You have 30 Days Left | The Great Market Reset

hey everyone me Kevin here I think we

have 30 days left all right let's

explain what I mean with 30 days left so

first we've got quite a few bullish

things happening in the market number

one we just had covid policies in China

finally softened a little bit now

they're not officially scrapping covet

zero they still got Cove at zero no no

no no no nobody nobody get confused with

thinking China's scrapping Cove at zero

no they are refining it they're

substantially reducing they've got a

20-point Playbook okay I'm just going to

give you some examples reduced wait

times less testing is the general theme

uh they're reducing the isolation

policies instead of a 10-day quarantine

it's five plus three at home they're

reducing how many people are affected by

it the close contact rule and this is

expected to really be a boon for

Airlines and travel to to to and from

China uh and so even though that still

sounds relatively extreme because it

kind of is cases are rising in China and

they're loosening policies well in

certain areas in cases are rising quite

a bit and if you throw up a chart and

you kind of compare cases you're like

really with that kind of average rise

yellow or loosening policies I think

it's because they finally realize if

they get rid of covet zero their GDP

will pop up like another two percent

which I realize doesn't sound like a lot

but when you're talking in terms of GDP

it's a big deal like China's growth

could be two percent next year or it

could be four percent next year and it

all comes down to covet zero but that's

not the only thing that's exciting

markets right now obviously the

inflation report that we had yesterday

was phenomenal people are calling this

the the the pivot the inflation pivot

not to be confused with the FED pivot uh

they're saying this is this is the big

Turning Point the bond market rallied

yields dropped like crazy and I think

most importantly uh bond yields or sorry

uh Bond break evens so the five-year

Break Even rate uh finally fell again

this was really important because it

started rising and the FED is crystal

clear that the last thing they can allow

to happen is inflation expectations

Rising uh or or essentially de-anchoring

because they believe believe that if

inflation expectations anchor high or

rise then it actually becomes

significantly more challenging to fight

inflation because if people expect

higher inflation then they'll buy more

today rather than next year because

they'll think that prices are going to

be higher next year so you may as well

buy this here this mostly doesn't apply

to obviously like you buying cereal or

bread this has a lot to do with are you

going to buy a plane for your company uh

well you might delay that to next year

when you think prices are going to be

lower if your expectations or prices are

going to come down uh you know business

equipment whatever that sort of

reduction in spending times the velocity

of money actually slows the economy

quite substantially now that those are

both good news items you do still have

companies like Bank of America though

saying hey you know don't get too

excited it's big Tech and growth

companies are still going through a big

D rating and we expect that D rating to

continue they're saying this D rating is

expected to continue because service and

wage inflation is still high and yes

this is true service and wage inflation

is still high and this is where I think

it's really important to look for

companies that we actually think can

grow earnings per share now I don't

think the market has actually properly

evaluated that sort of difference yet

and I think that's one of the reasons in

addition to obviously the Twitter drama

that you're seeing Tesla suffer as badly

as it is but if you are a Tesla investor

and you're scratching your head going

what the hell this is supposed to be

like a recession resilient stock I think

the what's happening is you've kind of

got a massive sell everything attitude

going on last week at Bank of America

alone when I have a statistic here Bank

of America alone not only do they have

net outflows of 4.6 billion dollars but

they basically suggested retail

capitulation was happening before the

CPI report money was flowing into bonds

and cash and uh really uh what's going

to happen in my opinion this in my

opinion I look I know I'm a licensed

financial advisor I know I've got some

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I believe that what happens is

