Latest / Felix Nikolas Prehn's Podcast / ️Why Everybody is WRONG about the MARKETS and the FED Pivot + Stock Market News 07 March 2024

Transcript

️Why Everybody is WRONG about the MARKETS and the FED Pivot + Stock Market News 07 March 2024 · Felix Nikolas Prehn's Podcast

• 0:00
  Speaker 1: And welcome and good morning to you.
• 0:02
  Speaker 1: Pre-morning life, glad you are here.
• 0:05
  Speaker 1: We've got to go through the biggest scandal ever in government data Well, almost Government data is usually a lot of bollocks, but this is a particular, the horrific example of the government fabricating facts, and it's going to affect you and your portfolio and you need to understand what this means so you can make better decisions now and throughout 2024.
• 0:32
  Speaker 1: So let me walk you through it a little bit of old banker insight and perspective.
• 0:38
  Speaker 1: But before we do, I want you to do one thing for yourself and that's put your and by that I mean Learning what are actually the great companies out there, and I just put out a complete benchmark of every NASDAQ stock out there and it's completely free, so you can download it and let me show you how to use it.
• 1:05
  Speaker 1: Go to Felix Franzerorg slash NASDAQ download it.
• 1:07
  Speaker 1: There's even a QR code on the screen.
• 1:09
  Speaker 1: You know we're moving with the times and me and the cats, and what you can do is their filters up here.
• 1:17
  Speaker 1: So these little tabs you can click.
• 1:18
  Speaker 1: So gross profit margins are pretty important.
• 1:21
  Speaker 1: So you can say filter by condition and then say greater than 60%.
• 1:29
  Speaker 1: Maybe that's what you're after.
• 1:30
  Speaker 1: Put the percent in, otherwise it won't work.
• 1:33
  Speaker 1: Six, 60%, if that's what you're looking for, and then that will, in theory, work.
• 1:40
  Speaker 1: Let's try that one more time.
• 1:42
  Speaker 1: Greater than 60% Percent.
• 1:47
  Speaker 1: I think I put it in the wrong top.
• 1:48
  Speaker 1: There it is Okay.
• 1:49
  Speaker 1: And now you've narrowed this down to only 45 companies, right.
• 1:53
  Speaker 1: So you've got 45 companies that have very good margins.
• 1:55
  Speaker 1: Very good gross margins mean generally a big moat.
• 1:59
  Speaker 1: Second thing you might want to look at is long-term earnings growth, because the NASDAQ are sort of really growth companies, but they're certainly tech companies.
• 2:07
  Speaker 1: You can do a filter here by you know whatever you want it to be 10, 12% plus.
• 2:13
  Speaker 1: You can also look at PE ratios.
• 2:16
  Speaker 1: Compared to forward looking PE ratios, you want the future PE to be significantly less than the current PE.
• 2:24
  Speaker 1: You also have good stuff like income.
• 2:28
  Speaker 1: Margins Again tells you what isn't a good business at present.
• 2:31
  Speaker 1: So play around with this and you will be surprised at some.
• 2:35
  Speaker 1: You will find some interesting businesses you might want to dig into deeper and that's ultimately what drives your long-term future financial wealth.
• 2:44
  Speaker 1: Right, not today, not this week, because no one cares the short term about margins and things like that, but in the long run that's actually what makes you money.
• 2:52
  Speaker 1: So I want you to get your pause on that Felix, rensseldorf, slash and NASDAQ and maybe spend a few hours on the weekend with it.
• 2:59
  Speaker 1: Seriously, it's so worth it.
• 3:01
  Speaker 1: You just get amazed by what industries are good and what are bad and so on.
• 3:06
  Speaker 1: So check it out Now.
• 3:10
  Speaker 1: Let's then look at a sort of scandal on kind of Nixon scale here.
• 3:18
  Speaker 1: Absolutely ridiculous.
• 3:21
  Speaker 1: I mean absolutely ridiculous.
• 3:22
  Speaker 1: So the government has just put out and this is not a political statement, previous presidents have done the same thing left and right off the aisle or identifying to be on one side of the aisle or the other, or who knows initial jobless claims came in at 217,000.
• 3:38
  Speaker 1: And that's basically flat.
• 3:40
  Speaker 1: So they're just saying, no, nobody is getting unemployed.
• 3:44
  Speaker 1: The continuing jobless claims are also completely flat month over month.
