The market correction continues, and understandably, the scary headlines pile up. So the vibes, what all of us are FEELING about what’s happening, just keep getting worse.

Whether it’s pessimism about the economy…

Or fears about recession…

Or the terrifying spectre of a multi-year tech crash like a bear market…

• The tech bubble was the most overvalued stock market in history.

• 37-month bear market (longest in US history…yes, longer than the 34-month 1929 to 1932 88% crash😉

• I lived through that, and I can tell you the vibes were worse than in 2009. It was 6 bear-market rallies; it was one thing after another; it was 3 years in hell, and “capitulation” became the #1 buzzword on the Nightly Business Report.

And I want to help everyone get through this because I’ve been investing since 1999, since the age of 12.

I might have only been a financial analyst for the last 13 years, but I have the experience to know when it’s time to be greedy when others are fearful, and fearful when others are greedy.

So let me show you the X Reasons it’s time to “Shut up and buy something smart….You’ll thank me in a year😉.

Let me debunk the fear, uncertainty, and doubt with facts, humor, and delightful memes😂…so you can enjoy the weekend, and hopefully make some smart buys and harness the genius of global capitalism to make your family’s financial dreams come true.

Reason 1: Believe It or Not…Everything Is Going Exactly As Expected! (And I Do Mean EVERYTHING😉)

Last week I told the story of how on April 8th, after 5 days without sleep, my “gut” was screaming at me to sell everything and sleep for 2 days. “Surely the bottom can’t be coming by April 10th!”

• 9 Critical Investing Lessons For This Correction

I explained how the $300K loss at the time (vs $292K in lifetime realized gains) would have been a $1.3 million mistake. Because within 4 months of the bottom…ZEUS was up $1 million.

My gut, after 13 years as a professional analyst and 26 years of investing experience, was wrong…dead wrong.

When I look back on that $1.3 million potential mistake, here is what I realize.

• There was no “dip” to get back in on.

• My confidence in my own advice and writing would have been shattered.

• The ZEUS fund would have been crippled.

• There would be no GNG today.

• Everything I had been working towards for 12 years would have died…on April 8th…had I not made a Ulysses pact with Chat GPT😉…of course, today we know that’s ridiculous😂…because Claude 4.6 Opus is the best AI to “tie yourself to the mast” with🤣.

The Proof I Know What I’m Doing (Despite My Delightful Humor😉)

This is what a hovercraft Portfolio Looks Like😉

• 20% NVDA

• 20% low volatility value dividend blue-chips.

• 20% commodities long or short (CTA)

• 20% bonds (long or short, including international bonds)

• 20% negative convexity ETFs

What many call “a damn weird portfolio” is actually an elegant hovercraft😉😂

So look at what happened…one of the best fund managers in America (statistically top 0.3%), who has literally delivered Buffett-like returns based on over 3,000 recommendations on over 600 companies for a decade, almost made a $1.3 million mistake…almost destroyed his entire professional life…because I was sleep-deprived and fighting the math!

On April 7th, This Table Is What I " was published and was the basis of “Shut up and buy something smart! You’ll thank me in a year😉”

I actually paraphrased that from Joshua Brown.

“VIX 60?! Shut up and buy something! Don’t Think, Just Buy!”

So on Monday, I’m pounding the table to my readers and DK members, in the article, chat room, on social media, putting out this table and shouting from the proverbial rooftops that all our feelings are dead wrong!

And the very next day, I’m begging to sell everything so I can “Just sleep for 2 days! Just 2! What could possibly go wrong in just 2 days!”

And here’s the part you might not know, and the most important part about behavioral finance, the psychology of getting rich, and staying rich.

The Shocking Discovery I Made After Avoiding The $1.3 Million Mistake

During the April 2025 tariff crisis, it was the 2nd worst bear market for managed futures in 50 years.

In that bear market, almost nothing except for negative convexity ETFs (like -3X Nasdaq, or long low volatility stock/short high volatility (BTAL) or put option tail risk funds like TAIL actually went up.

Bonds, managed futures, commodities, stocks, all falling together.

Trend following was hammered by headlines that sometimes changed by the hour (literally! 3 times in 1 day!).

