I Was Wrong.

hey everyone meet kevin here i was wrong

in this video i'm going to tell you

exactly what i was wrong about

what difference it makes

what change i'm making

why it's happening

start with the background

what i projected which bear in mind most

folks in finance will never give you a

projection because they are so fearful

of being wrong

most of you know and i think that's why

you follow this channel

i don't care about being wrong

i'd rather have a plan and a just

direction as needed and in this video i

admit i was wrong about something

let's break it down in december and

january

uh so last december so december of 2020

in january of 2021 i made numerous

videos talking about how we were going

to have a lot of coming inflation

fud fear uncertainty and doubt there

would be a lot of what i called

clickbait articles about how bad

inflation was and that's because we'd be

comparing to this whole of 2020 and we

would see this massively large

inflationary reading on year over year

levels and that we would have a summer

potential reopening boom and we would

see inflation surge especially if these

two things overlapped

and that would likely lead to supply

chain shortages or product shortages and

we would either be paying i said this

almost a year ago we would be paying

with our with increased money aka

inflation or we would be paying more

with our time as we wait longer for

products or services like airplanes deal

with cancellations or whatever these

things have turned out to be true

i also though

suggested that we would have a stock

market rally in the last quarter of

2021. i said we would have this rally at

the end of 2021 in my opinion because

markets would begin to realize that this

inflation will not last forever and will

probably have an inflection to the

downside in inflationary readings when

we get our september and october data

the reason i said that was because i

knew that in september the unemployment

boost would expire people would go back

to work i expected the summer spending

boom to go away i expected supply chain

shortages to soften out i expected

spending to somewhat fall as you go into

the fall because first you have your

reopening boom people like yay i'm

living life again and then you're like

wow i spent a lot of money now i'm gonna

like save a little bit again and not go

back to being as frugal as we were

during the pandemic because a lot of

people saved a lot more during the

pandemic we also got a lot more stimulus

payments than that but that we would we

would go back to some sort of normal

level of spending maybe normalize back

to a 2019 level of spending

right so those were my projections and

they're documented in

many dozens of videos that i've made

updating you along the way over the past

nearly year talking about 10 to 11

months that i've been talking about this

crisis coming

and this potential end-of-year rally

upon an inflection point in inflation

but i was wrong we did not get an

inflection point in inflation

inflation instead

has stayed

longer

more persistently and been larger than

expected that's because supply chain

crises have been worse than expected the

amount of monetary and fiscal support

that our country has gotten has been

insane in other words the money printer

has been rolling really fast okay people

have more money than we've ever had

before

in a weird way we also thought that

there was going to be an inflationary

fear because we expected the velocity of

money or how much money circulates in

our economy to go back up it hasn't a

lot of people have been taking their

extra money and actually investing it

and building their wealth they're buying

real estate they're buying stocks

they're investing in cryptocurrencies

which we're going to talk about in this

video as well and a big change i'm

making my portfolio

they're learning everything that they

can they're taking things like the

zero-to-millionaire real estate

investing course or the stocks and

psychology of money course linked down

below with that 41 off coupon code

expiring on the 29th of this month which

is in like two weeks

which is all great

but

even though the velocity of money is

staying low which should dampen

inflation

we're still seeing prices go up

i expected that in october and november

of this year we would start to see

inflation inflect down

but we're not seeing it and it's

partially because companies haven't been

able to pass along the full cost of

product increases or product price

increases yet

for example

let's say i'm gonna make an ipad

and i'm gonna sell you this ipad for

let's call it a thousand dollars this

one's less than a thousand dollars but

we're gonna call it a thousand dollars

right let's say it cost me five hundred

dollars to make this ipad well if my

costs went up to seven hundred dollars

and i still want to make 500 profit i

have to raise the price of this ipad by

200 because at 200 of supply-based

inflation

uh price is going up for supply costs

and therefore product costs my margins

get squeezed i'm no longer making 500

i'm making 300.

