Latest / Felix Nikolas Prehn's Podcast / Felix Prehn - Bank of America’s Shocking Warning + Stock Market News 11 November 2025

Transcript

Felix Prehn - Bank of America’s Shocking Warning + Stock Market News 11 November 2025 · Felix Nikolas Prehn's Podcast

• 0:00
  SPEAKER_00: Look, Wall Street just warned the big investors.
• 0:02
  SPEAKER_00: Well, you and me, the retail investors, are once again left uninformed.
• 0:06
  SPEAKER_00: And it kind of pisses me off that there is this one set of data for the big money, and then there's just noise for us retail investors.
• 0:14
  SPEAKER_00: So I just read this research report from Bank of America.
• 0:18
  SPEAKER_00: I've got it on the screen right in front of me here.
• 0:20
  SPEAKER_00: And I think everybody needs to know and deserves to know what these guys are talking about.
• 0:25
  SPEAKER_00: Because Bank of America, with all their research and all their thousands of people digging up that research, just flashed a critical warning signal that they've been tracking for many months.
• 0:36
  SPEAKER_00: And it finally snapped.
• 0:38
  SPEAKER_00: The AI bubble watch out metric just hit levels we have not seen since the dot-com crash.
• 0:46
  SPEAKER_00: And if you're holding any AI stocks, tech stocks, or even just an index fund, which will inevitably hold AI stocks, you need to understand what's happening behind the scenes.
• 0:57
  SPEAKER_00: Big money is already repositioning.
• 0:59
  SPEAKER_00: The question is, are you going to be left holding the bank?
• 1:02
  SPEAKER_00: Which is probably the idea.
• 1:04
  SPEAKER_00: Well, my promise to you is that by the end of the video here, you'll understand exactly what Bank of America's warning is all about.
• 1:11
  SPEAKER_00: Why AI companies are suddenly drowning in debt, and what the watch out metric is, and most importantly, what you can do to protect your portfolio right now.
• 1:19
  SPEAKER_00: It's not a doom and gloom video.
• 1:20
  SPEAKER_00: I'm not saying it's all over.
• 1:22
  SPEAKER_00: I'm just saying the smart money is doing something that nobody else really understands.
• 1:26
  SPEAKER_00: My name is Felix Preen.
• 1:27
  SPEAKER_00: I'm an ex-investment banker who's seen how these banks really work from the inside.
• 1:31
  SPEAKER_00: I'm also the founder of a GOAT Academy, where we have taught over 20,000 students so far.
• 1:36
  SPEAKER_00: And I'm also the co-founder of TradeVision.io, where we give retail investors the same tools and the same news and the same data that the pros news.
• 1:44
  SPEAKER_00: And I'm dedicating my retirement to teaching regular investors how to win in this game.
• 1:50
  SPEAKER_00: That's really what it's all about.
• 1:51
  SPEAKER_00: And I'm sorry, I'm in a hotel suite, so it's a bit messy, probably here, sound and audio and everything else.
• 1:56
  SPEAKER_00: I hope it's okay for you.
• 1:57
  SPEAKER_00: Let me know down below in the comments.
• 1:59
  SPEAKER_00: But this is so important, I thought I should really share this with you and not just sit on it for a week.
• 2:04
  SPEAKER_00: So this Bank of America report from Michael Hartnett, who's one of the most respected strategists on Wall Street.
• 2:11
  SPEAKER_00: You hear this name all the time if you're in this world.
• 2:13
  SPEAKER_00: And it's the kind of research that gets sent to what, billion-dollar hedge funds, institutional investors.
• 2:18
  SPEAKER_00: Yeah.
• 2:19
  SPEAKER_00: It's not written for you and me.
• 2:21
  SPEAKER_00: But the warnings in there, they affect your money, your retirement, and your portfolio.
• 2:26
  SPEAKER_00: So let's break it down in plain English.
• 2:29
  SPEAKER_00: Here's what's happening.