Lots of DK members asked me in chat “Isn’t it time to abandon managed futures and trend following? The headlines are too volatile! The strategy is broken!”

And for the bear market that was true. No hedging strategy (other than negative convexity, which has negative long-term returns) works in every market downturn.

BUT while managed futures failed to go up the expected 17% in that bear market (-6% for CTA) guess what happened to the portfolio?

• Closing ZEUS bottom: -10.8%.

• Closing S&P bottom: -19%

• Downside Capture Ratio: 56%

• Downside Capture Ratio Since March 2007? 57%

The portfolio did EXACTLY what was expected! The 50% hedging bucket had failed (underperforming expectations by 22%) and yet the portfolio did exactly as expected.

The Takeaway For You?

So what did I learn from that incredible, unprecedented bear market…which was a 20.3% bottom (the average of non-recessionary bear markets)? That saw ZEUS perform EXACTLY as expected….while feeling like nothing was working?

That the nature of being human during a bear market is that EVEN WHEN EVERYTHING IS GOING TO EXACTLY TO PLAN….It FEELS LIKE THE END OF THE WORLD!

Imagine what it was like for me, or yourself, on a bear market bottom day, like April 7th, 2025, or October 12th, 2022, or March 23rd, 2020.

• Unprecedented Tariff Crisis: Bear Market Bottom -20% (exact historical non-recessionary average)

• Fastest Rate Hikes in 42 years (we’ve never avoided recession when inflation is above 5%): 28% bear market bottom (the median since 1985).

• Unprecedented Global Economic Lockdown: -32% GDP growth (annualized), worst economic calamity in history: -33% bear market bottom = the average recessionary bear market bottom.

Every crisis is unprecedented. No correction is caused by the same constellation of factors.

32 downturns in 17 years, one every 6 months. Always caused by different news.

-8% Correction…The Average Downturn Is 7.6%…Literally THIS IS EXACTLY AS EXPECTED!

But how does it FEEL?

Does it Feel Like Everything Is Going To Plan? Because it is!

The Reason It FEELS Like A Bear Market? Because for the average stock, it is!

Prepare Yourself Emotionally, Financially, and Even Spiritually!

I’ve joked about how the most important thing I do is to prepare members for moments like this, emotionally, financially, and spiritually…but it’s true!

Few people know the facts about investing as well as I do. I have over 60,000 tables and charts in my computer database, so I can prove just about anything (or disprove anything) with facts.

But even I was shocked and almost destroyed by emotions…and EVERYTHING WAS GOING EXACTLY TO PLAN!

Do you know what Morningstar estimated ZEUS would do for 5 years when we started on Dec 12th, 2023?

23% CAGR.

And what have we done? 22% CAGR.

Draw a straight line from start to today, and you get 96% of the expected returns.

But how did it feel? That 22% CAGR returns were riding through periods when it was absolute hell, when I didn’t sleep, and my “gut” and FEELINGS were telling me the exact wrong things.

A man who has a chart, table, and meme for every occasion and market eventuality was almost destroyed…not because everything was going wrong, but because everything was going right! But I’m still human, and as my best friend and business partner, Connor, likes to remind me, “Sleep is still a thing!”

The #1 Thing You Need When You Have A Prudent Portfolio Isn’t More Stock Tips…It’s a Commitment Device!

Whether you make a Ulysses pact with your spouse, an AI system like I have (currently, Claude 4.6 Opus is leading the financial safety team at ZEUS), your minister, friend, or even the waitress at Olive Garden😉, you need to plan for moments like this.

Go pray, meditate, swim, take a walk, pet your dog or cat, listen to a podcast, music, an audiobook, watch a TV show, Netflix, or a movie, just don’t think about the stock market.

• TRY not to think about the stock market. 😉

• Try harder than that, please!😂

Even God’s own investment plan will fail if you hijack your portfolio and try to “fly by the seat of your pants”.

Personal Example Number 3 (Because I Don’t Think You’ll Believe Me Without Another Personal Story😉)

Let’s consider CTA, the #1 managed futures fund since its inception.

In 2023, it was flat, and in 2025 it was flat. Choppy trends caused whipsaws, and during the April trade war crisis, it failed.

But guess what the data said?

• Simplify Managed Futures: 12 Facts Investors Need To Know

After running 3 different optimizations, I discovered that CTA was STILL the best optimal strategy.

