Latest / Felix Nikolas Prehn's Podcast / Don't Buy Stocks. + Stock Market News 27 February 2024

Transcript

Don't Buy Stocks. + Stock Market News 27 February 2024 · Felix Nikolas Prehn's Podcast

• 0:00
  Speaker 1: Phoenix here and welcome to this live stream.
• 0:03
  Speaker 1: It's good to be back alive.
• 0:04
  Speaker 1: I'm excited.
• 0:06
  Speaker 1: I'm back from being massaged to an inch of my life and everything else that one gets up to on holiday, which is lovely, and it's an interesting day today and I want to look at it's not a demon gloom video.
• 0:20
  Speaker 1: I want to look at where I'll be.
• 0:22
  Speaker 1: How high can we go?
• 0:23
  Speaker 1: What's the smarter thing to do right now, potentially, than buying stocks?
• 0:28
  Speaker 1: I will also give you Goldman Sachs put out a paper today where they run through things that they think are going to go up and things that are going to go down and how that pair could actually make a really nice trade.
• 0:38
  Speaker 1: I want to show you that and I'm also going to do a live trading training, which I'm very excited about.
• 0:45
  Speaker 1: Literally one hour and you can join me for free and you can see how I made 105% last year, 129% the year before.
• 0:54
  Speaker 1: We're up 13% so far this year.
• 0:56
  Speaker 1: That's always return on capital employs and I'm not promising you those outcomes, but I promise you that I'll teach you what I do and how I do it and that that's a three step process.
• 1:07
  Speaker 1: It's way simple.
• 1:08
  Speaker 1: It's super suitable for beginners.
• 1:11
  Speaker 1: We literally have taught people who've never had a brokerage account and come and join me.
• 1:16
  Speaker 1: It's all the same, it's free.
• 1:17
  Speaker 1: We'll be in the experienceorg slash webinar.
• 1:19
  Speaker 1: Take about 90 minutes to walk through.
• 1:21
  Speaker 1: We do some real live trading together and you can ask me all the difficult questions, pummel me with them.
• 1:27
  Speaker 1: I look forward to it.
• 1:28
  Speaker 1: Felixfrancidorg slash webinar.
• 1:30
  Speaker 1: I love doing these because I think people are going to get a lot of value out of it, and that's really what this is all about.
• 1:35
  Speaker 1: So let's share my screen.
• 1:40
  Speaker 1: Let me see where the chat is.
• 1:42
  Speaker 1: The chat's here.
• 1:43
  Speaker 1: Good morning everybody.
• 1:44
  Speaker 1: Brilliant, and here we are.
• 1:48
  Speaker 1: So FelixFrancidorg slash webinar.
• 1:50
  Speaker 1: For those of you who could not hear, how exuberant are we, are we actually talking up this rally more than we possibly should?
• 2:02
  Speaker 1: Because look at what we were in mid-January, mid-late January, 23 January and we've not really done that much more, have we?
• 2:14
  Speaker 1: This is the NASDAQ.
• 2:14
  Speaker 1: Okay, we've gone up 160 points.
• 2:19
  Speaker 1: That's not that much on an almost 18,000 point index.
• 2:24
  Speaker 1: So from that point of view, we haven't actually done all that much here in the last month.
• 2:31
  Speaker 1: We've achieved very little, relatively little, despite a lot of excitement around Nvidia and so on.
• 2:36
  Speaker 1: So that's just one thing, I think, always just to anchor our expectations.
• 2:42
  Speaker 1: Now a lot of people in the industry are talking about this and this is 1995.
• 2:50
  Speaker 1: Part of you like it's 1995.
• 2:52
  Speaker 1: I don't think there was a song about 1995.
• 2:54
  Speaker 1: What was 1995?
• 2:55
  Speaker 1: Famous for, friends, maybe I don't know.
• 2:58
  Speaker 1: What's your, what's your?
