Latest / Felix Nikolas Prehn's Podcast / Sell Everything Except THIS Stock + Stock Market News 28 February 2024

Transcript

Sell Everything Except THIS Stock + Stock Market News 28 February 2024 · Felix Nikolas Prehn's Podcast

• 0:00
  Speaker 1: Good morning to you.
• 0:01
  Speaker 1: What a day, what a day, what a day.
• 0:03
  Speaker 1: Let's run through the key things that are happening today what you need to know, the fundamentals as well as today's news, so you can be the best informed stock investor out there.
• 0:15
  Speaker 1: That's what it's all about so we can make more money.
• 0:17
  Speaker 1: Isn't that what we're here for?
• 0:18
  Speaker 1: I thought that's what we're here for.
• 0:20
  Speaker 1: Smash the.
• 0:21
  Speaker 1: You know what?
• 0:21
  Speaker 1: If you are watching this on YouTube, which I think most of you are, let's get cracking.
• 0:26
  Speaker 1: My chief advisor back there, who's in charge?
• 0:30
  Speaker 1: She's called Squeaky Shall we get cracking?
• 0:34
  Speaker 1: Let's get cracking.
• 0:34
  Speaker 1: Let me share my screen with you and we'll look at pre-market and everything else as well.
• 0:38
  Speaker 1: Oh, yes, if you want to see how we make money and we're making pretty decent money we're up 13% so far this year, 105% last year, 126% the year before.
• 0:49
  Speaker 1: That's always return on capital employed.
• 0:53
  Speaker 1: I probably trade like two hours a week.
• 0:57
  Speaker 1: The way I do that is by following a very, very structured three-step system.
• 1:05
  Speaker 1: You're going to learn that system for free.
• 1:09
  Speaker 1: Come and join me on Tuesday, felix Frens at Orc Slash Webinar Link's down below.
• 1:14
  Speaker 1: Grab yourself a seat and I'll teach it to you.
• 1:16
  Speaker 1: It'll take about 90 minutes and you walk away with that knowledge and a bunch of other goodies in terms of knowledge.
• 1:25
  Speaker 1: Now the Donald the orange one is going to run against El Presidente Biden.
• 1:32
  Speaker 1: That one's, that's special.
• 1:34
  Speaker 1: I mean, he's won the sixth primary in a row.
• 1:37
  Speaker 1: Now Does that matter?
• 1:38
  Speaker 1: Well, if you are a investor in the Trump's back DWAC, remember that one.
• 1:44
  Speaker 1: That's actually potentially making him about $4 billion.
• 1:51
  Speaker 1: That little deal.
• 1:52
  Speaker 1: So this, this truth social platform, which I can't claim I've locked into, has anybody locked into that?
• 1:59
  Speaker 1: Is it?
• 1:59
  Speaker 1: Is it?
• 2:00
  Speaker 1: Is it decent?
• 2:00
  Speaker 1: Is it completely nutty?
• 2:02
  Speaker 1: Do I need to I don't know be a gun-wielding chap to be able to join that?
• 2:08
  Speaker 1: Let me know what, what, what, what, what?
• 2:09
  Speaker 1: You Americans out there, let me know Another channel, channel doing an ad if the likes didn't hit a certain level.
• 2:18
  Speaker 1: Ooh, threats, I like that.
• 2:21
  Speaker 1: You know, as I go live, I'll show you.
• 2:24
  Speaker 1: This is what YouTube shows me.
• 2:26
  Speaker 1: You see this.
• 2:27
  Speaker 1: Now it would be a good time to insert an advert.
• 2:30
  Speaker 1: I never do, because I think it's really irritating.
• 2:32
  Speaker 1: I mean, we're doing this live, right?
• 2:33
  Speaker 1: But yeah, I guess I could do that.
• 2:35
  Speaker 1: Unless the likes gave a 100, I shall press the button and you will get bombarded with adverts.
• 2:40
  Speaker 1: A few things to do.
