Latest / Felix Nikolas Prehn's Podcast / Felix Prehn - The Stock Market Crash & Rally of 2024 + Stock Market News 12 August 2024

Transcript

Felix Prehn - The Stock Market Crash & Rally of 2024 + Stock Market News 12 August 2024 · Felix Nikolas Prehn's Podcast

• 0:10
  Speaker 1: Felix here and we're live.
• 0:11
  Speaker 1: We're now fortified with our electrolytes for the day, and what I want to walk through here is where are we actually heading?
• 0:19
  Speaker 1: What are the likelihood that this is going to get worse?
• 0:21
  Speaker 1: I know we've kind of survived the Monday scare last week.
• 0:25
  Speaker 1: People are a little bit on the edge still.
• 0:26
  Speaker 1: Or is this actually just a glorious opportunity to load up some really good stocks at a discount, and, in which case, which ones?
• 0:34
  Speaker 1: That's sort of the thing I'm trying to get through here today.
• 0:37
  Speaker 1: In the next 20 minutes, 30 minutes or so I'm going to share my screen with you here.
• 0:42
  Speaker 1: We've got a nice new circle today which I think looks rather snazzy and pre-market looks rather good.
• 0:51
  Speaker 1: Right, nothing really to worry about.
• 0:53
  Speaker 1: Tesla's down a touch, but the rest of the market looks pretty happy, pretty snappy and happy.
• 0:58
  Speaker 1: Let me see if I can share my full screen with you here as well.
• 1:03
  Speaker 1: Where did that go?
• 1:03
  Speaker 1: So you can see Tesla?
• 1:06
  Speaker 1: There is Tesla.
• 1:08
  Speaker 1: So I prepared a few things for you and I'm going to walk you through them as usual.
• 1:14
  Speaker 1: If this is your first time joining in, welcome.
• 1:17
  Speaker 1: This is going to be a little data heavy, and I generally say that it's generally a little data heavy around it, because I think that's the only way we make better decisions.
• 1:25
  Speaker 1: It's the only way we make more money, and that's always my intention here.
• 1:29
  Speaker 1: Who is ready for a stress-free week?
• 1:31
  Speaker 1: Says Simon.
• 1:32
  Speaker 1: Indeed, that's what we're looking for.
• 1:33
  Speaker 1: So this is the big picture.
• 1:38
  Speaker 1: So we're going to get rate cuts right.
• 1:40
  Speaker 1: I think we're going to get a quarter percent rate cut in September and they're not going to tell us what we're going to get for the rest of the year.
• 1:46
  Speaker 1: They're going to be see.
• 1:46
  Speaker 1: We're going to be data dependent.
• 1:48
  Speaker 1: You know that kind of thing.
• 1:48
  Speaker 1: So what happens when rate cuts happen?
• 1:52
  Speaker 1: So the S&P 500 returns from three months before and three months after the first rate cut, and we're definitely within that three months before.
• 2:01
  Speaker 1: Well, nothing is definite, but I would argue that we are.
• 2:04
  Speaker 1: So what sectors over the years have done well?
• 2:06
  Speaker 1: Well, the blue.
• 2:08
  Speaker 1: They didn't have green.
• 2:09
  Speaker 1: Obviously, they couldn't afford it over at.
• 2:12
  Speaker 1: Where does this come from?
• 2:13
  Speaker 1: Goldman Sachs or somewhere?
• 2:15
  Speaker 1: Utilities tend to do very well.
• 2:17
  Speaker 1: Staples tend to do very well.
• 2:20
  Speaker 1: Staples are things that you need like, literally stuff that you can't live without.
• 2:24
  Speaker 1: If you can't live without it, it's a staple.
• 2:26
  Speaker 1: If you can, it's not.
• 2:27
  Speaker 1: Healthcare tends to do rather well, and that's sort of where it gets a little bit dodgy.
• 2:32
  Speaker 1: Then Materials, sort of positive, but energy sort of 2019 wasn't a positive one, but everything else is sort of a rather mixed story, and I think that's an important thing to bear in mind that how much of your portfolio is in utilities?
