Video Update - 2 Ways to Build Your Wealth With the Real Income Report

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Greetings from North Carolina, where I have been settling into this beautiful state after a fantastic weekend filled with music, research, and philosophical study. The weekend proved remarkable on multiple fronts. I discovered Jim Quick and the Coastline, a Carolina Swamp Soul Band that delivers phenomenal Carolina Beach music a genre I have always loved.

There is a station out of Myrtle Beach that plays this music exclusively; you can pick it up about an hour north and lose it about an hour to an hour and a half south of South Carolina.

Their performance at a lake about an hour south of our location was absolutely unbelievable.

We also attended a remarkable music festival in Greensboro, held in an older neighborhood where all the homes feature these magnificent big porches. Bands and acts set up throughout the neighborhood on these porches, allowing visitors to stroll around and choose exactly what they wanted to hear.

That experience was very cool and capped off a great weekend here in North Carolina.

Building Our Money-Making Tribe

When we started this adventure months ago, I talked about being tired of the tribalism, the us against-them mentality that dominates politics.

The only time that mentality should ever apply is when the Orioles are playing the Red Sox, where it truly becomes us against them.

This is going to be the tribe where we come together in an effort to make money.

That will be our focus. We do not care what your politics are. We really do not care all that much what baseball team you support. This is going to be focused on making money right here, right there.

It gets a little tricky because we find ourselves in this very news-driven atmosphere where news and politics are calling the tune in the market.

We have talked about tariffs, the big beautiful bill in the Senate, tax cuts, and everything else that is happening.

Let us step back here and remember my favorite saying: everything eventually is going to show up in either price or value, with price generally speaking representing momentum.

That has always been our view of the world.

Today we have reversed a little bit higher because it looks like China and the United States are at least talking, and maybe we have a handshake agreement on technology and rare earths.

We will see how all that plays out because it is not knowable.

The important thing to keep in mind is what will happen if we continue down this path with the pre-announced tariff levels.

Economic Impact Assessment

The economic mathematics are straightforward: about a one to one and a half percent trim off of GDP, maybe one and a half to two percent bump to inflation, which will begin to phase away and fade in 2026.

U.S. corporations are in really good shape right there. When we examine this situation, corporations were able to extend their debt out as far as the market would let them at very low interest rates. Profit margins have continued defying all the experts who said they had to be mean-reverting. They have stayed at a very high level for a very long time. They have minted cash and stacked up tons of cash.

Keep in mind I am talking mainly about larger cap companies. In the micro cap and small cap world, we have junked it up pretty good, but we will have more comments on that in a moment.

This situation is not anything that we cannot handle. When you examine what happened in April, we had all the news and noise suggesting this could be awful. As a big free trade guy, I thought this was awful. However, the truth of the matter is we could probably handle this, and we saw the market bounce right back up.

Technical Analysis and Market Position

Where are we in terms of price and value? I spent time this every weekend, giving about half an hour to John Bollinger's work. John Bollinger, the inventor of Bollinger Bands, publishes an excellent chart book every week. While I am not a market technician per se, nor do I play one on television, we do tend to test everything.

If somebody walks up and says you should try this because it will make you money in the markets, I write down a little formula and go home where it gets tested. I have done that for over three decades. We test, we test, we test, and we believe the numbers.

We are at a point where the market is recovering. We are much closer to a top than we are to a bottom. The market has moved pretty much straight up from that April low. If you flip through the fifty-some charts in this chart book with a whole host of different technical indicators, it becomes really clear we are in an uptrend—a decent uptrend. Momentum remains modestly positive, though it has been giving us some fits and starts. We are in an uptrend with still some momentum, though it appears to be fading momentum. We are closer to the top level than we are to levels where they bottom.

The Critical Warning Signal

The biggest factor that we worry about in the market today is this: does anything keep you awake at night? The answer there is the cats, sometimes the dogs.

Markets and all that—no.

But what do we think about a lot?

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