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Transcript

Felix Prehn - BREAKING: FED *Just* Flipped 📈 + Stock Market News 10 February 2025 · Felix Nikolas Prehn's Podcast

• 0:01
  Speaker 1: Felix here and welcome to this free market live stream from well, where are we?
• 0:06
  Speaker 1: Where are we?
• 0:07
  Speaker 1: Anybody can guess.
• 0:08
  Speaker 1: Actually, I bumped into a couple of you today, which was very, very lovely.
• 0:11
  Speaker 1: You know who you are.
• 0:12
  Speaker 1: I met you and your lovely wife.
• 0:13
  Speaker 1: Somebody spotted me at breakfast this morning as well, although remained incognito.
• 0:16
  Speaker 1: I'm in KL.
• 0:18
  Speaker 1: I'm in Malaysia, which is an amazing, lovely place, super, super, super nice people, and if you do ever see me out and about, do always say hello.
• 0:31
  Speaker 1: It's always amazing to see you.
• 0:32
  Speaker 1: And what I want to walk you through here is the fear being introduced into your system by mainstream media and why it's nonsense what the Fed has just announced in a roundabout, sly way, which is basically going to give us the boost that we are looking for in our portfolios, and then the one great big thing to watch out with some of our most favorite stocks.
• 0:52
  Speaker 1: There's really something to set up here which is concerning Again, 99% of people don't realize it, because the only people who've been sent this information are big clients of Wall Street banks, morning briefings from your Goldman Sachs and so on, and I'm going to share that with you because I think it's just as valuable for you as it is valuable for a big hedge fund or a big investment trust.
• 1:17
  Speaker 1: So does that sound good?
• 1:19
  Speaker 1: Does that sound like something you want to hear?
• 1:21
  Speaker 1: Then let me know in the chat.
• 1:22
  Speaker 1: Post a yes into the chat.
• 1:24
  Speaker 1: I know you're here and you're awake and I will share my screen with you here and, if I can, I'm on a laptop here, so it's all a little bit challenging.
• 1:37
  Speaker 1: Here we go, ok, so this is, of course, what they're trying to scare you with.
• 1:42
  Speaker 1: Trump unveiled new tariffs, this time on steel and aluminium.
• 1:46
  Speaker 1: You might have noticed, if you have a screener on Stockster that's exploding this morning, pre-market X, which is the US steel corporation.
• 1:55
  Speaker 1: Their shares have gone through the moon because they're about to eliminate their competition, which is rather sweet for them.
• 2:02
  Speaker 1: So why does this not matter?
• 2:05
  Speaker 1: Why does this not put me on the edge?
• 2:07
  Speaker 1: Yes, markets will get more of these scares.
• 2:10
  Speaker 1: We're going to get tariffs on the Europeans.
• 2:12
  Speaker 1: We might get higher tariffs on China.
• 2:14
  Speaker 1: We're probably going to get tariffs on a lot of Southeast Asia yeah, where I'm right now, malaysia, because trade sort of winds its way through funny routes.
• 2:22
  Speaker 1: I do think we're going to get tariffs on Mexico in 30 days in some form, and probably on Canada, at least on the energy part of that, and a lot of other countries.
• 2:30
  Speaker 1: And the market will freak out a little bit about this, but not that much.
• 2:35
  Speaker 1: And the simple reason for that is that before we get to what the Fed just did, which is super important in the big tech stocks, the simple reason for that is that we've freaked out about it already and the second time we freak out it isn't as impactful.
• 2:51
  Speaker 1: Do you remember August?
• 2:52
  Speaker 1: I think it was August 5th?
• 2:53
  Speaker 1: Japan raised their interest rates and almost crashed global markets.
• 2:58
  Speaker 1: We went down about 5% in the S&P and it was, you know, all clinging on for dear life.
• 3:04
  Speaker 1: And then they did exactly the same thing again in December.
• 3:08
  Speaker 1: Exactly the same thing, same action.
• 3:10
  Speaker 1: And the market went like, yeah, okay, kind of seen that play out before it dipped.
