저자: Kevin · 외국인
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비트코인·AI 소프트웨어·레버리지 ETF 등 전반적 급락과 공포 심리 확산을 설명. 엔비디아 실적 비트 폭이 작아 AI 기대 약화 우려 제기. 기관 리포트(BCA, Mizuho)의 스태그플레이션·경기침체 언급을 인용하며 엔캐리 트레이드 청산 위험 경고. 장단기 금리 스프레드(2년/10년) 급변 시 침체 신호 가능성 언급. 본인은 이익 실현(일부 현금화) 권고.
다듬은 글
Well, this is a disaster. The market just hit its worst 3 days for Bitcoin since 2022. And we just had the largest outflows in Bitcoin ETFs ever. Well, I mean, Bitcoin ETFs haven't really been around that long, but largest outflows anyway, nonetheless, in this last 3-day period. Leveraged ETFs, which have also been really popular over the last couple of years because, well, the market's basically been straight up.
So, your two and three acts, you know, QQQ's or uh MicroStrategy, those have been really popular with the exception of the last few weeks where now all of a sudden there are massive outflows. And as we say, when you're leveraged in, you get to leverage on that upside and you get all those sweet gains, but boy, it's a rapid slap in the face on the downside.
This is also what we've just seen the worst 5-day move in 2 years for artificial intelligence software, which, you know, it does come right after Nvidia earnings, which we'll also talk about in this video, but not after we hit some other facts and details about what's actually going on and why all this crap is happening.
Uh we've also seen the greed and fear index drop to the extreme fear category. Market momentum extreme fear. Stock price strength extreme fear, like new highs. It's like extreme fear levels. Stock price breadth, the number of stocks going up versus down, extreme fear. Puts and calls, how many people are buying puts versus puts versus calls, extreme fear.
Market volatility is actually neutral, which is kind of a bad thing. I'll explain that briefly in just a moment. Safe haven demand and junk bond demand both also in extreme fear. Why is it bad that market volatility being neutral is potentially bad? Well, when everything else is in extreme fear, and market volatility is actually neutral, it means we actually haven't had a vol spike yet.
So, what happens when a poopy doopy really hits the fan, and you actually get a volatility spike on top of already extremely bearish sentiment in the short term? Well, it could be a really sweet additional buying opportunity. Well, I guess it depends sort of what side of the fence you're on. I'm not the biggest fan right now of of looking for the buying ops, but we'll talk about that in just a moment.
So, this morning in the Meet Kevin Alpha report, I'm going to read you a little note that I made because I I thought it was pretty useful to look at. So, this morning, uh I at the bottom of my note, uh as I always like to say, I go like even if I if I think something's going to go up, I'll say, "Here's Here's what I think, uh but on the flip side, here's another thing that could happen, and here are the signals to watch for." So, for example, I might say something like, "Hey, you know, if right after the opening bell, things sell off, here's what that could mean." Well, here's what I wrote uh this morning.
That said, if markets sell down today, because mind you, after Nvidia earnings, futures this morning were green all morning. Uh if markets sell down today, that would be odd, especially after the Nvidia earnings catalyst, that sort of negative catalyst is over, right? Uh a large potentially negative catalyst has been removed as mostly benign, that is Nvidia, right?
If Nvidia missed, it'd be even worse. Uh so, that said, retail has been buying the pre-market dip. And if institutions sell the rip at the open, this could be a pooper dooper. Why? Because if institutions sell off at open, it likely means retail could start to paper hand as well. Take the bounce and get out before more red data.
Some might think on the day. In other words, get your little bounce in the morning and get out if you're trading for the day. And then I wrote, "I think this scenario could play out as a bad omen. In other words, if this scenario occurs, we might end up with a bad omen for the market." So, let me show that to you graphically.
Uh and you know, it's a little bit tough when I'm mobile here in Florida. Hey, but Florida looks nice, doesn't it? I mean, that looks beautiful out there. Uh anyway, so here's our pre-market, right? Pre-market, the dip gets bought. Pre-market opens, the dip gets bought. The dip buyers are in. This is usually retail in the pre-market.
