저자: Kevin · 외국인
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연준의 금리인상 공포와 심리 악화로 단기 급락 가능성을 경고하며, 주식·암호화폐 대부분을 매도하고 약 5.5% 풋옵션 숏 포지션을 잡음. 1/25 금리 서프라이즈 우려와 3/16 인상 가능성을 언급하며, 공포가 정점을 지나면 재진입하겠다고 밝힘. 현금 약 2천만 달러 보유, 60일 내 재진입 계획.
다듬은 글
This is a video you should watch in its entirety or you will end up like Karen whiners who are misrepresenting my actions or what I think is happening in the market. However, to continue, you need to know these two things. Two things you need to know is that on this channel you will always get radical transparency from me about what I think is happening in the market.
I'll tell you all about what I think is happening in the market. If I'm shorting a stock, I'll tell you. I can't make videos every time I fart and buy or trade stocks. I do this in the "Stocks and the Psychology of Money" course below, and the link to it, you know it. But otherwise, my general market movements, you know everything I do: you know when I open a short , you know when I close a short, you know when I bet on the market, or I don't bet on the market.
And secondly, if I say I'll do something, I'll do it. For example, if I say I'm going to bypass AMC for a year, I will do it. I'm not just going to say it and then, a month later, change my mind, sell it and just not tell you about it and never mention it again. This happens. But it's not me. Now, what I do may not fit your strategy.
It may not match your hopes and desires, but ultimately hope is not a strategy. The truth is, a plan and conviction are what create a strategy, and that's exactly what you'll see in this video. Now let's move on to this video, starting with a short message from Streamyard and the importance of the story.
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Check them out at the link below. Okay, friends. Let's begin. The beginning, or rather the beginning of World War I, caused a boom in agriculture. Why are we talking about World War I? Because we're going to find similarities. Commodity prices have skyrocketed. The price of wheat, hogs, milk, and corn doubled, more than doubled, leading to rampant agricultural inflation due to significant shortages.
Anticipating a continued boom, farmers took on huge debts to expand their operations. The average price of land in America has doubled because of all this new debt. So, huge inflation led to a huge boom in the real estate market. Commodity prices more than doubled, ultimately leading to a huge manufacturing boom.
And the short-term outlook was excellent. High prices, high profits. However, just as any pain eventually ends, so too does euphoria . Eventually, we began to overproduce, which led to a surplus of agricultural resources. Guess what happened next? Because farmers now had a heavy debt burden to expand their businesses at the peak of the business cycle, they had to lower prices to remain competitive to sell any of their produce and, ultimately, to service their debts.
As a result, prices for agricultural products fell sharply. And within 10 years, 60 out of every 1,000 farmers went bankrupt. However, this was only the beginning of the suffering, as it is only 6%. But the Great Depression culminated, and it took another 10 years for the agricultural economy to fully recover from its suffering.
The Great Depression is often marked by Black Tuesday, which occurred on October 29, 1929 . But what we don't usually talk about is what led to Black Tuesday. The stock market experienced something it was not used to. These were amateur speculations on stocks. Stock trading became a hobby. People began buying stocks solely in the expectation that the price would rise.
These were people who knew nothing about fundamental analysis and did not understand the true current value of a business. The fundamentals are out of whack, which, I hate to admit, sounds very familiar. But what's even worse, secondly, people took on huge margin debts. Although only 3% of people invested in stocks in 1929, a third of all wealth in America was concentrated in the top half of 1%.
And much of this was supported by debt financed at low rates and a rising stock market. But when stocks began to lose value in 1929, especially during Black Tuesday, and fundamentals finally came back into question, perhaps even less so because people were now afraid of the markets, what happened next?
The true economics of leakage. Consumers became afraid and stopped spending. They began to accumulate cash. Business became afraid. They stopped hiring, stopped investing, and stopped spending as much. Of course, things don't go to zero. Capital expenditures fell sharply. This, coupled with high levels of debt and overproduction in many industries , even outside of agriculture, led to a massive, horrific collapse that took America 5 years to recover from.
