i was wrong and i f'd up

oh my goodness i got myself a fresh

sarah doman brew here because boom i

hope you're celebrating today but we

have three important things to talk

about number one i was wrong and i could

be wrong again i want to show you

something number two the fed responded

to today's cpi print already and you got

to know about that then i want to show

you some stocks and traits that you

potentially want to pay attention to

which will go through towards the end of

the video let's get right into it so

look first in january when the nasdaq

was at like 353 i said the market

probably had 20 percent more downside

but i made a mistake i looked at the

technicals too heavily and saw a

quadruple balance at about 318 on the

nasdaq and thought wait a minute no wage

price spiral which is still true today

and

we might be getting that peak inflation

in march we did have that decline that

later came in april we thought hey maybe

that was a sign of the bottom

and we had a beautiful bear market rally

which uh really just led to some

unfortunate additional downside now the

reason i'm saying that i was wrong in

identifying the bottom i identified it

too early 318 was the qqq bottom that i

thought uh i kept maybe 20 of my cash

aside but i went in pretty dang close to

318. the truth is i could be wrong again

and so i want to be held accountable for

that and just be honest with you that i

could be perfect with this okay

now the good news though is we are now

using that 318 level as support we're

sitting at 325 now and today's cpi

number was going to be what either

created that 318 as support or

resistance again and clearly with a cpi

print the weight came in this morning as

such a beautiful miss all of the

expectations and the qualified

economists were wrong again and

inflation comes in outside of

expectations but fortunately to the low

side we have something beautiful an

inflection point and i have to caution

you though because this has happened

before and this chart might make you sad

now on one side you've got a lot of

individuals saying hey hey hey way well

like this is awesome that's it we've hit

peak inflation we're done no more

inflationary concerns we are going back

to the moon and i really hope that is to

be true but hopium is not an investment

strategy and this is where we have to be

honest with ourselves that we've hit

peak inflation previously and that's why

this chart here is a little bit

disappointing and actually gives

credence to a lot of the people who say

wait a minute real inflation first of

all is way higher than this report and

that's probably true but even if we get

an inflection in you know the cpi

inflation at least it gives us a softer

fed and probably means that even if real

inflation is twice as high even that

might be peaking right but the sad thing

about this particular chart here folks

is right here is that we have seen this

sort of peak before see that green dot

there we have been down this road before

that was march and then we got a decline

in april and then we went higher

than march and then we went even higher

the next few months and so that's why we

have to be real here and recognize that

uh-oh just because we got that march

peak over there and now we've got

ourselves another peak over here which

represents june now we just got the july

numbers which are thankfully lower over

here doesn't mean that we can't go

higher now one thing that is very

different though from that march peak is

that the march peak coincided with break

even expectations for inflation

way high in fact take a look at this see

here these are the march break even

inflation expectations that's just a

fancy way of saying what does the market

think inflation is going to do and

what's so important about this

is that this line tends to move three

months before

cpi moves and that's really important

because if we did hit a peak here in

march this was a warning that the actual

peak wouldn't really come until three

months later which ended up taking four

months came in july right uh four months

so anyway that's really fascinating and

this decline which i'm going to move

myself here for a moment this decline is

ahead of us which is really really

exciting that that decline in breakevens

is ahead of us and it is a reason to be

optimistic even though 8.5 inflation is

still pretty dang high in fact take a

look at this

this was a reply tweet uh and i want to

give a shout out to it because it was

kind of funny this reminds me of you i

love you bro i love you too man

march inflation is 8.5 no

terrible

and then of course august inflation is

8.5 let's go we're going back to the

moon

like

yeah it kind of is because the reality

is the answer here the logic here is

that this is the uptrend and then now

we're on the potential beginning of the

downtrend but again i've told you i've

been wrong and i could be wrong again

now i do believe maybe i'm biased i

probably am because i'm talking about

myself here i think i've been a lot more

right than i've been wrong for example i

literally to the day timed the bottom of

the dollar shorting the dollar in fact

here on screen is a post that i posted

when the dollar was at the bottom

talking about how i want to get into

what i was calling the great dollar

short and how i'm shorting the dollar

with options to leverage that a little

bit but not margin because i hate margin

but that i expect a substantial

retracement to the upside uh in in a a

dollar short position which would mean

the dollar falls right this chart you

see here is an inverse right so as it's

going down the dollar is actually going

up but i am investing expecting the

dollar to go down and therefore this

chart to go up but anyway these you know

there are

so many things about our macro economy

that say right now this could actually

be it this could be peak inflation and

we could be wrong like i said been wrong

before but we've got energy and

commodity prices coming down and it does

look like we are seeing a broadening

decline of inflation this is great now

the fed has responded to this and i

think this is important to look at as

well in terms of what kind of response

we've already gotten because it's going

to set up more of the responses this

market is going to experience from

fedspeak over the next month because

keep in mind we now have basically a

month of freedom to go play in the stock

market without having to worry about a

stupid inflationary overhang again and

so what the fed says over the next month

will matter and so here's what the

federal reserve told us this morning

right after a quick message from our

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charles evans the president of the

