Latest / Felix Nikolas Prehn's Podcast / Felix Prehn - DON’T SAY YOU DIDN’T KNOW | Nvidia Earnings Everything You MUST Know + Stock Market News 28 August 2024

Transcript

Felix Prehn - DON’T SAY YOU DIDN’T KNOW | Nvidia Earnings Everything You MUST Know + Stock Market News 28 August 2024 · Felix Nikolas Prehn's Podcast

• 0:02
  Speaker 1: and good morning to you on this momentous occasion which which you are gathered here today.
• 0:07
  Speaker 1: Nvidia is, of course, reporting today, and not just nvidia, but actually more than that salesforce and crowdstrike, which are both closely tied to ai, or the futures of those companies, are.
• 0:21
  Speaker 1: So today is really the day that's going to decide whether or not the rest of the year will be glorious or miserable for long-haul holders, and glorious for traders because we make money either way, at least we intend to.
• 0:33
  Speaker 1: So I want to walk you through what Wall Street's making of this.
• 0:37
  Speaker 1: I've got the inside report from both Goldman Sachs and Morgan Stanley, so I will share that with you.
• 0:44
  Speaker 1: I'll walk you through it, take your questions and so on, and we'll have a look also at how we can protect our portfolios, how we can make money out of this, and there are a few other massive, massive sells out of the Buffett camp today, for example, which is definitely something we want to keep a close eye on, and I appreciate you guys for the weather report and the live chat here.
• 1:08
  Speaker 1: Thank you very much.
• 1:09
  Speaker 1: Today is particularly hot and sticky over here in Hong Kong, where I am right now, so let me share with you a few things that matter, and I'll give you obviously my view on what I think is going to happen here.
• 1:21
  Speaker 1: And I'll give you obviously my view on what I think is going to happen here.
• 1:27
  Speaker 1: Now, what are hyperscalers?
• 1:28
  Speaker 1: Hyperscalers are Amazon, google, meta and Microsoft Basically the only people spending a significant amount of money on data centers.
• 1:35
  Speaker 1: You could argue Tesla should maybe be included in that, but it isn't, not by Morgan Stanley at least.
• 1:40
  Speaker 1: And their cash flow, as in how much money are these guys bringing in, how much money they've got lying around, is expected to Hang on.
• 1:51
  Speaker 1: So this is 2024, q4.
• 1:57
  Speaker 1: So then the last quarter of this year, this is Q3.
• 2:01
  Speaker 1: And this here is 2025.
• 2:04
  Speaker 1: So we're expecting pretty healthy business flow in the world of Amazon, google, meta and Microsoft.
• 2:12
  Speaker 1: Why does that matter?
• 2:13
  Speaker 1: These four guys are the biggest NVIDIA customers.
• 2:16
  Speaker 1: This really matters because all we care about with NVIDIA earnings today is, yes, they're going to beat, they will beat, but it's about guidance.
• 2:24
  Speaker 1: What will they say on the earnings call?
• 2:27
  Speaker 1: How optimistic are they?
• 2:29
  Speaker 1: And for this, this is probably the best bit of data we're going to get.
• 2:33
  Speaker 1: And if you look at the expected capital expenditure CapEx, as bankers like to call it is expected to be pretty steady going into 2025 and 2026.
• 2:48
  Speaker 1: So, considering that they're going to make more money, they're actually going to spend probably more on NVIDIA chips in 2025 and in 2026 than they are spending this year.
• 2:59
  Speaker 1: Right, which is pretty good.
• 3:01
  Speaker 1: And someone's asking where's the market stalling?
• 3:03
  Speaker 1: Well, nvidia, basically Everyone's sitting on their hands going what is going to happen now, and that's what we're about to find out.
• 3:14
  Speaker 1: Now there seems to be a cat stuck.
• 3:16
  Speaker 1: One second Important when cats are stuck, that you unstick them, you think, no, I haven't lost my marbles.
• 3:39
  Speaker 1: This is the culprit.
• 3:40
  Speaker 1: This is the culprit that makes me interrupt my live stream, which is she's called Squeaky, sort of the boss around here.
