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Is the Fed’s Next Move a HIKE? | Market Close
Recorded: March 30, 2026 Duration: 1:18:42Space Recording
Full Transcription
all right all right everyone let us proceed the show the show of course must go on
mr ahmed and i think davis actually is traveling back to the East Coast.
So we definitely cannot leave you guys hanging.
So here we are today with the market close.
Of course, this is the last market close I'm going to be doing.
Well, I don't know.
It really depends.
I'm going to try to fill in those gaps if I can.
But this is the last time we'll be streaming until I get back on my vacation a couple of weeks.
So let us get this show on the road. We have a few things we want to go today. We had Jerome Powell talking. He was live.
He really was saying some things that I didn't really want to hear as someone who's definitely long the market.
We also had Trump do a little bit of talking this morning.
I'm going to play a clip from that one. In addition to that, anthropic fears continue
to stream through, but against all odds, software actually is doing pretty good today versus
semiconductors, which socks is down like four and a half percent, which is pretty insane.
We're seeing a lot of the, a lot of stocks continuing to sell off. I mean, it is,
it looked a little bit better
this morning but since then i mean it has been a little bit of a monster fall that we had here
let me go ahead and share this screen see what we're dealing with over here see what kind of
damage we have not looking too great unfortunately oh we get a little bit of a bounce into the
close that's always a good thing to see there uh Oh my goodness, Trayvon, you get out of here. All right. So we have SPY down
about 44 basis points a day. It was actually a lot lower when I looked at it about 15 minutes
ago. SPY was down at 629. We have the Qs down about 88 basis points a day. So not that bad.
It was down all the way to 555 earlier today.
We did have Meta.
Meta's having a little bit of a green day here, which is good to see.
But arguably, Meta's still pretty far down from its all-time high.
So not bad to see a little bit of a green day here.
We have Google pulling back, Apple pulling back, which is now going to close below the 200-day moving average.
So there's like a lot of things we got to look at over here in the market, right? Of course, a lot of things are selling up. When you have things
below the 200-day moving average, you really don't get that great movement in the market that we
usually see in those rip-your-face-off bull markets. In fact, today, we're still getting
another close below the 200-day moving average, where SPY, SAVETY McHugh's, but Amazon has been
well below the 200- a moving average has shown no
means of recovery over here meta of course is way below the 200 day moving average as well and
apple is going to have its first close below the 200 day moving average since last august and in
fact i did post it earlier but we have amd which is looking to make its first close below the 200
day moving average you can see
over here as amd has dropped down it's been testing it bouncing testing it bouncing and you
thought it was going to make some recovery over here the other day and now we're having the first
close below the 200 day moving average for amd so things are not really looking that good in my
opinion um yeah semis are definitely hurting they are they're just not doing good at all if i pull
up the big chart over here,
we have semiconductors down four and a half percent. IGV is having a commanding lead here,
but on the year to date, semiconductors is still, I believe, green year to date. If I look over here,
well, it's about to turn red year to date if it does close around over here. So,
you know, going to hold on a little bit over here, see what's happening.
I know a lot of you guys are trying to buy the dip pretty aggressively.
For me personally, I'm not trying to buy the dip aggressively
in like a short swing term, swing straightening portfolio.
But I did start the portfolio up where I am slowly dollar cost averaging
into the market, into a bunch of names that I do find pretty favorable.
One of them, of course, is Amazon. Another one is Mercado Libre and a few other names. I'll probably be
posting that one on Twitter, but that's going to be like a very slow DCA buy, not like throwing
10% of the portfolio in somewhere, throwing 6% of the portfolio in something like that.
This is going to be something that I'm going to start for a long period of time because
firstly, I don't see a way out of the situation. I see the situation getting a lot worse.
We are down about 10% from all-time highs.
So I think that for this to continue accelerating downward,
we need to see a continued escalation.
But I mean, you had some commenter that I'm going to play a little bit from Jerome Powell,
which doesn't really bring a lot of confidence here.
You have S&P still trading at pretty excessive valuations here around 20 times forward.
I think it's about 20 times forward.
It was like 22 times forward the other month.
And I would say that dollar cost avenue to the market for a long period of time is something we continue to do so.
Obviously, you guys have 401ks or IRAs and so on, so you've already been doing that.
Maybe something a little bit more concentrated is what I'm going to be looking at doing with a few names i'll give
you guys posted on that one let's take a look at the fear and greed index someone did mention this
one earlier uh let's see how this one is looking over here i barely look at the fear and greed
index because i know this thing is going to be broken when especially when we have a massive
pullback we're at an eight over here okay so one thing to remember with the fear and greed index because I know this thing is going to be broken when, especially when we have a massive pullback. We're at an eight over here. Okay. So one thing to remember with the fear and greed
index guys is that this is very technical based. This isn't like sentiment based, like the AAII
sentiment survey. This is more technical based. You have the stock price breadth with net new
52 week highs versus lows. And that's on the New York Stock Exchange. This of course is falling
down, especially with semiconductors pulling back quite a bit here uh you have below the 20 125 day moving
after this is actually going to stay in extreme fear over here for quite some time as long as we
continue to trade below 6800 in the sp500 stock breath continues to be pretty bad over here as
everything continues to fall put and call option ratio um this one's going to be pretty volatile
depending if we get a bounce or not like if we get a pretty strong bounce in the stock market,
then this of course will probably, uh, pull back here and you're going to start to get a little
more optimism in the put and call option. VIX is at $30. So we need to have some sort of really
good news to see VIX come back and compress down. But VIX has been trending up for quite a couple
of months lately. So this will continue to stay up there. Safe havens, 20 days, stock and bond market returns.
This is actually a weird one because we do have TLT up about 1.25% today. So that is going to
outperform, of course, the stock market as it is a whole. Junk bond demand. I mean, let's be honest,
if rates, if the 10 years at 4.5%, no one is really going to want junk bonds right now. They're going to stick with the investment grade. So that really is your
companies that are producing a lot of free cashflow and producing a lot of profitability
to the bottom line. People are probably staying away from the junk bonds right now. I don't think
anybody wants to sell debt to, or to loan debt to beyond meat or anything like that. Obviously
that's not where the junk bonds are,
but you can understand there's a bit of fear in the market. There's a bit of uncertainty.
Usually when this happens, nobody wants to put money in companies that might go belly up in a couple of years. So we will see what happens with that one. All right, let's get on with the first
clip of the show today. We did have Trump do a little bit of talking as far as where we're going.
I mean, I'm going to collect all the headlines that I did see this morning and show you guys
a few of those. But you know, you look the stock market clearly hasn't really been that much good
news today. So I'm going to play this for you real quick. Talking about the war with Iran,
thousands more US forces arriving in the Middle East. We're talking about more than
3,500 troops, including 2,500 Marines newly arrived to that region as the war enters month
two. Now, this troop buildup only intensifies attention to that messaging that seems a little
bit mixed from the president. He voiced optimism about talks with Iran and then issued new threats
to Iran's power plants, oil wells, and Karg Island.
Are you considering still putting boots on the ground and would you do that without going to
conference? I just have lots of alternators. We have tremendous numbers of ships over there. We
don't need them all because of, you know, the power. Look, I would say we're just like we're
ahead of schedule on the ballroom in a much bigger way, we're ahead of schedule with Iran.
So earlier, the president told the Financial Times he may send troops to Kargis Island to, quote, take their oil,
but acknowledged that he would also mean the U.S. would have to be in Iran for what the president said was a while.
Meanwhile, the White House has not denied a Washington Post report the Pentagon is preparing for weeks of ground operations.
Of course, Iran has said if the U.S. launches a ground invasion, it will step up attacks on U.S. allies.
Case in point, you see that right here.
This oil refinery in Israel is the latest target of Iranian strikes.
So live now to CBS News Pentagon reporter Eleanor Watson.
Reporter Eleanor Watson. So Ellie, what can you tell us about the arrival of those troops in the region?
So, Ellie, what can you tell us about the arrival of those troops in the region?
Yeah, Reed, even as the president is pushing for those negotiations,
thousands of Marines arrived in the region over the weekend,
and we reported this morning that hundreds of special operations forces are now there too,
with more U.S. troops on the way.
This is all to give the president options if negotiations fail.
Those options could include things like reopening the Strait of Hormuz, seizing the highly enriched uranium from deep inside Iranian territory,
or capturing Karg Island, which, as you mentioned, the president has been threatening.
