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Hey everyone, me Kevin here. Oh boy, what is going on in markets? And in this video, not only am I going to tell you what's going on in markets, but I'm also going to give you a just very transparent breakdown of my opinion and my positioning so that way we could be crystal clear about where I stand and what commitments I'm willing to make for the future.
And in this video, I'm going to give you a very clear commitment. And if I'm wrong, I will dress up as a clown. I accept the challenge. So without further ado, let's give you a quick breakdown. Look, here's the thing. This morning we had Target earnings. Okay, people are like, "Is this a canary in the coal mine?" No.
Okay, Target is not a canary in the coal mine. Target is a poorly run business that is making bad business decisions. They've been complaining about fulfillment in their stores hurting their margins for online deliveries since co and they're morons because if they took more of a Walmart style approach, guess what?
They'd have better freaking margins. If they just invested into fulfillment infrastructure, they'd be fine. So, no. No. Is is Target uh a canary in the coal mine? No. But what is a canary in the coal mine? Is the 102 spread? Yes. Okay. Old news. Today, we had the first 20-year bond auction since when?
Well, since the Moody's downgrade. Okay. It came as a shocker because we got an over five handle. And it's probably because foreign buyers of US credit such as, you know, even even banks in Hong Kong, okay, they have requirements that they invest in a certain percentage of AAA rated bonds and a certain percentage of lower credit rated bonds.
So when Moody's conducts a downgrade and there goes our last AAA credit rating, there is no justification for certain institutions and banks around the foreign government holding US debt anymore. So yes, it exacerbates USD dollarization. It exacerbates uh anti-American exceptionalism. Okay. It's unfortunate.
I will never not betray America though. I am always going to betray America. People ask me, "Oh, Kevin, is it time to invest in Japan?" I don't know anything about Japan. Okay? I just know about America. And here is my commitment. First, I want you to know about the past. This is very simple. I was part of the problem.
The reason we have so much buy the dip today is in part my fault. Yes, I'm taking credit for that because in part because we even have a buy the dip song that people made over this because in March of 2020, I took on a bunch of debt and went into margin and bought a crapload of stocks and made a lot of money buying the freaking dip.
Okay, buying the dip was fantastic. That I was a 10 on the bareb scale. Okay, bear bull scale is one, sell everything, 10 buy everything and margin up and leverage up, baby. I am not a 10 right now. I am not a 10 because I'm highly concerned about layoffs. Now, I'm going to make a commitment. If we do not have a shock in our economy by Halloween, I will dress up as a clown for Halloween.
This is exactly the opposite as what I did in 2021. In 2021, I dressed up as Jerome Powell and we handed out not only full-size candy bars, but we handed out free money. We literally threw it up in the air say free money. Inflation is transitory. You know, we really leaned into the whole Jerome Powell and and Janet Yellen money printer.
And it was a great Halloween. It was it was one of my favorite Halloweens. But this year, if we do not have a shock by Halloween, I will have a clown show outside of my house, full-size candy bars, and we will have a circus, red nose, everything. And the way we're going to measure whether or not there was a shock, and you're going to hold me to this, okay?
The way we're going to measure whether or not there was a shock is TLT will be over 100 by Halloween. Okay? If it is not, and I am wrong, then we will confirm soft landing and it's probably fair to be more bullish because it means we survived the tariff debacle uh and the outcome of tariff warfare. See, a lot of people today are like, Kevin, look, tariffs did no damage.
You know, uh you were so negative on tariffs. Well, yeah, cuz tariffs are economically stupid. Okay? Anybody with an IQ greater than I rock knows that the economic outcome of tariffs are stupid. Now if we can achieve better net positive benefits through tariff negotiations then of course sure you could argue that well but you know the bad of tariffs was offset by greater good.
That's fine. That does not change the fact that tariffs are economically stupid. Okay that is that is an economic fact. It it's just a real it's very very simple. When we get past that, we have to remember that we're not going to see the impact of tariff drama probably until August. And this is why I think Halloween is very very fair because the longer we remain over the 210 and the spreads uh on the 10-year uh and two-year Treasury curve, the longer uh unemployment uh in the nature of um uh of our jolt data continues to decline, job openings decline, hiring declines, at some point likely driven by small to medium businesses, they will crack under the weight of high ter or or high treasury yields.