• 2:43
  Speaker 1: I'm not actually going to do that, but it's a good idea, probably.
• 2:45
  Speaker 1: Maybe we'll introduce that starting tomorrow.
• 2:51
  Speaker 1: I want to walk you through a couple of key things.
• 2:52
  Speaker 1: I want to look at free market.
• 2:55
  Speaker 1: I want to look at economic data, routes, a day GDP and everything else but I think really the fundamental question that I get asked the most is are stocks too expensive?
• 3:06
  Speaker 1: Should I buy, should I not?
• 3:08
  Speaker 1: Should I wait?
• 3:08
  Speaker 1: Is it all a bubble?
• 3:09
  Speaker 1: And I want to show you a couple of bits of data here that will help to clarify that for you.
• 3:18
  Speaker 1: If I can have a pen, microsoft says no, you may not.
• 3:22
  Speaker 1: Bill Gates has censored us.
• 3:25
  Speaker 1: What's it saying?
• 3:29
  Speaker 1: Eps earnings per share, so profits per share expectations for big tech have gone up 6%.
• 3:38
  Speaker 1: That's quite a lot.
• 3:39
  Speaker 1: The rest of the S&P is minus 3.5% and the other tech is basically minus 2%.
• 3:49
  Speaker 1: So the only thing that should be going up is big tech, nothing else.
• 3:55
  Speaker 1: Here is another way of looking at that the rest of the S&P, anything but Big Tech.
• 4:05
  Speaker 1: It's gone from $177 earnings to $171, so that's bad right, whereas Big Tech has gone up from $46 to $49, which is good.
• 4:17
  Speaker 1: That's essentially what's going on here.
• 4:19
  Speaker 1: Big Tech is carrying everything ARK, I think, and the Infinite Wisdom put out a statement that they thought global GDP is going to double because of AI.
• 4:33
  Speaker 1: They tend to make fairly bold claims Tesla should be at $3,000, and that kind of thing.
• 4:38
  Speaker 1: I do think it's true that AI will improve productivity, which basically means how much work can the average wage slave accomplish in a given day?
• 4:53
  Speaker 1: You'd be expected to have higher output because you've got more tools at your finger.
• 4:59
  Speaker 1: Puts.
• 4:59
  Speaker 1: It's a little bit like giving a housewife a dishwasher.
• 5:03
  Speaker 1: That's a good one, isn't it?
• 5:06
  Speaker 1: Thank God there are only five women on this channel.
• 5:09
  Speaker 1: You get the idea.
• 5:12
  Speaker 1: The steam engine was the real comparison point.
• 5:15
  Speaker 1: Think about mines.
• 5:17
  Speaker 1: Back then, everybody had to carry the coal manually out of the mine.
• 5:20
  Speaker 1: Now they had a steam engine.
• 5:22
  Speaker 1: They could actually put a little train through it and get out way, way, way more, way, way, way faster.
• 5:27
  Speaker 1: Therefore, the output with the same number of people employed went up.
• 5:31
  Speaker 1: I'm going to get killed for that dishwasher.
• 5:35
  Speaker 1: I actually don't have a dishwasher, which is another story we probably shouldn't get into.
• 5:41
  Speaker 1: Nvidia is a huge part of that.
• 5:43
  Speaker 1: I'll put out a video later on today to walk you through the key numbers there.
• 5:47
  Speaker 1: Big US tech is 40% of their revenue.
• 5:51
  Speaker 1: 40%.
• 5:52
  Speaker 1: Microsoft is number one, meta is number two, it's MSFT, it's meta, that's it.
• 6:00
  Speaker 1: For a long time.
• 6:01
  Speaker 1: Nothing happens.
• 6:02
  Speaker 1: Then Amazon follows, then Google follows, then a bit of Dell and a bit of Supermicro and so on.
• 6:10
  Speaker 1: Probably it's Microsoft.