You couldn't buy a fall and we'll be healthy in 5 weeks. You couldn't buy a fall, and we'll be healthy in 5 months. It was five years. You see, this kind of crazy speculation also happened in 2000 with the Internet bubble. Someone who bought in 2000 would have had to wait about 14 years just to break even at the prices they were paying.
This means they had to survive the 2008 recession to eventually get to the other side of the 2008 recession to break even on the purchase they made in 2000. That's 14 years of average returns of 0%. Unfortunately, I can't help but find a huge similarity between these previous markets and today's. We have massive inflation caused by chips and delivery, accelerated by the complications arising from societies handling COVID differently.
Look at China versus the United States. Misinformation about masks and COVID prevention, and complete disbelief in the fact that vaccines can help us. And so far they are not up to the job. While some agricultural commodities are currently rising rapidly, goods related to chips, metals and shipping have risen sharply, and businesses are expanding their production capacity with the increasing amount of cheap money.
But this cheap money is coming to an end. We are now seeing prices and wages go up and become so prevalent in companies like Chipotle where they openly brag in their earnings reports about how they can charge customers more money, despite the fact that their production costs are not actually going up.
And then other companies, whose production costs are rising, brag about what percentage they can pass on to consumers. This is called pricing power. A phenomenon that occurs when people have higher bank balances and a psychological mindset that prices, ahem, and rising prices are the norm. This is inflation.
You see, inflation is not just a rise in prices. This is not just an expansion of the money supply. It's a psychological belief that paying more money is normal, and when we do, prices or companies take advantage of us. As a result of these pricing powers, the Federal Reserve now describes overvalued quotes in the housing market and the stock market.
And this is due to the fact that sellers are, in essence, the ones who set prices. Companies, whether they are sellers or companies, can set prices, and people pay them. Now the Federal Reserve is starting to try to curb this madness, first by raising rates. When the federal funds rate rises, it can cause other interest rates to rise, whether it's marginal interest rates or simply higher lending rates.
When rates rise, borrowers tend to reduce the amount of loans they make. That makes sense. Consumers are borrowing less money because it is more expensive to borrow margin debt or take out personal loans or lines of credit secured by their homes. Interest rates are rising. When rates rise, businesses suffer from the same aspect.
But there is also a second factor in business: if consumers borrow less, demand may decrease. Therefore, businesses, in particular, tend to borrow less money when rates rise. This again leads to a decrease in consumer demand with rising financing costs. But businesses are cutting back on investment as demand declines.
It's kind of like , and it's much more complicated, but if you think about the analogy, it's kind of like the Federal Reserve taking its foot off the gas pedal on a car that's going too fast on the highway, say 100 miles per hour or 120 miles per hour, and then lightly applying the brakes to bring the car back down to 80 miles per hour.
The car is still going fast. We are not in a slowdown phase when we are driving on a highway in a stop-and-go traffic jam. It would be really bad if we slowed down that much. Well, we're trying to get from 100 to 120 on this nitrous fuel that someone put in the gas tank, to normal highway speeds or between 65 and 80.
You see, we were just going too fast. Unfortunately, driving a car is relatively easy. Managing the global economy is almost impossible. And this is exactly what the supposedly apolitical body, that is, the non-political body of the Federal Reserve System, is doing. They actually run the world economy, even though they are supposed to run only the American economy.
Because we are the largest economy twice, twice the economic size and power of China , we drive the global economy. So we are told to expect prices to fall when production meets demand, which is a known risk that if demand falls too quickly we could end up in a deflationary spiral and eventually a recession.
Is n't that right? Of course, if we don't hit the brakes, meaning the Fed doesn't hit the brakes, we could lose control and end up in a hyperinflationary crash. And this is where the Federal Reserve really has the task of dealing with two extremes. I think the easiest way to imagine it is as a large balance beam about 8 tons tall.
And all of us in America stand under this balance sheet. A massive sheet of plywood lies on top of the balance beam , and there are two weights on either side. And if that balance beam breaks and that plywood falls, we will all be hurt or crushed in the markets. And you see, the Federal Reserve stands in the middle and tries to balance this balancing beam on a little pyramid.
And on each side of the plywood, there is the risk of a deflationary spiral that slows the market too much, all the way to a deflationary spiral where spending slows so much that we fall into a recession. Because what is a recession? This is two consecutive quarters of GDP decline. OK? Well, if consumers stop spending so much that GDP goes negative, even slightly negative, for two quarters, you 're in a recession.
