Market Outlook for Jun 16, 2024
Вставка
- Опубліковано 25 чер 2024
- 0:00 - 4:01 Introduction
4:02 - 9:01 Economic data
9:02 - 16:25 Nominal rates
16:26 - 18:59 Real yields
19:00 - 20:46 Mortgage rates and OAS
20:47 - 44:31 New positions
44:32 - 1:01:41 TSLA
1:01:42 - 1:11:16 SPY
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COMEX stocks:
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Earnings calendar at sectorspdr:
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This Week in Earnings:
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ICE Mortgage:
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SPGlobal MBS Index
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Money Market flows:
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Fed Balance Sheet:
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LINK TO S&P SPREADSHEET:
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SIFMA:
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Freddie Mortgage Rates:
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Treasury:
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SOMA
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EFFR
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Reverse Repo
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FedWatch Tool:
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STIR analytics
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Forward Curves:
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Economic calendar:
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One of the best parts on my Sundays! Thx Mark.
Hi Mark, can you please talk about your overall portfolio. I really appreciate new positions but I would learn a lot by understanding how you put everything together. A Mark portfolio review would be a big hit!
So Elon believes Tesla should be valued to the extent of current US debt levels. Nice. Also, I’m not sure how Cathie Wood is still allowed to have a platform giving false hopes to retail traders (most of which are holding Tesla bags). If we are going to talk about value destroyers look no further than Cathie.
Fast forward a decade, copper sits at the $3-4 range. What did your thesis miss?
Great take on Tesla Mark. Fully agree.
Loved the Plato Chapter 7 part!
I subscribed about a year and half ago, insane value so far, and it'll only get better! Just to confirm, are current subscribers grandfathered pretty much going forward, or do you see a scenario where you might start charging everyone, including the original subscribers?
😊
Think he's mentioned several times this is for new subscribers only-MM has too much integrity and self-respect to ever do that
Think we’re early supporters, shareholders of a startup. I think he’d like to compensate us for that. Also other reasoning I could think of:
1. If he’s really gonna upcharge the grandfather users, how many of us are there in total at the moment?
2. How much more revenue can he really generate from the early subscribers?
I think him and his company would be better off making incremental revenues from new subscribers, and keep us early users as strong fanbase, and help him in the sense of word of mouth.
Adobe! when you don't cancel your trial it forces you into a full year subscription. Just terrible. Enjoyed this as usual. Thanks!
CBO raised its federal budget deficit from 1.5T to 1.9T for 2024. I am slowly making my way over to your side of the fence. It will take a debt crisis for them to stop spending and I am worried if the FED goes to the zero line they won't learn anything and continue to spend
Last week I remember you mentioned that Trump has been vocal about weakening the USD. How do you suspect he would go about doing this, should he be elected?
Hello Mark, thanks as always for these outlooks. I have 2 questions this week. First what is your approach on systematic trading/managed futures that trade purely data points both price and macro variables with no understanding of the narrative behind it just a bunch or properly done regressions. I beileve you should be familiar with N.N Taleb I was wondering your opinion on some of his perspectives particularly about not watching financial news and on most economist being charletans. Thank you
Apologies if you've answered this prior, but I purchased the applied options series back in 2021 when it launched. Will I be grandfathered in for all additional applied series releases, including new positions?
Hi Mark
Can you please explain the stok buyback process?
What is the stock buyback period and the buyback blackout period, are the stocks bought all at once or gradually?
Thanks for sharing your knowledge!
Mark - new applied level subscriber as of last week. Is there a video in applied series of a more in depth analysis of the yield curve and how to do so?
RE: BoJ releasing April minutes from monetary policy meeting .. Some officials were noted marking a weak yen's contribution to inflation, and emphasizing that BoJ must respond with monetary policy if exchange rate movements alter it's view on the outlook and risks. Would you give some commentary from your experience about potential expectations with this and the knock-on ripple effects? I was looking at it broadly as well as more directly JPY -> MXN as well. Thanks for your time, hopefully I got this question submitted for the Q&A outlook, if not I'll look for a live Q&A. Happy Market Holiday
Hi Mark, thanks for the great videos. 2 questions:
1. How would you go about finding all the stocks that make up a subsector/peer group?
2. Is their any finance podcasts you'd recommend for learning/news?
AGNC is gradually shifting its hedge composition to favor swap-based hedges over treasury-based ones. Why are they doing this - Does it tell something about their interest rate outlook?
