really the question, is how are they going to do anything about it? All they can do is fight inflation. That’s why we have the interest rates. And then they have their own exposure. And when I say exposure, I’m talking about specific banks, and we already know what those are. Those are Silvergate. It’s Silicon Valley Bank. It’s actually going across the ocean to Credit Suisse. And then we saw something going on in the Sweden pension fund. It is a contagion. It doesn’t have to get worse, but it does happen because of the exposure to these other speculative events.
And that’s exactly what we’re witnessing. And if you look at history, that’s what happens, is people get freaked out beyond the actual event. And I think that’s what we’re witnessing right now. I’m not trying to tell you how to make money off it. I’m saying that the… The number three point here, speculation is going to cause a greater problem than what we currently have.
So we have interest rates. This one annoys me because the pandemic really just exemplified a 30-year-old money supply issue, is every time we have a crisis, we just dump money on it. And I’m guessing that there’s nobody on this call who doesn’t already know that, doesn’t already know that that’s how we deal with the speculative excess that we’ve just come to live with. And yet a 40-year inflation stunned consumers in the markets. I don’t believe that’s true, but that’s what the headlines say. So suddenly, we pour all this money into the market, da, da, da. We do that, and then we’re surprised that we have inflation. And then the Fed has to do something about it.
These banks didn’t believe… There’s two things. The banks and the traders did not believe that the Fed was going to continue raising rates. Everyone thought they were going to pivot and back off from raising interest rates. And what proved to be true is they’re not, and they’re going to fight it. So we have this contention between the money in the market and what it costs, based on what the Fed is doing with their interest rates. So that’s not going away anytime soon. I think a lot of people think that the Fed is just going to be weak and bail, but they’re not.
Look at this chart here. If you look at how Paul Volcker dealt with interest or inflation in 1981, we are only here. This period right here, this period of zero interest rates, was really in reaction to the tech wreck and the home mortgage bubble bust right here. So we have these two things. And what the Fed did was just make money free for a long period of time. But if you compare this period to this period, we’ve got a long way to go if we’re going to tame inflation. This is a 40-year period, and we are at a 40-year high in inflation. And the only way that they were able to rein it in in the 1980s… 1981 is the year that they raised them. If they’re serious about reining in inflation rates, that’s where we’re going. And we’re not even close to that yet. I’m trying to move along here.
So then we have a problem with bonds. This is what killed SVB. The Fed raised rates more aggressively than anyone thought that they would. And SVB, which is the headline bank that failed at the time, actually was counting on the fact that the Fed would not do that. And then we know what happened is the bonds that they had on their books, they had to sell for less than their value. And they weren’t able to do that. So that means that… It’s like if you buy a chicken for 10 bucks and then you have to sell it for 8, you lose 2 bucks. That’s what they did. They had to sell assets in order to pay back their depositors. And that’s exactly why these contagions get started, is people don’t really understand what’s going on. But then once they fear that their own money is at risk, then they do something about it. And one thing that they do is they take their money out of the banks that they don’t trust.
And I put a little footnote in here because I believe that there was so much speculation going on in cryptocurrencies that even the bankers were starting to believe that crypto was going to be the next money. And it fell into a pattern for me like what we saw with John Law back in the Mississippi scheme, which happened back in the early 1700s; was followed on by the South Sea Bubble. It’s a typical bubble pattern that we’ve seen historically, where people get really excited about new innovations in the market, new innovations in banking and new innovations in money. And people get really excited about it, and they spend a lot of money and time and effort to try to do something, but it doesn’t work.
And we just saw what happened with FTX back in November. It busted. People were upset. People got arrested. We don’t even know… We’re not even going to see the arraignment… Or we’ve already seen the arraignment, but we’re not going to see the trial of Sam Bankman-Fried until next October. The names, the events, the times, the dates on the calendar, they change, but the patterns don’t. And I think that’s what we’re seeing right now.
And my suggestion is don’t be worried about the banking crisis. Be worried about the dollar, and here’s why. These banks are speculating that the US government is going to come in and bail them out. And if you look at any of the charts that I’ve provided, you’ll see how much speculation has gone on, and it’s frightening, in a way. Unrealized gains have increased dramatically just in the last-
… have increased dramatically just in the last year. The speculation level of what the banks are doing has increased during what we could call a banking crisis at the same time that the Fed is raising rates. These charts are, they’re alarming because they just show, if you look at the primary trend of how the investment markets are going, the banks go first and what happens next is the finance departments of all the big companies that you want to invest in, like the S&P or the Dow or whatever, they have to adjust for that. We don’t know what the impact is going to be of what, right now, we’re just calling a banking crisis of March of 2023, but it’s going to reverberate and people are making their choices. It’s something worth our attention.