• 6:12
  Speaker 1: Meta is probably 25% of demand for Nvidia.
• 6:17
  Speaker 1: The risk, therefore, is that Microsoft and Meta and Amazon and Google come up with their own chips which they are working on.
• 6:27
  Speaker 1: They are funding lots of others.
• 6:29
  Speaker 1: At some point there will be some competition for Nvidia.
• 6:33
  Speaker 1: That might not be for a couple of years, because it takes a long time for chips to really take off.
• 6:39
  Speaker 1: It's an expensive, slow thing to do to build the manufacturing capacity and research and everything else.
• 6:45
  Speaker 1: The moment, nvidia is still by far the market leader.
• 6:49
  Speaker 1: Maybe they'll stay up, maybe they'll always be one step ahead.
• 6:52
  Speaker 1: It's entirely possible, but that's the little bit of the risk with it.
• 6:57
  Speaker 1: God, this is a complicated chart, isn't it?
• 6:59
  Speaker 1: Oh my God, what have you done, felix?
• 7:01
  Speaker 1: Very simple?
• 7:03
  Speaker 1: No, it's not.
• 7:04
  Speaker 1: Actually, it's one of the most confusing charts I've ever looked at.
• 7:07
  Speaker 1: Using the dot com bubble tech multiples, so P?
• 7:14
  Speaker 1: E ratio where 70x, which was a little bit lofty.
• 7:21
  Speaker 1: I worked in a dot-com company.
• 7:22
  Speaker 1: Our success measure was cash burn rate.
• 7:25
  Speaker 1: Nothing else, no profits ever expected.
• 7:28
  Speaker 1: And then, in 2020, we went to 37X.
• 7:34
  Speaker 1: Right now, we are what?
• 7:39
  Speaker 1: 20-something?
• 7:40
  Speaker 1: 27x.
• 7:41
  Speaker 1: So we are not anywhere near the craziness of 2000 or even COVID-level strikes Right now.
• 7:48
  Speaker 1: Right, do you have a housewife?
• 7:52
  Speaker 1: Then?
• 7:52
  Speaker 1: No, two housekeepers who are lovely and Winston who's?
• 7:58
  Speaker 1: I wish I could show you a picture of that.
• 8:00
  Speaker 1: Actually, I wonder if it's uploaded already.
• 8:02
  Speaker 1: Winston's got fleas and Winston is therefore having a coconut oil bath, and if I can put up, let me see if a picture of that already sink to your dropbox.
• 8:15
  Speaker 1: If it has, I'll share it to you.
• 8:16
  Speaker 1: So he's just got completely lavaed head to toe in coconut oil, which I suppose, yeah, maybe it'll load.
• 8:24
  Speaker 1: If it loads, I'll show it to you.
• 8:25
  Speaker 1: So back to back to your fleas.
• 8:31
  Speaker 1: The S&P, as we know, is trading at sort of 5000 plus, right, and we're like, yay, party, brilliant.
• 8:39
  Speaker 1: But if you took out the AI stocks, we'd be down here at about 4500, which wouldn't be half as exciting.
• 8:47
  Speaker 1: I'd be literally like 10% lower, ouch.
• 8:49
  Speaker 1: And therefore this is an AI rally and this is also why we no longer care about the Fed, right, we're no longer interested.
• 8:59
  Speaker 1: You might have noticed.
• 8:59
  Speaker 1: Even I've started talking less about Papa Powell, who feels very neglected.
• 9:04
  Speaker 1: He feels he's no longer the omnipresent, powerful man when he speaks, everyone's like.
• 9:09
  Speaker 1: You know, and this chart basically says it to you.
• 9:15
  Speaker 1: On the top you've got the NASDAQ, essentially QQQ, which is as mooned, and then at the bottom here you've got US 10 year rates, and they've gone in the wrong direction, and we've got this massive, massive gap between where the stock market sits and where rates sit.
• 9:33
  Speaker 1: And the explanation for that is very simple it's AI.
