Carter Braxton Worth
Appearances
Money Rehab with Nicole Lapin
Calling the Bear: How Carter Braxton Worth Predicted the Market Drop and What Comes Next
Yeah, well, there's some are life health insurers. They're not, Aflac doesn't care about disasters. You're talking about property casualty. That's a different kind of thing. But MetLife, Peru, Chubb, Chubb is, you know, doing, insuring antique clocks and that kind of thing. Case by case, they're not all great.
Money Rehab with Nicole Lapin
Calling the Bear: How Carter Braxton Worth Predicted the Market Drop and What Comes Next
But again, this is a very fine area of the market to be in right now if one has to be long.
Money Rehab with Nicole Lapin
Calling the Bear: How Carter Braxton Worth Predicted the Market Drop and What Comes Next
The thing that I would say if you really don't change your stripes, and that is the single most important thing. So someone told me once, there's only three kinds of hands in the market. There's weak-weak, there's weak-strong, and there's strong hands. You can be two of the three, but you can't be one of the three. So let's talk about it. Weak-weak is this. Ready? So weak-weak. is this.
Money Rehab with Nicole Lapin
Calling the Bear: How Carter Braxton Worth Predicted the Market Drop and What Comes Next
We buy a stock at 10. It's 11. Feeling good. It's back to 10. It's 12. It's 11. It's 10. It's 9.50. It's 9. I don't want it. Walk away. Meaning you're willing to acknowledge error, move quickly. Bought it at 10. It was 11. We didn't get it. Now it's 9.50. Walk away. Weak, weak. Just hot potato. That's fine. And then there's strong hands. We buy it at 10. Goes to 11. Feeling good.
Money Rehab with Nicole Lapin
Calling the Bear: How Carter Braxton Worth Predicted the Market Drop and What Comes Next
We think it's worth 30. Then it goes to 12. But it's back to 9 now. Back to 8. We buy some more. It's down to seven. Fine. We're confident. We think it's worth 30. Buy some more. It goes to five. It's cut in half. We bought it at 10. It's five. We're buying more. And ultimately, we're vindicated, the thing that you're talking about. And it comes out and turns, and it goes to 30.
Money Rehab with Nicole Lapin
Calling the Bear: How Carter Braxton Worth Predicted the Market Drop and What Comes Next
That's strong hands. You took it. The third thing you cannot be is weak, strong. You think you're strong, but you're not. So you buy a 10 and then it's 11, then it's 10, then it's 11, then it's nine. And the other guy walks away. Weak, weak. She walks away. Get rid of it. Don't want it. The weak strongest. I can handle nine. Then it's an eight. I don't know. I don't know. Then it's a seven.
Money Rehab with Nicole Lapin
Calling the Bear: How Carter Braxton Worth Predicted the Market Drop and What Comes Next
I think I'll buy some more. Okay. I should do it. I know I should do it. Buy some more at seven. Then it's six. Oh, this is bad. That's five. All right. I got to get out and selling it all. That's a disaster. That's not not knowing who you are in the market. It's okay to buy it and be wrong. Buy it at 10, sell it at 9.50. We're wrong. Weak, weak. Just don't care. Or strong. We're buying at 10.
Money Rehab with Nicole Lapin
Calling the Bear: How Carter Braxton Worth Predicted the Market Drop and What Comes Next
We think it's worth 30. It goes to seven. We'll buy more. It goes to five. We'll buy more. We're confident. We did the work. The team is smart. We know what we're doing. And it merges like a phoenix. It goes to 25. You make money. But weak, strong. I think I'm strong. But you're really weak. And this is a mental thing. You buy a ten and eight and then you and then and then you walk away five.
Money Rehab with Nicole Lapin
Calling the Bear: How Carter Braxton Worth Predicted the Market Drop and What Comes Next
It's a disaster. It can't be weak, strong, weak, weak or strong, weak, strong, no good.
