Latest / Felix Nikolas Prehn's Podcast / Felix Prehn - AI Stocks Collapse! Is The Market Crashing? + Stock Market News 27 January 2025

Transcript

Felix Prehn - AI Stocks Collapse! Is The Market Crashing? + Stock Market News 27 January 2025 · Felix Nikolas Prehn's Podcast

• 0:00
  Speaker 1: Felix here.
• 0:01
  Speaker 1: Okay, and welcome to this horror show of a morning, and I want to walk you through what's actually happening.
• 0:10
  Speaker 1: I want you, by the end of this video, to understand what's going on there, which way the market's heading and also how to hedge it.
• 0:17
  Speaker 1: So how to potentially profit from this disaster unfolding this morning and to kind of run a bit of a therapy session and make you all feel warm and fuzzy and calm inside, which is really always my goal here.
• 0:30
  Speaker 1: So, yes, winston crashed the market.
• 0:33
  Speaker 1: Let me run you through exactly what's going on here.
• 0:36
  Speaker 1: I'll share my screen with you.
• 0:37
  Speaker 1: Here we go.
• 0:39
  Speaker 1: So, one, understand what's going on.
• 0:42
  Speaker 1: Two, how to hedge now, as in, how to make money right now.
• 0:45
  Speaker 1: That's our plan here.
• 0:47
  Speaker 1: So this is a chart of NVIDIA.
• 0:49
  Speaker 1: I just took it a minute ago and NVIDIA right now is trading at about $125, down something like 11%, which is pretty horrific for NVIDIA right Now.
• 1:01
  Speaker 1: Next, someone needs therapy, and then we've got ASML, which is down 10% or something like that.
• 1:08
  Speaker 1: These are the guys that make the equipment to make what NVIDIA makes, right?
• 1:11
  Speaker 1: They're down something like minus 10%.
• 1:13
  Speaker 1: So that's pretty bad, right, pretty, pretty horrific.
• 1:16
  Speaker 1: So what does it all mean?
• 1:18
  Speaker 1: Well, let me explain.
• 1:20
  Speaker 1: Let me just change something in our little settings here.
• 1:23
  Speaker 1: I wanted to do that, so let me explain.
• 1:23
  Speaker 1: This is our little settings here.
• 1:24
  Speaker 1: I wanted to do that, so let me explain.
• 1:26
  Speaker 1: This is the check sector this morning.
• 1:29
  Speaker 1: Tesla, by the way, also down about three percent, and I wanted to give you an opportunity here to do something in just a second, for which I just need a second to set it up.
• 1:45
  Speaker 1: I know the suspense is killing me too.
• 1:47
  Speaker 1: There we go, okay, done.
• 1:54
  Speaker 1: Now.
• 1:55
  Speaker 1: Why?
• 1:56
  Speaker 1: Why, oh, why, oh, why.
• 1:58
  Speaker 1: Well, here's goldman's take on it, and they could use as many words as they probably could, possibly could.
• 2:04
  Speaker 1: And they're basically saying look, there is this thing out there called deep seek.
• 2:08
  Speaker 1: It is a chinese llm, like an ai sort of clever thing, right, and they're claiming that it is 40 to 50 times more efficient than, say, open ai's model.
• 2:21
  Speaker 1: So they're claiming, they claiming they did something amazing and they spent almost no money on it.
• 2:25
  Speaker 1: And here's what JP Morgan says on it this morning the deep seek story is forcing investors to question the market position of all the mega cap tech names in the entire AI supply chain, right, ok, so that's the shock this morning.
• 2:41
  Speaker 1: But what does it actually mean.
• 2:42
  Speaker 1: Well, let me give you the real comparison.
• 2:44
  Speaker 1: The training cost of an AI model right now, like an LLM, is insanely expensive, like really really, really, really insanely expensive.
• 2:55
  Speaker 1: So what happened to my little edit attempt here?
• 2:59
  Speaker 1: Did that work?
