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Good afternoon: First, welcome to the many readers who have joined us in the last 36 hours... I also appreciate Josh Brown sharing yesterday’s piece and starting a lively conversation about the real path behind New York City’s recent election. I was going to shelve that piece to discuss something far more mundane. But it’s always the stories you least expect that will end up driving a conversation. For those of you who don’t know me, or those who are trying to get reacquainted, I wanted to share exactly what you’re getting with this letter - Me and the Money Printer. I publish a free version every day… and a paid version called The Capital Wave Report (more on that soon). I had a reader ask me - What am I paying for? Well, as I wrote a few months ago, this isn’t your typical newsletter. I have called it “The Newsletter That Can’t Be Sold.” However, as I mentioned in that post, I received letters from people stating that our work helped them save thousands, tens of thousands, and in one case, hundreds of thousands of dollars during the recent March and April selloff. That is beyond fulfilling… playing defense for retail traders and investors.... Of course, many larger publishers haven’t wanted to produce it because it doesn’t focus on individual stock recommendations or carry a portfolio; instead, it focuses more on risk management and what drives the equity markets… and what trends you need to follow to stay ahead of the ongoing pathway of rampant monetary inflation. In addition to playing defense, we focus on the one thing that drives and distorts the markets: Capital creation. Not just that the Fed and shadow banks drive global liquidity, but where it’s created, and how it finds itself in the equity markets, completely distorting valuations, blowing up traditional old school metrics, and creating massively perverse incentives. What do I mean by perverse incentives? Take a look at WHAT you can buy in this market… This equity market has devolved into a wealth of perverse incentives that aim to extract money instead of build shit in America. As I noted a few weeks ago, I can track and trade 5,514 stocks on Finviz. There are 4,300 exchange-traded funds (ETFs). And what’s wild - in the last month, the number of ETFs went up by 150. That’s not rational. That’s financialization. We live in a world where smart engineers can make more money creating leveraged ETFs around a single stock than by investing that money in productive assets, hiring people, and building things people need. And if you conduct enough “root cause” analysis, every problem we have in society can be traced back to monetary policy in the United States. I prove that every single day. What’s more important - I show you where to invest for this ongoing story… In the same damn things that the sovereign wealth funds are buying to extract even more capital out of the American economy. How I Got Here.I emerged from the 2008 Financial Crisis with a very limited understanding of that crash. Even though I’d lived through the Dot Com Bubble and studied economic history… and HAD A JOB ON WALL STREET… I was as dumb as a stump on derivatives and how the Federal Reserve worked. For 12 years, I developed a thesis, worked in financial research, and went to four schools… and it’s been one that has allowed me to avoid every major drawdown (the five… four-sigma events of the last six years) and time the bottom of all these crises (COVID, GILT Crisis, SVB Crisis, Nikkei Crash, and the most recent Trade Collapse). It’s honestly turned into a video game—one that operates on five key elements…
As I explain in a video below… the Insiders have called every major bottom of a crisis dating back to 2008. And the surge in buying accompanies a policy pivot…
Where’d I Get All This Information? Trial and error… and reading… This worldview and letter emerged from my years studying Monetary Policy at Johns Hopkins, trade policy at Purdue, insider buying as part of my MBA at Indiana, and cross-border capital flows at Harvard. Plus I’m a financial journalist by trade - and I’m just generally interested in how all this stuff works… Add my fascination with hedge funds and shadow banks, and you get this unusual combination of macro-forces that most people don’t pay close attention to. It was a puzzle. And it’s nearly complete. So, if you want to know when real institutional money is getting out of the market - and something really ugly might be on the horizon - that’s what I do. I’m the guy telling you to get out of the water before most retail and many funds start drowning. And I don’t really use any complex risk management tools. That’s Not All We CoverAdditionally, I focus on identifying market anomalies. I trade reversions around the fourth deviation of price on the S&P 500, particularly when we have sharp selloffs that can lead to quick snapback rallies, as we saw on Friday afternoon last week in the final hour. I made about 30% in less than 15 minutes on Friday… I talk about that regularly on my morning show at TheoTrade - which is free each day at 8:45 am. Tomorrow, I’ll turn my attention to Piotroski and Graham stocks that have reversion potential and teach people how to trade quality-cheap stocks around the 20-day moving average. And, of course, we focus on educating people about the ongoing impact of the money printer (whether it’s the Fed or Treasury) and how investors need to approach the new reality of an extractive economy based on rent-seeking businesses. As I’ve said before, all roads point toward MORE monetary inflation, more currency debasement, and less education on how the markets work. In the paid version of this letter, The Capital Wave Report, I provide daily insights on insider buying, momentum (both at the aggregate and by sector), and liquidity by tracking the Fed and Treasury. It might not be easy at first - but I’ll simplify it for you… Consider this piece that I wrote recently comparing surfing to trading. It will explain the three stools of this - it teaches patience, and I do all of the work for you. Finally, I put together a video for everyone recently about those three influences.
Carrying that surfing analogy - it is simply known as “The Wave Speech” - a gentle nod to the great Hunter Thompson. I assure you… Once you see how the Money Printer impacts the markets, you won’t unsee it, and you’ll sleep a hell of a lot better at night. Thanks for reading, and I look forward to learning more about you and your trading and investing styles... Stay positive, Garrett Baldwin About Me and the Money Printer Me and the Money Printer is a daily publication covering the financial markets through three critical equations. We track liquidity (money in the financial system), momentum (where money is moving in the system), and insider buying (where Smart Money at companies is moving their money). Combining these elements with a deep understanding of central banking and how the global system works has allowed us to navigate financial cycles and boost our probability of success as investors and traders. This insight is based on roughly 17 years of intensive academic work at four universities, extensive collaboration with market experts, and the joy of trial and error in research. You can take a free look at our worldview and thesis right here. Disclaimer Nothing in this email should be considered personalized financial advice. While we may answer your general customer questions, we are not licensed under securities laws to guide your investment situation. Do not consider any communication between you and Florida Republic employees as financial advice. The communication in this letter is for information and educational purposes unless otherwise strictly worded as a recommendation. Model portfolios are tracked to showcase a variety of academic, fundamental, and technical tools, and insight is provided to help readers gain knowledge and experience. Readers should not trade if they cannot handle a loss and should not trade more than they can afford to lose. There are large amounts of risk in the equity markets. Consider consulting with a professional before making decisions with your money.
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