• 2:30
  SPEAKER_00: The biggest tech companies in the world, think Amazon, Google, Meta, Microsoft, and Oracle, and you might want to take notes.
• 2:36
  SPEAKER_00: They're in an AI arms race and they are running out of money.
• 2:40
  SPEAKER_00: And I know what you're thinking, Felix, these are the richest companies on earth.
• 2:44
  SPEAKER_00: How can they possibly be running out of money?
• 2:46
  SPEAKER_00: But here's the thing: building AI infrastructure is insanely expensive.
• 2:51
  SPEAKER_00: We're talking about data centers the size of small cities, millions of computer chips, massive electricity builds.
• 2:57
  SPEAKER_00: And according to Morgan Stanley's data, these companies need$2.9 trillion for AI data spending throughout 2028.
• 3:08
  SPEAKER_00: Now, that is a trillion with a T.
• 3:10
  SPEAKER_00: If I show you this chart here on the screen, let me see if I can zoom in a bit on that for you, or hopefully I can do something in the edit.
• 3:17
  SPEAKER_00: Hyperscalar cash flow.
• 3:19
  SPEAKER_00: You see this chart right here?
• 3:20
  SPEAKER_00: Well, what's it showing to you?
• 3:22
  SPEAKER_00: Well, it's showing you that if we break this down, this money is meant to come from their own cash flow.
• 3:29
  SPEAKER_00: So this column here is their own cash flow, right?
• 3:31
  SPEAKER_00: So say this year, these four companies, Amazon, Google, Meta, Microsoft, Oracle, even five, um, they have$580 billion of free cash flow, which is extraordinary, right?
• 3:43
  SPEAKER_00: It's a staggering amount of money.
• 3:45
  SPEAKER_00: So you'd think they could pay for it.
• 3:47
  SPEAKER_00: But you see, they're spending so much money that they're gonna be spending 68% of all their cash flow just on that investment in the data centers.
• 4:01
  SPEAKER_00: And you may think, well, that's just about sustainable.
• 4:04
  SPEAKER_00: Maybe, maybe 68% is, but the next year, the spending is gonna go up and it's gonna be 80% of cash flow.
• 4:11
  SPEAKER_00: Now remember, they also have to pay for other things, right?
• 4:14
  SPEAKER_00: Uh other investments and dividends and buybacks and all that kind of stuff.
• 4:18
  SPEAKER_00: So what are they therefore doing?
• 4:19
  SPEAKER_00: Well, they're borrowing money.
• 4:21
  SPEAKER_00: So this year, that 106 billion there is money they're actually borrowing.
• 4:27
  SPEAKER_00: They're selling bonds to do that.
• 4:30
  SPEAKER_00: Now, next year, by logic, they're gonna have to raise a lot more than that, probably 200 billion plus, just to be part of this arms race.
• 4:40
  SPEAKER_00: So think about that for a second.
• 4:42
  SPEAKER_00: The most biggest, the most profitable tech companies in history, they need to borrow.
• 4:47
  SPEAKER_00: And the estimates from Bank of America is that they need to borrow a trillion and a half up to 2028 just to keep up with the AI race.
• 4:58
  SPEAKER_00: So it'll cause an enormous debt explosion.
• 5:01
  SPEAKER_00: And maybe you think, oh, I'm making this up.
• 5:02
  SPEAKER_00: No, look, Meta just borrowed 30 billion last month.
• 5:05
  SPEAKER_00: Oracle borrowed 18 billion last month, plus 38 billion in loans.
• 5:09
  SPEAKER_00: There's another company in the space that borrowed 27 billion.
• 5:12
  SPEAKER_00: So we've got 75 billion in bonds for data centers issued in just two months, plus another 38 billion in loans.
• 5:19
  SPEAKER_00: So 100 billion plus.
• 5:20
  SPEAKER_00: Now, put that into perspective, you go back two years, those same companies borrowed 14 billion for the entire year.
