Watch BEFORE Thursday [Critical Warning]

recession that is everyone's fear and it

should be because a recession leaves

everybody usually worse off sales for

your products and services go down your

retirement wealth goes down you might

lose your job your home your car

recessions are very difficult they're

highly stressful on people and nobody

wants to go into a recession in 2007 the

Federal Reserve gave us a formula for

what could essentially self fulfill a

recession they mention that there is

some form of

fear that begins in corporations at

Banks or around the world and once that

fear translates into tightening that is

usually tightening in lending conditions

which that's just a fancy word for

saying your credit card limit doesn't go

up anymore your credit card limit

actually might start going down Banks

become a little bit more reluctant to

give you that home equity line of credit

to finance that remodel on the home that

you're now stuck in because you've

locked in that 30-year fixed rate loan

and buy now pay later products which are

newer as part of this generation might

start tightening their belt on either

the fees they charge that is charging

more fees making some things more

unaffordable or they ultimately just

start saying no to a lot of different

types of loans as institutions become a

little bit more fearful that they don't

want that kind of risky debt on their

books that recoiling against risky debt

starts at the top those are all the Big

Wall Street boys and girls with all the

billions of dollars if they no longer

want that then companies start creating

less of that kind of product that is

they give less risky loans they pull

back they tighten so it always begins

with fear fear of something changing

something coming forward that really

becomes a self-fulfilling start to a

recession when tightening begins

companies start seeing their earnings

decline because they see less growth

their goods and services just sell less

than what they were selling the year

before usually we call that an earnings

recession there could also be a growth

recession which is just when you have

companies let's say like artificial

intelligence that that are growing at a

rate of 100% or 50% per year all of a

sudden start growing at 5% per year or

2% per year and then you have a growth

recession which tends to turn into an

earnings recession and so when you have

these recessions at companies where all

of a sudden their metrics are starting

to indicate a Slowdown the next phase is

a jobs recession because company starts

saying you know what if we're not

growing as fast maybe we don't need to

hire as many new employees in fact maybe

we need to lay off some employees and

then as the world realizes they can do

with maybe 10% less staff those folks

have to go work somewhere

else but what happens if you can't go

work somewhere else because job openings

have collapsed companies are looking to

hire less well then you get into a jobs

recession this is where the price that

employees are willing to work for

actually goes down so the value that

they're willing to work for the value

they put on their own labor goes down

now you start seeing people earn less

and less well what happens when people

start earning less and start taking jobs

for Less well people who are already in

those jobs get fewer promotions because

the companies can pay less and get a

similar level of work and if people

leave making a higher level of weight

for example somebody making

$120,000 and a new person comes in doing

uh the same work for $80,000 because

they couldn't find work somewhere else

this person's probably getting less of a

pay

bump and if this person leaves the

company might be able to replace them

with another person making

$80,000 meaning now you've just saved 50

or

$40,000 that's about a third that was

just saved and so this then all of a

sudden reduces real income for people

and when people have less income

especially after all the crazy inflation

we've seen they spend less so when we

spend less we start reaccelerating the

fear of a Slowdown and this cycle is

what becomes self-fulfilling you had the

fear which led to some tightening which

led to some reduction in earnings growth

or earnings which led to some reduction

in jobs which led to some reduction in

spending then the data after about 6

months or so comes back to the top oh my

gosh we were right the numbers are

getting

worse so they tighten more that is how a

recession self fulfills it's not unlike

the story of the father who had a small

gift shop outside of a

highway on the highway heading to Vegas

and the only thing that advertised that

gift shop on the way to Vegas were a

series of billboards on the side of the

freeway and that kept them busy people

saw the billboard were attracted by the

billboard and decided you know what I'm

going to go shop at that store they'd

get off the highway get a snack and

they'd go to the gift shop check it out

they'd bring business to the father's

store but the Father's son who had just

graduated college with an economics

degree said father don't you realize a

recession is coming we should prepare