Karg Island is a crucial hub for the export of Iran's oil.
hub for the export of Iran's oil. About 90% of Iran's oil is exported by going through that
terminal where the oil is loaded on tankers. Destroying the oil infrastructure on that island
could have wider consequences for the economy, so capturing it is another option the U.S. could
pursue. But we should note that island is just 15 miles off the coast of
Iran. So even if a mission is doable, the troops there would risk threats from cruise missiles,
from drones, from fast attack speed boats, and likely risk more casualties. Yeah, right. Well,
let's also talk about some recent hits, of course, attacks on Israel by the Houthis of Yemen and NATO
forces, we understand, intercepted a missile
that targeted Turkey. Are we at the point where these hits not only signal maybe an escalation,
but also more of an expansion of the war in a regional sense?
Well, the ballistic missile that apparently targeted Turkey, that's now the third
missile that Iran has launched towards Turkey that has been intercepted by NATO forces. That's concerning because Turkey
is a member of NATO and if there were to be a successful attack that could
require some NATO military response with other allies. But so far Turkey through
those different interceptions has not shown any indications that's leaning towards invoking that clause.
Now to the south in Yemen, the Houthis, which are backed by Iran, entered the conflict for
the first time since it started by launching this missile towards Israel.
They have.
All right.
So that's a little bit of an update we have for you in the market.
We're probably going to see some stuff happen after close here an update we have for you in the market. We're probably
going to see some stuff happen after close here, as we have seen for a long time. The markets are
bouncing a little bit over here, which is really good to see. We're going to be closing in about
three minutes over here. We're getting a little bit of a bounce of the close. I did notice that
Sox is kind of recovering over here, but still not looking good over here for the Sox ETF.
Queues are down over here. Let's take a look at some individual stocks real quick into the close. Yeah. Nebius is down
here at 92 bucks. This is pretty interesting because we literally undid the entire move.
We undid the entire move that we had after they got the deal announced from, was it Meta? I forget
the company that announced the deal with
nebius but we undid that entire move and i still remember all the way over here guys people are
getting very excited trying to buy nebius steve and i said look you can get better prices and here
we are today you're getting better prices than nebius iran is all the way down at 31 holy cow we
have not seen these prices in ir since back over here, September,
but I do remember that time we had, it was back over here, beginning of March, I believe we had,
um, I ran report its earnings. It was like below $30, but here we are again, guys. So,
you know, I, again, I'm not going to be like everyone load the boat. This is the bottom.
We're going to go higher from here. It's very difficult to know where the bottom is.
I mean, this is a falling freaking knife in the stock market.
Like, how do you know where the bottom is?
Like, we're below the 200-day moving averages over here, right?
If I look at the weekly chart, it looks like we're going down to 533 on the Qs.
If I look at the monthly chart, it looks like we're going to be going down at least to 545.
Like, we are in no man's land. Well, not really no man's land, but we're in chart it looks like we're going to be going down at least to 545 like we are in no man's land well not really no man's land but we're in a place where
it's just going to be extremely volatile guys the vix is at 30. the vix is above 30 right now you
are going to see massive chop in the markets don't get ahead of yourselves when you start seeing green
candles wait for some clarity for things to happen now with that being said like i mentioned earlier
wait for some clarity for things to happen. Now, with that being said, like I mentioned earlier,
dollar cost averaging for me makes sense here. You got to see what your goals are and everything,
but like when I'm talking about dollar cost averaging to the market, I'm talking about a
slow dollar cost average into a bucket names. And I am very bullish on for the longterm.
And this is money that I don't need for at least 20, 30 years, right? So that is what I mean, my dollar cost averaging.
Look at this as like your 401k,
but more like being strategic and tactical
with certain positions.
I do have a 401k as well.
And I don't max that out, but I do have that as well.
So like, if you're already doing 401k,
you know, why not put some investments toward the future?
With that being said, the market is closed today.
We have the Qs down about 32 basis points, a bit of recovery there which is good to see uh still on the daily chart the
queues is still below the 200 day moving average over here we have uh sorry did i say queues i
meant spy we have the queues down 76 basis points lately oh yeah good call on that one i'm gonna
bring up um someone did say recession's incoming. I mean,
I don't know. We'll wait and see. We're going to listen to a clip with Trump and see what happens
over there. Yeah. But I wake up, I buy Amazon. But congratulations. I mean, Amazon had a pretty
decent day today. Amazon was up about 81 basis points today. Meta was up about 2% today at 536.
It was crazy. I thought we were going to see below $500 of meta. We did not see below $500.
Netflix is staying pretty strong here. Even though it's down 50 basis points today,
it did not give up any of the gains it had since that WB deal. WBD deal did fall through the cracks
there, but arguably good for Netflix. I mean, that's a free $2 billion right there from doing
basically nothing. Maybe some litigation fees and all that stuff, but they got two, excuse me, they got $2 billion right there. We have Tesla down 2% today. This is starting to
get pretty interesting over here because it's coming back all the way down to where it was
last July. I'm not buying Tesla over here. I don't plan to buy Tesla here. If Tesla does come back
down to, I would say the low $200 range, I might consider starting to DCA, DCA into Tesla.
The big portfolio, no moves for me. Well, I lied. I did sell a position today. I did sell my
Marvel position about breakeven, but I did open that one up about two weeks ago. And the reason
why is because when you have the market pulling back, I don't want to be back holding certain
things that I just entered, right? So I'm going to wait and see what happens for clarity before I start adding and start
aggressively trading the market right now.
Still trying to hang out a little bit and see what's happening.
What is going on?
Evan, my man, Stock Market News is in the house.
Largest financial account on Twitter.
A lot of you guys probably know what this is.
Thank you very much for being here, Evan.
Let's give a like and subscribe on the channel, especially if you are on the YouTube channel for Wolf. Guys, by the way, Gav Blacksburg did an interview with Chris Camillo and that was
just released this morning. I'm going to pull up that, uh, I'm going to pull up that video here
and I'm going to share that with you guys because I cannot wait to check that out.
I have a 13-hour flight coming up later today, and that is not going to be a fun one. I take off
about seven hours, so I got a little bit of time, but this is the interview with Chris Camillo
and Wolf. So go ahead and check that one out, guys, when you get a chance. It's about a 40-minute
interview, so you can go ahead and listen to that one, see what he has to say. But remember,
Chris Camillo is the guy who turned $20,000 to, what was it, $70 million. But that did not happen
overnight. So don't listen to what he's long and go all in those stocks, you know, think it's going
to happen like tomorrow or something. Whenever I the whenever i listen to these kind of interviews i always try to take away their
strategy and how they think more than just like get getting some fish in them right learn how to
fish don't uh give a man a fish he'll live whatever the quote is teach a man to fish you'll
live for a lifetime so that is what it is yeah Yeah. Why did all the, all the AI stocks sell off? Well, all the AI stocks sold off because the ones that were leading the market up
for a long time is down 4.25% socks. All right. So what is in the socks ETF? Well, let me pull
up the seeking alpha over here and I'm going to pull up the socks ETF and seeking Alpha. Let me share that for you guys. So if you look at the holdings here for
stocks, you have 9% Micron. Micron is down 10% today. You have 8%, 7% Applied Digital. You have
6% NVIDIA. You have 6% AMD. You have 5%. All the stocks have been leading the market up.
All of them have been leading the market up this year. And when those stocks pull back,
when Micron's down 10%, when Applied Materials is down almost double digits, when Nvidia is down
4%, 3%, this whole ETF is going to go down. And when most of the market has been propped up by a lot of semiconductors and those fall
the market will fall so you got to remember the s&p 500 and the nasdaq are made up of a basket
of stocks but it is weight it is weighted based on market cap and if everything pulled back but
the ones that were leading the market and then those pull back you're going to have a fall in the market. And that's really what we've been seeing for the last few
days. We've seen a lot of deleveraging of these leaders in the market, namely NVIDIA, Micron,
AMD, Applied Materials, all these companies pull back dramatically. And that has been a catalyst
for the market to come down even further. It's a lot of deleveraging. And unfortunately,
unfortunately, we are not seeing a bounce in the market right now. Like no bounce. I thought maybe
we were going to get like a little bit of a bounce today, considering that things were green last
night. It all sold off. It all sold off this morning. As soon as the market opened, if I
pulled a 30 minute chart over here and I, let me hide this stuff. We as the market opened if i pulled a 30 minute chart over here and i let me hide this stuff we had the market open here today 9 30 a.m and just got sold off
we haven't even seen the open opening prices since the market opened right so usually whenever that
stuff happens like you got to kind of be careful um trying to call bottoms here right calling dcaing
or dollar cost averaging takes away the guesswork of calling the bottom. That's why dollar cost averaging makes sense for a lot of people because you don't need
to look at charts.
