GM Fired Me

Summary

In this video, Chris discusses job layoffs, market conditions, and investment strategies. He highlights GM's layoff of 1,700 workers and explains how market uncertainties, including economic growth scares and potential job losses, are influencing companies like Intel and GM. Chris also covers the impact of interest rate cuts by the Federal Reserve, the role of companies in maintaining profit margins, and the AI bubble surrounding Nvidia. He advises a cautious approach to investing, favoring value stocks, bonds, and CDs for consistent returns in the current unpredictable market.

Takeaways

• 📉 General Motors is laying off 1,700 workers in Kansas due to retooling, and the future for these workers is uncertain.
• 💼 Job insecurity might become more common, especially in industries undergoing restructuring or companies aiming to maintain profit margins.
• 📊 The Federal Reserve recently cut interest rates by 50 basis points, claiming it isn't worried about jobs but is focused on managing inflation risks.
• 🔄 Companies like Qualcomm potentially buying Intel could lead to layoffs, especially in overlapping or redundant roles during mergers.
• 📈 Investors need to consider the risk and growth potential when investing in companies, especially as companies constantly retool and innovate.
• 💰 Bonds and CDs offer stable, guaranteed returns, whereas stock market investments, especially in big tech, may be riskier given current high valuations.
• 📱 The new iPhone 16 has been released, but it may not drive major growth for Apple as the product upgrades are seen as incremental.
• ⚠️ Nvidia has been a key driver of the S&P 500's returns, but there are concerns about it being an AI bubble that might burst.
• 🌍 Geopolitical tensions, such as the Israel-Lebanon conflict, add uncertainty to the markets and global stability.
• 🏛️ The upcoming US elections add political uncertainty, especially regarding industries like clean energy and banking regulations.

Q & A

What is the main topic of the video?

The main topic of the video is layoffs in the job market, with a focus on GM's recent layoff of 1,700 workers, and broader trends related to the economy, stock market, and job security.

Why is GM laying off 1,700 workers?

GM is laying off 1,700 workers to retool its Kansas plant. Although GM claims the layoffs are temporary, workers face uncertainty about when or if they will return to work.

What does the presenter mean by a 'growth scare'?

A 'growth scare' refers to concerns that the economy or certain companies are not growing as expected, leading to layoffs and cost-cutting measures, especially to maintain profit margins.

What is the significance of the Federal Reserve's recent 50 basis point rate cut?

The Federal Reserve's recent 50 basis point rate cut is aimed at preventing inflation from cooling too much, indicating concern about slowing growth despite claims that the economy is strong.

Why does the presenter mention Qualcomm's potential acquisition of Intel?

The presenter mentions Qualcomm's potential acquisition of Intel because such a deal could lead to job losses at Intel due to redundancies. Mergers often result in cost-cutting through layoffs.

How does the presenter view Nvidia’s role in the current stock market?

The presenter believes Nvidia has been a major driver of S&P 500 returns, attributing much of the market's recent performance to an AI bubble, and warns that if this bubble pops, it could negatively impact the market.

What investment strategy does the presenter recommend in the current market?

The presenter recommends a conservative investment strategy, favoring bonds, CDs, and value or dividend stocks, as they provide more consistent returns, especially during uncertain economic conditions.

What are the risks associated with investing in stocks, according to the presenter?

The risks of investing in stocks include uncertain growth prospects, particularly if major drivers like Nvidia underperform. The presenter is cautious about stocks, especially tech stocks with high valuations, which may not offer sustainable growth.

What does the presenter suggest about the future of the housing market?

The presenter suggests that the housing market is tied to inflation, and if more people lose their jobs, demand for housing will decrease, potentially lowering prices, though this comes with significant pain for those affected.

What does the presenter say about the political and war-related uncertainties in the market?

The presenter mentions uncertainties related to politics, such as the upcoming election, and geopolitical tensions, like the ongoing conflict between Israel and Lebanon, which could further impact market stability.