for

recession and so the father taking the

advice of his college educated son said

you know what you're right we need to

cut so the first thing they did is they

cut the Billboards that were bringing

business to their business because they

thought well we've got a good loyal

customer base let's get rid of some of

that discretionary spending let's cut

the Billboards like cut

advertising and then wouldn't you know

it all of us sudden sales and

earnings went down and as soon as sales

and earnings went down they had to lay

off some of their staff and then before

you knew it the father's going wow

you're right we must be going into a

recession because now we've cut so much

we have to close the

business that's just an extreme example

of how recessions can self- fulfill

obviously don't cut your one lead magnet

to your business but this week is very

very important uh and we're going to

start by reviewing some of the catalysts

that are occurring this week so we can

understand why and and what these

earnings are supposed to tell us uh this

week will also be the start uh of uh the

road show that we are doing so if you'd

like to meet me in person uh we are

doing a road show between April 23rd to

to May 1st and uh I think we just had a

little

earthquake uh anyway uh April 23rd to

May 1st we're doing a road show you can

come meet us we've got a bunch of

different uh locations we've got 22

different cities we're going to in these

eight days so it's going to be a lot of

traveling I'd love for you to meet me

all you have to do is uh go to

metkevin.com

Roadshow uh metkevin.com

roow and you can come join me keep in

mind this is for my real estate startup

house act so if you're considering

investing uh in a real estate startup

you're an accredited investor go to

metkevin.com Road Show we'll have some

uh beautiful brochures and information

for you and you can ask questions it'll

be a great opportunity you can also go

to the uh house hack homes YouTube

channel link down below so you could

learn a little bit more about what we're

going to talk about there I go into

depth there but first let's zoom out a

little bit look at some this is just

this is just a list of some of the

information that we're going to get this

week and I want you to think of each of

these as not an individual company

providing you earnings but instead a

group of companies giving you a

direction of the consumer what is the

consumer willingness to spend money that

is what we have to understand see we

went through Co where everybody had

excess money and the question became

what are people going to spend this

excess money on well of course they're

going to spend it on things that they

can do at home uh they'll order Chipotle

Burritos they'll Netflix and chill

whatever but now even Netflix last week

warned us that hey you know by the end

of this year we're not going to give

guidance anymore for how many new users

we're signing up on the platform we'll

we'll just give you metrics on

engagements H that's very odd that's a

sign that maybe things are starting to

chillax a little bit with user growth

and people who would want to sign up may

have already and so a little bit of a

red flag on the consumer as well as the

red flag we got last week on the

consumer from Banks JP Morgan Wells

Fargo Bank of America and City Group all

reported that their net charge offs

year-over-year so from the beginning of

2023 to 2024 were 70 to over 100%

greater than what they were last year

that's a double so in other words banks

are saying ah we got some bad debt write

it off writing it off at twice the rate

in some cases that's scary but maybe

that is is just the large Banks so what

are we going to get this week well we're

going to get a lot of information like

for example we're going to start getting

some of the Community Banks reporting to

us are the Community Banks also starting

to see some of those loan losses

accelerate in which case are they going

to start tightening credit to minimize

some of those losses our consumers still

just is willing to remodel their homes

because they're stuck in place or are we

seeing paint sales go down as fewer

people are actually transitioning in

real estate the real estate market has

been saved by the 30-year fixed trate

mortgage we did have a correction at the

end of

2022 and at the end of

2023 uh but they were certainly nominal

relative to the level of what interest

rates went up right housing prices went

down at Peak maybe 20% maybe 10% at the

end of 202 3 and they've since recovered

the question is how long can that hold

well that's really a topic for a

different video but it's going to come

down to how many people become willing

to move and what inventory levels do if

inventory levels Skyrocket prices will

come down but again topic for a

different video this week we're going to

be focused on that consumer is the

consumer just as willing when they

stop at the gas station to purchase

snacks and sodas at elevated prices

we are going to find that from our snack

companies our soda companies this is

what they talk about now you might think

