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That is why the S&P 500 EPS has been rebounding since last year. Hello, this is Devel Romang, a long-term investor in the Woongdongi trading method and leveraged ETFs. Today, we begin with a subscriber comment. Nvidia is up 153%, USD 108%, and QD is up 23% after taking profits in the middle and buying a Bitcoin ETF as well.
Woongdongi commented, "I only regret buying USD in such small amounts. Thanks to you, I feel much more secure within the 4848 range than when I was trading alone." I sincerely congratulate everyone on their profits, and please always prioritize your cash balance rather than thinking, "I should have bought more." I will start by revealing my account first today.
My US direct investment rotation is currently showing an 89% return and a profit of 157 million KRW. I filmed a video a while ago stating that the USD return had surpassed 300%, but before I knew it, by quietly enjoying the ups and downs and utilizing my time to enjoy Nvidia's strength, I can see that the return has already climbed to 371%.
I have a feeling that we will soon reach a 400% return. Now, regarding the domestic account... I am currently at a 73% return with a profit of 8.6 million won. Adding profits from my second account, foreign exchange gains, and 16 million won from Bitcoin, my total profit has risen to 230 million won.
Now, regarding Bitcoin, I believe it is time to definitely break through its previous high and start to rise. Even if it does n't rise this time, I think it will eventually go up if you just hold onto it. Ultimately, I view this as a matter that time will resolve. With supply decreasing due to the halving, demand for the Bitcoin spot ETF Pro is increasing, and as liquidity continues to be supplied, demand is growing again, so I expect it to eventually rise.
I will be uploading a Bitcoin video soon, so please be sure to watch it; it will be very helpful. Currently, the US stock market has been showing a pattern of strong buying pressure at the end of trading for three consecutive days. This makes me feel that it is truly fortunate. Also, some quite important developments were observed yesterday.
Yesterday, the Jolt report on nine job changes was released, and we can see that the slowdown was much greater than expected, reaching levels seen in February 2021. Just by looking at the graph, you can visually confirm that employment is definitely being brought under control. This employment After reviewing the data, government bond yields fell significantly.
Consequently, both government bond yields and the dollar index have fortunately broken the upward trend that had persisted since 2024 and begun a downward breakout. In particular, government bond yields declined for four consecutive days, dropping sharply from 4.6% to 4.3%. What we need to observe here is that, firstly, a preference for safe assets has emerged, and secondly, expectations for interest rates are rising.
In fact, the September interest rate outlook had recently fallen below 50% because inflation was not contained as well as the economy remained more robust than expected. However, now that employment is showing signs of slowing, and the economy and consumption are slowing more than anticipated, and there is a growing belief that inflation will be brought under control, the September interest rate outlook has surged to 65%.
Looking at the current correlation between employment and the SMP 500, employment and the US stock market typically move quite similarly; however, this time, while employment continues to show a slowdown, the stock market has ended the 2022 bear market first and has begun to rebound. In relation to this, KB I have brought a securities report that is very similar to my own views.
First, this report presents the analogy that the recession had already passed in 2022 and that the economy emerged from it in 2023. Looking at the reasons for this, it cites: first, the US stock market entered a bear market in 2022; second, long-term and short-term interest rates significantly inverted; third, the economy recorded negative growth for two consecutive quarters; fourth, various leading economic indicators fell to levels seen during past recessions; and finally, housing construction indicators and the M2 money supply decreased significantly.
In other words, although a recession was not officially declared, examining the data reveals that the economy was effectively in a recession. If we view this through the lens of the economic cycle, where patterns always repeat, the report suggests that the recession cycle pattern has already passed, and the economy is now in a cycle of rebound.
Now, some of you might be wondering why a recession wasn't declared. The answer lies precisely in the strong employment figures maintained so far. Specifically, since economic conditions are judged based on the unemployment rate, the report argues that a recession was not declared because the unemployment rate has not yet skyrocketed.
Employment has held up well so far, but it is only now beginning to show a definite slowdown. Also, the pattern is that during a recession, both the investment and consumption cycles decline together, while during an economic expansion, both rise. However, as I shared data a while ago, the investment cycle declined first in 2021, and consumption only now has its excess savings exhausted due to COVID-19 subsidies.
In other words, the investment cycle had already declined first, and consumption started to fall somewhat belatedly. Here, the investment cycle began to rebound starting from early 2023, beginning last year. While the consumption cycle is still showing a slowdown, the investment cycle already showed a rebound last year.
Furthermore, with consumption currently contracting, I delivered news yesterday that GDP figures were being revised downward. I conveyed that the decline was much greater than expected, stating that the reason was the contraction in consumption. This could trigger a temporary economic slowdown. You might think, "Doesn't this mean the stock market will fall?" However, while we may see a temporary economic slowdown due to the slowdown in consumption, it could actually be positive for the stock market.
If consumption slows, employment slows down, and inflation... GDP is slowing down, which, conversely, can lead to interest rate cuts. And if interest rates are cut, what declines? As I showed you earlier, government bond yields fall. Why is a drop in government bond yields good for the stock market?
Because blood pressure rises in the opposite direction, which can actually be a positive factor for the stock market. This is because while consumption and services account for a higher proportion than investment in the real economy, the stock market has a higher proportion of B2B-related companies, such as semiconductor and materials firms.
In other words, the EPS of stock market companies moves in tandem with the investment cycle rather than the consumption cycle; although I mentioned that the consumption cycle is showing divergence, I said earlier that the investment cycle is rebounding. That is why the S&P 500 EPS has been rebounding since last year.
Furthermore, looking at recent investments in the AI industry, I believe the likelihood of this investment cycle turning around is low. Instead, there is more investment being made in power supply. In other words, when synthesizing various current situations and data—including this mid-term perspective and the liquidity injections by Biden, Yellen, and Powell—it seems highly likely that the stock market will perform well this year.
That is why I have been advocating for a bull market since last year. Looking at the current bull market cycle, the average duration of a bull market... We can see that there is still some time left, up to 30 months, and with the average bull market return at 90%, there is still room for further gains.
Currently, the market is moving within a very normal bull market pattern cycle. If the economy cannot withstand high interest rates and an economic crisis strikes or falls back into recession, the bull market will naturally end and a bear market could begin. However, if the economy holds up better than expected and a soft landing is achieved through interest rate cuts, there is a possibility that the bull market will continue.
But is this something we can predict? No, it is something we cannot control. Therefore, what we can do is observe investors' interpretations to determine where the stock market is heading and adjust our cash and buying proportions accordingly. That is why I currently maintain a positive view and have been consistently buying using the "puddle trading" method during the bull markets of last year and this year.
I am telling you that if you are investing in upward-trending US stocks, you should buy when the market creates small puddles like that, or occasionally when they create large ones. Even looking at the daily chart, the S&P is trending upward. Even looking at a 550-year chart, the trend is upward. Ultimately, if you hold stocks that are trending upward, even a big dip becomes an opportunity, and so does a small dip.
I want to emphasize that to seize these dips as opportunities, you must absolutely never exhaust your entire pension. Even if it means earning a little less, protecting your valuable assets is the priority. The stocks we have invested in are the most reliable investment options in the world. However, as you can see from the 2022 bear market, even such reliable investments can experience sharp declines or fall for over a year.
That is why you must utilize time effectively. I will hold out longer than you do and show you that I continue to hold onto my investments until the very end, so please stay by my side and walk this journey with me. That is all for today's video. If you found this video helpful, please subscribe, like, comment, and turn on notifications. I will see you in tomorrow's video.
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