This is Unexpected | Prepare for Market Chaos This Year.

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2024년 시장 전망: 기업들의 대규모 현금 보유가 광고·제조 투자로 이어져 공급 확대와 디플레이션을 야기할 수 있으며, 2024년 중 제조업 반등이 고용을 지탱해 경기침체를 피할 수 있다고 주장. 장단기 금리 역전은 머니마켓 자금이 장기채 대신 현금성 자산에 머물러 장기화될 수 있다는 가설을 제시. 머니마켓 자금은 시장 급락 시 저가매수에 쓰일 것으로 봄. 단기 장세는 현재 고평가 구간이라 과열(euphoria) 가능성도 언급. 자사 강의·뉴스레터 홍보 비중이 높음.

다듬은 글

※ 자동 자막 원문(다듬기 전)

01. Could 2024 be different? That's what this New Year's video is about. Let's review what JP Morgan just showed us in terms of some charts. Let's review my thesis on the money market magnet, which we published on ehack.com. Together, they will obtain all the information. And now, keep in mind the expiration date of the gold course.

02. I had to postpone it a little because there have been so many emails. And on New Year's Day, I took Jack skiing. It was his turn. Max went last week, so we got Jack. Uh, I didn't know what size was for their device, so I used the iPhone's measuring tool, which I found kind of funny. But, hey, this was us on New Year's Eve , I took him on the bus to the Fresh Market in Park City.

03. Prime beef was purchased, of course. And yes, here we are playing with snowballs. Uh, not as a break, but otherwise, yes, he's very excited. So I have some videos here, but that doesn't matter right now. The important question is: what will happen in 2024? Okay, let's start with these "oops!" photos And then I want to talk about my thesis on the magnet.

04. So, the first " oops!" photo What I really want to address is this one, which shows us the top 10 stocks in the S&P 500 and what the trend line looks like here. Let's get Kevin out of here. I wrote "oops!" there and I drew a trend line. And keep in mind that this is not the stock price. This is the weighting of the top 10 stocks .

05. So this could mean that the top 10 stocks will either fall off that trend line or do nothing. Yes, they could do nothing and let everything else go up in price. If everything else goes up in price and these don't do anything, then their weight would be less, right ? That's naturally how it would work.

06. Now, it's interesting because when you look at the top seven, the only one that has fallen behind all of them has been Tesla. Under the weight of interest rates, we have talked about that many times. There's always some drama happening with Tesla. Interest rates and Elon. Put both things together. They're guaranteed entertainment.

07. But Elon has always told us: "Hey, buckle up because entertainment is your only guarantee." So, to be fair, they had clear disclosure . Uh, this was another interesting point. Look at this. Corporate cash as a percentage of current assets by sector. Wow. Wow. This is crazy. When you look at the companies that have the most money, first of all, it is mostly the growth sector that has the highest percentage.

08. The lowest percentage would be in public services, basic consumer goods , materials, and industry. This makes sense. The largest percentage of cash, unsurprisingly, is in communication and technology services, real estate , even communication and technology services; that's going to be, well, basically those are their main growth bets, right?

09. So, keep that in mind. And yes, um, if you still want to email us because we're so behind on that, we've extended the golden coupon until we're done with all the emails. So, send us an email at staffmek.com. We'll probably finish them all off tonight. Uh, if not, first thing tomorrow and then we'll change the price.

10. So, uh, if you wanted to purchase the package and have n't received a response yet, I'm sorry . The entire team has been away. I've been working on it. I was up late last night in Park City waiting not only to celebrate the new year, but also to answer emails. So, uh, I even tried doing it on the chairlift, but let me tell you, it's a bad idea to try to do poles on the chairlift while holding your poles, your glove that you took off, and your seat.

11. Anyway, it's fine. So this is fascinating. This huge amount of cash in technology services really makes me feel very, very excited for many of the companies that could benefit from where we are potentially headed with the markets. I mean, look at what we wrote on e-hack yesterday. We wrote on E-Hack, we had this extensive article talking about the Fed's manufacturing lag and we talked about ubiquity too.

12. And basically, this was the big argument that, hey, there's a possibility that we could have all the manufacturing headwinds that we had during COVID, which turned into a massive stimulus for the manufacturing sector, leading to a massive rebound in manufacturing by mid-2024, which is interesting because it could be right when we start to see a slowdown in employment.

