Why Gold, Silver and Tech Are Crashing Together: Bubba Horwitz Calls It a ‘100% Margin Call’

Tech, gold, and silver are plummeting together today in what 40-year veteran floor trader Todd 'Bubba' Horwitz calls a "100% margin call." In this interview with Kitco News, Bubba breaks down why the simultaneous liquidation across safe havens and risk assets is a warning sign of a system-wide flush. He explains why the massive $2.3B insider liquidation at AI giant CoreWeave is a distraction from the real structural rot in the economy, warning that true unemployment is already sitting at 8.5%. While Bubba forecasts an eventual 40% to 60% market crash, he explains his exact options strategy for staying long the market, the specific tickers he is accumulating today, and his exact buy levels for physical silver as the washout continues. 

Recorded June 9 2026

Follow Jeremy Szafron on X: @JeremySzafron (https://twitter.com/JeremySzafron) 
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0:00 - The Tech & Gold Margin Call
1:23 - The $2.3B Insider Tech Liquidation
3:00 - Are Mega-Caps Exhausted?
4:10 - SpaceX, Private Markets & Liquidity
8:45 - CPI, Oil, & Macro Escalation
10:30 - The 8.5% Unemployment Reality
12:45 - Debt & The "Keynesian Rot"
15:30 - "100% A Margin Call"
18:40 - Silver's Washout & Exact Buy Levels
23:15 - Exact Stocks Bubba is Accumulating Today
26:45 - Options Strategy: Hedging the 60% Crash 

#MarketCrash #MarginCall #Silver #Gold #BubbaHorwitz #KitcoNews
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Transcript

SPEAKER_03 0:00

100% tells me that this is a market call. When you start to see the assets that you would run to gold, silver, platinum, some would run to Bitcoin. I'm a buyer now, but I would also be a buyer at 60, and I'd be a buyer at 55. And I will continue to accumulate this asset because of its worth worth, because of its industrial use, because of its value, because of its stored value, because it's baby gold.

SPEAKER_02 0:24

All right, tech is taking a beating today. Chipmakers are plunging about 8%, dragging the NASDAQ down about 4%, while insiders at AI giant core we've just jumped $2.3 billion in stock. And adding crude oil, it's pivoting after President Trump vowed a U.S. military response against Iran. And the macro picture is flashing red here. Now, my guest today warns that this setup could trigger a 40 to 60 percent market correction, yet he's still holding long equity positions. Now, how a veteran floor trader navigates this exact divergence without getting crushed is our focus today on KitCo News.

SPEAKER_01 0:58

Kitco News in Focus with Jeremy Safron.

SPEAKER_02 1:02

All right, welcome back. I'm Jeremy Safron. Joining us is a 40-year floor trading veteran, Todd Bubba Horowitz of Bubba Trading.com. Bubba, welcome back to Kitco. Good to see you.

SPEAKER_03 1:12

Jeremy, great to be with you. I'm looking forward to it.

SPEAKER_02 1:15

Yeah, me too. Uh obviously a lot happening today. I mean, I'm kind of trying to watch the tape, make sure that it's still relevant. So I'm gonna try not to time everything, but we can kind of start right with that contradiction. I mean, looking at the board with massive corporate valuations, but the guys running these companies are dumping stock. Core Weave Insiders just unloaded $2.3 billion. Now, it's all disclosed, it's legal, but that is a massive amount of liquidity leaving the room. Now, you traded through the dot-com bus back in 2000. When you see executive insider volume like this, I mean, does it tell you that the risk profile on AI Triad is kind of fundamentally broken here? Where are we at?

SPEAKER_03 1:51

You know what? No, really, what happens when you see I've actually traded through the 1987 crash as well. What really happens is these guys' positions get too big as compared to their overall net worth. So they want to start to liquidate a little bit. That's usually not a fear sign or an insider trade, like they know that there's bad news coming. It's the same thing that Larry Page did with Google, you know, 15 years ago. He said, Look, I nothing's wrong with Google. Everybody's worried about it. He said, There's nothing wrong with Google. The problem is that it's 85% of my net worth. And of course, nobody, unless you know how to hedge and use derivatives correctly, wants to have any one holding to be 85% of your net worth, no matter how confident and how good it is. You want to always be somewhat diversified to markets in general. And of course, the best way to do that is to learn how to hedge and use derivatives to hedge every position that you have. But for those who don't, and most don't, it makes it easier to liquidate some of your positions so you lower the amount of exposure you have to the market compared to the rest of your portfolio.