• 5:28
  SPEAKER_00: Now they're borrowing 100 billion in two months.
• 5:31
  SPEAKER_00: So this is kind of a hockey stick, right?
• 5:33
  SPEAKER_00: You skick it up, the charts flat, flat, flat, and then it goes out like that.
• 5:36
  SPEAKER_00: It's not a good kind of hockey stick.
• 5:38
  SPEAKER_00: Now, before we go deeper and understand what we can do about this, how we can benefit from this potentially, even.
• 5:45
  SPEAKER_00: If you're somebody who's serious about investing, that's maybe why you're tuning in here, if you want to learn the exact strategies that I used to find winning stocks.
• 5:54
  SPEAKER_00: And if you want to learn from the same people that I learned from, retired Wall Street investment bankers and hedge fund guys who are kind and patient and expect zero background and knowledge, then you know we never discount our mentorship programs because I just believe we should just deliver as much as humanly possible and over-deliver for you rather than like cut back.
• 6:18
  SPEAKER_00: But my team has strangely convinced me that it is Black Friday and that is apparently a big thing in the US, and therefore we are going to do something really crazy.
• 6:25
  SPEAKER_00: Um, it's the only opportunity ever in a year to get any kind of discount on mentorship with us.
• 6:31
  SPEAKER_00: So if you are serious about learning more, then book a free call with us, feelixfriends.org slash freedom.
• 6:37
  SPEAKER_00: So link down below, FelixFriends.org slash freedom.
• 6:40
  SPEAKER_00: It's a link in the description.
• 6:41
  SPEAKER_00: And it's a free strategy call, and you can discuss with us how a mentorship learning from investment bankers may or may not help you.
• 6:50
  SPEAKER_00: And and so I encourage you to hop on that because that thing is gonna never gonna come back.
• 6:54
  SPEAKER_00: So yeah, check that out.
• 6:55
  SPEAKER_00: Links down below.
• 6:56
  SPEAKER_00: But let's just jump back one second.
• 6:58
  SPEAKER_00: In August, Bank of America told investors to watch out for one specific metric to know when the AI bubble would be at bursting levels.
• 7:06
  SPEAKER_00: What's that metric?
• 7:08
  SPEAKER_00: Hyperscaler bond spreads.
• 7:11
  SPEAKER_00: Now I know that sounds about as exciting as watching paint dry because it's Wall Street jark, in a sense.
• 7:17
  SPEAKER_00: So let me explain to you what that actually means in plain English.
• 7:20
  SPEAKER_00: Bond spreads, well, when companies borrow money, they sell a bond, right?
• 7:26
  SPEAKER_00: Now, investors demand a certain interest rate to hold that bond.
• 7:30
  SPEAKER_00: The riskier the company, the higher the interest rate.
• 7:32
  SPEAKER_00: So a bond spread is that extra bit of interest that investors demand above the safest possible investment rate, which is generally the US government bonds.
• 7:43
  SPEAKER_00: So think of it like this.
• 7:44
  SPEAKER_00: If you have the perfect credit, you might get a 3% mortgage.
• 7:49
  SPEAKER_00: If your credit is a little shaky, you might pay 7%.
• 7:53
  SPEAKER_00: That difference between the 3% and the 7%, that 4% difference is your spread.
• 7:58
  SPEAKER_00: It's the risk premium.
• 8:00
  SPEAKER_00: So for these massive tech companies, their bond spreads were really low.
• 8:04
  SPEAKER_00: They were 0.5% in September.
• 8:06
  SPEAKER_00: And that's basically saying these companies are super safe, they're almost as safe as the US government.
• 8:12
  SPEAKER_00: But here's the alarm: those spreads just jumped, as you can see down here, from 50 to about 80.
• 8:22
  SPEAKER_00: Doesn't seem like a lot, but it's moving up rather rapidly.
• 8:26
  SPEAKER_00: It is a 60% increase in the risk premium the investors are now demanding.