Money Rehab with Nicole Lapin
Calling the Bear: How Carter Braxton Worth Predicted the Market Drop and What Comes Next
Yes, volatility be one word to characterize it, but also red, right? So we've had a great market for three years. I guess if you think about the last real drawdown was the 2022 bear market, the S&P declined 27%, the NASDAQ 137. And since those lows in the autumn of 2022,
Money Rehab with Nicole Lapin
Calling the Bear: How Carter Braxton Worth Predicted the Market Drop and What Comes Next
For three years, we've been ascending and ascending aggressively to the point where, of course, those who get into valuation, we reached just four or five months ago, the highest price to sales ever recorded in the S&P 500 and the Russell 3000. And now, of course, that excess is being expunged.
Money Rehab with Nicole Lapin
Calling the Bear: How Carter Braxton Worth Predicted the Market Drop and What Comes Next
Well, for starters, you're very kind to invoke or recall a good judgment. I have all sorts of bad judgments, things that go terribly wrong, but I'm pleased with this particular recent effort. The principle that informed that decision basically is... in January, December, January, was that the breadth was deteriorating.
Money Rehab with Nicole Lapin
Calling the Bear: How Carter Braxton Worth Predicted the Market Drop and What Comes Next
Now people say, well, there's always an issue with breadth, which is a way of measuring market health. And so we have had for a long time, great marquee names, right? Household names, Apple and Microsoft and Google, and they've even named them a group, Magnificent Seven, right? Have led so much of the equity market and people and, and, Perhaps rightly so.
Money Rehab with Nicole Lapin
Calling the Bear: How Carter Braxton Worth Predicted the Market Drop and What Comes Next
Well, it doesn't matter that others are lagging and not keeping up as long as these champions are carrying the team, all is well. But usually when you have divergence between the performance of an aggregate, an index dominated by a few big outperformers versus the constituents diverging and not performing, it invariably ends with weakness in the index.
Money Rehab with Nicole Lapin
Calling the Bear: How Carter Braxton Worth Predicted the Market Drop and What Comes Next
And what was happening in December, really started in October, is that individual stocks started to put in their peaks. So right now we know that the sell-off in the S&P, it starts at the index level on the 19th of February, only six weeks into it. But for instance, the semiconductors peaked in July.
Money Rehab with Nicole Lapin
Calling the Bear: How Carter Braxton Worth Predicted the Market Drop and What Comes Next
microsoft peaked in august i mean individual securities were starting to roll and stall and starting to basically turn over and head lower way before the index and so for instance right now the index itself is only down what 12 if you were to look at the russell 3000 it's important to talk about that because that represents 98 of the investable capital united states
Money Rehab with Nicole Lapin
Calling the Bear: How Carter Braxton Worth Predicted the Market Drop and What Comes Next
The S&P 500, obviously not as broad and big. And if you look at that index, the Russell 3000, the entire shooting match, it peaked on the 19th of February as down 15, 12, 15% or thereabouts. But the median performance of all constituents is down 38, meaning we're well into a bear market. It's been going on for months. And the individual stock or player on the team has been in real trouble.
Money Rehab with Nicole Lapin
Calling the Bear: How Carter Braxton Worth Predicted the Market Drop and What Comes Next
Only now is it coming out at the index level.
Money Rehab with Nicole Lapin
Calling the Bear: How Carter Braxton Worth Predicted the Market Drop and What Comes Next
It would be like watching a sickness, looking at 100 people in a room. And one person, you just don't think anything's wrong. And now everyone's sick. But it turned out, if you look back, wow, that guy was sick three weeks ago. She was sick six weeks ago. Meaning it doesn't come out at the aggregate level. All of a sudden, it starts slowly. It's under the surface.
Money Rehab with Nicole Lapin
Calling the Bear: How Carter Braxton Worth Predicted the Market Drop and What Comes Next
Individual securities start to underperform, start to roll over, start to stall, start to decline, even as the index goes higher. The principle is this. Let me just say it this way. The parts compose the whole. The whole looked okay to the maybe casual observer. We're making new highs in January, but the parts were rolling over.