SPEAKER_02 2:55

Yeah, yeah. And I mean, you know, it's making headlines today, but to your point, I mean, the 10B5-1 plan, I mean, it was all out there. And I guess that brings us to a bigger issue, whether this is a company specific or whether it's part of a broader liquidity drain across the AI trade. I mean, looking at these megacap stocks leading this parade, uh, it's a significant shift. I mean, NASDAQ down full 4%. Chipmakers are taking a heavy hit down about 8%. When you see or look at a sudden sharp decline of this kind of magnitude, and again, we had one on Friday in this kind of markets core leaders, is the AI trade completely exhausted? Is this just a necessary technical reset? How do you kind of position here?

SPEAKER_03 3:33

Well, I think you have to have some selling, Jeremy. Look, markets can't go straight up. We just had a rally of over 25% in less than a month. So you're gonna have some from pretty serious pullbacks, and I think this is one of them. You know, this is this is like the dot-com bubble. We have some extreme valuations, we have warning signs, galore out there for companies, for people, for the economy, but we continue to ignore them because, of course, we're in what is called a K-shaped economy, and of course, that means only the upper few percent are doing well, and the rest of the people are struggling. I mean, we have credit card debts that are major levels, major defaults, home loans, rates, and of course, rates are going to start to rise, which is what we talked about a long time ago, is that rates are going up, they're not going down. So you get these companies that get so overvalued that there has to be some pullback, and there's going to be some sellers at some point. And of course, when you get a couple to trigger some of the popular ones, that creates selling across the space because then people start to get a little nervous. They start to liquidate a lot of their losers and a lot of their winners to cover the margin calls that they're taking, which is a very bad sign for investors themselves who are trying to use margin and leverage for these markets because they're extremely whippy, they're extremely fast, and of course, leverage is great when it's going in your favor, but very dangerous when it's going against you.

SPEAKER_02 5:01

Yeah, man. You don't want to be caught uh grabbing those knives out of thin air. I mean, let's connect this a little bit to the private markets because the terminals pointing to maybe a specific catalyst here. I mean, analysts are talking about how this tech sell-off is happening right as the massive wave of new equity issuance hits the market. I mean, specifically SpaceX targeting its secondary pricing this Friday at a $1.8 trillion valuation. Now, the company posted $18.7 billion in revenue last year, but it did carry a $4.9% net loss. I mean, when a company carrying losses of that magnitude seeks to draw billions in fresh capital, does it kind of create a supply and demand crisis for liquidity that forces investors to trim liquid tech names just to fund these new deals?

SPEAKER_03 5:45

Yes, it absolutely does. And of course, when you're buying into a SpaceX, I mean, listen, I'm a believer, I think it'll be fine, but you're buying into the hole and you're buying into a company that does not make money. And of course, if we go back, not the same story, but if we go back to the original Amazon, you know, they were in the same position when you went into Amazon, and of course, it did work out. But again, when you go so deep in and have no profit and no money to make from the beginning, until you can turn that around and show the profits, you get overvalued to begin with, and then you see how the market plays out. Facebook was another big example that was overvalued as an initial IPO. The stock tanked initially, and of course, now look at it. So again, these are where the lot of that money's got to come from somewhere. So they start to liquidate out some of the other areas to bring money there.

SPEAKER_02 6:35

Now you said you still you you like the deal, and I mean you know it's a very different one in compared to the other AI companies. The bull case obviously rests on total launch dominance and the kind of reoccurring subscription revenue moat of Starlink. Supporters argue, you know, traditional cash flow models failed to kind of capture that true commercial space monopoly, which is the first time we've ever discussed it. I mean, why isn't it a near-total monopoly on global space logistics enough to kind of justify this premium? Do you think it is?

SPEAKER_03 7:05

Well, we're gonna see, right? We've seen the progress in a lot of people, you know, like, for example, cutting the cord, right? So when you go into satellite, you'd be cutting the cord, and of course, there's a dramatic demand, and if it can be priced properly, then it can be a very profitable venture. And I'm a bit I'm a big believer in Elon Musk as well. So I think that that that is something that when you look into a company, you want to look at their ownership and their management. And I think that helps us decide that he's got a real shot to turn this into a big winner, as he has done with PayPal, as he has done with Tesla, and now we'll see what he does with SpaceX.