• 3:48
  Speaker 1: So there we are.
• 3:49
  Speaker 1: What did I want to show you?
• 3:51
  Speaker 1: I wanted to show you.
• 3:53
  Speaker 1: If you don't press the like button, I'm going to show you cats.
• 3:58
  Speaker 1: That's a threat.
• 4:01
  Speaker 1: Yes, lots of money going to be spent in the direction of NVIDIA, which, of course, is glorious.
• 4:04
  Speaker 1: Also glorious for us, because we make a lot of money right, when the market goes up.
• 4:09
  Speaker 1: Can we make a lot of money when the market goes down?
• 4:10
  Speaker 1: Yeah, it actually doesn't matter.
• 4:12
  Speaker 1: We tend to perform equally well, maybe slightly better, in down markets and up markets.
• 4:16
  Speaker 1: So this is our teaching portfolio here, and we are up $25,000 on our $30,000 portfolio.
• 4:25
  Speaker 1: Why should you care, which is about 80% up so far?
• 4:28
  Speaker 1: Why should you care?
• 4:28
  Speaker 1: Because, well, if you look at our existing open trades here and also share them with you, just for transparency's sake here, we're up another $6,700 here on those, our industrial stocks are limping slightly, which means we're up well over 100% this year.
• 4:47
  Speaker 1: And if you are curious about how we do that, maybe you're just curious, maybe that's all it is, maybe you're just thinking do you think it's possible to make money from trading?
• 4:54
  Speaker 1: And a lot of people think it's not.
• 4:56
  Speaker 1: They just think no, no, no, zero-sum game and all that.
• 4:58
  Speaker 1: Well, let me show you how we do it.
• 5:00
  Speaker 1: A lot of people think it's not.
• 5:01
  Speaker 1: They just think no, no, no, zero-sum game and all that.
• 5:02
  Speaker 1: Well, let me show you how we do it.
• 5:03
  Speaker 1: Okay, just come and join us next week Links down below in the description and find out.
• 5:06
  Speaker 1: But back to NVIDIA.
• 5:07
  Speaker 1: So this is from Goldman Sachs.
• 5:10
  Speaker 1: Okay, it's a screenshot from the report that I've got my paws on and this really matters and very few people will understand this.
• 5:21
  Speaker 1: So they're talking about the continued bearishness from hedge funds and they're basically saying hedge funds aren't excited about chasing the market higher at the current levels.
• 5:34
  Speaker 1: But there are a few observations I would make about this.
• 5:38
  Speaker 1: This is from Goldman Sachs.
• 5:40
  Speaker 1: They're saying that the negative hedge fund flows, so they've been selling tech, they've been selling American stocks, particularly tech stocks we've seen recently are most often followed by a reversal higher in flows and further gains in equities.
• 5:57
  Speaker 1: So they're basically saying the hedge funds are so short that it's likely that they're going to reverse course and therefore we have a very, very big, beautiful buyer here.
• 6:07
  Speaker 1: If NVIDIA data comes in the way we want it to, as in positive.
• 6:12
  Speaker 1: And they're saying shorts could be covered if the grind higher continues.
• 6:17
  Speaker 1: If the market goes up, they will have to close their short positions and they get squeezed up.
• 6:21
  Speaker 1: As in.
• 6:22
  Speaker 1: They have to buy the stocks that they were shorting and we haven't seen any of the shorts that were added in July and early August get covered yet.
• 6:34
  Speaker 1: So those positions are open.
• 6:36
  Speaker 1: So there's some real pain that we could inflict today if Nvidia comes in bullish.
• 6:40
  Speaker 1: So that's some real pain that we could inflict today if NVIDIA comes in bullish.
• 6:44
  Speaker 1: So that's pretty good as in.
• 6:45
  Speaker 1: If the outcome is good, it's going to be really good, right.
• 6:48
  Speaker 1: And then this is Wong Stanley.
• 6:51
  Speaker 1: They're saying what are the risks from here?
• 6:53
  Speaker 1: Well, nvidia, positioning, seasonality and so on.
