Calculating The Madness Of Crowds

McAlvany Weekly Commentary

Top Execs Selling 5x More Stock Than Buying Goldman Sachs Calls For $3,000 Gold In 2025 Will Powell Drop Rates Again? "The Wilshire 5000 to GDP, this is a modified Buffett ratio. It touched 202% last week, which is an all-time high. It's a measure like the Buffett ratio, covers the aggregate of 5,000 companies, telling us something. There's notable insider selling. Five to one is the ratio. Actually, just above five to one. Historically, to be fair to the executives who are doing this, they're not making a market call today. They get to a period where they're comfortable and they want to get liquid, and they're usually two to three quarters early before a major downturn. When you see a significant uptick in insider selling, that's two to three quarters. You're on notice." — David McAlvany Kevin: Welcome to the McAlvany Weekly Commentary. I'm Kevin Orrick along with David McAlvany. Well, David, you did it. You did it. You're down in Texas and you told me you were going to do a Spartan race, but I haven't seen you training like I had in the past. How'd it go? David: Not training like I have in the past. How about not at all? It's been a nice 18-month break. The annual pilgrimage to Texas, it's here, it's arrived, like other holidays we spend feasting and celebrating together as family. The special highlight for this one is my second son's birthday. He turned 16 over the weekend. Kevin: Wow. David: On his birthday, he requested that we race together something called an OCR or obstacle course race. You mentioned it, the Spartan race to be exact. Kevin: Okay. If he's turning 16, you're just about to turn 50, aren't you? David: This is a huge year for us. My oldest turned 18; the next, 16; the next, 13; the next, 10, so we're out of single digits. My wife and I celebrate our 25th anniversary, and it's my 50th birthday in about 10 days. Yeah, this is a big year for us. After watching the Tyson-Jake Paul fight a few weeks back, I figured we might have another version of the old lion being surpassed by the young lion. Again, maybe I'm just feeling a little unenthused turning 50, but we did both bleed a little. It was not a competitive race between the two of us. It was just a great day. We ran, we suffered a little, we started and finished as a team, and we hopped over prickly pear in quantities I've never imagined, working through the 25 obstacles over the course. And then the course is about six and a half miles. We got to the end and they gave us this interesting pitch as we crossed the finish line, "Do you want to do an extra mile?" It was like one of those fear of missing out moments. He was like, "Sure, I guess we'll just run an extra mile," but it was a great memory maker. Kevin: And you did that. You did that. Well, that's awesome. I remember one of the people here at the office, Dave. I won't name them. When we were doing the Half Ironman on the big island in Hawaii, the last part of the run was looped. I remember we all had to run two loops. Remember that? David: Oh, yeah. Kevin: You patted me on the back and you passed me quickly. But one of the members of our team thought the loop was just once, not twice. When she got to the finish line, they said, "Oh, no, you need to loop again." That was a miserable feeling. Running that extra mile, I can see that, but if you recall, I think that was an extra six and a half miles for her. David: That's right. That's right. Kevin: Yeah. Let's take it to the economic side of things, talking about running the extra mile. Dave, we were doing this commentary back in 2008, but after the global financial crisis was really playing itself out to look like it was going to be a depression, there was a choice to be made. Do we let the depression happen—which usually is the best thing to happen because you come back out of it? We've talked about other depressions in the past where, if left alone, you come back healthier, not in bad shape.