SPEAKER_02 7:42

Have you heard that argument? I was thinking about it this morning. It was kind of an interesting one. There's that scrutiny over related party complexity here. I mean, uh it's you know, Tesla invested $2 billion into XAI before SpaceX acquired it, and then SpaceX itself bought $131 million in cyber trucks, nearly a billion in megapacks from Tesla. I mean, for the average listener trying to kind of unpack all this, I mean, how much structural risk do these interconnected transitions introduce in kind of one single piece of that empire?

SPEAKER_03 8:13

Well, there's a lot of risk if things don't go well, right? Because it affects one company affects another. But what they've done, I believe, is they've done kind of what Google did with Alphabet, right? It alphabet is the parent company, or Google's the parent and has all the offshoots, and they have each company has its own risk. Although it has investment from the main company, it can't take the main company down. So that is one thing that you want to look at when you look at these deals, the way that they're structured. So we're not seeing that that that Tesla or what is going into the full range of it. It's taking a piece of and made an investment into it. And it can certainly take, if it turned out to be a bad deal, it could take the loss without that major damage to the overall stock or the parent company itself.

SPEAKER_02 9:01

Yeah, interesting watching today. I mean, we'll see where this falls, continue to kind of monitor it. Uh, but I want to kind of pivot into the macro because tomorrow morning we got the big one, the CPI report, everyone talks about. I mean, markets are bracing for a hot 4.2%. Now, earlier today, I mean, crude oil was sliding on peace hopes, but it just part those losses because President Trump announced the US must respond after Iran shot down an American military helicopter. Uh with with geopolitical kind of tensions flashing red before uh before a hot inflation print. Does this headline wipe out any disflationary hope the market had, or or is, you know, the the debt-driven inflationary uh environment kind of permanently baked into the system anyway?

SPEAKER_03 9:42

First of all, inflation that we have is much higher than they're willing to admit, right? 4.2 is well less than what it really is. Yeah. We we've got, and the real problem here is not there is good inflation and there's bad inflation. This is a bad inflation. This is government and created inflation, this is things happening, inflation, that has no benefit to anybody, and it of course costs us more money to live. Uh, you've got crude oil, though, that has come down at least significantly from 120, which is where it was when this war started, and now is trading at $86 a barrel. And if you look further out into the curve, you're gonna see crude oil is down into the 80s or lower out in December and further out. So you're seeing the fear premium trade out in the crude oil right now, which should help bring prices down, but the rest of our prices are so much higher. I mean, beef is higher, $6.90 a pound for ground beef at the store if you can get it. And of course, dairy is expensive. So we have a lot of prices that have gone up, and of course, these these oil companies have taken full advantage. If you just saw the most recent report was Shell Oil, who had double their earnings and profit uh ever, a record number of profit for them, because we have a glut of oil, and oil has no business no matter what's going on in the Middle East. Oil in the United States or in Canada has no business being at the prices that it is, because there's a glut in these two countries, and we should not have these issues. But of course, when you continue to build massive amounts of debt, which is what we've got our our our government doing, it's gonna it's gonna weigh in inflation, which is also the mistake that the Fed made and where President Trump is wrong. They shouldn't be cutting rates, they should be hiking rates. They need to slow the pace of this inflationary cycle because the average American cannot afford to live at the prices that we're paying right now.

SPEAKER_02 11:33

Now, Baba, let's talk a little bit about the bond market because I mean, right now it's actively fighting the new Fed chair, Kevin Walsh. Uh the two-year yields recently surged near that 4.15%, though yields are moving a little bit lower today on this headline. Uh futures are still pricing at 72% chance of a rate hike by December. I mean, if Walsh is forced to stay hawkish to kill this sticky core inflation, how violently does that reprice these high-flying tech companies that that live and die on cheap capital?

