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This 1 Stock could become Cataclysmic & Afflictive‼️
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You got to be flipping my flapjacks.
$3.9 million plus public right back to
unbelievable the move on Friday.
Obviously, a lot of things I want to
react to in this video. One of the first
things I'll react to is do I believe in
the rally we had on Friday. Do I believe
that's sticking? Do I believe this is
going to continue for quite a while?
Those sorts of things. Okay. So, I want
to speak about right that right off the
top. I mean, the moves were were insane,
right? Honest stock was up over 11% on
the day. SoFi was up over 7%. Revolve
RVLV was up over 6%. Estee Lauder up
over 4% and I had ton of stocks up 2,
3%. And everything was going so perfect.
Even Dolingo put options made me money.
Duolingo stock must have been probably
the only dang stock in the whole market
that crashed while every other stock was
going up. Like literally like everything
was working in my favor, right? Duelingo
stock down 4% on the day when everything
else was um blasting higher, right? And
so I also want to talk in this video uh
toward the beginning about kind of this
sort of notion out there, right? Rising
subscriber numbers are one of the
clearest signals that a platform is
improving and becoming more relevant. Um
you know Duelingo, the numbers, the
growth they've shown there like is it
real, right? Is it lasting? Uh I want to
speak about that in this video and kind
of give a little bit of a warning out
there as somebody that's been in this
market for a long time. It's not saying
a lot of companies come become the big
things and then uh falter, right? Tom
Lee. Tom Lee was on CNBC yesterday
speaking about his views on the market.
So looking very forward to react to that
one. The professor Jeremy Seagull, he
was on CNBC yesterday speaking about uh
his views on where the market's headed
from here. So looking forward to
reacting that one. Oh man, we got the
Dean Evaluation Ashwath talking about
markets will move higher until risk show
up in earnings in the economy. Looking
forward to reacting that one. Share my
pins and perspectives there. So yeah,
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City for quite a while, then I was in
Arizona. I'm just happy to be home.
Okay, listen guys. The first time I'm
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deal when it drops 8 days from now.
Okay. So, you know, before we get
rolling here, what's my feeling on the
market? Do I think Friday's move was
lasting? Here's my take.
I distrust it. I distrust it
meaningfully. Here's why. Many times,
I've been in this market 17 years,
watched so many of these Fed presidents
speak, right?
What I see a lot is Fed president will
come out say blah blah blah market will
make a move big move many times up or
down. Okay.
And then a day you know a trading day
later or two all a sudden you get like
the real reaction. And so a lot of times
you cannot trust the initial reaction.
Same way as if the market went down big.
I wouldn't have trusted that either.
Like if the market was down big, I
wouldn't have trust that. I' been like,
"This market might come snapping right
right back." And so when I see the
market have that insane rally day on
Friday, I'm like, I don't know if I
trust it, man. I'll just be completely
honest with you guys, right? And but I
also kind of a little worried about us
having like a meltup rally all the way
into that first rate cut and because
everybody thinks it's going to like be
skyrocketing after the first rate cut
comes and then I'm like watch all a
sudden after that we get a major down
cycle in the market, right? So, you
know, I don't trust the whole I don't
ever trust when the stock market's
moving upon what somebody in the Fed is
doing. Never trust it. Never trust it,
man. because I've seen it before where
you know they signal this or and the
other part I don't trust about this
whole thing is I I've listened to so
many Fed presidents over the years what
Janet Yellen uh Ben Bernaki
uh Jerome Pal I listened to so many of
I what I witnessed with Jerome Pow on
Friday was not a super dovish Jerome Pow
like I just walked away feeling
differently than I guess Wall Street was
feeling like they made out like he's
like the most doubbish man ever. He's
about to cut 100 basis points here. I
just walked away not feeling that. I
felt like that was a man still weighing
all his options, right? He left the door
open to rate cuts, but I I don't know,
man. It wasn't as dovish as the market
took it in, at least in my personal
opinion. So, the whole situation's
weird. I I don't really trust it. Um
would it be shocked if the market got
hit this upcoming week? I wouldn't be
surprised. Like a lot of times the the
the market does the opposite of whatever
that initial move was. And so like if
the market faltered this week, I
wouldn't be surprised at all. On the on
the flip side, if we rally all the way
into the September cut, I'm going to
grow very skeptical. I'll grow very very
skeptical. I'll need to, you know, hedge
up a little bit more. Okay. Now, do
little dingo. What's going on here with
this stock, right? There's clearly an
issue when you got like it seems like
every stock in the market going up and
then Dolingo little dingo goes down 4%.