this is crazy but when gas prices were

skyrocketing Pepsi indicated ah we're

actually seeing uh people go to gas

stations more often so rather than fill

up their tank 100% of the way they'd

fill up their tank

half and that would lead them to go to

the gas station once uh and then

obviously once again when they had to go

fill it up up half against so you're

going to the gas station twice as much

which actually increased sales at

companies like Pepsi which is kind of

remarkable because really what people

have done here is they didn't actually

save money by going to the gas station

twice they spent more by buying more

stuff in the convenience store and they

also wasted their time by going to the

gas station twice but then again when

you look at any in and-

outline let's just say there doesn't

seem to be much desire for valuing

people's time but that's okay what we're

looking for is not a psychological

lesson on money we've got plenty of

those in the stocks and psychology of

money group link down below uh new

lectures posting tonight by the way very

very cool for all uh of our new course

or members and existing course members

but we'll also find is people's capacity

to respond to advertisements consider

all the way down here at the bottom

we've got snap I actually wrote next I

should write I'll write it next to it

Roku these are advertisers how much are

we actually seeing people buy Roku TVs

usually a lost leader uh what is that

going to do to roku's bottom line while

they'll probably lose more money but

what about advertisers see remember the

sign example that I gave the billboard

example what happens when advertisers

start cutting on advertising and cutting

on jobs because they're worried they're

fearful about a recession or people are

becoming less responsive to their ads

well it doesn't matter how much AI went

into your ad creation if ad dollar

spending is going down Facebook meta

will also be giving us some insight into

what this ad spending is like keep in

mind meta right now is buying as many

chips as they could possibly get their

hands on from Nvidia for artificial

intelligence-based servers GPU based

servers basically these are going to be

your uh microsofts your Amazon your

Googles your meta but the question is

which by the way we'll also get earnings

from Microsoft Google this week and top

of meta we're not going to get Nvidia

until another about 30 days but what's

remarkable is these companies will give

us a leading indicator as well as a

company like service now hey we spent

these billions of dollars on AI chips

are we actually able to make

money see the Wall Street Journal

recently suggested why is it that

companies seem to be willing to spend

billions of dollars yet they can't even

prove that they can make millions of

dollars with these AI

chips now it could be a sort of

sales-based issue for example if you say

you have artificial intelligence GPU uh

server stations well you're going to

attract likely more people to your

web-based services and your cloud

services and if you do it and your

competitor doesn't your competitor loses

so the competitors have to build out the

same infrastructure but what happens

when that infrastructure is built out

does a company like Tesla say hey you

know what we just bought 10,000

h100s are we going to now throw those

h100s in the trash and are we going to

buy the next generation of nvidia's GPU

chip Blackwell is nvidia's latest and

greatest chip that gets announced later

this year and there's this expectation

that Blackwell might be able to process

information for neuron Nets let's say

like for Tesla's full self-driving

technology potentially four times as

quickly well that means if Tesla doesn't

buy the latest greatest chips another

competitor let's say they had the

vehicle driving data would only need

2,500 of such chips that Tesla has

10,000 of which means they need 1/4 of

the power we're forgetting the commodity

of power that goes into these chips they

would only need 1/4 the power and

potentially do it faster to train a

similar level of self-driving technology

as Tesla has assuming they had data now

this is not a bag on Tesla video by by

no means at all I don't think anybody

has the data that Tesla does now of

course companies like Invidia are trying

to collect that data uh but uh you know

you're using a whole lot of different

vehicles to do so and the consistency of

that data may not be as perfect as Tesla

which has as we know very few

models the point though is we'll see

from a company like Tesla hey are we

going to buy that next generation of

chips or did we build out our GPU server

stack and now we're good that is what

we're going to hear from Microsoft and

Google as well and it's going to be

driven by how much money we can make

which we'll learn from companies like

service now Roku and

Snapchat of course we'll also see some

more generic information from consumers

like hey are consumers buying toys like

they were previously I don't know Mattel

will tell us if consumers are buying

toys like they were previously or

children having to get fewer toys

because people were starting to feel the