SPEAKER_03 12:01

Well, I think first of all, I think Warsh was a hawk to begin with. I think Trump made a mistake with Walsh. I think Trump Warsh was a hawk anyways. Uh but I think you're gonna see the tenure notes reach 6% before the year's over. Okay, I think we're we're we're we're running hot. They're gonna have to hike rates to try to keep things under control. And of course, that goes against everything that the president wants to do because, of course, he's worried about the debt. But when you create this mess and you you you have companies that you bailed out that were too big to fail, that created more of this debt because you're you're putting too much of a burden on the taxpayer. And that's really, listen, we know that government doesn't make money, government makes debt. And of course, we have to understand that this creates higher inflation and more costs because there's more taxes on everything that you have, because we're trying to fund a broken down government that has no idea of what to do versus the Federal Reserve, which is also so far off of their mandate. The Federal Reserve's job is is jobs and price stability. And of course, we're not getting an accurate jobs number to go along with all of those other things, because the real number you should be looking at when it comes to jobs is what's called the U6. The government uses the U3. After three months, if you're still unemployed, you fall off the roll, so it doesn't show. But true unemployment in this country under six months is 8.5% as of today, and getting worse, and there are more jobs going. So all of this mess that they created by trying to finagle interest rates shows you that the Fed has no business being in business and they should be ended, as uh as Ron Paul has said many times, because the Fed has no value and it's controlled by the banks, and of course, we know that the banks were bailed out because they were too big to fail.

SPEAKER_02 13:55

Yeah, we're also seeing some interesting data kind of for the engine of the domestic economy. Uh just this morning I said that the NFIB Small Business Optimism Index just fell to about 95.3. Now, it's its lowest level since late 2024, but labor costs are the biggest problem. And then at the same time, uh recent credit data is showing obviously the consumer stress is actively rising as the household budget gets stretched. I mean, how how do you deploy capital in an environment where the major indices are still sitting near all-time highs, but the underlying consumer is elevating their debt?

SPEAKER_03 14:29

That's a great question. I mean, listen, we've gone for for years, we've been our expenses have been rising faster than our income that we've been making. Okay, and you know it only takes so much time for everybody to go broke when you're in that position. The real problem is that you're not getting real full participation of people that are able to invest in the market anymore. There's too much debt. I mean, 13% of credit cards are 90 days past due or more. Uh 6% of car loans are in default, and 4% of mortgages are in default. The average American, the average consumer cannot afford to be investing. They're only still investing, whether it be through their pension fund or through their 401k, which is always a buyer, which way markets in general are predisposed to go higher anyways, and it's why they've averaged an 8.5% gain. I think we get too worried about some of these sell-offs. And again, I'm expecting 40 to 60%. You said it in a headline. Yeah. And I'm not expecting it in one day nor tomorrow. But at the end of the day, if you're a true investor and investing money that you can afford, there's really nothing you should do other than learn how to hedge your portfolio or let it sit. Because again, if we just base it on pure numbers, in history, the markets have gone up 8.5% year over year. And since 1950, they've gone up 10% year over year.

SPEAKER_02 15:47

Yeah, you know what? That's a good point, uh, Baba, because uh let's look at kind of how the street is framing this entire crisis. The mainstream financial media is completely obsessed with whether we're getting a hard landing or a soft landing. Uh, I was on X this morning, and a friend of this program, he's been on here, James Thorne, over at Wellington Altis, uh, put out a brutal take on this. He kind of called the entire debate Kinesian brain rot, is the way he said. He said his point is that everyone is waiting for a recession, which is like an economy dying of a sudden heart attack. But he argues the economy has already, you know, kind of died from structural cancer. He says, you know, long-term, uh terminal rot from decades of printing money and massive deficits. So, I mean, when you look at a system this one particularly right now, are everyday investors completely blinding themselves by looking for a cyclical recession while kind of missing the fact that that underlying foundation is already terminally decaying?