Diversifying into DBMF? Or KMLM? Nope, doesn’t actually improve the results, volatility, or hedging power.

It FEELS like diversifying into DBMF, KMLM, and other managed futures ETFs is safer.

And it certainly felt that way when I saw this last Friday.

I literally had to assemble the risk compliance team when I saw this, and after careful analysis, the results were “Hold”. Why? Because that’s what the math says, despite what my feelings say.

How did it FEEL on Monday when the market was up 2% in the morning, and ZEUS was down $110K (all due to oil crash), and I was about to pay $33K in payroll? Not great.

• I was sick and operating on zero sleep, too!

• My gut? SELL CTA immediately! OMG, this is broken!”

But my Ulesses Pact (Chairman Claude😉…yes, I really am this much of a nerd) didn’t let me do that, because the math says, no matter how bad I might FEEL at any given time, Ultra ZEUS runs on math. You can double, triple, or even quadruple-check the math. But once the math is conclusive, you act on the math. Period, Case Closed. Just like pilots never “fly by the seat of their pants,” they fly by checklist, and autopilot does 99% of the work.

Hedging Strategies Since April 2022

It doesn’t matter how something looks or feels; what matters is if the math works.

Trend following works, it has for 800 years, 100 years, and 50 years.

10 years of suck, and people thought trend following was dead. But after Berkshire was cut in half during the tech bubble? Value was dead too.

Remember How Value Was Dead? Nope, Value Never Stopped Working…If You Knew What Metrics To Use

And then adjust the value for growth? By eliminating the bottom 33% of slow growers?

18.8% CAGR from 1991 to 2024: Better Than Buffett…From a 100% Rules Based Value Strategy That Accounts For Growth

Since July 2023: Almost 3 Years Of 19% CAGR Returns…Same As The Historical Returns

Look at how VFLO performed in Dec 2024. Down almsot 7% when the market was dow 2%. CTA has also suffered periods when it didn’t work. Heck, trend-following didn’t work for an entire decade, and yet… average returns across all time periods over 800 years? 9.6%.

The facts are the math, the math is the math, and what does the math say about CTA?

The conditional value at risk or CVAR is the average of the 5% worst monthly returns. think of it as the “realistic worst case scenario” for a portfolio. The S&P historically has 9% CVAR because in a bad month, the S&P can fall 9%. CTA also has a 9% CVAR; it’s just as volatile as the S&P. In a bad month, it can fall 9%. At some point, that is expected. CTA falling 9% next month? If crude falls back to $70 (pre-Iran war) then CTA is down 6% on that alone.

BUT look at what happens when you protect CTA’s downside risk with negative-convexity tail-risk ETFs? -90% downside capture ratio. Not much better than CTA alone, (which is why normally we would use neg convexity ETFs, but this year is a weird year!)

Since April 2022

Ray Dallio founded Bridgewater, the 2nd biggest hedge fund manager in the world. And for 20 years, he’s been giving presentations about “the end of American empire,” about the dangers of debt, and scaring investors. And when asked about how he invests his clients’ money? He says it’s all quant, it’s 100% algos, it's rules-based investing, and 95% of the time when he disagrees with the algos, he’s wrong. That’s why he’s the most bearish billionaire I know. 😉😂🤣

If Ray Dalio invested based on his FEELINGS, the things he says on CNBC, and at Davos? On YouTube and at conferences? Well, he’d be up 12% in the last 4 years. Compared to 51% for the S&P, 27% for a 60-40 stock/bond portfolio, and 144% for Ultra ZEUS.

The point is, figure out how to invest based on math, and don’t try to suppress your emotions, just channel them in ways that don’t risk your portfolio.

One Final Example Of How The Smartest People In Finance Can’t Trust Their Feelings

In Dec 2018, during that bear market, Jim Simmons asked his closest friend, “Should we be short the market”? That friend was his Ulysses pact, and told him, “Jim, we’re a quant shop. There is no room for feelings or gut reactions; it’s all math.”

Who is Jim Simmons?

The Medallion Fund at Renaissance Tech is a 100% algo fund; there is no human in the loop. There is no CEO who says, “I feel like it’s time to overrule the math”.