I would be a little concerned about
that. Anytime a stocks that weak when
the market's that strong and be like
what's going on here? Okay, so here's a
important factor that you got to take
into account as somebody that's been
doing this for 17 years. How many people
you know been picking stocks for 17
freaking years? It's ridiculous, right?
Listen, I watched a lot of companies
grow and become big in in a very niche
space. Okay, GoPro was a good example of
this. GoPro was growing revenues. 2, you
know, $230 million, then they grew to
$52 million, $98 million, you know,
$1.39 billion of revenue, 1.62 billion,
and then they peaked, right? And at this
time it was like, oh, everybody's going
to want an action camera. This market is
just so huge. Everybody wants an action
camera. Everybody wants an action
camera, right? No different than the
Dolingo, little dingo thing. It's like,
everybody wants to learn a language. No,
they don't. No, they don't. Okay. And so
eventually, you reach a saturation point
even in these niche markets. And you
know, you just have trouble growing your
business anymore after that. Uh look at
what happened to GoPro's annual
revenues. Right today, they do $800
million. It's not like the business
disappeared. It didn't go bye-bye. It
wasn't like they went bankrupt and they
went out of business. No, no, no. just
it's a very small business. It's a very
niche business, right? Fitbit, another
great example. Like look at the Fitbit
users, monthly active users over time.
They went from 6.7 million, 14.9
million, 23.6 million, 29 million, 33.8
million, 38.3 million, 40.2 million,
41.5 million. And Fitbit, that was a
device that, you know, people were
making an argument back in these days
when they had that insane growth. People
were saying like everybody's gonna have
a Fitbit because it's, you know, it
tracks all your health and like why
wouldn't you have a Fitbit? Every person
on this planet's gonna have a Fitbit
eventually, right? And that was an
argument that was being made. And when
it had these insane growth rates, like
people believed it. Like, dang. Yeah.
Yeah. Yeah. They only have 15 million
users. Everybody should have a Fitbit.
They're going to go to a billion users
or billions of users, right? And what do
we know? Fitbit peaked. It peaked in a
major major way. Now, what happened to
Fitbit's valuation? Well, back in the
days when people were of the belief like
everybody's going to have a Fitbit or a
huge amount of people are going to have
a Fitbit, right? Fitbit's valuation was
around $10 billion market cap on
Fitbit's company, right? And fast
forward a couple years later, $1.4
billion market cap.
$1.4 billion market cap. Went from 10,
you know, stock fell 80 plus%. People
like it peaked, right? It peaked. And it
wasn't like actually users peaked at
that particular time because users
actually kept going up for quite some
years after that but people were
realizing like oh this niche market is
you know it doesn't have much growth
left and that's when you get a major
valuation you know kind of rerating in a
stock and it is brutal to go through
that because the issue is you never come
back. That's the thing like Fitbit never
came back to that $10 billion plus
valuation. If Fitbit was a public
company today, a standalone public
company, they ended up getting bought
out by Google. But if they were a
standalone company today, they might
still be around honestly, but what would
their market cap be? 1 2 3 billion,
something like that. It never would have
gotten back to that 10 billion plus
dollar valuation it used to have back in
the day, right? So that leads us to
Dolingo little dingo here. Okay, the
stock's already been hit. The stock was
at 500 something. We got the first
initial scare, right? that sent the
market cap down to where it is now in
this $15 billion range. Here's a deal,
okay? When we get the second scare with
the stock, the valuation will fall in my
opinion to $10 billion. And then when
the third scare comes, $5 billion.
That's my opinion. No, maybe I'm
completely wrong. Maybe that never
happens, right? Maybe it never gets
scares. Dolingo dingo just grows to
become a big dingo and it just, you
know, everybody in the world wants to
learn a language and everybody in the
world wants to learn chess, right? And
by the way, from what I've heard, I've
looked at a lot of reviews of Dualingo.
It doesn't actually teach you very well
um how to actually learn a language.
From the reviews I've looked at, reviews
I've looked at, people are like, "It
doesn't like if you want to actually
learn a language for real, don't don't
do Dualingo. Do something else." Right?