SPEAKER_03 16:39

Uh I think the everyday investor commonly makes the mistake and commonly panics too fast and is not really a true investor. Uh, you know, amateurs, they want to be right. Professionals want to make money. I mean, let's let's go to it. And I think what you're watching is that, you know, the average investors, there's still people waiting from the collapse of 2009 to get back into the market. You have to be in the market, you have to be in good, solid, strong companies. Yes, we're gonna have a recession. I think we're in a recession now. I mean, quite frankly, if you took away the top end of the K, the bottom end, I think, is in a recession. I don't think there's any doubt about it. I think we've been in a recession. I think you have this continued, you can see it by the number of homeless, by the number of defaults, by the number of people that are broke, that don't have $400 in their bank account for an emergency. So I think we're in very serious trouble, and I think it's only going to get worse. But again, we have to remember that the individual and the economy are not necessarily linked to what the market is doing. The market is more forward thinking, and I think we're now starting to see, you know, typically between this time of year and a midterm election, there usually is a pretty solid sell-off. And I think we're seeing it. And again, there's a lot of reasons. You can go into overvaluations, you can go into that, but the real warning signs are inflation is way too high. The Fed has done a lousy job with the interest rate markets, and of course, we've got no jobs, which is, you know, AI is destroying jobs, and not only is it destroying jobs, but it is increasing the cost of energy through electricity for the consumer. So we, the consumer, not only get the benefit of paying the taxes to the government, we're help funding the AI companies because our electric bills are going up because of how much electricity it takes to produce AI.

SPEAKER_02 18:32

Yeah.

SPEAKER_03 18:33

Who's caught holding that bag, Bubba? We've seen this before. Yeah. Well, naturally, you and me, baby. We're we're the average guy is always stuck holding the bag for everybody. It's the same. Listen, I go back to 2008. They should have never bailed out the banks. The banks that were bad, they should have let go out of business and bailed out the depositors. Okay? This is the problem we have in this country. They talk about small business, small business is failing. We're losing more small business every single day because they can't afford to be in business because costs are so high. They don't have the benefit of pricing. There's a lot of issues out there.

SPEAKER_02 19:10

Hey, you talked about margin calls just briefly there a little bit today, and I kind of want to bring this together before we look at the medals board because I mean we're seeing tech plummeting today, but it's not just tech. Gold's down over $80 right now, silver down nearly 5%. I mean, when you see the high flyers catching a severe bid down at the exact same time the ultimate safe havens are getting aggressively liquidated, does that tell you we're witnessing the start of kind of a massive system-wide margin call?

SPEAKER_03 19:37

Uh, yes. That 100% tells me that this is a margin call. When you start to see the assets that you would run to gold, silver, platinum, some would run to Bitcoin. You know, Bitcoin was the first trigger here that started to break down. Gold has been breaking down since it hit 5,600. And look at what's happened to silver since it hit 120.

SPEAKER_02 19:56

Yeah.

SPEAKER_03 19:57

But this is the first start. I'm very confident that gold and silver will turn around once we get through this first round. Okay, and you know, the first round started on Friday, okay, when we had the biggest point down day. Again, you can't percentage-wise, it was not that big a deal. It was six or seven percent. Yeah, and today we're down, right now, we're down two and a half percent. Okay, so again, but once the fear settles here and all the margin calls have been met, I think you'll see the money flow back into gold and into silver. I mean, is there a little bit more downside? Yeah, I mean, but gold was down a hundred bucks a few minutes ago, now it's down 70. So I think that I'd be I'd certainly look to be a buyer of gold and silver and not the miners, not the paper metals. I'm talking about real hard assets from KitGo or for wherever you get yours from. I think you want to own the physical because, in my opinion, there's not enough gold in the world to satisfy the amount of paper written on it.

SPEAKER_02 20:57

Yeah. Have you been uh a little bit surprised by this take? I mean, uh, to your point, it's happening quick. I'm sitting here looking at the Nasdaq 100. I mean, it's down about 2%. We started this broadcast, it was down almost uh almost four. So, I mean, rotating very quickly here. Uh, I gotta ask you, I mean, you know just as well as I do that in in history, these margin calls, I mean, it kind of shows those events usually wash out the weekends quickly, reset the board. Do you think this deleveraging flush is kind of a trigger for that 40% crash instead of just that necessary clearing of excess froth?

SPEAKER_03 21:30

Well, I think what happens, uh Jeremy, is once we start getting that movement downwards and you get a little bit more pressure on the market. And so far, and again, this is all we're very early in this sell-off, yeah, but if when the rallies don't sustain and make it back, and you start to get that downward leaning chart, I think that creates a little bit more panic. And that's all that will be what will trigger. Now, again, it's not gonna be like in a week we're gonna be down 40%. I mean, this is gonna be a series of ebbs and flows. And you're going to get some what we call rip your face off rallies in markets that'll run, but they'll run up and still not make a lower high. And it'll make the markets and it'll help continue to push them lower. And I think that we're well on our way to seeing that happen.