• 8:31
  SPEAKER_00: And Bank of America is basically saying the lows on risk are in.
• 8:36
  SPEAKER_00: This here was the low, we're now going up.
• 8:39
  SPEAKER_00: And I'm using a red pen because it's not a good thing, right?
• 8:42
  SPEAKER_00: Now, watch for 2000, what happened?
• 8:44
  SPEAKER_00: Well, we also started to go up pretty much at exactly the same pace, except then we went a lot higher.
• 8:51
  SPEAKER_00: So the market is starting to realize these companies are riskier than everybody else thinks.
• 8:57
  SPEAKER_00: And it's only going to get worse from here.
• 8:59
  SPEAKER_00: Let's talk about Oracle specifically, because this is actually the scariest piece of data I've seen in a very long time.
• 9:07
  SPEAKER_00: Oracle's risk premium here has absolutely exploded.
• 9:12
  SPEAKER_00: And what the market is basically saying, we don't think Oracle's gonna go bankrupt tomorrow, but we're saying Oracle just borrowed, we're saying Oracle just borrowed$56 billion.
• 9:25
  SPEAKER_00: And what if they don't pay it off?
• 9:28
  SPEAKER_00: And that's everybody should be asking the same question.
• 9:31
  SPEAKER_00: Because what Bank of America is saying is that the US tech bond prices fell 8% the year before the dot-com bubble peak.
• 9:40
  SPEAKER_00: So it came down the low.
• 9:42
  SPEAKER_00: In other words, the bond market figured out the problem before the stock market crashed.
• 9:47
  SPEAKER_00: So the bond market is often smarter than the stock market because bond investors actually care about cash flow and debt repayment.
• 9:55
  SPEAKER_00: They don't really care that you're going to reinvent something, solve the world, cure cancer.
• 9:59
  SPEAKER_00: Bond, bond investors don't care, right?
• 10:01
  SPEAKER_00: Whereas our stock investors, and most stock investors, you probably are too, right?
• 10:05
  SPEAKER_00: Let me know down in the comments.
• 10:06
  SPEAKER_00: Do you buy stocks or bonds?
• 10:07
  SPEAKER_00: So maybe both put it in there, S and B.
• 10:09
  SPEAKER_00: We often chase momentum, right?
• 10:11
  SPEAKER_00: And right now, the bond market is basically flashing like warning, warning, warning.
• 10:16
  SPEAKER_00: And if you go back and look at this table I just showed you here, and you see that last year they spent half of all their cash flow on AI.
• 10:25
  SPEAKER_00: And this year they're spending 68% of all their cash flow on AI.
• 10:29
  SPEAKER_00: Next year it's going to be 80%.
• 10:31
  SPEAKER_00: It's like a race to the death or something.
• 10:33
  SPEAKER_00: It's whoever can jump down this cliff first will somehow win, we hope.
• 10:40
  SPEAKER_00: And when you spend 80% of every dollar you make on AI.
• 10:44
  SPEAKER_00: Well, think about your own finances for a second.
• 10:47
  SPEAKER_00: If you make$100,000 a year and you're spending$80,000 on one thing, let's say it's a business venture.
• 10:55
  SPEAKER_00: Now you only have$20,000 for everything else, your mortgage, your food, your car, your savings, everything.
• 10:59
  SPEAKER_00: Not sustainable, right?
• 11:01
  SPEAKER_00: And it's definitely not sustainable if that business venture hasn't started making money yet.
• 11:06
  SPEAKER_00: So the key question is when does AI actually start generating enough revenue to justify these insane spending levels?
• 11:14
  SPEAKER_00: Well, nobody knows.
• 11:15
  SPEAKER_00: Not even Sam Altman from OpenAI knows, which is why he's literally asking for government subsidies.
• 11:20
  SPEAKER_00: Literally, this is the leading AI company, and he's saying we need government money.
• 11:25
  SPEAKER_00: He literally stated that OpenAI will need subsidies from the government to fulfill its obligations.