Money Rehab with Nicole Lapin
Calling the Bear: How Carter Braxton Worth Predicted the Market Drop and What Comes Next
And people say, oh, it's so much money and so few to have, but it's always high end top weighted. So if you go back the last 50 years, the top 10 stocks on average, 20 plus percent weight, meaning life sorts out winners and losers. It's just the way it is. A small hardware store gets acquired by a bigger hardware store. a bigger, a better software operator takes over another.
Money Rehab with Nicole Lapin
Calling the Bear: How Carter Braxton Worth Predicted the Market Drop and What Comes Next
We're always going towards bigger things, concentration. That's the way it is. And so the top 10 stocks, whether it was IBM in its heyday or GE or Cisco in 07, top 10 stock, always about 20% weight. But what started to happen this go round in the past 18 months is they were 30 and 33%. So much so that now that they're selling off, that's why the market is finally succumbing.
Money Rehab with Nicole Lapin
Calling the Bear: How Carter Braxton Worth Predicted the Market Drop and What Comes Next
Yeah, I mean, over time, and everybody knows this, markets go up. There are more Oreo cookies consumed 10 years from now than now, more Gillette razors, more people. There's prosperity, there's growth, and that's figuring out who you are in the market.
Money Rehab with Nicole Lapin
Calling the Bear: How Carter Braxton Worth Predicted the Market Drop and What Comes Next
But if you are a trader and you spend time trying to zig and zag, trying to study sequences, the current sell-off at the index level is highly unlikely to stop here.
Money Rehab with Nicole Lapin
Calling the Bear: How Carter Braxton Worth Predicted the Market Drop and What Comes Next
And that's a classic playbook. There was an expression, soap and cereal is the most offensive thing. Soap and cereal. And what that means is if you look at companies like Nabisco that sell crackers or Colgate-Pomona, we have 170, 200-year-old companies in this country that literally sell soap. domestic household things, and food products. Now, those are the most defensive things at all.
Money Rehab with Nicole Lapin
Calling the Bear: How Carter Braxton Worth Predicted the Market Drop and What Comes Next
People consider healthcare- Like P&G or J&J. Exactly, Colgate or Clorox or a General Mills cereal or that sort of thing. Healthcare is relatively new. We don't have healthcare companies that are old like that. 150 years ago, healthcare was, okay, bite on this stick because we're about to saw your leg off. We don't have anything else to offer you.
Money Rehab with Nicole Lapin
Calling the Bear: How Carter Braxton Worth Predicted the Market Drop and What Comes Next
Point being, they're not defensive pharmaceuticals the way soap and cereal is defensive. Classic staples. And you'll see that now in this current drawdown. What is going down not as much? Soap and cereal. That's consumer staples, utilities, very defensive names. And all institutional managers know this. And if you cannot hold cash...
Money Rehab with Nicole Lapin
Calling the Bear: How Carter Braxton Worth Predicted the Market Drop and What Comes Next
If you're concerned and you're selling some Apple or selling some Google or selling some Meta or selling some Tesla, by mandate, you're not allowed to hold the cash. They have cash managers, different product, different things. So that money must go back by the close or the next day by the close. And so you see rotation.
Money Rehab with Nicole Lapin
Calling the Bear: How Carter Braxton Worth Predicted the Market Drop and What Comes Next
It's always a part of markets and institutional money will rotate to defensive things because on a beta adjusted basis, even if everything goes down, those stocks go down less and you're seeing it in the market now. Here's a thing from March 30 saying, look, it's official. We're in a bear market. Just to talk about the statistics.
Money Rehab with Nicole Lapin
Calling the Bear: How Carter Braxton Worth Predicted the Market Drop and What Comes Next
The weak form of analysis in terms of charting intent is to look at an index. That's like if you went to the doctor, I went, and I walked in, the guy from nine feet away said, yeah, you look okay. I do. I look okay, right? But you don't know about my blood pressure, whether I have diabetes or gout or cholesterol. You cannot study a patient by doing that. You have to
Money Rehab with Nicole Lapin
Calling the Bear: How Carter Braxton Worth Predicted the Market Drop and What Comes Next
get in the chair, get in the gown, and then they take your blood pressure and they poke and prod. That's what this is. The weak form is saying, oh, the index is down only 9, 10. That's nothing. Underneath the surface, it's been massive deterioration and there's more to come.