I have cleared CFA level 1 and holder of OFTC since I believe 2017. I do have access of applied level, so my question is does it up for renewal later on or sort of come along with OFTC CFA program.
When you put out new content in the applied series is it written content or is it videos like the market outlook? I'm not a CFA candidate, just a dumb electrician I just like your content and think that its valuable enough thatbI should pay to continue to receive its benefits after July 30th. Just curious as to what I would expect to see?
Videos like this but with specific topics
Regarding CapREIT. I assume the 2018 date is set by government. Do you think there is any significant risk of that date being set to a newer date?
Would you be able to send some links to the experts on full self driving or any interviews/reports that you have been referencing in the videos?
I am a total noob here but I find his videos extremely engaging. I would like to know from the community here, how do I begin to learn this stuff? Can anyone point me in the right direction? Thanks.
Thanks Dr Mark..On Sunday's live stream a question was asked regarding that when the fed begin their cutting cycle do you expect equities to go even higher, which you would normally expect given Present values will be discounted with lower discount rates...but the questioner on Sunday also asked could you see a scenario where the fed cut but we still see a Market correction and recession....acknowledging the length of time of YC inversions, could you possibly shed more light on where you think potential stress points are to cause such a senario?. Thank you for everything loving the Applied Series.
Uber does personalized pricing. They price based on how much they think you’ll be willing to pay
Hi Mark,
From a pure economic perspective, if the US introduced 100% tariffs on Chinese EVs , who is more likely to benefit?
Shouldn’t average American consumers be upset about this move ? As they won’t have an access to affordable EVs ?
Hey Mark. In your "Real Yields" section of the outlook, you discuss "Breakeven Rates" every week - can you define this and discuss its relevance?
In your CPI/PPI video from last week you said the inflation in recent years was due to closing then reopening the global economy. What about some of the most massive government spending as a percentage of GDP ever?
Hey Mark. Have you followed any grains recently? (Corn, Wheat, Beans, Oats, etc) Oats seem particularly interesting as they've had more price volatility than usual and I'm seeing reports that supply is below 2019 levels, but demand being much higher due to health conscientious consumers wanting more foods and drinks with oats over wheat (i.e. oat milk). I'd be interested in your thoughts.
Hi Mark, how important is it to measure the cash conversion cycle of companies? Is it more useful for inventory heavy companies? Have you seen much value in watching this indicator?
Hi Mark,
Can you please share the link where you got the SnP spreadsheet attached in the video below
Which is the ideal metrics to evaluate REITs?
Hi mark, I've been thinking about a high level investing thematic that looks at the idea of political ideology swinging wildly from wokeism to conservatism and vice versa. I feel like the pendulum is swinging back towards conservatism so I'm looking at things like coal, nuclear and gold (sound money). Would love to get your take on this theme and whether U think there's any alpha to be had there?
Howard Marks did an interview precisely speaking on how the market is a pendulum. And will swing from one extreme to the other. When asked if he felt the equity market was at an extreme of greed yet, he stated that it’s above average. 40% towards greed. Still a long way to go before e he considers it greed.
What are your thoughts on Howard Marks? He thinks markets can get a lot more expensive before a correction
Whats your short term view on dhi?
CRM would be my short when discussing targeted customer service
In a recent Sunday Q&A, you alluded to possibly doing something with the CAIA program. Any development/timing on that? I like the topics covered in the program, but found the reading materials lacked depth. I believe your approach to teaching and deeper analysis would be a huge value add compared to what current prep providers offer. Thanks!
In a video a few years back you said that when you read the intelligent investor you realised that in the 40's a cheap stock had a PE of 4, in the 80's it was 6-7, 90's it was 10-12, 2000's it was 16. You said that you expect this trend to continue forever, and in 10-20 years time a 21 multiple will be considered cheap. Because of this, you said you never short the market/SPY. Do you still believe this? Do you know if study/chart from Bank of America accounts for this kind of trend?
What was the website you mentioned for tracking car inventory, and is it free?
I have 2 questions:
1. How to best follow politics for investment implications without going into its depths? And when I say investment it’s not about a single stock, rather in general, global macro.
2. I saw your comment on Reddit a while back where you said you build a picture in your mind and see things holistically rather than linearly when asked whether you use any learning techniques. I am interested in a further explanation of how this works as I am looking to learn ways to learn things in the most effective way.
Thank you.