Now, in regards to this, I used to own a
company named King Digital, right? King
Digital was a game company. They made a
fortune of money. Oh my gosh, did they
make so much money. And they had all
these very addictive all kind of like
Dualingo Little Dingo. All these very
addictive games, right? Which Duelingo
is kind of more of a game than actually
learning, right? And Candy Crush, Candy
Crush, Soda Saga, and all these other
games they had. Oh my gosh, Paradise
Bay. And they had a bunch of these
different games. They were so popular
and their user growth was just
astronomical, right? And then like all
companies, they started to reach a peak,
right? And then they just started to
slowly go down, slowly go down. and they
can never recover over time, right? And
you know, today King Digital, it's owned
uh by Activision Blizzard, which is now
owned by Microsoft, right? And like it's
still money-m like, you know, it's not
like it went under. It's not like it
disappeared. And that's the same exact
thing I see happening with Duelingo here
is I don't think they're going to
disappear. I don't think they're going
to go bankrupt. I just think we're going
to find out very shortly here that this
company's in a peaking process in 2025.
and it will never come back to these
sorts of prices. Now, with my put
options, I don't actually need that to
come true. That's the best part, right?
I that's just a hedge for my portfolio.
Like, if the market gets hit at all, if
Duelingo continues to get hit here, I
make a bunch of money. I'm out my put
options, cashes into long shares of
other stocks, right? But I think the
risk I'm telling you about here needs to
be considered because I see a lot of
retail investors buying Dualingo stock
heavily in 2025 this year, right? And
I'm like I I you know I'm just looking
at the company. I'm like this has all
the markings of being another one of
these type of companies. Now the the
argument I've already made in regards to
kind of like Fitbit and and GoPro is
those companies sold hardware products,
right? I already made this argument and
it kind of frustrated me because
somebody tried to debate my point. And
I'm like I already made this point about
like hardware companies are even extra
hard because you know like software is
just easier. Like Dualingo has all these
people on subscription plans. It takes a
lot hard longer for you know their
revenue to falter and things like that.
And so that's why I think Dualingo is in
a better position than GoPro and Fitbit.
But that doesn't mean their stock's not
going to go down 50 or 70% over the next
few years. So do keep that in mind.
Right now,
here's the thing with Duolingo and and
this should be like no one's talking
about this on the bull side and I think
like this you've got to take this
extremely seriously. Their monthly
active user number has started to
decline decline. That's like the I in my
opinion that's the first signal of like
uhoh like this ship could be going down.
Okay, they went down to 128 million
monthly active users from the previous
quarter. They were at 130 million
monthly active users.
that that's the first sign I believe and
I think this is also why the stock fell
from the 500 range down to the 300 range
now of like oh boy I think this insane
high valuation name is starting to peak
here right and that's why people are
already jumping ship on this one because
they realize the best days are likely
behind little dingo here but the sign
number two that we just got everybody
should be freaking out about this if
you're long and you're just like acting
like this doesn't exist I can't see it like
like
this. This next part is in even bigger
in my opinion. Okay, the social media
guru of the company, the senior global
social media manager, the one who really
built this company into like why do they
have all these users? It's because of
this lady. This lady, right? Yeah, they
got the product, but at the end of the
day, the product's only going to do so
much for you. You've got to go viral on
Instagram, Tik Tok, all the social
medias. And this lady did
one of the best jobs in modern history
for marketing of a company. Absolutely
historic job. And she's gone now. Right.
She posted this 5 days ago on her
LinkedIn page. So I'm leaving leaving
Duolingo after five unforgettable years.
8 billion impressions and even more jaw
drop more jaw drops. It's time to take
off the suit. Fresh out of college in
2020. I led Duingo's evolution into a
social first brand. turning organic
social into a growth engine that drove
waves of new users.
Yeah, we can't debate that she drove
waves of new users. Like the reason this
company is so massive because of her.
Dualingo social helped catapult the
company's market cap to nearly 7x in
just 5 years by breaking into culture as
an unexpected disruptor. It's been a
privilege working alongside a phenomenal
team that lifted me up and made the
impossible feel routine. You all taught
me how to fly and and own my power every
single day. As for what, why, who, when,
and how, I'm saving all that for the
book. I guess she's going to write a
book someday, right? So, yes, I'm no
longer Zarya from Duingo. It's I'll
mourn that for a while. For now, I'm
just Zarya. But then again, maybe
there's nothing just about it. Adios,
she says. Why would she leave?