You are in a technical recession. The same goes for the opposite end. If we don't control prices, and prices continue to explode the way they have been, uh, and uh, we're going to have hyperinflation, which will force the Federal Reserve to raise rates so much that we're going to stifle demand with high interest rates, where borrowing becomes almost impossible because the rates are so high.
Demand is suppressed and we fall into recession. Isn't that right? Both of these options are bad. I like to call them the two extremes. And so what we're all really hoping for right now is that we're all standing under that balancing beam, looking at Jerome Powell and the sophistication of the Federal Reserve keeping that balancing beam in order.
Unfortunately, market psychology has changed and we have lost some respect for Jerome Powell's ability to keep this balancing beam afloat. You see, after Joe Biden's meetings with Jerome Powell, whether it was to keep Jerome Powell's jobs or not, his job or not, Jerome Powell changed his mindset after his meetings with Jerome Powell and became much more militant about controlling the economy.
A hawk that could potentially be useful to Joe Biden. However, blaming politics here is not really relevant. It doesn't really matter what has changed in the world of Drum Powell. Most importantly, markets have somewhat lost faith in Powell's ability to protect us. And this may be due to its reversal in the temporary course.
Perhaps this has to do with his sudden U-turn after meeting with Joe Biden, which means there's more politics here than, ahem, the reality of wanting to provide factual information. But then again , is that it doesn't matter why people lost their faith. What is important is that people have lost a certain amount of faith.
And this loss of faith has led to wild speculation fueled by fear, which is likely to drown out any semblance of good news this market is expecting, and is why it seems every day that certain stocks are hitting new all-time lows or, at least, ahem, new 52- week lows. Uh, and it seems like any growth we have is actually unfounded.
Let me give you an example. Dr. Powell has made it clear that he does not expect to raise rates until the cuts are complete. However, now, since market participants, ahem, don't have that much faith in Jerome Powell, they are speculating that Jerome Powell is going to fool us on January 25th, just a few days from now, with a surprise rate hike.
Previously, the first rate hike from the Federal Reserve was expected on March 16, and speaking of March 16, Dr. Powell and the Federal Reserve in their brief economic outlook forecast a 25 basis point hike. That's a quarter of 1%. Unfortunately, now again, because market participants don't have much faith in the Fed, they are suggesting that the Fed may raise rates by 50 basis points, which is twice as much, on March 16th.
Again, doubts about the Federal Reserve, which , frankly, is understandable. But things are different now, are n't they? I mean, we started to get some positive catalyst, right? I mean, for example, the PMI in services and manufacturing showed some hope for inflation, that we should be optimistic about it coming down, right?
And I mean, JPA would n't want to crash the market, right? That may be true, but friends, one of the most important things to consider is the psychology of investing. And that's exactly what I talk about in my course on stocks and the psychology of money, where I tell you about tactics for different markets.
I don't bury my head in the sand and follow the same tactics over and over again . When markets change, I provide you with the rationale for these changes and suggest actions that can help protect our portfolios during such times. Of course, no guarantees. But here's the thing. Stock valuation is based on three things, and this time we're going to talk about something completely different.
Stock valuation is based on three things. Number one is fundamental indicators. Number two is technical trends, and number three is momentum. You can combine them together. And, uh, the momentum of the third level can vary significantly depending on people's individual moods and fears. For example, if the stock valuation is the sum of these three different levels, and then when you add this piece of paper, you get the stock valuation.
Uh, and let's say the score is right here, X on top, which means we've passed the fundamental level, the technical level, and the momentum level. So what happens when momentum potentially turns negative and we potentially see stocks trading below their fundamental fair value? Well, it's really good because of the drop possibilities, isn't it?
But the point is that momentum itself can entail all these significantly negative consequences, and momentum is caused by fear, people's faith in the market. Good. Let's now compare this to a time when there was a shift in psychology similar to what we are seeing now. We are now seeing a shift in psychology regarding how much we trust the Federal Reserve.
