U.S. Housing Market Cracks: Homes Selling Below Asking Price in 38 Major Cities

This is Invest Talk from KPP Financial. Helping investors make sense of the markets one day at a time. Here's your host, Luke Guerrero. Hey there, everybody, and welcome to the Thursday, August 13th, 2026 edition of Invest Talk. I am your host, Luke Guerrero, and I'll be with you over the next hour or so as we dive into the market. Talk about the stories that matter and most importantly, answer your finance and investment questions. To that end, before we talk about today's market performance and run down those show topics, let's tackle this color question now. Hi, I'd like to get your input on arrow environment incorporated possible a B A B second. A V A V is arrow environment incorporated. It is a defense technology company that doesn't just focus on air or land or sea, but does all the above plus space as well as cyber. Now it is a let's see how big is this guy? It's an $89.8 billion market cap company. It's had quite a bit of a rough year down 21.69% year to date. That's coming off of a pretty solid performance going back to 2021. Where this stock was up 38, 47, 22 and 57% respectively. Now the most recent quarterly earnings. Arne is a great honestly revenue was up to 641.6 million. That's up 133% year over here. A huge beat. Eba de margins. Look pretty solid at 22% full year revenue. Look solid bookings looked solid as well. And so what's really going on here is diving deeper than earnings. You got a bit of impairment issues. You have material weakness disclosures. You have three consecutive bottom line misses from Q1 to Q3. Q4 is the earnings we were talking about. Most of the drop off in this stocks price wasn't the past three months because it's actually up 17.67% of the past three months. And still down 25.66% over the past 52 weeks. And so this most recent quarter was more of a reversal in some of the trends we have been seeing here. And honestly, when you look at companies like this, I care about backlogs, about bookings. This company is $2.7 billion in bookings. The huge drop off has moved it towards a more reasonable valuation. When you look at price to book, it's trading at 2.2 times that is near its low over the past five years. So valuations have become more reasonable. At a time when every NATO ally is trying to rebuild its arsenal, this is kind of a picks and shovels play on the idea that drone warfare may at some point replace this armored warfare. And that record backlog shows exactly that. So given everything that's going on, given how much of a proof statement, I would say, the Iran conflict has been about the changing of the way that wars are fought. And therefore the where demand will be going forward. I would be okay entering not a full position here because you only have one quarter after three disappointing ones. Until I see another full quarter of positive performance, that's probably when I would want to enter into the full position here. Either way, I do like this company and hopefully what we saw in Q4 continues into the next quarter. That is AVUV, air of Ironmanic. Or sorry, AVAV, air of Ironmanic. Thanks to the call. We had a great show yesterday, just and looked into why the S&P 500 is near record highs. And more importantly, is that sustainable in 2026? He also answered a listener question on ticker GSK, which is GSK PLC. It was an ADR. If you happen to miss yesterday's episode, I encourage you to check it out. And remember the best way to never miss an episode of Invest Talk is to subscribe, wherever you get your podcasts. Now onto today where my main focus point is about cracks in the US housing market. Because what we've been seeing recently is that home selling is below the asking price in 38 major cities. And there's a report to this effect that shows homes are selling in 30 not just 38 cities themselves, but 38 of the 50 biggest city. So is this a signal that potentially the long dominant sellers market may be finally turning? Take a look at that and what these shift might mean for real estate as an asset class for home builder stocks and mortgage sensitive portfolios. We'll also touch on ACA premiums up 41% in the past two years. And now 63% of insurers are proposing a 10 to 25% increase. So what does that mean for healthcare stocks? What does that mean for you? We'll also touch on margin debt because we have seen a record level of that net credit balances or a record 1.5 trillion that is up 49% year over year. And should we have time at the end of the show will touch on private credit liquidity and how all these redemptions may be more emblematic of a mirage rather than a liquid market. We also have some voice make calls ready to play, including one on drip programs or I guess that would be saying programs twice. So drips and another on regener on pharmaceuticals to your R E