SPEAKER_02 22:16

All right. Let's uh kind of isolate a little bit of silver here. I mean, you you you expected silver to eventually get back over $120 an ounce. I mean, today we're looking at it right now, it's down about 4.2%. Uh, but you you know, we have heavy industrial demand, as you know, yet the prices remain incredibly volatile uh in a broad market sell-off. I mean, is is there any specific kind of technical or macro trigger that you're looking for to signal that silver's done washing out and kind of ready to make its run towards those new record highs again?

SPEAKER_03 22:47

Um, I think it's probably got a little bit more room to go to the downside. I would think probably in the mid-50s. You know, this silver move was triggered when we actually spiked up back in uh February and January. And I think what triggered it, you could see it, that the dealers were overwhelmed, and if you wanted to sell it, you had to sell it well below spot. I think now we've seen the panic of people panicking out. And I would say, I would give it, I'm a buyer now, but I would also be a buyer at 60 and I'd be a buyer at 55. And I will continue to accumulate this asset because of its worth worth, because of its industrial use, because of its value, because of its stored value, because it's baby gold. You know, all the reasons you want to look for it. Remember, we were just at less than a year ago, we were at $30. We're still 50% from our highs, but we're up 100% from our lows.

SPEAKER_02 23:41

Yeah, good point. Uh you said you're still long here. Let's put that kind of make that useful for investors here. I mean, where are you actually putting money right now? Are you buying broad indices? Are you buying energy names, miners, agriculture, and it's not a good idea?

SPEAKER_03 23:53

I'm buying the I'm I'm sorry, right now I'm buying the main indexes, the spy the queues. Um, there are things that I would look to buy, but I'm buying those right now because I always want to be, I'm always 100% long the market from an investing standpoint. Let's be clear, there's a difference between investing and trading. Yeah. But I my investments are also hedged using options, using derivatives. Okay. So I'm continuing, for example, I mean, just for example, today with this sell-off, I bought more Monster, I bought more MP, I bought more SMCI, I bought more CCJ, and I bought more RGTF. Just today, with this sell-off alone, they trigger automatic buys, and I'm protected to a mathematical certainty. So I know my at any given day my maximum risk is 3 or 4%, no matter what happens to the market. And I'm always willing to accumulate. And that's what I think the average investor has to learn is to keep some powder dry. So when you get these kind of big meltdown sell-offs, you have capital to go in and buy. Not leverage, not margin capital, but real money, just like buying physical metals, having real money in your pocket that you can store somewhere. And whether it goes up or down, you don't have to worry about it.

SPEAKER_02 25:00

Do you touch the miners at all? I mean, if they're being beat up a little bit, do you buy those dips or you stay clear?

SPEAKER_03 25:05

I play them as a trade. I would never buy them and hold them. Those are not something that I would hold. I'm not a big fan of the miners. I'd rather, if I'm going to deal in that space, I would rather own physical metals. That's that's where I really sit. Uh I fool around with GLD a little bit, I fool around with Nug a little bit, and of course GDX and some of the other ones, but those are only as short-term trades, nothing that I'm holding in my long-term portfolio.

SPEAKER_02 25:32

I mean, if the index is kind of still your preferred long, I mean, does that mean most single stock opportunities are not worth the execution risk right now, or are there pockets where you actually want more concentration, not less?

SPEAKER_03 25:44

Uh, I think that you could find some value. I mean, certainly if I were a looker right now, I might be looking at Palantir. I'm not looking at it right now, but that would be one. I would be looking for something that was beaten down. Apple's getting into that point where it's pretty well beaten down. I mean, it's down about 10 bucks today, down 11, 11.29 today. You know, it gets back to 270. I take a look at it. But again, right now, because I want to be in the market, because cash is even if you're getting, even in a CD, the amount you make on the CD doesn't cover the amount of cash, you know, the amount of taxes you pay. So you have to be in things that have a much better percentage and a much higher probability. So I'm parking my money in the spiders and in the queues until I get to that point where I get some real value where I think something's something has been beaten up enough for me to want to jump in. I mean, if Tesla got back to 350, I'd want to jump in there. You know, right now it's trading around 400. So those are the things that I'm watching for. But when I buy, because I've already got representation of those, I want to get something that's been really beaten up because I am involved. I may not be involved as big as I want to be, but I'm involved and I'm 100% invested. It's just a question of where that investment goes right at the beginning.