• 3:48
  Speaker 1: And then we've got something actually possibly genuinely positive here, which is that labor costs are rising less than expected.
• 3:59
  Speaker 1: That's deflationary, disinflationary, however, you want to abuse that word and that's kind of weird, because let me show you one thing.
• 4:11
  Speaker 1: I'll show you this.
• 4:14
  Speaker 1: First, you had some of these people who've sacked people bumble, rhomber, 30%.
• 4:21
  Speaker 1: Farfetch, 25%, hasbro, 20%, finder, 70%, spotify, 17%, levi's 17%, 15%.
• 4:28
  Speaker 1: Xerox 15%, duolingo 10%, rivian, washington Post, snap, ebay, you get the idea right Paper.
• 4:35
  Speaker 1: These are all just this year, 2024.
• 4:38
  Speaker 1: Docusign, chalp, schwab, mozilla, cisco, blackrock, nike, ups, citigroup 20,000, tysnkrup 5,000, best Buy 3,000, right, northrop Grumman I mean, even the defense contractors are laying people off and we've got more walls going on than ever.
• 4:54
  Speaker 1: 1,000.
• 4:55
  Speaker 1: Pixar and so on at 1,300, at least 1,300 that now no longer identify as working for Pixar, and that together with well, here's the official data, right, so you can get an idea.
• 5:08
  Speaker 1: The jobless claims in green seasonally adjusted that's what they do, seasonally manipulated.
• 5:16
  Speaker 1: So seasonally adjusted is green, and they're apparently just really low and flat, even below 2023 averages.
• 5:25
  Speaker 1: Right Now, let me show you this In the United States, there is a law called the worker adjustment and retraining notification act Glorious read and delightful thing if you suffer from insomnia.
• 5:39
  Speaker 1: Basically what it says if you're going to close a plant, you got to give workers 60 days notice.
• 5:47
  Speaker 1: How many of those have been sent out of late?
• 5:50
  Speaker 1: Well, in February so far, 26,000.
• 5:54
  Speaker 1: And that's quite a lot, and we've had quite a lot towards the end of 2023 as well.
• 6:01
  Speaker 1: But the jobless claims are this line down here.
• 6:06
  Speaker 1: That's apparently the real truth jobless claims and the fact that all of these factories are closing has apparently had zero impact on unemployment zero, none.
• 6:19
  Speaker 1: And it might have nothing to do with the fact that there was an election going on this year.
• 6:23
  Speaker 1: So no, this is just completely made up, completely made up data.
• 6:31
  Speaker 1: The government is just lying through its teeth and I think what they're probably going to start to do is they might start to seasonally adjust the warn notices, the worker adjustment and retrainment notifications, which is the acronym for it.
• 6:44
  Speaker 1: They're called warn notices if you haven't seen one of those before.
• 6:48
  Speaker 1: So that's probably what they're going to do next, because obviously the gap here is just so big it's kind of really hard to explain and it just means this data is nonsense and you think, okay, felix, you're a bit extreme.
• 7:01
  Speaker 1: Let me show you what the Fed says about jobs data.
• 7:04
  Speaker 1: There it is.
• 7:05
  Speaker 1: Last Fed report While the recent trends prior to the meeting have been remarkably positive about the job market, fed officials, which are Fed presidents, judged that some of the recent improvements reflected idiosyncratic movements in a few series, as in they made that shit up.
• 7:26
  Speaker 1: That's how the Fed describes it.
• 7:28
  Speaker 1: So the Fed doesn't believe jobs data anymore either.
• 7:30
  Speaker 1: Wall Street doesn't, and I don't want you to be the last one standing who still do, because it's misleading.
• 7:37
  Speaker 1: And why is it important?
• 7:39
  Speaker 1: Because, in theory, microsoft's confiscated my pen.
• 7:43
  Speaker 1: Here we go.
• 7:44
  Speaker 1: In theory, what happens is Also stolen my ink.
• 7:52
  Speaker 1: See how I'm blaming everybody.
• 7:54
  Speaker 1: That's apparently the way to get ahead.
• 8:03
  Speaker 1: In theory, higher joblessness, which is unemployment it's a funny word for it, I know does what.
• 8:10
  Speaker 1: It leads to lower interest rates because the Fed cuts interest rates, because they have a mandate to keep inflation low and unemployment high.