G and as well some questions that came in from the comments section of the Invest talk YouTube channel. And hopefully we are from some of you live throughout the show headed into break on the other side. I will talk about today's market activity. Don't forget you can call any time at 888-99 chart. [Music] It's official. Total lifetime downloads for the Invest talk podcast are now more than 63 million. Luke Guerrero is here now taking your calls live. Invest talk 888-99 chart. [Music] Well it was a positive day really across the board in markets you saw stocks trading. Higher for most the day finishing near the top of that range. You have the S&P 500 you have the Russell 2000 both setting fresh record closes. The Dow is up 13 Bips NASDAQ up 81 S&P up 65 Russell 2000 up 24. Now some of the best performing names are some names that had been beaten down recently. You saw these AI infrastructure names all higher big tech for the most part was higher airlines cruise lines home builders building materials. Certainly companies that are asymmetrically exposed to costs doing better. Then on the flip side you had department stores copper materials energy some of the worst performers on the day. Now the reason being I think a lot of it you seen in the Treasury curve right it was a bit firmer yields were down 4 to 7 basis points. You saw gold down 1.1 silver down 1.1 crude oil down 2.3. So you have this overall risk on tone that was pretty broad based and so you saw these these broad based gains in part well that rate rally. On the back of the cooler July core PPI print. Now being said I mean you didn't really see a big repricing here the market is still pricing a 34% chance of a September rate hike and 24 basis points of hikes through year and now it's down 4 basis points day every day. But still it was a slight re rating led to a bit of a risk on session oils weakness helped as well. Will we see follow through will we see a continued rotation certainly the coming days will be important to figure out where that's moving. On the date of front July core PPI was 20 basis points that was below consensus though juniors revised up 20 basis points to 0.4%. And you know I scored down 50 bips to 4.2% that was in line in the lowest level we've seen since March. Nishore jobless came up 209,000 of consensus though continuing claims was down and better than expected looking at you tomorrow will get July retail sales as well as the preliminary university of Michigan consumer sentiment to cap off the week. All right let's pivot back to the invest talk of voice bank for a question that came in earlier from England. I'm calling from England wondered what your thoughts were on the general on the pharmaceuticals it's our for Romeo e for England chief of golf and for November R.E.G. N. and wondered what a deal. and true price would be. Thanks a lot, bye. Now, Regeneron Pharmaceuticals is a biotech giant. At a New York, they have a pretty solid balance sheet as well. Now, I'm going to take you down that lane for a second because it's an $82 billion market cap company. It's got less than $3 billion in debt. It's got $8.6 billion in cash. I mean, it's got roughly $5.6 billion in net cash on its balance sheet. It's one of the reasons why I like this pharmaceutical company or this biotech company in a segment that typically runs really, really high debt loads and has really poor margins. This is the exact opposite here. 34.2% net margin, 36.3% EBITDA margin. And it's trading at a pretty reasonable valuation, 13.8 times price to four looking earnings, 2.6 times price to book value. It's up only 4% year today, but over the past year, it's up 43.53%. After really taking a hit in the middle of 2024. And there's a lot to be happy about recently. I mean, revenue beat 17% year over year, or sorry, it was up to 17% year over year. You had consecutive quarters of double digit top and bottom line growth. You had non-GAP EPS beat by 40%. And then you had guidance increased. You have management talking about a big key near term pipeline of catalysts. Because you have a couple of drugs here, a couple of treatments here that the FDA is expected to potentially approve towards the end of this year. And so on the back of this earnings in July, you saw stock pretty much search. Right, coming out of July, we were trading at about $600 in June. Now we're trading at 805. I like this name. We like this name. We own this name for clients in one of our strategies because in a lot of ways, I find it to be probably one of the most compelling large cap biotech values in the market. You don't often see, and again, this is only two consecutive quarters, but that certainly starts a trend. You don't often see a 40% EPS beat plus a, you know, 38% in their top treatment growth combined with all this cash, a fortress of a balance sheet trading at this low of a multiple. So