Hi Mark, Last week you mentioned that you didn’t think it was possible to buy CAPREIT for a Swiss investor. I was able to buy CAR.UN stocks. Is not that CAPREIT? I got a bit confused with your comment. While I see the potential of this stock, I am a bit unsure if I should increase my position to a 2% of my portfolio given the CAD exposure. Any advice on that? The rest of my portfolio is holding mostly USD and CHF assets.
Hi Mark -
Two questions:
1. Regarding personalized pricing. I agree that it is likely that regulators and politicians will jump in to curb this practice and that no one wants to pay a higher price than other people for the same product. However, from a purely theoretical economic perspective doesn’t this technically increase market efficiency as each consumers marginal willingness to pay is more accurately captured which in turn better approximates the “actual” demand curve (all else equal of course)?
2. Given your position on the new level III tracks (portfolio management is the only one worth pursuing at the moment). I’m wondering if you feel similarly for the practical module options. I am currently studying for the level II exam and have the choice between the “analyst skills” module focusing on equity research and the python modules. Would you say the analyst skills module is more valuable right now as it is further within CFAI’s core competency space and also feeds better into the portfolio management track for level III? Or is the python module equally valuable since we are in a highly data dependent world and AI is the current exciting buzzword for businesses looking to hire?
Hi Mark. In a previous video, you mentioned that you are generally more cautious about buying LEAP calls (as oposed to buying the underlying) in times of high interest rates because the LEAP gets expensive. However, I'd counter by pointing out that the outlay you save from buying the LEAP instead of the underlying can be yielded generously in T-bills, thus negating the effect of Rho. If this is correct, then should we really care about rates when it comes to pricing options? Meaning, can LEAPs be just as attractive in times of high or low interest rates?
During the rate cutting cycle, which would yield the most returns given current valuations: technology, utilities, or duration?
Regarding what you said about efficient markets may not be correct in the Sunday q&a, if you believe that the market is incorrect about some information that's publicly available, but it does not correct after a few quarters, when do you take your losses and end the trade? Perhaps this may also be when you start wondering/believing you're wrong
How important you think is du pont for financial statement analysis. Can it be done on companies of all sectors or a particular sector
Mark, as always great stuff! The extensive analysis is always nice to watch! Any thoughts on China, in particular Alibaba? Seems to be a nice value play (David Tepper just bought nearly 1B of BABA) can you do an extensive analysis on that one? Thank you!
Hey mark can you talk about your thoughts on oil and oil producers over the rest of 2024? I have 100 shares of XOP I have been selling ATM calls 7 days out and that has paid reasonably well. I am wondering if you think there is significant upside I should be aware of and stop selling the calls (I like my income generating ability with it) I know oil runs on it own economics, but I was hoping to hear your opinion.
When are you planning to start the channel about philosophy that you mentioned recently?
Did you get your COPX and FCX puts last week on the downside?
For Tsn: did you follow the company before or did the news spark your interest and you started to dig deeper? If the latter - did you do your whole background research process of „living with the 10K“
Or did you make a quick check of financials and the equity story while also you assuming an efficient pricing before the event - and trading the market dislocation?
For BWA: how did you came up with the idea of EV oversupply being the reason for the sell off? My newsfeed does not show anything - did you observe similar moves among EV firms since you are tracking the auto space?
When is the time to put on the homebuilders again? 30-frm ist falling consecutively - on what type of confirmation are you waiting? The cut, management guidance, mortgage apps/housing starts?
Hi Mark, what is the best way to save on taxes for capital gains in the USA: a personal brokerage account or an account under an LLC/S-corporation? Could you please guide me through the pros and cons of both options?
What did you make of retail sales and the negative revision to last month?
Any new updates on the applied level financial projections / modeling course that is supposed to be launching in august? Duration of the course? What company will be the focus?
On Microstrategy I looked at one of the convertible notes. Worth $600 million. And the dilution effect of that conversion represents an increase of only 1.3% of outstanding shares.
What am I missing?
Question on Applied level content and positioning. Is it useful for small amount accounts to play along based on your guidance? I mean a 10-20k USD account in interactive brokers. Would it be problematic to get in and out of positions? Also, small accounts have limits on what an individual account can or can't trade (e.g. bonds, options, etc). Just looking for input on how much of the content might be unreachable by simply having less money in a brokerage account.
Hi Mark, I diligently try to hear your videos on applied module and market outlook. I think of myself as very good in understanding theoretical aspects of investment. But in practical level, I am horrible. I can't connect all the knowledge and awfully bad at implementing. I live in US and thinking to start an investment with $20K and monthly contribution plan of $1500. I intend not to be a trader. I am currently 40 and don't need to touch the money in near future. So, 60-40 portfolio is ideal for me.