I don’t know if you’re reading while I’m talking, but it matters because we’ve seen this pattern repeated since 1987. Every time we enter into a fiscal crisis or we were actually about to have a debate over raising the debt ceiling again in Congress, every single time this happens, the answer is to print more money. The result of that is we lose value in the actual currency that we expect to earn our living, to pay for our houses, to invest in companies that you believe in. I know this is a very macro, big picture idea, but that’s what I’m saying is that the longer we kick the can down the road, the cheaper our money is, the cheaper it’s worth.
I don’t know how we counteract the monetary policy that leads to this. And so the only thing you can do is take care of yourself. There’s no way that you can impact the monetary policy. You just can’t. The impetus is always going to be to spend more money. And this is one of the things that, this chart has blown me away for the last couple of months. If you look at a 2010, that was at the tail end of the financial crisis in 2008, look at the dramatic rise in consumer debt. It just skyrockets and then it goes up from there.
After 2010, it’s not really a big deal that it ended up at whatever, 40%, but after the pandemic, the saving rate went down to 5%. Then you have this huge gap on the right-hand side of your screen right now between the amount of people that are paying on credit cards, mortgages, home loans, whatever, car loans and stuff. And then you have the savings rate, which goes to almost zero. And this is the actual result of that. Disposable income, it has dropped at its fastest pace since the Great Depression. It’s amazing to me.
I’m going to show you this slide before. That is consumer credit or consumer debt during a period of rising interest rates versus savings. And then the net result of that is this. Boom, we’re headed in a difficult direction. I want to make a point about this. We write about the financial industry. We write about what stocks you should invest in. We talk about trades that you should make. We talk about trading systems. We do a lot of things to talk about the banking system, how you should think about your money and all that kind of stuff. But you get misled a lot because I think there are a lot of people that will tell you that the banking system is fragile and the dollar’s going to die or whatever.
There’s a lot of headlines that will make you feel fearful about your situation. And I get that because I am also, but I don’t think the banking system is going to fall apart simply because the government is not going to let it. What they will do is they will sacrifice the dollar in the meantime. So, your spending power, let’s look at these charts again. This is what happens. I’m just going to go through them again. This is what happens, is it’s like it’s a unprinted, un-debated, un-policy, if that’s even a word. It’s not a negotiated event. Your spending power disappears based on the amount of money that they spent.
I’m going to whip through these because Etai and I, one of the writers that I work with on this project, we spent so much time trying to understand where the problem banks are, what the list is. There’s a apparently 186 banks on the FDIC’S list. We understand it, and then we’re looking at the data and we’re like, “What does that mean? Is it actually going to affect other banks?” And the conclusion I came to is, no, it’s not going to. If Silicone Valley Bank fails, it’s not going to impact JP Morgan. But the amount of exposure that JP Morgan has is global and crazy.
JP Morgan has, if you measured it against the GDP of the top five countries in the world, JP Morgan as a bank ranks as the fifth largest, just the bank alone. You have the US, Germany, China, Canada, and then JP Morgan as a bank. Like the exposure that they have and the tentacles that they have in the financial system. That’s why every time Jamie Diamond opens his mouth, people are like, “Okay, we should pay attention.” It’s like when JP Morgan used to actually say stuff back in 1907.
We’re in a similar situation where the banks are making decisions that impact everyone else. And when the banking system gets under crisis as it is now, that’s when we should pay attention. That’s what happened in the ’30s. That’s what we care about. And that’s exactly what Ben Bernanke was studying when he was in graduate school. He was doing a study on what the central bank should do in the face of a banking crisis, and he actually did it. He went and they started putting into policy what we’re following now, which is lowering interest rates and making the dollar worth less.
All right. I feel like I’m rambling here. Let’s get in on that. The banks that I’m talking about are what are labeled as globally systemically important banks, GSIBs. And who is it that is going to decide which of those banks like JP Morgan are too big to fail? Well, we already know that answer. It’s going to be the Fed and it’s going to be treasury. You can look up the treasuries. It’s actually called the Office of Financial Research, and they have their own form or method for determining what the contagion index is. I mean, if you want to take an early nap in the day, you could go to that website and try to figure out what they actually mean by that. But they’re tracking it and there’s a lot of money that is being exposed for unnecessary reasons.
I’m going to whip through this because I don’t think that… I’ve given you enough information at this point where if you want to actually understand the size interconnectedness, the sustainability, the complexity of the banks, you can go and do that work on your own. I’ve given you all of the information, but this is what the problem is, is that we grew up in an era of low interest rates and all the banks are based on, or the finances of the banks in the interconnectedness of the banks is based on low interest rates. When inflation arrived and well, first we had the pandemic and then inflation arrived, then we have a problem because they got to combat in rising prices.