Well, it makes sense to look at charts and everything, but you don't really need to pay
attention to the intraday moves in the market, even the weekly moves in the market.
You're going to buy at a set dollar value every X amount of weeks, days, months, whatever
it is until whenever, right right you take out the guesswork
of thinking like when the market's going to bottom you're just consistently buying and then
your total size of that position is going to be an average of all those buys you did a lot of people
did this with rocket lab speaking of which rocket lab is all the way down here not a little bit down
but it was down about six percent today so rocket Rocket Lab, I would be honest, is going to get very interesting
if this thing gets all the way to like below,
below like 40 bucks.
Going to be very interesting for Rocket Lab.
I'm not going to buy here though.
I think the market is still getting a lot of bad stuff going on.
Wow.
Hibs is almost fading the entire move over here.
Lemonade is back in the $50 range.
Oscar, did that go below $10?
It did not go below $10.
Peloton, be very careful with Peloton, guys.
Don't get too bold up in Peloton.
You need to look in those financials.
I was long Peloton in options,
and I stopped myself out when I was like around $8 or something.
I didn't really lose any money in that one,
but that was like a very small position.
But like you have to be well aware of the risk
when you're looking at Peloton, okay, guys? Like mean i use a palton i got a peloton like right
there but i ain't gonna buy the stock right now like this thing can easily go private at a massive
discount if it does that is not going to bode well for stock and you know they do have a lot
of assets in their business but they can easily sell off those assets in order to stay afloat so
you got to be careful with stocks like that don't get bolted up if you see someone on twitter getting very bold up do your own research for sure
i saw news after hours that vert uh signed a contract and it doesn't even appear that
um it's making a move on it let me actually pull up that stuff with uh vert vert of Holdings over here. We have here that Vertiv Holdings.
I'll share this one.
We have over here that Vertiv invests $50 million to expand the data center cooling capacity.
I thought they got investments.
They're investing in something so that pretty much is not really that good that news that's
gonna make the thing pump up all right guys so i have another clip i want to play obviously
powell spoke earlier today um i don't think it was really anything like he said something that
we don't really know but he's kind of giving us thoughts powell's last fomc meeting is the next
one so i don't know how much sustenance
that the market's going to put on what he's saying, but let me go ahead and play this for
you. This is a two minute clip. I also do have another clip I'm going to play for you after that
one. I wish I found like the whole clip over here, but I couldn't find, maybe I could find the whole
clip while I'm playing this one. So I'm going to go ahead and play this one for you guys and let's
see what he had to say today. The current crisis in the
Middle East and the effect on energy prices. Indeed, this classroom is familiar with that
question from the last problem set where we asked, how would you advise the Fed to respond to the
rising price of oil? And we teach that when there's a demand shock, that's a pretty natural
set of recommendations that emerge for the Fed. But when there's a demand shock, that's a pretty natural set of recommendations that emerge for the Fed.
But when there's a supply shock, like this energy price shock, there's trade-offs that the Fed has to juggle.
How do you make those trade-offs in general, and how do you make those trade-offs in this particular instance?
And can you help everyone with their piece of it?
Well, maybe they should tell me.
Sure, so you start with what you said.
You know, our tools work on demand. Higher rates will tend
to moderate demand, lower rates will tend to stimulate demand. And when you have a supply
shock, our tool doesn't have meaningful shorter term effects on supply. So when you have a
supply shock, the first question is, do you respond to it? And the classic question has
been around energy, just in general, not really speaking about the current situation,
although I'll get to that, I guess. But, you know, energy shocks have tended to come and
go pretty quickly. Monetary policy works with long and variable lags, famously. And so by
the time the effects of a tightening in monetary policy take effect, you know,
the oil price shock is probably long gone and you're weighing on the economy at a time when it's not appropriate.
So the tendency is to look through any kind of a supply shock.
But a critical, essential aspect of that is you have to carefully monitor inflation expectations
because you can have a series of these supply shocks,
and that can lead the public generally, businesses, price setters, households,
lead them to start expecting higher inflation over time.
Why wouldn't they? At the end of a certain number of years, inflation is now just higher, and that can happen.
So you monitor that very, very carefully.
Also, in the current situation,
you have to be mindful of the whole broader context. And the broader context is we're still,
we've been coming down close to 2% post pandemic, but we've never actually,
you know, gotten right and stayed at 2%. So it's been a while. And we're very mindful of that fact.
Inflation expectations do appear to be well anchored beyond the short term.
But nonetheless, it's something as we we will eventually maybe face the question of what to do here.
We're not really facing it yet because we don't know what what the economic effects will be.
But we'll certainly be mindful of that broader context when we make.
All right. So he didn't really give too much context at exactly
what we're doing i think that the going thing he actually i have a bunch of notes here that someone
posted from the uh pal interview let's actually go over this one together so we have that uh he
spoke at harvard for his final appearance as a fed chair he definitely said all right so federal
reserve will not cut interest rates this year a rate hike is still on the table inflation must
come back to two
and that will not change see this is an interesting one i mean this is this should not be news for anyone uh because if you look at the cme fed funds future let me actually share that one over here
this is the cme fed funds future you can basically see the probability of um of whether we get a hike
whether we pause or whether we get a cut throughout each term.
If you look at December 2026, this is where rates are expected to be at by the end of the year.
And you can see here there's a 78.6% chance that the Fed is not going to cut at all this year.
One thing you got to remember, guys, is that whatever the probability of this is going into
the FOMC event is going to be what the Fed's going to do. There's a very high likelihood
they're not going to stray away from this, but this is a volatile chart, right? So one month ago,
we had about a 30% chance of getting two cuts. Now we have a 76%, 78% chance of getting no cuts.
So that's something you need to be mindful. And Powell's not going to go up there on the podium
and he's going to be like, Hey guys, we are going to cut rates this year.
Hey guys, we're going to cut because he doesn't know what the problem is going to be.
He doesn't know what his cabinet's going to say.
He only knows what he is going to say for the next meeting.
And clearly he is not someone to start to throw banter out there that's going to move the markets.
He's trying not to move the markets.
That's really his job to reduce the volatility.
U.S. debt levels are manageable today, but debt is growing much faster than the economy. That's really his job to reduce the volatility. U.S. debt levels are manageable
today, but debt is growing much faster than the economy. That's very true. We saw that with the
taco Trump pivot last year. Federal Reserve must stay completely free from political pressure.
All right. Well, let's see that. Let's see how that works out. The U.S. banking system is much
stronger and safer today than it was in crisis that artificial intelligence will eliminate some jobs but will also create new ones and improve living standards over time i actually
did talk about this one during the meetup um by the way it was great to see everyone uh during
the meetup uh last saturday also people who are around on friday as well you know honestly i
apologize if i was talking to you and i had no idea who you were because I've been talking to you on Twitter.
There's this dude, Austin, who I've talked to a lot on Twitter.
And the whole time that he was there, I was talking to him and I didn't realize it was him.
I thought it was just some dude named Austin.
But I guess I should have clicked on the profile photo and saw who that was that I was talking.
Anyways, really appreciate meeting a lot of you guys over there.
Looking forward to the next one.
Anyways, Powell did say he is very optimistic about the long-term future of the U.S. economy,
but it says right now it's genuinely difficult for young people entering the job market.
So I'll get a little bit of my commentary over there afterwards.
I did want to play another clip over here.
This one's significantly shorter uh but in this one um
oh actually this one is from fed governor steven moran um i don't want to play the whole thing of
this one because he is a descent uh meaning that he has been calling for cuts so he's definitely
more uh he's more dovish when it comes to the fed but uh let's see what he has to say this is
actually a five minute one i'm not sure if i'm gonna play the whole thing but uh let me just play this clip for
you this has been dissenting in favor of bigger cuts at recent meetings but Governor Stephen
Myron joins us now for a CNBC exclusive welcome good to have you good morning thanks for having
me back has your view changed at all as a result of the rising oil prices and diesel prices and fertilizer prices
about the outlook for inflation? Yes, so traditionally the Federal Reserve looks through
an oil price shock. Now, the reason why we do that is because oil price shocks tend to boost
the price level immediately. They flow through into prices very quickly. Gas prices move higher.
