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Felix Prehn - The 3 Best Investments to Get Rich this Decade + Stock Market News 23 July 2024 · Felix Nikolas Prehn's Podcast

• 0:01
  Speaker 1: Felix there and welcome to this morning live stream with an echo which we've now killed.
• 0:06
  Speaker 1: Exciting things happening today.
• 0:08
  Speaker 1: Of course, big earnings coming up later in the day, and there's a bunch of things that are moving the markets.
• 0:12
  Speaker 1: But I just want to walk you through here what I think are the three biggest opportunities we have right now, and I'll actually give you a fourth.
• 0:21
  Speaker 1: Bankers struggle to count a fourth bonus one as well.
• 0:25
  Speaker 1: Now, of course, this isn't financial advice, just an old banker sharing his thoughts.
• 0:28
  Speaker 1: Just because I'm buying something or doing a trade doesn't mean you should.
• 0:32
  Speaker 1: You should always do your own research and so on, because otherwise you're a Muppet who follows a guy who listens to his golden retriever, and he wouldn't really want to do that.
• 0:40
  Speaker 1: But let me walk you through and jump straight into it.
• 0:43
  Speaker 1: First of all, quick glance at the market, just so you know what's happening.
• 0:47
  Speaker 1: Everything's pretty calm today.
• 0:49
  Speaker 1: Why we're waiting for Google and Tesla to give us their earnings today and I'll jump back to what's done in a few minutes.
• 0:55
  Speaker 1: I'll walk you through what to expect there and what really, really matters, but so far, market's looking pretty steady, which is good.
• 1:01
  Speaker 1: Gives us a bit of time to run through some stuff.
• 1:02
  Speaker 1: So my number one thing that I absolutely love at the moment is fat drugs, drugs for fat people who want to be less fat.
• 1:11
  Speaker 1: Apparently, the word fat is inappropriate You're not meant to use the word right but anyway, fat chance of that.
• 1:15
  Speaker 1: So NVO is down 9% on use of Roche's drug.
• 1:20
  Speaker 1: Roche is a I don't know what, are they French, swiss, something foreign kind of you know a drug manufacturer who've been lagging the market and they're coming out allegedly with a pill that you were able to pop and it'll make you instantly slimmer, more attractive and richer.
• 1:37
  Speaker 1: And the worry is that NVOs, novo Nordisks, which is larger than all of Denmark at the moment, is going to have their margins compressed.
• 1:50
  Speaker 1: Well now, nvo is now pricing in the immediate impact of competition.
• 1:59
  Speaker 1: They're basically saying the pills from Russia are available today, saying the pills from Russia are available today, but NVO actually has patents that carry into 2031 and 2032 in the US and Europe.
• 2:11
  Speaker 1: And what does it mean?
• 2:12
  Speaker 1: Very simply put, there are more fat margin years to come for Novo Nordisk and its fat loss drugs.
• 2:18
  Speaker 1: So the market's kind of like jumping to a long-term conclusion and in reality I think we're going to get some great earnings coming up from NVO and people are going to go.
• 2:28
  Speaker 1: The margins just look great and they're going to forget about the Roche thing for a little while.
• 2:33
  Speaker 1: Let me look at the chart here.
• 2:34
  Speaker 1: So what have we got here?
• 2:35
  Speaker 1: We've got in blue NVO.
• 2:37
  Speaker 1: Well, let me do the.
• 2:40
  Speaker 1: Where is my pen Blue?
• 2:43
  Speaker 1: So blue is NVO, which is rallied very, very nicely.
• 2:47
  Speaker 1: And then in orange you've got Roche and all Roche is doing is catching up a little bit, because it's been a massive, massive, colossal, miserable underperformer.
• 2:58
  Speaker 1: They went from highs of $400.
• 3:01
  Speaker 1: And right now they're trading at about $280.
• 3:05
  Speaker 1: So it's more like okay, maybe Roche isn't dead kind of type thing, whereas NVO gets these little pullbacks relatively frequently.
