Latest / Felix Nikolas Prehn's Podcast / Felix Prehn - The $1 Trillion BUY Warning! + Stock Market News 28 November 2024

Transcript

Felix Prehn - The $1 Trillion BUY Warning! + Stock Market News 28 November 2024 · Felix Nikolas Prehn's Podcast

• 0:01
  Speaker 1: Felix here and at long last, we're on the right stream.
• 0:03
  Speaker 1: Slight technical glitches here today, perhaps because it is Thanksgiving.
• 0:06
  Speaker 1: Happy Thanksgiving to you.
• 0:08
  Speaker 1: I hope you're having, or about to have, a beautiful, wonderful, grateful, marvelous day with lots of food and everything else, and I think it's an amazing day, when the markets are closed, for us to take a step back and actually assess a few things and really learn what's going on out there, like, for example, how to show up on the right stream for the right time, that sort of thing.
• 0:28
  Speaker 1: So what I want to walk you through here in the next few minutes is the following these are our goals for today.
• 0:35
  Speaker 1: It's always my goal to make you the best informed investor out there, and today I want you to understand who the biggest stock buyers are out there and I want to show you what they're doing.
• 0:46
  Speaker 1: I also want to show you why that matters and what really matters for your portfolio today and in the coming weeks, and I will also walk you through all your favorite stocks and I will also throw in a couple of potential breakout stocks that might about to explode and then explain to you exactly why that's happening, and then I'll do my utmost to answer all of your questions out, stocks that might about to explode, and then explain to you exactly why that's happening, and then I'll do my utmost to answer all of your questions.
• 1:08
  Speaker 1: Would that be helpful for you if you knew that?
• 1:11
  Speaker 1: If this would be helpful for you, let me know.
• 1:14
  Speaker 1: Put a number one in the chat, literally just put a one in there, and I will know that this will be helpful.
• 1:21
  Speaker 1: And if it isn't, let me know too.
• 1:22
  Speaker 1: So who's the biggest buyer out there?
• 1:26
  Speaker 1: Buybacks Confusing Somewhat.
• 1:28
  Speaker 1: Well, it's companies that are buying back their own shares.
• 1:32
  Speaker 1: Now why would they do that?
• 1:34
  Speaker 1: It's basically a way for a company, a listed company, essentially a stock, if they want to give dollars, cash, back to shareholders.
• 1:45
  Speaker 1: Okay, lots of ones there.
• 1:48
  Speaker 1: Indy, that's about 20 ones which I love.
• 1:51
  Speaker 1: That's brilliant.
• 1:52
  Speaker 1: So they want to give money back to shareholders.
• 1:54
  Speaker 1: Now, what are their options for giving money back to shareholders?
• 1:57
  Speaker 1: Well, they can't exactly mail you a check, can they?
• 2:00
  Speaker 1: Well, they could do.
• 2:01
  Speaker 1: Dividends.
• 2:01
  Speaker 1: What's the problem with dividends?
• 2:03
  Speaker 1: They tend to get taxed in a more higher level because dividends taxes are usually more like income taxes, whereas buybacks don't really affect you.
• 2:12
  Speaker 1: Except what do they do?
• 2:15
  Speaker 1: They reduce the numbers of shares out.
• 2:19
  Speaker 1: So imagine you have a company like this, your company, and there were four shareholders, right, Shareholder one, two, three and four.
• 2:28
  Speaker 1: Now the company says I'm going to buy back shareholder four shares.
• 2:33
  Speaker 1: So what does that mean?
• 2:35
  Speaker 1: Well, shareholder four disappears.
• 2:36
  Speaker 1: So the other three now own how much?
• 2:40
  Speaker 1: Or maybe I should go back a step.
• 2:41
  Speaker 1: At the beginning, every shareholder owns 25% right, all of them.
• 2:47
  Speaker 1: There's four of them.
• 2:48
  Speaker 1: But after they've bought back the shares from one of the shareholders, everybody now owns 33% of the company.
• 2:56
  Speaker 1: So your share has become more valuable because you now own a bigger slice of the company.
• 3:02
  Speaker 1: And that's exactly what buybacks do.
• 3:05
  Speaker 1: So it's a wonderful thing.
• 3:06
  Speaker 1: Absolutely love buybacks, and we are seeing a huge, huge, huge growth in buybacks.
• 3:13
  Speaker 1: So it's the green line here on this chart which is buybacks, and they're going up, and the forecast is that they're going to go up very, very aggressively, according to Deutsche Bank.
• 3:25
  Speaker 1: So precisely, jerry, the stock becomes more valuable.
• 3:30
  Speaker 1: You're spot on.
• 3:31
  Speaker 1: So what's driving that?
• 3:32
  Speaker 1: Why are we seeing an increase in buybacks?
• 3:35
  Speaker 1: And I'm going to give you the exact numbers, and all of that in just a second.
• 3:39
  Speaker 1: Well, companies are making more money.
• 3:42
  Speaker 1: This blue line here is cash flow.
• 3:45
  Speaker 1: So companies are just generating an absolute ton of money and they don't know what to do with it.