But monetary policy only hits the economy with lags. It doesn't...
If you change monetary policy today, it doesn't affect economic growth.
It doesn't affect unemployment or inflation for 12 to 18 months from now.
So if the oil price boosts the price level today through the gasoline price and other
things, but not 12 to 18 months from now, monetary policy simply cannot affect that.
Now, the way that that wouldn't work, that this traditional logic the Federal Reserve
has always observed, the way that this logic would not work is in one of two scenarios.
One is you get a price-wage spiral, where wages start moving higher and then prices start moving
higher too. There's not really any evidence of that thus far at all. And with the labor market
on a gradual cooling trend for the last three years, that seems extremely unlikely. The other
way that you would get the oil price shockFLATION 12 TO 18 MONTHS OUT
IS IF INFLATION EXPECTATIONS STARTED TO GET AFFECTED.
AND WHEN YOU LOOK AT THE INFLATION EXPECTATIONS, YOU DON'T REALLY SEE THAT.
SO I LIKE TO LOOK AT CPI SWAPS. CPI SWAPS FOR THE NEXT YEAR MOVED HIGHER BECAUSE PRICES HIGHER
NEATLY, EXACTLY AS WE SAID. BUT WHEN YOU LOOK AT FORWARD RATES,
WHEN YOU LOOK AT INFLATION EXPECTATIONS, ONE YE forward, one year, two years forward, one year inflation, three years forward,
they haven't budged. And when you look at medium to long-term inflation expectations,
like five years, five years forward, they've actually been coming down since this entire
thing started. So in order to get an inflation shock from oil that the Federal Reserve can affect,
it needs to affect inflation beyond a one-year
horizon. And there's thus far no evidence of that. All of that is true. But, you know,
there was evidence, first of all, that the Fed's inflation target was higher. I mean,
that inflation was higher than the Fed's target going into this, right? And that what this will
do is, even if it's in the short term, will have an impact on headline CPI, on PCE, you know, the longer this lasts.
And it's now, what, we're five weeks in and there are concerns that it will have a bigger
impact on underlying inflation, even if you're not seeing it necessarily in those expectations
or wages.
Yeah, so if I saw one of those two things happen, if I saw a wage price spiral or I saw
evidence that inflation expectations were starting to pick up, then I would get worried
about it.
But as I said, there's no evidence of it thus far.
And you can move the monetary policy rate all you want today, tomorrow,
but it's not going to affect inflation the next couple of months, right?
It can only affect...
All right, so it's not a whole lot of ways to say.
Obviously, he's going to shoot for lower rates
and then try to talk down inflation and stuff.
But I don't know.
The market's kind of looking at this and then I'm really getting bowled up.
You really got to have the Fed chair up there to see what's going to happen.
As a matter of fact, actually Kevin Warsh is going to be voted on the Senate committee coming up very
soon. Actually, I think it was as early as April, uh, Warsh vote Senate. Let's see here um we'll hold up senate vote april 13 is when they're going to vote for him the
committee hearing was delayed as potential around the week april 13. okay so we'll see what happens
there um wash is probably going to be the fed chair that's going to be speaking for the june meeting
uh fomc meetings let me take a look at this thing over here
Let me take a look at this thing over here.
Meeting calendar.
So we have April coming up.
That's Powell's last meeting.
Then we have June.
Yeah, so Warsh is going to be there during that one.
We'll see what happens.
I mean, he's pretty dovish on rates,
but he's not exactly dovish when it comes to the balance sheet,
which means money printing.
But we'll see what happens. As long as inflation is entamed, he's probably going dovish when it comes to the balance sheet uh which means money printing um but we'll see what happens as long as inflation is entamed he's probably going to continue cutting
rates i'm seeing the market move a little bit here after hours let's take a look at the market
after us real quick um over here yeah so the market is down about 16 basis points i mean it's make its usual move
fix is at 30 so it's really not going to um do a whole lot over here uh amd oh wow amd
actually bounced a decent amount of clothes i was actually thinking about um thinking about
opening up some hedges here today but i'll wait for a bounce if I do any.
Yeah. No, I don't have any hedges right now. I'm just chilling right now. I've got about 17%
cash today after I closed the Marvell position at about breakeven. So I wish I was 100% cash like a
lot of those people out there, but I was not. So it is what it is. It's just the nature of being
in the market. I mean, it's all going to come back eventually. The question is when will it come back?
All right. So I don't know if you guys listened to a gentleman named Warren Pies. Warren Pies is
an equity analyst and researcher. He does run money for a lot of affluent people um i'm gonna play this clip for you it's
about four minutes over here really good to hear this guy talk in fact this is one of the few guys
that was actually very bullish in 2023 and he changed his stance recently and it's interesting
to hear his input on it let me go ahead and play it for you guys and then i'm also going to share
his uh twitter handle in case you guys want to check his page out.
He's remain on downgrade watch for him. And the key will be whether this war heads into April.
Joining me now is 314 Research co-founder Warren Pies. Warren, good to see April's coming fast.
Obviously, it's next Wednesday, I guess. A week ago, you thought maybe you'd give it a week to see if we get
de-escalation to taco trade. So explain the thinking now. Yeah, thank you for having me.
I think we've, just like everybody, you know, maybe we all learned the wrong lesson from last
year, which is to just to wait and expect a capitulation and look for that off-ramp in one of these kind of um self-induced market sell-offs
but um i i think it's been prudent to wait and to let technicals guide you in this oh by the way
guys this is from last friday um still relevant today since we closed basically flat in the day
but we are getting to the point where the rubber meets the road i think uh it's the i do think
there are signs that this this sell-off is starting to
move into the second phase which is um where investors are seeing that this is not a short-lived
uh conflict you're seeing the the back end of the crude the crude curve start to reflect longer
a longer uh time elevated crude oil prices and you're seeing some cross-asset moves you're seeing
a longer time elevated crude oil prices. And you're seeing some cross asset moves. You're seeing
gold rally. You're seeing the two year yields drop in the face of oil rallying in the stock
market falling today. That's the first, I think, warning sign that the market's going to start
looking through the inflationary first early impacts of this into the recessionary consequences.
Yeah, that for sure. I saw you highlight that today,
which was significant, that there was a bit of a switch from how this thing has traded for the past
few weeks. You know, at the same time, he said, let the technicals guide you. I mean,
we keep waiting for this kind of, people say whether we need some kind of a real flush,
some kind of comprehensive liquidation. You see a lot of stocks trading at
their lows. You know, it feels like it sometimes does when you have some of that climactic action,
but maybe not everything lined up. Yeah, I don't think it's there yet, to be honest. I wish I could
say that. But knowing the oil market like I do, we're looking down the barrel at a very,
very serious situation. If this last, like Rubio's comments, the G7 today was, hey, two to four more weeks.
If this last four weeks, you know, the S&P 500 is going into a bear market.
Oil will be at $150 a barrel.
You know, there will be shortages.
I'm not trying to be alarmist, but this is just you need to be sober-minded about what you're facing down.
And I don't see sentiment reflecting that yet.
We look at, like, managed money, or we look at inverse ETF volume.
It's a lake where you'd expect to be for a run-of-the-mill pullback and things like that.
But I don't see the real fear and panic in the levels that we're talking about.
We moved in this consolidation range where we lost momentum back in February.
That's when we initially downgraded stocks.
And we basically said, okay, we want to see this range resolve. And that range was 6538 on the downside, 6900 on the
upside. We broke through 6538. We're waiting to get some good closes, a weekly close below that.
So I think you should expect the momentum to accelerate to the downside from here
based on technicals and sentiment to make. Yeah, I mean, you've made the point when it comes to oil,
it's sort of a cumulative effect to some degree. We have this daily shortfall. We're kind of burning
through reserves and, you know, releases and there's some, I guess, rationing going on.