• 8:21
  Speaker 1: A bit of a Freudian slip there.
• 8:23
  Speaker 1: If you manipulate joblessness like the Ness Monster, then by saying unemployment is artificially low, you actually keep interest rates high, and higher interest rates are bad for you and me.
• 8:43
  Speaker 1: In the stock market, we would like interest rates to fall.
• 8:46
  Speaker 1: That would make somebody like a SOFI worth a lot more or any growth stock you might be in worth a lot more.
• 8:51
  Speaker 1: This is actually something that truly, genuinely matters.
• 8:55
  Speaker 1: But it also means, in my opinion, that come November, for some miraculous reason after November, if there is a change in the White House incumbent, if the orange one moves in, we're going to have to get a yellow pen for that.
• 9:14
  Speaker 1: What will happen then is that in December you're going to get a massive increase in unemployment because they're going to want to blame it on Biden.
• 9:27
  Speaker 1: There is a chance that at the end of this year, economic data just explodes, implodes, and therefore you're going to get more rate cuts and people are going to feel quite glum and you might get some earnings revisions downs, especially in the retail sector, stuff that's more affected by sentiment.
• 9:48
  Speaker 1: The government is trying to keep sentiment artificially high by basically lying to you, and I think it's something you need to understand.
• 9:57
  Speaker 1: Smash the like button for a little bit of manipulation.
• 10:00
  Speaker 1: It's happening at the very top.
• 10:02
  Speaker 1: Does that mean the party has to end now?
• 10:04
  Speaker 1: Does that mean the market is going to collapse anytime now?
• 10:08
  Speaker 1: No, I'll tell you why.
• 10:11
  Speaker 1: This chart was made by somebody who liked the color green and they thought I'm going to put two lines in.
• 10:16
  Speaker 1: I make it really clear by using green and green Little hard to tell them apart, but we'll use a green pen, shall we just to honor the idiots who made this?
• 10:27
  Speaker 1: The dark green is the S&P 500.
• 10:32
  Speaker 1: Then the light green.
• 10:34
  Speaker 1: Do we have a light green?
• 10:35
  Speaker 1: I'm not sure we do.
• 10:37
  Speaker 1: We have a weird looking green.
• 10:40
  Speaker 1: The weird looking green is margin debt.
• 10:44
  Speaker 1: It's basically what the Reddit degenerates do to buy AMC stock and all that sort of thing.
• 10:53
  Speaker 1: Are you kidding 할�?
• 10:55
  Speaker 1: Here, that's margin debt, and in 2021, it was up there, so it can go a lot higher.
• 11:09
  Speaker 1: That's basically the point.
• 11:10
  Speaker 1: Markets only top out once.
• 11:14
  Speaker 1: Margin debt is super, super high, and you can see that in 1999.
• 11:19
  Speaker 1: You can see that in 2008.
• 11:21
  Speaker 1: You can see that in 2019.
• 11:24
  Speaker 1: So we've got some way to go, because the degenerates can still borrow and therefore buy more shares, which is a terrible idea.
• 11:31
  Speaker 1: By the way, never, ever, use margin to buy stocks, ever.
• 11:36
  Speaker 1: There is no excuse for it.
• 11:38
  Speaker 1: There's no reason to do it.
• 11:40
  Speaker 1: It's just idiotic, because the one thing you want to be able to do when the market tanks which inevitably it will, it always does and then it goes back up again.
• 11:53
  Speaker 1: If you are highly in margin debt here, the stock market goes down, you are selling down there, the market then recovers and you haven't got any money to get back into it, whereas if you didn't have any margin debt, you can just hold through the fucking dip and buy some more shares and therefore come out smiling a winner way wealthier.
• 12:18
  Speaker 1: We should enjoy a downwards correction, because it's the thing that makes you wealthy.
• 12:22
  Speaker 1: Rallys don't make you wealthy, it's the downward correction.
• 12:26
  Speaker 1: If you use them right, that makes you wealthy.
• 12:27
  Speaker 1: But I don't think the dip's coming yet because partially because we've got this much money We've got $9 trillion in money markets, bonds essentially Not quite bonds, but funds, whole bonds More than $7 trillion in bonds and probably about $2 trillion or $3 trillion of that which could flow back into the US stock market when interest rates come down.
• 12:57
  Speaker 1: If they come down, they'll come down at some point, but you get the idea.