Institutions ain't awake yet, okay? They got to put their suits on. Then what happens? Vomit. I said, "If we saw this, it's a bad omen." Then you get a bounce, there's your day trade opportunity to get out. Okay, what happened after that? Well, the bad omen continued. So, you can see the market's not closed yet, but it's still plummeting.
Why is this happening? Well, this is the first time in quite a while that I've actually seen two institutional pieces reference recession again. I have not seen headlines like this, mind you, since August, which is about six, coming up on seven months ago. The headlines, one, and I'm going to go through these pieces with you.
One of the headlines this morning was, "A mini stagflation shock or sorry, quote, mini stagflation will end with a financial shock." That was from BCA Research. Excuse me. And then Mizuho wrote, "Is there a doge-led recession risk?" These are the first two notes that I've gotten from institutions about recession risks, frankly, since August.
And the reason I think that's important is because since about September, we've had really nothing but bullishness on institutional pieces. I read these almost every single day, and institutions have been calling their clients going, "Trump's in or getting in. Buy, buy, buy." And basically, we've had this max enthusiasm, right?
And this is one of the reasons why you see the cash cow of Nvidia down as much it is as it is today. And I want me to go through these you know, institutional pieces, because that has relevance here as well, and then we'll talk about the Fed. But I want you to know this, Nvidia beat. Problem is, and we know this about Wall Street.
We know this. We knew this going into it. It's not a matter of is Nvidia going to beat or not. We knew Nvidia was going to beat because they always beat. They're always modest in their expectations, but the amount at which they beat by was minor. And that's what we have to talk about. Quick mention, and I want to talk to you about that amount of those beats and how rare this sort of low beat is.
And then we're going to go into those institutional pieces that are the first mentions of recession, and I want to show you what they're referring to and what they're seeing out there. But I just want to mention that yes, tomorrow we're going to have a substantial price increase on the Trump economics course.
It's going to be probably over $250, and it's not going to go back down. I guarantee you if you join the Trump economics course, you will be locking in your lowest price. You go to meetkevin.com, you get lectures on entrepreneurship, sales, productivity, tax efficiency, strategies for investing under Donald Trump, especially with the tariff drama, new lectures regularly coming out.
Then in the future, we've got our course member meetups coming. You get to come to those as well. The entry price right now is pretty low. You get lifetime access for the low fours. Actually a pretty good deal given that you almost get opening live streams with me every single day. Uptime's probably somewhere around 97%, which is pretty good.
You know, because sometimes obviously I'm traveling or I'm not available, but the vast majority of time I'm there. We do Q&A, fundamental analysis, earnings calls, uh your Q&A, the companies you want me to analyze. I'm happy to go through uh and and provide my commentary on. We do real estate analysis.
You name it. Business analysis we've done. Join us in the course member group. Go to meetkevin.com, get the Trump economics one. It comes with the buy/sell alerts as well when I see something interesting, and you get the lifetime access to any of the other products we got. It includes that Meet Kevin report.
So, go check that out at meetkevin.com. Okay. So, Nvidia had its lowest beat since February of 2023. Keep that in mind. They only beat by 2.47%. I was sitting watching this computer when those Nvidia numbers came out, and I saw, "Nvidia beats estimates." The first thing I I thought is, "Duh, but by how much?" Did the math, only 2.47% on the beat on Q4.
That's because some people think that yeah, maybe people went for Blackwell chips, but maybe they went for the lesser of the versions, which is why networking missed, gaming missed, and overall revenue only beat by 2.4%, 2.47% to be exact. Then Q1 guide, look, they're their money makers, okay? This company prints cash, but Wall Street is greedy, okay?
Fundamentally, this company is a freaking money printer. You can't bet against this company. But why does it go down? Because Wall Street greed once more. So, what do we have? Q1 revenue expectation of 43 billion versus the 42.3 expected. Usually, we beat that by 7 to 10%. What did we do here? We only beat it by 1.65%.
Oh my gosh, small beat. That's not like long term, I still I look at this like, "Oh man, Nvidia knows how to make money. This is so cool. They're the greatest cash cow ever. This is such a brilliant company. They're so rich. They've got so much money, so much cash flow. They're designers. They don't even have to deal with manufacturing BS.