But how does that snowball if we go two to four weeks? Yeah, so to me, and we talked about this
a week ago. So every day, I would say just
as a good rough estimate, and this includes the SPR release, this includes the bypass pipeline
to the Red Sea from the East-West pipeline. I still, there's still the 10 million barrel a day
hole in the market every day. And that's with all the best assumptions I can possibly make.
If we roll that forward one month, that's 300 million barrels that we lost. We can already see it's gone on the water. The water excess inventories are gone. Now we're cutting into
onshore excess inventories. As we roll into April, you're going to draw below what we would
consider excess. And then you move into, even if we get a resolution to the war and we open the
Strait of Hormuz back up, you still have time to get
production and lost refinery capacity back online. This tells me that best case scenario is we're
going to lose 600 million barrels of inventory out of global inventories. That's about an 8 billion
barrel storage globally. That's a huge number. That's more than we've ever seen in any calendar year on record.
So that's in two months. We're changing the shape of the oil market in real time
in a short two-month window. Never seen anything like it before.
Yeah. So I mean, the takeaway you want to have from that one guys is that if oil still stays afloat,
we're certainly going to see continued down pressure on the market.
There was actually some interesting price action today regarding oil
because I've been looking at some oil over here.
Hold on a second.
Not that one, this one.
All right.
So if we look at crude, oh, you know what?
This isn't the same thing that I saw with you, with, with XLE.
Okay.
So crude closed at its high of day.
Okay.
That's what we want to see.
I forget about what I just said.
That is not what you want to see over here with crude continue to come up over here.
But Warren Pies is basically saying that there's obviously a lot of constraint
when it comes to oil, as far as supply goes with the straighter for moose.
And we did have some continued development with the other straight
that's nearby the straighter for moose, which is getting a lot more oil supply as well.
But if this price of oil continues to go up, that's going to strain all of the
byproducts that are created using oil, whether it's machinery, whether it's plastic or anything like that.
And also on top of that, we do have reserves that we did release some of them.
But even if we did release these reserves into the open market, we do burn about, I think it was about how much oil do we burn per day?
Let's see here.
We use about 20 million barrels of oil per day.
Globally is 100 million barrels of oil per day.
So like even if it relief reserves, it's not really going to do anything.
So he said that if this war goes on for two more weeks, we're going to be in a bear market.
And what we heard from the White House was today that the war is going to go on for a total of four to six weeks.
We are in week four of the war, about week four.
And two more weeks, which is in line with Rubio was saying,
would put us in that six-week range of being in this war,
which we don't even know this is going to end anytime soon.
So I think that is where kind of the constraint comes with one inflation,
because even if this war does end,
inflation is still going to stick around because oil has been up for a long
time. So I don't know. We'll wait and see. Um, this is,
this is probably one of the reasons why I'm not like we're at a bottom here
because you're continuing to see oil plow higher. Um,
that's not what the market wants to see.
So it was pretty interesting seeing that we were rallying to close,
but now we're kind of giving up
that rallying after hours.
All right.
So another clip that I did want to play
for you guys is regarding Anthropix.
So there actually is one more
I wanted to play besides that one.
Where was it?
I played the Moran one.
Actually, no, there was not another one.
For anyone that is a Rocket Lab bull, which is really already news that we knew about,
but they did finally get the full-on approval of it.
But we had that Rocket Lab.
That's Rocket Lab.
Rocket Lab received the approval to acquire
Minarik AG, expanding it to Europe
and strengthening the satellite stack.
This deal adds high-speed laser comms
tied to major defense contracts.
So obviously, this is a story of Rocket Lab.
You have already that they are a space platform
to launch their own rocket ships. But in addition to that, they do build a lot of Rocket Lab. You have already that they are a space platform to launch their own rocket ships.
But in addition to that,
they do build a lot of software as well,
but they are continuing to expand further into defense.
And that's kind of the reason
why you're continuing to see Rocket Lab
still be strong in the face of a market pulling back.
It's down a good amount percent today,
but still, I believe they are green here today.
Is Rocket Lab green here today today let's see over here
is rock lab green year to date no they're red year to date but i mean they went all the way
to 100 bucks so they were acting pretty nice earlier this year asts um this is also another
space flight this is also another space flight.
This is actually still green in the year.
I think it just turned red in the year today, but still doing pretty good.
Do you see SpaceX considering not IPO-ing on Hoden and SoFi?
I don't know. I mean, I was actually very surprised to see that news this morning
because you would think that they'd want the exit liquidity
to get a lot of retail in there. But if we take a look at the news I was received on SpaceX earlier today. No, that's not the one. Where was there was some news regarding SpaceX and.
SpaceX and
all right, I can't find it.
But they're considering not having the SpaceX IPO
available to Robinhood and SoFi users.
To be honest, that's probably a good thing.
Why would you buy a $1.5 trillion IPO,
which is obviously going to be oversubscribed
right when it comes out, when the market is going down. In a time wheno which is obviously going to be oversubscribed uh right when it comes out
when the market is going down uh in in a time when a market is falling like this you don't buy ipos
because ipos make massive moves based on its hype but if the market is pulling back there isn't going
to be so much hype when those happen again rocket lab is probably your closest comparison when it comes to sales, when it comes to SpaceX that's publicly traded.
Definitely not as big as SpaceX because Rocket Lab is certainly not a $1.5 trillion company,
but it's probably your closest proxy to it.
So you saw a bit of the excitement with Rocket Lab when the SpaceX IPO was announced.
Went to nearly 100 bucks about 50
down since then so if this hype wears down you can certainly expect the hype with spacex to wear down
as well right so we'll continue to see what happens there yeah ipos almost always go down they do a
lot of ipos usually go down um we've had more than a few of them happen actually when uh arm ipo'd
back here,
rally pretty high.
And then it pulled all the way back dramatically, especially to last April.
Um, rubric was an IPO.
Uh, I did buy very close to this IPO around here and it went up and then look,
it's all the way back down here.
And so that's certainly not fun to see.
Oh, wow.
Palo Alto is up 5% today.
Crosstrek's up two and a half percent today.
Interesting.
Palantir is down over here today.
It's pretty interesting.
Was anybody buying some stocks today?
I know I saw Ahmed.
He was buying some Palantir.
Oh, VCX.
What's VCX doing?
Wow.
Down another 35% today.
I would have loved to short this one, but there were no shares available to short this one.
And I know Citroen Research actually shorted this one uh so it's pretty interesting to see i mean if
you're chasing this one i i think hard lesson learned i guess uh definitely don't yeah he
bought 10 million dollars worth of shares um probably why it's up so we'll see what happens
with that one starlink is like 70 spaces revenue it's actually pretty interesting
uh there was someone that was uh at the event which knew a lot about starlink um maybe i should
have collected those details from them all right but anyways i wanted to uh play a clip here uh
regarding anthropic and the continued fear of destroying software. And they did extend into
destroying software in cybersecurity, which is pretty ironic to see that kind of solve in
cybersecurity, considering that you would think that as a Gentic AI and AI does get a lot better,
that would make cybersecurity more important, right? At least that's what I would think it
would. Maybe the market doesn't agree with me on that one, but I would think that that would be the case.
So let me go ahead and play this
regarding the AI disruption of cybersecurity from Anthropic.
Anthropic reportedly testing a powerful new AI model
with more advanced cybersecurity capabilities.
That news hitting the cybersecurity stocks last week.
Sima Modi has the details in today's Tech Check.
Hey, Sima.
Hey, Leslie.
And there's a key distinction here.
This is Anthropik's latest model,
rumored to debut in April.
And the expectation is that it will be more powerful
and robust in nature.
And according to reports,
will lower the barrier,
possibly to bad actors.
Now, the CEOs of the world's largest cyber companies
are calling on AI Labs to be more responsible.
Palo Alto Network CEO Nikesh Arora writing in a blog post this morning that
a single bad actor will now be able to run campaigns that once required entire teams.
Every desktop, he says, now effectively behaves like a server
and is likely to have unsupervised AI tools operating near sensitive systems.
The attack surface keeps growing, mostly unnoticed.
Aurora, who bought $10 million in Palo Alto stock last Friday,
is calling on OpenAI and Anthropic to release these capabilities
in a responsible fashion while ensuring the defenders have been consulted.
The key question, Leslie, now for investors is,
if the large language models continue to enhance their AI capabilities
and build offerings that are competitive to the software and cybersecurity
vendors, will they replace these companies or they actually increase the total addressable
market? Analysts at Wolf weighing in on this whole conversation, they think this only leads
to more spending on cybersecurity. They're actually upgrading shares of CrowdStrike to
450.
