Latest / Felix Nikolas Prehn's Podcast / Felix Prehn - 5 Reasons to Buy *This* NOW + Stock Market News 18 July 2024

Transcript

Felix Prehn - 5 Reasons to Buy *This* NOW + Stock Market News 18 July 2024 · Felix Nikolas Prehn's Podcast

• 0:00
  Speaker 1: Good question, isn't it?
• 0:01
  Speaker 1: That's the mystery, it would appear.
• 0:03
  Speaker 1: So, in which case, good morning to you, this glorious pre-market live stream.
• 0:09
  Speaker 1: And it's a glorious day because markets are looking a little bit more happy, and I'll explain to you why.
• 0:14
  Speaker 1: I'll also explain to you why markets tanked yesterday, because it's important you know that, so you can make better decisions going forward, and that's always.
• 0:22
  Speaker 1: My ultimate ambition here is to make you into better investors, share a little bit of my sort of ex-banker insights and everything else.
• 0:28
  Speaker 1: So good morning to everyone.
• 0:30
  Speaker 1: Let's share my screen with you.
• 0:35
  Speaker 1: Google says oh, hang on, we seem to be incurring a slight technical hitch.
• 0:42
  Speaker 1: Let me try and fix that.
• 0:44
  Speaker 1: Okay, there we go.
• 0:45
  Speaker 1: There we go.
• 0:45
  Speaker 1: Google says be good time to insert ads.
• 0:48
  Speaker 1: I think ads on live streams are particularly irritating, so we shan't be doing that.
• 0:52
  Speaker 1: So what have we got here?
• 0:54
  Speaker 1: Why are we looking so green, green, green?
• 0:56
  Speaker 1: This morning, tsmc have reported very, very nice revenue and profits and everything else, and they're saying they're going to be spending more money.
• 1:07
  Speaker 1: And my mouse pad isn't working either.
• 1:11
  Speaker 1: That's what happens when you move things around.
• 1:13
  Speaker 1: Anyway, we'll struggle through today, profit beat.
• 1:18
  Speaker 1: And, of course, tsmc is the ultimate supplier of pretty much everything AI chip related.
• 1:24
  Speaker 1: So therefore, the market is going.
• 1:26
  Speaker 1: Ah, there is demand after all.
• 1:28
  Speaker 1: It can't be as bad as we thought.
• 1:30
  Speaker 1: So therefore, pre-market looks like this Nvidia up 3%, meta up 2%, tesla up 1%, amazon up 1%, apple up almost a percentage point.
• 1:42
  Speaker 1: Everything looking pretty nice and green, which is very, very lovely.
• 1:46
  Speaker 1: What's also very nice and green is my portfolio, and you might be thinking I don't care, felix.
• 1:52
  Speaker 1: Well, this is my teaching portfolio, so I share this with students live, and we're not just up to 16K so far on a excuse, my handwriting today, because I didn't plug in the pen on a 30k portfolio but we also have about another $8,000 live on our trading account, which I would show you.
• 2:13
  Speaker 1: But Schwab has decided to cut down on brokering services.
• 2:19
  Speaker 1: It's just on a leap, which is lovely, isn't it?
• 2:23
  Speaker 1: Schwab stock absolutely tanking as well at the same time, but I'm sure they'll let us back in at some point.
• 2:30
  Speaker 1: It's always lovely to know that Broker's got your back.
• 2:33
  Speaker 1: So if you want to learn how we did that, I guess that was why I was showing it to you.
• 2:38
  Speaker 1: Day three of our three-day masterclass is today, and it'll be fun, and it's the most important out of the three days, because I will teach you how we do profit-taking and risk management on autopilot, and that is probably the one skill that actually will help people get to consistency, which is what I want for you.
• 2:57
  Speaker 1: So come and join us.
• 2:58
  Speaker 1: Link is down below.
• 2:59
  Speaker 1: So let's walk briefly through what happened yesterday.
• 3:01
  Speaker 1: I also have another very exciting announcement, which is kind of blowing my socks off, so I will share that with you in a few minutes as well.
• 3:11
  Speaker 1: You can't, you're painting in the background.
• 3:12
  Speaker 1: Yeah, I just set it on fire and I changed it.
• 3:14
  Speaker 1: No, I actually I just moved to a different room.
• 3:16
  Speaker 1: I kind of felt like a bit of change.
• 3:18
  Speaker 1: I've got in the day here a view of a beautiful bay, and it's sort of sometimes quite nice.
• 3:25
  Speaker 1: So stream's good, brilliant Love that Guten Tag from Massachusetts and Massachusetts is one of the words hardest to spell for people trying to learn the English language, but it's a lovely place, okay, so what happened yesterday?
