Latest / Felix Nikolas Prehn's Podcast / The last time THIS Happened was... | Trucker Boycott + Stock Market News 19 February 2024

Transcript

The last time THIS Happened was... | Trucker Boycott + Stock Market News 19 February 2024 · Felix Nikolas Prehn's Podcast

• 0:00
  Speaker 1: Thanks and welcome to this Monday morning.
• 0:02
  Speaker 1: Yes, I realize the market is closed, but isn't that a wonderful thing.
• 0:06
  Speaker 1: It gives us a little bit of time to dive a bit deeper into some subjects, take more of your questions, without the matters of the market being open.
• 0:15
  Speaker 1: Futures are, of course, trading.
• 0:17
  Speaker 1: It's only cash markets that are closed and they are presently slightly in the green for the NASDAQ.
• 0:23
  Speaker 1: S&p, dow Jones basically flat, the Russell down a third of a percentage point.
• 0:28
  Speaker 1: You've got orange juice up, which I know is very important and dear to your heart.
• 0:33
  Speaker 1: The dollar basically flat.
• 0:34
  Speaker 1: So it is a slay market in the markets, which is sometimes a very nice thing.
• 0:41
  Speaker 1: Trucker strike, potentially, or boycott rather, is an interesting one we should be looking at, especially those of you guys in the US, if you're interested to hear your opinion on that.
• 0:53
  Speaker 1: So if I haven't seen it really in mainstream media, I've seen it across social, especially Twitter is full of it.
• 1:01
  Speaker 1: And what does it all about is let me show my screen with you here for a sec.
• 1:06
  Speaker 1: You see that, for example, on Twitter here, josé Tecaruso saying you know, do you support boycotting of NYC shipments by truckers?
• 1:17
  Speaker 1: And 279,000 people have seen that.
• 1:22
  Speaker 1: That's pretty, pretty extreme and it is, of course, all about the good old Donald who, well, has been fined something like $300 million and banned from doing or running his business in New York State for I think it's three years, which seems kind of bonkers.
• 1:43
  Speaker 1: And that is basically all about him allegedly inflating the values of his properties when pitching to a bank, which is quite frankly what people do when they borrow.
• 1:57
  Speaker 1: I'm no skin in the game in terms of politics, but it is an unusual one.
• 2:02
  Speaker 1: Basically, even when you buy a house, you go to the bank and say this house is worth X, and the bank might say, no, it's worth X minus something.
• 2:11
  Speaker 1: And then you sort of negotiate a bit and show them some other transactions and then you arrive at an evaluation.
• 2:18
  Speaker 1: I mean, to me that's always how banks have worked, so I feel this is an odd one.
• 2:22
  Speaker 1: It might well get overturned I'm sure they'll appeal it but for the moment it is undoubtedly the thing to get the grassroots.
• 2:32
  Speaker 1: Make America great again.
• 2:34
  Speaker 1: Trump troops, get them out there and they are basically saying let me show you this.
• 2:42
  Speaker 1: I'm a trucker.
• 2:43
  Speaker 1: I stand with a boycott Time to show the corrupt we run this country, not them Truckers for Trump.
• 2:48
  Speaker 1: That's got 30,000 views 740 reposts.
• 2:51
  Speaker 1: Please repost 6,500 reposts if you support truckers boycotting NYC.
• 3:00
  Speaker 1: And yeah, kind of interesting, basically because New York has fined Trump $354 million when New York court, one should say rather so yeah, it seems to be a big subject.
• 3:15
  Speaker 1: Do you think it's going to happen?
• 3:16
  Speaker 1: I understand there was a similar thing happening in Colorado some years ago, which was also about a judgment about a trucker getting 120 years in jail or something for causing an accident, and then they actually produced a sentence to just 10 years after.
• 3:33
  Speaker 1: The truckers kind of brought Colorado to a standstill.
• 3:36
  Speaker 1: At least that's the story that I heard.
• 3:38
  Speaker 1: So that's an interesting one.
• 3:40
  Speaker 1: Feel free to hit me with your questions.
• 3:42
  Speaker 1: Of course we've got a little bit more time today.
