Cathie Wood's URGENT, DANGEROUS Warning for 2022.

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saturday i got some hot coffee here and

this is the perfect time to take a sip

but today we gotta talk about kathy wood

suggesting that there could be a

recession ahead of us and we gotta be

worried about it oh man

oh that was a perfect swallow thank you

so folks let's take a look at what kathy

wood just said because boy oh boy

there's a lot in this

now i want to start by saying this

this comes across as defensive but also

strong by kathy wood uh and uh this does

not water down her message of the

dangers and the prospects that our stock

market faces going forward i highly

respect this piece usually on fridays

kathy wood not every friday but

oftentimes does a video this time she

decided to do a cold hard

piece after she announced this piece on

twitter

obviously referencing her blog on her

website uh bloomberg picked it up other

websites picked it up but none of them

actually gave a good summary of it imo

because we're actually just gonna go

through the meat of the matter here and

do my own version because that's what we

do okay here we go we're gonna get right

into it and i'm gonna add my comments as

we go so first of all kathy wood we need

to know her

funds have not done super well with the

exception of her uh autonomous and robo

taxi fund uh or or robotics fund i

should say uh that is arc q rq you can

always go to finance.google.com to kind

of compare relative to performance other

than arc q all of her funds are

down for the year which is not great and

again you can jump on over to see this

yourself by uh just typing in

finance.google.com we give it a

year-to-date performance actually our

queue just went negative uh my bad but

anyway

uh it's nothing to laugh at it's just is

what it is but anyway uh look at arc w

look at the genomics look at the

innovation look at the fintech look at

the space uh i mean every every one of

the popular funds is is down here which

is not great and you compare this

performance to the nasdaq you're uh up

24 on the nasdaq you're down 22

year-to-date on the rk 31 on genomics

and and so on and so forth so painful

right painful painful performance a year

today got it so what does kathy say

about this well this is what kathy has

to say kathy says that hey perhaps some

of the concern that has been rotating

that has been influenced by negative

headlines in the media is the volatility

of our strategy this is a core theme of

what she talks about that her disruptive

innovative strategies uh or are

long-term investments these are a

five-year planned investment

that she renews essentially as she she

this is hence the basis being an active

etf she can change her strategies as she

goes of course but her goal is investing

for five years and so she's worried that

people are comparing themselves to the

benchmark of the s p 500 and when they

compare themselves via this relative

performance they take temporary losses

and make them a permanent and so she

believes that going forward forget about

what the s p 500 does

we are going to or at least we're

expecting a 40

compounded annual rate of growth over

the next five years just to understand

what that looks like if you took a

hundred dollars multiplied it by a 40

growth rate two times in a row you're

almost double you're at 196 dollars if

you do that for a full five years

100

turns into 537

and so kathy is sending this warning

that hey if you're trying to compare

yourself to the benchmark you could be

trying to invest in something that look

in 2020 did a 16 return kathy's rk did

over 150 right you could miss out on

years like this by being worried about

the 16 s p or the 24 or 25 or whatever

the s p is doing this year and then be

sad about the minus 22 this year who

cares strategies are volatile you're

gonna see that 150 then you're gonna see

the 20 negative 22 then hopefully you

see a 40 and a 60 maybe in a time when

the s p does six percent next year maybe

rkg as an example will return something

like 50 and then people go oh my gosh

kathy did almost uh eight times or just

eight times a little over eight times

what uh the s p did with her rg fund

right this this is the nature of

volatility that she's trying to explain

i'm obviously simplifying this here but

anyway

she mentions that after 11 months in

other words basically she's saying since

february all of her strategies have kind

of just been straight down and it's been

very painful and she's saying after this

11-month sell-off we are now in a deep

value territory she didn't take it to

the level of going deep effing value

because i mean that that could have made

a big difference here we could have gone

to the to the moon on that just on

momentum on monday but she did go use

the phrase deep of value and she

purposefully does this because what

she's trying to do is she's trying to

compare

value stocks

to

deep value and for her opinion or in in

her opinion and this is what she's

talked about just putting together a lot

of information from kathy wood uh over

time her opinion is that a lot of

apparent value stocks like uh like i

don't know more of your classic kind of

like the coca-colas of the world or

