sh*t

oh

what up step bros and step girls i'm

stuck

uh in stocks that

have gone down

uh folks look we we gotta talk about

this disaster of uh netflix and uh the

market because um we got problems and

that's why we got to talk so look

last

february february 19th we had a really

bad omen and that was the bloomberg

terminal two-factor identification thing

uh telling me to pray that gives me a

four-digit combination and it literally

was p-r-a-y on february 19th

and

i don't know if it's coincidence or

maybe the suits know something but the

market crashed for like the next three

months thereafter okay it was horrible i

mean uh february was negative march was

negative april was like a tiny little

rebound and then may was even worse and

the summer was okay and and then they

had the september crash and then you had

a little bit of rally in october

november and then the december crossing

it was just a crappy year right

so today

i uh get a bloomberg code uh if you

watch my morning live stream you'll see

me actually hold it up and it's uh it's

the title of the video uh sh9

t

and it's like oh okay so it's censored

[ __ ]

and uh the market starts out great

but boy oh boy dude we follow the same

convictionless rally pattern and the

same pattern that we felt uh in last uh

uh last february

and the market just you turned straight

freaking down

now that's intraday last february it

happened for months

uh but it was okay because like netflix

earnings were coming out and uh that's

the beginning of tax season subscription

services and

how bad can it be

i mean

people stop buying peloton so peloton

has to stop manufacturing pelotons

because they've got so much excess

inventory made a whole video on that

earlier today like

expected that's why we sold out a

peloton at 113

uh you know unfortunately peloton is uh

you know it was a covet play so you got

the colvin reversal play and such

you know maybe maybe some of that was

going to come to netflix as well

but no

no netflix was an utter disaster now i

covered the netflix earnings in detail

at the end of the closing market live

stream so you could watch the exact

numbers but i'm just gonna give you the

bottom line uh no bs

uh uh answers here to what you need to

know about what happened with netflix

okay it was bad

they were expecting a forecast of

revenue or user growth of around six and

a half million users in q1 so right now

uh january february march well they

revised that down

to two and a half million

like what

more than a half or the forecast was

half of expectations less than half of

expectations it's insane way less than

half it's like 35 percent of

expectations it's terrible

uh

and they're suggesting that emerging

markets were and are potentially their

largest growth for new mar uh consumers

because like everybody in america

already has it but now i'm like

i gotta think about starting to cancel

my netflix subscriptions and all my

other subscriptions because uh i'm

losing money here i'm out of freaking

money buying the dip i am literally on

autopilot right now driving back from

the dentist

uh and uh the dentist like kevin the

good news is you don't have any cavities

the bad news is you've got an abscess

under this tooth right here that you

said you had pain on or i'd pain in my

tooth that i complained about i emailed

them back in like the pandemic in like

june of 2020. uh but the pain went away

i'm like oh i'm brilliant i'm using

sensodyne no the tooth just freaking

died and now there's an abscess under it

and it's like you're gonna have to get a

root canal and i'm like uh okay what are

you doing now he's like well we're gonna

start the root canal here's your shot

here's your anesthetic i'm like can we

not do the anesthetic so i can save that

money because i've been buying the dip

so we did the root canal without

anesthetic which apparently isn't that

bad when your tooth is already dead

because tooth is dead the nerve is dead

but i'm like i need to save that 300

shot

to come by the tip

uh but anyway so going back to netflix

the

the the netflix omen here is absolutely

horrible it's it's literally

bad there's there's a reason netflix

fell 10 instantly when we were covering

the earnings on it uh

but like it goes deeper because it's not

just netflix falling 10 now it's down

like 21

dragging down disney stock dragging down

roku anything subscription

subscription-based is like oh

the time to sell up there has been less

volatility

in crypto in freaking crypto than there

has been in the stock market the last

few weeks which is my my boy but

look

this is bad because the signal here

is that uh

spending growth is slowing now

to some degree

this is like a

a short-term bad and a long-term good

because what happens when spending slows

down which by the way is what i advocate

whether you're a course member or you're

just watching these videos

stop spending freaking money because