13. You could see an uptick in manufacturing jobs. And who would be manufacturing them? Well, as always, it's the companies with a lot of cash. You see, it takes about 2 years. We discussed this topic on e-hack.com here. You can read the full article there, but it takes about 2 years to get a factory up and running.

14. So, what many companies have been doing is really what this is too hot for. Let me, let me expose the dragon chain armor. Yes. And what many companies have been doing is really the ubiquity approach. So Ubiquiti, for example, had this situation where they increased their inventory spending by about $487 million , where suddenly it seemed they had a negative cash flow.

15. They had a negative cash flow of 145.4 million. This comes directly from your 10K form, you know, from the quarter that ended June 30. In fact, that's also when their year ends. At the same time, his stock-based compensation was increasing. So, you have here the stock compensation increasing substantially from 3 billion to 4.7 billion.

16. Those people are probably selling because it 's an uncertain time. At the same time , the company's free cash flow is negative. Because? Because they are accumulating inventory. In fact, in their 10K they say: "Why did we do this?" The increase in inventories is a result of the strategic decision to secure inventory while components are available, in an effort to increase product availability.

17. I think that's what many companies are going to do in 2024. Make sure the shelves are stocked. Businesses do not want to be in a situation like the one in 2021, with the government handing out money like candy and not having enough supply to deliver the products. So I think companies with a lot of cash will do everything they can to ensure their supply chains are excellent, their inventories are stocked, and they invest as much as possible in R& D, as well as expanding, growing, and advertising.

18. In fact, that was another thing we talked about on e-hack.com, this idea of companies; in fact, we have a whole article about Trade Desk here. Barron's, for example, sees Trade Desk as a major beneficiary of what could be a 30% increase over the last presidential cycle in political advertising spending.

19. $15.9 billion in political spending , which is an insane figure. But it's not just about the money the campaigns have. It's also because of all the super PACs and corporations that donate money to political campaigns for advertising or whatever. So I think what happens is the following, and then I really want to get into this part here, which is where we talk about my thesis on the money market.

20. Very good. I believe there are companies with ample liquidity that invest money in advertising and manufacturing, producing more inventory with a ubiquitous effect to ensure a large supply. Okay, so what happens when supply skyrockets and you end up advertising more? Why are you advertising more? You do more advertising because you're trying to induce demand.

21. And the best way to induce demand is by announcing that your prices have just dropped. And I think deflation will hit hard in 2024. And the beneficiaries could be the manufacturers, as they emerge from the manufacturing recession. We have had 13 consecutive months of declines in manufacturing. So, if companies advertise more, lower their prices, and possibly sacrifice profit margins, who benefits?

22. Consumers benefit from lower prices, but so do manufacturers. Nobody is touching the manufacturers right now. They're like China. You know, it's like , I don't know, man. I don't want to try to catch a falling knife, man. China, I don't know how low it will go. Manufacturing, I don't know how low it will go.

23. I don't know, man. I believe there is a possibility of seeing an advertising and manufacturing boom in 2024 that will create the jobs needed to keep us out of a recession. But then there's the bearish argument of: "Wait a minute, what about the inverted yield curve?" Many people believe that the inverted yield curve will dilute very quickly as we enter 2024 and we will see another massive sell-off of stocks.

24. Do you remember the last time the performance curve started to rise? Okay, we went from about 80 basis points to -20. And when was that? From July 19 to October 31. I know this clearly because it was 3 months and a week of constant decline in the stock market. And of course, that's when we did our Reg A fundraiser for House Hack.

25. Come on, man. Alright. Alright . We had to wait for the lawyers. It would have been perfect to do it in June or July. Alright. So, listen, whoever came in got the one-on-one rating. Everyone who didn't buy in missed out because now the company is worth between 50 and 100% more than what those shares cost.

26. Go to the House Hack YouTube channel. You can learn where we come from with valuation and everything else. Just search for House Hack Homes. It is linked in the description below. To make it easy for you. Good. So, what about this investment? Are we going to reinvest? Well, there are a lot of bears, frankly, right now arguing that we're going to reinvest and that the Fed is going to cut rates and that stocks will crash because of this reinvestment.