whatever

these companies are going to get

potentially replaced by disruptive

innovation and that these will end up

being value traps maybe coca-cola is not

the best example maybe a ford motor

company is a better example where it's

like hey is ford actually going to be

able to innovate and stay the course

with companies like whether it's xping

motors which kathy would recently

started investing in in china or tesla

or some of the pure ev plays you know

this is her argument right and her

argument is that the same is true in a

lot of the companies that have been

terribly sold off this year uh

specifically in the genomic space where

they've become so cheap that not only do

they look like value but their

disruptive value rather than potentially

being value traps that'll get all

replaced by innovation these deep value

plays are things that can 5x over the

next five years this is a big selling

feature she's talking about she's like

don't compare me to the s p 500 when

we're investing in deep f in value it's

so much i mean she's got to be

professional right so let's keep it

clear but anyway uh you know this is

where she spends a little bit of time

talking about how she does not believe

that her disruptive strategies her

investments into companies like docusign

teledoc or zoom she does not believe

that these companies uh or uh or

companies that are necessarily

overvalued but she also disputes the

argument that these are just

stay-at-home plays she argues that look

you've got a company like zoom that's uh

down 68 percent from peak to trough for

docusign 56 teledoc 70

top to bottom high to low right uh and

this at the same time as you've got

companies like zoom and dock you sign

crushing it in terms of revenues ebata

increased 58

uh over at uh zoom since the fourth

quarter ended july 2020. uh that's

that's incredible right so so these

these are things where she's saying hey

look we've got a lot of potential growth

in these don't just call them

stay-at-home place now one thing that i

dispute with kathy here is that i think

what they they may have missed here a

little bit is trade psychology

now i understand she is the five-year

investor trade psychology is something

that maybe is is in her opinion going to

be less important over five years i

respect that

but here's what i mean when i say trade

psychology when the pandemic struck

people fled uh there was a flight a

flight of people to docusign t-dock

and zoom because these were not just a

stay-at-home place

as kathy's saying because she's saying

hey they're not just stay-at-home place

i agree uh here let's write this right

stay at home they're not just

stay-at-home place they're innovative

place but the thing is people were not

going to

uh teledoc and zoom and docusign for

innovation kathy's like hey i'm all in

on this for the innovation well sorry

people were not trading into these

stocks for innovation they were trading

into them as a stay-at-home safety play

because if they were exposed

to carnival cruise lines or the airlines

or whatever they didn't have safety so

those investors were able to flee to the

stay-at-home cohort to to invest in but

now stay at home has been on this

downtrend

and the carnival cruise lines and

american airlines have been on a

downtrend because of omicron so these

folks are having to go to different

safety place and right now it looks like

that those safety plays are things like

apple uh microsoft msft there we go

whatever it doesn't matter you know what

i mean apple microsoft uh even to some

degree to some degree okay not as much

but tesla

adobe even though adobe had a little bit

of compression recently facebook right

these these are big companies that

people seem to be fleeing to so there's

this big basket of money in my opinion

that flows around pandemic strikes it

flows into docusign teledoc zoom

recovery comes that big basket of money

goes into what i talked about those

airlines and the carnival cruise lines

now those are a problem but you don't

want to go back to teledoc zoom and

docusign because we have fears of rates

going up in valuation compression so

instead we u-turn that line over here

and we're going to the uh the fang right

the netflix and so on and so forth and

so i think that's the the trade

psychology that was missed here and i

think kathy wood and the team at arc had

a missed opportunity to talk about this

that a lot of these declines are not the

market voting saying that these

companies are bad

it's people leaving the stocks who never

meant to be in these stocks in the first

place they just used them as a temporary

uh cash park so to speak i think that

was a missed opportunity an explanation

and that's obviously why i'm talking

about it now

this either way you slice it kathy woods

says brings these to a deep value level

of of pricing so now let's talk a little

bit about inflation this is the next

part and this is the perfect part for

you to take another sip of beautiful

coffee because folks we got a lot to

talk about with inflation and the first

thing we're going to talk about with

inflation is actually this word

transitory and i want to tell you

something that just happened hold on

listen to this

[Music]