• 3:44
  Speaker 1: I want to run you through a couple of bits of data that I just think are very important.
• 3:48
  Speaker 1: If you haven't already signed up for the life trading session it's tomorrow Life trading training at 10am Eastern time, just after the market opens at FelixFriendsorg slash webinar so do, and it'll take about 90 minutes, I reckon depends a little bit on how many questions you ask me.
• 4:06
  Speaker 1: I basically run a Q&A until I exhaust you FelixFriendsorg slash webinar and here make sure you a couple of things.
• 4:15
  Speaker 1: The expectations for earnings are kind of interesting.
• 4:21
  Speaker 1: We're looking at hugely bullish earnings expectations going forward, and the last time we've seen that was at the height of 2021.
• 4:34
  Speaker 1: And is that justified?
• 4:37
  Speaker 1: Well, I think at the moment we have quite low earnings expectations for this quarter and the next one.
• 4:45
  Speaker 1: I do think going into Q4 we have much, much higher earnings expectations, and I think a lot of that is just cost cutting.
• 4:53
  Speaker 1: Cost cutting and also AI, the idea there being give it a year and AI will pay off.
• 5:04
  Speaker 1: I think it'll be more layoffs, so the lack of PayPal can probably lay off another 4,000 people or something, and that will happen across the board and that should be good for stock prices, not so good for the people who work there.
• 5:18
  Speaker 1: Back on, egelecton is asking for soyfibes.
• 5:24
  Speaker 1: A bull put spread better or a butterfly better?
• 5:27
  Speaker 1: Well, it depends very much on what you're trying to achieve.
• 5:31
  Speaker 1: I would say the thing with selecting strategies is ultimately about understanding how volatility and time interacts with them.
• 5:40
  Speaker 1: That's really the important thing to understand.
• 5:42
  Speaker 1: Don't just pick it because it points in the right direction.
• 5:44
  Speaker 1: You need to understand how that works.
• 5:46
  Speaker 1: Cast cutting indeed, that's the new word of the day.
• 5:50
  Speaker 1: Midwest cannabis Hello to you.
• 5:52
  Speaker 1: What's one piece of advice you'd give your younger self?
• 6:00
  Speaker 1: You are 22, you've got a £50,000 portfolio, which is well done to you, and on a £30,000 salary so, yeah, well done on saving there.
• 6:15
  Speaker 1: What I would say to myself is learn earlier, take the investing more seriously, much more seriously, because I was focused on oh, I'm getting a good job, I'm getting a good salary, that will make me lots of money and I can save it.
• 6:31
  Speaker 1: And that's, I think, in hindsight, the wrong approach.
• 6:34
  Speaker 1: The right approach is literally to focus single-mindedly on growing that portfolio and doing that by really learning what you're investing in.
• 6:43
  Speaker 1: I think index investing is for suckers.
• 6:46
  Speaker 1: I think it just means you are waking up and going.
• 6:50
  Speaker 1: I'm going to get average returns because I want an average life.
• 6:54
  Speaker 1: If you want an average life, I don't want an average life.
• 6:57
  Speaker 1: I think, really understanding what makes a good business, what ROCE means, what gross margins means, what the earnings growth are, and then only buy and invest in things you understand, don't do the FOMO thing.
• 7:08
  Speaker 1: And if you do that and you get serious about it at your age, you'll be, you'll screw up, you make some mistakes, you'll make some investments that won't work and you'll learn that.
• 7:18
  Speaker 1: Every single fund manager in the world does the same thing and it's fine, it is completely fine.
• 7:23
  Speaker 1: But you learn those lessons earlier.
• 7:25
  Speaker 1: Therefore, you'll get better and therefore you are my friend going to be.
• 7:29
  Speaker 1: You're going to be a decan millionaire for sure.
• 7:32
  Speaker 1: If you just follow that.
• 7:34
  Speaker 1: It's a given.
• 7:36
  Speaker 1: You just have to follow the path of compounding, yeah, saying how would you trade SMCI?
• 7:42
  Speaker 1: I wouldn't, when I can make a predictable return trading the S&P, why would I trade SMCI?