• 2:49
  Speaker 1: Probably not very much right For most people.
• 2:52
  Speaker 1: Well, maybe it's something to look into.
• 2:54
  Speaker 1: I'm not saying you should.
• 2:55
  Speaker 1: Utilities have actually done quite well of late because of this, but I want you to understand what's going on here, what what's going on here, what's likely to happen in the next couple of months, especially once you smash the like button.
• 3:07
  Speaker 1: We also hope to make you better informed running tomorrow.
• 3:09
  Speaker 1: Very excited for it, we've got over 1100 people have signed up so far to our life trading challenge.
• 3:15
  Speaker 1: This is for beginners.
• 3:16
  Speaker 1: For two days I'll walk you through our rules, our setups, our systems.
• 3:20
  Speaker 1: We'll do some real trades together and so far this year we're up $24,000 on a $30,000 portfolio for you guys inside the coaching program.
• 3:29
  Speaker 1: You saw me live trade again on Friday, for example, and that means we're up 80%, which we're rather smugly about.
• 3:35
  Speaker 1: So I'm not promising returns I never do but I promise to show you the system and everything else.
• 3:41
  Speaker 1: I'm also putting out a video today where I show you every single trade in July.
• 3:45
  Speaker 1: So let the mad comments begin on that one.
• 3:49
  Speaker 1: It's funny when you share stuff, there's always someone who goes but our trades against your rules, why did you do that one and that kind of thing?
• 3:55
  Speaker 1: People always do that a little bit, which is interesting.
• 3:57
  Speaker 1: But you got to master the foundation, right, you got to master the basics.
• 4:03
  Speaker 1: Once you master the basics that's what I teach you on Tuesday and Wednesday, and you keep doing it for years then, of course, you can go off and you know, I don't know put with your driver or whatever it is you want to do.
• 4:15
  Speaker 1: Right, if it works for you, it works for you.
• 4:16
  Speaker 1: But at the beginning you got to understand the rules.
• 4:19
  Speaker 1: I'm going to teach you the rules.
• 4:20
  Speaker 1: That's really the intention here.
• 4:21
  Speaker 1: Okay, lost in the UK, I do that.
• 4:28
  Speaker 1: Are you one of those guilty buggers?
• 4:30
  Speaker 1: You've been tuning in for years, so you have some privilege there.
• 4:34
  Speaker 1: Okay, this is the big story that no one's really talking about yet, but it's what's going to define the next six months, the next 12 months of the stock market.
• 4:42
  Speaker 1: What am I talking about?
• 4:44
  Speaker 1: Well, let's find a super suitable pinkish color.
• 4:47
  Speaker 1: This here are the max seven top seven largest stock.
• 4:52
  Speaker 1: You know the Microsoft's, the Tesla's, the Nvidia's and you can see their earnings growth.
• 4:57
  Speaker 1: Their profit growth is slowing Because we had this insane, monstrous growth in 2023.
• 5:06
  Speaker 1: And it's slowing down.
• 5:07
  Speaker 1: Nothing lasts forever at that level.
• 5:09
  Speaker 1: But there is some good news, and that is that everything else so we're going to call it the rest is actually improving, and that's good because it means the rally should, like, broaden out a little bit less at the top, but a little bit more in everything else.
• 5:27
  Speaker 1: So you got to watch out for that, because it's a two-edged sword, isn't it really?
• 5:33
  Speaker 1: In an ideal world, both would go up, but that isn't happening, and therefore there might be a little bit of sense to go a little broader with stock selection than just the top seven.
• 5:42
  Speaker 1: And I'll tell you which stocks Goldman Sachs likes, particularly what they're recommending in just a second here.
• 5:48
  Speaker 1: But the beautiful thing with every dip and we've just had a dip we're in the dip.
• 5:58
  Speaker 1: Sharon, people can be idiots, yes, yes, yes, I second that.
• 6:02
  Speaker 1: I have sort of faith in humanity, but there are some people.