Yeah.
So that's something that I always found interesting. It's like, it kind of makes sense why you would sell like,
why cybersecurity would sell off in the midst of a market falling,
but to accelerate that sell off in response to those news,
you see it's more like an excuse to, for deleveraging for institutions.
That's the only way that I would see it.
Valuations are of course pretty big big for companies like crowdstrike which is
trading like 16 times in fact i do have uh breakdown evaluations from jam and ball uh who is part of
um altimeter let me pull this one over here he releases these articles every single week which
are really cool to read um he also releases these charts that shows the valuation of software so this is as
of last Friday so Palantir is trading at 47.8 times enterprise value next
12 months sales cloudflare is at 26 times crowd tracked at 16 times did it
out to 10 times shop by 10 Palo Alto 9 Palo Alto probably a little bit higher
is up like five percent today
digital ocean is a nine simsar is a nine guide wires at eight uh you know these companies these
top 10 companies are definitely going to be trading pretty expensive and definitely going to
have heightened valuations because look at their look at our margins over here so gross margins for
for these software companies are obviously going to be in the high percentage wise because they're able to scale out and reduce costs.
Look at these operating margins.
Palantir is 32% operating margins, 47% free cash flow margins, and they're growing to 62% next 12 months.
That's why this is expensive, guys.
This is also the forefront of software AI, right?
So there's hardware AI, there's Nvidia and there's software
AI, which is Palantir. So it's going to have a premium. Cloudflare, which is more in the space
of AI inference queries, providing that edge compute for faster response to queries.
Trading at 26.3 times EVNTM forward, gross margin 75% operating margins. They are not
profitable in the operating margins. They are not profitable operating margins,
free cash flow margins 12%.
So they have like a very wide mocha is about 40%
of all DNS traffic goes through Cloudflare.
They are also protectors of the internet as well
because they do block DNS tax,
DDoS tax for a lot of companies as well.
So they do have that individuality
when it comes to edge computing.
They are a dominant force there,
but this trade's very expensive.
I will not be buying Cloudflare at the current price today.
Very expensive.
Crowdstrike is 16 times with a gross margin of 75.
They are not profitable on an operating basis,
but they have a 26% free cash flow margin.
Crowdstrike is the leader when it comes to endpoint security client management.
Okay, so that's the reason why they trade at a premium.
Datadog is 10 times free cash flow margin of data dog is probably the one company where i'm like
why is this so expensive it doesn't make any sense yeah their management is really good team
and by no means is it a bad company it's a really good company uh but they're more in the
observability range and what do you think about compliance uh would you think about the importance
of having outsourced products for monitoring your own applications?
Just makes me curious.
Like, why would you have Datadog if you could probably build something in-house?
Like, you're not going to build yourself an in-house cybersecurity product because guess what?
That's a lot to manage.
It's a lot of overhead to manage if you're going to be keeping this in-house developing, making it better, and also catching all the latest definitions that are out there as far as reducing the amount of viruses and potential attacks. That's something that's a lot harder
to do when you're talking about monitoring applications. Maybe having a thousand licenses
of Datadog with the max tier plan doesn't really make sense. Maybe reduce that by about 10, 20%.
And that's probably going to be enough for Herica in terms of the growth of Datadog.
We continue to see that in the last few quarters is that their net dollar retention has actually slowly subsided.
But still, the best company when it comes to observability out there and excellent company that's managed very well.
But I wouldn't be surprised to see this come down to like seven, six times, which mean like a 20, 30 percent drawdown if this fear does continue.
Shopify had e-commerce payment platform. You guys already know about
that one. Palo Alto is the dominant leader when it comes to cybersecurity as far as revenue growth,
sorry, as revenue. And their free cash reports are 36% and 42% operating margins. But this is
quite a mature cybersecurity company, so you're not going to get a double on it, right? But at the
same time, probably one of the least riskiest cybersecurity plays out there. Snowflake,
highly disruptive company. I do think that this one's potential for a lot of disruption out there.
They are not operating profitable. They're not profitable from the bottom line. They have 24%
free cash margins. I was a buyer of Snowflake when it was in the low hundreds and $150 two years ago.
Would I buy Snowflake here?
Probably not.
I think there's a lot of disruption when you think about data processing, especially when
it comes to business intelligence and all that stuff.
That is open for disruption.
I would not be surprised to see companies start to build their own products out there
to replace what Snowflake does.
Digital Ocean, edge computing, this one has a lot of potential, but it's ran quite a bit. So I'd
really hold off on that one. Samsara, IoT, Internet of Things. I don't really know exactly
what they do, to be honest, but that stock's performing pretty decently lately. Guidewire,
I don't even know what they do. But these valuations are still pretty excessive. So
if cybersecurity pulls back here, if we get crowd tracking, the low
two hundreds, I'll be a buyer until then probably not gonna be buying
crowd checking time soon.
A rubric is not in this list.
Cause the evaluations can press quite a good amount.
That's one of the data security.
So I've talked about cybersecurity ad nauseam for quite some time.
Um, but speaking of being bullish stocks, we did of course, and I think
Amit was discussing this one this morning.
We did, of course, have Bill Ackman basically come out with this tweet saying that there's a lot of stocks trading compelling valuations.
The two big ones in the portfolio that are trading compelling valuations are Met and Amazon.
You saw those green today, basically.
But I don't know.
Bill Ackman is an interesting guy when he starts getting loud on Twitter.
When Bill Ackman starts getting loud on Twitter, that means he's hurting.
Okay.
That was a very short post we saw from Bill Ackman.
Two paragraphs.
I still remember when he made his massive post during the bottom of the tariff change
from Trump.
That was the bottom because he was flipping out on twitter this one a little more confidence so my bill acumen indicator does not
show that we're at a bottom yet i don't know maybe we are maybe we're not but i do agree with them
there's certain stocks that are trading really good valuations which is the reason why i'm
dollar cost avenue to it let me actually pull up the bill acumen tweet over here. I did post this last night.
Here we go. Yeah. So this is a bill.
I mean, this is such a short,
this is such a short post of Bill Ackman guys.
He's not freaking out. He's not freaking out one bit.
He's just saying that it's ignore the bears. Like, okay, well,
I want to see this guy like completely flip out in Twitter and then it'll
be time to buy until then.
I mean,
you know,
you're,
you're basically paying two and 20 to own mega caps.
you know,
I'm a lot of Bill Ackman's great guy,
you know,
but,
I don't see the point in pouring so much money to his funds.
You could just buy his stocks and he's not even like a trader or anything.
He trader as in like trader, not traitor. He's not, he his stocks and he's not even like a trader or anything trader as in like trader not traitor he's not he's a he's not a trader he buys and holds so i mean
like do you need to pay two and twenty for something like that to manage your money i don't know you
could just do it yourself save some money but then again i'm not managing billions of dollars so what
do i know some of the highest quality businesses in the world are trading at extremely cheap prices
i don't think they're trading at extremely cheap prices i don't think they're trading extremely cheap prices this is in 2022 they're trading cheap they're
not trading extremely cheap prices ignore the msn what does msm mean may i meet you nice
no no that's not what msn means but not nice one. What does MSM mean, Bill Hackman?
Mainstream media. Okay. He's got a point there. You do have to ignore mainstream media when it
comes to that one. One of the most one-sided wars in history. I don't know, man. It is very
one-sided, right? We could end it, but that doesn't mean it's going to end anytime soon.
So I wouldn't downplay the war or anything. will end well for the us in the world again i i think there's gonna be more
of a taco here than anything um i don't think things are gonna end well the only way to really
end this is to pull out of iran and declare victory which we know is not gonna be a victory
and we have a large potential for world peace dividend. We'll see. He sounds very
confident here. One of the best names in a long time to buy quality. Okay. He does make a lot of
sense here. When you're buying long-term, you don't buy mean stocks. Meme stocks is not a good
long-term investment. Meme stocks is a good trade, not a long-term investment because I don't know
if beyond me, it's going to be around
in 10 years. I don't even know how it's still around right now. And that is a meme stock.