you don't necessarily have to listen to

the coffee swallow but you have to

listen to the transitory part okay

jerome powell came out saying that

inflation we're going to retire the word

transitory right immediately when he did

i made a video saying i think he's being

politically swayed by joe biden i do not

think that jerome powell thinks that

inflation is no longer transitory in

other words i think that general powell

is still strategizing as if inflation is

strategy is is transitory that he still

thinks inflation is going to go down

when these inflation or not the

inflation when the supply chain issue

subside we know this is a fact because

if you look at the summary of economic

projections from the federal reserve not

that document different document right

here if you look at the summary of

economic projections

not this scribble right here but rather

this right here what do you end up

getting you end up getting an estimate

from the federal reserve that shows that

inflation is going to fall

uh by half in 2022. so the fed still

seems to think that inflation is

transitory which is important because

this means the fed thinks that inflation

is going down

the mainstream media especially the

right wing media right before the 2022

election not taking political sides just

calling it like it is they're going to

do everything they can to back on biden

and the best thing you can do to back on

biden right now is go you idiot your

policies cause inflation which don't get

me wrong to some degree they may have

they may have contributed look i i'm

this is not political video okay just

saying

you're gonna get the mainstream media

going oh yeah inflation's going to the

moon uh and ironically you even got the

left-leaning media

making this argument because i honestly

don't think they they understand that

the flip side argument but that's okay

we'll put that aside so you've got the

fed thinking inflation's going down

you've got the mainstream media thinking

that inflation's going up but then guess

where kathy wood falls

she actually somewhat aligns with the

fed then inflation's going to go down

we're going to look at this here look at

this

all right broad-based market indices

have rotated away from growth stocks

towards value and defensive stock so she

calls fang defensive uh

fine that's kind of acknowledging that

sort of flight to safety i think she

missed that argument in in the uh the

state home play but no problem

then she says that inflation tends to

benefit value stocks but in this case

she's comparing value stocks to energy

financial services industrials and

materials in fairness a lot of materials

have gone up a lot we'll talk about

those in just a moment with the

exception ironically of precious metals

precious metals have not done very well

uh in 2021 but anyway she mentions that

higher interest rates tend to hurt

aggressive growth stocks that sacrifice

short-term profitability for the benefit

of substantial growth in the future

in other words in english oh and then

this is the bs part from drone powell

which we just talked about on the side

but i'll come right back to that in

other words

kathy wood is saying that look when we

have inflation and fears of inflation

companies or or

investment managers institutions they're

going to look around at property or

companies they're going to look around

at other investment opportunities in

companies and say hey wait a minute

if we're going to have higher inflation

then and we're going to do our

discounted cash flow models which

discounted cash flow does two things

what it takes into account a discount

rate and it takes into account future

cash flow

the problem is if you reduce the value

of future cash flow

on companies that already have very

little future cash flow then the present

value the pv of the companies is going

to look a lot less and so she makes this

argument here that companies investment

companies are uh unfairly

uh ignoring the fact that there are

companies that are aggressively

positioned for massive growth that yes

sacrifice short-term profitability but

in doing so i'll let them take advantage

of massive growth opportunities because

they're investing now into what they

know will be bigger growth rather than

hear more dividends or here's you know

whatever here's some stock buybacks or

whatever they're investing what they

know or expect is going to make big

money in the future

and this uh in addition to this this

inflation narrative which he doesn't

necessarily agree with is giving reason

to investors to tax lost harvest

the innovation sector leading the

innovation sector to sell off more

right in addition this is i've also kind

of touched on this she believes that

algorithms are are doing 70 of the

trading and because of the formulas that

we just talked about are automatically

crushing these sorts of stocks in fact

she mentions during march and april the

big strategies during march and april of

2020 were look for companies that have a

lot of cash on their balance sheet

and then calculate their cash burn in

other words

this was very very common i remember

this stuff i mean this this is great and

not that it was really long ago but i

remember doing even these types of

calculations people would go in and say

okay american airlines they got 20

billion in the bank they're burning 5

billion a month okay got it they're 4

billion or they're 4 months rather away

from bankruptcy if they get an infusion

of

10 billion dollar bailout okay cool that

gives them six and a half uh six and a

half months all right we still think

they're gonna go bankrupt sell

right and this is basically the formulas

these algos going okay this is the new

input you got it we'll sell according to

the new rules she's making this

comparison that that's what's happening

with this whole inflation argument now

is this right here where the algorithms

are basically ignoring the fact that

we're making big investments into big

innovation and instead we're selling off

companies that really shouldn't be

selling off that much again i'm going to

reiterate that i personally believe

missing a little bit the argument about

how many people actually thought that

docusign teledoc and zoom were their

safety stocks during the pandemic and

have pulled their money out they never

were meant to be there in the first

place so the reality is the stock should

have never gotten that expensive in the

first place

but if you look just to take kind of a

little break from from kathy's piece

right here if you go back

and you look at what's happening in the

stock market right now and you zoom out

on the day chart here for something like

docusign we've hit a freaking floor

this is good look at this floor that

we've hit i mean we from from december

3rd to now we've had some substantial

red days in the market and docusign has

not gone under that floor let's look at

uh zoom just for giggles to see if

they've hit a floor

and then we can also just briefly look

at tdoc so so look at zoom zoom hit a

floor hit a low of 184 on the third 182

ish on the 6th and just hit 174 here on

the 15th but notice how that's that's

like a nominal decline it feels like

we're somewhere around a floor on

docusign and on zoom similar with tdoc

we fell under 100 i think we went to

about 90. we had a nice little rebound

here yeah we went to 87. but look that

floor compared that floor 87 to the low

that we had on on 12 3 we had an

intraday low of 89 intraday low of 88.

uh low here of 87.27

we're at a floor on tdoc as well now

yeah we've come back off of it a little

bit right now an hour 97 or whatever

okay big deal i mean that's that's

relatively nominal but the point is i

feel like

in simple speak the weekends have left

the party so to speak okay this is a

good sign for these particular stocks

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christmas day and then going back to our