27. Generally, when the curve slopes steeply, you know, when we go up the yield curve, stocks go down. That's all you have to remember, okay? A steeper slope means the stock is falling. I actually wrote an article on e-hack while I was on the plane back here from Park City, Hebrew, actually. But anyway, as I was flying back here, I thought, aha, you know, will we really see the performance curve turn positive again?

28. And so, I have this thesis. I want to be clear. This is a thesis. It's not a guarantee, but it's a theory. I wrote it a couple of hours ago. I wrote that I am concerned that the money market magnet could keep the yield curve inverted for much longer. Look, think of this simply, okay? For the yield curve to invert, you really need people to buy one-year and two-year Treasury bonds, specifically the two-year one because we're looking at the 10-2 investment, right?

29. So, you look at the two-year one, that's at about 4.25 right now. Okay, the 10 one is at, uh, we're at about 3.85. So, you have an investment of 40 basis points, right? Because rates are usually higher on the 10-year mortgage. Okay, so let's stick with this for a moment, even if you're not that interested in bonds, try following me for a bit.

30. You need people to buy two-year bonds, but two-year bonds are almost like cash equivalents, you know, because they are very short- term bonds. So why would people buy a 2-year bond to earn a 4.25% return when they could simply put their money into money market funds and earn up to 5.5% with banks that basically beg their customers to deposit money?

31. JP Morgan is begging me to. They tell me: "Brother, please give us your money, your house hack funds, well, the other house hack funds." "You already have many of your things here." "Give us more and we'll give you 5.5 % in a money market." And so I started thinking about this because someone asked me a question.

32. I think it was on the House Hack YouTube channel. Like: " Kevin, uh, is House Hack still buying short-term Treasury bonds?" I say: "No". That? So, why would we buy Treasury bonds with a six- month or one-year maturity if we can get five and a half cents in a money market and have liquidity tomorrow?

33. Regarding the appreciation of capital, I understand. I always argue that, but the truth is that the capital appreciation play is over 10 years; In the shorter term, I suspect it will not be so desirable. So, if you're really trying to invest in bonds for capital appreciation, you go for 10- or 20-year bonds, right?

34. Bonds with a maturity of 10 or 20 years. Now, of course, I've also made that argument, but wait, money markets won't stay at 5% forever. Yes, but even if we have five rate cuts in 2024, so what? Who cares? We are still at 4% in the money markets. Okay. Okay, so, assuming the two- year bond stays at 4.25%, which it probably won't, am I really going to take my money out of the money market to buy a two- year bond for an additional 25 basis points ?

35. No. Money is constant , so it stays in the money markets. And not only do you have companies with a lot of cash, but whoever owns all the money in these money markets has a lot of cash; The question is, where does that money go? Well, for investors in money markets, I think the money will go to buying dips in stocks when things really start to go down, because right now things are a bit expensive.

36. I mean, take a look at this. Here are JP Morgan's S&P 500 valuation measures. And as you can see, we're about to hit a positive standard deviation on the right side. So we're a little high. Do you see that little red box over there? I drew it because I thought: yes , I know we're elevated, but look at that period of time where the red box is.

37. We were elevated for basically two years, where we were well above the one standard deviation line. And then look at 1997 to 2001. That's called euphoria. Okay , that's euphoria. And we could go back into euphoria. I'm not saying we should be there. I'm just saying we could go back to euphoria and potentially stay there for two years, and then maybe we'll have our recession in 2026 or 2027.

38. Eventually, there will be another recession. Okay. This is very interesting because, one second, 10-year yields fall, which means that those seeking capital appreciation in bonds and buying 10-year bonds cause prices to rise and the 10- year yield to fall. That makes car and home loans cheaper. Good, car loans, mortgages, cheaper.

39. That's good. The two-year rate remains high because nobody wants it, as money markets are high. So what does that mean? We remain invested . In fact, I wrote on e-hack that there is a possibility that we will soon see headlines about the longest inverted yield curve in history or since such and such a date, that it will finally arrive in 2025, the recession in 26, whatever.

40. We'll keep kicking the can down the road. But the point here is that there are some really important conclusions. Number one, I think it's entirely possible that we'll see money markets not flood the market and create euphoria. Although we might see euphoria, I think money markets only move when the S&P 500 and the NASDAQ 100, the technology index, are not at all- time highs.