we go through this Tech rating D rating

which we've actually already seen much

of I feel uh and you're going to see

companies that can actually still grow

EPS stand out with their forward returns

Above the Rest now that doesn't mean the

entire Market's not going to move up

you're going to see Uprising tide lifts

all ship so right if we have a rally for

the next 30 days Rising tide lifts All

Ships but the question is going to be

what are those returns going to look

like over the next year Well I believe

those returns are heavily going to be

Centric on or or you know are heavily

going to benefit companies whose

earnings per share is growing

substantially more than others so for

example if you have Amazon EPS flat just

as an example that doesn't mean it's not

going to go from 100 to 150 but if you

have their EPS flat and then let's say

Tesla's EPS is growing at 40 50 percent

I would expect an outsized return let's

just say

so again could be totally wrong and it

doesn't just have to be Tesla right look

at companies that are growing earnings

per share like crazy and also remember

that Goldman predicts the bottom of the

stock market actually tends to come six

to nine months before the bottom of eps

so you want to keep that in mind as well

so uh EPS growth companies uh there are

a lot of them you really want to look

for companies that have pricing power

which has gotten really challenged a lot

of advertising companies just don't have

as much pricing power as they used to

but they still have some pricing power I

think for example Netflix and Disney

going to a subscription ad model uh

subscription and AD model like cheaper

is is kind of a sign of a lack of some

degree of pricing power right

uh and and you've got uncertain systems

in terms of like hey are those

advertisements actually going to turn

any kind of profits for these companies

we'll see I mean certainly you would

expect more income than zero but is it

enough to actually make sense I mean

yesterday you had Amazon talk about

potentially cutting Amazon Alexa because

it's costing them billions of dollars

and uh you know the world just haven't

hasn't moved to voice despite how many

times garyvee over the last three years

has said everything's going to voice

it's either just not actually moving to

voice uh or I mean personally I still

find voice relatively frustrating it's

difficult to fully get it to understand

me I can type faster than I can get Siri

to understand what I'm saying which I

feel like is kind of ridiculous but I

sometimes I feel like Siri was better 10

years ago when it was actually it was a

little more than 10 years ago did you

know Siri used to be a separate company

it was actually bought by Apple it was

an app in the app store I want to say

like 2008 or 2009. I used to have it it

was an app called Siri Apple bought it

and it became part of Apple uh anyway so

look for companies with EPS growth a

substantial growth I actually think

Apple does have pricing power even

though their iPhone shipments are being

delayed because of covet in China I

think they still have substantial

pricing power that's another one uh

you've got obviously end face huge

pricing power and look if if rates do

meaningfully plummet and uh we then we

actually need to prepare with househack

because the real estate market as as fun

as it is to talk it down because

obviously we want to see prices come

down because I sold 85 of my real estate

in January and to to the you know April

and I want to go shopping for great

deals for investors with househack

because you know I'm putting my

reputation on house hack which we expect

the accredited investor thing will be

ready by the end of January by the way

the non-accredited that is accredited

it's obviously available now we had a

deadline coming up here on November 30th

but anyway

yeah so go to househack.com to learn

more about that and read the

solicitation this video is not a

solicitation but anyway if rates plummet

we're going to see a floor put under the

housing market very very quickly uh and

that's going to be a very strong support

for residential Investments type type

stocks see like the housing market needs

to stay bad probably through the summer

of next year for you to actually see a

derating of EP uh EPs and growth and PE

multiples at like a company like end

phase but otherwise they're growing like

crazy they're a phenomenal company it's

just If the Fed u-turns and prices come

down before uh the real estate market

really has that long of sustained pain

that people are like no no not buying

solar panels anymore uh and therefore

using in Phase inverters and and uh you

know well they're micro inverters or

batteries well then the interface could

survive uh very well uh so we'll see you

know we'll see everything is dependent

on Powell now do also remember when I

say we have 30 days left it's because

you have as CPI and the next CPI comes

out on December 13th if that comes in

bad

all of this excitement instantly

probably gets eradicated because then

it's like oh my gosh okay fool me once

uh you know shame on shame on you fool

me twice shame on me and uh look we've

been fooled before already we thought

inflation peaked and then we had a rally

and then it didn't and then we got

Jackson hold and then we got Jerome

powelled right so I just want to leave

you with this remember that Nikki leaks

from The Wall Street Journal Andrew and

Powell both together have made it very

clear the Federal Reserve hates stock

market rallies the only good news is

that break evens are falling that's the

only good news but otherwise you know

the FED is like we probably need to talk

this rally down otherwise we risk

getting a bad inflation report and

undoing all the progress we've made

that's bad but what's good is that

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and folks we'll see you very soon