1. For bond allocation what's the pros and cons of 24/25 Yr T-Bond and TLT.
2. Is it possible to start income factory with .10 delta options with the portfolio size. How? As I am investing on index level, how could I select the stocks for the theta play.
3. If I am a buy and hold investor, is it okay for a newbies to tilt to specific sector by selling SPY considering economic cycle. Same question for tilting with Factor investing. Or should I set aside separate fund for this. For example, against my $12K stock, I might set aside 60% to SPY, 40% sector tilt, and 40% factor investing. Your thought please.
Thank you as always.
Did you get put ABR? Did you buy any other Canadian REITS other than CAR.UN?
Hi mark, just wondering - before your business we're you working for someone else? If so for how long? Did you enjoy the work?
Hi Mark. Besides copper and gold, do you like uranium or any other commodities?
What option strategy can be used for fairly valued company to generate income? I don’t feel comfortable selling puts and having underlying (Deutsche Telecom) being put to me given price of stock. Premiums generated from selling ITM puts are low. Is it better to skip it and find a better underlying?
Hi Mark is the applied series be valuable for someone wanting to break into private equity?
GM is up ~33% YTD, that seems like respect from the market, somewhere around 15-20Bn of market cap added, so buybacks are priced in?
Also, what is your outlook on AGNC for the next few years? The dividend is quite juicy but yield is much higher than historical values. I see you haven't mentioned in quite sometime, did you exit the position? Lower rates would lead to net interest margin expansion, asset values yes? is prepayment risk real with lower rates?
Are there captions on the applied level videos? If not, I would find them really helpful since the volume tends to be low on your videos even at maximum volume
Have you tried wearing headphones? They help for me.
As a Canadian investor, would you suggest that I hold CAPREIT in margin account over my TFSA due to the tax treatment of their dividend.
Kraft Heinz (KHC) is trading around $32.50/share with a dividend yield of just under 5 percent. Market cap is approx. $40 billion, with 2023 net income of $2.8 billion, and operating cash flow of $3.97 billion. Decided to sell 30 DTE put options. Any thoughts on the company at current prices?
Have you heard of a Diageo? They are a multinational alcoholic beverage. Their stock has been on downward trajectory, most analysts are with buy recommendation, and it’s alcohol at the end of the day, I wouldn’t see any particular reason why people would cut on that. Did you ever consider this stock for your portfolio?
If there are.onlu a few stocks reporting, why don't you just check one by one them and find out what's going on there? Who's right and who's wrong.
Hi mark,
I am a cfa l3 candidate with a shitty job . According to you after gaining experience and profitability in the market regularly at what point you think is right in terms of capital or experience to start hiring people and start a hedge fund by raising some funds as this is what i am aiming for.
Is it logical to think of making mortgage payments as dollar cost averaging into an investment?
It appears if I mention a certain digital asset, the UA-cam AI censors my comment... so I have to be careful in my wording.
I respectfully disagree with you dismissing the coin as requiring a "killer app" to be valuable.
The value is not in an application, it's in the properties of the public ledger:
- defined scarcity and issuance schedule
- decentralization, no single point of failure
- inability to be censored; nobody can stop you from transferring in or out to anybody anywhere
- near zero cost of ownership
- low cost of transaction
Put simply, it's a digital asset that anyone can use and **nobody** can prevent the usage of or tamper with, and it's been battle tested as such for over a decade with billions of dollars in bounty to anybody who can crack it.
What is such a thing worth? Your guess is as good as mine, but I think "digital gold" is the best analogy, and not "programmable money with no use case".
Thanks for your content, big fan.
If capreit is returning the capital, isn't that lowering your cost basis for tax purposes?
TSLA and FSD+Retail, like GME+Retail could be scary :)
If you had to hire an analyst to work for you, what skills would you require them to have, considering that an AI model can do almost everything that a Junior analyst can do.
In CFA L2 Commodities, you present the Theory of Storage, where Futures price = spot + storage cost + convenience yield. What is the convenience yield meant to represent? It seems to me it's just a different word for hedging, in which case this theory is just the hedging pressure theory + storage costs.
Thank you btw :) it's hard to overstate how much I appreciate your Market Outlooks and the Q&As. And thank you for declining to talk about stuff that you don't know enough about. That is a criminally underrated quality in this day and age, and it speaks to your integrity and professionalism.