Why would this woman leave? You got to
ask yourself that.
I'm going only come up with one
conclusion on why she would leave
Dualingo. It's that she feels, which is
my opinion, she feels like growth has
peaked with the company in that user
numbers are going to be an absolute
near impossible thing to have keep going
up. I believe she thinks the user growth
is peaked and it doesn't matter what she
does on Instagram, Tik Tok, she's not
going to be able to, you know, keep the
up these sorts of numbers and she wants
to get out while the company's on top.
That's my belief. I could be completely
wrong on that, but I have been paying
attention to stocks for 17 years and
watching all these executives leave
companies, come back to companies,
right? Get hired, get fired. I've been
watching all this. And so like a woman
like that, I'm like I don't see her
leaving. If she really, in my opinion,
if she really thought this company could
grow to 200 million users, 300 million
monthly active users, 400 million
monthly active users, I don't think she
would have left. I think she would have
kept on the ship and been like, we're
just going to keep pushing. And
remember, she she, you know, just
departed. Was it August 15th? That's not
like a usually a rash decision. Usually
you're going to plot that out over
several months. If you're somebody like
her that's a senior, you know, manager
of of all the social media marketing and
all the marketing for the company,
you're not just going to like wake up
one day and be like, I'm out of here.
No, no, no. That's going to be a
calculated decision that you'd likely
consider for a few months. She probably
let my guess is she probably let the
executive team know in July that she was
likely going to end up departing and
then maybe she had a two week or maybe a
longer than a two week uh thing and then
eventually she left. Right? So my
opinion is here that woman probably sees
that user growth is in a peaking process
and you know she doesn't want to the
last thing she she's got this insanely
great reputation right of like she grew
Dolingo to the moon. She grew it from
you know such a small user base into
this thing that had 130 million monthly
active users.
If they start going down on users it's
going to stain her reputation in a major
way. Hey, if all a sudden they go down
to 120 million monthly activives, 110
million, 100 million and she can't
recover, that totally damages her brand
and that totally damages like what she
can do like longterm and the type of
company she can work for now that she's
going out on top. Dude, this lady's
going to be able to get a job anywhere.
If you're Apple, how many millions you
want to pay her? If you're Meta, it
doesn't matter who you are. If you're
any brand in the world, you would pay
this lady millions of dollars to come
over to your company. Any startup that
like she's going to be one of the
offers she has right now. But you got to
go out on top. If things are going to
start to decline and you stay around on
that sink and ship, then you're the one
that looks like, oh, you got lucky or
you, you know, whatever. So, she's got
to go out on top. So that's my opinion
and the the longs are acting like
they're not paying attention to this. Oh
no, no, it doesn't exist. And I'm like,
dude, I mean, you should pay a little
attention to this. Okay. All righty.
Next up here, Tom Lee at
>> Funstrat, chief investment officer of
Funstrap Capital. Good day to be a bull
like yourself, Tom.
>> Yes, it is.
>> What how do you process what we just
heard? Well, I I think that it's the Fed
acknowledging that the risks now are
tilted for the labor market to be
softening and they want to head that
off, especially because they don't think
that tight labor markets are going to
necessary create inflation. That that's
a very good sign and I think it means we
have a dovish Fed again and that's kind
of a green light for small caps.
>> Small capsities are there. I mean, they
are working. Last I looked, small caps
were up three%. So, this is is this what
we need to really confirm the sort of
broadening that comes and goes in the
market? Uh yeah, because I think that
one of the things we should watch for is
what happens to mortgage rates, but
mortgage spreads are right now 360 basis
points higher than the 10-year.
Historically, it's 1.6 percentage
points. So, you could see a huge drop in
mortgage rates. That's going to help
housing, helps the financials, small
caps, and I think already the ISM, which
has been below 50 for almost 30 months
now, could finally go back above 50. And
that's a good sign for industrials.
Although we had a discussion right on
the heels of the speech about a little
steepening in the curve. Is there a
sense that the vigilantes are at least
present if not being necessarily vocal?
>> Uh yeah, and but we could also be
steepening because growth expectations
are improving as well. So this could be
like what I'd call a bull steepening.
I'm not really sure what the fixed
income terms are, but I think it's
actually a positive sign for growth.