All of the other economic situations that are flowing through the banks are based on low interest rates. That is a banking crisis. That’s what we’re talking about. I’m not saying that any individual bank is at risk. I’m saying the entire system is at risk because it was interconnected with the idea that we would have low interest rates forever, which started in 1987. It’s like an actual documentable event. Our lives have been centered around the idea that we can have cheap rates forever, and then if we have to fight inflation, we got a problem. And that’s the problem that we have.
This one kind of annoys me too, but if you look at these numbers, Citigroup, JP Morgan Chase, Bank of America, I’m actually a customer of Back of America, so I’m not throwing them under the bus here, but look at that. Look at those numbers. These are the uninsured deposits at the banks. There’s no way that if the government wants to bail any one of these out, they can. It’s a facade, really. And if you just look at these numbers, and I pulled these numbers off of the Office of Financial Research, that’s where these numbers come from. It’s public information. What would happen if Citigroup, JP Morgan and Bank of America all went down or there was some kind of run or something? I don’t think that would happen, but you’re talking about 6 trillion that’s at risk and uninsured. Insane.
All right. That’s the important part about what I’m talking about today is what can you do about it? What can you do about it? You can’t really do anything about it other than protecting your own money. You can’t protect the value of the dollar unless you move into something like gold or cryptocurrency or something that’s alternative currency to the dollar itself. We recommend that you do that at least with 10% of your money just because you don’t know what’s going to happen. So, it’s better to save your money when you can.
I don’t like this answer, get it federally insured. I don’t like it because then you’re depending on the government, and I’m not a big fan of the government as it stands. I mean, that is something you can do, but I’m not a huge fan. I would recommend you pull it out of banks altogether. Or if you feel like you have a good relationship with your bank, like I have a good relationship with HSBC, for example, and I can invest in precious metals. I can move my money around into bonds and stuff like that in the bank. So, I’m okay with that, but I am concerned about the popular delusion that banks are failing and that people are just suddenly going to run and pull all their money out.
That’s step number three is like, look for other investments that you can put your money into. And that’s what we also do. In essential-
That’s what we also do. So in Essential Investor, which is a project I started, I really started in 2006. It’s an idea that takes advantage of these larger movements in the economy and we recognize politics and monetary policy, and the other things that you can do other than turning on the news and just listening to what is happening around you. The investment strategy that we use is we identify stocks that are going to be outside of the macro view. We wouldn’t touch a banking stock right now. We probably wouldn’t touch a tech stock. There are a few that are interesting, but we would look at new mines, for example, new producers of rare earths. I would be interested in that. The economy is changing for the better, for most part. So, we have to identify the ones that are not going to be subject to the craziness of monetary policy, and we interpret that. I mean, that goes with a analysis part. We understand that it’s not as easy as just identifying the primary trend.
We actually have to interpret what advantage of the company is going to have itself, and where do they fit in the market that they’re doing. So I mean, that’s the work that we do. And I don’t know, I don’t actually want to be in the position of convincing you that we do it better than you, but we do do it, which means that we can do it better than you can because that’s all we do. That is the advantage that we provide. And then we put it into action, which means, or says here, implement. But what we do is we give you a price to buy and sell at. So, we’re trying to make it as simple as possible, but the complexity of the environment is what makes it challenging. When you have to deal with monetary policy and the whole climate change thing, there’s a shit ton of money going in there. I don’t know where that’s going to pop out. EVs don’t look like they’re working. So, there’s a lot that goes into the, not just the analysis, but the implement implementation too.
We want to be in the right place at the right time, and we’re trying to do that. So, I mean, I could go through all of this again, but there’s a lot of things to think about. There’s the economy, there’s inflation, there’s Ukraine, China, China’s going to be a problem, that one’s going to be a big deal. Banks, we already know that all the problems exist. So what do you do in order to find the right companies? That’s what we want to do. How does it fit together? The point I’m trying to make is we do the analysis so that we can actually pick stocks that are going to weather the inflation environment, they’re going to actually produce. My biggest thing is I want returns over a long period of time. I’m not much of a speculator myself. So, in Wealth365, you’re going to hear a lot of people who are trading. I’m not much of a trader myself. I am talking about what’s happening in the market and how to pick stocks that are going to grow over time, and how do they fit together.
A couple of things that we like are semiconductors, I think that market is going to be successful over a long period of time. Oil and what we call dirty energy. I think natural gas fits in there, that is going to work over time. It doesn’t really matter what you think about windmills and solar energy. I think that that industry will develop over time. And I think there’s investments in there that are going to work, but it’s not going to replace the amount of cheap energy that we get from carbon. It’s undeniable. If you want to pay more for your energy, you can, but fossil fuels are going to be with us for a long time. Yeah, so well I feel like I’m repeating myself now. When we go to implement, we want to look at the tactical ways to deploy the ideas that we have, and we’re always involved in analyzing and understanding the opportunities that are available to us. So, we’re doing that, but it’s important for you to recognize that we’re not doing it in the way that we’re trading the stocks or the ideas.