They just milk margins off of their software basically and their designs." It's really incredible. But Wall Street looks and goes, "Huh, well, the last five quarters of beats were 21%, 12%, 8%, 6%, 5%. You know, this is the lowest beat since November of 2022. You all must be slowing down." Well, it's true.
If you only beat by 1.65, maybe next time it's a match, and then in the next time after that, it's a miss. And then all of a sudden, that hopium, that enthusiasm of this never-ending growth cycle for AI fades. Look, I'm not here to be a bear on AI. AI is a fantastic innovation. We're here to say I'm I'm personally bearish on the over-hyping and the over-expectations that people have.
People have this expectation that that yes, look AI is great. We can all agree on that, but they have this expectation that's going to cure cancer tomorrow and and and that LLMs aren't plateauing that they're somehow still like exploding in in their capabilities. And yes, there's growth in the capabilities, but it's not explosive.
Uh and this is I think why you've got Jensen Huang going, "Well, you know, future reasoning models are going to have a 100x computer of the first generation AI models." Okay, so Jensen now, in order for you to make this large claim, you have to compare back to like old 2022 versions of AI and compare them to future versions.
Like that's kind of like, "Oh, let's compare the iPhone, you know, 19 in the future, the iPhone 20 in the future to the iPhone 12." You know, of course it's going to I mean, and and Apple does that. It's a marketing thing. I'm just saying you got to look through that bull sh- So, what about these institutional pieces?
So, what happened here? Well, this this adds adds fury to all of this, insult to injury to all of this. So, first, BCA Research suggests we are staring down the barrel of {quote} a mini stagflation or, you know, event until we hit a deflationary shock. Now, they say the timing of this is unclear, but I personally given that I'm, you know, in in flying school, I think of this as like a stall while you're coming in for a landing.
You know, I've made this analogy before, but I kind of think of it as like you're coming in for your landing, you're slow cuz you're coming in to land, you know, your landing gear's out, your flaps are out, whatever. You're coming in, and then all of a sudden, you know, you get a new instructor, like somebody teleported a new instructor in, and that instructor's name is Trump, and he's like, "Nah, get this up." And you're like, "Okay." And you pull up.
And and temporarily, it's like, "Oh, look, we're climbing again." But bro, that momentum that we had and the drag we have of higher interest rates, this ain't good. And then all of a sudden, stall stall. And that's where we are right now. Now, what we could do is maybe add some power back, you know, grease the economy a little bit, add some power back, level off the pitch, right?
And and get to flying again. But if we don't, and instead you've got Trump going, "Pull it back more." I don't know why he sounds like Schwarzenegger all of a sudden. "Nobody knows pulling it back and pulling it out better than I do. Pull the power out. I said pull the power out. Pull it out right now." And you're like, "Okay." And you got Elon Musk in the backseat going, "Pull it more.
Cut it all. Let it crash." It's kind of like what you got in the back. It's like, "Okay, pull. Well, what's going to happen to the damn plane?" It's going to stall. You're going to going to go straight down if you're close to the ground for a landing, or you're going to go head over boom and then go straight down.
So, that's that's my analogy for what's going on here. And so, BCA Research doesn't make that analogy. Instead, obviously, cuz my analogy, they say that structural inflation is preventing the Fed from cutting. So, in other words, we keep the drag in on our plane, right? We're keeping that resistance pushing us basically down to the ground.
It's like kind of like think about almost like interest rates being high as your flaps on a plane. Slow it down, baby. Get some more drag in. We're coming in for the landing. I like that analogy too much. I got to get over it. Uh you know, and then we've got a lot of fuel in the tanks, especially this AI trade.
But what happens when that AI trade that's partially fueled by Japan starts fading? See, uh what I thought was very interesting is in the BCA Research piece, what they actually talk about is the Japanese carry trade not being anywhere close to over. In fact, potentially, the Japanese carry trade might keep going.
Uh and it actually might still be adding fuel to the fire. See what they say here, I'll show it to you. Japan's deeply negative real uh rates scroll up here on the other side cuz of course they two-parted. Have inflated the AI bubble. Therefore, the normalization of Japanese interest rates is a prime candidate to burst.
In fact, the yen carry trade is reflexive. It needs a funding currency with stably low or negative yield and a destination investment with stably high returns like AI. So, the bubble could burst either if the stably low yield on the yen ends, or the euphoria around AI stocks is shattered. Okay, well, this is why we started by talking about Nvidia.