• 2:59
  Speaker 1: What do you remember from 1995?
• 3:02
  Speaker 1: Let me know in the chat.
• 3:04
  Speaker 1: And this is literally the NASDAQ 1995.
• 3:08
  Speaker 1: And it looked pretty similar.
• 3:11
  Speaker 1: And if you go forward, go zoom out, rather this was 1995.
• 3:20
  Speaker 1: And here was the beginning of a massive, massive bull run I mean enormouscom bubble and then all the way back down again to pretty much where it started.
• 3:33
  Speaker 1: And then it took like 10 years to get, to get back, maybe even 15 years, I think, to get back to where it started, which is also a perspective I always wanted to bear in mind.
• 3:44
  Speaker 1: Like, yeah, stuff goes up in the long run, but when we really overshoot it can take really long period of time.
• 3:50
  Speaker 1: Japan, 34 years, I think, something like that, 30 plus years anyway.
• 3:55
  Speaker 1: So what am I trying to say here?
• 3:57
  Speaker 1: I don't think we're quite at the super bubble stage, but I think we are getting there and therefore we want to be a little bit smarter about it.
• 4:07
  Speaker 1: We want to be a little bit cautious about it.
• 4:08
  Speaker 1: There are some stocks that are perhaps better opportunities than others.
• 4:13
  Speaker 1: I think Google, for example, might be one of these.
• 4:15
  Speaker 1: This is Google, and Google has trended up, like the rest of the market, but not as much, and it's come down a fair bit.
• 4:25
  Speaker 1: And it tends to do that.
• 4:26
  Speaker 1: It retests its sort of longer term uptrend again and again, and again, and each time we hit that it's actually a really nice bio-opportunity for people who have a longer term horizon.
• 4:37
  Speaker 1: In 1995, pablo Escobar okay, the Macarena was back then.
• 4:43
  Speaker 1: Oh God, that was a ghastly dance, wasn't it?
• 4:45
  Speaker 1: I was always again.
• 4:46
  Speaker 1: So here we get into something A little unusual.
• 4:53
  Speaker 1: What the heck is gross exposure?
• 4:56
  Speaker 1: That bluish line there in the back is essentially exposure of funds to the market, and they have a lot of money.
• 5:07
  Speaker 1: They have more money than they've ever had and they are longer and more bullish than they've ever been.
• 5:11
  Speaker 1: So some people might then point to that and go, okay, it's a top, it's a bubble.
• 5:17
  Speaker 1: We've also got a lot more money because Pappapowl has been very generous by printing $4 trillion extra to make sure that the lovely money managers have more to make money from.
• 5:30
  Speaker 1: Skip that one, and that's also a bit of a complex chart to look at, isn't it really?
• 5:37
  Speaker 1: Yeah, it's just showing that.
• 5:40
  Speaker 1: Okay, let me explain this that volatility, which is kind of fear, is very, very low.
• 5:51
  Speaker 1: And when it's very, very low, like it was here, and the market keeps rallying up, then typically the market comes down to kind of catch up with it.
• 6:02
  Speaker 1: So you would think low fear is a good thing, but it also can be complacency, and I think we're heading in that direction for sure, and that's why I'll also tell you guys later, if you've joined the live trading training like how you can actually protect your portfolio, because it's a relatively simple thing to do, and I'll send you a video on that.
• 6:24
  Speaker 1: That's China Stocks Rebounding here, and I did a little video yesterday from Manila, from my hotel room, and I was saying hedge funds are selling, and some of you guys in the comments were like, well, they're selling.
• 6:36
  Speaker 1: Who's buying is?
• 6:37
  Speaker 1: And I think that retail investors are big enough to buy what hedge funds are selling.
• 6:42
  Speaker 1: Yes, that's the answer.
• 6:44
  Speaker 1: So hedge funds are selling tech that's what I was saying massive amounts of it and unusually large amount to it.
• 6:55
  Speaker 1: And what are they buying?