• 3:55
  Speaker 1: Like, literally, don't know what to do with it.
• 3:57
  Speaker 1: They're sitting on what's the cash flow?
• 3:59
  Speaker 1: Something like.
• 4:01
  Speaker 1: I'm not sure which scale it is.
• 4:02
  Speaker 1: It's about 400, 4,000, $4 trillion, something like that.
• 4:06
  Speaker 1: That's what it says here.
• 4:08
  Speaker 1: $4 trillion, it's a lot, it's a heck of a lot of money.
• 4:10
  Speaker 1: And then what are they going to do with it?
• 4:12
  Speaker 1: Well, they're going, at the current rate, $275 billion a quarter in buybacks.
• 4:23
  Speaker 1: It'll be about $1.1 trillion this year.
• 4:26
  Speaker 1: Now, the other thing that's $1.1 trillion is US interest on national debt Scary right on national debt Scary right, which is something hopefully the next lot is going to address with Elon and Palantir and so on.
• 4:44
  Speaker 1: So they're saying that by next quarter, buybacks are going to increase from $275 to $325 billion, that's an extra $50 billion a quarter and that for the year, we're going to get $1.3 trillion in buybacks.
• 4:58
  Speaker 1: Now, traditionally, companies exceed the buybacks they announce, so it could actually be even more than that, and they're saying it could increase faster Also, that's what they're saying.
• 5:09
  Speaker 1: So that's very, very good news.
• 5:12
  Speaker 1: And why do you think they could buy more?
• 5:14
  Speaker 1: Well, buybacks as a percentage of profits is what this chart tells you and I'm sorry, there are quite a lot of charts here, but I think you can handle it and I think we can go through it again and I'll ask you whether it makes sense in a second.
• 5:39
  Speaker 1: So this purple line here is basically buybacks as a proportion of their profits and spellings not the greatest in the world.
• 5:52
  Speaker 1: And you see, in 2007, 2008, they were using like 90% of their money to do to buyback.
• 5:56
  Speaker 1: In 2008, they were using like 90% of their money to do to buy back, and over the last couple of years and the last data we have here now, it's about 45%.
• 6:04
  Speaker 1: So you can see that there is potentially a very significant ability for these companies to return more money to you and me, shareholders.
• 6:12
  Speaker 1: And what would that do?
• 6:13
  Speaker 1: Make shares more valuable.
• 6:15
  Speaker 1: So what happens?
• 6:16
  Speaker 1: Stock market goes up, right.
• 6:17
  Speaker 1: So that is the thing that's going to underpin 2025.
• 6:24
  Speaker 1: Now we're also going to see a lot of buyback still to the end of the year, because the biggest buyback season is the last quarter of the year and we only have 20 days left in the year.
• 6:35
  Speaker 1: So is that useful?
• 6:37
  Speaker 1: Is that helpful?
• 6:37
  Speaker 1: If that's helpful, please put a one in the chat, if some of that at least, or if any of that makes some sense to you, let me know in the chat by just putting a little one in there.
• 6:49
  Speaker 1: So the next thing I want you to understand is why December and January are such golden opportunities for traders, for investors.
• 7:00
  Speaker 1: Thanks for the bonds there, fraser, robert, sean, appreciate it.
• 7:08
  Speaker 1: Tc Indie Bones I still like you lots of ones.
• 7:13
  Speaker 1: You stand out, my friend.
• 7:14
  Speaker 1: That's always a good thing to do.
• 7:17
  Speaker 1: So the year isn't the same, right?
• 7:20
  Speaker 1: So we have January to December.
• 7:21
  Speaker 1: The stock market doesn't go up in a straight line.
• 7:24
  Speaker 1: It does, you know, more that sort of a thing, right?
• 7:26
  Speaker 1: And there are certain periods of the year that are better than others and we get more increases in share prices than in others.
• 7:35
  Speaker 1: And December is wonderful.
• 7:38
  Speaker 1: The last two weeks of December and the first two weeks of January are by far the best month, or the best four-week period, of the year.
• 7:49
  Speaker 1: The stock market goes up on average 2.6%.
• 7:52
  Speaker 1: That might not sound like a lot, 2.6%, but that's justa four-week period.
• 7:56
  Speaker 1: That's actually really quite a lot, still having all the ones pouring in here.
• 8:01
  Speaker 1: So now you understand that you know that you are in the Goldilocks period.
• 8:06
  Speaker 1: You are in the sweet spot.
• 8:07
  Speaker 1: This is the best time of the year to be in the market, right?
• 8:10
  Speaker 1: I hope that's helpful.
• 8:12
  Speaker 1: Year to be in the market, right?
• 8:13
  Speaker 1: I hope that's helpful.
• 8:13
  Speaker 1: And what really matters in these periods is, yes, the market's going to trend up, but there will be stocks that are going to trend up more than others and that's because they do more buybacks and the news is better, the industry is better, the sector is better and so on.
• 8:30
  Speaker 1: And how do you know all of that?
• 8:31
  Speaker 1: Well, it's very tedious to read all the news and all the reports and do all of that.
