Okay folks, so we've got lots to talk about. Number One: I got to give a violent update on the market and plays: do you feel that whiplash My neck kind of hurts Number Two: I want to talk about a new bold prediction that just came out from Goldman Sachs about what is going to happen next month with the record cash on the sidelines. And then lastly, number Three, I want to give my response to the problem of Congressional stock trades and Speaker Nancy Pelosi's opposition to banning Congress members from owning individual stocks. And the only thing that I ask in return for all of this is that you hit that ravishing like button.

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Okay folks, so the market giveth and the market takeoff. After the sigh of relief rally that we got after the Fed speak yesterday today, the market decided it actually wasn't very relieved and it sold off. We're in a time where capital just doesn't want to commit to one direction, and if it is committing, it's committing to getting out. You've seen a lot of big short-term money going in after massive red days, buying the dip, inducing the rest of the market to buy the dip, and then gutting all the profits out of that.

Then you get another red dam. The same damn thing happens over and over again. It's really just the flavor of today's market: non-committal capital risk aversion, tax loss harvesting, and getting ready to lock in some good capital gains before 2021 ends. But on the bright side, you might find this perspective that Cnbc reported that Goldman Sachs said very, very interesting.

Cnbc reports that big wealth investors are likely to put their money to work in stocks after amassing record levels of cash. They go on to say hundreds of billions of dollars in cash have been amassed by big investors in the last few weeks of 2021, setting the stage for a massive risk on move into equities in the New Year. A Goldman Sachs analyst said every private wealth advisor in the world is conducting year-end allocation review meetings right now. The feedback will be largely that investors are holding too much cash.

With rising inflation investors, cash allocation jumped 14 percentage points this month from November to a net 36 percent overweight. The highest cash exposure since May 2020 May 2020, right before a lot of that cash ended up finding its way back into the market. It goes on to say, a lot of the move out of cash could happen in January. When money managers make their initial bets of the year, January typically makes up 134 of the yearly floats according to Goldman, meaning the month of January typically sees the biggest influence.

Okay, so what are they saying? They're saying that there's a lot of cash on the sidelines right now and now. You have this period where big money investors are reviewing their portfolios ahead of the New Year, trying to set goals and objectives for 2022. And what are they going to notice? They're going to notice that they're very, very, very heavy cash. And what are they going to try to strategize how to reduce their exposure to inflation? They're looking at that inflation data and saying, hey, inflation is at 39 year highs Why the hell are we holding so much cash? Holding cash makes sense If you're playing some sort of three-dimensional chest where you think, hey, wait a second the Fed is going to overdo their corrections on monetary policy and asset classes are going to get bludgeoned meaning that you have more value per dollar and you can buy distressed assets at lower prices.

But even with the Feds accelerating hawkishness bond yields are moderating. The market isn't expecting the Fed right now to overdo it, so you're not seeing the big money expecting the Fed to overdo it. I would almost argue that if you're thinking 2022, especially the first couple of quarters, your biggest threat is still that supply chain issue, and a lot of the tightening that we're seeing from the Fed isn't really going to have much of an effect at all until we get into the summer or even broader out in the year, at which case, inflation could easily have a couple more quarters of being hotter than we'd like to see it. So anyways, you're going into these meetings and people are overweight.

Cash and cash is getting inflated at record rates and you're gonna have a lot of people say, hey, wait, why are we just having this cash sit here, not working for us when it's actually losing value and they're basically speculating that, hey, a lot of this cash could find its way back into the stock market come January. They say that this typically happens in January. Anyways, January typically has the biggest inflow, and the rest of the months tend to have more outflows. I think that in totality, if you look at this from a big money perspective, even if people buy in January and the market goes down next year, it's still a better buy than holding cash at record inflation rates.

If you have the option of losing five to ten percent of your capital due to market losses or five to ten percent of your capital due to inflation, it's much better to have the losses come from the stock market. Why? Because you can write off your loss or at least carry the loss forward for upcoming years where you do have gains if you lose it due to dollar inflation. hey, you're pretty much screwed. You just lost that purchasing power and it's gone forever.

So I think, quite simply, when you're heading into 2022 and people think, oh, everybody's just going to hold cash on the sidelines. I think that what this is really saying is that big money is really being pushed to find something useful to do with those dollars, and the stock market historically benefits from that. Okay, next. so Congress people have been under increasing fire for being able to hold and trade stocks while in office, which of course, can be a conflict of interest because if they're making decisions and hearing privileged information on a lot of the industries and companies that they're invested in, well, obviously there's room for corruption there.

I don't need to remind you of some of the politicians that sold their stocks after a coveted briefing last year before the rest of the market did, but a study in 2011 showed that Congress members beat the stock market by an average of six percent a year now. Speaker Nancy Pelosi's returns have been critiqued a lot harder. Because of the influence and privilege of her position on Capitol Hill, and for the last three record years of Bull Market runs, Nancy Pelosi has still managed to beat The Market even further in 2020, nearly doubling the market average 29.5 percent to the S P 16.3 percent. Of course, the insinuation is that politicians are using insider privileged information that isn't available to the public in order to beat the market.

In the case of Pelosi, her husband is a heavy career investor, focusing on real estate and venture capital. Their combined net worth is somewhere around 100 million plus, and Paul Pelosi makes a lot of big bets every year with his massive amount of dough. And because they're married, it's technically both of their capital, so they both have interest in it. Earlier in 2020, before the House Judiciary Committee voted on reigning in, big Tech speaker, Nancy Pelosi's husband executed a bullish bet on Google parent Alphabet, which netted him 5.3 million dollars.