And when the “Man who solved the market” can’t time the market worth a darn?

When the king of hedge funds admits that when the algos disagree with him, 95% of the time he’s wrong and they are right (and that’s why his personal feelings and opinions have never managed client funds, it’s all rules-based algos).

When I, someone in the top 0.3% of fund managers and stock pickers, who crushed my peers in 2024 running this portfolio from my office (and often from my hot tub command center😉😂🤣

• During a crisis like the Pandemic or Trade War Crisis, I move all my chart research to the hot tub at my local community center, where I do my best thinking.

• And drink my ridiculous 2-gallon smoothies packed with 100g of precious, precious fiber. 😂🤣

If I see the same data as the Hedge Fund Masters Of The Universe…And I Beat 90% of Them…Obviously, the only conclusion can be my edge is all that precious, precious fiber😉😂🤣

The bottom line is that no amount of fiber intake makes it heroic to hijack your portfolio from your predetermined risk management rules out of feelings. It FEELS like control…for an instant, but it’s actually a lack of control.

• Ulysses saved his ship and the lives of all his men by taking away his ability to act based on gut FEELINGS during a crisis he knew was coming.

And every correction, from now to the end of capitalism and the stock market, is going to be the same kind of Siren Song crisis.

If you don’t plan for your emotions to go wild? Failing to plan is the same as planning to fail.

Reason 2: Now Let’s Address The Facts And Reasoning That Make All This Right (And Makes What Follows Some Of The Easiest & Lowest Risk Profits You Can Make In The Next Year)

Let me show you something remarkable.

Today I want to focus on Microsoft because software companies are being hammered on the plausible-sounding but WRONG narrative that “AI can replace all software as a service or SAAS companies because of 'vibe coding.”

The PEG ratio (PE divided by growth rate) of the tech sector is down to a 5-year low because of the idea that “Every worker can talk to an AI that will write code in real time that will do whatever they need, so companies like Adobe, or even IBM or Microsoft will be put out of business”.

Glenn, Connor, and Tyler (our developers) consider this to be some of the most ridiculous logic they have ever heard. Glenn has been a software developer (team leader who helped build NIH’s PubMed system) and explains that the amount of regulatory compliance and cybersecurity requirements alone make “vibe coding” a joke.

You can’t go into work with code Claude 4.6 written on your phone and plug it into your company's database. That threatens the entire system and the company’s survival.

My friend Tom (an AI engineer at IBM) explains that his teams are using agentic AI to help stabilize the COBOL-based legacy mainframe systems that power 90% of the financial markets.

• Literally, COBOL-fluent engineers are coming out of retirement because they are being paid like rock stars because no one else can do this.

Without Tom (the man on the wall😉😂🤣), the global economy melts down.

Do you think an IT manager will allow his department to experiment with brand-new code? That every employee will be able to create and delete code in real time, because it theoretically saves the average 5% cost companies pay for software. Yes, 5%!

The average big company pays 3.5% of costs to software. So to replace that…you think IT departments at JPMorgan are going to cancel Microsoft 365?! That’s the most absurd thing I ever heard (and Tyler, Glenn and Connor agree).

My friend Tom is an AI engineer at IBM and tells me what it’s like in the trenches.

He spends his days creating agents with a team of engineers so that COBOL and other legacy software running on Z mainframes (which are air-gapped and not connected to the internet for security reasons) can keep working. Tom is one of the people “on the Wall” who keep the lights of the world on. Without people like Tom, the global financial markets would melt down, and the world as we know it would end.

• And remember, I’m the king of absurd memes! 😉

• Every meme is based on real facts I’ve come across, which have been fact-checked. That’s what makes them funny. Untrue memes are just fair tales.

The idea that software as a service is going away because of AI sounds plausible…but the moment you scratch below the surface, the entire premise collapses.

Let Me Show You Just How Ridiculously Easy And Low Risk Making Buffett-Like Returns Is…Using Microsoft As An Example

know it would end.

OK, so now that you understand why Connor, Glenn, Tyler, and Tom (the 4 smartest programmers I know) all think that “vibecoding is going to kill software companies,” let me use the king of software, Microsoft, as an example.

Do Microsoft’s fundamentals support this?