>> The only real losers today are going to
be some of the yielders and some
staples. Would you be cautious on those?
>> That's right. I think that that markets
have been holding their breath. They've
been getting defensive. That's why we've
been bleeding for 5 days. And so now I
think there's a relief and some capital
gets put to work and it's, you know,
it's good for equities and risk assets.
>> So, all right, we need to make some news
here, Tom. Everyone listens to you.
We're at record highs now for the S&P
and the Dow. How much more can these
stocks rally?
>> Uh, I think there's a lot of upside. Uh,
especially because, you know, once you
get an ISM back above 50, it really does
argue for a broadening of markets. And I
think one of the leaders probably comes
from the financial sector. So I think
you know towards the end of the year
6,800 7,000's possible
>> led by tech still.
>> Yeah. So I think you still want to play
this week.
>> Yeah. You want to be long AI and the
crypto trade because those have been the
market leaders. So the MAG 7, Bitcoin,
Ethereum, but the broadening is really
the financials, industrials and small caps.
caps.
>> So you like them all.
Yeah, it's kind of cyclicals AI and
crypto, but not the defensives.
>> Your crypto calls have been getting a
lot of attention lately, especially on
on ether. Yes.
>> Where we were talking earlier, we were
debating whether it's the future of the
financial system.
>> A lot of people are thinking people like
you have said that.
>> Yeah. I mean, I think it's a it's a
really important moment happening this
year with, you know, the Genius Act, you
know, really greenlighting stable coins
and then project crypto, which is Wall
Street moving on to the blockchain. I
think it's a lot like 1971
when the US dollar went off the gold
standard that created the innovation of
Wall Street because they had to sort of
essentially create the synthetic dollar.
Wall Street moving on to the blockchain
is a bigger moment and I think that's
why Ethereum is essentially having its
1971 moment equivalent.
>> But a lot of people just see it as wild
speculation and fraud.
>> Yeah. You know, here's the thing.
What if I told you guys you can't get a
true peak in the market until you get what?
what?
Until you get the small caps to rally
hard and you get that blowoff topping
crypto, right? Once you get that, then
you could actually mark uh you know a a
you know topping in the market and and
potentially some pain for many quarters
or many, you know, even a year or two in
the market, right? But you got to get
like small caps just been too sleepy.
Even during this whole bull run we've
had for almost 3 years now at this point
in time. You got to get a small cap
rally. And the small cap rally, you
know, you never know how long it could
last. It could last like 3 months. It
could last like 6 months. It could last
like a year or two, right? It could be
an on andoff thing where it lasts like a
year or two, right? Where it's like
maybe we have initial like insane small
cap rally, then it takes a breather,
then we have another big bull run,
right? Um, and then maybe it falters
after that. But it's a process, you
know, like like you know that that you
you it's hard to call a major top in
them. And that's why I didn't get that
scared in April, right? You saw me
buying stocks left and right March and
April. You didn't see me like you, oh
crap, I got to get out all my positions.
Like, no, you saw me buying heavily. I
wasn't scared at all. 0% scared when all
that tariff stuff was going on. Like,
you watch all those videos from back
then, right? And I'm sure a lot of you
guys that are watching this right now,
you were watching my videos back then
and you know, hopefully you were able to
take advantage of great deals. But I
looked and I'm like, I wasn't scared at
all cuz I'm like, we hadn't even had the
signs of like an actual major topping
process, which you've got to get small
caps to roll heavy into a top. And we
hadn't even had that. So, it didn't even
feel like, oh, this is some multi-year
top and we're going to go down in the
market for a year or two. Didn't feel
like that at all. All it felt was like
was short-term drama. Everybody's caught
up in the tariff drama. Trump blah blah
blah boom right back up. Right. So
anyways, uh next one up here, the
professor Jeremy Seagull, it's great to
have you here. What do you make of just
the emphatic nature of the the market
response both equities and bonds and you
know especially I mean I look at this I
look at the the massive breath I look at
the moves in the cyclical parts of the
market and the lower quality stuff. It's
almost as if this is early cycle and
we've been in, you know, a growth scare
or something as opposed to we've already
been at all-time highs. So, how do you
read it?