Outlines

00:00

🤔 Economic Uncertainty and Job Layoffs in the Market

The speaker introduces the topic of job layoffs, mentioning GM's plan to lay off 1,700 workers. This raises concerns about the broader market's future, particularly with the uncertainty in economic growth and employment. The Fed's recent actions, such as cutting interest rates by 50 basis points, signal fears of inflation cooling too much. The speaker emphasizes that these layoffs and market dynamics reflect deeper economic challenges, particularly for new investors trying to understand the current situation.

05:00

💼 Qualcomm and Intel Merger Rumors and Job Security

Rumors surrounding Qualcomm potentially buying Intel could result in job losses, as redundant positions may be cut. Intel, which has struggled in recent years, might experience restructuring if this deal goes through. The speaker advises caution when considering investing in Intel stock, acknowledging its history of underperforming. This segment discusses the consequences of mergers and acquisitions, particularly the negative impact on employees, and how investors should weigh such risks.

10:00

📈 Stock Market Strategies: S&P 500 and Tech Stock Bubbles

The speaker delves into stock market strategies, specifically discussing the S&P 500 and the impact of the AI bubble, with Nvidia playing a central role. With Nvidia driving a significant portion of recent returns, there are concerns about a potential market downturn if this bubble bursts. The speaker touches on the importance of watching company earnings and the broader economy's growth, and offers advice on investing in index funds as a safer long-term option compared to individual stock picking.

📱 Apple’s New iPhone and Product Cycles Impacting Investor Decisions

Apple's new iPhone 16 release is discussed, but the speaker expresses reluctance to upgrade, emphasizing the importance of product innovation in attracting customers and growing revenues. The conversation connects this to broader investment decisions, explaining that investors should seek out companies with continuous growth potential. However, for those investing in dividend-paying companies like McDonald’s or Coca-Cola, the focus may shift to consistent profits rather than high growth.

💰 Balancing Portfolios: Bonds, CDs, and Stock Market Risks

This section focuses on creating a balanced investment portfolio by including bonds, CDs, and stocks. The speaker emphasizes the importance of guaranteed returns in the current uncertain market, advocating for a diversified approach. They stress that while AI stocks have led the recent surge, these investments carry significant risk. As an alternative, value stocks and dividend-paying companies are recommended for more stable, long-term returns.

🌍 Geopolitical Risks and Economic Predictions

The speaker turns attention to the political and global uncertainties affecting the market, citing tensions in the Middle East and upcoming elections in the U.S. They argue that these geopolitical factors add volatility to the market, with potential impacts on sectors like clean energy and home building. The speaker notes how political outcomes could benefit some industries while imposing stricter regulations on others, adding another layer of risk for investors.

🏦 Investing Strategies in Times of Market Uncertainty

The speaker offers personal insights on managing investments during times of economic slowdown and layoffs, as companies strive to maintain profitability. They emphasize the importance of setting aside money regularly for various types of investments, ensuring both safety and potential growth. The focus is on building a diversified portfolio, leaning toward value and dividend stocks as opposed to speculative growth in tech and AI stocks, which they view as overpriced.

🏠 The Housing Market and Inflation Concerns

In this segment, the speaker discusses the link between housing prices and inflation, highlighting the shortage of affordable housing as a critical issue. They suggest that job losses might lead to decreased demand, potentially bringing housing prices down, though this comes with its own economic pain. The speaker is wary of stagflation and suggests that while the Fed is fighting inflation, the broader economic effects, such as job losses, are hard to ignore.

💼 Market Reflections and Personal Investment Advice

Concluding the video, the speaker reflects on the importance of staying healthy, both physically and financially, in uncertain times. They encourage viewers to balance their investments between safe and growth-oriented assets, while staying informed about market conditions. The speaker emphasizes honesty and realistic expectations when it comes to investing, especially in light of layoffs and broader economic challenges.

Keywords

💡Layoffs

Layoffs refer to the temporary or permanent termination of employees by a company, usually due to financial constraints or restructuring. In the video, GM is laying off 1,700 workers as part of retooling its Kansas plant. The speaker discusses how layoffs are becoming more common due to growth scares and economic uncertainty.

💡Growth scare

A growth scare is when companies or investors become worried about a lack of economic or business growth, leading to cutbacks or cautious investments. The video highlights that companies, like GM, are laying off workers because they fear the growth won’t meet expectations, which is a central concern for maintaining profit margins.