dock her piece kathy reminds us that

remember when the pandemic struck the

best places to go were actually the

genomic sequencing the synthetic biology

the messenger rna tech stocks the

machine learning stocks the molecular

diagnostic testing stocks among others

conventional wisdom said uh like hey

don't buy those stocks but those were

the best things to buy and so yeah we

got a red year in 2021 that doesn't make

those companies bad companies though is

essentially what kathy's saying here

okay moving on kathy then says that it's

really important to to remember that you

have a lot of market commentators and

high frequency traders right now who are

warning against the mistakes made during

the tech and telecom bubble and this is

true i mean if you listen to you look

like at this point eight weeks ago uh

when when i was selling i was selling

stocks eight weeks ago things were green

things were really euphoric i said i was

setting up some short positions on

certain uh opposite companies that i

thought would sell down even more and in

full transparency one of those was arc i

invested in s arc uh which is kind of

just a funny way of saying short arc but

it's not really shorting arc because

that would push the price of arc

potentially down further it was just

taking the inverse position of arc so if

arc went down one percent s arc went up

one percent

now uh unfortunately i close my

my short positions too early but that's

just you know poor individual timing the

the move of selling a lot of the stocks

i was doing was right but why i was

selling a lot of stocks was actually

before all of this crap started i was

noticing that the market was starting to

have a hate on for money losing

companies even if they were good

companies so i thought i'm gonna sell a

chunk and then wait to buy back in a

little price that's that is a trade

that's not necessarily investments trade

and the trade

mostly worked out i lowered my cost

basis in i would say eight out of the

ten trades that i made in some positions

it wasn't as perfect but that's okay

that's the nature of trading you try to

be right seven out of ten times right

and that worked out but here

this

kathy just posted this letter

and what's interesting is over the last

week

we've had people like jim cramer and the

mainstream media come out and say all

right time to sell off the money losing

companies and i'm looking and i'm going

wait a minute dude

the prices have kind of hit a bottom you

just saw a tdoc zoom and docusign now's

the time to maybe think about actually

picking these up so what did i do before

kathy's letter came out

i actually bought 420 call options on

kathy wood and rk

fingers crossed yeah also on hood by the

way but anyway uh

hood discussions really for another

video so now kathy's saying hey look

don't bet against

d5 don't bet against autonomous electric

vehicle transportation don't bet against

the innovative disruptive innovations

that we are investing in it is too

simple to just follow the mainstream

media on this don't do that instead now

is the opportunity to capitalize on

innovation which will end up looking

like quote the likes of which the world

has never witnessed sometimes i think

there are little nods against joe biden

in some pieces i read i could be overly

looking into these things though anyway

uh this new age is thanks to five major

innovations and that's dna sequencing

robotics energy storage artificial

intelligence and blockchain uh she also

talks about this and this is a big piece

for her she talks and we've already

covered this a lot so we're not going to

go crazy on this but she talks about

benchmark sensitivity about basically

like don't root yourself into the muscle

memory of comparing to the s p 500 that

trying to beat the market in the short

term is is i'm just going to simplify

this stupid like okay cool yeah you beat

the market in the short term oh yay

you're the market and you beat kathy in

the short term oh

talk to me in five years when her

strategy's 5x that's basically the

argument that she's making here like you

actually think the s p 500 is gonna have

a forty percent compounded annual uh

rate of return that's gonna 5x in five

years you think the s p is going to be

20 000 in five years her argument is

probably not because the s p is going to

be weighed down by companies that folks

listen this

have already had their opportunities to

have massive growth and big profit like

the fangs look she's been selling some

of her amazon and apple and some of

these others which she sees is almost

more cash parks

uh and so listen to this

even the fangs could be in harm's way as

the convergence of blockchain technology

and ai in the so-called metaverse

attempts to destroy the roles of central

data aggregators now she's literally

attacking fang

got him

all right well we'll see i guess we'll

have to we'll have to look back okay