• 3:39
  Speaker 1: We had rotation and if you were watching me this whole week, I was telling you a lot about rotation and I was saying, look, we should be going into small caps and that's exactly what happened.
• 3:50
  Speaker 1: So the big techs underperformed because people sold them, took profits and bought small caps with them.
• 3:55
  Speaker 1: That's pretty much exactly what happened.
• 3:56
  Speaker 1: And then we had ASML coming out another major chip manufacturer or component manufacturer with weaker than expected results, and then everyone went oh no, the bubble is over, no one's buying another chip ever again.
• 4:12
  Speaker 1: Just you know, sell and therefore focus is a little bit back on AI and tech earnings and people are wondering are we just too optimistic?
• 4:25
  Speaker 1: Are we just expecting too much from these guys?
• 4:27
  Speaker 1: So I'd be very, very cautious around the days when the big tech companies report, because unless they beat gloriously staggeringly, then the market will tank.
• 4:44
  Speaker 1: I mean, these stocks could tank like 20% on okay earnings.
• 4:47
  Speaker 1: They need exceptional earnings.
• 4:49
  Speaker 1: So I'm not a bear in any way, shape or form.
• 4:51
  Speaker 1: I'm just sort of telling you that's what we got to look out for and therefore, well, actually the sell-off is probably quite positive because it's lowered expectations, which is definitely a good thing.
• 5:03
  Speaker 1: Winston's just going out.
• 5:04
  Speaker 1: Can we see that?
• 5:05
  Speaker 1: No, you can't see that, can you?
• 5:06
  Speaker 1: He's walking out the door.
• 5:12
  Speaker 1: And then we have the China restrictions.
• 5:14
  Speaker 1: So Biden administration coming out saying they're considering increased restrictions to limit China's access to American tech, and that just generally also just freaked out pretty much the whole tech sector and there is a rumor that they might go for this most stringent export restrictions, which would mean nobody can sell any chips or any technology to China if they have the teeny, tiniest components made in the USA.
• 5:37
  Speaker 1: So if the sticker on the box is made in the USA, then you can't sell the thing, and that would be a problem for pretty much anybody who makes anything electronic, because there is always going to be a small US component to it.
• 5:49
  Speaker 1: So that's a problem.
• 5:51
  Speaker 1: And then what happens in August is that, quite frankly, all the buyers are in the south of France, which is why I'm not there.
• 5:57
  Speaker 1: It's full of Americans, I'm just kidding, no, it's full of tourists, generally speaking.
• 6:03
  Speaker 1: So the locals sort of disappear in August and rent the houses out to Americans.
• 6:10
  Speaker 1: So there is very little inflow.
• 6:15
  Speaker 1: There's actually typically an outflow of money into the market in August and therefore a small dip will become a big dip because there isn't really much market depth Because, as I say, everybody's on a yacht in the south of France.
• 6:25
  Speaker 1: That is actually serious.
• 6:27
  Speaker 1: That's really what happens.
• 6:28
  Speaker 1: So, understanding that, well, we did have some good news, and this is one of the reasons I entitled the videos I have today, because I'm feeling actually very, very positive and very bullish on the market.
• 6:48
  Speaker 1: The Federal Reserve is likely to cut interest rates.
• 6:51
  Speaker 1: Now the chap saying this is the former Fed president, robert Kaplan.
• 6:58
  Speaker 1: You might remember him from last year when he was talking about Fed stuff.
• 7:02
  Speaker 1: Guess where he is now.
• 7:03
  Speaker 1: He's now the vice chairman at Goldman Sachs.
• 7:06
  Speaker 1: Isn't that a lovely revolving door.
• 7:08
  Speaker 1: There's no collusion, no corruption between Wall Street and those that govern Wall Street.
• 7:14
  Speaker 1: No, no, no.
• 7:15
  Speaker 1: Trump's going to make the next treasury of the secretariat the JP Morgan CEO, but of course he'll just act in the best interest of the little guy.
• 7:25
  Speaker 1: That's what's going to happen here.
• 7:27
  Speaker 1: Same with Robert Kaplan.
• 7:28
  Speaker 1: He joined Goldman Sachs not for the millions of dollars in salary, but purely because he wants to make the world a better place.
• 7:35
  Speaker 1: And he says the Fed is likely to reduce interest rates in September in light of recent progress on inflation.
• 7:40
  Speaker 1: That's what he says.
• 7:43
  Speaker 1: Its path for September is pretty clear.
• 7:45
  Speaker 1: I think there is a good chance they could do one more cut in December.
• 7:49
  Speaker 1: So the market again going okay.
• 7:50
  Speaker 1: We quite like that.
• 7:51
  Speaker 1: There's sort of an insider saying that.
• 7:53
  Speaker 1: We do have also three Fed presidents speaking today, so watch out a little bit for what they're going to say or just watch me and I will tell you tomorrow.