People are starting to get the heebie-jeebies about uh maybe it is not going to grow at 50% compounded forever. Damn it, it's it's just going to, you know, make lots of money, but that's not good enough fresh on Wall Street. We want more. I hate that so much, man. Uh you know, like I I hate sounding bearish on AI because I I know the companies are great companies, like, you know, Google and Amazon and Meta Apple.
I hate this lingering cough, so I'm And uh and Nvidia, these are great companies, but man, you know, that is a potential problem where you've got investors who've just gotten a little carried away, literally carry trade. Now, you might not understand completely how the carry trade functions, so I thought I I would draw a a simplified explanation for us.
I'm going to do my best here with my little uh clever chart here, okay? All right, so so what do we got? This is the USD to the Japanese yen. Okay? When the US dollar becomes more powerful, that's okay because think about it. Let's pretend you're a Japanese person, okay? So, you're in Japan, you got savings, you got 20 grand in the bank in US dollars.
And you're like, "Huh, I could use this 20 grand to go to my bank and borrow $40,000 of margin, you know, Reg T 50% margin requirements in the US. So, now I have 40 grand. And what am I going to do with that 40 grand of dollar holas? Oh, I'm going to invest it in Nvidia or or AI stocks. And so, now you're investing 40 in the US while you're borrowing at like 0% interest in Japan, very low.
The interest rates are extremely low there. They're trying to get it up, okay? They've been trying to get it up for a while. It's finally starting to, you know, pick her up a little bit, inflation. Uh and and so, anyway, some folks are concerned that as rates move up in Japan and the stock market falls in the United States, then more people might sell the US dollar and buy the Japanese yen, basically leading the Japanese yen to dollar to go down.
It's okay? So, when the mountain goes down, it's bad, okay? That mountain down, that's all you have to remember. USD to JPY, when it go down, bad. Okay? Now, see how rapidly it went down over here? And now for a message from our paid sponsor, Helium Mobile. Now, some of you might know that I actually have four different cell plans on my phone because you can add a bunch more on a phone now using an eSIM.
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They're very, very transparent about exactly what they do at the Helium Mobile website. Just make sure if you want to join that exclusive waitlist, use my link down below and enter code Kevin to secure your spot. You can use them as a new primary number, you can use them as a secondary number, or if you're like me, you can use them as a third or fourth.
And since the cost is zero, you really have no downside having a second connection to the internet, or to data, if you will, to a cell network. So, you may as well check out Helium Mobile. Okay? Now, see how rapidly it went down over here? Yeah, it peaked out right around when the market peaked out in America, around July 10th.
That's when the Japanese you know, conversion peaked out, USD to JPY peaked out. Then for about 3 weeks, kept going, kept going, kept going until August 4th, that's when we had our carry trade disaster. That's when all of a sudden, people in Japan are like, "Crap, I'm getting margin called because American stocks peaked out on July 10th and they've been going down for 3 weeks.
Now I'm getting margin called in Japan." Now I have to sell the stocks, and the Japanese currency is is you know, basically uh when I sell my US dollars, I'm getting less Japanese currency back. So, that means I'm getting less on the stock that I speculated on, and I'm getting less back because the Japanese currency uh you know, basically appreciated and I'm getting these dollars back that are now worth less.
So, now I have to sell even more to pay off my my margin debt, and then you get screwed, and that's how you get the shock of the Japanese carry trade. That's why I said at the beginning of the video, it's weird and it's a red flag that volatility is still neutral on the greed and fear index, okay? We haven't actually had that vol spike yet.
Remember, the vol spike that we had August 4th was the worst since COVID. That could happen again. Not only and that's why they say there could be mini stagnation and then basically, you know, deflation. Now, why do they say stagnation? Well, the reason they say stagnation first is because of Trump's tariffs, which we'll talk about Trump's tariffs in just a moment.
But, they talk about Trump's tariffs first and then after they talk about Trump's tariffs, what do they do? Well, they say, "Oh, okay. Yeah. Well, after the Trump tariffs and we get stagnation, that is slow growth and higher taxes from the stagnation, then the carry trade could hit and that's how we end up stalling, crashing, and going into deflation.