chicago fed told us that this report is

the first positive report we've seen and

he says that look we've tightened

monetary policy quite a bit but he does

expect that we'll continue to increase

rates the rest of the year and into next

year in line with the summary of

economic projections that the fed gave

us which is that we should see 3.4 by

the end of the year and somewhere around

3.75 to 4 by the end of 2023 this does

set up the stage though that the fed

might begin to slow down in fact fed

evans goes as far as saying quote i feel

like we're in a good place

and we can pivot to being more

restrictive if inflation gets out of

hand in other words as long as we stay

on this disinflationary trend we still

have high inflation don't forget that

it's still a big number right but as

long as we continue on the down this

inflection down this disinflationary

trend the fed can relax a little bit and

so what's the bond market doing which

the bond market's been pretty dang good

at predicting what the fed's going to do

the bond market tells us that now

we only have a 28

probability of a 75 basis point hike in

the september fed meeting which is

september 21st relatively still far away

about five weeks away that's down from

52 percent just a day ago that means the

market has really softened its

impression of the fed continuing to

spank us around and even though fed

evans says we continue to see supply

chain challenges and in hindsight we

should have raised rates six months

earlier he actually expects the second

half of the year to be quite

positive which is a really interesting

note coming from the federal reserve

that

they're not looking at this market as

gloomily as they did back in january or

or really december when they began to

have their fed flip-flop in fact take a

look at this on screen here this right

here is a video that i made on january

5th and i wrote the fed just crash

stocks the worst report yet and in this

report when you actually go through the

report you will see and you could look

at the most popular timestamps here you

will see the most horrible phraseology

from the fed yet with how bad this

report was it's actually a good lesson

to go back and watch that video because

it shows you how rough the fed was and

how badly they really had to kick us in

the behind to make us realize oh crap

things are about to be bad it still took

me about 16 days to go oh man wait a

minute this guy means something for the

portfolio but holy smokes

when i hear the feds say in fed speak

except this expect the second half to be

quite positive we're finally getting

bullishness from the fed back

also fed's kashgari just spoke

as i have been recording this video the

current updates are that he believes we

are far far away from declaring victory

on inflation which is of course that

because remember they have to talk

inflation down that's what they do they

move their or their mouths to push down

inflation right and he says that he's

happier that inflation is surprised to

the downside but it doesn't change the

rate path expectancy for him he instead

believes that we're going to get to 3.9

at the end of this year 4.4 by the end

of next year which is a lot more hawkish

than what the market is currently

pricing in and could set us up for some

more downside these sorts of this sort

of talking the market down very very

very common so be prepared for that kind

of stuff to happen in the stock market

he does say it's much more realistic

that we're going to raise rates and then

leave them there until inflation is on

its way to two and a half to two percent

so this does mean the fed is going to

continue on their path so don't hold

your breath too terribly much that the

fed is ready to u-turn any minute

because they ain't and the market so far

is taking this commentary from kashkari

in stride as this commentary is

occurring right now as we watch qqq only

slightly rotate to the downside off of

highs of the days right now but i want

to take this opportunity to talk about

some suggestions that i'm seeing in the

market it's very very popular for us to

get frustrated and i call this the sort

of the rising tide fallacy it's very

very popular for us to get frustrated

when we invest in stocks and then we see

everybody else's stocks go up but one

thing that happens psychologically is

when everybody else's stocks go up it

actually starts yanking on the stocks

that are left behind and eventually

those tend to catapult up which is

pretty remarkable and it's a

psychological phenomenon but it's also

one that's based on valuations right if

a house in a neighborhood is selling for

400 000 and all of a sudden five comps

sell for 500 well houses of that model

selling for 400 are probably going to

start rubber banding up and by the way i

think

if you're not in real estate yet you

have some massive opportunities coming

up for investing in real estate and this

is why as soon as possible you should

get into the real estate investing

courses linked down below if you bundle

that with bundle one with the stocks in

psychology you get my trade ideas like

the great dollar short or positioning

fundamental analysis which people really

really seem to love some of the

fundamental analysis uh that we're doing

and i'd love to have you in those take a

look for example at just the little post

that i wrote this morning which relates

to this idea of sort of the rubber band

look at this so end phase is up 57 here

today one of my favorite companies one

though that i do believe has some

headwinds coming from real estate you've

got apple down eight percent

year-to-date microsoft 14 amazon 17

google 17 qqq 19. but look at what's

lagging you've got tesla still down 29

year-to-date nvidia down 42

personally i believe both of those could

end up being rubber band opportunities

that once the bad news is out of the way

the twitter overhang the glut of chip

supply overhang once that bad news the

gaming overhang once that bad news goes

out of the way you end up rubber banding

to where these others are the same is

true in reverse for something like end

phase which in my opinion has run too

much

is likely to get rubber banded down it's