Regeneron is the name we like. It is the name we hold for clients. I'm going to give it a thumbs up. That is R E G N Regeneron Pharmaceuticals. Thanks for the call. Well, folks, I don't know if you pay attention to your emails. I imagine you get a lot just like I do, but we recently sent out an email. Talking about an upcoming event, we will be holding in person. It's going to be a bit of a conference. Well, I've guest speakers, many topics that you may be interested in. So look forward to more information about our really first in person event in quite some time. How to secure your tickets and how to be involved in Invest Talk Live. All right, folks, we are headed into a break. Please remember, you can submit your questions anytime on our 24/7 voice bank. And during our live shows, you can ask them of me or Justin Live by picking up that phone and dialing 8-899 chart. There are a few things that make KPP financial special. One of them is parallel investing. This means they invest right alongside their clients. Here's how it works. When KPP financial makes a trade for their clients, Justin Klein makes the same trade for himself and KPP on the same day at the same price and same percentage. No front running, no special treatment. Learn more about parallel investing at investtalk.com. All right, so this first one isn't really about stocks or bonds or options or anything like that, but it still affects everyone's financial plan, especially anyone who is between 50 and 65, who's self-employed, who's considering early retirement. And so far, what I've seen is nobody's really talking about. Now, Peterson KFF updated their 2027 ACA Marketplace premium brief on August 3rd, with proposed rates from all 50 states in DC. This report is essentially the most complete national data set we have. And looking at the numbers, it's genuinely alarming. Across 276 participating insurers. Proposed premium increase is range from -1 to positive 54. 63% of insurers are proposing increasing. Between 10 and 25%, 51 insurers are asking for more than 25%. The median proposed increase is the second highest since 2018. Now, that's just numbers. Let me put it in an example here, right? If you are 40 and you're earning 65K a year, you paid 316 a month for health insurance in 2025. 2026, that jumped 2477. For 2027, the proposed rate is 546. That is a 41% increase in two years. On a $65,000 salary, health insurance alone will consume nearly 10% of gross income for people in the NINAPLIS. And we're starting to see the consequences already visible. You're having average monthly effectuated enrollment. It's expected to fall to roughly 17.5 million in 2026 from 22.3 million the year before. And here's where this becomes a bit of a portfolio and planning conversation. The ACA subsidy cliff for 2027, since it's 63,840 for a single-filer and the 132,000-frae family of four. That means it incomes that are above this threshold. You pay full freight on premiums. No help. Incomes below means you get substantial help. And the way ACA defines income through Maggi, modified adjusted gross income, means you're Roth conversion timing, your retirement account withdrawal sequencing, your HSA contributions. They all directly affect whether you qualify for subsidies. A $5,000 Roth conversion that pushes your Maggi above the cliff could cost you 8-12,000 in lost premium subsidies. That means that this becomes not just a decision about health care costs anymore, or rather a decision about tax planning anymore. It's also a decision about health care costs. And so if you're somebody who is getting health care through the marketplace, if you're doing Roth conversions, which we have talked about in detail, about making sure you don't fill bass beyond your recent bracket or your current bracket. If you're between 50 and 64, if you need to model your conversion amount, this matters. Health costs aren't just a household expense. They're a portfolio track. They are a timing constraint. And increasingly, a reason people are delaying, leaving employer-sponsored coverage, even when they'd otherwise be ready to retire. So if you're planning a retirement, a career change, self-employment, understanding the potential 2027 health care premium shock needs to be top of mind. All right, let's see if we can squeeze in another listener question now. Now, I'm calling today about on-to innovation, Tukur symbol, O-N-T-O. I was wondering if you could just take a look at it. And let me know if you believe it is overvalued, fair valued. If you think I should hold on to it, or if I should take my profits. Thank you for your time. Bye. All righty. O-N-T-O is a $16.56 billion market cap company. They are a semiconductor process control company. So essentially, they're handling the inspection, the metrology, the software for these advanced semiconductor manufacturers. Most