when markets get rough you want all of

the freaking money that you can get your

hands on so that way you can invest uh i

don't care if that means refinance all

your properties uh pay off your margin

debt you know take out longer term debt

that's stable 30-year fixed rates where

tenants are paying it in favor of like

margin debt right margin and bad right

now bad like in in some cases

it it's going to make sense for people

to start paying off their margin even if

that means taking some losses taking

some l's just to prevent margin calls

because ultimately you want to protect

that core of your portfolio right now

you can do that with some tricks like

some things that you could do is you

could take you could go buy you know uh

at the money or slightly in the money uh

i prefer in the money uh longer term

call options whether they bring you out

to january 2023 or january 2024 or

whatever

and and uh because you're using less

capital now maybe you can pay off your

margin that's an option that's literally

what i did in may of uh 2021 and that

worked well i got completely out of

margin in may of 2021 and held options

with no margin so that way it still had

the leverage

but without the risk of a margin call

now the problem with that is you got to

have balls of steel to do that because

if you go

into call options especially if you go

nutso when you start going out of the

money calls the volatility on those is

freaking insane i do not recommend you

go out of the money calls because the

theta decay will eat you alive i did the

math earlier on on tesla calls if i went

for a 2 000 tesla call versus uh no

actually i did it on end face 300 out of

the money because then face is like 150

so if i went for a 300 january 2023 out

of the money call option uh after six

months of handling it i would lose about

75

of the value huddling that sucker

so instead

i calculated well what if i did like an

80

uh which is like super in the money you

know i'd have to decline 50 for that not

to be in the money uh the stock and so

what's super in the money and i can hold

that thing for 180 days and

approximately because you know black

souls model options pricing is insane

but anyway uh i can hold that thing for

180 days and my theta decay would only

cost me like six or seven percent i

think it might have even been lower when

i executed it may have been as low as

like five percent i set a lower limit

anyway if none of that made sense the

point is just basically to say be

careful of out of the money call options

in this kind of market but we gotta have

a little bit more of a discussion about

where we're heading and and i think

that's the important part is where we're

heading and strategies for for that uh

in addition to the strategies i just

talked about and what this this netflix

earnings means and and what uh you know

this this uh two-factor identification

code means

it's a problem we're gonna talk about

that i'm also gonna talk about real

estate in just a second some strategies

some strategies regarding real estate uh

but first uh this video is sponsored and

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okay so

what what's on my mind right now well

look you all know i hate selling i'm not

much of a seller i did sell today uh but

i i bought more than i sold i bought

about 1.8 million dollars and i sold

about 800 000 now what i did is i sold

about 35 different positions

and i've narrowed my portfolio down into

my highest conviction

about 14 positions and i'm going to

eventually get this down to about 11

positions this is not

advice by any means because for most

people more diversification is better

you need about 30 to 50 stocks to have

the diversification approximately of an

index

uh approximately

and uh i'm not really good at hitting

the different sectors because i believe

my big element of diversification is the

fact that half my portfolio is in real

estate right actual real estate

ownership not stocks

uh but i'm heavily exposed to consumer

discretionaries in tech and those don't

do well in this kind of market this is

the kind of market where you can build

some sick positions in them but you're

going to have again to have balls of

steels to survive here uh otherwise you

know you might for example be interested

in stocks like that can actually benefit

from pricing increases by inflation

which have we've talked about the

inflation pie before through m1 finance

which i created which was like

sherwin-williams hasbro mattel those

stocks have actually done very well

relative to the losses we've seen at

companies like arc uh invest which are

going super high tech in the innovative

so your defensives your dividend payers

look at att it's up 20 whereas arc is

down like 30 over the same time frame

right so your your infrastructure place

the the john deere's the caterpillars uh

that the hasbro mattel sherwin williams

uh maybe maybe more of the the cores

like the costco or the targets