• 6:57
  Speaker 1: Real estate, why Hedge funds kind of have to be contrarians to outperform the market.
• 7:05
  Speaker 1: If you just do what everyone else is doing, you're going to get average returns.
• 7:08
  Speaker 1: If you are doing the opposite, you potentially get very, very large returns.
• 7:15
  Speaker 1: So that's what they're doing.
• 7:16
  Speaker 1: They're buying materials, utilities and real estate.
• 7:20
  Speaker 1: That's essentially where they're shopping and they are ditching what has done the best, which is tech and healthcare and industrial to the extent, actually industrial.
• 7:30
  Speaker 1: The numbers just out of the trotious we got to know.
• 7:36
  Speaker 1: Are you wearing shorts right now?
• 7:37
  Speaker 1: You know what?
• 7:37
  Speaker 1: I'm actually wearing trousers today, which is very, very rare.
• 7:40
  Speaker 1: I generally refuse to live in climates where you have to wear trousers.
• 7:44
  Speaker 1: I think it should be warm enough 11 months of the year to be able to wear shorts, which is pretty much what we got here, and today it's going to be a little bit nippy.
• 7:52
  Speaker 1: Nick remembers Kevin Keegan Okay, interesting.
• 8:03
  Speaker 1: Are they red trousers?
• 8:04
  Speaker 1: No, no, they're blue today.
• 8:05
  Speaker 1: Very low key today with the whole color thing.
• 8:09
  Speaker 1: But yeah, you see me when you see me on holiday.
• 8:12
  Speaker 1: You see me sometimes in larger shots, not at the desk here, but I'm very excited to be back today and I'm very excited to be teaching hundreds of you on the live trading training in 52 minutes as well, so grab yourself a free seat.
• 8:27
  Speaker 1: This is Goldman Sachs today, so this is kind of gold dust.
• 8:30
  Speaker 1: That doesn't mean you should do the trades.
• 8:33
  Speaker 1: This is a.
• 8:34
  Speaker 1: Basically you know, a trader at Goldman Sachs will come up with this list and say that this is what we're doing and it doesn't mean that they're right or that they're wrong.
• 8:41
  Speaker 1: In a sense, I used to be one of those people who came up with trade ideas and I wasn't always right and I wasn't always wrong, but I quite like the way they're thinking, because it tells you something and essentially what they're saying is buy puts, which is a bearish set up.
• 8:59
  Speaker 1: They're expecting these stocks to have over delivered.
• 9:02
  Speaker 1: They're not saying they're going to collapse, but they're just saying we think they're going to come down compared to the rest of the market.
• 9:08
  Speaker 1: And there's some big names in this A farm, palantir, groupon, spotify, shopify, netflix you know pretty, pretty big names and they're basically just saying that they have outperformed the market so much that they don't think they're going to go up that much more.
• 9:26
  Speaker 1: So they're suggesting to buy puts on these.
• 9:28
  Speaker 1: And then and this is kind of this is hedge fund thinking, and maybe people sometimes say to me Felix, your stuff's just too complicated and I struggle to make things simpler, but I'm trying On this stuff here.
• 9:43
  Speaker 1: They're saying buy quotes, which means they're bullish, right, and they're suggesting to do the combination.
• 9:47
  Speaker 1: And that's how you kind of capture a market going back to its average.
• 9:54
  Speaker 1: You sell the outliers to the top, you buy the outliers to the bottom and that way you hope that you're not completely wrong on all of them and therefore you should make some money.
• 10:04
  Speaker 1: And there's some again big names in here Pfizer, for example, citizens Financial, alaska Air, mobile Eye.
• 10:13
  Speaker 1: You know some stuff that's been beaten up a little bit.
• 10:16
  Speaker 1: Price performance the last 12 months on these is pretty negative, minus 40% on Mobile Eye.
• 10:23
  Speaker 1: Pfizer, down 32%, and so on.