• 3:00
  Speaker 1: Yes, brilliant.
• 3:04
  Speaker 1: To train an LLM on something useful costs about $100 million.
• 3:08
  Speaker 1: Deepseek is saying they can do the same for $5 million.
• 3:13
  Speaker 1: Say NVIDIA I mean say Meta or Microsoft or Google or Tesla need 100,000 of the latest NVIDIA chips, and those guys are saying they can do it with 2,000 gaming chips, like the kind of thing that they've got on my computer.
• 3:29
  Speaker 1: So basically saying what they're doing is 95% cheaper.
• 3:32
  Speaker 1: Now, whether or not that's true is debatable and we don't really know the answer to that.
• 3:43
  Speaker 1: All I'm going to say is that Singapore a country the size of a postage stamp sorry, singapore, it's a lovely country, but it's tiny, with basically no AI compute facilities is something like 7.7 billion.
• 4:02
  Speaker 1: Something like 7.7 billion I think it was of Nvidia's revenue in the last quarter.
• 4:08
  Speaker 1: That's what I'm saying.
• 4:14
  Speaker 1: Okay, you connect the dots.
• 4:15
  Speaker 1: That's a potential explanation for this number being maybe gobbledygook, right?
• 4:16
  Speaker 1: Nonsense made up.
• 4:17
  Speaker 1: Now you're going to ask yourself then what do I do today?
• 4:21
  Speaker 1: Right, and some of you.
• 4:22
  Speaker 1: You are saying you want to buy the dip.
• 4:25
  Speaker 1: About half of you are confused and you want a kind of peace of mind here.
• 4:30
  Speaker 1: Let me ask you one question why do you think people are struggling on a day like today?
• 4:37
  Speaker 1: And I give you two choices.
• 4:38
  Speaker 1: Do you think it's that there are not enough opportunities out there?
• 4:41
  Speaker 1: Or maybe the AI rally is over.
• 4:43
  Speaker 1: There are no more opportunities ever again in tech?
• 4:46
  Speaker 1: If you think there are no opportunities, put a one in the chat.
• 4:49
  Speaker 1: I'd love to see what you're saying.
• 4:53
  Speaker 1: Option two Are people confused today because people haven't learned how to maximize the opportunities in a situation like the one today?
• 5:04
  Speaker 1: So if you think it's because people haven't learned, then put a two in the chat.
• 5:08
  Speaker 1: Frosty Butt puts a two in that.
• 5:11
  Speaker 1: Okay, scott, you're an insider.
• 5:17
  Speaker 1: Anybody else?
• 5:19
  Speaker 1: Anybody else?
• 5:20
  Speaker 1: Tracy, two, two, two, two, two.
• 5:22
  Speaker 1: Okay, we're getting a lot of twos in here, okay, so you think it's?
• 5:24
  Speaker 1: Glenn is a little on the fence there.
• 5:26
  Speaker 1: Okay, I like that, glenn, being honest about it.
• 5:28
  Speaker 1: Uh, brian, lots of twos, okay.
• 5:30
  Speaker 1: So you mostly think there is a, there is a, a knowledge gap here, right, and I think you're.
• 5:36
  Speaker 1: I think people just haven't learned.
• 5:37
  Speaker 1: In fact, people haven't been taught.
• 5:39
  Speaker 1: Look at all the twos rolling in here, right, brilliant 3,300 people on the chat here.
• 5:43
  Speaker 1: Somebody is a doomsayer.
• 5:46
  Speaker 1: It was two to that.
• 5:47
  Speaker 1: Is it cold today?
• 5:48
  Speaker 1: It is cold today.
• 5:49
  Speaker 1: I've got the window open.
• 5:49
  Speaker 1: I like fresh air.
• 5:50
  Speaker 1: I'm like a golden retriever that way.
• 5:59
  Speaker 1: But you see, one of the reasons people are actually afraid to learn this is that they just think, well, if I do something wrong here, right, I'll lose all my money.