These treasury yields, this Moody's downgrade, these higher treasury yields, they are not damaging today. They are damaging in the future when small to mid-size businesses can no longer refinance. People go bankrupt because they can't make their payments on their stupid buy now pay later Chipotle anymore.
Then they get laid off on top of that and they really can't pay off their buy now pay later crap, which is still sustaining Walmart and and Home Depot spending. huge beneficiary by the way of the whole CLA effect which whose losses have just doubled because of you know consumer delinquencies but more on that separately.
When all of this sort of debt buildup and consumerism hits the fan mostly likely due to a surge in layoffs TLT will skyrocket. Now if it doesn't happen by October and this is where I make my commitment I will admit wrong. Okay, we were right to buy the dip in March of 2020. We were right when we were saying buy the dip in 2018.
We were right about buying real estate. We were right about where to buy real estate, which is very important, the whole COVID bubble with House Act. I've been I've been screaming for years, there's a COVID bubble and the markets that are blowing up because of, you know, COVID relocations will not last and those markets will get hit heavily.
And sure enough, that's exactly what happened. Uh when you look at um uh you know the Austin Texas markets, what up John? When you look at the Austin, Texas markets or you look at uh uh you know parts of Florida or whatever. Have a good day. Uh this this was obvious. This was predictable. We we knew that.
And so we were right about that. We were also right about the Nike swoosh recovery uh from uh from 2022 on. We literally had a Nike swoosh recovery. Right now, in the near term though, it feels like Evan is taking a big L. And I just want to be transparent about that because what if if I can say I've been right in the past, I also need to be able to tell you transparently when and if I'm wrong.
I think it's too soon to say that I am wrong that there is no shock coming and that the soft landing is secured. It's too soon to say that. If we get to October and the tariffs have not as well as the slowdown in the economy have not led to a spike in layoffs as Jerome Powell says the economy breaks to the downside in the fact that it has to come out with some sort of you know dramatic rate cuts.
If that does not happen by October I will dress up as a clown and I will take a fat L baby. I will admit because you know what it's the right damn thing to do. Now people, you know, like very few people in the comment section, they'll say things like, "Oh, but Kevin, you're just being a flip-flopper." No, I I would respond to the data, you know, everything that I gave.
I mean, if people people were on me during co, you go back to my videos in April of 2020, I would do weekly analysis of real estate trends in certain markets because realtors would send me data. Leave a comment down below if you were one of those realtors. They'd send me data in their markets and I'm like, "Oh my gosh, like real estate's about to boom.
Real estate freaking exploded in COVID. I bought 11 properties personally in 2022 and 2021 because I'm like this is about to take off and there's a boom in the latter half of 2021 and 2022. Okay, it's it's a databased approach and and to me it's basic but it doesn't prove out the very next day. That's one of the hard things is like we we you know we could look at data and say okay here's the game plan and then what happens is uh you know the very next I'll give you an example.
Okay, so I say uh in my core, my last Core Eve versus Palanteer video I think is very on point. I talk about how the financials of Core are actually really really good right now and a lot of people didn't realize that Nvidia was bailing them out anytime they fell under $40 per share. Uh now people see an Nvidia stake disclosed and the thing has like doubled.
Okay, we've been talking about call options and core for weeks and everything. I actually didn't think it was going to break over 100 today. I thought it was going to get rejected by 100. So it's really impressive. Like the amount of momentum in Cororeef has been really mind-blowing. But the thing is if what like I'll say hey I think long-term core is going to be a bag holder like in you know 2 or 3 years as these chips become bag holder ships.
Cororeeve is the face of bag holding. Uh people will leave a comment and be like oh well core is up 8% today. I'm like I understand it is right now a momentum play. It is actually a good short-term upside bet as long as there's no shock. you know, really unfolding right now. Uh, in the long term though, I suspect it's going to be a bag holder.
Now, am I going to buy shorts on it? No, because like you can't time it. Like, you don't know when it's going to turn into a bag holder. But my point is, we have to look at these sort of like broader outlook here and this commitment that I'm making. Mind you, also, I see house hack as the hedge to this.
Now, I'm I I want you to know why, okay? I I don't want you to think of this, oh, like here's a house hack pitch or whatever. I want you to understand why I see paid off real estate as a piggy bank hedge or cash. So I I if I I think if I explain that clearly uh it will make sense. So I have invested a lot of money into house hack, well over $5 million, $5 million into the latest round that we're doing that pays a 5% yield plus upside in the stock.