we thought banks but bank earnings

weren't that great uh and so those are

just ideas for diversifying i i'm not

going in that direction though uh what

i'm doing is i'm concentrating and

really doubling down on my bets

which is painful

but i get some beautiful entry prices

this is not for everyone though and this

is where i just want to give not advice

because i can't get financial advice but

a suggestion to everyone you got to look

at your portfolio and you've got to ask

yourself are you somebody who's who's

willing to potentially sit on a

portfolio that's red for a year or 18

months or longer uh kind of like uh or

potentially even years i don't i don't

think that but you have to be willing to

say yeah i don't care i own this

percentage of the company i'm increasing

my ownership in the company i'm good i'm

diamond handed i don't have a risk of a

margin call because you're you're

protected whether you refinance some

properties and get out of margin or you

you switch switch some some share

ownership to margin i don't care what

you got to do

you got to make sure that you're

protected and ready if you're going to

go

all in on tag and then what do you do

well then you spend less money in your

life on your day-to-day basis you sit

down tonight right after i don't care

right you know what after you watch this

video don't go watch another youtube

video unless it's one of mine uh

go go cancel subscriptions to like

everything like seriously cancel

subscriptions to everything i don't care

netflix disney uh

you know any of the discretionary crap

you have in your amazon cart and stuff

cancel everything uh and what's

interesting is

first of all as you do this and you

focus on saving more money and investing

getting into the market however you want

to invest ultimately is up to you you

know the stocks i like uh but but you

should choose them for your own

portfolio and your own diversification

shake get as much money as you can and

then when you have more money these are

the times to be greedy and be picking up

good deals you just need more money so

sometimes that actually means going out

of your way and picking up that extra

overtime shift maybe that means picking

up a side hustle uh now i know that's

not super popular to say it's like oh

just go work more but that's the reality

like

it it's so easy to just say right now

and i don't get me wrong like

i get i get those feelings too i don't

love red days i try my best not to get

affected uh because that's the point of

the psychology of investing you don't

want to paper hand at bottom and and

then miss out on opportunity

opportunities of a potential lifetime to

buy dips right

i know some people who have more cash

around i spent a lot of my cash early uh

i still have cash so like i said i went

one and a half in today no 1.8 in and uh

eight out so net i went one million

dollars into the market today right it's

crazy i know but uh i'm still buying

uh but the point is like get out there

and work harder it's easy and this was

the temptation that i was going to say

it's easy to have the temptation to say

you know what

sell everything

take the l and just go on a two-month

vacation and effort right it's easy to

say that

but uh ultimately here's a crazy thing

that could potentially happen this is

the weird thing okay

you know how i just said stop spending

money guess who the first people are

gonna stop spending money the people who

are watching this market

businesses

you want to know something interesting

and this is why you always want to make

it deep in my videos because this is

where you get where you get the good

stuff okay screw all the people who

click on the video and click out in the

first 20

impatient losers unless you gotta go you

know maybe i mean i do that sometimes

too but maybe there's a reason or i'm an

impatient loser i don't know

what is it the pot calling the kettle

black all right here's the thing

youtube

youtube okay

youtube

pays

us for ad views right you know that

uh ad views uh ad rates go up

when companies are trying to advertise

like crazy and and get more customers

which i'm and i still believe this i

think in 2022 at some point ad rates are

going to go up substantially because i

think advertisers are going to or just

businesses are going to have to

advertise more to get the consumer

well right now that's not what's

happening

the ad rates on youtube usually when you

go from december to january fall like 15

okay big deal they're down like 28 to 35

right now that to me is a signal that

potentially businesses are actually

starting to advertise a little less

to prepare for the potential fallout of

the federal reserve hiking and that's

what we're seeing right now is a lot of

the of the market uh hedge funds

institutions banks everybody's preparing

for

this rate heights hike cycle now

why are we raising rates well because

we've had a lot of inflation the