• 8:01
  Speaker 1: And remember the fable that you were told when you were little Soft landing is coming.
• 8:10
  Speaker 1: So far, the data is saying yeah, so we've got higher jobless claims, more unemployment and I'm marking that green because it's good for the market Not good for the unemployed, but it's good for the market.
• 8:24
  Speaker 1: We have manufacturing index massively up compared to consensus, so there's no more recession, continuing jobless claims creeping up slightly gently, as we'd like it to, because again that says soft landing.
• 8:38
  Speaker 1: And then business conditions have improved, employment has improved, new orders have improved.
• 8:45
  Speaker 1: So we're looking at pretty much that sort of Goldilocks, everything is perfect scenario which you only get in the few months before presidential elections, because that's when the people who make this data are up particularly under the thumb.
• 8:57
  Speaker 1: I would imagine YouTube stops Felix's stream again.
• 9:01
  Speaker 1: Wait, what's going on there Happened the last two days?
• 9:05
  Speaker 1: Weird, yeah, so yesterday the recording was broken, right, but if you try to play it back, like they lost the first 10 minutes of it.
• 9:12
  Speaker 1: So I'm going to have to have a word with my friendly chap or lady at YouTube.
• 9:17
  Speaker 1: Aruna saw red hot chili peppers last night.
• 9:21
  Speaker 1: That's very good.
• 9:21
  Speaker 1: It's nice to see people in life.
• 9:23
  Speaker 1: How old are they now?
• 9:24
  Speaker 1: They're still looking good.
• 9:25
  Speaker 1: Still looking good.
• 9:26
  Speaker 1: Probably.
• 9:28
  Speaker 1: One stock we talked about about a week ago was Lilium flying Eve-told sort of robo-taxis.
• 9:35
  Speaker 1: Flying EVE tolls sort of robo-taxis 8% up after the Saudi group signed a binding agreement for 50 jets with the option for 50 more.
• 9:45
  Speaker 1: So it was last week, a letter of intent.
• 9:47
  Speaker 1: Now it is a binding agreement.
• 9:48
  Speaker 1: So that's pretty good for that sector.
• 9:50
  Speaker 1: And can you see that all the stuff that was up in 2021 is coming back the sofas, the liliums, all that highly risky growth stuff.
• 10:01
  Speaker 1: It's coming back.
• 10:02
  Speaker 1: Why?
• 10:03
  Speaker 1: Because interest rates are coming down and that's the way the cycle goes.
• 10:07
  Speaker 1: So if you understand the whole cycle, it's actually pretty easy to make money out of it.
• 10:12
  Speaker 1: In my humble opinion.
• 10:13
  Speaker 1: You just have to be like well, that's very likely to happen, have a bit of a longer-term horizon and just jump in when the cycle turns.
• 10:20
  Speaker 1: The cycle is turning.
• 10:21
  Speaker 1: So there we go.
• 10:30
  Speaker 1: Rhcp oh, there is an acronym for Red Hot Chili Peppers.
• 10:33
  Speaker 1: I did not know that.
• 10:33
  Speaker 1: That's something we learned today.
• 10:37
  Speaker 1: So why am I bullish?
• 10:39
  Speaker 1: Let me just break that down for you.
• 10:40
  Speaker 1: And then I also have a rather exciting announcement and I'm going to have to type it because my usual pen pad is well, it's not malfunctioning, it's just not plugged in.
• 10:52
  Speaker 1: So I can't really blame anybody but myself for that.
• 10:55
  Speaker 1: So why am I bullish?
• 11:01
  Speaker 1: First is lower rates.
• 11:02
  Speaker 1: We're going to get lower rates.
• 11:04
  Speaker 1: Maybe we won't get the 1% or the 2% interest rate cut or whatever.
• 11:08
  Speaker 1: It could be that the Fed keeps them a little higher for longer, but right now we're looking forward to lower rates.
• 11:11
  Speaker 1: Lower rates mean higher growth stocks, basically particularly higher growth stocks, small caps the same story.
• 11:24
  Speaker 1: Second thing the second coming of Trump is, in my opinion, exceptionally likely if you see the total shambles that Democrats are putting out there.
• 11:35
  Speaker 1: And I'm saying that not in terms of policy, just in terms of just this is not how you win an election, right, sending them out into the basement.
• 11:41
  Speaker 1: So Trump Biden's got COVID.
• 11:44
  Speaker 1: It's not exactly going to help him, not exactly making him look more kind of in charge or presidential.
• 11:49
  Speaker 1: And I said this to somebody earlier Would you let take politics out of the question?
• 11:54
  Speaker 1: Would you let Biden drive your children to school?
• 11:56
  Speaker 1: And I think the question certainly the answer for me.
• 11:59
  Speaker 1: I certainly wouldn't let him drive Winston.
