Why Stocks are Selling Off AGAIN - MORE Answers!

hey everyone kevin here the market it

feels like it is in turmoil you've got

all the indices down

the dow is down over 445 points the s p

is down

another percent another day in a row to

me this is a potential lead up to this s

p correction that who knows we might see

i'm not sure but there's one thing i

know for sure and that is we do have

some insights

on why this madness continues to happen

in this video we'll also be going

through some of my top picks

based on a future earnings of multiples

and we'll see which ones feel like a

bargain compared to which ones feel

expensive

so we'll touch on that as well so let's

get right into it so obviously right now

there's no doubt the target of the

market sell-off

is tech and that's very clear because

short interest in the market is up to

percentage points again

we are up to 26 short in the market

right now

this is far from the peak that we had of

35

in 2020 in march now we don't really

expect

to go back to a 35 short interest level

like what we saw

in march of 2020 we certainly had way

more of a catalyst for a market crash

then

than we do and now now we're just being

weenie babies over a potential spike in

inflation

which we knew was coming but anyway we

are definitely seeing short interest

going up

and tech is without a doubt the easiest

target here

but the craziest thing is you think that

oh okay well they shorted and now

they're making money

they're done right no the hedge funds

continue to short

we're continuing to see short interest

data go up

and because shorting is not at extreme

levels there is less of a worry by hedge

funds

that they're going to get squeezed like

they did with gamestop 25 percent as a

market short level

is nothing compared to the 130 140

percent

that gamestop was short so don't get too

excited that if

hedgies are shorting we might be able to

squeeze them instead

according to miller tabak and co in an

interview this morning

all sectors continue to fall as hedge

funds continue to add

to their short positions it's a bet

that's been working very well

so rather than taking new money and

buying the dip they continue to buy

their shorts and that continues to

remove buying pressure

and continues to add to selling pressure

now we also had

swiss global equities mentioned this

morning that they believe this bull

market

that the overall bull market that we're

in uh looking at the scope of over the

last year not so much the last three

months

but the overall bull market they believe

will really only come to an end

when we go into a recession and right

now we're not heading into a recession

they say they

say instead this is really this you know

between now and february

has really just been a bump in the road

it's creating buying opportunities

but it's not the start of a recession so

we'll be

back on our bull market trajectory they

believe and we don't know if they'll be

right or not

but hey the economy is being held down

by the fact that less people are getting

jobs we saw friday's unemployment uh

data come in

way worse than expected we only added

about 288

000 jobs compared to a million jobs

expected we did get a job

openings report this morning that there

were 8.12

million job openings versus the

expectation of

753 million jobs expected

or a job openings expected which is a

difference of about six hundred thousand

which if those six hundred thousand jobs

had been filled from those openings that

difference there and expectations

and we saw that go to the uh the jobs

added report from last friday

unemployment report which shows that we

would have been closer to expectations

on both reports

so it's really really clear we have the

job openings people just aren't going

back to work now earlier in the live

stream this morning we talked about how

my goodness mcdonald's in florida is

having to pay people to get interviewed

50 bucks just to get an interview

whether you take the job or not

just to have people to talk to to try to

give them a job people don't

necessarily want to go back to work and

it in some cases does make sense given

the fact that we are still seeing

a basically minimum wage equivalent

unemployment boost through

september and as a result bloomberg

reiterated that quite frankly because of

the things that are happening in the

market not only with unemployment but

these inflation fears

and the increasing of shorting bloomberg

suggested and reiterated that no one was

going to be surprised if this correction

continues to go deeper

and longer the swiss firm we referenced

also believes

that inflation at some point will hit a

peak

quote soon now they believe that

the markets overall tech sectors and the

other parts of the market

will start to react positively when that

peak gets hit and we start seeing a

decline in

inflation figures now what i really

think they're saying here

is when we hit an inflection point in

inflation we could see a quick

rebound in equity prices specifically

the tax sector which has been getting

destroyed as hedge funds have to start

preparing

for that inflection point and they start

unloading their shorts

now that's an interesting theory it's

obviously one that i certainly hope is

correct

but here's just a quick and brief visual

way to think about that

if hedgies right now are seeing

inflation expectations

do this actually it's not really a rate

that's been going up it's kind of been

more like

that if inflation expectations have sort

of been moving like this

and hedge funds since february have also

been shorting at a sort of a similar

path

then at some point we're going to hit

this peak inflation level let's say

that's uh i don't know let's

i'm just going to make this up okay

let's say peak inflation

uh peak inflation ends up being

somewhere around july as just an example

and we end up seeing peak inflation and

peak shorting because the shorts are

trying to anticipate what's happening in

the market

we end up seeing peak inflation here and

as we start getting data that suggests

okay we had our big inflation

now we're going to start seeing that

inflation go down i really think that

could yeah

probably going to be july because in

july we'll get the june data

i'm going to stick with july let's say

we see that peak in july

and we start seeing inflation and

inflationary expectations going down

generally the short sellers the blue

line we're drawing here

are going to start unwinding their

shorts because they don't want to be

caught

shorting a bunch as inflation

expectations are declining

obviously worst case scenario is this

peak

of inflation continues to go in this

green line here

that's the worst case scenario right so