💡Profit margins

Profit margins measure how much profit a company makes for every dollar of sales, expressed as a percentage. Companies try to maintain or grow their profit margins by reducing costs, such as through layoffs. In the video, the speaker explains that GM and other companies need to cut jobs to keep their profit margins stable, especially when growth slows.

💡Federal Reserve (FED)

The Federal Reserve is the central bank of the U.S., responsible for setting monetary policy, including interest rates. In the video, the speaker mentions that the FED cut interest rates by 50 basis points and that FED officials, like Waller, are concerned that inflation might cool down too much, signaling economic uncertainty.

💡Inflation

Inflation refers to the increase in prices of goods and services over time, reducing the purchasing power of money. The video discusses how the FED is monitoring inflation, and there is concern about it cooling too much, leading to potential economic slowdown. Inflation is also tied to housing costs and overall economic demand.

💡Retooling

Retooling is when a company updates or modifies its production processes or facilities, usually to make new products. In the video, GM is retooling its Kansas plant, which has led to temporary layoffs, as they prepare to introduce new products. The speaker uses this example to explain how companies must invest in new technologies or products to stay competitive.

💡S&P 500

The S&P 500 is a stock market index that tracks the performance of 500 of the largest publicly traded companies in the U.S. The speaker mentions the S&P 500 when discussing investment strategies, noting that its recent returns have been heavily influenced by a surge in technology stocks like Nvidia, raising concerns about the sustainability of growth in the market.

💡AI bubble

The AI bubble refers to the rapid growth in stock values of companies related to artificial intelligence, driven by high investor expectations. In the video, the speaker is cautious about the AI bubble, particularly regarding Nvidia, which has played a significant role in recent stock market gains. There’s concern that if the bubble bursts, it could lead to losses for investors.

💡Dividend stocks

Dividend stocks are shares of companies that pay out a portion of their profits to shareholders regularly. The speaker contrasts dividend stocks, like McDonald's, with growth stocks, explaining that dividend stocks are attractive for their steady returns even when growth is slow, making them safer investments during times of market uncertainty.

💡Bonds and CDs

Bonds are debt securities that pay investors regular interest over time, while CDs (Certificates of Deposit) are low-risk savings products that offer fixed interest rates. The speaker recommends bonds and CDs as safe investments during uncertain times, emphasizing that they provide guaranteed returns compared to the unpredictable stock market.

Highlights

GM is laying off 1,700 workers due to plant retooling, signaling potential job instability.

Companies need to maintain profit margins, leading to layoffs if revenue growth slows.

Fed cut interest rates by 50 basis points, but it's not necessarily about job security.

Concerns about a 'growth scare' and uncertainty in the market are emerging.

Investing in companies requires understanding how they use capital for growth and R&D.

Qualcomm might buy Intel, which could lead to layoffs due to redundant roles.

Intel stock has underperformed, making it a potential value trap for investors.

The S&P 500's recent growth is heavily tied to Nvidia, signaling a potential risk if the AI bubble bursts.

Consistent returns through bonds and CDs are suggested as a safer bet in this uncertain market.

Apple’s new iPhone 16 is out, but not impressive enough for some to upgrade, indicating possible limited growth.

Dividend stocks like McDonald's and Coca-Cola offer a reliable source of income despite limited growth.

Political and war-related uncertainties (e.g., conflict in Lebanon and Israel) are contributing to market instability.

Investors should think about underappreciated stocks in undervalued sectors for potential growth.

The AI bubble, especially with Nvidia, could be risky, signaling that safer value stocks may be a better option.

Setting aside money automatically for diverse investments (stocks, bonds, CDs) ensures long-term wealth preservation.