folks now we gotta talk about

the recession the r word shout out in

the comments if you remember when kevin

was doing meet kevin reports back in

2019 we had that like newsy music but

anyway back in 2019 i did a report while

i was in park city utah and i did a

report at the beginning

probably maybe somewhere on march april

of 2019 about how the uh yield curve was

was trending towards an inversion

anytime you get an inversion of the

yield curve you get this fear that we

might be heading towards recession and

this is essentially when short-term

dated bonds have a higher interest rate

than long-term bonds that doesn't make

sense like if somebody asked you hey hey

uh will you

lock away money you know invest ten

thousand dollars into something you'll

get five percent on your money over ten

years

and somebody said hey but if you lock it

up for 20 years it would be natural for

you to think oh if i lock it up for 20

years maybe i'll get paid six percent or

seven percent i'll get paid more money

right well the when you have an

inversion of the yield curve somebody

goes to you and says hey um we'll pay

you 10 interest if you lock up your

money for two years just as an extreme

example it's like wait a minute why am i

getting paid more for a shorter period

of time that's odd that's when you get

the inversion of the yield curve when

that happens the market is flashing this

red warning sign going we're heading

towards a recession

and that's what you don't want now one

of the reasons this is really odd

that we might be heading back to this

potential inversion of the yield curve

which is what kathy wood starts talking

about right here one of the reasons

we're seeing this is because in in the

opinion of kathy wood she does not

believe the bond market thinks that

inflation is here to stay she thinks

that the bond market is sending us very

clear signals that inflation is not

going to be worse over the long term

that inflation is going to go down

and in fact you can see this by looking

at something a little bit simpler it's

the uh 10-year treasury yield okay go

over to the 10-year treasury yield which

is right here and remember how everybody

got really nervous about inflation at

the beginning of the year year and we

had this skyrocketing of the 10-year

bond yield but then the 10-year bond

yield fell

in the summer as the inflation fears

went away

then delta came around all the supply

chains got whacked over the head and

then we had these inflation fears come

back so the 10-year bond yield went up

again now we're at like peak bond or

peak inflation fears and look at where

we sit we're sitting at 1.4 which is

like over here

it's it's chopping out all of the big

fears that we've had so why

well in the mind of kathy wood the bond

market does not believe that the federal

reserve is going to be capable of

raising rates as much and then instead

the bond market is telling us we are

heading towards not only a very flat

yield curve but that we could

potentially have an inversion of the

yield curve in fact get this the

financial times yesterday reported that

the federal reserve in their statement

of or summary of economic projections

which is right here believes that the

federal funds rate right here is going

to be 1.6

at the end of 2023 well the financial

times came to us and the financial times

said the bond market for fed funds

futures is pricing in 1.27

end

of 23 fed funds yields

that means if the yield is 1.27

but the fed is projecting 1.6

then the market's basically saying hey

we don't think you're going to get to

that level fed we don't think you're

going to be able to raise rates that

high because inflation is going to

inflict down mainstream media ain't

telling you that but the bond market is

making it very clear the people actually

betting with their money on inflation

which is where you bet or where you want

to bet on inflation you go bad in the

bond market they're saying inflation's

going to go down

which is potentially reiterating that

kathy could be right about her growth

strategies but anyway listen to this

she mentions here that fi the bond

market seems to be warning the fed not

to titan since february the yield curve

measured by the difference between the

yields of the 10 year and the two year

has flattened pointing to a rising

probability of recession lower inflation

or

both

during the next year folks kathy's

basically saying look if fed chair

jerome powell stays on this harsh path

the bond market's sending us all a

signal that we could be running to not

only a deflationary environment in 2022

but also a recession in 2022. now going

back to deflation we got to understand

this when we have inflation we increase

our discount rate meaning we're

discounting future cash flow more it

means that future cash flow is worth

less to us which means money losing

companies have their values go

down

deflation you lower your discount rate