what most companies are indicating is

that they've only been able to raise

prices about half of the increase

of product costs which means that if

the cost of manufacturing this ipad went

from 500 to 700 or 200 increase i've

only actually been able to raise the

price of the product from a thousand

dollars to eleven hundred dollars which

is only making up for about a hundred

dollars of the difference that means we

actually have

delayed inflation still baked into

products

and prices have not gone up fully yet

which means we're actually seeing

inflation

longer than expected and it's going to

stick around

more than anybody thought

no i don't want to say that anybody

thought because i know that there are

many people who believe that inflation

is way worse than what the government's

telling us which is true i mean to some

degree if there's more inflation built

into this product and it has not been

realized yet then even though

the government report could actually be

correct in the way they're measuring it

it would actually be wrong in telling us

how much inflation to expect going

forward because it has not all yet been

realized in product prices or the

reports are just rigged both in fact you

could have a combination of both to some

degree right

but

that doesn't matter so much i think most

of the market right now is in agreement

with what we believed a year ago what we

believed a year ago was we were going to

see

inflation spike

and then eventually taper down

and this

has not started happening yet we are

right here

and unfortunately this little shelf here

is lasting longer we're still hoping

that this goes down but this inflection

point that i thought would be realized

in october and november of 2021 has not

happened yet and now it's anybody's

guess is it going to be

march or should i say q1 is it going to

be to q2 or the summer of next year we

don't know

but what's really interesting is two big

things are happening in the market and

they're affecting the way that i'm

investing

number one

has to do with crypto and number two has

to do with what the market actually

thinks about inflation so let's talk

about crypto first

i believed that if we got an inflection

to the downside two things would happen

one cryptocurrencies would fall and

technology stocks would go up that's

what i believed i believe that

cryptocurrencies would go down because

cryptocurrencies

uh a lot of folks invest in

cryptocurrencies because they want an

inflationary hedge this summer when used

car prices were going down before

inflecting back up when lumber prices

were going down before inflecting back

up when oil prices were going down

before inflecting back up guess what

cryptocurrencies were doing

falling the 10-year treasury rate was

low this summer it was down to like 1.25

and cryptocurrencies were low at the

same exact time because inflation

expectations were falling we thought

that's it we're on trajectory the

inflationary curve is going down but

unfortunately the reason we got this

curve down was in part due because of

the delta variant in a very brief kind

of slowdown

and all of a sudden commodity prices

started going up used cars lumber uh

aluminum uranium

every commodity essentially has been

skyrocketing it said lithium you name it

and now

supply chain issues are even more

strained under high product costs and

shipping issues and port congestion is

worse than it ever was before

to where the port of los angeles and the

port of long beach are going to a

24-hour shift to try to squeeze out

another 60 hours of work a week

just to try to get product moving it's

nutty right

and so what have we seen over the last

three to four weeks as we've seen

inflation be more persistent and longer

line it up with when jerome powell

started talking about when inflation

started being recognized as being longer

lasting and more persistent and you will

see cryptocurrency prices go up

and so what i have done

over the last six weeks is i've actually

increased my cryptocurrency portfolio to

be larger than anything i've had

previously previously my max

cryptocurrency holding was about 580 000

there were some fluctuations over the

last uh eight or so weeks where i did a

little bit of selling and then buying

back so i was able to lower some of my

cost spaces but in addition to lowering

my cost spaces in crypto take a look at

my coinbase pro now

right now in my coinbase pro which

doesn't represent all of my crypto i

have some over i know this sounds crazy

but i have some at robin hood because

coinbase was down and so i have like 70k

of ethereum and a little bit of bitcoin

like 40k of bitcoin over there but

anyway uh and it is so i mean okay so

that would take me to what uh 40 plus

two it's just under 1.4 million in

cryptocurrencies so anyway you could see

that i've actually placed a lot more

money into cryptocurrencies than i ever

have before and and i'm doing so because

i recognize at least for the time being

the inflationary fears are going to stay

and i want to be on that ride so i'm

increasing my allocation to

cryptocurrencies to about six to eight

percent of my portfolio and i'm

considering raising that to eight to ten

percent and i might shave that back down

once we get to

that inflection point now don't get me

wrong i love cryptocurrency so i don't

want anybody think i'm like paper

handing it's trading i know i'm going in

to make money and to trade right there's

fundamental

there are fundamental ways to invest

there are technical ways to invest and

then there are momentum ba ways to

invest this is part momentum part

technical and then part inflationary

hedge kind of trading so it's a little

bit in my opinion a mix of all

but anyway i'm going in with a very