squeeze remember when a company like

Disney reports something that I like to

look at is what's the discretionary

spending like at the parks because

people will still go to Disney but in a

tougher economic time they'll spend less

per person when they're there sorry no

stuffies we get it on Amazon it's

cheaper sorry not paying 20 bucks to

throw the sack three times because we

know it's a scam

anyway in a good time people will pay

the 20 bucks cuz it's part of the

entertainment value bad time people

won't you could see the same thing at

companies like Royal Caribbean Cruise

Lines where the consumers will tell you

hey look we'll go on a cruise because we

got to go somewhere we're going to lose

our freaking Minds just sitting at home

all day

long but damn we we're not going to do

the

excursions no we'll sit on the beach

when that sucker docks okay those are

the discretionary spends that you will

learn about from these companies so far

it seems like the airlines like JetBlue

and American hairlines that are

reporting this week are holding up with

their business class and their luxury

style spend in other words the people

willing to pay for first class you're

still seeing that spending I expect to

see that American Airlines and JetBlue H

just like you're seeing it at American

Express which appeals to typically a

higher credit higher net worth

individual but that might not be so true

for a company like Visa who might show

us a little bit more of a broad swath of

the American

Consumer certainly UPS would be very

useful as a indicator for sales at

companies like Amazon because frankly

well let's just say UPS delivers a lot

of our packages and when there's a

recession they tend to witness a

Slowdown very very early let's just say

UPS may have just gone through a big

round of layoffs but you got to prop up

that bottom line because maybe that Top

Line is getting hurt a little

bit of course we're going to see the

Autos you know we'll see a Ford report

we'll see Tesla report we'll see Hilton

which also appeals to those business uh

customers we'll see Verizon I just

canceled my Verizon service they suck

their customer service is trash sorry uh

AT&T report we will also uh here's

another Auto we'll see GM report we're

we expect the interest rate sensitive

stocks to do pretty poorly end phase for

example lower guidance lower sales

mostly because interest rates are

staying higher for longer by now we

should have seen Ray Cuts already based

on what people were expecting in

December well a lot of these well at

least Nas for example has done better so

far than it did at the end of last year

when it was down at 70 bucks now it's

somewhere around $19 but what happens

when that was based on interest rates

coming down this year and now it looks

like they might not come down at all

well we'll see we'll see just how

interest rate sensitive they are the one

that never seems to fail is

Chipotle now this is an interesting one

I just ordered Chipotle yesterday and uh

my goodness three burritos $9 a piece

kids Cas sadilla all in it was like 90

bucks uh it is remarkable clearly the

willingness to pay for delicious juicy

meats and beans and rice with some guac

on

it is is quite High they've got some

pricing power they've got large

peee now clearly we've seen over the

last year the companies we thought had

large pee may not have and other

companies that we uh also thought large

PP did end up having large PP so for

example at the end of 2022 uh I made uh

sort of a a bet on which companies I

thought had the largest pricing power

the largest PP and the two bets that I

made were on chips basically a full

investment into everything your uh

Nvidia this was back when it was like

$130 a share right your AMD your

asml uh all of these uh Taiwan

semiconductor a little bit of Intel you

name it and this obviously did

exceptionally well well but boy it was

not helped by how long it's taken to get

interest rates sensitives down and so

there was this giant anchor in the

portfolio of companies like Nas and

Tesla uh as a result of us not getting

rate Cuts as soon as we had hoped now

things were looking good at the end of

2023 because we actually started seeing

interest rates

plummet but now we're seeing a

Resurgence of inflation and quite

frankly when we get our April inflation

data a lot of people are going to say

even if April's inflation data comes in

low people are going to go back to the

well one report doesn't make a trend

you're going to need two or three good

inflation reports following three bad

ones to actually help us get some hope

of rate Cuts coming again and that's

going to take some time so interest rate

sensitives will probably be under a

little bit of pressure for a little

while longer so the question now is what

do you do well we know there's a lot of

sitting on the sidelines in money

markets I've been a big fan of trimming

positions and going to cash since March

uh mostly because at the beginning of

March uh the inflation Dynamics changed

so rapidly and markets actually didn't

react to it as quickly as I thought

markets uh sort of took this approach of