recently, revenue was up 35% year over year. That was a beat by 5.5% non-gap operating margins. We're up 4.9% from the start of the year earnings per share. Beat by about 15%. I mean, this thing has been humming along since really beginning of 2025. It was up 203% in the past 52 weeks. It's up 114% year to date. And with this run-up, it's trading at about 33.7 times price to forelooking earnings, 8.6 times price to book value. This is nearly. as expensive as it has been. And that's my concern because in bite of it being kind of an important process control company for AI chip packaging, it's really expensive. And coming off of quarters that they've had consecutively means that having less noteworthy beats in the future can be a real drag on price performance. So for now, I'd keep this thing on my watchless wafer to settle out here before I'd consider entering a position. This O-N-T-O, thanks to the call. On the next Invest Talk we'll look into this story in soft jobs report and the dollars in new direction. What it means for investors. That's tomorrow. For now I'm Luke Guerrero, we are ready to take your calls any time at 888-99 charge. At KPP Financial, accountability means more than advice. It means we invest alongside you. Through our parallel investing approach, when we recommend an investment for clients, one or more KPP principles invest their own capital at the same time. Same day, same price, same percentage. If your portfolio moves, ours does too. That is alignment. That is transparency. That is the KPP difference. Visit InvestTalk.com to get your free portfolio review. So Redfin just published their June Sadalyst data across the 50 biggest metro areas in America and the number that jumped out most to me is that a home sold below asking price in 38 of those 50 markets. 38, that is more than half. That is nearly 80%. Now before you start to panic and anytime we talk about any stress, people seem to automatically start thinking about 2008. This is not what is going on here. It is not 2008. It is not a crash. Now home prices are still near record highs. In fact, the national median is 434,900. Certainly not cheap. The FHFA index shows prices rising 2.2% annually in May. 80% of metro markets still posted year over year price gains last year. Prices aren't collapsing. They are sticking while the terms of sale are shifting in other ways. So not 2008. What is actually happening is that sellers are losing pricing power. Only about 25% of US homes are selling above asking price. At the peak of the market in 2022, the number was about 55. So the bidding wars that define the pandemic housing market seems like they are done. In most of the country, if you are listening to a home, that means you should now expect to sell for less than what you are asking for. Not just in the market, but in the psychology of how buyers and sellers need to start operating. And we always talk about this. Real estate is regional. There is a geographical pattern that tells you where the softness is concentrated. A lot of them. Northern Texas, the 10 largest average discount from asking price are almost entirely in those two states. Miami, West Palm Beach, they are selling it nearly 5% below ask. Across the south, broadly, buyers are paying 2% to 3% below list in the month of June 1. Typically, this happens when markets reset. These are areas that saw a massive wave of new construction during and after the pandemic. You have these builders who were putting up homes as fast as they could. And now they are supply. When buyers have options, sellers have to compete. Another part, insurance, property taxes, both of those have exploded in those two areas. Insurance premiums have doubled or tripled in some Florida markets. And property taxes in Texas where there is no state income tax. They are among the highest in the country. And so those costs are really shown in sales price, but they do show up in the monthly payment and a buyer looking at a $400,000 home with 8,000 in annual insurance in 10K in property taxes. That is a very different affordability picture than what the sticker price is showing. Now if you move to San Francisco, New York, Boston, a little bit different pictures, slightly above ask. Those are markets where there remains a bit of a constraint in supply and demand from high income earners is strong and it is continuing to hold. This is essentially the housing version of a K-shaped economy. Affordable Sunbelt markets are softening. High end coastal markets are holding or appreciating. One other thing that we are seeing is a bit of a consolidation in builders. Dreamfinders are screwed by these homes for $2.2 billion. This is something you tend to see late cycles when the markets get tougher, smaller builders get absorbed by larger ones. We're seeing pending home sales, falling 5.4% month over month. We're seeing new