clear mindset that i'm increasing my

position here as a head but

at the same time there's something

really interesting and weird that's

happening and this is the second thing

that's happening with price action and

it has to do with tech stocks

folks tech stocks are starting to blow

up again and this is really weird

because remember the whole point of me

saying i think there's going to be an

inflection to the downside

was to suggest that tech stocks would do

well so i'm like 80 invested in tech

stocks or fintech stocks

a firm i'm in on this thing

at a cost basis of like 95

uh maybe even less i could because

something like 88 dollars because i just

kept adding adding adding adding i

bought a little bit then i bought more

and i bought more and more more anyway

so uh the thing's at 150 dollars right

now it's insane it's just run run run

run run it's crazy uh end phase i've

added like crazy to this in the dips

over here now we're coming back to 173

we're on a run again i've got over uh

somewhere around nine and a half million

dollars of tesla this thing has been on

a straight run up in just the last two

months and you're seeing it over and

over look at sofi another fintech

company that's blowing up here recently

you got a nice trend up look at

matterport another one of my massive

favorite holds this thing has

totally left its summer channel over

here this was ipo insanity and momentum

but it's finally getting a fundamental

liftoff in its pricing

and so we're seeing this really cool

transition which you're not seeing in

everything like you look at something

like docusign you're actually seeing a

little bit of a bleed down as coveted

fears are going away and the

stay-at-home traders are kind of exiting

positions like docusign that's okay i

mean i'd like docusign to be cheaper so

i can actually build a real position in

this but uh otherwise

you're seeing some good growth in some

of my favorite favorite stocks so in a

weird way it's almost as if we're

potentially still seeing the start of an

end of 2021 rally

even though we didn't get the inflection

point in inflation yet which is crazy

because it's like wait a minute we

thought the inflection down in inflation

would lead to a rally instead what ended

up happening is the catalyst the major

fear catalyst of things like evergrand

uh the debt ceiling the budget deficit

the infrastructure packages the taper

all these things happen and uncertainty

escaped our market like now there's

nothing to really be fearful of anymore

at least like near-term there's really

nothing where people are like oh this is

it this is the next big catalyst for a

crash right a lot of fear and

uncertainty has escaped so we're seeing

this sort of rally

but the other thing that's crazy and

this blows my mind as well

is the 10-year treasuries and 10-year

break-even rates

are starting to rotate down again when

they've certainly capped so take a look

at this if we go over here to a

one-month chart we can kind of see this

capping

of the 10-year treasury yield with a

dick with a peak around 1.61 which is

way lower than that

1.75 ish that we had at the beginning of

the year so we never got back to those

levels and more recently which is

amazing we're seeing a decline after

getting higher than expected cpi data

why

because folks

the market knows yes

yes inflation is here it's going to last

longer but we're not going to

hyperinflate we've got a very strong and

efficient economy let's invest in the

tech companies that have high profit

margins that have cleaned up their

workforces and have a more efficient

workforce that are investing in better

supply chains because i'll tell you

we're going to look back at 2021 we're

going to look back and go damn that was

the year to just buy buy buy because in

my opinion in the years going forward

we'll look back and go man how did these

companies get so freaking efficient how

did they get their margins up so high no

guarantees the market could fall it

could slow down and all this but

i've put almost all of the cash i have

into technology

and crypto about six to seven percent

crypto 80 in tech stocks and uh then

then of course a little bit of cash uh

to pay some taxes

but uh folks i'm very very very

optimistic i'm optimistic about what i'm

seeing in the bond market for treasuries

predicting that slowdown in inflation in

the future the market's accepting that

inflation is going to be here for longer

and while inflation's going to be here

for longer we're pushing crypto up that

makes sense

and this is the cool thing that i love

we're actually also participating in

potentially that end of 2021 rally in

tech stocks going up because of tina

there is no alternative tina like why

would you invest

in a dying company

or something that's not innovating when

you could invest in a big fat innovator

something that has really good profit

margins now that's not to be confused

with a company that's losing money hand

over fist and is speculative some of the

newer specs the newer companies

dangerous you got to be careful

but the big boys the ones with really

good profit margins particularly some of

my favorites and phase etsy

tesla's margins their gross margins are

amazing affirm even though they're

losing money these are companies to pay

attention to very very excited i i can't

be more excited for your future and i'm

really happy with all the decisions that

i made so far

even though i was wrong

about the inflection point in inflation

the market is

reacting better than i could have

expected

so there you have an update if you like

my thoughts and perspectives check out

the programs link down below on building

your wealth and folks we'll see the next

one thanks so much bye

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