41. I think they're moving to buy on the dip. Think about it. That's interesting. You have money in money markets. Are you going to buy at all-time highs? No, man. Are you just going to wait to buy on a dip? And so, in a strange way, you reiterate the thesis that I have held for about 14 months, which has been correct until now.

42. Knock on wood. OK. I make mistakes too. But if you want to know my perspectives, the Gold course will tell you all about them. Stocks, entrepreneurship, the mistakes I make, and LLCs or corporate entities, tax benefits, not paying taxes in your life. Live streams for course members, lifetime access , all new content filmed this quarter, including just a few days ago.

43. The Gold course is a bargain. And if you need to create a bundle because you're already a course member and you also want this one, all the new material in the Gold course is presented in a new way . Hey, send us an email at staffke.com. So now I've forgotten where I was. Alright. Well, oh, yes, yes, yes.

44. OK. So, you have this Nike-shaped chart that receives support because every time the stock market falls, people from the money markets come in and create a floor. So you have a floor. Every time the market goes down, you have a floor. And that's why you create the Nike swoosh, because there's a lot of cash on the side.

45. So, there's a lot to this . OK? No, no, no, I don't intend to be here and try to overwhelm. So, let me try to draw some simple conclusions here. I think that's why people like coming to the channel. No, no, I don't know. I do the best I can. I know it's not, you know , like I don't go around saying that the markets are going to collapse every day.

46. That seems to be very popular right now , but I don't know. It's like people who are super short on cash or something and need some confirmation bias. No, I don't understand. Uh, but anyway, it's fine if you're short. If you're shorting, you should also pay attention to these things. So, what are the conclusions from this?

47. Well, consider this. OK. I think what do cash-rich companies do? One, spend; two, manufacture; Well, now, uh, in advertising, or rather, spending on advertising and manufacturing, making more things, that creates disinflation or, honestly, let's not beat around the bush, it's going to create deflation because the supply will probably skyrocket.

48. OK. The problem with this is that, as supply increases and demand does not necessarily increase, prices have to fall. The price equilibrium has to go down. And we believe that by mid-2024 we will have much more online manufacturing capacity . What does it mean to have that additional online manufacturing capacity ?

49. It means more jobs, more jobs for the economy. More jobs for the economy mean less chance of the dreaded recession. OK. Very good. So, at the same time that you get more spending on advertising and manufacturing—you know, the manufacturers who create deflation— what do you get from people who want to speculate on bond equity appreciation?

50. Well, they're going for the 10-year bonds. 10-year bonds fall. So what happens when the 10-year bond falls? Well, mortgage rates, home equity loans, lines of credit, and cars become less expensive. So investing in things homeowners buy or in cars could make a lot of sense for 2024. Your local Restoration Hardware, Lowe's, Home Depot, you name it .

51. We've analyzed all of this, The Trade Desk from the advertising side , and you expect that everyone with cash on the sidelines will simply support or basically prevent the declines from getting too deep. As soon as the declines deepen, people buy. Obviously, all of this would be bad if we get employment data this week and, you know, we have some disastrous data or whatever about employment .

52. Again, I'm going to e-hack.com. I simply type catalyst into the search bar. What do I get? We'll have the JOLTS numbers in two days. We have the ADP numbers in 3 days, on day four. We have the employment numbers on the 5th. The CPI on the 11th. So there's a lot here, but I think it's really fascinating because when you put all these pieces of the puzzle together, it's like, wow, that's really interesting.

53. I think, in particular, one of my favorites is this one, simply because it really shows us that, hey, just because things are elevated doesn't mean they ca n't be euphorically elevated for a while. Now, I saw this. I found it interesting. S&P 500 profit margins. Look, the reason I wrote "wow" wasn't because profit margins were near bottom, which I think could get worse, but usually it only gets worse in a recession.

54. It is worth pointing that out. But the trend is upward. Look at that long-term trend since 2001. Companies are simply making a lot more money. Maybe I should go down. Oh. So, yeah , look, that's my opinion on the matter. Send us an email at staffmek.com. We'll keep that price active probably until tomorrow morning, just to catch up on all the emails.

55. Thank you all. Staffme.com. See you next time . th right nd real estate agent, or value , which may include .