you could potentially have a negative uh

discount rate if you're looking at

certain countries especially in like

europe which would actually

substantially increase the value of

companies uh in the future that right

now are getting crushed under this fear

of inflation and this is why kathy

believes that if we head towards

deflation which she actually says her

conviction in is growing she

acknowledges that she could be wrong but

she believes that deflation is coming in

two forms both cyclically and

non-cyclically which is a permanent

destruction of pricing then we are going

to want to be investing in innovative

companies that take advantage of things

like industrial robots batteries and the

innovations that she's talking about she

regularly talks about wright's law

and that every cumulative doubling

reduces costs by a certain percentage

she believes the cost of robots that

every doubling in the number of robots

we have reduces costs by 50 percent and

the doubling we have in batteries

reduces costs by 68

and ai training costs are plummeting and

then basically unless you're investing

in innovative companies when it comes to

deflation you're going to get whacked

and so i like to say that in a

deflationary environment

what you want to do is ideally you want

to find two characteristics two main

ones i agree that you want to be in

innovative companies but in addition to

being in innovative companies i think

you ideally want to find companies that

either are or have the potential to be

high margin the reason you want high

margin is when you have high margin and

prices come down higher margin companies

have pricing power which enables them to

still retain substantial profits that is

of course for profit driving companies

versus maybe money losing companies and

this accelerates our ability to uh to

see cost declines on the s-curve of

production

that is of course the manufacturing ramp

she also believes that a good deflation

can see

not only these innovative companies

explode but she also believes that our

gdp could double that our gdp could go

from the 21 trillion where we sit now

and double by 2040 and the big winners

are going to be the innovative companies

honestly i couldn't agree more i could

not agree more with you know there there

the thing is i find myself very aligned

with kathy's thinking there's some

things that uh that that i slightly

defer on uh that uh you know whether

it's a trading psychology or or uh you

know timing for certain things but

beyond that i i really aligned with this

this sentiment substantially but anyway

supply chain bottlenecks that could have

lasted a much longer or have lasted much

longer than most have expected have

turbocharged this inflation debate so

she's talking about how uh consumer

sentiment has dropped to levels below

the the coronavirus pandemic in the

middle of the depths of it and that

people are less confident now because of

this whole inflation narrative that's

going on and that some of these things

have led people to shop earlier leading

to more advan like supply chain

disruptions earlier than usual in my

opinion this is potentially going to

lead to what i call

shelf deflation and this is when you

have a lot of companies who are going to

spend a lot of money advertising like

crazy in 2022 talking about all these

discounts they have now because they

ordered too much crap for the holidays

now their shelves are full now we're not

selling as much so what's probably going

to do well in my opinion in 2022 well

for 2022 trade strategies i really think

ads are going to do well so advertising

companies advertising companies like

your snap your fa facebook your trade

desk adobe roku pins twitter reddit uh

and potentially also your buy now pay

later platforms like a firm because

people are going to want to continue to

buy the way they had been but they might

be maxed out on their credit cards so

what do people do when people are maxed

out on their credit cards as bank of

america tells us they

use buy not pay letter

things to know but anyway uh now

she believes that consumption growth is

going to

uh expand with the except and this is

where i add the note but i also think

that debt is going to expand yeah now

she also says that if we're correct

during the next three to six months the

market is likely to focus more on the

risk of recession and a serious slowdown

along with a surprising drop in

inflation now this is worth noting if we

do and this is a countervailing argument

here if we do end up having risks of

recession rise

then these are potentially going to have

some risks associated with them because

generally when there's a risk of

recession then advertising goes down the

first thing every company did was cut

their ad spending during the pandemic by

now pay later it could be a potential

issue because buy now pay later

companies are the ones left holding the