That's not great. It's also, you know, the stall reference I think is very appropriate because type this into the Google. S&P PMI report. Look at the last US PMI report and it literally says the economy came close to it was either stalling or stagnation. It was one of those. But, I I actually think it was it was stall stalling.
Uh pretty sure it was stalling so the reference. Yes, another pilot. Anyway. Okay. So, that's BCA research. We're only halfway done with the institutional reports and we got to talk tariffs. But, understand what they're arguing is you could end up getting stagnation from tariffs, which is bad. That slows growth and it increases that inflation fear.
Then, that hence stagflation, right? Stagnation and inflation. Then, the Japanese carry trade really hits hard this time. Except this time, we won't have economic data to bail us out like we did right before the election along with a lot of enthusiasm. Because the election is already passed. So, election, you know, pricing and election enthusiasm doesn't happen.
So, now all of a sudden you're left with a crappy market, the carry trade, higher inflation, the Fed that hasn't cut yet, a market that's falling, and no catalyst for big enthusiasm, and layoffs. It's a recipe for a market crash and and quite frankly, a recession. And this is why BCA literally in their piece here says, "To sum it up, the US and the UK is staring down the barrel." That doesn't sound good.
"Is staring down the barrel of mini stagflation until a deflationary shock." Okay, that's not good. Potentially emanating from Japan. Okay. Now, the whole deflationary shock thing is actually exactly what I think is going to happen. I don't know when it's going to happen, but I you know me I and I don't want to be redundant about it, but .
You know the argument. Supply chains have gotten so loose and so overbuilt that companies will do anything to get business again. So, what are they going to do? They're going to lower their prices. This is what happens when PP fades, okay? Business is taken in the margin, they lay off people, they reduce prices, and they try to get things going again.
The layoffs are on the corner. I'm tired of all the people on on, you know, CNBC going, "But, Kevin, the jobs jobs are fine right now." Did you see the unemployment claims this morning? Coming in like 20K higher than expected? That's just the start. As soon as that number goes bad, it's over. Usually the market is already rock bottom when unemployment claims peak out.
I'm just saying. Uh now, I know I've been early on this, okay? I hear it all the time. Okay, every single day my wife, she's like, "Kevin, you're early again." And I'm like, "I know. I know. I know. PP's going down. Inflation is going to go down. It's just a matter of time." She's like, "You're early." Anyway.
So, then then we have the next piece. What is this one? Doge led recession risk. Now, I know this is going to come across as like a big anti-Elon thing, but it's really not. They say the market is focused on negative economic fallout from this federal federal spending cuts, but it's not just the federal spending cuts.
It's what they call the ricochet effects. The quasi public sector that relies on sort of the contracts from the government that could end up creating new economic headwinds, unemployment, blah blah blah. Now, see, they don't actually suggest a stagflation issue. They go straight to deflation. They say, "We are far cry from any trend in rising inflation.
We remain confident that the disinflationary process is intact more so with the Fed on hold." Now, we have to analyze Trump 2.0. What are we going to get? With growth headwinds, the Fed will be able to get off pause easing and get back to easing once disinflation resumes, which they think it will. Now, where is the poopy doopy?
Well, the poopy doopy is growth headwinds are mounting and they say that investors should start accumulating duration, which is basically like TLT, okay? I'm I'm full transparency. I'm like long TLT, okay? Like I think it is the the it is going to be the best trade of 2025. I've been saying it for a long time though, so my timing hasn't been exactly perfect on it.
But, anyway. So, they talk about this you you know, interesting effect where the government has basically been a strong contributor to growth since the third quarter of 2022, especially with health care and government jobs. Now, this is obvious because we you know, we were coming out of a hole back then and we the hole would have probably been deeper had it not been for the government doing all the hiring.
I'm not a shill for government spending. They actually agree with that. They're like, "That's the Keynesian approach, you know, you bought them out earlier." But, you you're better off in their opinion, and I agree with this as well, having more tax cuts. Even if the hole is a little deeper, you'll come out stronger.
So, in other words, they're kind of planting the seeds here that, you know, hey, it's it's the Biden administration's fault for over hiring because the government is inefficient. You know, it just leads to what they call the Ricardian equivalence where the private sector saves the corresponding deficit increase of the government.