home median prices dropping 2.7% year over year. Is it a correction? Is it a normalization? Honestly, it depends where you're looking. In Florida, parts of Texas, sunbelt markets that overbuilt during the pandemic, there's a correction. Prices are falling. Inventory is abundant. Days on market are stretching. Sellers are making concessions that would have been unthinkable two years ago. In the Northeast, in Midwest, high demand coastal cities, I would say this is probably more emblematic of a normalization. The frenzy is over. Supply is still tight, but enough to support prices. Now for your investments, your home builder stocks. Deals tell you the industry expects the environment to be challenging long enough that scale matters. Larger builders with better balance sheets, the ability to buy down mortgage rates for customers. They're going to take share from smaller ones. That's just how it works. Reads focused on certain geographical areas, sunbelt multi-families. They're going to face headwinds. The same overbuilding that's softening the fourth sale market is creating rental vacancy pressure. This is part and parcel for what occurs geographically. Home improvement retailers. They revenue outlook. Not so great right now. For potential buyers, if you're in a market where homes are selling below asking, you finally have releverage that has not existed this decade. Negotiate aggressively. Ask for concessions on closing costs on rate buy downs on repairs. Don't wait for 2008 style crash that is not coming. These structural supply shortage and most markets will not allow it. But don't overpay either. In the 38 markets where the sale to list ratio is below 100%, time is on your side. Use it. From time to time, we also receive questions via web form from investtalk.com. Here's one that came in from our friend Randall Antikar, P-L-S-E. Let's type this in and I'll read the question. It says, "I have a fairly large position, 3,250 shares in a company called Pulse Biosciences to your PLSC. I have held this stock through a long downturn and trimmed some of the shares in the upswing we had recently. The question is, should I continue to hold, continue to trim, buy more, or get out? It is about 3% of my total portfolio." So before looking at all this, 3% is a perfectly reasonable allocation of your overall total portfolio to any single stock. So without even looking at it, the fact that you have 3% doesn't mean, okay, I need to trim. Now, let's dive into this company specifically. PLSC, as I mentioned, is Pulse Biosciences. So they are a bioelectric medicine company. They have nanopulse stimulation. They have ablation technology as well. And so their big thing is this end pulse cardiac catheter system for atrial fibul-- atrial fibul-- fibulation, a fib, all right? That's a huge growing area for a lot of these Medtech companies. Abbott has a big division that deals with the catheters, metronic, Bioscience Webster, Johnson and Johnson. This falls in the category there. Now, this company is roughly $3 billion, so a bit of a small-camp company revenue. Uh, kind of all over the place, 1.4 billion in 2021, 700 million in 2022, zero the next two years, 350 million in 25, I project to be 2.44 billion this year. Uh, they haven't made really any money. Um, their net margin has always been negative, turn on assets or turn on equity has been negative. Pretty volatile. I mean, it's, it topped out at 40, 415 back in 2020 that it dropped off a cliff to about $1. Uh, and since 2022, it has been climbing in a not peaceful way, back up to 44, 92, uh, where it's trading today, it's up 227%. Year to date, uh, it's 167.54% in the past 52 weeks. I don't know. I mean, it's 434,000. My math is telling me roughly in quarterly revenue on a $3 billion company. That's a pretty crazy premium, um, for a clinical stage tech company. Um, they are burning through cash. They are deluding shareholders. I don't know. For me, this is a bit of a gamble play. I think 3% might be too high for a gamble play based on my own risk tolerances. If it were me, I would trim it back to maybe 1 1 and a half percent here, uh, especially because, I mean, I don't know when you bought this thing. You could have bought it anytime from the end of 2021 to 2022. And you could reasonably tell me, okay, you went through a downturn, right? It doesn't mean you bought it at the top. You probably bought it somewhere. My guess is between 30 and 10 saw drawdown. Now you're positive. Hopefully, um, I, I would trim this thing. This is a big risk. It's not making any money. PLSE. Gonna have to pass. Thanks for watching. Let's keep one. Let's get one more question in here from 888 99 chart. Hey, invest talk. I had a question between two companies. Yeah, I know they're not in the same sector, but I just wanted to know which one you guys would rather have in your portfolio as sort of