• 6:04
  Speaker 1: And few people actually understand that we retail investors have a massive advantage and that we can do these nimble little setups that, like on a day like today, can actually make us a lot of money.
• 6:14
  Speaker 1: And there are two ways of doing that and I want to break that down for you in just a moment.
• 6:18
  Speaker 1: But I wanted to offer you today the chance that I haven't offered.
• 6:22
  Speaker 1: Probably in six months or nine months or 12 months, and that's if you want, you can hop on a call with my guys directly.
• 6:30
  Speaker 1: We offer something that nobody else offers out there and that's one-on-one coaching with my mentors, who are investment bankers, retired hedge fund managers.
• 6:42
  Speaker 1: Our most senior has done it for 50 years, managed huge billion dollar hedge funds, done it since the 70s and these are the people I talk to.
• 6:52
  Speaker 1: We also do weekly live trading.
• 6:53
  Speaker 1: We're going to be running live streams today, but you can also just hop on a one-on-one Zoom call with someone today and go oh my God, this is what's happening to me, or in any situation like today, like what do I do right?
• 7:03
  Speaker 1: And if you are interested in that, in mentoring and actually finally really learning what's going on out there which is, in my humble opinion, the only way anybody ever gets where they want to get to you can literally directly book a call with my guys.
• 7:17
  Speaker 1: Felixfrenzorg, slash freedom.
• 7:18
  Speaker 1: It's just a consultation call.
• 7:20
  Speaker 1: There's no pressure.
• 7:21
  Speaker 1: You ask questions, we ask questions, you guys have a chat about it and see if there's something that might be a good fit for you.
• 7:26
  Speaker 1: So you're very welcome to do that.
• 7:27
  Speaker 1: I put the link down below as well felixfrenzorg slash freedom, no-transcript.
• 8:05
  Speaker 1: And I did that for a long time and then finally, I've realized now that I actually just need to get ahead of myself, so I no longer have my back against the wall.
• 8:12
  Speaker 1: But most people come to that conclusion on a day where they feel pretty, pretty icky.
• 8:17
  Speaker 1: So, as I say, have a chat with us.
• 8:19
  Speaker 1: Felix, friends and doctors freedom.
• 8:20
  Speaker 1: But let me walk you through what's actually happening here, right?
• 8:23
  Speaker 1: So let's just assume for a moment that the deep seek story is true, that those guys are really solving AI problems at a 50th of the cost.
• 8:32
  Speaker 1: They're sort of the Elon Musk of AI, right?
• 8:35
  Speaker 1: Let's just say that's what it is.
• 8:38
  Speaker 1: Well, it would then possibly be the end of the NVIDIA rally, wouldn't it?
• 8:44
  Speaker 1: Because if you think about it and look at the stock chart of NVIDIA here and I want to show you something on the NASDAQ in a second as well NVIDIA, nvidia, there we go, logan, I'm with you on that, okay, but let's just humor the story for a second.
• 9:05
  Speaker 1: Okay, this is nvidia from a chart point of view.
• 9:08
  Speaker 1: We've had, you know, one, two, three tops here, now the fourth top, a little bit that level for a pretty long time.
• 9:17
  Speaker 1: We haven't really done a thing since what?
• 9:20
  Speaker 1: Last july or something, right?
• 9:21
  Speaker 1: This was here June.
• 9:23
  Speaker 1: Stock's just kind of gone sideways.
• 9:24
  Speaker 1: So maybe we've just plateaued, maybe this was the top of the pattern and we're due for a correction and we're now going to go back down, right, and then we're going to do that, and then we're going to do that again.
• 9:35
  Speaker 1: Entirely possible, right?
• 9:37
  Speaker 1: But let me give you a silver lining here.
• 9:40
  Speaker 1: Nvidia has got a significant risk.
• 9:45
  Speaker 1: But think about this.
• 9:47
  Speaker 1: Think about what markets shall do the cockroaches on Wall Street.