• 11:31
  SPEAKER_00: Let that sink in.
• 11:32
  SPEAKER_00: The poster child of the AI revolution says we need government bailouts to survive.
• 11:38
  SPEAKER_00: So if the most hyped AI company in the world needs government help, what does that tell you about the business model?
• 11:44
  SPEAKER_00: Now, before you run off and sell all your stocks, Michael Hartman from Bank of America, he makes an important distinction in the report.
• 11:51
  SPEAKER_00: He talks about watch out signals versus get out signals.
• 11:55
  SPEAKER_00: Watch out signals tells you a bubble is forming, you need to be careful.
• 12:00
  SPEAKER_00: Get out says, run, right?
• 12:02
  SPEAKER_00: So right now we have multiple watch out signals flashing.
• 12:06
  SPEAKER_00: The get out signals haven't triggered yet, but they're coming.
• 12:09
  SPEAKER_00: So what's the first watch out signal?
• 12:11
  SPEAKER_00: Well, it's market concentration.
• 12:13
  SPEAKER_00: The Max 7 stocks.
• 12:15
  SPEAKER_00: So the first one is market concentration.
• 12:18
  SPEAKER_00: So the first one is market concentration.
• 12:20
  SPEAKER_00: Magnificent 7 stocks now are 40% of the entire stock market.
• 12:26
  SPEAKER_00: That means seven companies out of 500 make up almost half the index.
• 12:32
  SPEAKER_00: That's extreme.
• 12:34
  SPEAKER_00: So when everyone's crowded into the same trade, well, that's when you need to start worrying.
• 12:38
  SPEAKER_00: What's watch out number two?
• 12:41
  SPEAKER_00: Write this down.
• 12:43
  SPEAKER_00: It's called market breadth.
• 12:45
  SPEAKER_00: Now, what does that mean?
• 12:46
  SPEAKER_00: It means how many stocks are participating in the rally.
• 12:49
  SPEAKER_00: Right now, it's very few.
• 12:51
  SPEAKER_00: Bank of America shows a comparison to the last six months of the 1999 dot com bubble.
• 12:58
  SPEAKER_00: And what happened the six months before the crash?
• 13:01
  SPEAKER_00: Well, you had your tech stocks, they went up 45% in last month, last months before the dot com bubble.
• 13:11
  SPEAKER_00: What about the market?
• 13:12
  SPEAKER_00: Well, the SP, that went up 5%.
• 13:15
  SPEAKER_00: Let me just try and move this for you so you can see it.
• 13:18
  SPEAKER_00: There we go.
• 13:19
  SPEAKER_00: So you see the problem with that?
• 13:20
  SPEAKER_00: What's the problem with that?
• 13:21
  SPEAKER_00: The problem is that you have a very, very, very tight concentration.
• 13:25
  SPEAKER_00: Only tech goes up, the rest of the market doesn't, because the rest of the market isn't actually making any more money.
• 13:32
  SPEAKER_00: And it kind of sounds familiar, right?
• 13:34
  SPEAKER_00: That's exactly what's happening right now.
• 13:35
  SPEAKER_00: AI and tech stocks are soaring while everything else is pretty much struggling.
• 13:39
  SPEAKER_00: And then the third warning is just insane valuations.
• 13:44
  SPEAKER_00: The AI megacaps are trading at 45 times trailing earnings.
• 13:49
  SPEAKER_00: That means if you buy these stocks today, it would take 45 years of current profits to pay back your investments.
• 13:56
  SPEAKER_00: But for context, the historical average PE is about 15.
• 14:01
  SPEAKER_00: So average is about 15x.
• 14:04
  SPEAKER_00: So at 45 times, you're not buying based on the current value, you're buying based on hope and hype of the future.
• 14:10
  SPEAKER_00: And then number four is basically the rest of the world jumps on the same thing.
• 14:14
  SPEAKER_00: Look at Japanese AI stocks or Korean AI stocks like SK Hinex and so on.