• 6:07
  Speaker 1: Somebody had a go at me yesterday, did it very politely, but he said he's a doctor and I should shut up about what causes fat obesity.
• 6:15
  Speaker 1: I don't think what I say about obesity is particularly controversial offensive maybe, but not controversial.
• 6:21
  Speaker 1: Anyway, you know, I'm not allowed to talk about it.
• 6:24
  Speaker 1: Apparently.
• 6:24
  Speaker 1: I think when people tell you you're not allowed to talk about it, you really should talk about it, because there's only one reason people don't want you to talk about it is because they want to maintain some sort of power or status or they're threatened by it or something.
• 6:36
  Speaker 1: So, talk about the things people don't want you to talk about, but you Brits there with your riots, talk about it.
• 6:41
  Speaker 1: Just don't get arrested and maybe disclaimers will apply or something.
• 6:46
  Speaker 1: Anyway, forward PE mega caps the 1, 2, 3, 4, 5, 6.
• 6:51
  Speaker 1: Oh, they're extremely Tesla.
• 6:53
  Speaker 1: How cruel, how cruel.
• 6:54
  Speaker 1: Anyway, the forward PEs were at sort of 30 something.
• 6:58
  Speaker 1: They were even at 38 up here.
• 7:01
  Speaker 1: They were really expensive by this measure and they've come back down to 27.
• 7:06
  Speaker 1: So they're cheaper, which is pretty nice.
• 7:08
  Speaker 1: Right?
• 7:09
  Speaker 1: We like cheaper, don't we?
• 7:10
  Speaker 1: Don't?
• 7:10
  Speaker 1: We like cheaper?
• 7:10
  Speaker 1: I think we like cheaper.
• 7:11
  Speaker 1: So they're now at sort of 2017, 2018 prices, 2022 prices almost not quite, but getting there, so positive, isn't it?
• 7:22
  Speaker 1: Things cheaper, I think things.
• 7:24
  Speaker 1: Cheaper is always positive and we're expecting earnings to generally improve for Meta, for NVIDIA, for Apple, for Google, for Amazon, not so much for Microsoft, apparently I wouldn't write Microsoft off.
• 7:40
  Speaker 1: But there you go.
• 7:41
  Speaker 1: And here is another one.
• 7:43
  Speaker 1: I'm a bit of a contrarian If you have a long enough time horizon.
• 7:50
  Speaker 1: Last thing, again, I'm not a doctor, but you need to take less calories in compared to calories out, who?
• 7:53
  Speaker 1: I'm sure it's very offensive, very offensive.
• 7:55
  Speaker 1: It can't be that.
• 7:56
  Speaker 1: No, it's genetic, it's genetic.
• 7:57
  Speaker 1: Fatness is genetic?
• 7:58
  Speaker 1: No, it's not, of course.
• 8:00
  Speaker 1: It's a simple energy calculation.
• 8:01
  Speaker 1: You're quite right.
• 8:03
  Speaker 1: Quality of food nutrition determines how well you you know, basically, if you, if you eat stuff with no nutritional value.
• 8:10
  Speaker 1: So if you just eat Big Macs all day long, they have no nutritional value, no matter what McDonald's tries to tell you.
• 8:16
  Speaker 1: Your body is always hungry because it's got no nutrients.
• 8:18
  Speaker 1: It's going to ask for more food and you mistake that, for it wants more Big Macs.
• 8:21
  Speaker 1: Eat more Big Macs and you die, whereas if you ate, you know, highly nutritious food you actually don't want to eat anymore.
• 8:30
  Speaker 1: This is why juicing works, and I'm not a fan of juicing, I think it's idiotic.
• 8:34
  Speaker 1: But it works because it's very, very high in nutrients.
• 8:37
  Speaker 1: So your body's like I'm full, I'm good, but you know anyway, everything in moderation.
• 8:43
  Speaker 1: Net call volume I'm hitting you here hard this morning, aren't I?
• 8:46
  Speaker 1: What does that mean?
• 8:47
  Speaker 1: How many call options have people bought?
