Illiana Mike, the host of the Investing or Gambling podcast, joined me on my show this week. Mike is a good friend of mine, and I often join him as a guest on Investing or Gambling, which releases new episodes weekly.
Mike and I don’t always see eye to eye. I take a long-term, buy-and-hold approach and remain in the accumulation phase of my investing journey. Mike, on the other hand, is more of a trader and believes investors shouldn't hesitate to take profits when the time is right. That contrast always makes for a great discussion.
I wanted to bring Mike on to dive into his current investing outlook—particularly what he's suggesting for young investors and what he's watching as a trader.
Key Takeaways from Our Discussion
Watching Interest Rates & the Bond Market
Mike is a firm believer that the bond market runs the show behind the scenes. The global bond market is worth around $130 trillion—roughly $20 trillion more than the total global stock market. He closely tracks the 10-year and 2-year Treasury yields, paying particular attention to the yield curve and potential inversions.The Case for Physical Assets
Mike is a strong proponent of owning tangible assets like real estate, silver and gold. He believes these are important hedges to inflation, especially in uncertain economic environments.Recession Concerns
Mike expects a recession within the next year. He feels inflation has finally caught up to the U.S. consumer, who drives 70% of GDP. Prices have remained elevated for years, and he believes this will start to weigh on consumer spending.Investment Strategy for Young Investors
While I tend to favor growth and tech stocks, Mike leans more toward value-oriented, necessity-based businesses. He recommends focusing on companies that consistently pay dividends and serve essential needs—think consumer staples, Walmart, Costco, oil and gas, utilities, and companies with “sticky” business models like Apple and Amazon.Economic & Market Trends
The recent dip in Treasury yields may signal slowing economic data. Mike doesn’t believe the U.S. will default on its debt, as the government can print money endlessly, and global demand for Treasuries remains intact.Headlines are now pointing to a negative GDP print for Q1 2025, according to the Atlanta Fed's model.* While some worry about tariffs impacting GDP, Mike is unsure. He does, however, believe the automotive industry could be hit hardest. Interestingly, despite these headlines, stocks still bounced today—proving once again that markets often move in ways that don’t always make sense in the short term.
Geopolitical Risks
Mike sees Trump’s early-term policies as a geopolitical risk, particularly regarding spending cuts, reciprocal tariffs, and trade relations. He believes tightening the leash on wasteful spending abroad could lead to tensions with other countries and shake up strategic alliances.
My Thoughts on the Market
As I’ve been consistently writing on Substack, I believe QQQ has strong support at $500. But part of me wouldn’t mind seeing a 10% pullback in QQQ, bringing it down to $485 or lower.
While most traders focus on the S&P 500, this QQQ chart is too important to ignore. Yesterday, we saw an early morning dip followed by a sharp bounce. It could be options expiration, retirement flows, or simply buyers stepping in at a key level. But at the end of the day, all that matters is there were more buyers than sellers—that’s the bottom line.
I should also note that the Nasdaq Composite is already sitting on its 200-day moving average.
Bitcoin, which has closely tracked the Nasdaq in recent years (for reasons that aren’t entirely clear but have held true), also found buyers around $79k—right near its own 200-day moving avg.
This level certainly could be a key area of support. While some are still calling for Bitcoin to drop to $70K, that’s a bet I probably wouldn’t make right now. Traders and investors tend to respect the 200-day as a technical level with Bitcoin, and so far, it seems to be holding. That said, I’m not a trader, and Bitcoin could still see $70k for all I know.
Another thing to watch here is the VIX and any breakouts above 20. Can the market experience a 10% correction while the VIX stays around 20? If so, it would be a more orderly selloff. It won’t make it any less painful, but I think it would be more healthy in the long run.
For some perspective, looking at inflation rates across the G20 countries, we know the U.S. is currently sitting at 3% YoY. But when you step back and compare that to other major economies, it becomes clear that inflation remains a persistent issue globally.
The only conclusion I can draw from this is that Bitcoin feels like a necessity as a global savings vehicle. In a world where currencies continue to erode purchasing power, Bitcoin stands out as a serious option to preserve wealth across borders. Bitcoin as an investment is an international play.
Lastly, in honor of Illiana Mike—who loses sleep over our government debt to GDP—I leave you with a pretty photo of the G20 ranked by Government Debt to GDP.
If you enjoyed the conversation with Illiana Mike, you can check out his Investing or Gambling podcast on Spotify here:
Thanks for reading, watching, and listening!
In case you missed:
*References:
The first quarter is on track for negative GDP growth, Atlanta Fed indicator says
Disclaimer: This blog is for informational purposes only and does not constitute financial advice. All opinions are my own, and I am not a financial advisor. The information provided reflects my personal views and is intended to encourage discussion and thought among readers. Investments involve risk, including the loss of principal, and past performance is not indicative of future results. Always conduct your own research or consult with a qualified professional before making any financial decisions.
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