• 10:25
  Speaker 1: So you get the idea.
• 10:27
  Speaker 1: So the drift here is essentially where did that chart go?
• 10:32
  Speaker 1: I don't know where the chart went, but the drift is essentially that a market does two things.
• 10:39
  Speaker 1: So this is the market average, and then you get your outliers, your sort of bullish outliers who are doing this and in theory always come back to the, to the medium.
• 10:58
  Speaker 1: That's sort of the general, the gist with it.
• 11:01
  Speaker 1: And then you get your stuff that people hate, which would typically move in opposite directions to the bullish stuff.
• 11:08
  Speaker 1: So the theory being that as long as they come back to somewhere in the direction of the, the average, you could actually make money in both directions.
• 11:19
  Speaker 1: And that's the sort of thing that I quite like.
• 11:21
  Speaker 1: I'm not saying you should do this to these trades, but that's kind of the idea.
• 11:25
  Speaker 1: I hope that makes some sense.
• 11:26
  Speaker 1: And Julia says yes.
• 11:31
  Speaker 1: Very much like an RSI chart, exactly.
• 11:33
  Speaker 1: You sort of you go against the grain, and if you did it and that's probably what they're suggesting is to do it with what is our two, four, six, eight, 10, 12, 15 names, maybe they have an even longer list and they might do with a whole basket.
• 11:47
  Speaker 1: So 15 names bullish, 15 names bearish, and that way you can be wrong on some of them, but as long as you're right on a couple of them, you will make sufficient money to pay for the, for the, the, the losers, essentially.
• 11:57
  Speaker 1: So that's kind of an idea here.
• 12:01
  Speaker 1: Let's go a little bit more into news right here, right now, and whenever anybody catches that reference and durable goods, orders are Collapsing.
• 12:14
  Speaker 1: And what are durable goods?
• 12:16
  Speaker 1: Well, it's anything from fridges to cars to airplanes, stuff that you buy that lasts.
• 12:22
  Speaker 1: Boeing, I think, is at three plane orders this year or something like that, which obviously is a factor, and we've had a fair bit of this data in 2023, where we had these big red candles.
• 12:37
  Speaker 1: It doesn't exactly scream the economy is booming and everyone's buying machinery to expand factories and that kind of thing.
• 12:46
  Speaker 1: No, it's kind of says maybe be a little bit cautious, be a little bit careful.
• 12:51
  Speaker 1: That's kind of what it says to me.
• 12:53
  Speaker 1: So, on that note, let's have a look at pre markets up to and pre markets, it's all right, flat ish.
• 13:04
  Speaker 1: Google is recovering a little bit.
• 13:06
  Speaker 1: Everything else is very much flat.
• 13:08
  Speaker 1: Well, except for Hello, why it was down to percent, and Tesla actually up to a half percent, which is quite a nice move here.
• 13:19
  Speaker 1: And let's have a look at the economic calendar.
• 13:22
  Speaker 1: So we're getting a fair bit of economic data out this week, inflation data out, I think, also on Thursday, friday.
• 13:28
  Speaker 1: But yet the durable good stuff is you exclude the fence, it's minus seven percent.
• 13:34
  Speaker 1: So that's that's not good.
• 13:37
  Speaker 1: So I mean, that's not exactly saying this economy is booming and booming and booming.
• 13:41
  Speaker 1: You know it's minus seven percent.
• 13:43
  Speaker 1: So therefore it hasn't grown over the year.
• 13:47
  Speaker 1: Can we zoom out?
• 13:48
  Speaker 1: No, it hasn't really.
• 13:52
  Speaker 1: Has it we are.
• 13:53
  Speaker 1: We're in pretty, pretty low waters here, and we haven't been that low since COVID.
• 13:59
  Speaker 1: Covid was worse, much worse, three times as bad, but still it's not exactly great territory for industrial stocks and so on, which is possibly what's a good time to buy them, which is also a little bit fine.