>> Well, first of all, I thought it was
very dovish and I think the market
reaction is is perfectly right. Uh,
listen, a small stocks doing so well is
textbook. Small companies borrow at the
Fed rate at the Fed funds plus one plus
two. They are very sensitive to those
short-term rates, which now we're going
to go down. I wouldn't be surprised to
see a 25 basis point at each of the next
three meetings um down to the low 3s by
the beginning of next year. I I think
it's appropriate. U I've been saying
that for quite a while on CNBC that the
short rate should be about 100 basis
points below the long rate and that does
put it in the the low 3s. And um I'm not
surprised at the reaction and I I think
this means more upside for for equities.
>> Yeah. In terms of where the Fed funds
rate should be, in my opinion, the Fed
funds rate should always be around where
CPI is trending. And so let's say CPI on
a three-month trend, four month trend is
trending 3%. Fed funds 3%. Let's say
we've got a CPI trending, you know, for
three or four months straight, you know,
right around 2%. Fed funds rate should
be right around 2%. We got a CPI, you
know, um, at zero, which is rare for it
to be a zero. Fed funds rate should be
at zero. We actually had that in the
great financial crisis. I think that was
a good uh, time period to have the Fed
funds rate at zero because we had CPI
that was around zero at that particular
time, right? um if you had C if you had
CPI at 5% put the Fed funds rate right
around 5%. So that's the way the Fed but
the Fed doesn't do this. The Fed like
you know had us at five you know four
and 5% for the longest time. Fed funds
rate still does when we have a CPI in
the twos and it's just like why like and
then you know they had interest rates on
the floor for the longest time. We had a
CPI go three four five six and then they
finally started reacting. It's like oh
my gosh like how long are you guys going
to wait here? So now in regards to the
Russell Wilson here, the uh IWM, let me
show you this. I think this is
important. Everybody sees this. Okay,
look at the Russell Wilson is lower
today than it was in the fourth quarter
of 2021, right? So we haven't had that
major rally. We got to have a blowoff
top in the Russell. We got to have this
Russell go like 3,000 or so before I can
become like confident, if not 4,000.
before I become confident that oh we're
going to have like a year or two like
down cycle in the market you got to have
a major major blowoff top
>> I guess the question is I mean you say
you thought it that pal was more
doubbish than maybe we were led to
believe he would be a lot of folks felt
like he would not want to close off
various options right you have Morgan
Stanley Bank of America a lot of these
big firms do not have a forecast for
rate cuts this year which says to me
that there is a a relatively robust
counter case to the idea that we should
be cutting right now. I mean, I realize
it's at inflection points you're going
to get this disagreement. Um, but the
idea that Powell is perhaps going to
tolerate, you know, cosmetically high
headline inflation numbers uh for the
next few months, uh, you think the
market can continue to be good with that
even if, let's say, long rates were to
leak higher?
>> Well, first of all, the Fed never
forecloses anything for sure. um it
always does leave that option open, but
it's the first time I really heard him
say that the tariffs are a onetime
increase and implying that as long as
that doesn't spread to other sectors
just you know as as Steve mentioned that
we should not be looking at that
inflation and uh saying that that's one
reason to tighten credit. I've often
said, you know, tariffs are like a tax
increase. Monetary policy says you
should not tighten credit when increased
prices is caused by a tax increase. And
it seems like pretty much he was on
board with that notion. He hasn't seen
inflationary expectations uh go up. Um
you know my belief is that you know the
inflation data um in the future may not
be as important particularly if it comes
from core goods and from tariffs and
imports. He'll be looking at the service
side of it and by the way we know
housing is a big part of that service
side and that's been very soft. we see
that you know prices on on in homes
across the country are finally softened
to the point of going down I think in a
majority of states right now. So housing
even though it does get in a lag in the
CPI and the PC deflator doesn't seem
like that big component is going to be a
core a source of that service inflation.
So, I think that, you know, pretty much
that opens the door for those lower
rates and um uh I I think that's pretty
much the way it should be and um I mean
obviously anything can happen, but uh uh
the market wanted it and uh they got it
and it was it was more clear than I
thought uh he would be u like he was a
year ago. The pivot a year ago,
>> we saw a rate now. I don't know if it's
going to be 50. I think 50 depends
pretty much on what the uh August
payrolls are going to be. If we got a
negative print, it might be 50, but I
think that 25 is certainly in a bag bar
barring, you know, some sort of crisis
we we don't foresee at the present time.