• 7:53
  Speaker 1: Because it's in the news?
• 7:54
  Speaker 1: Why I don't understand that it's just FOMO.
• 7:59
  Speaker 1: Why do I need to trade the latest thing?
• 8:00
  Speaker 1: Don't ever trade the latest thing.
• 8:02
  Speaker 1: Trade the boring things.
• 8:04
  Speaker 1: Seriously, you'll make more money because you won't lose a lot of money.
• 8:07
  Speaker 1: Small space living giving us some interesting advice there.
• 8:20
  Speaker 1: So that's one thing.
• 8:20
  Speaker 1: Yeah, we're very bullish at the moment.
• 8:22
  Speaker 1: This is one from Goldman Sachs and they are quite insightful, which is why I copied and pasted it for you here.
• 8:30
  Speaker 1: So let's just read through that.
• 8:32
  Speaker 1: The high level macro story which is the economy still seems to be a pro risk one.
• 8:37
  Speaker 1: That means bullish.
• 8:39
  Speaker 1: Our medium term US view is basically better growth, lower inflation and higher growth and even lower inflation than our forecast.
• 8:50
  Speaker 1: Valuations are rich, so stuff isn't cheap, but that's also the kind of macro environment in which vault trades cheap, volatility and valuations trade expensive.
• 9:01
  Speaker 1: That's exactly what we are we continue to see.
• 9:04
  Speaker 1: The pullbacks are short and shallow, so the buyers are still out and the basic challenge is that people have not been willing to be sufficiently long and spend too much time trying to call the technical pullbacks, and I'll just stay with the upturn.
• 9:17
  Speaker 1: So he's basically saying we think it's a little, it's a little insane where we are, but we think it's going to last a while, and I agree with him on that.
• 9:26
  Speaker 1: I just think caution is required, but I also think that this positive story here is going to continue for some time.
• 9:35
  Speaker 1: I thought this was a fun chart.
• 9:36
  Speaker 1: Isn't this the fun chart?
• 9:38
  Speaker 1: Nvidia in yellow.
• 9:41
  Speaker 1: What's the other stock?
• 9:43
  Speaker 1: Can you see it?
• 9:44
  Speaker 1: It's the one with the topless guys, the topless hunks.
• 9:47
  Speaker 1: You see, baffling, sleep, sometimes outside the stores.
• 9:52
  Speaker 1: That is Abercrombie and Fitch, who make horrible smelling perfume and cheap t-shirts and that kind of thing for teenagers, and they are basically up the same amount since 2021, 377 and 386%, which is kind of weird, right?
• 10:10
  Speaker 1: One makes t-shirts, one makes apparently the next future revolution and the new steam engine and everything else, yet they're starting moving the same way.
• 10:18
  Speaker 1: So which one?
• 10:19
  Speaker 1: Which one would you rather buy, the next or the future?
• 10:24
  Speaker 1: I put this out today as well on X, as I should now call it, and it's Tesla versus Toyota.
• 10:33
  Speaker 1: And Tesla is in blue, toyota is in orange and Toyota has massively outperformed Tesla of late.
• 10:42
  Speaker 1: And I said Lemmings, fall off cliffs.
• 10:45
  Speaker 1: I think the story is just don't chase stuff to the very top right.
• 10:53
  Speaker 1: If I were into Toyota right now, I'd take profits, and I think Tesla is starting to look really interesting, and I think being a contrarian can be a healthy place to be.
• 11:05
  Speaker 1: It doesn't make you very popular.
• 11:07
  Speaker 1: I pissed off a lot of Tesla people with that thing because they said are you calling us Lemmings?
• 11:12
  Speaker 1: I'm like, well, yes, but right now you're the contrarian play, so let me know what you make of that.
• 11:20
  Speaker 1: And then we also have Goldman Sachs the lovely people, the bankers with the great big heart, raising their price target from 5,100 to now 5,200 for the year, which is again bullish sentiment, doesn't it?
• 11:38
  Speaker 1: People read it, people that believe it, people expected people trade on that basis, and so on.