• 9:36
  Speaker 1: That's what it's all about, and does that make sense?
• 9:41
  Speaker 1: Yeah, I would say so.
• 9:43
  Speaker 1: I don't know about the scale of it.
• 9:45
  Speaker 1: You never really know.
• 9:46
  Speaker 1: The market tends to overreact a little bit.
• 9:48
  Speaker 1: But yeah, I can see why.
• 9:50
  Speaker 1: Productivity improvements will mean stocks are worth more.
• 9:56
  Speaker 1: Their earnings are going up, at least the big ones.
• 10:00
  Speaker 1: Just, it's only a handful of stocks.
• 10:03
  Speaker 1: The rest of the market is kind of like, yeah, we're not really doing much, but I had to include this.
• 10:09
  Speaker 1: This kind of made me chuckle today.
• 10:10
  Speaker 1: Statisticians are kind of the bane of human civilization really, and Statista, large organization, in their infinite idiocy, came out with this chart.
• 10:23
  Speaker 1: This is a serious chart that Bloomberg published the number of S&P 500 CEOs by gender or first name, and there are now 41 female CEOs and there are 22 CEOs called John.
• 10:46
  Speaker 1: Can you think of a more random statistic?
• 10:50
  Speaker 1: Well, who thought this was useful?
• 10:53
  Speaker 1: James is another 18, 18 James's.
• 10:58
  Speaker 1: Apparently, it's the most that they've ever beaten the Johnson James's by.
• 11:04
  Speaker 1: I mean random.
• 11:08
  Speaker 1: I thought it was amusing.
• 11:11
  Speaker 1: You might think I've lost a plot.
• 11:12
  Speaker 1: There's another one.
• 11:13
  Speaker 1: This is a little bit less amusing, this is a little bit more scary.
• 11:17
  Speaker 1: The pandemic winners have not done that well.
• 11:21
  Speaker 1: So Madonna, which was worth 20 billion I don't know $1,000 invested in selected companies pre-condemic, was went up 20X and now it's only worth.
• 11:34
  Speaker 1: So it went up 20X and now it's only worth 4X.
• 11:38
  Speaker 1: So the only way to make these companies whole again is to have another pandemic.
• 11:43
  Speaker 1: Isn't that the logical conclusion?
• 11:45
  Speaker 1: You think we're going to get another one?
• 11:47
  Speaker 1: I think we're going to get another one, maybe a food shortage or something like that, a water shortage or a pandemic.
• 11:53
  Speaker 1: I think once they've got this system going and they can make that much money out of it, why not run it again?
• 12:00
  Speaker 1: People will just put on the fricking mask again and go with it.
• 12:03
  Speaker 1: That's at least what I think.
• 12:05
  Speaker 1: Then we, of course, have big news.
• 12:07
  Speaker 1: The Apple Car.
• 12:09
  Speaker 1: Rest in peace.
• 12:12
  Speaker 1: It's not going to happen.
• 12:14
  Speaker 1: They have canceled it.
• 12:16
  Speaker 1: My attempts to draw a cross failed miserably.
• 12:20
  Speaker 1: Artist and resident.
• 12:22
  Speaker 1: So what have they done?
• 12:23
  Speaker 1: They have 2,000 people that have been working on the Apple Car and they fired them all.
• 12:29
  Speaker 1: Now, apparently, they've reassigned them to AI because that sounds good and they might make the stock go up.
• 12:38
  Speaker 1: Sounds a bit idiotic, really, but I don't understand why the car guys will be good at AI.
• 12:42
  Speaker 1: But anyway, I'm going to lay a lot of them off.
• 12:46
  Speaker 1: At the same time, tesla, elon's Tesla, announced a new design goals for the Tesla Roadster.
• 12:52
  Speaker 1: There will never be another car like this, if you could even call it a car, and he said he's hoping to start deliveries next year.
• 12:59
  Speaker 1: He tends to be a little bit optimistic on that front, so I wouldn't hope my breath on that score.
