$90 bln drain yesterday. I don’t like it.
Summary
TLDRIn this video, the host discusses his new haircut and delves into the stock market's modest positive close, influenced by major tech stocks like Nvidia, Apple, and Amazon. He notes the significant corporate tax drain and lack of market correction, suggesting the market may be overvalued. The host also addresses the government's surplus, comparing it to the deficit and its impact on the economy. He shares his insights on buying opportunities in stocks like Lenar and Google and discusses the dynamics of commodity trading, emphasizing the importance of understanding market patterns and having a long-term perspective.
Takeaways
- 💇 The speaker got a haircut at a local barbershop in New York City, which was their first non-self haircut in a long time.
- 📈 The market closed up with modest gains, influenced significantly by large cap stocks like Nvidia, Apple, Google, and Amazon.
- 💹 There's a large impact of a small concentration of stocks on market averages, despite a 90 billion corporate tax drain.
- 🏦 The speaker still believes the market is overvalued and may experience a significant correction, especially with the government running a surplus in June.
- 💔 The government's surplus represents a net transfer from the economy to the government, taking away 100 billion, with a need to recover 1439 billion since the April 15 tax deadline.
- 📊 The speaker predicts a potential market correction, comparing the current situation to the economic conditions of 2022, which saw two quarters of negative growth.
- 💡 The speaker emphasizes the importance of understanding the difference between government spending and draining reserves through the sale of treasury securities.
- 📉 The speaker bought stocks of home builders and Google when they were down and believes in following the actions of producers and banks in commodity markets.
- 🛑 The speaker warns of a potential pullback in oil prices around $80, based on recent selling by banks and producers.
- 🗓 Historically, the speaker has been vocal about market predictions, including calling the bottom of the 2022 sell-off and advising to buy during panic.
- 🤼♂️ The speaker encourages daily exertion and maintaining a long-term perspective amidst the ups and downs of the market.
Q & A
What significant change did the speaker make to their appearance?
-The speaker got a regular haircut from a barber shop, which was the first time in a long time as they usually do a self-haircut with clippers.
How did the speaker describe their appearance before getting the haircut?
-The speaker described their appearance as looking like a maniac and a cross between someone escaping from an insane asylum and Robert De Niro.
What major factor is influencing the stock market averages according to the speaker?
-The speaker mentioned that the stock market averages are greatly influenced by a small concentration of big name stocks like Nvidia, Apple, Google, and Amazon.
What economic term did the speaker use to describe the government's current financial status in June?
-The speaker used the term 'government surplus' to describe the government's financial status in June, indicating a net transfer from the economy to the government.
What is the speaker's view on the market's current state?
-The speaker believes that the market is ahead of itself and that despite the strong leading flows, there hasn't been any significant correction yet.
What was the speaker's prediction regarding the market's future correction?
-The speaker predicted that when the market corrects, it could do so in a very big way, but they also mentioned that the magnitude of the drain from the economy is not that significant in the grand scheme of things.
What did the speaker say about the government's balance as of April 14th?
-The speaker mentioned that there is a need to recover approximately 1439 billion to get back to where the non-government's balance was on April 14th.
What was the speaker's stance on the understanding of the economy by certain individuals in the financial sector?
-The speaker criticized certain individuals, including a billionaire hedge fund manager, for lacking a true understanding of the economy and being more focused on exploiting legal loopholes for profit.
What advice did the speaker give regarding personal responsibility in the stock market?
-The speaker advised taking responsibility for one's own actions in the stock market, reflecting on past experiences, and not to expect precise timing on market movements.
What activity did the speaker recommend for maintaining perspective and mental toughness?
-The speaker recommended engaging in some form of hard exertion, such as hiking, long walks, boxing, or jiujitsu, to maintain perspective and mental toughness.
What was the speaker's experience like at the barber shop?
-The speaker described the barber shop as being 'underground' and having an entrance that resembled a subway entrance. The barber, Mike from Brooklyn, was watching soap operas when the speaker arrived.
Outlines
💇♂️ New York Barber Experience and Market Insights
The speaker starts by sharing a personal anecdote about getting a haircut in New York City, which was a departure from his usual self-haircutting routine. He then transitions into discussing the stock market, noting that despite a modest positive close, the market is influenced heavily by a few large stocks like Nvidia, Apple, Google, and Amazon. He mentions a significant corporate tax drain and expresses concern that the market may be overvalued. He also discusses the concept of government surplus versus deficit, explaining how the current surplus represents money taken away from the economy, which could lead to a significant market correction if it continues.