• 8:51
  Speaker 1: What happens when people buy lots of call options?
• 8:53
  Speaker 1: It means they are bullish as heck.
• 8:55
  Speaker 1: If people are buying zero call options, they are bearish, they are miserable, they're depressed, they miss the Big Mac.
• 9:04
  Speaker 1: And right now we're down here, which is the lowest we've been pretty much since 2021.
• 9:11
  Speaker 1: Very, very low.
• 9:12
  Speaker 1: What does the stock market do after that?
• 9:14
  Speaker 1: Typically, well, when things go down a lot, they tend to go up again.
• 9:19
  Speaker 1: That's how it works.
• 9:20
  Speaker 1: So long enough time horizon.
• 9:22
  Speaker 1: I'm quite bullish about it.
• 9:23
  Speaker 1: Short term, who knows?
• 9:25
  Speaker 1: But long term looks pretty good.
• 9:27
  Speaker 1: Right, we like a dip, okay.
• 9:29
  Speaker 1: And then I'm going to hit you here with a little bit of a Goldman Sachs excerpt, and I know it's a little data heavy.
• 9:34
  Speaker 1: I'm sorry, but I think I don't know.
• 9:37
  Speaker 1: If you don't know, you don't know.
• 9:38
  Speaker 1: So you know, there are only 110 likes, 750 people watching, so probably it's too much data.
• 9:44
  Speaker 1: But okay, a couple of themes from Goldman Sachs.
• 9:47
  Speaker 1: And they don't write this for you to understand this.
• 9:49
  Speaker 1: They write this to their commercial, their big money clients, their fun clients.
• 9:55
  Speaker 1: So they phrase it so that they sound really smart.
• 9:59
  Speaker 1: Anyway, travel trends clearly deteriorating.
• 10:01
  Speaker 1: People are traveling less.
• 10:03
  Speaker 1: They've got the sort of post-COVID travel bug out of their system and they might have a little bit less money about.
• 10:09
  Speaker 1: So Disney parks are not looking so good and just generally travel not looking wonderful.
• 10:15
  Speaker 1: Expedia, airbnb and so on, you know, not brilliant, cynical trends, still not very good, as in, we expect them to get good, but not there yet because we're not quite sure what happens to interest rates.
• 10:34
  Speaker 1: Software that might be a little bit closer to home for most of us, software remains choppy.
• 10:39
  Speaker 1: Some are good, like FT&T for example we talked about that Datadog Some not so good.
• 10:44
  Speaker 1: There is a couple of tickers here.
• 10:46
  Speaker 1: It felt like we haven't seen a consistent drumbeat of activity.
• 10:51
  Speaker 1: So what that basically means is that their clients are not consistently buying software.
• 10:59
  Speaker 1: They're kind of like in a wait and see approach.
• 11:00
  Speaker 1: Ai spending remains very strong and by narrative they basically mean story and you know, are people acting on it.
• 11:07
  Speaker 1: Um tsm, july monthly sales up 45%.
• 11:12
  Speaker 1: Or even Palantir, noting unrelenting wave of demand from customers for artificial intelligence systems, which is interesting that they mentioned Palantir.
• 11:23
  Speaker 1: I thought first time I've seen that.
• 11:25
  Speaker 1: But there is some anxiety around when are these AI benefits going to materialize?
• 11:34
  Speaker 1: It always takes longer for new technology to have a positive impact than we think, so we always get a little over excited.
• 11:43
  Speaker 1: We have a dip and then we get really excited because it actually works.
• 11:47
  Speaker 1: Uh, jimmy says you can't like the video if you're not logged in.
• 11:56
  Speaker 1: Really, that's very peculiar.
• 11:58
  Speaker 1: That might explain it.
• 11:59
  Speaker 1: Interesting is that some new fangled setting somewhere um, live chat, live chat, live reactions, message delay Weird, I didn't know that was a thing.
• 12:15
  Speaker 1: I appreciate that.
• 12:16
  Speaker 1: Okay, it means you need to be logged in.
• 12:19
  Speaker 1: Okay, I think that's probably Google's way of getting your data.
