**Prepare for MASSIVE Capitulation and Margin Calls**

11 months 11 months is how long it took

for the market to hit lows after in

January I warned that the Federal

Reserve was likely going to have to

force a technical recession in order to

get rid of inflation and that it would

make sense to park money into cash as it

would likely be the best asset class

even in a high inflation environment

because cash becomes more valuable as

assets decline in value cash and

inflation only hurts if you're trying to

buy things that are inflating in value

like food and groceries and gas but if

you're trying to buy real estate or

stocks those can go down in value now

I'm really proud of having sold all of

my real estate at the beginning of the

year and having realized this change of

the Federal Reserve in January however I

thought the change would come a lot

faster and I made a big mistake I bought

stocks back way too early and I kept

dollar cost averaging even though we

know that usually the bottom doesn't

actually come until the Federal Reserve

not just pivots which is when they slow

their rate reductions but actually

substantially Cuts rates to bail out

markets because they realize they've

gone way too far and this is where the

warning from me comes from take a look

at this folks this here shows you it

took 11 months for the NASDAQ 100

Technologies index to bottom and the

worst may not yet be over as we sit here

in December it's entirely possible that

December tax loss harvesting could drive

us to new lows this is despite the fact

that inflation is finally behaving the

way that we are expecting it is falling

however we have a Federal Reserve that

says nope sorry we're going to continue

to go until we are convinced we are at a

tragic directory of achieving two

percent headline pce inflation now the

Federal Reserve does have a back door to

say hey look we can relax and that's

simply to say that as long as inflation

averages two percent pce via their

policy of Fate flexible average

inflation targeting the FED could

actually U-turn pretty darn quickly

however I believe

expecting anything to be quick in this

market is a really big mistake in fact

if we look at the five-year break evens

we can see that even though stocks

continue their plummet today what do we

have on the five-year Break Even we

actually have a slight tick up in five

year break evens suggesting that we're

not on a straight plummet down for

five-year break evens and we really have

more work to do to convince the bond

market that inflation is absolutely

going to Trend down certainly below 2018

levels which 2018 levels are about here

where I'm drawing this dotted line here

which means we're still sitting at

levels where the Fed was hiking in 18.