inflation has happened do we expect it

to continue no once covid ends which we

don't know when cove it's going to end

that's a problem if coveted keeps going

we're going to keep having inflation but

once covet ends prices are going to come

back down

not only are prices going to come back

down once coveted ends but guess what

business is cutting on advertising

people cutting on their purchases

business is cutting back on hiring

whatever

that has the net effect of actually

helping inflation go down so ironically

you have this this really big fear

period or fear moment that we're in

right now which is okay

let's prepare for the fed rate hiking

rates substantially because of all this

inflation

uh and in doing so people actually

induce lower inflation and if at the

same time we peak on covid and covet

ends going into the summer then the fed

could actually turn dovish going okay

inflation's inflecting down things are

getting better market could rally could

could no guarantees or you could just be

screwed right that's always possible too

it just goes hyperinflation i don't

expect that and neither does the bond

market you need to look at this figure

every day folks

five year break evens uh but the problem

is a lot of the websites they don't give

you updates daily uh the bloomberg

terminal does shout out to bloomberg

love bloomberg they give you updates

daily i mean by the minute on this stuff

uh and i'm watching it all the time and

the point is the five-year break-even

rate which is the difference between the

five-year treasury bond and the treasury

uh inflation-protected security tips

that uh peaked in about november

and uh it has not gone higher over the

past two and a half months if anything

it's fallen which is crazy because if

the the

five-year break-even rate is falling

that implies the bond market thinks that

if inflation is going to come down not

actually go up so if you think about

this

you have the bond market saying

inflation is going to go down

you've got the end of covid whenever

that comes and maybe won't happen okay

then this will be wrong but once covet

ends inflation will go down it will go

down

uh then you've got the fact that people

are going to cut back and if people cut

back what does that do

inflation goes down because people are

spending less so prices have to come

down right that will happen

unfortunately though because the market

is getting so revvy and so prepped for

the disaster of the federal reserve

raising rates which quite frankly isn't

really that freaking big of a deal

you know people think that oh my gosh if

the fed raises rates to two percent the

10-year treasury's gonna go to like four

percent and the housing market's gonna

crash and everything

no it doesn't have to happen if you look

at history you can actually see that the

the ten year

uh has in the past during these rate

hike cycles uh gone up a little bit

leading into the federal reserve hiking

rates and then it stops

and when it stops the fed funds rate can

actually go above for short periods of

time what the five or 10-year treasury

rate is which is insane because it's

like wait a minute the fed funds rate

could actually be higher than treasury

yields so in other words there could be

a ceiling to how high treasury yields

could go yes there could be there is a

ceiling to how high treasury yields can

go so but the problem is what we have

right now is so much massive fear

uncertainty and doubt

because

we the markets don't know that the

markets aren't certain that a inflation

is going to go down

it may not that's always possible but

the problem is everybody seems to be

pricing in oh oh that's it

it's going to be a disaster prepare for

a disaster it really feels like the

market's trying to prepare for the worst

and i really think things are going to

be better but i can't guarantee that i

don't have chris paul so i'm putting my

money where my mouth is i'm investing as

if things are going to get better but i

do recognize that probably the next

three months are gonna be ugly i hope

not hopefully uh hopefully the december

meeting was the most bearish for the

federal reserve

maybe not though we'll see there are

expectations now that the federal

reserve is going to surprise hike

interest rates in january which if they

surprise hike interest rates in january

uh that that's going to crash tomorrow

people are going to freak the f out if

that happens so that would just be

terrible if that happened uh beyond that

uh

i i don't think rates are going to get

hiked in january we're still we're still

in the taper process and the taper is

not going to complete until march and

the federal reserve has told us not that

they can't change their mind but they've

told us we will not

raise rates until the taper is complete

then the taper is not expected to be

complete until march now it's possible

that they just come out and say okay

taper's done today uh that would be such