Okay. You can rewind 20 seconds to digest that one. It was it was actually a pretty interesting argument if you think about it. Okay, government spends an extra billion bucks, business is saving extra billion bucks because of all the extra regulation. Anyway, but the government is so wasteful that usually the velocity of money at the government is is a magnitude higher than private sector spending anyway, just because there's so much waste.
Trump has a logic to front-loading economic pain via tariffs and Doge, which sets up the Fed to resume easing and making for a strong recovery in 2026. Uh however, that does mean we could end up triggering a recession by the end of 2025. I want you to see that. We already saw a Treasury Secretary Yellen suggest that the private sector is already in recession.
But, they say that there is a real risk that the US will enter a short-lived recession in late 2025. Well, this is the first time I've seen this kind of talk in a while. January 2026 call options TLT, anyone? Anyway, oh, I'm not done with that laptop. So, now now, hashtag not personalized financial advice.
And if you want more not personalized financial advice, make sure to check out the courses over at mekevin.com. I'm sorry to sound like I'm shilling that hard, but I'm serious. We're going to have a really big price increase tomorrow and and and it's it's not going to come back down. Like you are guaranteed the lowest price.
So, I'd I'd rather make it crystal clear and you know, I know I'm going to get the comments like, "Yeah, Kevin shilling his stuff again." So, well, I mean A, that's part of my job. Uh and B, I'm trying to keep it short and sweet for y'all. Okay. So, now that we've considered this, we have to look at some other issues that we face as well.
So, we got the BCA research piece out of the way. We got the vol vol out of the way. We got Nvidia out of the way. Oh, yeah. Trump and the tariffs. So, you know, now Donald Trump is well, he's also expecting to start a fast-paced program to remove transgender military members from from military. That's going to be interesting.
It'll be like a witch hunt for trans. You're transgender. Get them out. Honorable discharges merely. Um but anyway, uh Donald Trump said today, "We don't like the way the EU is treating our companies." He slams the EU Apple decision. Probably because he talked to Tim Cook. You know, do you remember that's what happened the last time is is he had conversations with with good old Timmy Cook and uh uh and and then Donald Trump goes and does the bidding for Apple if they promise big investments, which I guess that's that's the whole point of of the office anyway is is to, you know, try to work for for your American companies.
So, I'm a big fan of that. However, I'm a little concerned about this. China tariffs will be an additional 10%. Okay. Well, we already announced 10%. So, an additional 10% would be 10 + 10 = 20. And then we're getting a March 4th date for Canada and Mexico. Donald Trump also says the deal is not done yet on Ukraine.
And uh you know, it looks like Zelenskyy's coming down Friday to sign a mineral agreement. Uh which that'll be interesting to see if we can get closer on ending the war there. Uh we talked about the carry trade. We talked about Nvidia. Uh the Fed. Mr. Oh, yeah. Okay, hold on. Here we go. Uh Fed Fed Hammock spoke today and said that we're likely to hold rates steady for some time.
Okay, this is old news. asically in this do-nothing, no-forecast mentality. Which is also weird. I just always been forecasting what their opinion is. Okay, transitory. It's just going to be a bump. One month doesn't make a trend. One quarter doesn't make a trend. We're going to We you know, we're not going to pay attention to tariffs until they hit.
Just kidding, we're going to pay attention to tariffs. Just kidding, we're not going to pay attention to tariffs. Like they're famous for giving you their opinion on what's GOING TO HAPPEN. YOU REMEMBER IN 2022, if I were a first-time home buyer, I consider waiting right now. It says drop. I mean you know me, I study this guy like like I'm in love with him or something like that.
I'm not, okay? I got a wife and seven kids and I'm happily married. So, but this idea that Hammock says we're going to hold rates for a city for some time. They're not giving us any guidance beyond that. There's no opinion. It's just Yeah, things are good right now. We're holding rates. And when they shut up about the future, it's because they're concerned.
That's my take. They're concerned that some poopy could hit the fan quickly. It's If they If the Fed right now understand the psychology. If Jerome Powell came out tomorrow and said, "Hey guys, shit's going to hit the fan." It would instantly hit the fan. Like there's a no way he could be honest with you about the downside because then everybody would say it's your damn fault.