• 9:52
  Speaker 1: They will think if Meta, google, microsoft and Tesla do not need to spend $50, maybe even $80 billion a year on AI chips and they still get to the AI goals, do you think the market will love that?
• 10:09
  Speaker 1: They can do it like, rather than spend $50 billion, they can spend one.
• 10:13
  Speaker 1: They get massively more productive, massively more profitable and they save all that money.
• 10:19
  Speaker 1: And they don't know what to do with the $50 or $80 billion, so they give it back to us and share all this.
• 10:22
  Speaker 1: Do you think the market's going to love it?
• 10:23
  Speaker 1: Yeah, don't know what to do with the 50 or 80 billion, so they give it back to us or share all this.
• 10:32
  Speaker 1: Do you think the market's going to love it?
• 10:33
  Speaker 1: Yeah, of course.
• 10:34
  Speaker 1: So for the Mac 7 and QQQ and NASDAQ as a whole, this should be amazing, incredible.
• 10:35
  Speaker 1: If you're making chips, you're selling chips, you're designing chips.
• 10:37
  Speaker 1: There's a risk here right Now.
• 10:41
  Speaker 1: Thanks for banning the spammer there.
• 10:44
  Speaker 1: Fox, I appreciate you.
• 10:45
  Speaker 1: As always, fox is our in-house Fox here.
• 10:49
  Speaker 1: But look, this story might be vastly exaggerated.
• 10:54
  Speaker 1: The numbers may or may not add up, but what does the market hate the most?
• 11:01
  Speaker 1: It's not actually bad news.
• 11:02
  Speaker 1: What the market hates the most is uncertainty.
• 11:05
  Speaker 1: Right now we have uncertainty, and that's all you need to tank a market.
• 11:11
  Speaker 1: All we need is uncertainty.
• 11:13
  Speaker 1: Now, when was the last time we've tanked in the market Like this?
• 11:18
  Speaker 1: Well, last August springs to mind.
• 11:20
  Speaker 1: I don't know if you remember that.
• 11:21
  Speaker 1: I think 5th of August the Japanese kamikaze fighters decided to raise interest rates, and I'm sure that's a terribly offensive thing to say, but you see, that's what we do around here.
• 11:34
  Speaker 1: We offend equally.
• 11:36
  Speaker 1: It was here, wasn't it?
• 11:37
  Speaker 1: That dip there, right?
• 11:39
  Speaker 1: So let me show you, this was the dip, that was the Japan dip.
• 11:44
  Speaker 1: Let me show you this was the dip, that was the japan dip, that one here.
• 11:50
  Speaker 1: So right now we're looking at a similarish, not quite as deep a dip, so we might go a little bit lower.
• 11:52
  Speaker 1: And was that a good buy opportunity?
• 11:54
  Speaker 1: Let me just think about that.
• 11:55
  Speaker 1: Um, yeah, right.
• 11:59
  Speaker 1: So in the long run, things go up.
• 12:01
  Speaker 1: Now, by things I mean in index, I don't mean every stock.
• 12:03
  Speaker 1: Stocks do not have to go up Now.
• 12:04
  Speaker 1: By things I mean in index, I don't mean every stock.
• 12:06
  Speaker 1: Stocks do not have to go up in the long run.
• 12:09
  Speaker 1: Right, there are plenty of examples where stocks have gone absolutely nowhere.
• 12:13
  Speaker 1: Let me give you an example.
• 12:14
  Speaker 1: People said, oh, it'll go to the moon, it'll go to the moon, definitely, definitely, definitely.
• 12:19
  Speaker 1: And I can't think I can get this on the screen, but you get the idea right.
• 12:27
  Speaker 1: This is what can happen to stocks Started up there at 73.
• 12:31
  Speaker 1: It's trading at $2.
• 12:32
  Speaker 1: I said I should short it at like 60 or 70.
• 12:36
  Speaker 1: I should have just freaking shorted it, but it went against my rules so I didn't.
• 12:41
  Speaker 1: But, yes, it would have been one of the most profitable trades ever.