• 6:56
  Speaker 1: But NVIDIA, there is color in the remaining sections positioning it does not appear that we have regrossed to level seen before the downturn.
• 7:07
  Speaker 1: So again, they're saying the market is quite short, nvidia, and this may mean that the risk reward from nvidia is skewed to the upside, as in.
• 7:20
  Speaker 1: The risk here is that we're going to get a rally.
• 7:23
  Speaker 1: Why would a rally be risk?
• 7:24
  Speaker 1: Well, banks try to make money on the way up and on the way down.
• 7:28
  Speaker 1: They don't really care which way the market goes, which is sort of the classic trader move.
• 7:32
  Speaker 1: The Knights of Nii are here.
• 7:36
  Speaker 1: We should just probably do a live stream and stream one of those and see what happens Now.
• 7:53
  Speaker 1: Nvidia this is back to Goldman's.
• 7:56
  Speaker 1: They're saying positioning does not feel as crowded as when we were at $125 in June.
• 8:03
  Speaker 1: They're saying the potential impact of the Blackwell timing, more supportive valuations, as in, there is only a 45% premium right now, versus a 155% premium we've had in the last three years, upside to earnings and ongoing demand trends, which is what I showed you at the beginning of this video.
• 8:23
  Speaker 1: The Microsoft, the Amazon, the Google, the expenditure right, they're going to keep buying.
• 8:28
  Speaker 1: It remains strong and, yeah, still plenty of debate on how Blackwell timing shapes up.
• 8:39
  Speaker 1: But again, it sounds quite positive.
• 8:42
  Speaker 1: It actually sounds quite positive and they're saying numbers typically hit at 4.20 pm, followed by a conference call at 5 pm.
• 8:49
  Speaker 1: But it's all about what Jensen says on the call.
• 8:52
  Speaker 1: Options is pricing in a nearly 10% move up or down, which is a $300 billion market cap swing, which is interesting.
• 9:03
  Speaker 1: They said the stocks finished down 2%, which means the skew is positive.
• 9:11
  Speaker 1: As in, it's more likely we go up than down.
• 9:14
  Speaker 1: Generally speaking, what you actually want going into earnings, you want the market to tank a little bit, because it just means that it's easier to beat right.
• 9:24
  Speaker 1: You haven't baked in these sky-high expectations.
• 9:26
  Speaker 1: A little bit of disappointment is already priced in and that's quite a good thing.
• 9:30
  Speaker 1: So we haven't really done very much here in the last week or so and that's quite sweet to see.
• 9:35
  Speaker 1: Pre-market.
• 9:36
  Speaker 1: We're also doing very little here, sitting at 128.
• 9:38
  Speaker 1: So just watch this.
• 9:40
  Speaker 1: This blue line here was the expected move down yesterday and 142 was the expected move up yesterday.
• 9:50
  Speaker 1: Right now the market is pricing that in as $2 higher than yesterday, both on the up and on the downtrend.
• 9:58
  Speaker 1: So the market has shifted a little upwards since yesterday in terms of expectation, and you could say that's a positive thing.
• 10:12
  Speaker 1: On Uber, I hesitate to join Options Internet Training because I do best with hand-holding and concrete, real-time demonstrations.
• 10:17
  Speaker 1: Well, we can't hold your hand physically if you want that a damp hand, but we do do live Zoom calls and we do live trade and it's all live.
• 10:27
  Speaker 1: So you can do stuff live and Travis is planting an apple tree.
• 10:31
  Speaker 1: That's a good thing to do.
• 10:32
  Speaker 1: You want a shrubbery?
• 10:34
  Speaker 1: Well, that's going on here today with the Python fans Spanish bloody inquisition.
• 10:43
  Speaker 1: I sometimes feel like that.
• 10:44
  Speaker 1: If you look at the comment section, they're going.
• 10:46
  Speaker 1: It's clickbait bastards, which is what I would care to say to the 700 of you who haven't found the like button yet.
• 10:52
  Speaker 1: And yes, so that's where we are at Now.
• 10:58
  Speaker 1: Is there any more?