• 3:17
  Speaker 1: And then everybody bought the dip and then it went back up.
• 3:19
  Speaker 1: And so why do we care?
• 3:20
  Speaker 1: And this is what's going to happen with the tariff sale.
• 3:23
  Speaker 1: It's basically fatigue and it's a logical psychological response that first time we're scared.
• 3:29
  Speaker 1: Second time we remember what happened last time, which was there was a dip, we should have bought it and it went back up.
• 3:36
  Speaker 1: So we don't actually sell and the more often this happens now with tariffs, the less the impact.
• 3:42
  Speaker 1: So there is one impact, though, that will come from it, which will impact the largest tech companies out there your NVIDIAs and your Teslas and your Microsofts and I want to explain that to you because that's insanely important to understand how that will impact those magnificent seven stocks over the coming six months, 12 months and so on.
• 4:01
  Speaker 1: So let me break that down for you in just a second.
• 4:04
  Speaker 1: But first, quickly, the Fed.
• 4:08
  Speaker 1: The Fed put out this thing here.
• 4:10
  Speaker 1: It's called the Monetary Policy Report.
• 4:12
  Speaker 1: It is 83 pages of just oh my God.
• 4:16
  Speaker 1: Could you be any more boring?
• 4:18
  Speaker 1: So if you suffer from insomnia, this is the cure the report to Congress on monetary policy.
• 4:24
  Speaker 1: I will also let you know in a second exactly when Jerome Powell is speaking.
• 4:28
  Speaker 1: That also matters, but not as much as this, and in this 83 pages they use as many words as humanly possible to basically tell us that quantitative tightening, as in the shredding of money, the good stuff, the green stuff, is coming to an end by this summer.
• 4:49
  Speaker 1: What does that mean?
• 4:50
  Speaker 1: What did they do?
• 4:51
  Speaker 1: They printed $4 trillion during COVID, allegedly to save the little guy.
• 4:57
  Speaker 1: Really, all it did?
• 4:58
  Speaker 1: It has made the wealthiest insanely wealthier and everybody else got a small little one-time check right.
• 5:04
  Speaker 1: But that's a whole different political story we don't need to go into.
• 5:07
  Speaker 1: It's the most insane action by any central bank bank forever.
• 5:11
  Speaker 1: I mean really like lunacy.
• 5:12
  Speaker 1: I don't understand why these guys are not in an asylum at this point.
• 5:18
  Speaker 1: And then, since then, they've been shredding just a little bit, just a little bit, a little bit every month.
• 5:22
  Speaker 1: And what does that mean?
• 5:23
  Speaker 1: Well, when you're shredding money, you're withdrawing money from the system, which means there's less money to buy stocks and it impacts stock prices Harder for the stock market to go up if there's a little bit less money about.
• 5:34
  Speaker 1: So we've all been gagging for the moment at which they stopped shredding money, stopped shredding money.
• 5:40
  Speaker 1: You know what I mean?
• 5:41
  Speaker 1: Yay, this is coming this summer.
• 5:44
  Speaker 1: This is what that 83 pages tells you in as many words as humanly possible.
• 5:48
  Speaker 1: Um, go, go and look it up and uh, and and read it because, um, well it's, it'll at least put you to sleep.
• 5:55
  Speaker 1: So there is something.
• 5:56
  Speaker 1: Um, but, I said that was a but right, I said there was a warning here.
• 6:02
  Speaker 1: The tariffs what do they?
• 6:05
  Speaker 1: One of the side effects of tariffs is that they increase the US dollar value compared to other currencies.
• 6:17
  Speaker 1: And what does that do?
• 6:21
  Speaker 1: Well, it has an impact on the biggest tech companies in the world, and I'll show you why in a second, but before I do, this chart is very, very, very powerful.
• 6:32
  Speaker 1: What does it show?
• 6:33
  Speaker 1: It shows the magnificent seven stocks.
• 6:35
  Speaker 1: So your, your teslas, your microsoft, your apples, your, you know, your whatnot, your netflix, and and so on, the top seven stocks out there.