a shock uh that all the indices will go

down four or five percent this is my

expectation if something like that

happened but again i don't really expect

that

what could happen though prepare for

that

uh then you've got

uh the march meeting so the march

meeting is really what's going to be

interesting because that's where the fan

has forecast that they're going to raise

rates once

and that they could actually start the

quantitative tightening cycle as well

something special about that i'll talk

about

uh if they raise rates a quarter of a

base or a quarter of a percent which is

25 basis points no big deal uh the

market at this point has priced that in

but why are we still seeing pain if the

market's priced in that quarter percent

well because now

you've got people like bill ackman who's

shorting the market uh you know coming

out and saying you know what we should

do shock and awe like we had in the 70s

and 80s which is when the uh the

government completely lost control of

pricing it's mostly because they had

price ceilings we don't do price

ceilings anymore because they're an

economic travesty

and and when those price ceilings get

removed and you go off the gold standard

what do you end up with no faith in fiat

which don't get me wrong i realize a lot

of people don't have faith in fiat right

now as is anyway that's fine but

uh then you probably aren't in the stock

market anyway then you're probably in

crypto uh but the problem is even though

crypto lately has been less volatile

again we keep seeing the relationship

between crypto specifically bitcoin and

technology stocks get tighter and

tighter and that's an issue because now

it doesn't provide you that

diversification probably the best

diversification is

uh quite frankly cash

because it gives you that opportunity

people always say cash is trash no cash

is great this is why i went up to about

5.8 million of cash in november during

the rally i mean i was taking 10 days

left and right in november in hindsight

i wish i took more

but that's hindsight right hindsight's

20 20. i wish i took more i wish i

shorted more uh in november but i didn't

so you know now the part that i left in

the market or the part that i added to

early in december uh i i on these recent

purchases they're down

it's no shame in saying that's part of

the market okay but

march

uh markets expecting now or starting to

price in this half percent increase

well if we do end up getting a

sharp decline in economic activity not

to the point of recession but just in

the point where people are paying back

spending it's not risk not recession

fears but paying back spending so i

think you've got two extremes you've got

one extreme which is just recession the

other extreme is just continued insane

spending and growth and that would cause

hyperinflation right so one extreme is

hyperinflation the other extreme is

recession

in my opinion

uh and yes hyperinflation could also

cause a recession on the other on the

other side right so to both extremes you

could have a recession i think we're

gonna end up with something in the

middle that is people cut spending

inflation goes down and all these bad

expectations that are being priced in

the market eventually chillax a little

bit uh that's the expectation

but

until we have the certainty of those

results

we're going to keep seeing pain

uh that's the problem

and so when people ask why is the market

falling

this is why it's because the market is

pricing in that unknown uncertainty of

how bad are things going to get oh my

gosh what if the fed tapers early uh

ends the paper early oh my gosh what if

the federal reserve does shock and all

like bill lackman says people are

starting to prepare for that so they

pull their money out and this is going

to be one of the first periods of time

in a very long time where you can't just

buy the dip and then within 30 days

expect prices to go back up like people

are legitimately going to buy the dip

and they will be upside down and that is

gonna make them sad that is gonna make

them feel like crap that is gonna make

them feel stupid uh you know you'll get

that feeling in your stomach like oh my

gosh this sucks i'm a crappy investor

the stocks i pick or crappy whatever

right you get a feeling that pit in your

stomach

and uh and you almost you just want to

sleep more it's kind of just like i just

i just want to check out i don't want to

do anything you know stop the pain how

do you stop the pain you sell right

which generally the worst things to do

is trying to sell out of the bottom of

the market uh but ultimately you got to

do what what's right for you

uh and and for your mentality but uh

boy uh we're gonna keep having these bad

expectations and uh we're gonna keep

seeing this stuff get priced in uh i i

think

certainly until the federal reserve

meeting and jerome powell talking on

wednesday wednesday's gonna be a huge

day uh jerome powell talking on