bag of debt that's really unsecured

right so so that is a

if we do go towards the risk of

recession

not ideal if we don't go all the way

towards risk recession but we just go

towards deflation these could do better

my thoughts because people are going to

well you don't want to go google but

anyway

kathy wood does suggest that we're

already seeing a plummeting in certain

prices of commodities

and she lists a few here suggesting that

uh we're starting to see inflation like

lumber prices falling 35

and some of these other like iron prices

dropping 30 percent 36 percent this uh

and it is fair in fairness china has

already substantially reduced their

steel forecasts which iron is a

component of

for 2022 probably because of the real

estate industry but remember folks gas

up 50 still year-to-date coffee's up 83

year-to-date lumber's up 24 here today

fiberglass up 20 year-to-date precious

metals are getting whacked and yeah some

things like aluminum have come off their

highs but they're still relatively high

so i can't say that yet that we've seen

commodities plummet just yet although

they do tend to plummet over time

so this is where she kathy goes in to

mention that hey look we are reiterating

that we believe that innovation stocks

are not in a bubble we believe they are

in a deep value territory we believe

that volatility has become a bad word

but basically they're creating

opportunities for us to invest

and she basically bottom lines her

argument by saying look we believe that

tried and true investment strategies

like just buy the s p 500 are going to

suck

in the next five to 25 to 10 years and

instead it's going to be dna sequencing

robotics energy storage artificial

intelligence and blockchain technology

that is going to

dominate

she says we will not let benchmarks and

tracking errors hold our strategies

hostage

to the existing world order boom that's

a good mic drop so i have to say all in

all i respect this i think they did a

phenomenal job here i think only one

mention of tesla in here but she's

trying to she's honestly she's been

trying to distance herself a little bit

from tesla because

she's kind of become known as like some

people are trying to cast her as like oh

you're the one hit wonder who went big

on tesla and and she's really trying to

which i don't i don't agree with i don't

share that sentiment um

she's really trying to

separate herself from that uh

characterization i don't blame her at

all for that but um

look bottom line i agree with her

i think there's a potential of investing

in genomic plays i agree i don't own any

recovery stocks i think a lot of more

value traps i think there's a trade

opportunity once we get to peak delta uh

overlapping with peak omicron which i

talk about in my omicron videos i do

think that there are advertising and buy

now play pay later opportunities uh

going into at least the first quarter of

uh 2021

i'm sorry 2022 but uh but otherwise look

in face phenomenal freaking company a

cyber security companies like uh

cloudflare absolutely amazing especially

with the log4j hack that we've seen and

how cloud a flare can help companies

prevent uh falling victim to these sorts

of issues i think that's that's huge

obviously tesla continues to be a big

investment i'm not a big fan necessarily

of kathy getting into x-ping although i

do think x-bang and neo have

substantially oversold

other companies that personally i'm a

big fan of

etsy although you could see some

consumer excitement rotate down although

i do expect prices are going to come

down we're going to see some

dramatically really good sales numbers

from etsy as people clear out their

inventories

matterport it's a disruptive innovation

this is absolutely phenomenal nvidia you

can't go wrong with them trade desk for

the advertising absolutely freaking love

them sofi and fintech smaller position

but like um you got headwind risk

potentially if rates go up but we don't

think rates are going to be able to stay

high that long potentially opens the

door to looking at companies like rocket

mortgage or united wholesale right

uh you know a firm as the buy now pay

later option expi is innovative in the

real estate investing space

uh and a palantir has a potential the

fintechs like paypal square

and of course the others like

the other stocks that we like like of

course tesla phenomenal so these are

some that i've been keeping an eye on

and adding positions to roku snap for

advertising as well but anyway these are

all my thoughts on what kathy's just

said uh her warning regarding recession

something to keep an eye on regarding

your portfolio i want to balance your

recession and deflation or keep in mind

keep an open mind to recession and

deflation when you look at balancing

your portfolio

and folks that's it if you found this

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next one thanks so much goodbye