Well , in 1987 there was also a shift in psychology. People trusted the Fed less and as a result became afraid. Actually, think about it. In a popular YouTube news report from 1987, a news anchor says, and I quote: “ Investors used to see the economy as half- full. Now they see her with the glass half empty .
The same thing happens in 2022. 70% of people are dissatisfied with the state of our economy and believe that inflation is out of control and will likely remain out of control for some time to come. Furthermore, in the same 1987 report, we were told that there were, quote, new fears about inflation with the decline in the dollar.
We also have rising interest rates and huge budget and foreign trade deficits to deal with. And then we were described as a nation, and I quote, living beyond our means. Well, people, what do we have today? So far in 2022, the dollar has declined. We have huge inflation. We are concerned that inflation will continue.
We are concerned that interest rates will rise. And we have a significant trade deficit, especially with China. And it is fears that drive the market, not the actual catalyst in general. Now, actual catalysts may calm fears. Consider in E-e, in the 2020 election, the stock market fell significantly before the election as there were fears that the transition of power would be a disaster in America.
Just a few days after the election, the market recovered and took off, and we also got approval for vaccines, but the market started to recover even before the vaccine was approved. And this is because the catalyst for fear before the elections has disappeared. But for 2-3 weeks leading up to election day, we had a lot of problems in the stock market.
The news of 1987 showed us the same psychology. We saw this in 2018 as well. In 2018, the housing market fell 12% in one month from May to June, when interest rates jumped 1% in 4 weeks. Well, in the last four weeks, home interest rates on a 30-year fixed-rate mortgage have risen from 6% to 1%. Folks, history doesn't necessarily repeat itself, but it can often rhyme.
And the biggest problem we have right now is the decline in sentiment. You can be the best. fundamental analysis in the world, but if you buy Zoom without realizing that the market has changed its sentiment on Zoom, I don't care how good a company Zoom is, the markets are going down and will significantly drag Zoom down with them.
So, where are we today ? Well, the doctor's appointment is on January 25th, 3 days before my birthday, which is the time when the Federal Reserve is expected to raise rates a bit. And if the Federal Reserve does indeed raise rates on the 25th, it will be a shock and a 180-degree turnaround from what the Federal Reserve has said.
I expect the indices to fall by four to 5%. But I do n't really believe the Federal Reserve is going to push us. This means that the next catalyst will be fourth-quarter earnings. Reports from huge technology companies. And here's what happens to profits. Everyone is excited about the amazing fourth quarter earnings, but I think individuals, investors, and institutions are forgetting to some extent that no one cares about fourth quarter earnings.
They can be wonderful. You know what? Everyone is really worried about the forecasts. Forecasts for the first quarter. That's what stocks are based on. What is happening now? Apple, TomTom, Google mobility data has dropped significantly due to the closure of businesses related to the coronavirus due to staff shortages.
Adele canceled her concert four hours before it was due to start because she couldn't get enough staff to show up for work due to the coronavirus, with everyone calling in sick. Do we really think that the first quarter forecasts will be good in the middle of the omocrone? I hope so . I really hope so.
But the reality is this. If the forecasts are bad, stocks will fall. If earnings beat expectations and the outlook is good, despite Omokron, guess what signal that sends to the man at the helm, the Federal Reserve, what signal does that send to the Fed? Well, if earnings and forecast numbers significantly beat expectations during the omocrown, that gives the Fed more reason to raise rates, and that will increase concerns not about January 25th, but about March 16th.
In other words, good news is bad news. Bad news is bad news. If profit figures don't show up, the stock market punishes companies. Just look at Peloton or Netflix. Even if Pelaton had some potential misinformation, we don't need to delve into Pelaton now. What matters is not fourth-quarter earnings.
An important forecast for the first quarter. And even if they are positive, it will only heighten concerns about what the Federal Reserve will do to respond. The Federal Reserve is watching profits. They watch what CEOs say because that's the best indicator of what's happening in the economy - what people are actually doing with their money.
Banks have now acknowledged that consumer savings levels have returned to pre-pandemic levels . This is not ideal. People are saving less money, which potentially means they have less discretionary funds to spend. Banks also do not expect an increase in the size of consumer bank accounts this year. Now, while existing bank account sizes are larger than in 2019, again, banks are not expecting these consumer accounts to grow, and savings levels have dropped back to what they were before, not to the large savings levels we had throughout 2020 .