We’re saying if you have a pile of money, let’s say at $500,000 or something and you want it to be a million, we want to the stocks that are going to get you there. And that’s what I want to do for my own family too. And we have to look at all these things. We have to look at housing, interest rates, interest cuts, da da, da, da. Like all the stuff that we publish on a daily basis. It seems time-consuming, but that’s what we do and we pick good stocks. So, you might wonder how this strategy has worked. It’s done pretty well, in we just picked a few stocks that we picked during the pandemic. That one worked. 211% gained, 661% gained, this one I think is going to continue to go up. This is Inmode, semiconductors like I said, I think that’s going to work pretty well. And we have a slight decline there because of the trouble in Taiwan, but I think that one’s going to keep going up. MP Materials, 166. These are all trades that we’ve made since 2020, early 2020.
This one we sold in December, and we’ve been doing this for a long time. So, one of the dangers of presenting our work is that we just picked the ones that go up and it makes you skeptical, da, da, da. I get that. But we have been successful in picking a lot of stocks that have gone up in difficult trading environments. So, this is the tech wreck. There is the panic of 2008, and then we’re about to enter. This is the whole point of this presentation is we’re about to enter another period where the way Warren Buffet is famously having been quoted as saying, I don’t think he said it the first time, “But when the tide goes out, we get to find out whose wearing their swimming trunks.” And I think we’re on the precipice of that. Everyone’s worried about a recession, that doesn’t really mean anything unless it actually impacts your own household environment. People are worried about a bear market, you could trade your way through any of these things and you could find good companies that are going to survive.
And the most important thing for me in this next 12 month or 24 month period is that we just don’t lose our wits and we recognize the best investments that we can actually choose to invest in. Even if there’s confusion over interest rates, confusion over the recession, confusion over the dollar reserve currency. I think those are all things to pay attention to, but we can also pick good stocks in the meantime. That’s why we created the Essential Investor. It’s important to me that we use that phrase because I’ve been thinking about this for a long time and I think it’s the right approach. We believe that there are primary trends in the market that you can follow and you can do well. And that’s what we want to do. I’m interested in trading myself, but I wouldn’t take any more than 10% or 20% of my money and do that. What I’m interested in with Essential Investor is growing wealth over time. We do issue trades, so what to buy, what to buy, what to buy, when to buy, what you’re buying. We do that on a weekly basis.
And if you’re a platinum plus investor, we also give you speculative. It’s ones that we’re like, that might be interesting, but we’re not going to put it in the conservative category. But we do issue at least one of those a week. So, we have weekly trade alerts, something to pay attention to. We have the model portfolio, which is broken up into mostly conservative stocks, but we have five in there. And working with Zach Scheidt, who’s our investment director, he’s done a lot of research on what should your portfolio in terms of asset allocation look like. And he’s settled on 20 stocks, 15 that are conservative and long-term dividend paying stocks, five that are more speculative cause why not? Maybe you hit a home run.
And so, we have the model portfolio, which does both of those things, but I am evaluating it and Zach is evaluating it as like the market turns also. So these are good stocks, they’re good choices, and we just think that it’s over the long run. That’s the best way to run a portfolio of your own money. You got some stocks, you got some speculations, we’ll probably put some in gold. We do have some gold miners in there. And then you also just be aware that the dollar is losing its purchasing power by design, so we want to buy other things that your money can buy.
All right, Addison, unfortunately, I’m going to have to get you wrapped up here. Do you want to go ahead and get to that link? It looks like Etai put it in the chat, but do you have a page where that is?
Yeah, let me just these are-
I’m sorry, a slide.
No, that’s fine. These are all the free stuff that you get. We have a bunch of reports that are following along the exact ideas that I was talking about. You get all this, and because we’re working with Marissa and with Rob, you can get all of that, everything I just said for $497 today.
All right, great. Thank you so much, Addison. Yeah, that link is in the chat. Etai, drop that in. It’s essentialinvestor.net/w365, so hopefully everyone can take advantage of that. Addison, thank you so much for being with us today.
Marissa, I was coached a lot for this event and I want to apologize for going over a little bit, but the content of it is the thing that I’m most passionate about and I want to thank you for helping me, and then also Rob too, for hosting.
Of course. No, thank you so much, Addison and Etai for being here. And yeah, unfortunately due to time, I’m going to have to take it from here. But thank you again and let me go ahead and grab the screen. I’m just going to go ahead-