• 10:58
  Speaker 1: Well, yes, there is a little bit more.
• 11:00
  Speaker 1: This is the semi and semiconductor equipment positioning of the big boys on Wall Street.
• 11:08
  Speaker 1: You know the ones with the grown-up pants, and we're right here, which means what we're kind of below the typical average 2019, 2020, 2021.
• 11:19
  Speaker 1: And we've come a long way down from the peak of July.
• 11:24
  Speaker 1: So again, that means it's more likely that the risk is that we might go up rather than down a lot, because most of the time we're above this blue line, right.
• 11:36
  Speaker 1: So again, that's a good way to say it.
• 11:37
  Speaker 1: This blue line, right.
• 11:38
  Speaker 1: So again that's a good way to say it.
• 11:43
  Speaker 1: I'll be to say we'd get more cats if we didn't like today.
• 11:45
  Speaker 1: Yeah, I did threaten that, didn't I?
• 11:47
  Speaker 1: Yeah, so where did she go?
• 11:54
  Speaker 1: I think she must be in the curtain.
• 11:56
  Speaker 1: Do your cats like to sleep in curtains?
• 11:56
  Speaker 1: Mine do.
• 11:57
  Speaker 1: She'd get rather grumpy with me if I keep picking up.
• 11:59
  Speaker 1: This one is a bit of a diva, this one.
• 12:00
  Speaker 1: Now here's something else Hit that like button.
• 12:04
  Speaker 1: He ain't going to do this.
• 12:05
  Speaker 1: Free Lotus.
• 12:06
  Speaker 1: Yes, I do call people who join in and don't hit the like button Free Lotus, because that is what you are.
• 12:11
  Speaker 1: That is, the toll here on this channel is to smash the like button or the dislike button, actually, if you can find one, although I think YouTube has decided that us YouTubers are too sensitive.
• 12:25
  Speaker 1: They no longer show us how many dislikes we get, because apparently we can't handle it, which is kind of funny.
• 12:30
  Speaker 1: The abuse, though, in the comments section, that's so loud, that's completely fine.
• 12:36
  Speaker 1: What has Papa Warren done?
• 12:40
  Speaker 1: Well, he sold a lot, a lot.
• 12:45
  Speaker 1: This chart starts in 2017 and ends now.
• 12:48
  Speaker 1: He's never really sold that much before, at least not in the last seven years.
• 12:52
  Speaker 1: And what's he selling?
• 12:53
  Speaker 1: Well, this is over.
• 12:55
  Speaker 1: At Bloomberg Terminal, berkshire Hathaway sold B of A Bank of America another 130 million shares, which is pretty extraordinary.
• 13:07
  Speaker 1: Right, he's not telling us why, but he keeps dumping Bank of America.
• 13:12
  Speaker 1: He's still the largest shareholder, but he keeps dumping it.
• 13:14
  Speaker 1: He's definitely not particularly happy about Bank of America for some reason.
• 13:18
  Speaker 1: Well, there's a lot of reasons.
• 13:21
  Speaker 1: I think it's about CRE commercial real estate crisis.
• 13:24
  Speaker 1: People haven't really talked about that.
• 13:25
  Speaker 1: I don't really know why.
• 13:27
  Speaker 1: Mainstream media doesn't seem to like to cover it.
• 13:28
  Speaker 1: I guess they get a lot of advertising money from it or something, or maybe their owners own a lot of commercial real estate or banks or God knows what, but it's a fairly big deal, especially in major cities.
• 13:38
  Speaker 1: There's something else that's kind of an interesting one, eli Lilly, which is the fat loss people LLY stocks done tremendously.
• 13:47
  Speaker 1: Well, they are selling direct to the consumer now, which I rather like, and you can now get the weight loss drug ZepBound or ZipBound for as little as $399 a month.
• 14:02
  Speaker 1: You know what's even cheaper Eating less.
• 14:04
  Speaker 1: So you got this prescription.
• 14:07
  Speaker 1: You can purchase a month's supply of single-use vials through their direct-to-consumer site starting today, and they're about half the price.