📉 Market Concerns and Personal Investment Moves
The speaker continues to express his apprehension about the current market environment, despite acknowledging that the drains from the economy are not as significant in the grand scheme of things. He talks about his personal investment decisions, such as buying stocks in home builders and tech giants like Google and Amazon when they were down. He also discusses his strategy for investing in commodities, emphasizing the importance of following what producers and banks do. He predicts a potential market pullback and provides a historical context by referring to past market corrections and his own experiences.
🗣️ Reflections on Market Dynamics and Economic Understanding
In this paragraph, the speaker reflects on the dynamics of the stock market and the importance of having a long-term perspective. He recounts instances where he advised buying during market downturns, facing backlash from those who disagreed with his timing. He emphasizes the need for individuals to take responsibility for their own investments and not to expect precise predictions from anyone. He also criticizes those who make money through questionable practices, advocating for integrity and understanding of the economy over short-term gains.
🏋️♂️ Life as a Struggle and the Value of Hard Work
The speaker concludes by likening life to a 12-round fight, emphasizing the need for daily effort and resilience. He shares his experience of getting a haircut from a barber named Mike in a unique, underground shop, adding a personal touch to the narrative. He encourages his audience to engage in physical activities like hiking, walking, boxing, or jiu-jitsu to maintain mental and physical toughness, and signs off with a reminder to stay strong and prepared for the ongoing challenges.
Mindmap
Keywords
💡Market
💡Nvidia
💡Corporate Tax Drain
💡Government Surplus
💡Economic Growth
💡MMT (Modern Monetary Theory)
💡Treasury Securities
💡Mega-cap Tech Stocks
💡Home Builders
💡Commodities
💡Perspective
Highlights
The speaker got a haircut for the first time in a long time, choosing a local barber shop over self-haircuts.
The stock market closed up again, influenced by large cap tech stocks like Nvidia, Apple, Google, and Amazon.
A significant corporate tax drain of 90 billion occurred, with no market correction seen yet.
The speaker believes the market is overvalued and anticipates a possible major correction.
The government is running a 100 billion surplus in June, which is a net transfer from the economy to the government.
There is still a need to recover 1439 billion to reach the pre-April 15 tax balance.
The deficit for the year is projected to be around 1.4 to 1.5 trillion, including the 200 billion drain.
The speaker reflects on the economic impact of large drains in 2022 and the market's response.
Interest income transfers are discussed as a positive economic factor, contrary to popular negative views.
The 20-year Treasury auction is mentioned as a non-issue due to the money already being in the system from government spending.
The speaker bought stocks in home builders and Google when they were down, and shares in Amazon and oil company PSX.
Oil prices are discussed, with the speaker predicting a rebound and subsequent pullback based on producer and bank actions.
The speaker recalls past market corrections and his predictions, emphasizing the importance of perspective in investing.
The speaker criticizes short-term thinking in social media and the need for long-term perspective.
The speaker discusses his philosophy on integrity, knowledge, and playing by the rules in contrast to certain wealthy individuals.
The speaker's experience at a unique barber shop in Brooklyn is shared, adding a personal touch to the discussion.
The speaker encourages daily effort and perseverance, comparing life to a 12-round fight.