• 6:42
  Speaker 1: And it shows you the stock chart here in green and red.
• 6:46
  Speaker 1: Let me get a pen this sort of chart here.
• 6:53
  Speaker 1: My mouse is a little wobbly.
• 6:54
  Speaker 1: You see, right, that's a stock chart and it's gone up very, very, very nicely.
• 6:59
  Speaker 1: So what's the problem with it?
• 7:00
  Speaker 1: Trading volume on the Magnificent Seven is here in blue average trading volume and, as you can see, it's cratered.
• 7:09
  Speaker 1: So what does that mean?
• 7:11
  Speaker 1: It means less people are buying it.
• 7:12
  Speaker 1: It also means less people are selling it, in fairness, but also it just means there isn't buying volume.
• 7:16
  Speaker 1: So, generally speaking, when volume collapses, you'll rally lids.
• 7:21
  Speaker 1: There's a lid on it.
• 7:23
  Speaker 1: You hit your head, basically, you bump your head right, and the same thing happened here in late 2021, right, volume collapses.
• 7:31
  Speaker 1: And then what happens?
• 7:33
  Speaker 1: I was actually the top of that rally and then we came down for an entire year we dropped and right now we're in that same situation and I think there are some concerning thoughts here that might just encourage you to take risk management a little bit more seriously.
• 7:46
  Speaker 1: Maybe go out there and find some stocks that are a little bit more exciting than these magnificent seven stocks.
• 7:51
  Speaker 1: Does that make some sense?
• 7:52
  Speaker 1: If that makes some sense to you, put a one in the chat so I can see that this makes some sense to you.
• 7:57
  Speaker 1: It doesn't have to make 100% sense, but if it sort of tickles in a little bit, then let me know by putting a one in the chat.
• 8:04
  Speaker 1: Then let me know by putting a one in the chat.
• 8:10
  Speaker 1: Mike says one, scott says one.
• 8:11
  Speaker 1: Good to see you, my friend, scott Vincente.
• 8:13
  Speaker 1: Okay, I'm seeing the ones come in here.
• 8:14
  Speaker 1: I think yeah, nicholas Doug, okay, now they're coming in.
• 8:17
  Speaker 1: Now they're coming in Brilliant.
• 8:22
  Speaker 1: Come back to those dollar.
• 8:24
  Speaker 1: Remember what I said no-transcript investors.
• 8:59
  Speaker 1: My role is for myself, my money and my family is to beat the index, because otherwise I could just buy the index and buy in bed.
• 9:06
  Speaker 1: So I want to beat the index.
• 9:08
  Speaker 1: So it's been pretty good to win tech stocks these last couple of years because tech stocks have just beaten the index very significantly.
• 9:16
  Speaker 1: But the top chart here shows you the US dollar index, which is basically the US dollar against all these foreign currencies the euros and the yen and all these other monkey currencies out there.
• 9:26
  Speaker 1: And as the dollar goes up see up here it goes up that white line here.
• 9:34
  Speaker 1: When it hits the peak, what happens to tech stocks?
• 9:38
  Speaker 1: They have to not outperform the market buyers much Outperform.
• 9:44
  Speaker 1: They're still going to do better than the rest of the S&P Because, let's face it, the S&P 500 is what it's a basket of 500 companies and a lot of these 500 companies are basket cases, right, they're just fairly poorly run businesses.
• 9:57
  Speaker 1: They're not great businesses.
• 9:58
  Speaker 1: Very hard to find 500 amazing businesses.
• 10:01
  Speaker 1: So maybe the top 30 are great and then the 470 are pretty rubbish.
• 10:05
  Speaker 1: So that's generally how it works and right now what we're seeing is that the dollar is going up again significantly and that's going to have an impact on tech stock performance.
• 10:17
  Speaker 1: So we just expect that to outperform a little bit less.
• 10:21
  Speaker 1: Why is that the case?
• 10:22
  Speaker 1: Say you are Netflix right and I'm in Malaysia right now.