not in a position that i really want to

buy it right now though it is very

difficult to shorten this market because

when you take this sort of basket and

the macro economy is driving everything

up even something that fundamentally is

overvalued can still go up and so that

is another risk factor

and of course i encourage you to use the

coupon code because yeah look i know the

coupon code's expired the price goes up

over time as we add more value so you

get the best deal when you join early

and any new content for the courses is

coming free to those courses in fact

we've got huge plans for expanding the

real estate course to some new topics

that'll be really fun updates coming to

the property management course updates

coming for more fundamental analysis in

the stocks course which we do every day

in the live streams which i highly

encourage you take advantage of those

live streams on average get somewhere

between four to seven thousand views

every day and there's a reason they do

is because there's really good

fundamental analysis in there and even

though i might not trade on every single

move there are a lot of lessons that you

could learn from them so

i do also want to shout out that if you

haven't yet followed me on twitter you

could do so and you can get some great

responses and commentary like this see

this morning i wrote we're going back to

the moon baby this is it i've got my

sarah dolmen brew and we're ready to

rock of course the emperor replied with

he's going to regret this tweet to which

i replied your mom will and then of

course there are responses like this the

excessive bullishness in

terrible macro conditions probably won't

work out best cpi is likely manipulated

and real inflation is obviously much

higher the whole rally is a retail trap

at least tell people there's a lot of

downside risk well that is what i think

i'm doing in this video is that a i

could be wrong right uh b i think that

there are other downside risks i'll tell

you what the biggest downside risks are

right now the biggest downside risks are

the following

a slow decline in cpi where cpi goes

down but then it like levels off at like

eight and then the fed's like

okay i guess we have to hike more to

actually get it to go down more right so

even though cpi could go down if it goes

down too slowly that's a risk we could

see an earnings recession and even

though bank of america tells us that

even poorer individuals are still

spending as much money or are still

spending more money now than they did

last year we still have spending growth

we could end up having an earnings

recession however we could see a tale of

two cities event here where some stocks

do poorly and others do very very well

and that is going to be predicted or

predicated rather by earnings uh but

also then we have like i think more new

more like um

edge case scenario dangers like world

war three right taiwan keeps complaining

about increasing tensions between china

and the worst aggressiveness that we've

seen since the 90s and even japan is

complaining that china is dropping bombs

in their exclusive economic zone as uh

training missiles you know these are

things that increase tensions

but really i think if anything they'd

create an opportunity for for buying and

being in this market i've bought more

the last few days and really i'm i'm a

big fan of at these levels i'm ready to

ride and i'm ready to run with you so uh

that's very important now i did have one

other question that came up and it was a

question about qt my thoughts on uh what

about a q a t well so regarding

quantitative tightening something to

know about this is

yes it can restrict the supply of money

that is outstanding which can reduce

pressure buying pressure on stocks

it could also increase selling pressure

on stocks although a lot of institutions

are sitting pretty cash heavy right now

so once we confirm a bottom and that the

bear market that this is not a bear

market rally we would expect more

institutional cash to flow in but qut is

really interesting mostly in my opinion

for keeping that the treasury yields

high uh and high would be like 2.7

percent on the 10-year or something like

that which does put more downside

pressure on the real estate market so qt

in my opinion quantitative tightening is

the rolling off of treasury bonds

and the selling potentially of

mortgage-backed securities

don't worry if you don't know what any

of that means basically qt in my opinion

is likely to keep treasure yields higher

and i think it has the biggest overhang

on real estate not necessarily the

biggest overhang on stocks which i did

spend about two and a half to three

hours this morning again working on more

documents for our attorneys for our

series a that's coming up course members

will have the first opportunity to

invest in the series a and if we have

any kind of warrants that go along with

that first investment which is like a

free call option uh which which we might

end up doing tbd this is not a

solicitation this is just sort of

teasing what's going on in my life uh

then then course members will get uh the

the biggest uh share of those or biggest

benefit of those at least that's the

expectation of how we're structuring

things now

but folks we're really really excited to

buy real estate so uh you should be

buckling up and at least get educated on

real estate just make sure you stay away

from two things in my opinion i don't

think you directly want to invest in a

syndication indirectly could be

different you know if like a company

you're investing in to syndication

separately but you get like the promoter

fees i think that's okay uh i am not a

big fan of reits because i like

investing in companies that can reinvest

cash flow and build wealth even more for

the company and shareholders uh and i do

think the worst thing you can do in this

environment either way is flipping so i

would really caution against flipping in

this market look for good deals

hot maybe even get into short-term

rentals but remember short-term rentals

or a job and take time and work

all right folks thank you so much for

being here appreciate you love ya

[Applause]

[Music]

you