• 12:22
  Speaker 1: Sorry about that.
• 12:23
  Speaker 1: That's the way YouTube works, and Airbnb here says it's going to take a lot longer than people think for AI applications to change.
• 12:32
  Speaker 1: So patience, my friends, patience and patience and patience.
• 12:36
  Speaker 1: And then they share with us which of the big tech stocks do they like, which ones do they loathe?
• 12:47
  Speaker 1: In order of most to least loved.
• 12:48
  Speaker 1: So, meta is very much loved, google is sort of right.
• 12:53
  Speaker 1: And then Apple gets a little heart.
• 12:55
  Speaker 1: Amazon, a tiny heart.
• 12:57
  Speaker 1: Microsoft you can hardly see it.
• 12:59
  Speaker 1: So they love Meta Back in stride.
• 13:03
  Speaker 1: Capex addressed Meta connect catalyst.
• 13:05
  Speaker 1: Apple uncertainty around the story.
• 13:08
  Speaker 1: And then there is the Google thing, because Apple makes 20 billion in clean cash from Google.
• 13:14
  Speaker 1: Google pays them to be the exclusive search engine on iPhones and that seems to be potentially illegal Surprise.
• 13:23
  Speaker 1: Amazon frustrated but not defeated.
• 13:26
  Speaker 1: Aws acceleration is there.
• 13:29
  Speaker 1: Margins and ad optimism are positive.
• 13:32
  Speaker 1: Microsoft nothing really wrong, just they're not excited about it.
• 13:39
  Speaker 1: And Google few overhangs, perplexity, open AI competition, not sure about the Apple collaboration regulation, cyclical, just sort of everything is a little dodgy around Google.
• 13:53
  Speaker 1: So, short-term, love meta, maybe Apple hate Google, but long-term you might want to flip that on its head.
• 14:00
  Speaker 1: That's always the interesting thing with it.
• 14:02
  Speaker 1: You want to separate those brains, the trader and the long-term investor.
• 14:10
  Speaker 1: I think that's how we make most money.
• 14:12
  Speaker 1: Andrew, you got unsubscribed.
• 14:15
  Speaker 1: You have to resubscribe.
• 14:16
  Speaker 1: Very strange, that's happening here.
• 14:18
  Speaker 1: Prevent fake liking.
• 14:20
  Speaker 1: Oh yeah, that's really the concern of YouTube.
• 14:22
  Speaker 1: Fake interaction None of the con spam bots though.
• 14:27
  Speaker 1: Ah, electrolytes are good.
• 14:33
  Speaker 1: Alrighty, let me move on then a little bit more and I'm sure sorry there are a few more data points I'm going to hit you with.
• 14:39
  Speaker 1: If you're really allergic to data, come and join our live trading challenge tomorrow and the day after at felixfrenzorg slash.
• 14:49
  Speaker 1: I put webinar down there.
• 14:50
  Speaker 1: Is that right?
• 14:50
  Speaker 1: It isn't, is it?
• 14:52
  Speaker 1: It's not Not right at all.
• 14:55
  Speaker 1: Interesting, interesting, is it that one?
• 15:00
  Speaker 1: Yeah, that's the one.
• 15:01
  Speaker 1: Some interesting things going on here today.
• 15:03
  Speaker 1: Let's see if we can get that on the screen here for you.
• 15:08
  Speaker 1: There we go, there we go.
• 15:10
  Speaker 1: That's the one.
• 15:11
  Speaker 1: That's the wrong one too, good God.
• 15:14
  Speaker 1: Good God, what are we doing?
• 15:16
  Speaker 1: What are we doing?
• 15:17
  Speaker 1: Anyway, it is tomorrow.
• 15:18
  Speaker 1: It's just not a masterclass, it's a challenge, but it'll do.
• 15:21
  Speaker 1: It'll do.
• 15:22
  Speaker 1: It's better than not being there.
• 15:23
  Speaker 1: So, yeah, join us.
• 15:24
  Speaker 1: 8 pm, new York time.