Transcripts
what's going on everybody it's Tuesday
June
18th still here in New York
City got a haircut
today first time I got a regular haircut
in like I don't know as long as I can
remember I usually I use my my uh my
clippers and I just do a self haircut
but there a little barber shop right
down the street I went in there cuz I
started looking like a maniac I was is
looking like a cross between some uh
escape from a from an insane asylum
combined with Robert
dairo so I got a
haircut uh all right let's talk about
what's going on so market closed up
again today just modest uh positive Clos
D folks these averages are being
influenced greatly by a
Nvidia uh you know these big name stocks
Apple Google Amazon it's it's a a small
concentration of stocks that have a very
large impact on the
averages but uh leading flows are still
strong yesterday was a 90 billion drain
on that corporate tax drain which I've
been talking about and you know we
really haven't seen any kind of a
correction whatsoever I still think that
the market is ahead of itself we've had
right now in the month of June which we
are
in government is running a 100 billion
Surplus remember government surplus is
the opposite of a net of a deficit the
deficit which I don't use that word but
I'll just use it in this uh explanation
is a net transfer to the economy
government surplus is a net trans
transfer from the economy to the
government so it's it's it's taken that
away okay that's 100
billion taken away and by the way we
still have like
1439
billion to
recover since the April 15 tax Trin to
get back to where the the non-g
government's balance
all right the economy's balance was on
April
14th I think when this thing corrects it
it can correct in a in a very big way
but um again I have to say that in all
fairness these
drains
okay 200 billion
whatever um they're not that big in
terms of the over overall transfers like
if you look at what the deficit is going
to end up being this year okay by
September 30th we're probably looking at
you know a 1.4 1.5 trillion
deficit and so that would
include a 200 billion
drain
so like I said in a in a prior
video when you think about for example
2022 when we had a
1.7 trillion drain for the
year I mean that was massive and that uh
ended
up creating two quarters of negative
economic growth okay and we had you know
was a it was a rough year in the stock
market in
2022 all the way up to October oober
2022 which I basically called out the
exact date of the bottom in that sell
off when everybody was panicking about I
said we're going to reach an inflection
point
where the negative impact of rate hikes
you know because the it's it's the
discounting future cash flow for
financial assets I said that'll be
offset by a rise in in interest income
transfers nobody else was saying it I
was the only one saying that and by the
way everybody now was talking about
interest income transfers but the funny
thing is they're talking about it in a
negative
way like oh the government's going to
have to pay all this interest yeah that
that goes into the economy and it's
nothing for the government in its own
money and its own currency by the way
speaking of
that I I saw a thing this
today the 20-year auction treasury
auction remember going back to like the
fourth quarter just getting into the
fourth quarter of 2023 I was talking to
you guys and I said all these monists
are freaking out because they're saying
the fourth quarter of 2023 is going to
have a record
issuance of Treasury Securities and
they're like oh my God who who's going
to buy all that and I said back then
that this is a a a a
nonissue when you're talking about
because I mean it it's just like it's
again it's another one of these
comical uh lack of
understanding on the part of the monitor
who's going to buy them the money to buy
treasuries comes from government
spending itself I always use the the uh
analogy you got to fill up a swimming
pool with water before you could drain
it the sale of government securities is
simply a reserve drain the spending puts
the money into the system into the
economic system and then people just
exchange those reserves that cash for
treasury Securities CU they're safe and
they're liquid and they have an interest
rate attack so like when you see this is
funny because had so many and I've I've
spoken about this many many times every
time it has popped up and believe me
mark my words it's going to pop up again
at some point in the future where
they're going to say oh my God this is
going to be a record treasury issu is
how they going to sell all this
stuff and they always sell it because
the money is already
there
so it's funny how like nobody catches on
and it just keeps repeating and it keeps
repeating and it keeps repeating over
and over and over again all let's get
back to the stock
market I'll be honest I do not like the
current environment where even
though I just kind of said that the the
the the magnitude of the drain is not
that big let's say let's say we're
talking about 200 billion by the time
the fiscal year ends on September 30th
um and that that that's showing up in
the slower rate of economic
growth but I think it you know a lot of
what we're seeing I think in like the
the stock averages again they're being
influenced greatly by these large Mega
cap tech
stocks you know
Nvidia Apple Microsoft
Amazon Google etc etc there's a lot of
stocks like I bought some stock
today home builders were down you know
pretty sharply lenar was down I bought
lenar I bought what I bu today I bought
some Google today that was down um
Amazon recently was down I bought so
there's stocks uh oil PSX I I I bought
um Philip
66 oil was up at 8 I said it was going
to rebound remember when it went down to
72 I said there's good buying by
producers down at this level how many
times have I explained to you guys that
when it comes to physical
Commodities you got to do what the
producers are doing and you get that
report every Friday by the way I break
that down in my report in my mmt Trader
report I go through that when the report
is released it has it in in there what
should you do with gold with
oil with silver if you're wondering I
have it in there because I follow what
the producers do and I follow what the
banks
do so when it was down at 72 I
said you got to be buying it down here
and I said up at 80 which is where we