like a dark horse. And it's between Uber and Robinhood. I know they, um, like I had said in different sectors, but I wanted to see which one is probably one of those that you would rather have in the portfolio. Thank you. Uber and Robinhood. I don't know if I would call either of these dark horse companies. They're pretty well known companies. Uber, of course, the ride share delivery app moving into autonomous cabs is where they eventually want to get to. And then Robinhood, the retail brokerage disruptor really got, um, investing in your phone on your pocket and turned it into gambling as quickly as possible. Between the two, I mean, they're both profitable. They both had pretty solid earnings recently. Uber had about 2.3 billion in quarterly free cash flow. They had huge gross bookings growth. Um, you know, they have over 20 or over 50 million Uber one subscribers now. I mean, it's a real business. Real cash flow, real moat, they're just throwing money into this autonomous vehicle strategy. Now, if it works out great, um, if not, they did burn a lot of cash. Robinhood, great earnings, 40% beat most recently, um, revenue, beat as well. About 1.31 billion in revenue. They have nearly a third of a trillion in assets. Under management, almost 20 billion in net deposits. Um, you know, I don't know between the two. It's kind of tough. Um, one is banking a lot on their autonomous strategy because if you think about it, if anybody else can successfully do autonomous cars, the need for Uber, what less than it was before. Um, Robinhood's interesting to me. You know, they, uh, they're genuinely transforming recently from a mean stock brokerage into a full service financial platform. They have some things that, you know, uh, I'll just say it. I don't like from a, from an ethical standpoint, um, uh, getting involved in, in prediction markets and, and contracts and gambling, make it really easy. You know, I saw a recent report that showed, I think it's like 53% of Gen Z people include sports gambling as part of the retirement plan. Like it or not, it's part of their business. It exists there. It is a growing area. People will continue to gamble. Um, certainly that is a, uh, something that is going to potentially lead to explosive upside. Should they continue to do that? Should it not get regulated? My intuition tells me in the coming decade that's probably something that will get regulated as a lot of people find themselves in, in a bit of financial ruin. But between the two, I think Robin Hood is a bit more of a dark horse pick because of its revenue streams. Um, but you might, I mean, it's heavily tied to trading volumes, market sentiment in a recession. Retail trading drops way more quickly than institutional trading. They've never been through a real recession. Um, they're seeing their crypto revenue collapse. But, but again, between the two, I wouldn't say either of them is a safe pick, but between the two, Uber a bit safer. Robin Hood would be kind of the true dark horse high risk, high reward. That is UBER and H OOD. Thanks for the call. Let's see if we can get one more question in on drips. Hello, invest talk. This is Joe from New York. I'm calling about stock dealers. Take a sample DDS. I was wondering, what's your take on company, the stock? Is it a good buy at the price range? Is that at the moment? I want to know is this is a good time. She actually stepped in and purchased the stock. I will appreciate your feedback. Thank you. All right. Let's take a look at DDS, which is Dillard's Anke. It is a nine point nine billion dollar fashion and apparel retail company. So they got clothes, they got cosmetics, they got home furnishings, and a whole bunch of other consumer goods. Now, it has been kind of on a steady uptrend for quite some time. I mean, volumes a bit lower. You know, it hasn't really moved the needle much here. I've looked at this company before. I think they're a pretty disciplined capital allocator. You know, they have really solid margins. They got 1.16 billion dollars in cash. They're trading at a reasonable valuation. They've been kind of stagnant year to date. But, you know, I would say this is a company that is good at buybacks. Is a company that pays a low but consistent dividend. Not too exciting, but amongst the department stores that are facing secular headwinds, I think one of the better ones is a best talk. I'm LaGuerre way of one goal here to help you achieve your financial freedom. And our work continues after our final break. So get your questions in now at 888-99. Invest talk. Tell your friends they can listen live, download the free podcast, or watch Invest Talk on our YouTube channel. And they can leave their finance and investment questions any time on 888-99 chart. There was some data released recently by Finra that showed margin debt, borrowing jumps about 7.9% in June