That is not quality. And that is not what Bill Ackman is telling you to buy. He's telling you
to buy Amazon, Meta, Google, whatever's in portfolio. Let's see actually what's in Bill
Ackman's portfolio. Bill Ackman's 13F. So he has 11% weighting 11 waiting in actually let me do it by waiting
18 in brookfield he has 16 in uber he has 14 in amazon uh is that right he He only has 14% in Google. I thought he had more than that.
He has 11% in Meta, QSR,
Howard Hughes,
all that stuff.
He still holds STZ.
He sold out of Chipotle before.
He actually made a lot of money in Chipotle.
So yeah,
I'm very into Nebius.
Am I buying Nebius here? Probably not.
My average is pretty low.
I was actually looking to sell some butts in Nebbias,
but probably not a good time to do that,
so I stayed away from it.
Brookfield is actually the most interesting one
that I don't own on here.
Really good long-term play.
That is quality, my friends.
Brookfield is a very good quality company.
Wow, that's trading at $38?
Interesting.
What is the chart looking like in this beast?
Below the 200-day moving average.
Okay.
No, not really looking good.
Yeah, Brookfield is a pretty interesting one.
You've got a nuclear play in here.
You have real estate plays in here.
They own so many properties around the entire world.
So many buildings.
We'll see what happens.
Zeta.
Someone asked about Zeta.
They're green today.
IGB was green today.
So didn't mind that one.
It's a dead cat bounce.
I don't know, guys.
I have no idea if this is a dead cat bouncing on.
But yeah, that is Bill Ackman for you.
We will see what happens there.
Let me actually pull up something here because I want to see if CNBC is doing something crazy on TV right now.
And then I'm probably going to end the stream
um stephanie link was on cnbc stephanie link is cool i like stephanie link um hold on
they usually have something good in the closing bell but i don't see any guests on here
We usually have something good in the closing bell, but I don't see any guests on here.
No, nothing there.
Who's Scott talking to?
Oh, Tom Lee was on today.
All right, cool.
So I want to play this one for you.
Let me just get the beginning of this clip.
I did not know Tom Lee was on here.
All right, here we go. This is going to be interesting.
I didn't listen to this one, so this is going to be interesting to see what he has to say.
Hold on. Let me make sure I'm sharing the sound. I don't want you guys to yell at me.
All right, good. Sound is on. He's also a CBC contributor back here at Post9. It's good to see
you. Great to see you, Scott. Just to remind people, you're like, we're going to get off to a good
start. I think we're going to have a bear market at some point this year, and then we're going to
have a strong rally and finish well. As I mentioned, obviously, you didn't have this
on your bingo card. You thought maybe it was going to be issues around a new Fed chair,
et cetera. Yeah. So with that as the context, what do I do now?
Well, I think markets are in the process of discounting a lot of the bad news because the war isn't quick and there's risk to the oil supply disruption.
And I heard a lot of our clients kind of worrying what it means for the economy and for GDP.
But I think that means the market now can respond to less bad news.
And I think one of the less bad things is it's possible earnings estimates should be
going up right now, even with higher oil.
It's because of the defense spending.
If we're spending $200 billion a month on war, Department of War, that's $2 trillion
a year incremental.
Every $10 rise in gasoline or oil is $70 billion a year.
So even if $30 oil rise is $200 billion, it's more than offset by defense spending.
So I think markets should start to sort of front load this discounting and we could start rising.
I think that's the critical thing that people are trying to get their arms around of all this, that the reason why people haven't gotten, you know, en masse negative,
and the market hasn't looked worse than it's traded,
albeit down five straight weeks,
is believing that the earnings story is going to stay intact
and that it's going to remain resilient.
But even those who think it's going to remain resilient
are pointing to places that are not the defense area and convincing themselves that it's going to hold up.
Do you believe that?
Yeah, I mean, we are in a fog of war, so I can't say things definitively.
But we do know that after five weeks, we can see how markets are letting things outperform.
five weeks, we can see what how markets are letting things outperform and outperformances
energy rate sensitive, which is utilities, treasuries and financials. But it's also large
cap tech and crypto. So I think in some ways, the market is betting that growth is going
to hold up in the US. Would you buy the market today? Yeah, I think we're 90 to 95% through the sell-off.
Why? Why? Why? Why? This is one thing I don't understand about Wall Street analysts to say
that they believe we are X percent at the end of the sell-off. Because what if we're not?
Well, you just said we're almost done with it, right?
It's just like, I will never, ever tell you guys that I think the sell-off is done, or
I think the sell-off is almost done, right?
I'll tell you guys when I think it's done after we recovered for a little bit, but when
we have a falling knife like this, like a falling freaking knife in the stock market like why are you calling the bottom like
i just i don't know why i don't know why handed though you know tom has been right for a long time
the unfortunate part is that he's been wrong lately especially things have been pounding the
table on that's probably the reason why a lot of
people are hating on him because of the fact that he has been wrong, not only recently, but it
thinks that he was very bullish on like BMNR. So, you know, that this goes to show as a learning
lesson and I've done it myself many times too. In fact, I've done it recently as well, right?
Don't borrow conviction from people. If people are very bullish something,
don't just buy it because this person said it. Buy it because you did your research,
you built your conviction on it, and you believe the long story is going to work out. So you're
going to buy it because of that reason. Because when it falls, you're going to feel like crap.
Now I shouldn't listen to this guy and bought the stock. It'll be more of taking accountability.
I bought it because I believe it. I'm going to continue to hold it because i still believe in it if you don't believe
in it anymore don't hold it don't average down to losers if you don't believe in it that that's all
i gotta say about this we'll listen to this rest this one i'm gonna be a few more minutes on
i'm gonna end the pod because i got to get ready to go to egypt gives you that that confidence
well i think some of it's positioning,
and Goldman had a really nice piece about hedge fund positioning. That's right.
Certain things that looked up, sorry to interrupt you, just so people have the full context,
their note was basically like, look, we've observed a lot of hedge funds selling,
which looked like capitulation activity to us. So maybe that's run its course. So now you can perhaps build that base back up. Yeah. So I think that's one component. The second is retail sentiments.
Very negative because the A.A.I.I. Bulls less bears is minus 20.
That's a tactical sign. The VIX closed above 30.
And now I think earnings season is going to show earnings probably going to hold up better.
And then the last piece there is I think we're just going to have to realize that
stocks tend to bottom early in a wartime situation. So we've looked at every war since 1900.
Stocks will bottom within the first 10 percent of that war. So if this is a, you know, two-year war,
we're going to bottom pretty early into that process. So let's hit tech more broadly because it hasn't traded well and it hasn't really
shown any signs that it's finding its legs.
You had memory names, for example, last week look horrific.
And what does Micron do today?
Let's show it.
Ugly again.
There's like no—it doesn't feel like there's an ability for a stock like that in a group
that went straight up into the right to find any stability there.
Mega caps, they haven't looked great at all.
And the only thing I can find people saying good about them is, well, look at their multiples
now.
They've compressed a lot in in
the pullback yeah we're in the fire ready aim phase right where any little bad news is going
to cause people to de-risk but as you know that's why the positioning is is something to watch
because at some point people have gotten too neutral and then less bad things can happen in the market has a v-shaped recovery if you were inclined i
this is this is something that i again don't get okay there's words that people can use when
they're on tv that can make people very anxious and want them to buy now right when you say that
the bottom market's close to the bottom people get get anxious. It's like, okay, so I want to buy now. Cause I don't want to miss the bottom.
Right.
And he also just said, like.
People get anxious because they don't want to miss the recovery.
Right?
Like that the statistics where it goes, like, if you miss like the 10 best days
in the stock market in the year, you're going to lose like half your games.
What are you going to miss on a half the game?
Which is true.
Sure.
But you know, that doesn't mean you need to like liquidate everything and then
buy everything and time the bottom. It just means like, don't get aggressive when markets are falling
off cliff. I prefer to like more of buy the recovery than anything, um, versus trying to
time the bottom because I thought the bottom was 5% ago, but I wasn't like, this is the bottom guys.
I just mentally thought, you know, maybe we're at the bottom of the range. We've been trading
sideways around for the last like five, six months six months uh maybe things are going to be kind of bottoming out here and it didn't
right and i'm glad i didn't like buy hard or anything because if i did i would have been
i would have been toast right now not the stock tost um but like toast trying to buy like you
say you are would that be the first place you would look tech or somewhere else yeah i'd look
at what's been strong already.
And to me, because they've already had a rolling bear market.