• 3:14
  Speaker 1: All we've had here was a pullback and now we're kind of.
• 3:19
  Speaker 1: I think it's a buy for dip opportunity.
• 3:21
  Speaker 1: You should do that.
• 3:22
  Speaker 1: You have to go do your own research.
• 3:23
  Speaker 1: It's going to fit into your risk profile and everything else, but I think there's a fat chance that they're going to do really well.
• 3:28
  Speaker 1: That's just my view on it.
• 3:30
  Speaker 1: So Russia's based in Basel.
• 3:33
  Speaker 1: Thank you very much.
• 3:34
  Speaker 1: I appreciate that.
• 3:35
  Speaker 1: So it's one of those foreigners and yeah, so I like fat drugs.
• 3:39
  Speaker 1: I think there is a very, very, very good chance they're going to keep making these kind of margins for a couple more years and then margins will shrink absolutely.
• 3:48
  Speaker 1: Maybe that's the time to jump out of it, but I don't think the well, the TAM, the total addressable market, is huge.
• 3:58
  Speaker 1: I mean really large.
• 4:00
  Speaker 1: So I think there was a lot of opportunity here and it's like getting their drugs approved for, like heart problems and all sorts of other problems that are kind of obesity related.
• 4:09
  Speaker 1: They will be able to get into more and more of the populace and insurance will cover it.
• 4:15
  Speaker 1: So very, very smart stock.
• 4:17
  Speaker 1: I think Another smart stock is this.
• 4:19
  Speaker 1: Now, what's this little smart stock?
• 4:20
  Speaker 1: This is Winston's trading portfolio.
• 4:22
  Speaker 1: Winston's my golden retriever and he trades following a simple three-step system and he is up so far, $24,000 US on a $30,000 teaching portfolio.
• 4:36
  Speaker 1: That equals an 80% gain this year, trading, not holding Nvidia or anything like that.
• 4:43
  Speaker 1: So if you want to learn how we do that completely for free, come and join us.
• 4:48
  Speaker 1: Felixfrenzorg slash webinar Put the link down below and the link takes you to here and you just pop your email in and sign up for it.
• 4:55
  Speaker 1: It's completely free of charge.
• 4:56
  Speaker 1: You take about 90 minutes of your life, it'll be fun and I'll teach you the whole system, the risk management, the automations that'll be implemented.
• 5:03
  Speaker 1: This is for beginners, by the way, so if you know nothing about anything, then there we are.
• 5:08
  Speaker 1: Arrowdriver says ads again.
• 5:09
  Speaker 1: You know, I literally had a chat yesterday with YouTube who said there wouldn't be any ads and if there are again, I should let them know.
• 5:17
  Speaker 1: So let me let them know and let me take a screenshot of timing of this as well, so they can see it and can do something about it.
• 5:28
  Speaker 1: So it's YouTube profiting from it, bastards.
• 5:31
  Speaker 1: Anyway, they do provide a good platform.
• 5:33
  Speaker 1: Every platform gets a glitch sometimes.
• 5:35
  Speaker 1: So, yeah, apologies for the ads, there shouldn't be any ads in it.
• 5:36
  Speaker 1: There really shouldn't be.
• 5:36
  Speaker 1: Like a platform, every platform gets a glitch sometimes.
• 5:37
  Speaker 1: So, yeah, apologies for the ads, there shouldn't be any ads in it.
• 5:38
  Speaker 1: There really shouldn't be.
• 5:38
  Speaker 1: Now number two.
• 5:39
  Speaker 1: You might be thinking this is not really very novel, is it Felix?
• 5:42
  Speaker 1: Okay, let's look at this Similar story to the fat story NVIDIA.
• 5:46
  Speaker 1: Nvidia has a 75% market share.
• 5:48
  Speaker 1: Nvidia has 75% EBITDA margins.
• 5:52
  Speaker 1: Ebitda is profit, massaged and made to look pretty.