• 12:01
  Speaker 1: No, I wouldn't, because I think he's not really all there and therefore, should he run the greatest country in the world, most powerful country in the world?
• 12:10
  Speaker 1: You know, that's my opinion on that.
• 12:14
  Speaker 1: And so what's Trump going to do?
• 12:15
  Speaker 1: Trump is just pro-business.
• 12:16
  Speaker 1: Trump is very much pro-Wall Street.
• 12:20
  Speaker 1: He's going to appoint JP Morgan CEO.
• 12:23
  Speaker 1: I mean, you know, crying out loud, the VP candidate is a venture capitalist.
• 12:31
  Speaker 1: So you think they're going to be friendly towards business and investing and the markets?
• 12:38
  Speaker 1: And yeah, absolutely, where are they going to collect all their money from over the next couple of weeks and months?
• 12:43
  Speaker 1: Those kind of people?
• 12:45
  Speaker 1: Therefore, they're going to have to fall in line.
• 12:49
  Speaker 1: The analyst says not my dog either.
• 12:50
  Speaker 1: I wouldn't let my Trumps let down my kids.
• 12:52
  Speaker 1: Yeah, and I think that's a fundamental problem.
• 12:54
  Speaker 1: That's kind of got to be a sort of yardstick for letting somebody run a country.
• 12:59
  Speaker 1: I would have thought.
• 12:59
  Speaker 1: Therefore, they just got the wrong candidate.
• 13:02
  Speaker 1: Maybe they'll change it, but I think it'll be a little late in the party.
• 13:05
  Speaker 1: It's just too late.
• 13:07
  Speaker 1: The news cycle is a little longer than that, I think, and, as I said, it's nothing to do with politics, particularly.
• 13:13
  Speaker 1: I don't even really particularly know much about what Biden does other than giving money away again for student loan thingies.
• 13:22
  Speaker 1: He's done that again today.
• 13:23
  Speaker 1: Money away again for student loan thingies, right, he's done that again today, which isn't good for SoFi, but yeah, so I think Trump will be very, very much pro-business.
• 13:28
  Speaker 1: You're going to have lower taxes.
• 13:30
  Speaker 1: All of these things are things the market likes, and you may not like the guy, you may hate the guy, whatever you might think he's the worst person in the world.
• 13:37
  Speaker 1: I know some people think that's completely fine, but none of that matters, because the only reason we're here is because we want to make money, right.
• 13:43
  Speaker 1: So you know, much like I buy a Philip Morris stock, I abhor smoking.
• 13:48
  Speaker 1: I think it's a horrible thing, it's killing people and I don't understand it.
• 13:52
  Speaker 1: But although I used to smoke, but it doesn't mean I can't make money out of the stock.
• 13:57
  Speaker 1: For me, it's the same story here.
• 13:58
  Speaker 1: So I think this is the Trump trade, essentially.
• 14:01
  Speaker 1: And then, well, I guess it also falls under Trump.
• 14:06
  Speaker 1: Really, there's more Trump.
• 14:07
  Speaker 1: There is infrastructure spending.
• 14:08
  Speaker 1: Infrastructure spending is likely to spend more money, spend more, but in the US, whereas Biden is spending a fortune overseas, which doesn't really help.
• 14:24
  Speaker 1: Well, it helps the military sort of stocks to an extent, but the money doesn't kind of circulate a lot.
• 14:31
  Speaker 1: Much right, it just goes into the hands of a billionaire who owns some sort of missile manufacturer, you know Lockheed Martin, or something like that.
• 14:37
  Speaker 1: So the money will circulate more if you're building bridges or roads or airports or something, because it'll get paid to contractors, you'll pay employees in the US and therefore it'll circulate faster.
• 14:48
  Speaker 1: You're going to get more domestic expenditure and that'll again be good for the stock market.
• 14:55
  Speaker 1: So I don't know if that's quite five, but it's certainly a list.
• 14:58
  Speaker 1: That's kind of largely why I'm bullish right now.
• 15:00
  Speaker 1: So I think the cycle just got extended because Trump is not going to let the market crash on his watch.
• 15:10
  Speaker 1: That's my opinion.
• 15:12
  Speaker 1: Honestly, something happens.
• 15:13
  Speaker 1: They're going to bail us out to such a large extent that I kind of feel like we have a pretty risk-free four years coming up.
• 15:18
  Speaker 1: If the guy wins, if he doesn't, then it's a different story, but at the moment, while it looks like he does, it's the guy wins.
• 15:21
  Speaker 1: If he doesn't, then it's a different story, but at the moment, while it looks like he does, it's the same story.
• 15:26
  Speaker 1: If he doesn't, then obviously everything changes and we have to close some trades.
• 15:29
  Speaker 1: But that's the way I'm looking at it right now.