This generally leads to a decrease in purchasing power. I expect some of this to potentially be confirmed in the first quarter guidance. But don't take this opinion as proof alone. Look at how mortgage searches have moved over the last 5 years. In the fourth quarter, they reached their lowest level in the last 5 years.
But this applies not only to mortgage loans. This also applies to car loans. Take a look at car loans. We know that there are fewer car loans available, and seasonally this can be a problem. But the housing market, while experiencing a shortage of inventory, we are actually still selling more homes.
It's just that houses are appearing on the market and selling very quickly. So seeing this double correlation between the lows, which we have n't seen seasonally over the last 5 years, is something to look out for . Who knows, hopefully we'll get some really positive first quarter expectations for tech and other companies.
But in any case, our country's margin debt peaked at $935 billion in October. Remember what we talked about in 1929–about huge debts. Fortunately, the margin debt has decreased. Margin debt has decreased. 2% in November and approximately 1% in December. But if we compare margin debt to January 2020, just before the pandemic, our margin is actually 66% higher now than it was then.
This means that in just 23 months, margin debt has skyrocketed to $349 billion. Almost all of this has been added since summer 2020. And now, as many stocks are returning to the levels they were trading at in the summer of 2020, people who borrowed money to invest in stocks at those levels could potentially start to see their principal disappear.
And when the bulk of people start to disappear, people really start to get nervous. Remember that the amount is what you brought into the market. Having your profits wiped out is less painful than seeing your actual hard- earned money disappear. The same goes for cryptocurrencies. Most people started buying cryptocurrencies in early 2021.
Well, if we fall below these prices, we could see the same kind of fear. Now that means all of this together, the views and attention on Jerome Powell on January 25th and March 16th will be extremely important. So where is some good news? Because for now, all of this is painful. I mean, so far it looks like our future will be either more stock market declines or unfounded rallies that will eventually lead to a sell-off, which is roughly what's happening.
Institutions seem to be selling stocks in the last 2-4 hours of the trading day every day, potentially taking advantage of retail investors falling and dumping their money on them. But what do we think about a positive catalyst? There has to be some kind of positive catalyst, right ? Yes, I personally think that the fastest positive catalyst we could get would be the CPI data.
CPI data will be released on February 10 for January and March 10 for February. Well, it's not guaranteed, but if we finally see a downward inflection point in the CPI, it could cool the Federal Reserve. And with everyone watching the Federal Reserve, maybe the markets will finally start to turn up.
So February 10 and March 10 will be important. days. I don't know if February 10th will be early enough for us to see any kind of inflection. So, most likely , we will see an inflection point in inflation on March 10, although this may not even happen. The next catalyst after that, you know, if the Fed tries to calm the markets and reassure them because the CPI is coming down and they eventually become less aggressive, the next catalyst after that is the market seeing the rate hikes and then realizing that, okay, the rate hikes—that's not so bad.
But I want you to consider what history has told us about when markets have responded in the micro- short term to Federal Reserve actions. Consider this, and this is why these Fed dates are so important. On December 19, 2018, the market fell significantly when the Federal Reserve raised rates by 2.5%, or two and a half%.
But the market bottomed out two days later. So the Fed raised rates, and the market bottomed two days later, and the 2019 rally began. This could be...because the Federal Reserve has lowered its forecast for further rate hikes. At the end of 2018, the Fed lowered its expectations for rate hikes to two hikes out of three for 2019.
And the market traded positively for two days. The S&P and NASDAQ sold stocks by 20%. And the market bottomed out when the most feared date arrived, which, in my opinion, is now either March 25, or, excuse me, January 25, or March 16 . Let's take March 2020. The market bottomed out on March 23rd, which was literally the day the Federal Reserve announced unlimited bond purchases, essentially an unlimited amount of lending and spending programs to make sure businesses and companies stayed afloat.
The market turned up on these views. After that, he barely failed for about 10 days. On April 3, we reached the second bottom. It was higher than on March 23, but the market really started to rise. So, it took about 10 days of shock and the market took off when the Federal Reserve took action. Ironically, these programs were almost never used.