• 14:19
  SPEAKER_00: They've doubled in the last eight weeks.
• 14:20
  SPEAKER_00: So in global retail investors in Tokyo and Seoul, and just not too far from where I am right now, their buying AI stocks is probably rather late to the party.
• 14:29
  SPEAKER_00: And that's where us retail investors come in.
• 14:32
  SPEAKER_00: There is a retail frenzy.
• 14:34
  SPEAKER_00: We have literally seen a record inflow into tech funds in the last two months.
• 14:43
  SPEAKER_00: That's you and me going, oh my god, I want to be part of this.
• 14:46
  SPEAKER_00: So when retail investors are piling at record levels, institutional investors are gradually getting ready to exit.
• 14:53
  SPEAKER_00: There's a reason they call us exit liquidity.
• 14:56
  SPEAKER_00: Now, at the same time, I think it would be a mistake to panic and sell everything.
• 14:59
  SPEAKER_00: It's not about ICE, I'm just giving you my opinion, my thought on it.
• 15:02
  SPEAKER_00: But it seems that Bank of America is shorting hyperscaler bonds right now.
• 15:06
  SPEAKER_00: He's making a bet these companies' debt will lose value.
• 15:10
  SPEAKER_00: Deutsche Bank is apparently shorting the whole AI infrastructure theme to hedge their own bonds that they hold from all these hyperscalers.
• 15:22
  SPEAKER_00: So everyone's focused on AI stocks, but nobody's really thinking this through and looking at the historic parallel.
• 15:28
  SPEAKER_00: And my hope is that I've given you a little bit of guidance here of what that looks like.
• 15:33
  SPEAKER_00: So what you actually want to watch out for, it's a really, really boring thing.
• 15:36
  SPEAKER_00: It's called US hyperscalar corporate bond spread.
• 15:39
  SPEAKER_00: And it's not something that you typically discuss over your cornflakes, I presume.
• 15:42
  SPEAKER_00: Um, but it is something that's insanely important.
• 15:46
  SPEAKER_00: And we might be going another year or two, and this might keep going up.
• 15:50
  SPEAKER_00: And then at some point, this thing is gonna pop and everyone's gonna be talking about hyperscalar corporate bond spreads.
• 15:55
  SPEAKER_00: And you'd be like, ah, I watched that video, right?
• 15:57
  SPEAKER_00: Didn't I?
• 15:57
  SPEAKER_00: From that strange guy with a strange accent sitting in a strange hotel room.
• 16:02
  SPEAKER_00: Um, I should have paid attention.
• 16:04
  SPEAKER_00: So pay attention to this.
• 16:06
  SPEAKER_00: I will do my utmost to keep you guys informed.
• 16:08
  SPEAKER_00: So maybe subscribe to the channel.
• 16:10
  SPEAKER_00: But if you actually really want to learn this, understand this, and grasp the market and stop feeling, oh my God, I'm scared by all these things around me, which is what 99.9% of people feel like right now, then find yourself a mentor who's been there, done that institutionally, got trained by his boss, who was a banker, who has handled billions of dollars through his career.
• 16:31
  SPEAKER_00: And my offer to you is have a chat with my team, see if you want to learn from my mentors who are tremendous people, and um worked for Iner Goldman in Deutsche and Bernsterns and the big hedge funds and so on in the US.
• 16:43
  SPEAKER_00: And the time to do that, well, there's never a better time to do it right now than right now.
• 16:47
  SPEAKER_00: Why?
• 16:48
  SPEAKER_00: Because we're running this insane Black Friday offer.
• 16:51
  SPEAKER_00: So go to FelixFriends.org slash freedom, book yourself a free strategy call, and keep learning, my friends.
• 16:58
  SPEAKER_00: You got some value out of this?
• 17:00
  SPEAKER_00: Take action for yourself and then share this video with someone else.
• 17:02
  SPEAKER_00: You might benefit from it.
• 17:03
  SPEAKER_00: All the best.