Transcripts

hey friends this is Chris welcome back

to the channel so is everyone losing

their job that's sep of today's video I

want to talk about this and also what's

going on in the market today and the

subject comes up because uh GM just

reported they're going to be laying off

like 1,700 workers um essentially it's

in Kansas plant and um they're going to

retool the plant so they're essentially

hey this is a temporary layoff maybe you

have a job when you come back but the

thing is if I'm a GM worker it's like

that doesn't make me feel any better I

want work now and unfortunately though I

think this is going to be kind of a

common theme that you're going to see in

the markets going forward and I'm

starting with this story because I want

understand you know for those of you who

are new to this stuff new to investing

like how does this game played and and

sort of what's going on and and why now

um essentially I think there's a couple

things is one is you have a grow scare

right and two we're kind of like

uncertainties in the market now the FED

just cut 50 basis points and they're

claiming that it's not about jobs right

we're not worried about jobs it's

actually at Le according to Fed Waller

they just came out recently he's just

like yo we're worried actually that

inflation will be too cool and we

actually want to sort of get things

going before it gets too cool right so

in a way they're saying gross scare but

not really saying grow scare because

they they always keep saying the same

thing what the economy is strong it's

like well the econom is strong why are

you cutting so there's that so my person

opinion of stuff is like I honestly

think there there is a bit of a gross

scare and also a job scare um because

you you're going to see it in individual

companies and the other issue is too is

like for companies and essentially this

is what you think about investing is

remember you're giving your money to a

company you're saying hey take my money

do some great things with it make me

some money right and so the company then

takes their money and then they you know

use your money to invest in whatever new

products or research marketing Etc and

try to attack customers to come through

the door but the thing is like companies

essentially always need to be doing you

know R&D and updating their product

lineup to get people to do that so

that's what GM is saying hey we're going

to retool and we're going to try to you

know get these new flashy products out

there the other issue is though with

dealing with Wall Street and this is

just reality of it you got to maintain

your profit margins right so if the

growth isn't there if the revenue isn't

coming in you got too many people on

staff unfortunately going to have to lay

people off so pay attention to these

kind of things um the other issue is

like as well which is related one is uh

Qualcomm might be buying Intel and

unfortunately I think if that happens

a lot of people Intel will probably lose

their jobs um when you you know merge

companies or or you know one company

requires another one there might be some

redundant roles that you know two people

doing the same role you don't need that

so and you're looking for ways to you

know cut cost because essentially you

just bought this thing and now you're

like okay we need to completely figure

out a way to change the management

structure turn things around and get

things going again and if you guys don't

know Intel's just been a it's been a dog

of a sock been terrible the last couple

of years and so who knows maybe the the

qualcom thing will turn around I think

theyve been talking to regulators and um

people Intel and trying to work out a

deal with that so there might be

opportunity theoretically Intel stock if

you're willing to take that risk I'm

just bringing up I'm not here to pump

Intel stocks something like that because

frankly Intel stocks has been a t

terrible stock um it's a bit of a value

trap like you're like oh my god look how

great that P is ETC but they always find

ways to disappoint when it comes to

earnings so we'll see if there is a

change in management there and guys when

you like talk about the markets and this

is sort of why I like to just be honest

with you about this kind of stuff is

again you're giving your money to

someone else another company and you're

saying grow my money faster than I could

you know do it by myself and if you're

doing it by yourself you know you throw

into a savings account you're buying

bonds or you're putting in CDs for these

kind of things and this is where it

becomes tricky right now in the market

that we're in because interest rates are

going down and the fed's indicated said

things like your your rate of return and

stuff is is not going to be so great so

you know maybe your savings account is

going to be around 3 to 4% maybe CDs is

going to be kind of roughly the same

maybe 3 4 maybe you can get four and a

half these days um you know depending on

you know which bank to use Etc uh and

then the other issue is well if I do

that and this is kind of just talking my

invting with you is like I'm definitely

guaranteed to not lose okay so there's

nothing wrong with with buying bonds

which I which I always talk about with

you guys or getting CDs you're not going

to lose so there's nothing wrong with

that and in fact if you want to lock in

guaranteed returns it's a good way to

preserve wealth now if if you want to go