They were just a sign that the Federal Reserve was ready to stop at nothing to save the market. These were unlimited funds for rescue. Now look. In October 2008, TARP, a $700 billion bailout program, was enacted. But the market continued to fall. It continued to fall until the first quarter of 2009.
What happened in the first quarter of 2009? In fact, it was in February 2009. Ah, the Fed announced liquidity in February 2009 with the following quote. The Fed is poised to make a significant expansion of the asset-backed term loan, also known as TAL, and the expansion could increase the size of TAL to $1 trillion and could expand eligible collateral to cover other types of entities.
What kind of madness is this? Congress announces a massive bailout in October 2008, but the market continues to fall. Just when the Fed finally comes out with a bigger bailout program in February, the market bottoms out. These were the days of Ben Bernanke. But, friends, nothing has changed. The Fed talked sweetly.
We need money or a reduction in aggressiveness to move this market - that's what moves the market. Still do n't believe it? How about this? When did the S&P 500 bottom after the 2000.com crash? It was the second quarter of 2003. Guess what else happened next? The Fed finally cut rates to 1%. They made their final rate cut to 1% in the first quarter, er, the second quarter of 2003 .
And because the economy was still sluggish, personal spending in the fourth quarter was down, uh , compared to the January 2003 Federal Reserve meeting , the trade deficit was widening, blah blah blah blah, the Federal Reserve cut rates, became less hawkish, and what happened? The market turned upward.
So the reality is, my friends, no matter what happens in our market over the next 60 days, everyone is looking at the Fed. Everyone is watching what the Fed is doing with this big balancing beam. So I'm making an extended, huge bet that January 25th and March 16th will be a critical catalyst. days for our market, and we will reach the peak of fear by these dates.
We may be reaching peak fear now, but I don't think we'll necessarily reach peak fear now because everyone will be paying attention to March 16th. January 25th is expected to be unremarkable, but who knows? Maybe Powell will give us some guidance on March 16, which is why January 25 is so important.
Now, I also believe that markets react relatively quickly to bad news from the Fed and slowly, sometimes taking 2 to 10 days to react to good news from the Fed . Well, in my opinion, we have three paths to development. And then we'll talk about my bet. I believe we are balancing between two dangerous recession paths and one neutral path.
I really believe that this neutral path has the potential that we won't necessarily go into a hyperinflationary type recession or a deflationary type recession. It's kind of like a short picture. What am I talking about? I myself wrote a little bit that I hope we will have a normalized Fed and disinflation.
Disinflation means a decrease in inflation, not necessarily negative, right? Disinflation is what we are looking for. We're hoping for this downward inflection point, right? And so, in my opinion, there are three paths for individual portfolios. Uh, number one, for most passive index fund investors, I think the best answer here is probably , and not financial advice on any of this, obviously, but just buy on the dip, dollar cost averaging, your income shrinks, dollar cost averaging.
And now could potentially be the time for that. The second path could be to sell, uh, to move to cash as a hedge. So there is path 2 A, sell and go to cash as a hedge. Path 2B may be chaotic, but buy weekly put options as a way to hedge. The second way is hedging. Or path 2 B You can sell exactly as much to liquidate your margin.
And then the third way is to do nothing. So, you have three general paths. One—just DCA, keep buying on the dip. The second way is hedging. And the third way is to do nothing. The second way is more of a trader's mentality, is n't it? And, honestly , sometimes doing nothing is the best thing to do, which is the third way.
Sometimes continuing to dollar average is also best. This is a passive way of investing, the easiest thing you can do. I think that's the wisest thing to do. However, in this case with PA, I personally chose to trade, uh, these market catalysts. Now I could be completely wrong . I hope so. I hope we're at the peak of fear, have hit the bottom of the market, and, uh, you know, we're going to grow like crazy.
I don't think the markets can go up on anything other than January 25th and March 16th, when things will go much better than we think, as I described how the market has historically responded. Now, uh, I've sold 99.15% of my shares and my entire crypto portfolio. With the cash I have, yes. I currently have a 5.56% short position in the market.