• 13:06
  Speaker 1: But it is entirely possible that he might still hoping to find a picture of Winston covered in coconut oil.
• 13:15
  Speaker 1: Let me see no, dropbox, not quick enough.
• 13:21
  Speaker 1: Not quick enough, la.
• 13:22
  Speaker 1: And there's a picture of him chewing his coconut.
• 13:26
  Speaker 1: See, he was very happy with that coconut.
• 13:31
  Speaker 1: What about the oil slick?
• 13:32
  Speaker 1: Oh, yeah, here is the oil slick.
• 13:33
  Speaker 1: That is Winston.
• 13:34
  Speaker 1: There we go.
• 13:36
  Speaker 1: What happened?
• 13:38
  Speaker 1: What happened?
• 13:39
  Speaker 1: No, here we go.
• 13:45
  Speaker 1: If you have a dog, he's got fleas.
• 13:46
  Speaker 1: Get yourself a big bucket of coconut oil and just cover the dog with the coconut oil.
• 13:51
  Speaker 1: Wait a day, they'll all die.
• 13:53
  Speaker 1: Very, very simple.
• 13:54
  Speaker 1: You don't need any chemicals.
• 13:55
  Speaker 1: And there he is, and he actually quite likes it because he likes the taste of coconut oil.
• 13:59
  Speaker 1: So there is treatment for dogs, everything.
• 14:04
  Speaker 1: Strange things you learn on this channel.
• 14:05
  Speaker 1: Hey, should we look at the live market?
• 14:07
  Speaker 1: Today's?
• 14:08
  Speaker 1: A particularly odd one, isn't it?
• 14:09
  Speaker 1: 160 likes, 580 people watching.
• 14:14
  Speaker 1: Apparently, I should threaten you with adverts.
• 14:17
  Speaker 1: Pre-market looks a little on the red side.
• 14:21
  Speaker 1: I Google meta down, nvidia down a percent, nothing dramatic.
• 14:27
  Speaker 1: Apple is basically flat.
• 14:28
  Speaker 1: Apple should actually be up to continue that story idea with Apple cancelling their car.
• 14:35
  Speaker 1: I think it's a good thing.
• 14:36
  Speaker 1: I think it's a very, very good thing because Apple investors buy Apple for their high margin.
• 14:44
  Speaker 1: What's the Apple gross margin?
• 14:46
  Speaker 1: Anybody know?
• 14:46
  Speaker 1: 58% or something like that.
• 14:48
  Speaker 1: I'm guessing something in that range.
• 14:50
  Speaker 1: If you're going to make a car, if you do it really, really well, you're going to get a 20% margin.
• 14:57
  Speaker 1: So it would just destroy the margin of the business.
• 14:59
  Speaker 1: And look at paperless down to the falling margin.
• 15:01
  Speaker 1: It's not really what you want and it's expensive.
• 15:04
  Speaker 1: It takes a long time.
• 15:06
  Speaker 1: I don't think the brand is necessarily that aligned.
• 15:09
  Speaker 1: You don't have a Tesla phone or a Tesla Watch or a Tesla computer.
• 15:13
  Speaker 1: I mean, I might all still come, but it's just quite a big disconnect.
• 15:18
  Speaker 1: Yes, you could lean on the design thing of Apple and the religious fanatism of Apple users, but I thought it was always thought it was a really weird idea.
• 15:29
  Speaker 1: I think it's a really weird idea.
• 15:30
  Speaker 1: I'm very glad they canceled it.
• 15:32
  Speaker 1: I think it's a good thing.
• 15:33
  Speaker 1: I just think the stock should go up on this news.
• 15:35
  Speaker 1: I suspect it will go up some more and I think Tesla is the obvious beneficiary from this, because Apple would have competed with Tesla, at least on the slightly more premium model.
• 15:48
  Speaker 1: So that's not happening and that should be good for Tesla Not massively, but still positive.