a little more aggressive you say okay

that's not good enough for me I want to

do stocks here's the problem with stocks

right now and I'm not saying I don't buy

stocks I'm just saying this is the the

risk and the things you want to take

into consideration is that where's the

growth going to come from so the safe

way to play stocks is you just buy the

S&P 500 you buy the index fund and

you're like okay I don't want to worry

about picking individual stocks I just

want to go you know total Market in the

USA generally is going to be pretty good

and um I'll go with that

one problem with this I just want to you

know kind of give you realistic

expectations is the S&P 500 like a lot

of the returns lately have been

basically AI bubble right so Nvidia has

been like a huge portion of the S&P 500

I think it's like at one point it was

like 40% of all returns it was like

Nvidia alone so if that bubble pops it's

going to be tough for like the markets

to do well so we're going to watch for

that and so that's why like I'm watching

all these things together companies come

out with their earnings and sort of what

they're saying are they are they growing

right I'll give you another example so

again we're looking for growth here what

we're looking for in the market right

it's essentially you got to think okay

if I want to try to you know do better

and beat the market if I if I'm not

satisfied with with guaranteed returns

of you know bonds and CDs like where can

I find growth in the market well we just

saw the new Apple phone we just saw it

today as the the 16 I probably should

have Tak a picture but guys it's there

and you might have seen it also it's

actually a nice phone I I was Prett

pretty surprised it's actually a nice

phone there's nothing I mean I have an

apple there's nothing wrong with the

apples they're fine um just that is it

nice enough for me to upgrade do I want

to go this cycle and it's funny cuz when

my wife and I she saw it and the first

thing she said is like maybe we'll get

the 17 so I guess 16 is off the table

for us um that that's one thing is like

for me personally I want my fully phone

I want a smart a smaller phone I just

don't want this big phone and this is

kind of related to the GM story remember

companies always have to come out with

you know new reasons for you to buy

their products remember as an investor

you want to invest in a company that

essentially is is growing their revenues

Etc um at least if you're in a growth

kind of company um if you're in a

dividend company and for some people you

know they ask me about dividend stocks

sometimes the basic idea there is that

okay maybe you're not going to have

crazy growth so this is example

something like McDonald's right the

McDonald's is not going to grow much

more yes their revenues will increase

every year and you know maybe their

profits SL earnings will increase every

year but that's probably just going to

keep up with inflation maybe be a little

bit but the advantage of those is that

okay if there's no growth at least

they're sharing profits with me uh

through a dividend so I I just use examp

McDonald's example you could talk about

Coca-Cola or any number of you know

saver stocks like that um the thing is

what's interesting about this and this

is sort of like you know talking about

just investing in the markets right now

is again S&P 500 that's total us uh

stock market so index and there's

different atfs out there that will

capture that and you want to get

essentially a low fee one um that means

that you don't have to worry about

picking individual stocks you you you

know throw some money and have a have a

savings account it's like your your cash

Reserve in case anything goes wrong you

get some consistent set returns and

bonds and CDs and then you know throw

some money in the market can do S&P 500

Index but like you know much of our our

returns these days and I think has been

the AI bubble so one of the ways to

think about this is like okay bu low so

high what's been underappreciated right

what what where is if all the money

going Nvidia like what what are the low

stocks right now and that's something

that if you want to buy individual

stocks that's probably one thing to be

to be looking at so you know for me

personally and and guys I don't I don't

you know pumping individual stocks or

whatever I just try to just talk you

through like what to think about with

the mark and stuff like that is I'm

thinking okay if we're worried about a

grow scare like what's the best way to

do this so my opinion is like I just

want consistent returns so just sort of

what I'm doing if you guys are curious

um you know we're we're we're taking

bonds and CDs right now and and um I'm

going like more value stocks and

dividend that that's my opinion on this

stuff um I just don't think the grow is

going to be there I feel like Nvidia is

a bubble and I don't hit by a car here

um and I'll be in a bubble right but I

feel like Nvidia is a bubble and I just

don't trust that Apple's going to grow

anymore right so that's where I think

the opportunity is um the other issue as

well is like we have this lot of

political uncertainty and War

uncertainty I I just saw just just today

you know I came out here for a walk I

just need to get some fresh air um the

war between like Israel and other

countries M Le you know Lebanon it just

keeps getting worse I there something

like Lebanon just launched 100 missiles

over at Israel so it's frustrating that