So I would say the MAG-7 should be leading, large cap tech.
The semis I know are breaking down, but they've been leaders.
I mean, even after this pullback, they're up over 70% year over year.
And I think crypto is going to lead as well.
Why so?
Well, crypto is proving to be a good wartime store of value.
So I think if people have been over allocated to gold, which is underperformed, and they're looking for stable value, especially high net worth families, I think they're going to allocate towards crypto.
What about financials, which have gotten hammered, too? This is another area that I hear people suggest. It's going to be hard for the market to do a lot as long as financials remain a question mark.
Yeah. I listened to Fed Chair Powell speak today, and, you know, I think private credit has been maybe the thing that's been causing financials to weaken. And if Fed Chair Powell is correct, I mean, the private credit is isolated, and that means financials got too cheap.
Well, I mean, isolate is a relative word.
I mean, I think people are worried that it could still get a lot worse than it is now,
but there's a difference between that morphing into something systemic,
which the chair said, along with many others who are much smarter in this space than me, don't think it is.
Yeah, that's right.
Private credit, it's actually pretty big.
It's about the same size as high yield, but it's not as highly, widely held as mortgages were and for retail so this is
going to end up being an issue for high net worth families and allocators but that's different than
one causing widespread damage all right tom thank you we'll check in with you again soon i'm sure
that tom lee up next we track the biggest movers into the close today. Oh, that was really it with that one.
You guys are going to definitely enjoy Ahmed tomorrow and the rest of the time.
There's not another meetup until May.
Let me actually pull up the calendar that Ahmed has real quick.
All right, so we have – hey, look at that guy over there that's me all right um
let's see so we had the la meetup recently chicago meetups on may 9 singapore meetups in june
uk meetup in august austin i'm probably gonna be be at the Austin meetup. I don't think I'm going to go to the UK one, but I am going to go to the Germany one.
He didn't list that one on here.
Oh, wow.
Sitting down with leaders.
I don't think.
Oh, okay.
He already did do the Brett one.
I thought he was going to have that on.
Hold on. He's a scout for ace one six seven okay yeah i i thought i saw i thought i saw um germany on here i don't know
when germany is going to be but i definitely would like to go to that one but uh yeah all right guys i think that's about it for the show really great to see you all if
you're at the meetup last weekend looking forward to the next one i'm i'm not gonna be able to go
to the chicago one again uh i'm not gonna be doing the streams um the intraday streams i
usually do it around 245 for about an hour before I'm going to go to the close.
Uh, I'm not going to be doing that one next couple of weeks.
I'm going to be overseas.
I'm going to be in Egypt.
Uh, hopefully I'm going to be going to Jordan.
Um, if not, then that would mean that plane trip is canceled and I'm probably not to divert
and probably just go to Italy at that point.
Um, yeah, I'll keep you guys posted.
So I'm still going to be live in the Twitter.
I might like record like a video or two and post on my YouTube channel, but it'll be very
difficult to do any live sessions. Uh, they're like 12 hours
ahead. So what is, what is the time in Egypt over here? Time in Egypt is 11 PM in LA. It is 2 PM.
So they're like 10 hours ahead. No, I can't even do math right now. They're nine hours ahead.
hours ahead. No, I can't even do math right now. They're nine hours ahead. Right. So what a fun
day to lose so much money. What a fun day. Amcor is down 7% on semiconductors down 5%. Hood is down
1%. These are big positions in my portfolio. So today was not a fun day. Micron is down 10%.
I don't know, guys. We'll see what happens. Maybe we are at a local bottom.
I thought we were going to be green today. We did not end up green today. We sold off
pretty handsomely as soon as the market opened. Haven't really turned back since then. So
hopefully we get a little bit of recovery here. Amazon was up about 1%. Meta's up about
2%. Someone asked about Microsoft. Microsoft is up about 60 basis once a day um but it is microsoft
is literally trading at where it was trading last april anyways i actually i added money to the
account but i didn't execute those orders yet so i'm probably gonna do those after i just buy a few
of these mega caps right now some companies i'm probably gonna be adding to the dca uh you know
again dca like slow dollar cost average for me. Um, just going to be just doing this until God knows how long, once the market starts
to get bullish again, I'll probably stop the DCA and probably start to look to be more
tactical until then.
I mean, we get, if, if we are really going to be 30% down, just like a Citron said, or
Citrony Citrini said, uh, we're going to be like 30% down this B500 in 2026 or 2028 or something like that.
I mean, hopefully not.
But always look to the bright side of things, guys.
I mean, if you're invested for the future for decades, then you have to get used to this stuff.
You have to get used to bear markets.
You have to get used to pullbacks.
You can't be long-term invested in the stock market and think the market goes up every day.
Everyone knows that.
But being in the situations where we are having the bear marks or we are having the corrections
and stuff that is the part that's very real and right now i don't think we have capitulation yet
um i capitulation usually happens when you see like that massive sell and everything is being
sold off.
I just, I don't see that yet.
I don't see that capitulation yet where like the selling really happens.
And unfortunately, it's hard to determine the bottom when that happens.
But the good part is, is that if you are buying in size and the recovery, then you don't really
need to worry about calling the bottom. You're not going to catch the recovery, then you don't really need to worry about calling the bottom.
You're not going to catch the bottom, but you don't need to worry about the bottom.
Right?
So that is my take on it.
At the same time, you know, dollar cost average, you have a 401k and so on.
Don't liquidate all your stuff thinking that the market's going to go down lower
because time out of the market is never as good as time in the market.
You know, timing the market is not as good as time in the market, right? I'm invested all the time, right? And this is probably the most amount of cash I had in a while, especially since last April.
I'm at 17% cash right now. Definitely red year to date. I think I'm like 15% down year to date or something like that.
The hedges, I did have some hedges a couple of weeks ago and should have held those,
should have, would have, could have. But really, it's about the long term. So if you're playing with money and you expect to get rich in next week by buying the dip and calls today, think
again, I would be very careful to do that uh it's a serious thing you know so you
got to think about your mental capital and your mental perseverance as well i mean if you are
out there trying to call the bottoms buying selling buying selling buying selling then
that's going to be strenuous on your uh on your mental fortitude right so that can be very
stressful i've been in those situations before especially during covid it was not a fun situation
in covid but that was a long time i'm when I learned my lesson and now just being more patient.
Being more patient is the name
of the game as it is right now. So anyways, guys,
thank you very much.
Really appreciate you guys being here
again. If I met you last Saturday,
really great time to meet you.
Met a lot of cool people last Saturday.
I saw Davis again for the
second time.
He really is Davis really is a voluntary hobo. I don't know why this guy bought Palantir in the single digits, but he still sleeps on people's couches. I don't
get it. I don't get it. Anyways, good to see him. Good to see you guys too. Looking forward to the
next meetup. Again, probably not going to the Chicago one, but obviously there's going to be
a lot of people there. Nate lives in Chicago. A lot more people who are on the East Coast will probably go to that one.
But it was really a good time, guys. Really enjoyed hanging out with you all.
It was also really cool to talk more than just being on the screen, streaming here and there.
You know, like actually talk about personal stuff too, which is really cool.
Because, you know, we all have personal lives outside of this.
So keep in mind to enjoy your lives, even if you're in like a 20 30 drawdown um you know it is
what it is take it as a learning lesson and then uh executing those learning lessons next time
right to not make the same mistakes over again because this is a long haul game this is a game
where it is a marathon it's not about getting rich overnight it's not about uh pumping calls
overnight and hoping you double triple the next day um There is a time for that, but the time is not now. The time for that is when we have a massive recovery and things are great. That is a time you start increasing risk, or at least when I do. Right now is not a time where I increase risk because you can go broke very quickly trying to call the bottom here.
whisk because you can go broke very quickly trying to call the bottom here right so just be very
careful guys out there enjoy your lives it's only monday for me it feels like it's a weekend
uh because i'm about to leave but yeah really appreciate you guys tuning in take care amit of
course we'll be back market closed market opens i'm still going to be watching i'm still going to
be in the chat uh won't be doing much in the streams. I really appreciate you guys.
Again, the Chris Camillo interview is on the Wolf YouTube channel.
Go ahead and check that out.
I'm going to be listening to that one during my flight.
I got a 13-hour flight tonight.
13-hour flight.
So that's not going to be fun.
But again, really appreciate you guys.