• 5:57
  Speaker 1: Lots of lipstick on the pig.
• 6:00
  Speaker 1: Charlie Munger be rolling in his grave if I called it a profit margin.
• 6:04
  Speaker 1: He hated EBITDA.
• 6:05
  Speaker 1: He said if you see, ebitda.
• 6:06
  Speaker 1: There's a crook behind it but it's not quite that bad.
• 6:09
  Speaker 1: It is a widely accepted term, but 75% margins are extraordinary.
• 6:13
  Speaker 1: Now, developing a new chip, building it, making it takes years.
• 6:21
  Speaker 1: It's a really, really long time.
• 6:22
  Speaker 1: And the market is kicking NVIDIA a little bit here I'll show you the chart in a second On the headlines that, oh, I don't know, arm's coming out of this and AMD and Intel and whatnot, but in reality that competition is quite a long way away.
• 6:36
  Speaker 1: But in reality that competition is quite a long way away.
• 6:38
  Speaker 1: So for me again here, as a short medium term, I still think Nvidia is by far the market leader and nobody comes close.
• 6:44
  Speaker 1: Maybe in three years or in five years margins will come down as there's more competition, but for the moment there seems to be nobody coming even close.
• 6:53
  Speaker 1: And here is a chart of the major chip manufacturers.
• 6:56
  Speaker 1: Let's see how big I can make this.
• 6:58
  Speaker 1: And what have you got?
• 7:00
  Speaker 1: Well, you've got in green I made it intentionally green NVIDIA, nvda, you've got in yellow.
• 7:09
  Speaker 1: Arm, you've done reasonably well.
• 7:11
  Speaker 1: Sorry about the colors, but you get the idea.
• 7:13
  Speaker 1: You've got AMD down there, and then down there you've got Intel.
• 7:17
  Speaker 1: So some value investors will therefore say to.
• 7:19
  Speaker 1: Then, down there, you've got Intel, so some value investors will therefore say to you well, you should buy Intel, it's the cheapest stock out there.
• 7:23
  Speaker 1: Or is it the company with the worst products?
• 7:25
  Speaker 1: I mean, I think there's some lessons from some of the recent sort of tech advances EVs, for example.
• 7:34
  Speaker 1: Tesla hasn't done a thing in a year, it's true, but still it has done way, way, way better than any of the companies trying to chase the Rivians, the Neos.
• 7:45
  Speaker 1: Everybody hasn't really achieved very much.
• 7:48
  Speaker 1: I think there's a lesson in if a company is really really good and they've got an amazing product, it's likely that they're going to keep dominating.
• 7:55
  Speaker 1: Would you bet against Microsoft in enterprise software?
• 7:58
  Speaker 1: Probably not.
• 7:59
  Speaker 1: Would you bet against Google in search?
• 8:01
  Speaker 1: Probably wouldn't.
• 8:04
  Speaker 1: Amazon in online shopping?
• 8:05
  Speaker 1: I probably wouldn't.
• 8:06
  Speaker 1: So there are just companies that are leaders, and the more you lead, the easier it is to lead, unless somebody invents something extraordinary.
• 8:15
  Speaker 1: And yes, there are some startups coming up that are funded by good people and so on, that are coming out with chips which could possibly rival NVIDIA, but it's going to take them years to get that stuff to market and in the years, I'd rather make money with the thing that's working than go.
• 8:31
  Speaker 1: Yeah, but but in three years, you know, somebody will overtake NVIDIA maybe, but for the moment I go with what works very, very simple.
• 8:43
  Speaker 1: Amy owns some Google stock.
• 8:45
  Speaker 1: You don't mind the ads so much.
• 8:46
  Speaker 1: I try not to put on.
• 8:47
  Speaker 1: I have no ads on these live streams, but we got some weird things happening in the last week with these live streams there and it happens only to some of you and some of you get cut off and some of you don't.