kind of stuff um and then you got the

election the uncertainty with that um

I'm still saying it's 5050 I I you know

I know the national polls say that KLA

Harris is winning uh you know depends on

what point you look at maybe she's up

two maybe she's up six it just depends

but that's not the swing States right so

there's a there's a lot of uncertainty

with with those kind of things and you

know the thing with with um KLA Harris

she may she may support some Industries

it may be a little bit tougher on others

so you know the bet would be clean

energy maybe get a boost uh perhaps on a

com Harris you know maybe the bank

regulations would be a little bit more

stricter than under Trump um you know

maybe also too you may see uh and I I

think possibly both of these may be

benefit would be something like the home

builders may get a lift uh because you

know they're going to try to promote um

you know getting more houses on the

markets there may be opportunities there

um but again it it all depends on on you

know your risk profile and what you're

looking for um you know one of the

things that that I I try to do and I

just you know want want you guys to

think about this also is you know every

month when you know money comes in is

just set some money aside right you

don't even see that money and you just

have like like automatically diverted

into your your various Investments right

so again you you're going to have some

cash you have some CDs has some bonds

and you also have some stocks and you're

going to allocate that that you know

what makes sense for you do you want

guaranteed returns or you want to try to

go for some more growth and I just sort

of gave you some things to think about

like for me personally I think we're at

the top of the market in terms of like

those big Mega cap tech stocks and I

just don't see the growth is going to be

there it doesn't mean they're terrible

companies like that I just feel like

we're at very very high valuations um so

you know if you're not going to do S&P

500 uh I would tend to go whatever has

been

not so popular not the AI stuff and more

value dividend oriented that's just my

opinion cuz sometimes like this is just

how it is on on YouTube some of the kids

are like well Chris what are what are

the Investments you like like what do

you love what are the stocks that you

want to pump and it's like well I mean

well there's two problems with this is

like one is if you want to be popular on

YouTube you just pump the biggest bubble

possible and everyone wants to hear

about their Bitcoins and their cryptos

and their AIS and all that kind of stuff

but I'm just not seeing it I I think you

know right now the opportunity is going

to be more at least in my opinion you

know value and dividend that kind of

stuff and then just more fixed assets

where you're you're guaranteed that

you're going to be getting a set return

and you're not losing um that's one

thing that I've learned and especially

in the market that we in right now with

layoffs is that I think the Big

Challenge going forward for people is

just like making sure you have a job

guys I mean I'm sure those GM people are

not happy right now and then you know

the Intel the rumor on the street would

be like oh if if they emerge you know

they'll lose this department or whatever

and I just think a lot of companies are

looking to cut cost because they're

having a grow scare and they need to

keep Wall Street happy so I just wanted

to share some thoughts about what's

going on in the market and I know

sometimes it sounds like a bummer or

that kind of stuff but you know I like

to be honest with you about this stuff

and and talk to you guys like adults

about these things I think it's

important and I I know and it's I always

you know try to talk to everyone a

general audience but I know the young

kids are used to you know everything

going to the moon and they're thinking

oh it's going to be hockey stick growth

kind of thing and you know doesn't the

FED cutting by 50 basis points doesn't

that mean

everything's going to be awesome not

necessarily I I'm still thinking grow

scare here possibly Stak infation that's

um uh another concern um whether or not

we've completely beaten inflation we'll

see um a lot of that has to do is in ter

of inflation ER is tied to housing and

there's just not enough affordable

housing now unfortunately this is just

how our our system works um if more

people lose their jobs the demand goes

down and the prices should go down I

mean that's that's how it should work

but there's going to be a lot of pain

and it's it's like it's hard to talk

about that kind of stuff with people

like you know you don't really want to

tell people hey you have to lose your

job to get prices from the control you

just is not really something you want to

say but it may be something a lot of

companies are doing so I just wanted to

share some thoughts of what's going on

the market guys and um sort of what I'm

feeling and just want to get some fresh

air I I um how can I say if you want to

do well in this in this life be healthy

right so for me get some exercise you

know um get outside and and clears your

mind that's sort of like sometimes I

like to do this it just it's a lot

easier to to think about and put things

in perspective of what's going on in the

world and um I always appreciate your

time and I want to hear your thoughts on

these things and uh I'll catch youall in

the next video