Now again, given Nancy Pelosi's privileged information and influence and position on Capitol Hill, people were going to speculate on whether she had anything to do with this bet. and I'm not saying she did or didn't, but there's always that question of what is and isn't appropriate if your husband is making big bets. financial bets on industries that you have a say in regulating is that appropriate? And obviously she says that she's not involved and has no prior knowledge of her husband's trades. So she's saying that she's completely detached and obviously, look, I'm not going to speculate on whether she's lying or not, and the potential for corruption isn't the same thing as actual corruption.

My point is that inevitably, when more than 40 percent of members in Congress hold individual stocks, there's got to be some conflicts of interest that have come up and have gone against the public interest. Whether that's with her or some other congress people, whether democratic or republican, which is why this blanket calls for Congress to be barred from holding and especially trading stocks. And today, when asked point blank about whether Congress and their spouses should be able to trade stocks, this is what Speaker Nancy Pelosi said: we are free, free-market economy. They should be able to participate in that.

Yes. So she basically says that we are in a free market and that Congress should be able to participate in that. I struggle with my outlook on this issue. On one hand, I don't want politicians that have shunned the stock market and investing their whole life to then go and have to make decisions on my capital gains rates.

It's also true that we want to encourage people who have been successful investing in the economy and have been successful business people to run for office. If you discourage investors and business people from running for office, what happens? Well, you get less friendly business policies and investing policies. You get less understanding of that segment. I think it makes sense if you have a very, very high position in government to have to put things in a blind trust.

But when it comes down to a congressional seat or even a senate seat, I don't know that I would discourage people from investing. but honestly, I think there's two separate issues here and one big solution for those two separate issues. The first one is the privilege insider information problem. If you are briefed on something that the public doesn't yet know about and you make a stock trade in reaction to that private information that's obviously a big power inequity and it's a complete disaster.

But that's an issue that's not just present in Congress. it's also present to a larger degree with insiders of publicly traded companies themselves. But they're allowed to react to what's happening in the company. It's just that they have a very, very strong reporting standard.

If an insider in a company decides to buy or sell, they have to inform the public within two days of that decision. And if it's a very big transaction, they'll often disclose that far ahead in advance. with Congress. though, the reporting standards are pathetic.

you have up to 45 days to report and many still don't report. That's completely ridiculous, and the penalty for not reporting is extremely small 200. So honestly, the system that we have right now is not really a reporting standard. It's just like yeah, you can report if you want and then if you get caught, maybe then you have to pay 200.

So a simple way to improve upon this problem is to require Congress to report within a two-day time period, if not before they make the transaction dramatically, increase the penalties, make the penalties a percentage of the total transaction that you made, and then after that, you have to increase the enforcement. Because if nobody's getting caught, then it doesn't even matter if you have penalties and what would happen if you did this. Well, all of a sudden, the public would know exactly when their Congress people are buying and selling stocks. Sure, bad actors would still get an edge if they're acting on insider information, but we do have laws on the books that say hey, you can't buy and sell based on private information If the reporting standards were higher, Congress people would know, hey, wait a second, People are watching me do this shite.

They'd be less likely to skirt those rules or even create that idea that they're screwing the rules right now. They could just say, oh, my accountant made a little reporting error. Oh yeah, we just did an automated sell on that right before the pandemic lockdowns. It was a coincidink.

Yeah, I don't know. I just felt very bearish on the market all of a sudden after I walked away from that secret intelligence briefing. I don't know it wasn't related to the briefing, it was just. you know, my fundamental analysis changed dramatically.

If you had something close to instant reporting standards, this wouldn't be a fraction of the problem that it is today. Secondly, there's also the problem with influence. Forty percent of Congress hold individual stocks, and the top stocks held amongst those members are tech stocks. If Congress is going to vote on a proposal to say break up Big Tech and Congress is overwhelmingly invested in big tech stocks.

Doesn't that create an inherent conflict of interest between what's best for the public and what's best for these Congress people and their wallets? Same thing could be said about Congress investing in oil and gas talks, big pharma, defense sectors. I mean, there's no end to the conflicts of interest that one could have, but at the same time, a lot of people would argue. Hey, if you elected a Congress person that was invested in certain industries like Big Tech or Big Pharma, you already know where they stand on those issues because they're invested in those issues. So it's not really a surprise that they're biased in their favor.

And it's not that they're biased because they're invested, it's that they're invested because they're biased. They like those sectors, and they're going to vote in the same way as they're going to invest. And at least if Congress people were forced to have much higher reporting standards, we would know where the biases are. We would know how they're investing their capital, how they're voting in the market with their capital, and that could be indicative of how they're going to vote when it comes down to the Capitol hill at the end of the day.

Honestly, Congress is very ripe with conflicts of interest everywhere. I mean, you think about it this way: Congress is allowed to take donations for their campaign to get into power from groups that are lobbying for certain agendas. What's the difference between that and actually being invested in those industries themselves Both give tangible benefits to the congress person for being biased in the favor of that industry. But at least with donations, you have a much higher reporting standard, so you can at least see where your congress person's biases lie, and you can decide for yourself whether you agree or don't agree with where they're taking donations from.

And the same thing could be said about investing. But anyways, folks, I just want to give you my thoughts on this issue. Very, very convoluted and problematic area. Make sure to come to your own conclusion.

By the way, this isn't a place where I'm trying to push an agenda. Anyways, folks that caps off this video. If you'd like to join us on ziptraderu, we do have coupon code holiday25 which will get you a discount. We did raise the price after the Black Friday sale, but if you do want to get in on our lifetime access for the daily morning briefings, our step-by-step lessons, and the private chat, I'll go ahead and put a link to that below if you're wondering what broker to trade these stocks on? Well, Weibull does give five free stocks when you sign up and deposit with our link below.

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