• 8:34
  Speaker 1: Most of us don't have time for it or no interest in doing it.
• 8:37
  Speaker 1: What if I told you that?
• 8:40
  Speaker 1: The one piece of information that helped me from being an average investor who was making 8% 10% a year to making 100% plus a year and I'm not promising you those returns because we're different and that kind of thing but there is one piece of information that's really done that and that's understanding how to spot breakouts.
• 9:04
  Speaker 1: So stocks do this right, and then they go boom right Up.
• 9:08
  Speaker 1: Knowing that that's happening there and what to look for to be able to spot those breakouts with a very, very high probability is what really got me to where I am today and I'm going to give you that information for free and I could charge you a lot of money for that information, but I don't want to.
• 9:25
  Speaker 1: Why?
• 9:26
  Speaker 1: Because I think you deserve to understand it and it's helped me to get from wage slavery to doing whatever the heck I want, which is a really, really lovely place to be.
• 9:35
  Speaker 1: So if, at the end of this video, you are so minded that you still want to learn this, because you actually want to make use of today and you have half an hour and you really want to be a winner in a sense, then go to felixfrenzorggetfree the link's in the description of this video as well, so you don't have to even write it down and watch that 30 minute masterclass I recorded for you and you'll actually learn this and I'll walk you through a couple of examples in a minute as well.
• 10:01
  Speaker 1: Some live stuff.
• 10:02
  Speaker 1: But you need to understand the concept and it's a lot more time efficient if you watch that and then you will understand what the heck's going on here.
• 10:11
  Speaker 1: But what the heck's going on here, but to really understand, why is the market so wonderful?
• 10:16
  Speaker 1: In December, late December and early January, I was asking.
• 10:32
  Speaker 1: November was a big buyback month it is.
• 10:33
  Speaker 1: It's December as well.
• 10:34
  Speaker 1: Yeah, we have tremendous inflows and still buybacks Slightly less buybacks than November, but the inflows from funds are larger.
• 10:42
  Speaker 1: So if you look at this chart here, it tells you the flow of funds and the flow of funds are greatest when this is the very beginning of the year.
• 10:52
  Speaker 1: So this is early January, early Jan, and then if you count together these three bars here, that is late December, and those are the sweet spots of the year.
• 11:08
  Speaker 1: So that's basically where we are.
• 11:10
  Speaker 1: It's just more money pours into the market in late December and early January than any other time of the year.
• 11:15
  Speaker 1: It's just a historic fact.
• 11:17
  Speaker 1: This has been the case since 1928.
• 11:20
  Speaker 1: So understanding this and understanding the patterns of the market is what separates the maybe I get lucky to the.
• 11:29
  Speaker 1: Well, I actually know what I'm doing, because I understand that this is a very, very, very good period to make some money.
• 11:34
  Speaker 1: And then there are other periods of the year, like September for example, which are horrible.
• 11:38
  Speaker 1: And what do you see me doing in September?
• 11:40
  Speaker 1: I'm usually on holiday.
• 11:42
  Speaker 1: I do nothing.
• 11:43
  Speaker 1: I do nothing at all.
• 11:44
  Speaker 1: It's a terrible time to put investments on.
• 11:46
  Speaker 1: So, alison, I appreciate you do.
• 11:50
  Speaker 1: Thank you very much for tuning in.
• 11:52
  Speaker 1: So is that helpful?
• 11:54
  Speaker 1: Is that helpful?
• 11:54
  Speaker 1: Again, put a smiley or something in the chat.
• 11:57
  Speaker 1: If you think this is helpful, take a screenshot if you like.
• 12:00
  Speaker 1: Feel free to take notes, obviously, but let's walk through to the real life world, right here, right now, today, and the market's open tomorrow.
• 12:08
  Speaker 1: By the way, there won't be a lot of trading volume, but still it'll move a bit.
• 12:13
  Speaker 1: This is the S&P.
• 12:14
  Speaker 1: This is a screenshot from tradevisionio, which is a software that we've developed to give everybody the same quality data that Wall Street has access to.
• 12:23
  Speaker 1: Thanks for the smileys there, daniel, expanding time, and Patrick and Martin and Philip and Fraser.
• 12:30
  Speaker 1: I appreciate you.
• 12:31
  Speaker 1: I appreciate you for wanting to learn, and what have you got on here?
• 12:36
  Speaker 1: You've got that red line there and I'll zoom in a little bit for you, and that's the resistance line.
• 12:45
  Speaker 1: It sits at 6,000 points at the moment in the S&P.
• 12:47
  Speaker 1: We're trading one point below it, basically.
• 12:49
  Speaker 1: So what if you knew how these resistance lines would work right?
• 12:53
  Speaker 1: Would that be a helpful piece of information?
• 12:56
  Speaker 1: Well, let me show you what happened yesterday with the resistance, and I haven't looked at this yet.
• 13:00
  Speaker 1: I don't actually know what the chart's going to say, but I can imagine what it's going to show me, because there is a certain pattern to this that always does the same thing.