>> Yeah, that seems like the safe
assumption. And I guess the other
>> I got to be honest with you guys, I'm
rooting for the market to go down this
week. I would love the market to go down
big this week. Here's why. So many of
these Wall Streeters, you know, were
coming on and just being like so bullish
and oh, you know, Pal's so dobbish and
the market loves it and all this stuff.
And I just I just I think it'd be great
if the market was down huge this week
and everybody's just like then has to go
on and like why is the market down so
big? Um well uh cuz it would they would
not know what to say. Like literally,
what are they going to flip now and say,
"Oh, maybe POW was more uh, you know,
hawkish than we thought when we
initially listened to it." You know,
it's just, oh man, it'd be so good. So,
yeah, I'm kind of secretly hoping the
market goes down big this week. I would
love that.
>> Element of of why we're seeing this
spring-loaded market response, aside
from it being a somewhat more clear
message about uh the likely rate cut, is
the setup, right? We spent, you know,
several days with the leadership parts
of this market selling off, rotating
around a little bit of uh perhaps a
reason to rethink things like the AI
trade and and whether in fact uh policy
was going to remain as uh as restricted
as it is right now. So, how do you think
the stock market continues to digest
this in terms of what parts of the
market do better?
>> Yeah. And and by the way, you know, when
when we got those PMIs from, you know,
S&P Global, that surprise on the upside,
I think a lot of people said, "Whoa,
>> Pal does have some nation to say things
are not falling apart. I'm going to be
data dependent." That did not deter him.
I think that that that was that put a
little bit more question. I think coming
into the week, we thought, yeah, he's
he's he's going to pivot. And some of
the data actually was not that weak. We
do not see the economy falling apart. We
don't see crazy strength by any means.
Uh you know I think that uh you know
Goldman Sachs and others uh uh think one
and a half to 2%. I think the Atlanta
Fed thinks 2 and a half two two and a
half% for this third quarter. That's not
a runaway economy. Uh and with the uh uh
supply of labor being restricted so much
by immigration and other policies, as
pal mentioned, any dimmunition in demand
is going to result in negative payrolls
and and rising unemployment. >> Yeah.
>> Yeah.
>> Yeah. Um
I mean, people are under the assumption
that all the time the Fed lowering
interest rates is always good for the
market. It's not always, you know, you
can even look at last year, you know,
they start lowering interest rates and
the market actually starting to falter
uh right after that, right? Uh you can
look at, you know, the great financial
crisis. They're lowering rates, lowering
rates, and the market just kept going
down and down and down and down and
down. The economy kept going down and
down down as they kept lowering rates,
right? So, you know, it's
I understand like people always assume
like the market's going to have to go up
huge when they are cutting interest
rate. It doesn't always work that way.
Many times the market can go go down
when they're actually cutting the
interest rates. It might get excited
before the interest rates cuts come, but
many times it actually falters when when
they're actually doing the interest
rates cuts. So that's something to
consider. And we've had a massive move
up in the market, you know, without them
cutting interest rates anytime recently,
right? Something to think about. Markets
will move higher until risks show up in
the earnings and economy. The NYU School
of Business, they call him the dean of
valuations for a reason. Osw great to
have you on. Perfect day for it. Have
valuations gotten a little bit stupid or
are we okay?
>> I think for the last 10 years, we've had
this conversation over and over again.
Markets reach a new high.
>> We say a market's crazy and experts like
me come on and we say, "Markets are too
rich. You got to sell." And two years
later, we repeat the whole process. Over
the last 3 or four years, I've decided
that markets maybe are more trustworthy
on this than experts are that the
markets seem to figure things out. When
you look through this year, there have
been two faces to the market. Through
April 8th, tech especially was beaten
up. The Mag 7 collectively lost I think
$2 trillion in market cap just in that
in that first 3 months. Between April
8th and today, you look at tech, it's
come back. not just come back but it's
become one of the strongest sectors
again the S&P so this is a longstanding
story and the story has legs is the
market rich absolutely is it
underestimating some of the risks that
are probably around the corner maybe but
given that these risks have to show up
in the numbers which should be in the
economy and in earnings until that
happens I think markets are holding on
and saying hey we don't know what's
going to happen so we're going to price
in the expectation that things are going
to be Okay.
>> Do you think the market is overreacting
to the Federal Reserve news today?
