Latest / Felix Nikolas Prehn's Podcast / Felix Prehn - Why the Stock Market is CRASHING [worse than feared] + Stock Market News 28 February 2025

Transcript

Felix Prehn - Why the Stock Market is CRASHING [worse than feared] + Stock Market News 28 February 2025 · Felix Nikolas Prehn's Podcast

• 0:00
  Speaker 1: Felix here, and welcome to this pre-market live stream of doom and gloom, though, in reality, I want you to actually understand what's going on here, so I'm going to walk you through six things here.
• 0:10
  Speaker 1: This morning, institutions have indeed started to sell.
• 0:14
  Speaker 1: That's not good news so we need to understand that and why they're selling and where they're selling.
• 0:18
  Speaker 1: That leads us to number two what's actually causing this?
• 0:21
  Speaker 1: Where's this panic coming from?
• 0:23
  Speaker 1: And then three, what do we do now?
• 0:27
  Speaker 1: Or some stock ideas?
• 0:28
  Speaker 1: I'll walk you through some ideas.
• 0:30
  Speaker 1: You might want to look at inflation data just out.
• 0:32
  Speaker 1: Inflation is actually just dipped.
• 0:34
  Speaker 1: Does that mean we get fed cuts, yes or no?
• 0:36
  Speaker 1: And then number six.
• 0:37
  Speaker 1: And, most importantly, I want to give you one rule for timing your buys in this mini crash situation that we've got going on here.
• 0:47
  Speaker 1: So do you think those six things we understood, those that will be helpful.
• 0:51
  Speaker 1: Then write six in the chat.
• 0:53
  Speaker 1: Just the number six, and I see that you're alive and awake and, despite all the misery out there, you're still uh, you know, sort of with us.
• 1:01
  Speaker 1: Um, so let me share my screen with you and um, I'm, as you can see, in a hotel room, somewhere probably not so near you, and you can see what I'm talking to here.
• 1:14
  Speaker 1: So here's number one and six.
• 1:15
  Speaker 1: One, two, three, four, five, six.
• 1:16
  Speaker 1: We're going to run through this and in those in that order, I've prepared some research for you, uh, to make sure you guys get the most value out of this.
• 1:24
  Speaker 1: Thanks for, for all the sixes that's a lot of sixes rolling in there A brilliant 666.
• 1:29
  Speaker 1: Okay, that's a bit creepy.
• 1:31
  Speaker 1: This shows you what CT, gts, cta, what the heck GS stands for, goldman Sachs CTA stands for?
• 1:41
  Speaker 1: I can't remember.
• 1:42
  Speaker 1: It's basically an algo fund.
• 1:44
  Speaker 1: These are computer-driven funds that sell and buy at certain levels based on rules that a human being inputted at some point.
• 1:54
  Speaker 1: They don't tend to beat the market that well.
• 1:56
  Speaker 1: It's not really a great investment strategy, but it's got a lot of money and a couple of trillion dollars and therefore they matter.
• 2:04
  Speaker 1: And as low as a certain level they will sell.
• 2:07
  Speaker 1: And this is how much they'll sell off the S&P.
• 2:09
  Speaker 1: And they will sell somewhere between 50 to sorry, 35 or so, 35 to $50 billion.
• 2:19
  Speaker 1: I'm not sure why my pen is purple today.
• 2:21
  Speaker 1: It's one of those days they didn't want me to use red, perhaps to be a bit more gentle.
• 2:25
  Speaker 1: That's quite a lot of money, right?
• 2:26
  Speaker 1: So what's the level that they're selling at?
• 2:29
  Speaker 1: Well, according to our dear friends at goldman and sax and in there um, you know the bankers who really care below 5887 on the s&p they're.
• 2:41
  Speaker 1: We closed yesterday at 5861.
• 2:45
  Speaker 1: Not good.
• 2:46
  Speaker 1: So they have started to sell and we'd expect them to keep selling pretty substantial amounts of money over the coming days if we stay at these levels Now inflation might be a little bit of an opportunity and we'll get to that in a moment.
• 2:58
  Speaker 1: But I just wanted you to understand this.
