just lost LOTS of money - wtf just happened

Summary

In this financial analysis video, Kevin discusses his recent hedge losses due to positive economic data, despite his bearish stance. He shares his skepticism about a second wave of inflation and predicts deflation, leading to joblessness. Kevin reveals his current investment strategy, focusing on real estate and expressing optimism about the mortgage sector, which he believes will benefit from lower interest rates in a soft landing or recession scenario. He also provides a personal update on his studies and family life.

Takeaways

• 📉 Kevin experienced significant losses in his hedges due to positive economic data, which he anticipated would negatively impact the market but instead led to a rally.
• 📈 Despite good inflation data, Kevin maintains a bearish stance, concerned about a Q3-Q4 slowdown and potential deflation, which he views as beneficial for consumers but detrimental to jobs.
• 🏠 Kevin is actively investing in real estate, specifically 'wedge deals,' which are averaging around $134,000 each and are currently performing well.
• 📚 He is studying for the FINRA Series 86 and 87 exams and spending quality time with his family, including building a greenhouse and playing with Nerf guns.
• 💼 Kevin discusses a new stock sector of interest, the mortgage sector, which he believes will benefit from a soft landing or recession due to falling interest rates and increased refinancing.
• 📊 Google Trends data indicates a spike in refinancing searches, which Kevin believes will positively impact mortgage companies' earnings and the value of their held mortgages.
• 📉 Kevin closed his hedges after the CPI data release, acknowledging the current market uptrend and the difficulty in timing the market's reaction to economic data.
• 💡 He sees the mortgage sector as an asymmetric market opportunity, with potential for growth in both a soft landing and recession scenarios, and has set price targets for Rocket Mortgage and United Wholesale Mortgage.
• 🚫 Kevin emphasizes that the video is not personalized financial advice and that any investment decisions should be made with thorough research and consideration.
• 📈 Despite the current market rally, Kevin remains cautious, believing that the inverted yield curve signals a delayed recession and that the market may overreact to rate cuts by the Federal Reserve in the future.

Q & A

Why did Kevin describe it as a 'tough day' for him at the beginning of the script?

Kevin described it as a 'tough day' because his hedges performed poorly, resulting in a significant financial loss, which he humorously compared to the value of a small house in Florida.

What economic data did Kevin refer to as 'good' during the week?

Kevin referred to PPI (Producer Price Index) and CPI (Consumer Price Index) as 'good' economic data, indicating that these inflationary indicators came in better than expected.

What was Kevin's expectation regarding the impact of good inflationary data on companies and earnings?

Kevin initially thought that good inflationary data would be negative for companies and earnings, but instead, he observed a market rally, suggesting that the positive data was being interpreted as a reason to buy stocks.

What does Kevin mean by 'Nike Swoosh recovery'?

The 'Nike Swoosh recovery' is a metaphor Kevin uses to describe the market's volatile recovery, which, like the Nike logo, has an upward trend but with fluctuations.

Why is Kevin concerned about a Q3 Q4 slowdown and 'lessness'?

Kevin is concerned about a Q3 Q4 slowdown and 'lessness' because he anticipates a decrease in economic activity and possibly a deflationary environment, which could negatively impact jobs and consumer spending.

What does Kevin believe about the second wave of inflation?

Kevin does not believe in a second wave of inflation, arguing that overcapacity in manufacturing and a lack of demand will prevent prices from rising significantly again.

Why did Kevin close his hedges after the CPI data?

Kevin closed his hedges after the CPI data because the market continued to rally despite everything retailing, indicating that his bearish strategy was not aligning with market movements at that time.

What new stock sector is Kevin increasing his position in, and why?

Kevin is increasing his position in the mortgage sector because he believes it will benefit from lower interest rates, whether in a soft landing or a recession scenario, due to increased refinancing activity and the value of existing mortgages held by companies.

What is Kevin's view on the current state of the inverted yield curve?

Kevin believes that the inverted yield curve is getting more inverted, which traditionally signals a potential recession, and he thinks this could push the Federal Reserve to make significant rate cuts in the future.

Why does Kevin think the mortgage sector could be the best performing sector in the next 12 months?

Kevin thinks the mortgage sector could be the best performing because he anticipates increased refinancing as rates come down, which could boost the value of existing mortgages and the earnings of mortgage companies.