now we're about we're almost 200 basis

points higher now we're with Federal

Reserve rates than where we were then

right rates then were about two and a

half percent now we're at almost four

and a half percent so yeah we've got

significantly more tightening in the

pipeline today but some some say we also

have significantly more risks that

inflation can move to the upside in the

pipeline so what's the big lesson well I

think there are two lessons number one

actually there are a few let's just get

started with them number one if you are

tax loss harvesting the good news is you

probably have an opportunity for

patients for example if you were to sell

stocks in December it seems relatively

unlikely right now that within the next

30 days we would expect to see some

crazy stock market rally because even

though we're going to have another jobs

report and another inflation report

between now and next uh month of a month

from now say like January 20th or 21st

the inflation report for example comes

out on the 12th we're not going to have

another Federal Reserve meeting until

February 1st that in my opinion creates

a really interesting opportunity where

if you sell now what you're doing is

you're getting ahead of what could be

bad Q4 earnings next month and you have

that opportunity to maybe buy back in

after ugly Q4 earnings or just wait for

that fed meeting on Feb 1. that's

actually really interesting I really

suggests that this could be a really

powerful time to tax loss Harvest

however that also creates the second

potential consideration and that's that

well if everybody thinks let's tax lost

Harvest we got nothing to lose Q4

earnings are gonna suck anyway then

maybe bearish mindsets are already so

strong that it's possible we could

actually be in a better place next month

as people who have already tax loss

harvested start buying back in though I

do have to say I think sentiment right

now is so pained after having one year

of stocks in straight decline that

people are basically just mad at each

other this is one of the things we

actually talk about in my programs on

building your wealth whether it's real

estate investing or Stock Investing when

times are toughest is when people in

real estate for example same thing is

true with stocks start fighting each

other everybody blames each other for

losses in their own portfolio because

everybody is sad everybody's upset

everybody's looking to point the finger

and nobody wants to take personal

responsibility for the fact that we're

going through a recession nobody knows

perfectly what's going to happen but

when sentiment gets so bearish there are

actually two things that could happen

number one you would think is the

assumptive answer and that is sure we

could see sentiment go from Super

bearish to bullish and we can rally out

of this mode but with a year of

sentiment being so ugly and so much

uncertainty created by the Federal

Reserve and no meeting from the Federal

Reserve between now and February 1st it

potentially makes logical sense to say

you know what just wait for the FED Feb

one or potentially March 22nd and Don

don't be anxious to get back into the

stock market even though there's this

rally optimism however that same rally

optimism could actually lead to that

rally optimism not occurring all this

negative bearish sentiment compounding

and now all of a sudden people getting

so frustrated that we actually end up

with a capitulation sell-off now this is

the Other Extreme we have not yet in the

2022 sell-off had a capitulation

sell-off if we end up in a capitulation

sell-off we could see stocks move in a

single day

substantially if you think two or three

percent on the NASDAQ is a big day you

might be surprised we might end up

seeing

seven to ten percent and circuit

breakers breaking the stock market

basically freezing trading at the stock

market because sell-offs become so

severe between now and the end of the

tax loss harvesting cycle at the end of

the year both of those are a possibility

and I have absolutely no idea what's

going to happen but there's one thing

that I will tell you I made a big

mistake this year and I would love to

admit that mistake and I've admitted it

many times before but I just want to be

crystal clear my biggest mistake this

year was not mistiming the FED on my

cell it was being impatient to get back

in and that's really dangerous there's

no in my opinion reason to be impatient

to get back in with a Federal Reserve

that's behaving the way it is right now

which is likely overly bearishly

correcting to the downside now that's

unfortunate because it takes away a lot

of Hope p.m for the market when the

reality is I strongly believe in five

years from now we're going to look back

and want to go oh wow that was a stupid

recession inflation was obviously

transitory why did they push us into a

recession wouldn't be shocked if that

comes true wouldn't be shocked if Tesla

is a four or five x but does it

potentially make sense to sell now and

maybe re-buy in a few months it

potentially does I've had to do exactly

that recently because I don't want to be

exposed to margin now I still have a

very large Tesla position but I've

definitely reduced my Tesla position to

make sure that I'm not at any risk of

having a tax bill or some kind of other

Bill come up that pushes me into a

margin uh situation where all of a

sudden I'm looking at a margin bill at

the same time as potentially walking

into a stock market capitulation that

would be very very dangerous because

then you risk getting margin called at

capitulation cycle very very bad now

I've never been margin called before but

sometimes that means you have to make

the painful decision before getting into

those environments and you have to be

prepared you have to work harder you

have to defend your portfolio from a

margin call and by staying out of margin

best case scenario and you have to work

harder to make more money so hey you

know what yeah I have been saying for

all year long work harder make more

money there's a reason why I am filming

more and more lectures every single

weekend for my stocks and psychology

money course my real estate course

that's going to be a huge one next year

my Elite Hustlers course helping people

start businesses build their

entrepreneurial businesses build their

income as an employee the reason I'm

providing more value for all of these

programs linked down below is because I

believe now is a the best time to study

and learn but it's also the best time

for everybody to think about how can we

make more money and I think my job as a

professional is to make sure during hard

times I I'm providing as much value as

possible and that's my goal I'm not

going to crawl into a hole and go into

silence it's okay to be wrong it's

important to admit mistakes learn from

them and move on now remember I am a

licensed financial advisor but I'm not

your personal financial advisor so

everything that I teach or I share with

you ultimately you have to take the

perspective that works for your

situation and make the best of it my

goal is to continue to provide value and

I hope that these warnings are useful I

do think there is an opportunity to tax

loss Harvest between now and Q4 earnings

I really can't see a lot of hopium

between now and Q4 earnings however

because sentiment is so bearish because

puts are so expensive and calls are so

cheap there is always that possibility

that the market flips remember things

could also get so bad that the Federal

Reserve actually comes in before their

February meeting and ends up you turning

in a positive direction for markets I

think unfortunately hope is not an

investing strategy and hopium is the

worst thing to have when it comes to the

Federal Reserve because they're not

coming to the rescue anytime soon the

only way I would foresee the Federal

Reserve coming to the rescue anytime

soon is if this chart started plummeting

and unfortunately just the opposite is

happening today it's not plummeting if

anything it's rising that's bad it's the

opposite that we want to see on top of

that which this is actually to some

degree a little bit good we are seeing

Financial conditions tighten in the bond

market by seeing bond yields rise now

this is a little bit concerning because

it's somewhat suggests that uh-oh we

could actually be trending towards a

real recession where earnings are

actually going to become at risk and

when earnings go down earnings per share

go down and valuations can continue to

collapse for big companies now right now

if you look at the 10-year bond yield

you could see the 10 years sitting up

about 11 basis points today that is a

recessionary fear so what's happening

here is people are actually selling

bonds off because they have the

potential fear that it makes more sense

to hold cash going into Q4 earnings and

next year or potentially that bond

yields actually deserve to rise even

more that is financial conditions are

likely to tighten even more bond yields

are likely to rise even more and all of

that could lead to a deeper and deeper

recession and this is where it's very

very difficult right now because we

don't know exactly which companies are

going to get whacked with earnings

markdowns it could be every single

company that exists now I know this

sounds bearish I want to be very clear I

am a long run bull I am more invested in

this market than I am in cash and you

know listening to January Kevin 20

January 2022 Kevin that's pretty stupid

I should have just sat in cash all year

long I didn't but that's the way it is

and I want to be here to share my

insights with you and sort of my beliefs

going forward I believe that the FED is

going to have a massive massive rate cut

cycle ahead of it at some point in the

future but we can't bet that that's

coming before a big capitulation

destructive crash and that's why I just

want to warn you to just be careful

don't look at your net worth as to what

it was look at what you have now and

make sure you're protected and consider

your net worth now with it which is

protected hopefully as an option on the

future that's all thanks so much for

watching and seriously good luck out

there