• 3:00
  Speaker 1: So far it's been retail that's been panicking, which is why the retail stocks are down.
• 3:05
  Speaker 1: The MSTRs, the Palantirs, the SoFis, all those kind of retail plays.
• 3:10
  Speaker 1: Bitcoin pretty hit hard, but institutions have just been like we're good, pretty happy, we're going to chill.
• 3:15
  Speaker 1: But that changed yesterday, which is why we saw that very, very dramatic sell-off.
• 3:24
  Speaker 1: How people are still complaining that I, that I slurp.
• 3:26
  Speaker 1: Apparently this is a slurping channel.
• 3:29
  Speaker 1: If we just slurp along with me.
• 3:31
  Speaker 1: This shows you how you're feeling, probably fearful.
• 3:35
  Speaker 1: Who's feeling fearful?
• 3:36
  Speaker 1: Put, put, put fearful in the chat.
• 3:38
  Speaker 1: Like, be honest, it's no shame in feeling a little fearful.
• 3:41
  Speaker 1: We're down here at sort of 23 or something on the zero to a hundred scale of of greedy and fearful.
• 3:49
  Speaker 1: This is extreme fear, right, this is like, oh my god, it's terrible, it's the end of the world and, um, we don't get those very often.
• 3:58
  Speaker 1: We have those.
• 3:59
  Speaker 1: I think it was a 2021, 2008, that kind of level.
• 4:02
  Speaker 1: We're not often an extreme fear and that could be an opportunity, right, everyone's fearful, okay, fearful, fearful, yes, I quite love you are, um, are um, honest here.
• 4:12
  Speaker 1: The end is near indeed.
• 4:14
  Speaker 1: Yes, you should have a sign, just just just.
• 4:16
  Speaker 1: If you're in a town center somewhere, just hold up the sign and go.
• 4:18
  Speaker 1: The end is near and you're going to be viral on on social media soon.
• 4:22
  Speaker 1: This is yesterday pretty ugly, right.
• 4:24
  Speaker 1: Nvidia, particularly down eight and a%.
• 4:27
  Speaker 1: Google, meta Microsoft down all about 2%.
• 4:30
  Speaker 1: Amazon as well.
• 4:31
  Speaker 1: Tesla down another 3%.
• 4:32
  Speaker 1: The only thing that's holding up somewhat decently is finance, energy, but overall, pretty evil, evil.
• 4:40
  Speaker 1: End to the day yesterday.
• 4:41
  Speaker 1: I'll just give you a little bit of a perspective.
• 4:43
  Speaker 1: This morning's looking a little bit better, but first I want you to understand what's actually driving this, because once you understand what's driving the market, perspective this morning is looking a little bit better, but first I want you to understand what's actually driving this, because once you understand what's driving the market, you'll be able to see when the pattern changes and therefore you might be able to make better decisions.
• 4:56
  Speaker 1: When things improve, right, logan is excited and happy.
• 5:01
  Speaker 1: What happens when you're one of my students, logan?
• 5:03
  Speaker 1: You become a bit weird, right, don don't you?
• 5:06
  Speaker 1: Trump says he's going to put 25 on european cars.
• 5:13
  Speaker 1: Well, he actually said european cars and other things, not defining other things, which isn't tremendously helpful because it creates what it's uncertainty.
• 5:23
  Speaker 1: Uncertainty is the one thing that the market truly hates.
• 5:26
  Speaker 1: It makes, makes us feel on the edge and therefore we actually forget to smash the like button on a video like this, which would be a real shame.
• 5:34
  Speaker 1: And then he's saying on Chinese stocks sorry, chinese imports he's putting 10% tariffs on everything.
• 5:40
  Speaker 1: It doubles up on the previous 10% that we just got.
• 5:44
  Speaker 1: It puts 20% on all Chinese goods.
• 5:46
  Speaker 1: It also removes all the exemptions of the small shipments, the below $800 shipments, the sort of stuff you're buying on Timu and Amazon, and that kind of thing that gets shipped from China to the US and therefore evades taxation or tariffs.
• 6:00
  Speaker 1: That's all gone.
• 6:01
  Speaker 1: So that rattles some businesses and some people, but why does it rattle the market as much as it did yesterday?