22:30
Stellantis sending all engineers back to the office
I’m starting to question any rationale in investing in anything Canadian . With SP500 massively outperforming Canadian equities and Canadian GDP going nowhere, Canada just feels like dead money. I hope I’m wrong .
I think GME should buy $3B worth of Bitcoins ;)
Please uncover the British stock. Lots of Brits like myself on here I believe😊
I'm looking forward to learning too. Lots of value in the UK currently.
Try to guess
@@MrDeadlyCrow i hope its iag airlines. Pe ratio of 4 and consistent earnings means debt levels should get obliterated over the coming years
@@MrDeadlyCrow If he offered any clues to start with, I missed them.
Please tell us how Nietzsche’s philosophy has shaped you as an individual and helped you in life. Do you strive to become an Übermensch, or do you consider yourself one?
Instead of shorting the personalized pricing companies, perhaps going long privacy companies?
Dr Mark, your analysis on Tesla is very coherent and I agree with a lot of it. One thing I would say to try and advise you away from a short risk reversal which has infinite losses, is that you say in passing that other companies are ahead of tesla in self driving tech and it seems you are very sure about it without giving this assumption a fair and rational assessment. Look at the tech where it is, where it is going, and where it has been only one year ago and most importantly HOW the software works. End to end neural nets (Tesla) vs hard coded training on a ring fenced area (not scalable weak e.g. Cruz). Please give this comment some attention before doing the risk reversal trade, go for puts if anything. Even Jensen Huang, when asked, said Tesla is leading the self driving race without hesitation.
Love your content, been a weekly watcher of your UA-cam vids since 2020, and studied CFA based solely on your content. You have been warned my friend :)
Tasha Keeney is a CFA, maybe that adds some credibility to her Tesla forecast?
Hi Mark, i understand TSLA is overvalued, and it seems you will always have a bearish bias against them... But if you look at Musk's other companies (including Tesla when it had just started), they have literally been making the impossible, possible... 15 Years ago, people were saying Tesla (being a new company) will never be able to compete with established car companies (who were literally decades ahead of tesla in term of car manufacturing) and that Tesla will one day be taken over by one of the established brands... I wouldn't dismiss Musk, considering how many successful businesses he has created /helped created (including Chat GPT)
Did musk create any of these businesses? Pretty sure Tesla was already established when he moved in.... PayPal? OpenAI?
You are firmly in the cave.
Great point.
Like Charlie Munger once said, you may disagree with Elon Musk, but it's extremely unwise to short on someone as smart as Elon. 😂
Musk's Tesla market cap prediction has the same gravitas as his annual "FSD is coming next year", "Robotaxis by 2020" and his "zero new Covid cases in April" 2020 banger. He seems to be counting on his yes men online having goldfish memory.
Mmmm sounds like an emotional bias. The whole point behind BIG data was always that you maximize profits with personalized no?
Pharmaceutical companies already do this at the country level. What’s so different at the individual level?
If you find an ETF to short, I’d take the other side of THAT bet
AI bubble is real. As soon there's weakness, the market will tank
Soooo buy Tesla?
First
Hi Mark, when do you think car.un will warrant a premium to the book value per share? Would it be toward the end of rate cutting cycle (perhaps when policy rate is near 2%)? Also what is your forecast on GTA housing price short term and longer term? I know you are bullish on them but what happens when they become too unaffordable (maybe 40x median income? Do they just stay at peak price but struggle to go up more? I feel like housing price is different than car.un because the tenants for car.un pays below market rent so their yearly rent will increase no matter what, and turnovers are even better for car.un as new tenants pay 20% + more in market rent. But housing price seems to be in a correction mode which contradicts what the financial theory says (especially condos, but some houses too) in GTA (and vancouver, the expensive areas). Curious to hear your thoughts about it. Also I am curious about why do you choose to sell your house? I am guessing the house is probably at 5-10% your net worth which isn't significant, so why not keep it as a "hotel" when you come to canada?
Hi Mark! You mentioned a couple of times that non-canadians probably cannot invest in capreit. Could you explain why? I have an IB account and I have successfully bought shares and also sold puts on car.un( why was I allowed to buy). Is n't capreit a public company with international shareholders?
Thanks for the awesome content as always.
There is also an ADR
Same here. Missed his answer. If someone reading this and have the answer, happy to read it
Are undervalued stocks preferable underlying candidate for selling puts? You seem to sell puts on underlying that have experienced price pullback or that are undervalued.