• 8:58
  Speaker 1: It's a weird little thing there and it happens only to some of you and some of you get cut off and some of you don't.
• 9:01
  Speaker 1: It's a weird little thing there.
• 9:01
  Speaker 1: Stock number three and then we get onto a little bonus stock here for Tesla Reporting earnings today.
• 9:05
  Speaker 1: So am I buying it today?
• 9:06
  Speaker 1: No, why not?
• 9:07
  Speaker 1: Big risk event Could drop a lot, could go up a lot.
• 9:10
  Speaker 1: They are definitely putting in some of the layoff costs into this quarter, so that could make earnings per share look a little bit worse.
• 9:19
  Speaker 1: And really I think all people care about with the earnings is Elon hopefully talking about robo-taxes.
• 9:25
  Speaker 1: That's really all people want to know about.
• 9:26
  Speaker 1: But just look at who.
• 9:28
  Speaker 1: Tesla is right.
• 9:29
  Speaker 1: They're the clear winner in EVs.
• 9:31
  Speaker 1: There is nobody else out there and I'll show you the chart of the competition in a second.
• 9:34
  Speaker 1: He's actually come close in terms of successfully selling a lot of EVs.
• 9:40
  Speaker 1: Nobody's actually done it.
• 9:41
  Speaker 1: They've survived a very hostile government, actually several hostile governments, who've also been keen to please the auto unions, because those teamster unions are pretty powerful.
• 9:51
  Speaker 1: If Trump wins and EV subsidies go away, which is his promise, then the only EV company that's actually profitably making cars in the US will be Tesla, and in my opinion, they have clear tech.
• 10:05
  Speaker 1: Profitably making cars in the US will be Tesla and in my opinion, they have clear tech leadership on FSD in the US and massive potential, new businesses like Energy.
• 10:12
  Speaker 1: And you know Robotos, which is a new word I just made up Robots.
• 10:16
  Speaker 1: Robotos are the Greek robots and AI.
• 10:20
  Speaker 1: So you get a successful car company plus all the other stuff.
• 10:26
  Speaker 1: And then you know, I guess, also taxis.
• 10:30
  Speaker 1: You know robo-taxis.
• 10:31
  Speaker 1: Taxis is actually a German word, believe it or not, from a royal family in Germany, or not a royal, but sort of.
• 10:42
  Speaker 1: You know something like that called Torn in Texas and they were the official courier in the good old days when people were lying in the side of the street and, you know, rotting away from all sorts of diseases the sort of lovely Middle Ages in Europe, and they were called torn taxes and therefore these couriers were called taxes.
• 11:04
  Speaker 1: So you've learned something really random today, haven't you?
• 11:07
  Speaker 1: Elon says this is today, today, maybe yesterday or something take away the subsidies.
• 11:11
  Speaker 1: It'll only help Tesla.
• 11:13
  Speaker 1: Also remove subsidies for more industries, because it makes it fairer.
• 11:16
  Speaker 1: Actually, it makes it easier for good companies to succeed.
• 11:20
  Speaker 1: So I think there's a lot of optimism from my point of view into Tesla.
• 11:25
  Speaker 1: Now here's the chart since 2022, basically since the peak of the market.
• 11:29
  Speaker 1: That's kind of where I started it.
• 11:30
  Speaker 1: So this up here was sort of the peak glory land of the EV hype.
• 11:36
  Speaker 1: And then who's done best?
• 11:39
  Speaker 1: Well, all of them are down.
• 11:41
  Speaker 1: All of these stocks are down.
• 11:43
  Speaker 1: Let me zoom in a little bit more for you so you can see it.
• 11:45
  Speaker 1: And BYD is down 7%, gm's down 15%, ford's down 27%, tesla's down 38%, rivian down 82%, nio down 89%, and it's obviously a snapshot.
• 11:58
  Speaker 1: I'm not saying it's going to stay that way, but if you look at the one company here that's actually making money selling those EVs, there's only one and that's Tesla.