>> I think so. I mean, I think the, you
know, I've written extensively about the
Fed and and Fed rate cuts not really
conveying much to the market other than
something for us to all talk about. I
mean, they don't even affect the one
thing they're supposed to affect, which
is interest rates, traded rates. They
might affect the Fed funds rate, but
Treasury rates themselves have a life of
their own. So, it'll be interesting to
see if there's a Fed rate cut whether
the T-bond rate drops below 4%. My guess
is it will not because as long as
inflation stays at 2.5, 2.6, 2.7%.
The T-bond rate is destined for 4% plus.
So, it'll be interesting to see what
what the bond market does if there's a
Fed cut. My guess is it won't do much
and stocks will have to retrace some of
the upswing you saw.
>> So, what do you Okay, fair enough. And I
by the way, I wouldn't necessarily
disagree as you might have heard the top
of the show. So what do you attribute
today to then?
>> Hey, you know what? The game of
expectations keeps getting reset for
this market and sometimes just
delivering what was expected becomes an
unexpected plus. I mean happened with
tariffs. The same thing with rates. I
think for a period there in the middle
there was worry that inflation would continue.
continue.
>> Listen listen listen.
How could we forget? Did we not pay
attention to what happened to the market
before Pal's speech? Market was down
like five or six straight days. The
market kept going down. NASDAQ kept
drifting down and so we had a market
just kept drifting down. It was fearful
of what and remember what I talked about
it was either this channel or the main
channel I talked about a few days ago
and I talked about the market now has
the storm before the storm.
So the event is supposed to be the storm
but the market nowadays has a storm
before you get to the storm. And I was
explaining this days ago on the channel,
right? Either either this channel or the
main channel. And I was explaining
essentially, you know, POW's speech
that's supposed to be the big scary
storm, right? Meanwhile, the market just
kept going down. A lot of stocks are
getting hammered because it was already
in the storm. Just people didn't realize
it yet. And then by the time you
actually get to the storm, it's not even
scary anymore. We're already at the
event. It's like, oh, it's not it's not
scary anymore. So, you know, it's it's
fascinating, but that's just what the
market does nowadays.
>> Go up and rates might continue to go up.
I think part of it is expectations keep
getting reset and markets be and you
beat those expectations. Market viewed
as a positive surprise. It's a very
strange twist on the expectations game.
But it is what I think is driving the
market today.
>> Yeah. And you know we talked earlier in
the show about next week we get the
Fed's preferred measure of inflation PC.
What if that were to come in hot? I mean
I read Pal's speech three times. Pass. I
>> I'm not Listen, the market's going to do
what the market's going to do. I'm not
here to tell the market it's it's
incorrect. It's not my job. It's
obviously interpreting it one way. I I
don't read
the speech the same way the market
appears to be. Do you?
>> I No, I don't either. But in a sense, in
this case, I think the market views
absence of bad news is good news. That
the Fed that Paul did not come in and
say anything explicitly about not
cutting rates. So I think in many ways
the market is reading in whatever it
wants to read into this process. I think
um the feeling the market
>> exactly in that folks that ladies and
gentlemen is why you can never trust the
initial move the market makes cuz it
will read however it wants on that
particular day and then it can
completely flip. And so maybe this isn't
one of those situations. Maybe we just
rally hard this whole week and
everybody's just flood money into the
whole market this whole week. Maybe that
is the case. Or maybe this is like many
of these other time periods when we're
going to look at the market at this time
next week and it'll be quite a bit lower
than where it is when it comes to NASDAQ
and SP500, the Dow. Like, we'll have to
see. As a long-term investor, the great
news for us is we don't have to stress
about all that, right? We, you know, we
get great deals in the market. Sweet.
We're going to be buying, right? we have
our stocks appreciate and the market
just keeps going risk on. We're going to
make, you know, it depends on how much
money you got. Maybe hundreds of
thousands of dollars in the next week,
millions of dollars, like depends,
right? Maybe for some folks few hundred
bucks here and there. All righty, guys.
Appreciate you joining me as always.
Thanks so much for being here. If you're
looking to get that Patreon sale in 8
days from now on, September 1st, pin
comment down there. Click on that, put
in your name, email. We'll send over
that deal for you. And make sure you
create an account uh with my Patreon.
That'll be the next step after this
process. So then you can make sure you
can receive that deal. And that will be
for my highestend Patreon tier in the
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