and hit another record. That means a total margin debt is now 1.5 trillion. That's about 49% higher than last year. New credit balance, which measures the total borrowing position of investors after subtracting their free cash, hit negative 1.06 trillion. That is also a record. These are big numbers. And I want to make sure we handle them honestly because the temptation is to either ignore them or to scream that the sky is falling. And neither of those is really helpful for you. The historical pattern is worth understanding here. Advisor perspectives, tracks this data going back decades, and they've identified something interesting. Trophs in net credit balance, meaning peaks in investor leverage, have preceded S&P 500 peaks with eerie regularity by six months in 2000, by four months in 07, by four months in 2018, by two months in 2021, by zero months in 2025, meaning leverage peaked at the same time the market did before the there was a sell-off. Every time investors have been this stretched a reckoning follow, not immediately, not always on the same timeline, but consistently. Now, there's an important caveat that Finer itself acknowledges the data doesn't break down by investor type. Some of this 1.5 trillion is retail speculation. Some of it is institutional hedging. Some of it is market makers that are facilitating trades. You can't look at the aggregate number and conclude that Main Street has leveraged to the gills. A large chunk of this is hedge funds and proctesques doing what they always do. But the broader leverage picture is genuinely concerned. A seeking alpha analysis from the same period puts hedge fund borrowing at 7.2 trillion with gross leverage approaching 10 times. Leveraged ETF assets, which we talked about a couple of weeks ago, maybe last week. I don't know, time flies. Have doubled $290 billion in a year. Margin debt to free credit balances is approaching 7. A ratio that historically means things are getting a little extreme here, guys. But here's my take. Margin debt at record levels. Not a sell signal by itself. It's been at record levels for really much of the past two years. But it does tell you something about the market's vulnerability to a shock. When investors are this leveraged, any sudden decline forces liquidations. Because Margin calls, don't wait for your thesis to play out. That's exactly what happened to that situational awareness fund last month. His positions were sound on a fundamental basis, some of them. But the leverage meant he could not survive the drawdown. He had to sell his best ideas at a 10% discount to Citadel because his prime brokers wanted cash that he did not have. The market can run higher from here. We've leveraged at these levels. It has before. But the magnitude of any correction is amplified by the leverage underneath it. If the S&P drops 5%, leverage positions force selling that turns 5 and 8. Margin calls they can cascade liquidations. They feed on themselves. The market doesn't need a fundamental reason to sell off violently. It kind of just needs a little bit of a catalyst with enough leverage. Well, folks, that does it for another episode of Invest Talk. Justin and I, thank you for listening and encourage you to tell your friends and family members about our free podcast downloads. You can get those anytime at iTunes, at Spotify. And while you're at it, we'd really appreciate it if you left us a rate and review. Additionally, if you haven't checked out our YouTube channel yet, I encourage you to go to YouTube and check out Invest Talk with two T's. And if you feel as though you need a second set of eyes, which honestly, I think everyone does. We at KBB Financial do portfolio reviews with listeners, prospects, and people just like yourself, each and every day. Head over to investtalk.com and schedule a free and confidential portfolio review by clicking on the portfolio review button. Independent thinking? Shared success. This is Invest Talk. Good night. Invest Talk is a trademark of KPP financial. Because of the nature of the interactive dialogue inherent in the format of this program, it's important for the listener to understand that not all comments made will apply to them. Specifically, nothing said she'll be taken to be investment advice, or shall statements on this program be considered an offer to buy or sell security. Because such advice is rendered solely on an individual basis, and at times, will require that the investor review a prospectus before investing. Invest Talk is a copyrighted program of client, haveless, and piezley financial. A registered investment advisor firm, which retains all rights. For more information regarding KPP's investment advisors, call 1-800-557-5461. Thank you for listening. And your comments and questions are welcome on our 24-hour listener line at 888-99-Chart. [MUSIC PLAYING] [MUSIC PLAYING]