that's we're all

tentatively waiting for that inflection

point

and the hedge funds are watching that

very closely as well

if this inflection point turns down it

would not be

uh surprising at all to see the current

inflation levels of uh not inflation

levels the current short interest levels

of around 25 26 percent

to start going down and what happens

when you start closing these shorts

is you start buying back your shares and

then you use new money to buy new shares

and you potentially see that view-shaped

recovery in stocks

which would kind of look like okay we're

going to the moon

then we fall february march stay kind of

at the bottom

april may and start trying to come out

maybe june

july and and hopefully we see a recovery

this this could all be for nothing i

mean this is totally just speculation

but the point that this would likely

become very true

is when we get to this one specific

point here

when this point happens when we get an

inflection point in inflation data going

down

that is when markets and hedge funds as

well the ones doing all the shorting

right now the tech sector

when they expect to start unwinding we

even had a jean

at a blackrock investment say that

markets right now seem to be

extrapolating good

data that and basically implying that

the market is overheating and so what

they're doing is they're going oh my

gosh

q1 data q1 earnings we're so good at

tech companies

data gdp everything for the economy's

health and growth

is exploding housing prices up 16

in the first quarter everything's

exploding in the first quarter

that hedge funds and even mutual funds

are looking at that data and going oh my

gosh if we continue on that trajectory

all year

we're going to the moon but we're going

to have mega mega mega inflation because

we're overheating and the feds can have

no choice but to dampen this particular

person gene over at blackrock

says hey hey hey markets are a little

bit over

extrapolating good data and they say

that remember

the fed has a really high bar to raise

rates

and if you're extrapolating data that's

not going to be at that peak level all

year we're going to see a softening in

that

that overheating data and the fed's not

going to react as quickly as you think

you might be acting a little prematurely

and

in shorting too much and once the market

realizes

that we might see that rotation away

again who knows

that's just what gene over at blackrock

thinks which kind of echoes what the

swiss firm believes

and i'm purposefully referencing other

companies and and statistics or should i

say

uh interviews here because i don't want

you to only hear from me

and i don't want to only hear from me

either i don't want to sit in an echo

chamber and just say the same crap

i'm looking for what other people are

thinking

for example on cnbc this morning during

our live stream we heard firms saying

hey what we're doing is we're looking at

what we think is a good deal which i'm

going to talk about in just a moment

and we're just adding to those sure may

things fall even more

yeah but once we get that u-turn it

could come much quicker than we expect

we'll see

we'll see loretta mester she is a

fed bank president said that equity

prices are high right now

and she does see inflation staying or

ending the year at above two percent but

she thinks that we're going to get a

rotation down in inflation so

potentially that inflection point

by next year as supply constraints ease

now

that's interesting because that makes

you wonder well wait a minute

does that mean loretta mester thinks the

inflation

inflection point is in july or does she

think it's more like

a january through march thing of next

year

my guess is it's actually kind of

potentially both

if supply strain can or supply chain

constraints get better

in january through march of next year

then we'll probably

start seeing the inflection point

downwards

sometime between july september october

of this year

and then really get to normalized levels

uh sometime

next year which would sort of align with

what loretta mester

suggests but certainly doesn't help when

the fed's going yup stocks are high

all right whatever i mean they were

saying that in the summer of last year

too

they're like oh yeah equity prices got

out real fast

but anyway these are some i want to go

through some names just briefly here uh

some of the names that i think

are some of uh some picks that you could

look at

at 2024 earnings and go oh these have

actually dropped to levels where they're

kind of

nice to add to uh and i want to mention

these i do

quickly want to mention that coupon code

that was extended

uh briefly is still available get that

39 off coupon code you check out those

programs down below

you get my private live streams you get

uh and those those won't last forever

but the private live streams there's no

i have no plans of ending those uh the

private live streams i love doing those

with all of you but you do get lifetime

access to all the

existing lectures and new lectures that

i add so they're kind of like living

breathing courses they continue to

expand

check those out down below on real

estate stocks the psychology of money

youtube videos uh real estate agent

sales you name it

but here are the some of these that i'm

looking at so i've got three sort of

baskets

of of stocks i've got what i think are

the

lowest future multiple stocks the medium

multiple stocks and the high multiple

stocks

that means which companies am i paying

the highest dollar volume for right

today

for future earnings 2024 earnings and

which am i paying the least for

can we go through this in detail uh in

our private live streams but just to

give you a generic overview of some of

the things that we've been talking about

we've been finding that the lowest or

sort of the best deals right now with

the selloffs that we've been seeing

uh four forward earnings have been

companies like etsy pinterest

and face and shift technologies with the

most expensive being companies like

redfin pallenti or tesla and square

and the uh it's sort of the middle group

being something like uh we've got here

coinbase and peloton being in

the middle uh let's see here uh

yeah so these are some that i find

pretty attractive right now

a little bit of all of these but i'm

trying to keep that balance between all

of them

so anyway this gives you a little bit of

an idea of some of the things that i'm

looking at and i think this is really

interesting insight

about what's going on overall in the

market so thank you so much for watching

folks really appreciate it and we will

see you in the next one

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