• 6:09
  Speaker 1: Well, it's got a lot to do with concentration.
• 6:13
  Speaker 1: At the moment, the top 10 stocks are a huge percentage of the S&P, enormous percentage.
• 6:22
  Speaker 1: I think it's 30-something percent, 37% or something.
• 6:26
  Speaker 1: The top 10 stocks are 37%.
• 6:28
  Speaker 1: The other 490 stocks are the rest.
• 6:32
  Speaker 1: Huge concentration, the highest concentration we've seen since, well, 1929, which, again, doesn't make people feel particularly warm and fuzzy inside because, if you remember, that was the beginning of the Great Depression.
• 6:45
  Speaker 1: So therefore, it's really all about big tech.
• 6:48
  Speaker 1: Big tech wobbles.
• 6:50
  Speaker 1: The whole market goes down Because the rest of the market hasn't moved that much.
• 6:53
  Speaker 1: I don't know.
• 6:54
  Speaker 1: If you own other non-tech stocks, you will notice that they haven't actually moved that much.
• 6:58
  Speaker 1: So it elevates, it magnifies what's going on there, because it's all about Nvidia and Microsoft and Apple and so on.
• 7:06
  Speaker 1: But the next question then is therefore what do we do with this?
• 7:08
  Speaker 1: If you thought it'd be helpful to understand the patterns deeper and it'd be helpful to understand what do we buy and how do we time that entry, then you're probably human.
• 7:22
  Speaker 1: It's helpful for everybody, right?
• 7:24
  Speaker 1: It's what the guys on Wall Street are looking at.
• 7:26
  Speaker 1: So if you want to get those rules and those systems and those three key points where we buy and sell, then I'll give them to you.
• 7:36
  Speaker 1: You just leave this video right now.
• 7:38
  Speaker 1: Literally go away.
• 7:38
  Speaker 1: Watch FelixFriendsorg slash.
• 7:41
  Speaker 1: Get free instead, because you will actually learn the rules rather than learn today's news and, what's more important, the skill of spotting the patterns of the market or understanding today Open question.
• 7:53
  Speaker 1: You can answer that in the chat if you want Now.
• 7:57
  Speaker 1: I also showed you this one yesterday, and that is that we are at the most bearish sentiment in a very long time the seventh highest bearish sentiment of all time.
• 8:08
  Speaker 1: It almost feels like the market's crashed like 30%.
• 8:11
  Speaker 1: Right, it's down like 5% or something.
• 8:12
  Speaker 1: It's really not that big a move, or 8% or something like that.
• 8:13
  Speaker 1: It's down like 5% or something.
• 8:14
  Speaker 1: It's really not that big a move, or 8% or something like that.
• 8:16
  Speaker 1: So why is that Kind of an overreaction?
• 8:20
  Speaker 1: I think it's just this generation, in a sense, of investors who've had it very, very good.
• 8:27
  Speaker 1: We're always like, oh, we're going to get bailed out, it'll all be fine and I think it will all be fine, by the way, but we're at kind of like 2008 global financial crisis levels, which is clearly not what's going on out there.
• 8:37
  Speaker 1: The US economy is in pretty good shape.
• 8:39
  Speaker 1: Yeah, there are problems here and there, and the other, inflation is pretty decent, right, near full unemployment.
• 8:45
  Speaker 1: Unemployment figures have spiked a little bit.
• 8:47
  Speaker 1: Where In Washington DC?
• 8:49
  Speaker 1: Right, when did you start worrying about the bureaucrats getting fired?
• 8:52
  Speaker 1: Really, let's face it.
• 8:54
  Speaker 1: Worrying about the bureaucrats getting fired?
• 9:01
  Speaker 1: Really, let's face it.
• 9:02
  Speaker 1: More slurping, more slurping.
• 9:03
  Speaker 1: So that says to me this is pretty bad and it might continue for a while, but it's unlikely to get that much worse.
• 9:11
  Speaker 1: That's what that's saying to me, because we can only get so bearish.
• 9:15
  Speaker 1: Plus, there's this little chart here out of Bloomberg.
• 9:18
  Speaker 1: What does this show?