SPEAKER_02 26:58

I gotta ask you, I mean, uh, we get used to volatility on this show. Obviously, we did do this for a living, and a lot of people out there are somewhat used to the volatility, but there's a lot of retail investors feeling paralyzed right now. I mean, they hear about a 40% market correction, they freeze. But as we discussed, you're still kind of long the market. So I want to ask you, I mean, what's a specific kind of mechanical option structure, like a protective put or a collar, I mean, that a retail investor can execute today to kind of cap their downside risk while staying in the market?

SPEAKER_03 27:28

Great question. A collar is no good because a collar just is basically like selling the stock. You're stopping it wherever it's at, and you have no upside, you have no downside, which is fine. But there's really a I I teach a trade and I do a trade, I use a one by two back ratio because if you understand options, there's time decay involved. So we we sell one option, we buy two, so it makes us net long one, but we've overcome some of the time decay. But after I put that position on, I can look and tell you to the exact penny where my risk comes in based on math. And that's all I care about is the mathematics of the model. And the model tells me that right now my open risk is four and a half percent on my overall portfolio. But that means that that's if I want to roll it down and create a new basis for my port for my stocks if they continue to go down. Like, for example, I just rolled down the QQQ from I was I was long puts from 725. I had a position on from 725, I just rolled it down to 700. So I took out a big piece of change, okay, but I have to also re-establish my basis. So if we continue to go down from I have 4% risk from 700 now.

SPEAKER_02 28:41

Now, for our audio listeners who kind of track options, implementing and rolling over protective strategies, you know it. I mean, it comes with a high premium cost that can significantly drag down that longer-term portfolio performance. Is there a point that the insurance premium of hedging outweighs the actual benefit during uh you know a prolonged kind of choppy market?

SPEAKER_03 29:02

No. It's if you use it properly. Uh, I mean, I use I'm hedged 100% all just like I'm in the market all the time, I'm hedged 100% all the time because I only need a 3% down move to add stock to my portfolio and take credit out and use that credit that I'm taking to buy stock. So, no, I think that that's a misnomer. If you're buying just straight put options and paying those juicy premiums, you know, remember, most people don't buy puts until it's already too late. The horses run away, the barn, and then you want to build a fence, right? You they buy them when premiums are way too high. I buy options all the time. I buy them high, I buy them low, but I'm always long. For those who understand, I'm always long the volatility. So in the initial spike in volatility, I'm always going to be a benefactor of that initial spike.

SPEAKER_02 29:53

You know, what is kind of well, we'll wrap this up here because it's been interesting. What is one kind of risk people at home are not watching today? I mean, everyone sees AI, uh, the Fed, gold, oil. What do you think is one of those quiet pressure points that could hit portfolios people don't realize?

SPEAKER_03 30:08

Well, I think the massive amount of debt. I listen, I think the credit card debt, you know, you're paying usury rates when you have a credit card. You're paying 30 some percent, 29%. And you can't go bankrupt against a credit card because the lobbyists, of course, beat that, so you can't go bankrupt. So they're paying more. And and just a bit of advice to anybody who has credit card debt, you have no business investing in the stock market until you pay off your credit card debt because you're never going to make the 30% that you're paying on your credit card versus your investment. So you have to have your debt free where you're not out of control paying, because let's let's face it, wouldn't anybody be happy with a 10% return year over year? But if you're paying 30% for your credit card, doesn't it make sense to take that return first and pay off the credit card debt and then invest to the market?

SPEAKER_02 30:58

Um, you know, a lot of people hear that 40% correction, they either panic sell, uh, some others do nothing, as you know. I mean, what is the disciplined middle ground here? What's you know, kind of one move that reduces risk without blowing up their whole long-term plan?