• 12:06
  Speaker 1: So why are they down 38%?
• 12:08
  Speaker 1: And then you add all the other businesses on top, and it makes me rather exciting about this.
• 12:22
  Speaker 1: Why alien, okay, stream stopped for you as well?
• 12:25
  Speaker 1: Okay, super annoying.
• 12:25
  Speaker 1: I'll have another chat with support.
• 12:26
  Speaker 1: We'll see what happens if they can do something about it.
• 12:29
  Speaker 1: So, yeah, that's just me.
• 12:30
  Speaker 1: I just think that those are some real opportunities, and you know what I think.
• 12:35
  Speaker 1: And this is obviously controversial and I have to put a disclaimer on this because it's the opposite of what you're meant to say.
• 12:40
  Speaker 1: But in my opinion, which is just my opinion, it's not financial advice.
• 12:43
  Speaker 1: You're meant to say, but in my opinion, which is just my opinion, it's not financial advice.
• 12:45
  Speaker 1: You shouldn't necessarily follow it, probably shouldn't follow it.
• 12:46
  Speaker 1: Past returns are usually a good indicator Because great companies usually do very, very well into the future.
• 12:58
  Speaker 1: So, if you look at 10 years ago, the market cap of the magnificent seven so the largest seven companies, the Microsofts and Googles and Amazons and so on was $2 trillion.
• 13:04
  Speaker 1: Today it's $16 trillion.
• 13:05
  Speaker 1: That is an 8x.
• 13:08
  Speaker 1: And what happens in the next 10 years?
• 13:11
  Speaker 1: Well, what if it does another?
• 13:13
  Speaker 1: Let's say it does 5x?
• 13:14
  Speaker 1: Well, then you'd have what do you have?
• 13:17
  Speaker 1: You have $50 million.
• 13:18
  Speaker 1: You have an $80 trillion cap.
• 13:20
  Speaker 1: It could be a lot more, who knows, but I think the likelihood that it's going to go up a lot is higher than it isn't.
• 13:27
  Speaker 1: Because, well, once you're sort of a near monopoly, once you've got all your tentacles into the regulators, and once you've got lots of money making you money, it's much, much easier to be the dominant player.
• 13:39
  Speaker 1: And if somebody little comes up with a good idea, you just go.
• 13:41
  Speaker 1: I'm either going to squash you or I'm going to buy you out.
• 13:44
  Speaker 1: What would you prefer?
• 13:45
  Speaker 1: Most people would say please give me the money.
• 13:47
  Speaker 1: So it's very, very easy to stay in that dominant position, and companies like Google are magnificent at it.
• 13:53
  Speaker 1: Look at the list of takeovers that Google have made and see if any of those products or companies are still around.
• 13:59
  Speaker 1: Almost none of them are.
• 14:00
  Speaker 1: They just kill them off, and it's what you do when you're that big, because you've got unlimited funds.
• 14:05
  Speaker 1: So I still like the big tech stocks.
• 14:09
  Speaker 1: And then, well, a little bit more sort of today news.
• 14:12
  Speaker 1: Fairy tales do sometimes come true, and the fairy tale we've been told by the Fed is that you will get a soft landing, my son, and everything will be wonderful, stars will glitter and the sun will shine and the birds will sing and everything will be perfect, and you know what I mean.
• 14:30
  Speaker 1: Okay, government data is a load of I was going to say bollocks, but then that would be swearing, wouldn't it?
• 14:37
  Speaker 1: We don't do that on YouTube.
• 14:38
  Speaker 1: What is it?
• 14:39
  Speaker 1: The blue thing is basically inflation, and if it's high it's bad.
• 14:44
  Speaker 1: And then the red thing is a really weird indicator called too many jobs, which is peculiar, but yeah, if you have too many jobs, it tends to be inflationary.
• 14:56
  Speaker 1: So we're going back to a place where those things are both coming down and therefore we might actually get this mythical soft landing that we were promised by the people who tell us the fairy tales.