You know, you can read our disclosures over at house hack.com. Every investment has risk. Uh and and and also I've spent a lot of money sustaining house hack in the early days. uh just like you know me paying for things right out probably millions of dollars you know just to try to get this thing up and running uh and and it's because I believe in it so much as as not only a good solid long-term investment if we soft land and everything is fine but also as a crisis hedge here's how that plays out today is about $70 million in assets if we hit a crisis and the Federal Reserve cuts rates in a recessionary environment like Jerome Powell says to zero then I believe we are going to be able to crack the egg of our real estate, $70 million worth of assets, turn it into probably about a $230 to $260 million portfolio.
If you take $230 million minus, you know, the $60 million we've already deployed and we only buy wedge deals with that and we create $100,000 for every $600,000 or every $500,000 we invest, we'll generate additional profits of $30 to $40 million in asset value. So in other words, like we will generate massive uh profits with uh those deals uh by by essentially breaking the piggy bank.
So that's why I see that piggy bank as a hedge. Not only that, but when you break that egg, what you really do is you create long-term leveraged optionality. Okay, that sounds fancy, but it's very, very simple. Let's say you have $70 million of real estate today. It appreciates 10% over, I don't know, 10 years or 5 years, whatever.
Okay, we don't have to speculate. We know real estate's going to go up over the long term. Well, I mean, I think that, okay, can't guarantee it. Uh, so whether it's 3 years, 5 years, 10 years, who cares? If you generate 10% in just appreciation, like the property's going up in value, that's $7 million.
But if you do that on a leveraged portfolio because you crack the piggy bank, you know, your hedge and you get 10% on a $240 million portfolio, the company makes 23 $24 million in in in profits in in, you know, appreciated untaxable profits that you can redeem tax-free through refinancing. So really when you look at this this piggy bank of cash that house hack is it's really just it's it's a diversified hedge that does well in a soft landing environment where we develop ADUs and and you know look for yields through development or wedge deals or it's a piggy bank hedge in the event of a worst case scenario crash.
Uh and obviously if there's some sort of worst case scenario crash we're not going to be paying 5% bond yields anymore. we will obviously to our existing investors, but we're just going to close the round because we could probably raise at, you know, a 2% yield and people would still buy it. So, you know, obviously that's why I think now it's is an opportune time.
But that said, I want you to apply that to yourself. How can you apply that to yourself? Well, you apply it to yourself with trailing stops on a portion of your portfolio. So that way, if we do have a crisis, you trailing stop out and you have cash. You diversify to investments that provide you yield.
Yes, house is an example of those. That's why that's why we do this. Like people are like, "Oh, why why why are you offering 5% yield?" This is why. Because when I put my money where my mouth is, when I say I think it's a good idea to diversify to a cash, b trailing stocks, and c flowing investments, it's because if we go into a poopy dupy environment, I want you to be able to have that optionality.
Okay, great. So, let's make that clear. Yes. Okay, you can learn more about house or house. Okay, you get that idea. This video is not a solicitation. Go read the solicitation agreements, whatever. What matters is I am going to make a commitment that if we have soft landed by October I will have a clown show for Halloween.
And I think I deserve it because it means that I was wrong. It means that I was wrong to be uh a bear. I personally believe that we on the downside could be exposed to a generational shock uh that is triggered by I don't know what yet. you know, some black swan, whether it's the combination of, you know, the tariff drama or uh employment or whatever disasters are going on.
What it doesn't matter. That shock uh could lead to a substantial surge in layoffs. And as soon as we get that substantial surge in layoffs, that actually shows up in the data, the Fed's going to panic. Rates are going to zero, and the stock market's going to be very devastated because earnings are going to have to get written down substantially because nobody's going to be buying a new Tesla or or, you know, uh whatever.
everybody's going to be canceling their AI subscriptions because people are out of money. Unfortunately, that's what happens in a recession. So, I think as a result of that that downside risk, I want to put a date on this and say if that does not occur by October, then it's a clown show. Okay? Literally, I'll I'll take the L.
Uh I don't know what we'll do if we're right. I don't really want to like celebrate and rub it in people's faces because if I'm right, it means we're in a recession and a lot of people are suffering. that sucks. I mean, we'll be fine because again, we're we're hedged and built for that. It's fine. We're we're good either way.