Looking at the next 3 years worth of consensus estimates? The answer is “Heck no!”

21.66% CAGR EPS Growth Through 2031

OK< but what about things like free cash flow? Maybe all that spending is going to wipe out Microsoft’s free cash flow, and it will become like Amazon was for 20 years, a company that reinvested all profits into more growth and no free cash flow to speak of?

Reinvesting profits intro growth and still generating plenty of free cash flow.

This is what “Shut Up And Buy Something Smart…You’ll Thank Me In A Year” Looks Like😉

125% upside in the next 2 years? 88% in the next year? That’s not Buffett-like returns, that’s Joel Greenblatt and Jim Simmons/Renaissance Tech-like returns! From the safest software company in the world, according to rating agencies.

What about the other Cloud Giants?

Amazon has almost 100% upside to fair value for the end of THIS Year.

It has 3X potential by the end of 2028.

Personally, I like AMZN and MSFT the best for a special project I’m working on for later this week.

• Working Title is “Why the Correction Is Almost Over And How I’m Planning To Profit From the 40% Rally Coming In The Next Year”

I spent 6 hours this weekend carefully planning out the future of Ultra ZEUS, and I’ll walk you through all of that fun math later this week.

Reason 3: A 40% Rally Is Likely In The Year Following The Correction Low

This is the chart that launched me on a 6-hour ZEUS optimization this past weekend when I realized that the almost 20% shorts we have are going to get decimated (likely a 50% decline in a 40% rally year).

That’s why I came up with a 2-stage rebalancing plan for Ultra ZEUS that I’ll be publishing later this week.

• Integrating it into the big picture update for Friday.

• That’s the plan, pending “crazy stuff happening along the way”😉

Reason 4: PEGY Analysis Confirms The 40% Upside Potential Over the Next Year

OK, so I’ve shown you, through personal stories (and examples from Ray Dalio and Jim Simmons), why our feelings are a terrible strategy for investing.

I’ve shown you why Microsoft and Amazon have about 100% upside potential over the next year.

• NVDA 100% to 150% off the correction low.

I’ve shown you why a face-ripping rally is historically likely…and now let me show you how the PEGY analysis confirms that.

As of this morning. 17.8% CAGR is the new FCF growth rate for the S&P through 2028. Vs 5.5% historical. Stocks overvalued? Not unless you think growth rates don't matter😉

Morningstar’s discounted cash flow model shows the S&P is 13% undervalued. PEGY shows 16%.

• Suddenly, my crazy fiber-fueled math doesn’t seem so crazy, does it?😉

34% rally in 12 months? And now what happens if the market falls another 8% to 10% before bottoming? Then suddenly that 40% historical 12-month rally isn’t crazy…it’s 100% historically expected AND justified by fundamentals.

Reason 5: The Smartest Sounding Bearish Case About This War? Isn’t So Smart😉

The world is awash in smart-sounding experts looking for reasons to be bearish. And the smartest sounding bearish argument that “this time is different” regarding the end of this correction?

• The war is disrupting Helium supplies.

• Helium is critical to making chips.

• So the war breaks the AI boom thesis.

• And as goes the AI stocks, so goes the market.

OK, so here are the facts that take a plausible-sounding story (remember how vibecoding was going to sink the software companies?😉) and the moment you scratch the surface, the story falls apart.

Courtesy of the incredible team from Exponential View.

Yes, there is a risk that the global helium supply is disrupted.

Let’s remember that a 14% reduction in Qatar’s exports = 4.76% reduction in global helium.

Yes, the major source of helium for SK Hynix, the world leader in high bandwith memory that’s critical to the chips NVDA makes, is at risk. But the company reports that it won’t be affected this year. And the cost? Helium is about 0.75% of the total chip cost. Remember how 5% of a company’s costs are software? Well, these facts blow a hole in the “War with Iran = end of the AI boom story”.

Reason 6: $100 Oil Won’t Cause A Recession

Energy prices are 50% less important to GDP then they were in 1990, during Gulf War 1.

Remember the gasoline-fueled crisis and recession of 2022 when gas hit a record $5 per gallon? That never happened, and for gas to hit new records would require oil to go to, and stay, above $140.