are right now we have
seen good bank selling and producer
selling at 80 so until I see a reversal
of that I'm saying 80 right now we're
going to see a pullback from 80 or
slightly above 80
whatever so yeah it's all in there folks
it's all in there
um so I went back and I looked at
March when we also had the uh quarterly
corporate taag
Trin and
it took a couple of weeks like two weeks
after
that you know that
deadline when the market started heading
down and we had like a 6% correction I
think we could see that again uh look
I'll go back to what I've been saying
the leading flows the leading spending
flows are very strong you cannot you
know that's that's the water coming out
of the pipe
volume is
huge uh you know the the the uh the pace
of that flow is very very
large I mean for now you can't go
against that but when I see the
government running a positive balance a
surplus for the
month which is what's happening now I
mean that is a net drain from the
economy
and you know as as B as stocks are right
now you know that's the opposite
situation of what we saw in 2022 when
everybody was selling and panicking and
freaking out and I could give you so
many examples of me
personally when I've been through
this either as a publisher of my report
where people were freaking out and they
were selling you know the I remember um
in uh late 2018 in December 2018 I had
people cursing at me cursing at me
because I said you got to buy
that all
right so many of these uh instances
where I go back remember yesterday I
talked about how you got to reflect on
that you got to give yourself some
perspective and and we don't often we
don't do that we just we live in the
moment and I think a lot you know
especially nowadays with social media
and everything like that like oh our um
you know our time frame our uh you know
we just it's very short term everything
is very short term you got to be able to
step back and get some perspective
that's what I spoke about
yesterday that's what I spoke about
yesterday and I remember all those times
I remember all those times people
calling me all kinds of names cursing me
I said you got a buy back then it's
going to go back up don't worry even in
October 20
22 and we're going to have the same
thing now with what's happening right
now all right and in April I said we're
going to have a pullback and they were
like oh man I had one guy telling me
your timing is terrible no he said your
timing
sucks and I said months in advance in
April 15th we're going to have a
correction yeah maybe it wasn't a 20%
correction we had a that 6%
you know how many stocks I added to my
portfolio in that
6% I was buying meta at $420 I mean
like come on folks come
on
seriously take responsibility for
yourself like I said yesterday I'm just
trying to help you guys out I'm just
trying to help you guys
out my timing sucks because it doesn't
happen on the exact day that it's
supposed to happen it happens a little
bit later you know a lot of this
stuff like I always say
like this is markets are dynamical
systems if there was one
thing that you could look at and that
would tell you every single time exactly
what's going to happen at exactly the
moment
don't you think everybody would be doing
that I said in in uh other videos I
said the guys that are consistently
making money every single day they have
an edge I gave so many anecdotes about
my days on the floor I I've spoken about
who I know
personally uh the guy who founded virtue
Financial Vincent Viola who was a
champman of IMX guys like uh what's his
name from Citadel the big hedge fund guy
they just front run orders they they're
not if they had to actually do what
we're trying to
do which is be figure out the economy
and by the way I see what these guys say
about this guy who runs
Citadel and I forget his name but he's a
big hedge fund guy and he's worth like I
don't know 20 30 40 billion something
like that you know good for him I tip my
hat but how hard is it to make money
when you're front running orders but
when I listen to this guy talk about the
economy and saying like there's going to
be doomsday because of the uh the
national
debt it is it is
totally an an expose on how little this
guy understands he built a business and
good for him that takes advantage of
what used to be kind of illegal but now
now it's legal and he's a
billionaire all right if you could do
that my my hats off to you
too but is he Smart in the sense of
really having an understanding no does
he care no he doesn't care he's got
$40 billion he doesn't care I
care maybe I'm stupid because I care and
I you know things like
knowledge this may sound crazy to some
of you but things like knowledge things
like understanding things like
Integrity things like playing within the
rules uh and not bribing members of of
Congress and the government to because
that was almost going to be uh made
illegal that activity and those guys
with their money they they bought off
the
system sorry but I believe in stuff
maybe I'm stupid maybe I'm a Fool maybe
I'm a py but so be it I I don't care I
enjoy my life okay anyway that's all I
got to say what you think about the
haircut and the guy's name was Mike from
Brooklyn right here a little Barber Shop
no nothing fancy I go in a barber shop
in fact this Barber Shop it was like
underground I had to walk down
underneath the sidewalk
and I thought it was the entrance to the
subway uh and it might have been
actually I didn't follow this kind of
like a Labyrinth of of walkways I went
downstairs underneath the the pavement
and I I got a haircut and he was just
sitting there Mike was sitting there
watching the soap
opers when I came in then a couple other
people came in but I'm like wow
cool all right
everybody hang in there man this is a
you know
it's it's a 12 round fight you know you
got to be ready you got to wake up every
day every day is the same man don't
think like every you know one day you're
going to wake up and it's all going to
be butterflies and rainbows for the rest
of your life it's a fight that's why I
always encourage you
guys to do some kind of hard exertion
whether
that's you know hiking something hard
walking just walk walk 10
miles see how that feels boxing boxing
is awesome
jiujitsu take my word for it that helps
a lot see you tomorrow bye
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