SPEAKER_03 31:12

No panic, don't overinvest, especially if you're a little bit concerned. If you if you can't sleep at night, if you get nervous, that means that your position is too big. Okay. You have to be able to withstand the markets. And I listen, I don't want anybody to panic because I think we're going to cut 40 to 60%. Look, we're we're up, still up, we're still in our all-time highs, we still had a big rally. And again, the history tells us that the markets will continue to rally. You just have to be able to withstand the pressure, which is why you shouldn't be checking your iPhone every day and checking your uh the portfolio every 10 minutes. Because in your IRA and in your your 401k, you're not selling it anyway. So why aggravate yourself? Why make yourself nervous when those things aren't probable? And the probability model says that this market will go down, but it will also recover, and 10 years from now, we'll be higher than we are today. I mean, I started trading, Jeremy, the Dow was 800. It's now 50,000.

SPEAKER_02 32:09

Yeah, yeah, good point. So, I mean, the real opportunity, uh, you know, buying the tech in pay in in in in this panic state, or maybe buying the flesh and metals energy, a geopolitical risk, or is it kind of doing nothing? Uh kind of waiting until his volunteer is not a good idea.

SPEAKER_03 32:23

I'd be buying things of value. Uh, again, it listen, the first thing you look at is the fundamental, and I'm not a fundamental trader, but when I'm investing, I want to know that the company makes money. That's the first thing I'm gonna buy. I want to make some money. Uh, gold and silver, those are hard assets that have shown the cliff to continue to go higher over time. So again, you you cannot expect this is investing, it is not a game of immediate gratification. It is delayed gratification. You have to allow yourself to let markets fluctuate, knowing that over the long haul, the money's gonna be made.

SPEAKER_02 32:58

Yeah, and that's what smart money often does. I like the long conviction. Uh, let me ask you, just as a journalist on the other side, I mean, uh, what would make you abandon this a little bit? What price level is there, data point, maybe a market signal that tells you I'm wrong, I'm out?

SPEAKER_03 33:12

No, never. Yeah, I don't get out. Exactly. I like it. I again I go back and play the statistics. Okay, listen, if this market goes to zero, we got a lot more problems than the stock market. Okay. And of course, I have I'm hedged anyway, so I'm not worried about it. But again, the only way you can develop true wealth in your life is to stay invested. Trying to time the market. Just one quick stat for you. If you missed over the last 10 years, if you missed the best 10 days, you cut your yield by 50%.

SPEAKER_02 33:46

I mean, you see this all the time. You you talk to people at home. Is there kind of one mistake retail investors make in moments like this? I mean, chasing the hot trade, refusing to handle.

SPEAKER_03 33:57

They chase the companies that don't make money, and then they sell too soon. They never more people here. I'll give you one quick example. People that trade and invest are the same. They buy one stock as an investment, they buy one as a trade. The investment goes straight up. The investment, the trade goes straight down. They refuse to take the loss on the trade. Okay, so they they hold on to that and turn that into investment. The stock that went straight up is an investment, they take the money, and of course, the dog keeps going down, and the the one they sold keeps going up, but they've taken it off already, so they have no chance. You cannot panic in this market. You cannot let it get to you. If you have a good company and a solid company that makes money, then it's going to be fine. And you cannot let it panic. Look for value, look for companies that make money. Do not let the daily headlines, especially, unless you're listening to Jeremy, because at least he tells them straight. He's not trying to deal in panic, he's trying to deal in fact. I appreciate that. And that's what I appreciate about your show. It's always in fact. I appreciate that.

SPEAKER_02 34:58

Well, I mean, to your point, Baba, I mean, we're sitting here looking. We started this broadcast down about 4%. We're sitting at about two now. So that's a really important lesson for investors. You can be bullish and still manage risk, you can stay long and still admit that the market is dangerous. Uh, Todd, Baba Horwitz, Chief Market Strategist at Bubba Trading.com. Always a pleasure. Thanks for cutting through the noise and kind of sharing your perspective with us today. Uh, everyone panics a little fast.

SPEAKER_03 35:24

Be relaxed. Relax. Jeremy, thank you so much. I appreciate you, brother.

SPEAKER_02 35:28

And thank you for watching or listening, by the way. Subscribe right here to Kitco News for more market analysis. And let us know in the comments below. Do you agree with Bubba that a 40% correction is possible? I'm Jeremy Saffron. Of course, we're going to keep an eye on all these latest numbers, including this little correction in dipping gold and silver with the precious metals. We'll be here again tomorrow with uh Gary Wagger, I believe. So stay tuned. We'll see you next time.

SPEAKER_01 35:51

KitCo News in Focus with Jeremy Saffron.

SPEAKER_00 35:56

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