wednesday's gonna help uh or her a lot

personally i think he went super hawkish

because of biden and there was a lot of

political influence

uh i made a short about how i've lost a

lot of trust in jerome powell because i

feel like he just you turned on the

whole transitory thing and it was almost

kind of like a rug pull not because

he believes that he needed to u-turn i

think it was political i think biden

realizes like

i'm not getting anything done

if uh powell screws me by not being

tough

then i'm not gonna re-nominate him you

know unless he gives me those blessings

and if and see he can

this is the funny thing about politics

okay listen to this

not only could uh

biden say to powell hey i'm only gonna

renominate you if you start getting

tough on inflation and then paul's like

okay i'll do it well it's always

possible that powell could have just

been like man if that i don't believe

that i'll just i'll just go back to

being dovish right but guess what

biden can then

go all right i'll just appoint five

hawks to the board and and they'll do

the tightening votes for me because it's

not all up to powell right so the board

biden's got a pick and nobody has picked

five people you know he could have given

him five hawks

and uh and then powell would be hands

tied so it's kind of like biden and

powell had to have alignment

and i really think biden realizes if he

doesn't do whatever he can in his power

to get inflation under control even the

pieces that he wants of build back

better aren't going to happen and if the

pieces of buildback better aren't going

to happen uh then then good luck in 2022

uh in in the midterms first of all we

already expect this we think democrats

are going to get reamed in the 2022

election uh and it's not political it's

just what what expectations are right

now

and uh and then it biden might end up

being a one-term president we you know

we could end up with a with with

desantis or abbott or or trump again in

2024 who knows that part doesn't matter

that's so far out right now that doesn't

matter but those are the fears

that biden has right now so because he

has to prove to people that he's

fighting inflation and powell is his

mouthpiece for that now part of me hopes

and it's just hope that the december

hawkishness was giving biden what he

wanted

i'm hoping that powell

tones dials it back a little bit you

know we've seen

some inflationary statistics in the

united states start rotating down which

is good cpi came in at expectations

month over month cpi came in below

expectations fifty percent of

expectations came into that point two

percent as opposed to 0.4 which was

really good pmi uh for services and

manufacturing showed lower pricing

pressures yeah you've got big pricing

pressures in germany and other areas

like that areas that have very rarely

seen inflation uh you know the eurozone

beat on inflation higher numbers bad uh

germany just came out with an insane uh

manufacturing survey uh

but but we got to focus on america

at least

most of us here watching this caring

about the the u.s stock market

so

all right

uh

this this to me means there is this

potential

this is sort of the bottom line of this

there is the potential

that powell goes back to being

his dove as long as the indicators start

rotating in the direction of

reduced consumer activity which implies

less inflation which we've already seen

in addition to the the inflation

measures i just talked about we've

already seen uh consumer mobility

plummet not only because people are

going to the office a lot of people are

working from home now more so than we

thought but also because

uh we're tracking tomtom apple and

google mobility data and the beginning

of january was a

plummet like from december 28th to the

beginning of january we had the biggest

plummet a bigger plummet in mobility

than what we saw in uh in the coveted

winter of 2020 which is kind of insane

to think about but but we did

so

uh

bottom line

if powell

goes dovish

i think we get massive rallies and

at some point that will happen as long

as covidents so let's make this crystal

clear

here we're gonna sit down for this okay

we'll make this crystal clear sit down

on the grass right here okay make it

crystal clear

as long as covet ends

as long as covalent ends

and

we start getting a slowdown in economic

activity but not to the point of

recession

then inflation will come down

dovishness will come back to the fed and

we'll get back to this balance

the two extremes are we slow down too

much we go into recession or we keep

growing like crazy which seems less

likely now we go to hyperinflation

market crashes due to new recession

i am betting on that middle road

i am betting on dovishness comes back

from powell

because consumer data starts rotating

down inflation pressures start rotating

down and you go to link down below and

sign up for masterworks check it out and

thanks for watching bye