It it doesn't it doesn't it doesn't matter. Uh and there are some, you know, stocks that I have exposure to, which we talk about in the Alpha Report, where it's like, okay, well, I mean, if we soft land, you know, some of these are, you know, these little small companies probably have the chance to really uh 10x uh which is fine, too.
So, like either way, it it doesn't matter to me. Uh but I want to be transparent about that. Uh because I think if we soft land with no correction by October uh or or shock, then we're probably through it because that means in a soft landing, it means that unemployment is likely going to be rising again.
Manufacturing is going to be rising again. Uh spending is going to be rising again. Earnings growth can start getting priced in again. EPS growth gets priced in again. Uh, and when those things get priced in again, we could bull run for the next 10 years. And it means we we had rolling recessions. As Kathy Wood says, we didn't have the big shebang like the 2008.
We just had rolling recessions and we got through it. In that case, I was wrong to be bearish between July of 2024 and October of 2025. And as a result of that mistake, I will dress up as a clown. Do I think that I'm wrong right now? I'm like 50/50, you know, like uh I I I mean, if I really had to lean, I'd probably say I think I'm 60% likely to be right.
I don't really want to be right because again, it's it's going to be very painful. But, you know, some of the recent data we've gotten has been pretty bullish. And so, I I I don't see myself as somebody who flip-flops. I see myself as very very consistent uh over long periods of time with large bets.
And I'm very transparent about that. And if I'm wrong, I'm wrong. But I'm willing to change my mind if I'm wrong and I'm willing to do that by October. Uh because that's that's when we'll know. So I think that's clear. Uh and hopefully this sort of transparency in in where my head is is is reasonable.
Uh and that way you know where where my mindset is coming from as an investor. So uh leave me a comment down below what we should do for Halloween if we're right. Uh and uh you know maybe we'll have to do like Last of Us Armies or something like that. Uh, or um, you know, it'll sort of be mood fitting.
Uh, or what you want me to wear on the clown show, you know, like G g-string and and red nose. So, I don't think anybody wants to see me in that. Um, but, um, either way, I appreciate y'all. I'm going to keep providing value to you. Uh, the goal is every single day with a Meet Kevin report around 9:00 a.m.
We didn't do that today because of the, uh, Eric Ding interview, which I actually think was was a very impressive uh, interview. No, I don't agree with everything, but nobody should nobody should agree with everything. Uh and um uh here, I'll show you as as sort of a bonus for you making it to the end of the video.
I'll show you the uh dusty cyber truck. Uh the thing about California is it rains so little. Oh man, it looks terrible. I just got this washed like 8 days ago and uh when it doesn't rain, look at this. And this is gross. I could like write in there like clown, you know. Um, but uh, but I will say I really like the Cybertruck.
I know a lot of people poop on it, but this thing's a freaking utility beast. Uh, although I have to say I was a little embarrassed I had to do this. I went to Lowe's and Home Depot to pick up 8 uh foot uh, 1 and 1/2 in schedule uh, uh, 80 PVC. And um, you can't fit eight footers in this. you can only fit six feet in the bed and you can't pop the little window on the inside.
So, it's like I can't stick it through there. I'd have to leave the tailgate open, but I don't want to do that. Uh, you know, because like and then I have to tie it and all this sort of stuff. So, it's a little embarrassing. But I actually took this car uh which is Lawrence Sienna and you could stick you could probably stick I would argue 10 I could probably get a 10ft stick in here uh which is more rare anyway.
You get that maybe with like crown moldings or whatever but I could probably fit a 10ft stick in here and go from back to dash in the front just fine. Like when I stick the 8t in here it actually drops about where the center console is. So, I probably have an certainly an easy extra two feet there, which is kind of crazy.
A little bit disappointing. Uh the the what I could have done, I suppose, is I could have just rolled this open and then had again them sticking out like hanging over by 2 ft off the back, but again, I you know, and then I guess you could have kind of like jam the tunnel cover against it. Uh maybe I'll do that next time.
But I've got the little partitions in there and it it just seemed like too much of a headache. Uh so I do wish the bed was a little longer. I would have paid for the longer version, but um ask me tape. Thanks so much for watching, folks. I really appreciate you. Um and uh I'm going to go charge the segway now. I'.
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