And $150 crude is just record gas prices. According to Moody’s, every $10 increase in oil prices slows the economy by 0.1% to 0.3%.

Reason 7: High Oil Prices Likely Won’t Cause A Recession

OK, so every $5 increase in oil prices = 0.1% slower GDP growth. So what is GDP growth today? What kind of oil shock would it take to cause a recession?

• Keep in mind, in 2001, we had a 0.4% GDP contraction, the mildest recession in history, 1/12th as bad as the GFC.

• Recession only matters for V-shaped recoveries (more on that in Reason 8).

2.86% real-time GDP growth based on daily and weekly data that includes all the most important economic inputs.

OK, but what is the trend? Maybe the war is starting to weigh on the growth, and we’re just missing the trend?

That's real-time GDP growth. Start of the war on Feb 28th. No growth slowdown. Notice the tariff recession that wasn't. 😉

The tariff impact was big, with growth slowing from 3% to 1.8%, a 1.2% impact.

• The Yale Budget Lab estimated a 1.1% peak impact before the Supreme Court overturned IEEPA tariffs.

OK, but that’s just one model. What do others say?

What about the probability curves? Do we have those? Maybe the low end of the growth estimates shows a possible recession?

And what about Q2, which begins this week?

Using the NY Fed real-time GDP estimates and Chat GPT, you can get new recession probabilities every Friday.

What a world we live in! 🥳

The real-time risk of recession, according to the NY Fed, is 7% to 11% right now.

• Betting markets are showing 36% as a really good arbitrage opportunity.

Interactive Brokers is showing 5% risk this quarter (which is reasonable, so no arbitrage opportunity there).

Reason 8: Why Economic Growth Rates Matter To Investors

Growth is above 2%, it’s not trending lower. That means 15% is the likely lowest stocks can go…and that’s what history says.

So history + fundamentals, including the S&P being undervalued by 13% to 16%…all saying a 15% correction is as low as we’ll likely go.

So growth above 2%? Check.

Stable or trending higher? Check.

No growth scare correction likely.

And don’t forget this.

Positive growth = V-shaped recovery. 1.55X the duration of the peak-to-trough decline.

A 2% month decline = 3 months to record highs if growth is positive.

So you can see why I am so excited…the vibes don’t matter. Growth is strong, not falling, and that means a 10% to 15% correction = stock market that’s 16% to 20% historically undervalued.

• March 2023 market is about 20% undervalued.

• October 2022 market bottoms 20% undervalued.

• April 2025 market bottoms 20% undervalued.

Now stocks are 16% undervalued (13% by DCF), and if stocks fall 3% to 10% more (-16% historical low)? They are then 20% to 25% undervalued…just like all the other times that we have 40% face-ripping 12-month rallies.

Now do you see why I collect charts? And tables? Putting everything together, history + fundamentals + valuations + secular trends = the kind of “so obvious how could I have missed it” opportunities. Like this one.

Who Could Have Seen That The Tech Boom Would Have Lasted This Long? Experts Like Tom Lee! And Danny Ives…And Morningstar…And Me!

Trends + fundamentals + history and even technicals!

On Friday, I’ll explain in part 2 of this report how this chart actually REALLY excites me.

• Bottom line up front, the terminal phase of a correction is a waterfall-shaped global margin call that shakes out all the weak hands.

• The current chart? Looks like the start of a terminal correction plunge.

• That means we’re likely 2/3rd of the way done (even though stocks are just 50% as low as history says they should end up at).

• 1 to 3 weeks to the final bottom is most likely based on the data I’m seeing.

• AND NVDA, MSFT, and AMZN are all 100% to 150% upside potential within 12 months from those correction lows (5% to 15% below current levels).

That’s the kind of signals that the pattern-matching neural network in my head gets excited about and sends me off on 6 to 10-hour-long all-night ZEUS optimization compliance committee meetings. 😉

If Ultra ZEUS does nothing? We make $508K base-case over the 12 months following a correction.

If we make one simple change (I’ll explain this on Friday) we make $1.2 million.

And if we go with Plan C? What I just came up with? Then $1.6 million.

• $1.1 million difference = an extra $283 million positive economic impact from $125K extra donations!🤗 74.4 more lives saved & 56,818 more tons of carbon offset = lifetime emissions for 20 American families.