You scared everyone. Uh but you know, they do say things like oh you know, valuations are a little stretched right now, but the economy's doing fine. Yeah, we're just going to hold rates for a while. Okay, buddy. Uh then uh so the Fed, that's why they're at the pretty much near the end of the video here.
Uh on Tesla, okay, obviously a lot of drama around Tesla. Tesla's applied for a California transportation permit. That's cool, but at the same time, they're also getting hit with lawsuits from hardware three owners. One of the reasons they're going to hit with these lawsuits is because they promised that if you bought full self-driving that you'd actually in the future be able to have full self-driving.
But it doesn't look like hardware three is going to be capable. And it looks like you're going to have to get a hardware four upgrade, which if you listen to the last earnings call, Elon Musk basically admitted to this, which is probably bad for the whole lawsuit aspect. But he's like, "Uh it's probably a good thing that not a lot of people bought the FSD package cuz we're probably going to have to upgrade them to hardware four." So he basically just handed them a win on that lawsuit anyway, so I thought that was interesting, but I don't know, maybe he's just being honest about that.
Which that's really respectable. Uh however, he's also mega pissed about the New York Times calling them a-holes for identifying for exposing 45 identities tied to Doge. And so this is leading to a lot of people saying, "Hey, you're risking those people's lives, New York Times. How could you dare expose those people?
I hate you, New York Times. Why don't you expose your writers, your authors?" And they actually do cuz all the author names are listed on the same page. But a response that's gaining popularity below that was actually this one. Sorry, do you think government workers should be able to operate completely anonymously and in secret kind of like a deep state?
Interesting counter. Interesting. So the problem with with Tesla right now and and you have to know this about Tesla. And I like I you know me, I love the Tesla company. I love the people. I love the product. I had a Tesla model a Tesla Roadster from from 2009. I had the I I still have my my black Model X, you know, my black X.
I love riding my black X. Right now my dad's riding my black X. Uh now my wife's driving my my Model S and I'm driving the Cybertruck. I don't know, you know, I could come back and it's going to be all graffitied after all this drama that's been going on. But you know, I don't think that it's right for people to take out their their angers over Elon Musk Musk sitting at a cabinet meeting and commenting about being tech support on Tesla owners.
I think the people of Tesla are good. I think Optimus style robots are the future. I think you know, Amazon and Meta and Symbiotic, all these robotics where these these large companies will will continue to get into robotics. If they're not already in robotics, they'll get into robotics. Humanoid robotics are a future.
My VC fund has invested into a private robotics company. So I'm a big fan of where we're going with Tesla. But we do know the valuation is rich. You know, we just did another valuation update on Tesla in the course of our live stream and we're still over a three peg. You know, that's with like a 35% growth rate.
So the valuation is rich on EPS because you know, we know we're not going to sell more cars right now. And and keep in mind too, I want you to do this. This is another one that I thought was interesting. If you look at like just cars in general right now, you could go to trends.google.com and you just look at car trends for buy car or like cars for sale.
There is like a systemic decline in searches for cars for sale. Now that theoretically could be because maybe people are using apps or whatever or just interest rates are really really high and it's becoming more unaffordable. But you could see that drop off there. Okay, that's that's odd. You know, we are now lower than where we have been since 2010 in people searching cars for sale.
What I also thought was interesting was if you look at lease Tesla, uh lease Tesla is almost as high as buy Tesla. Uh and you know, I can't remember what it was. I looked it up I looked it Oh yeah, yeah, yeah, yeah, there it is. Okay, lease Tesla buy Tesla. There we go. So now in fairness, buy Tesla could also be like buy Tesla stock.
But I thought it was interesting that searches for leases have almost eclipsed buy Tesla. So that's interesting because to me that that signifies a bit of unaffordability challenge. When when people start saying, "Hey, we are in a place we need to lease uh and and and then you know, start kind of like watching our outflows because we don't we can't afford the financing because of rates even though rates are built into the lease financing.
We can't We maybe we can't afford the payment. Maybe we don't have the credit. Maybe all we could do is a three-year lease. That's it. We can't we can't set up for the whole longer term buy." But I thought that was interesting. So uh want to remind you that we are still uh a little chunk away from real stress in the economy.