ah whatever earnings are good things are

going good let's keep going up and and I

was sort of banging my head against the

wall going my gosh these inflation

numbers are so bad uh the Federal

Reserve is going to have to flip-flop

for from their December pivot and

eventually that will be bad for the

stock market and so I started increasing

my uh cash position and reducing my

exposure to uh interest rate sensitives

now I'm not here to say I'm perfect with

my portfolio God no I'm anything but

perfect I'm just simply here to show you

uh the transparent bets that I make and

the the mistakes uh where I get it right

and where I get it wrong uh and the goal

is to help you find some perspective on

what to do maybe with your portfolio if

you were looking to make any changes or

just reiterate your

positioning but what I've done since

March is I've increased my cash position

substantially because I thought that at

some point the Federal Reserve will

matter again at some point inflation and

earnings will matter again the fact that

those things don't matter is a sign of a

top for me a local top so I increased my

cash position now we're finally starting

to see a rollover of AI at least we saw

it last week who knows maybe this week

we'll reiterate that no no no

everything's going right back to the

Moon well that's a very hopeful position

and that's okay but at some point which

we have not done yet we are going to

reprice in the Federal Reserve and by

repricing in the Federal Reserve both of

these at least recently have been a down

indicator they've been downers again

maybe earnings this week will say the

consumer is fine but if we hear this

week that the consumer is actually also

going

down then quite frankly just the weight

of the fed and the consumer alone could

lead the market to crack down further I

don't know what's going to happen again

A lot's going to be predicated on these

earnings numbers or future reports on uh

inflation but I'm

concerned so uh my belief is that there

will be plenty of an opportunity to uh

purchase cheaper equities and cheaper

single family homes right now I think

single family homes are a broad ripoff

um I bought single family homes in

October and November with my real estate

startup we did very well on those I

believe uh but then we started seeing

pricing go

ridiculous uh to the point where it

doesn't make sense

anymore what what we look at by the way

is the wedge right so we look at what we

believe the after repair value of a

property is uh and what we could buy it

for and then obviously there's how much

it takes to renovate it in there well

this right here is what we call called

The Wedge right our Allin versus the

after repair value and uh usually in in

fearful markets uh so when you have fear

that wedge could be as high as I would

say uh let's go with 150 to 200k uh per

$500,000 invested that's sort of my

metric in uh a a normal Market that

wedge is usually around 100K and in a

period of you Euphoria which is very

dangerous those wedges become less than

50,000 uh and so while $100,000 wedges

still exist today there's a whole lot

more of this going on which is

speculation on a strong spring housing

market and uh that sort of speculation

always scares me so I think the same is

true in stocks there's just there there

are going to be little periods of time

where it's better to buy or Worse to buy

and I think things barely off their

all-time highs make for a little bit of

a bad time to buy right now so a little

cash heavy sitting in those money market

funds uh I could recommend a few uh I

don't have any connection to this one

I'm not even invested in this one but I

think it's a good one VXX is a good

money market I am exposed to this one VG

XXX it's another money market so you can

get your yield move in and out without

having to do treasuries uh and then of

course I mean jpm's got one but you

could also look at things like a Robin

Hood gold or you know some the the

fintech apps that are basically trying

to buy your deposits uh and that's good

for them they they want growth and they

want you investing and playing with

options and all that but anyway uh with

all that said make sure to visit me at

the road show metkevin.com

Roadshow uh it will be linked in the

description down below and uh it's going

to be incredible we're we're I can't

wait to meet a lot of you it's going to

be really fun and um we'll we'll have an

hour event together and it'll be totally

free so take a peek at those make sure

to RSVP so we can confirm exactly where

we're going we expect to go everywhere

that's on the list right now but

obviously if you know in two or 3 days

there's a location has very few signups

uh we we uh you know we might have to

cancel the event I don't think that's

the case right now based on the signups

we have it looks like we're going

everywhere on that list but you will get

a confirmation email the day before uh

the event so you have a very clear heads

up that yes everything is Gucci all

right folks thanks so much for watching

and we'll see you in the next one again

that little Spiel right there there just

a reminder for you to