Summary
Phil Anderson dismisses Nassim Taleb’s bearish AI/market collapse warnings and argues that chart analysis combined with the real estate cycle provides a more reliable framework for forecasting. The email outlines what topping signals to watch for — particularly in housing stocks like ITB — and provides model portfolio updates including new watchlist additions and invalidated setups.
Key Claims
- Stock prices are a barometer of future business conditions, as Gann originally showed — confidence: high
- Years ending in “5” and the peak of the real estate cycle are positive tailwinds for the Dow Jones in 2025 — confidence: high
- A real estate cycle peak is expected sometime in 2026 or later — confidence: high
- Housing stocks (e.g. ITB) breaking to new highs in 2023 signalled the second half of the current cycle is underway, mirroring 2005–2008 cycle behaviour — confidence: high
- Homebuilders like PulteGroup (PHM) and DR Horton (DHI) peaked in 2005, approximately 2 years ahead of the S&P 500’s 2007 top — confidence: high
- ITB is forming a potential head and shoulders top; a break below the ~$100 neckline would confirm a major trend change — confidence: medium
- Taleb’s extreme predictions (market collapse, asset deflation from rate rises) have repeatedly not materialised — confidence: medium
- PSE is described as “about the only place in the world” providing real estate cycle analysis combined with Gann methodology — confidence: low (self-assessed claim)
Mex Pete References
- AEIS (Advanced Energy Industries Inc): Stock trading around breakout level; described as a candidate to add to the Mexican Pete portfolio if it holds the breakout.
- UBS Group AG (UBS): Was on the US watchlist as a potential Mexican Pete setup but invalidated due to erratic and volatile trading — setup did not form correctly.
- Deere & Co (DE): Had a Mexican Pete breakout but moved so strongly that risk/return is no longer skewed in favour of entry; too much downside to the stop level at current price.
- F&G Annuities & Life Inc (FG): New addition to US watchlist; described as making higher lows on pullbacks while testing the 48. (Pattern not explicitly called Mexican Pete but fits the ascending support / resistance test structure.)
Stock Picks / Signals
| Ticker | Action | Detail |
|---|---|---|
| AEIS | Watch / Potential Add | Trading around breakout level; pulling back slightly; may add to Mexican Pete portfolio if breakout holds |
| ITB | Watch / Caution | Head and shoulders pattern forming; break below ~$100 neckline = major trend change signal |
| UBS | Hold Off / Invalidated | Setup invalidated by erratic trading; do not add position |
| DE | Hold Off | Breakout too extended; downside to stop too large; risk/return no longer favourable |
| FG | New Watchlist Add | Watch for move over 50 resistance since 2023 IPO rally |
Predictions / Forecasts
- 2025 Dow Jones: Another strong year expected; supported by years-ending-in-”5” pattern and real estate cycle tailwinds.
- Real estate cycle peak: Anticipated sometime in 2026 or later.
- ITB / Housing stocks: Could peak ahead of the broader S&P 500 by approximately 1–2 years, as occurred in 2005 vs. the 2007 market top — watching for this signal to confirm cycle peak approaching.
Notable Quotes
“Instead of getting lost in the headlines and ‘expert’ calls for a collapse, let the market guide you instead.”
“As Gann originally showed us, stock prices are a barometer of future business conditions. When price is in an uptrend by making higher highs and higher lows, that shows price is discounting favorable conditions ahead.”