• 10:28
  Speaker 1: Say if I was subscribed to Netflix here, I would pay for Netflix in ringgit, which is the local currency here, and Netflix then receives ringgit, and Netflix has to convert those ringgit into dollars.
• 10:42
  Speaker 1: The dollar is more powerful and they get ringgit.
• 10:45
  Speaker 1: They get less dollars.
• 10:47
  Speaker 1: So what does that mean?
• 10:49
  Speaker 1: The stronger the dollar, the less all the foreign money is worth, and because someone like Netflix gets about 40% of their revenue from pesky foreigners, their revenue growth slows down, profit growth slows down, their forecasts slow down, and we've just seen that with some of the big tech companies reporting who are saying, yeah, there is a currency impact and that's going to get worse in the next quarter and possibly even worse in the quarter after that if the dollar remains strong.
• 11:20
  Speaker 1: That's something to watch out for.
• 11:21
  Speaker 1: That buying the MacGyver 2007 right now might not be the greatest thing to do, judging by historic levels.
• 11:28
  Speaker 1: I'm not telling you to buy or sell.
• 11:30
  Speaker 1: Obviously, you got to come to your own conclusions.
• 11:31
  Speaker 1: My purpose here is just to share information with you that I think will be very helpful for you to make better decisions, but it's up to you.
• 11:40
  Speaker 1: I'm not giving you financial advice, so okay, so that's really, really important to understand.
• 11:49
  Speaker 1: So what's the next question then going to be?
• 11:51
  Speaker 1: Well, what else do I buy, right?
• 11:53
  Speaker 1: And that's a really, really powerful question.
• 11:54
  Speaker 1: Who's thinking that?
• 11:55
  Speaker 1: Who's thinking right now, like I've got some money lying around, I don't know what to buy?
• 12:00
  Speaker 1: If that's you write searching, write, searching in the chat, because you're searching for something.
• 12:07
  Speaker 1: You're wondering what do you invest in, what do you buy?
• 12:09
  Speaker 1: And you're not quite sure.
• 12:10
  Speaker 1: And is it a good thing, is it not?
• 12:11
  Speaker 1: And I put a little poll out there asking you guys what's your strategy.
• 12:16
  Speaker 1: And it's social media, it's a bit of analysis, it's a bit of news.
• 12:20
  Speaker 1: You've got some rules, which is amazing.
• 12:23
  Speaker 1: Okay, some of you are searching.
• 12:25
  Speaker 1: Yeah, me, me, me searching, searching, wanda, me searching.
• 12:33
  Speaker 1: Okay, brilliant, jonathan, like a lot of you guys are searching.
• 12:34
  Speaker 1: It's a really really common thing, right?
• 12:35
  Speaker 1: So the most important thing is that, when you buy stocks, that you actually have a rulebook on that and that you know exactly why you're doing what you're doing and that you're doing it with a set of rules and principles, because the most successful investors in the world they don't wake up in the morning and they go look for something to buy.
• 12:56
  Speaker 1: Let me come up with some principles, some patterns, some strategy.
• 13:00
  Speaker 1: Let's invent something today.
• 13:01
  Speaker 1: They don't do that.
• 13:02
  Speaker 1: They've got a rule book and they look for very specific things and it means it's very easy for them to buy or eliminate or even exit because they've got those rules.
• 13:10
  Speaker 1: And I've been very lucky, I've had amazing mentors who've traded and invested for decades and they've all had rules.
• 13:17
  Speaker 1: And the common rules they've all had were these three rules about finding stocks that are about to go ballistic and then how do you get out of them and how do you manage your risk.
• 13:28
  Speaker 1: Those three things are really, really, really key and if you understand that, you understand those principles, the whole thing changes.
• 13:37
  Speaker 1: You're no longer looking around for the news, some stories, some here, some there like chasing something and wondering whether it was the right thing to do.
• 13:43
  Speaker 1: You just kind of come and collect it and you smile while the market goes up, down or sideways, or, you know, through Gauzy, exactly.