I want you to know what real stress in the economy looks like. The 10-year Treasury right now is 4.28. The two-year Treasury right now is at uh 4.074. So that's about a 20 basis points difference. That's nothing. When that breaks the 50 to 90 range and all of a sudden we get a bad data set. This is how it's going to go, okay?
I I I'm just going to play it to you straight. You can go to cnbc.com to look at it. Okay, you just type it in. 10-year and two-year. My take is you're going to see some data shock that hits or another carry trade or whatever. The two-year will plummet. Possibly a whole percent down to 3% let's say.
The 10-year will plummet down to like 3.6 you know, 3.6 or whatever. Uh and that could keep going. You could see the two-year at at 2% or 1% and then the 10-year at 2% or whatever. When the spread between the two gets above 50, that's usually the sign of being closer to a recession. So it's not the uninversion of the yield curve that matters.
And it's not the wiggling that we've been doing above the uninverted point. It's breaking the 50 through a sudden spike up. Volatility spike, some kind of shock. So just the other day, I also I sent an email a daily wealth email, which has been anything but daily lately. I'm I'm sorry. I'm just a little buried right now cuz we got a big big announcement coming up for House Hack.
It's it's really exciting. Uh but I sent an email the other day and it basically said, "Consider taking something off the table." You know, this was a couple days ago. And it wasn't a way of saying like, "Oh, you need to be a mega bear or like, oh you know, sell everything." That's that's not what I'm trying to say.
I've been a bear. I have been. But I'm not trying to like get people to panic. So I don't care. It doesn't It's not like I'm short anything where it matters. Like I'm not trying to get out some financial gain out of saying this. But let me just put it this way. I wish there were more people that would grab you by the shoulders when you're really up on a stock.
That would grab you by a the shoulders. Kind of like what I did with that Dogecoin millionaire guy. I wish there were more people who'd grab people like that by the shoulders and say, "Please take some money off the table and just protect your downside." That's it. I'm not asking you to like sell out of everything.
I'm not trying to give you personalized financial advice. I'm just trying to say, "Hey man, consider taking some of the dollar hollers off just to protect your downside. Make it so that if the market does go into a recession, you're still safe. You're still protected. Like I'll give you an example. I you know, what I told the Dogecoin millionaire guy was back when I only had a lot of money in Doge.
I'm like, "Dude, just take some of it and make it so you never have to work again and just put it aside. Even if you just put it aside in cash." And I know it's painful because it's like, "Oh, but it could go up more. Yeah, but it can also go down and you don't want to go back to have to start over.
So, I just wish there were more people that were willing to say that. I do recognize though that's very unpopular to say on social media. Uh it's I think it's one of the reasons why probably I you know like my my channel doesn't get like the craziest amount of subscriber growth or whatever. I think in part because it's it's less of hey, let's be blind and assume that markets are going to go up forever and just buy buy buy.
I'm not a fan of that. I thought much more of a fan of let's be realistic. Yes, AI is good. Yeah, there's data center growth, but we realize it's not going to grow at 100% forever. Let's be measured in our valuations. Hey, if we miss some upside, that's okay. Remember Warren Buffett for a moment. Warren Buffett doesn't play options.
Warren Buffett doesn't care about FOMO. He invests in good quality companies at great valuations. And he waits. And the patience of Buffett was amazing. We think about this. Buffett Buffett was worth like a million bucks when he was 30, which which which is a lot already, right? But he wasn't worth 100 mil until like 15 years later and and and then you know, certainly billions until he was even much older than that.
Now, I'm not trying to make a comparison here to to Buffett, uh but to say like oh, you know, you everybody's going to be a billionaire like Buffett. No, I mean we we don't need to try to all go for that because then everybody's going to go bust, all right? Like 99.9% of people are going to go bust and that's a going bust is a much more miserable life than having a good life, right?
So, the point of that is Buffett didn't take his million bucks and yolo it all. Sure, he could have become a billionaire by 35 instead of when he did and if you know, in in his 50s. But he could have also gone to zero and then had nothing to compound. So, just be cautious. Just a word maybe of of wisdom and call it out from me, call it from Buffett. Check out the courses at mekevin.com. Love you all. See you soon.
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