Money Rehab with Nicole Lapin
Calling the Bear: How Carter Braxton Worth Predicted the Market Drop and What Comes Next
Oh, yeah. Well, clients, I've been short. So I have two types of institutional clients, and those are pension plans. Those are long, only mutual complexes. Those are hedge funds. Those are family offices, endowments, and then individual investors. Now, this is not random. We reached the highest price to sales recorded, even higher than .com. 1929, March 2000, February 2025.
Money Rehab with Nicole Lapin
Calling the Bear: How Carter Braxton Worth Predicted the Market Drop and What Comes Next
And we have hit our head to the penny at that line. Now, how big a drawdown? Why not 20%? That's garden variety, normal. Some people think it's going to be 50. I can't speak to that. I think that's unknown. But I am very confident in saying that the current sell-off is highly likely to stop here. Unlikely, right? Not likely to just be over.
Money Rehab with Nicole Lapin
Calling the Bear: How Carter Braxton Worth Predicted the Market Drop and What Comes Next
Oh, at least 20%.
Money Rehab with Nicole Lapin
Calling the Bear: How Carter Braxton Worth Predicted the Market Drop and What Comes Next
Tesla's just lost 50% of its value. Tesla has made no progress in four years. I'm a seller.
Money Rehab with Nicole Lapin
Calling the Bear: How Carter Braxton Worth Predicted the Market Drop and What Comes Next
S&P 500. Bearish, lower. About to 48, 48.50 or thereabouts. Gold. Gold had a huge surge in 2019 and 20. Gold was sideways for four years and gold's had a similar surge. That which was hated and ridiculed and scorned is now loved. It's on the cover of the Wall Street Journal. We're backing away from it. We're going to let someone else trade that here. We think it's crowded and at risk.
Money Rehab with Nicole Lapin
Calling the Bear: How Carter Braxton Worth Predicted the Market Drop and What Comes Next
I think that a general statement that is worthwhile, I think, is that there's nothing to be lost by postponing all new buying. If someone's that cost average down every month and plays golf instead, do it every month. But you have to know who you are in the market.
Money Rehab with Nicole Lapin
Calling the Bear: How Carter Braxton Worth Predicted the Market Drop and What Comes Next
NVIDIA. Now, for instance, look at the insurance stocks. Look how good Chubb is.
Money Rehab with Nicole Lapin
Calling the Bear: How Carter Braxton Worth Predicted the Market Drop and What Comes Next
how good aig is they're very defensive look out look at berkshire hathaway there's a reason for this right they're the only thing even with all the insurance craziness and very different fires and disasters so a place to hide there's a there's a good etf if you wanted to it's kie and that picks up aig and progressive and chubb and allstate and so forth and so on how about apple getting beat down with the tariffs
Money Rehab with Nicole Lapin
Calling the Bear: How Carter Braxton Worth Predicted the Market Drop and What Comes Next
Apple-eyed nibble. How about Nike? Nike. Oh, that's unhappy. That's unhappy. And sometimes this happens. Great franchises, Nike, Disney. It's tempting always to think it's cheap. So Nike is the same price it was in 2015. It's now 2025. So adjusted for inflation, Nike's lost about 40% of its value. And that's a disaster. I wouldn't step in and buy that. Why? Just because it's down?
Money Rehab with Nicole Lapin
Calling the Bear: How Carter Braxton Worth Predicted the Market Drop and What Comes Next
There's no thesis. Just one of the oldest rules of the book. Hard to do. I'm constantly holding my own finger off the buy button. Don't buy stocks in downtrends. Just don't do it.
Money Rehab with Nicole Lapin
Calling the Bear: How Carter Braxton Worth Predicted the Market Drop and What Comes Next
Don't do it.
Money Rehab with Nicole Lapin
Calling the Bear: How Carter Braxton Worth Predicted the Market Drop and What Comes Next
I just showed you one of the great markets. Insurance stocks are fantastic.