So, of all the cash I have, I have a 5.5% short position in the market with a put option in the market. Uh, and this is a short-term position, so I want to be completely transparent. This means I have no margin. I have almost $20 million in cash and about $1 million in a short position. I now plan to fully return to trading the market within 60 days.
This is extremely risky and exposes me to significant capital gains. But after each fall in March 2020, I was extremely consistent. Extremely consistent. I mean, I'm, you know, the kind of person that people like to say, "Oh, Kevin wasn't consistent." " Actually, that's not true. Going back to March 2020, Kevin was on this path.
Buy the drop. Buy the drop. Always buy the dip. Now Kevin is changing direction. So, it would be fair to say, yes, it is a change of direction. And this change of direction happened suddenly. Uh, it actually happened, uh, on Thursday night, uh , after I, uh , spent the entire night doing a significant amount of, uh, additional research on top of all the years of research I already have on this economy.
And when I combine the new information with all my old experience and all my old research related to understanding this market on a daily basis, I worry that we are really just in the Titanic lifeboat stage. So it's kind of like the Titanic hitting an iceberg. Maybe we hit the iceberg in December, when it's like, oh [ __ ], the Fed is actually going to react to inflation.
But right now we're just getting into the lifeboats, and we're not at the sinking stage yet , and we're definitely..." not at the rescue stage yet. This is just my opinion. And that's why I'm betting big on it. I believe this creates an opportunity for me to reduce risk and market exposure, as well as time it for better results.
Well, that could be very stupid because, again, we know that time in the market trumps time-to- market calculations. We know that it is much safer to use DCA. But when you are 100% exposed to higher- rated tech companies, you may want to consider a more defensive approach, especially if you are also exposed to margin, and especially if you have other cash needs.
But the most important takeaway from all of this is that I expect there will be more fear in this market between January 25th and March 16th . And so I plan to re- enter the market very suddenly. I am going to buy stocks again very suddenly , balancing short-term call options and stock purchases. All of this will be available to participants in the course on stocks and the psychology of money.
So I'll be spending money on puts for the next few weeks. And I will spend money to buy back these shares. market for the next 60 days. I take the entire portfolio and trade it, which is extremely risky and I don't advise anyone to do it. But if you want to know every fart I make with that $20 million, use this link below and join the course on stocks and the psychology of money so you can see how and why I reallocate.
And that way I can really use my portfolio to take advantage of what I think is going to happen in the market. However, it is very important to follow the checklist and understand what the market needs for growth. First, the Fed's fear must end. I don't think it's possible before March 16th. CPI data should indicate a decline.
We have n't seen this yet. This is unlikely until March 10th. Third, high returns are unlikely to convince institutions to buy long positions because institutions represent client money. And as long as customers are afraid of the Federal Reserve and uncertain about the Federal Reserve, markets hate uncertainty.
I don't believe institutions can buy the dip until the catalysts of fear are gone. Otherwise, they are likely to lose significant customers. And hedge funds don't want to lose clients. If you had a bunch of clients and $100 million under management, would you want to invest when your clients say, "Hey, if you don't protect us right now, we're going out and taking our money out." "It's important to consider this." That's why we see, uh, short positions so high.
That's why we're seeing so many sales. So again , markets and institutions should sense that the Fed rate is rising. Well, first of all , the fear of the Fed is decreasing, but also the markets need to realize that the Fed rate hike is actually not that big of a deal. Usually it is the fear that leads to this that is the bigger problem.
So once these things are clarified, I believe we have the conditions for a proper economic recovery, not a false, unfounded growth. Because unfortunately, markets are now regularly selling off in the afternoon, which involves an outflow of funds from institutions and trading or traders taking advantage of the crowds of buyers on the decline.
Now, to be perfectly clear, this is a massive deal and a very risky one. This is not financial advice. I will be back on the market very soon, but I am waiting for the proper catalyst to return. And if you're not actively participating in the market on a regular basis, like I am literally all day every day, eight hours a day, passive investing is probably best.
If you're more of an active trader, buckle up. Ultimately, the choice is yours. Thank you very much for watching. Check out the programs to build your wealth at the link below with a huge coupon that expires January 28th, especially considering our Path course is coming out at the end of this month.
This is super interesting. And check out StreamYard at the link below. Thank you very much. See you later.
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