• 9:19
  Speaker 1: This shows you money market funds.
• 9:21
  Speaker 1: There are $7 trillion in money market funds, $7 trillion sitting on the sidelines.
• 9:29
  Speaker 1: We've decided that the stock market is too risky and they'd rather be in money market funds.
• 9:33
  Speaker 1: Now, if this is an if guarantee, if elon manages to cut us government spending single-handedly, the money market fund interest rates will come down.
• 9:50
  Speaker 1: They already have, but they're going to come down some more, which means it'll be not that attractive to keep the $7 trillion in money market funds and therefore this $7 trillion will gradually but slowly and it takes some time move over into the stock market.
• 10:04
  Speaker 1: So the medium, longer term, this is a lot of money to pour into the stock market About as much money as retail investors.
• 10:12
  Speaker 1: Retail investors are at $7 trillion, so this is as much money as all of us retail investors have in the stock market Pretty, pretty tremendous.
• 10:27
  Speaker 1: What does it all come down to?
• 10:28
  Speaker 1: Volatility.
• 10:29
  Speaker 1: You understand volatility, and I talk about this sometimes.
• 10:32
  Speaker 1: I know it's a bit of a strange concept, but I want to dip you through this very, very important concept every once in a while so that you start to become familiar with it, because it will allow you to make better decisions.
• 10:42
  Speaker 1: The volatility index, also known as the VIX, has been spiking like mad.
• 10:47
  Speaker 1: We're over 20 right now, as we're live here, which is generally a fairly elevated level, and there was one more chart I wanted to show you.
• 10:58
  Speaker 1: Okay, let's get back to that in a second Hold.
• 11:00
  Speaker 1: That thought I just wanted to.
• 11:01
  Speaker 1: Let me show you a couple of, I think, potentially interesting stocks that one might want to start nibbling at.
• 11:06
  Speaker 1: Obviously, it's your call and you've got to decide your risk management and so on, but Meta is trading at 2015 valuations.
• 11:17
  Speaker 1: It's still above its 50-day moving average line, so it's not a sell signal.
• 11:21
  Speaker 1: It's bounced off that line here.
• 11:23
  Speaker 1: It's looking pretty decent even in this environment and therefore it's maybe one that is more stable and reliable than some of the stuff in there.
• 11:28
  Speaker 1: And, yes, it's maybe one that is more stable and reliable than some of the stuff in there.
• 11:30
  Speaker 1: And yes, compared to 2015 valuations, which is literally where they're trading right now, they're bringing in $100 billion more now than they were in 2015.
• 11:39
  Speaker 1: Still at the same valuation Kind of crazy, right.
• 11:42
  Speaker 1: So that might be an interesting one, and I thought I'd print out a couple more.
• 11:46
  Speaker 1: Looked up some numbers.
• 11:47
  Speaker 1: What are these numbers?
• 11:49
  Speaker 1: You want me to take a note of this or take a screenshot of this.
• 11:51
  Speaker 1: These are share price.
• 11:54
  Speaker 1: What's going on with my mouse here?
• 11:59
  Speaker 1: Microsoft.
• 12:00
  Speaker 1: This is share price divided by free cash flow.
• 12:06
  Speaker 1: How much cash have they got left over at the end of the day or the end of the year?
• 12:11
  Speaker 1: And then multiply that.
• 12:19
  Speaker 1: So the lowest one here is Meta 27, which is a pretty reasonably low valuation.
• 12:21
  Speaker 1: Google is also there.
• 12:21
  Speaker 1: I'm a little concerned with Google, I must say, because I haven't Googled anything in a while.
• 12:25
  Speaker 1: I use Grok way better, if you ask me.
• 12:28
  Speaker 1: Amazon just put something out with Alexa, which is also going to make people use Google less, because they'll then use Anthropic to search.
• 12:35
  Speaker 1: Apple is likely to put out something similar on iPhone.
• 12:38
  Speaker 1: So there's a slight concern here that ad revenue on Meta's side might not grow as much as in the past.
• 12:44
  Speaker 1: Right, if you look at the valuation multiples here, meta looks like an interesting play.
• 12:48
  Speaker 1: Looks like.