Warning Signs

As-salamu alaykum everyone, how are you doing? I hope you had a good weekend. And today is Monday, Ramadan the 22nd, depending on where you are in the world. We're going to take a note of where we are in the markets and see some signs that perhaps are warning signs or at least giving us mixed signals that we should be aware of. The market tends to go up using the stairs, but it goes down like an elevator. So we need to be very aware of the signs around us. And that's what I hope to help you do in this live. Without further ado, let's get started. Enough financial advice. Be sure to do your own due diligence before making any investing decisions. And leave a like if you like these lives. So let's start with inflation numbers that came out on Friday. Sorry, that's the fasting affecting me. So the inflation was basically met expectations. Jerome Powell came out and said this was roughly in line with what he wanted to see. That being said, I would caution against being overly optimistic here. The fact of the matter is we had month over month over month growth of 0.3, 0.3, so three tenths of a percent. And if you take the January number, which was five tenths of a percent, you average that that's four tenths of a percent. You annualize that. That's around five percent annualized inflation, well above the two percent annual inflation that the Fed claims to be targeting. So unless we see month over month improvement in inflation, then we may be in for a rough surprise. That being said, I don't want you to be panicky. You should not be selling. Well, I'll tell you what I do. I like to keep some dry powder. I tell PIF members typically it's 10 to 20 percent. Right now it's closer to 10 percent. Dry powder may increase that depending on what the data tells us. But having that amount in dry powder allows you to take advantage of dips when they come in. The more experienced you become as an investor, the more you look at dips as blessings and you look forward to them as opposed to being fearful of them. If you need the money, then don't invest it. Money that is needed in the near term should not be invested. So the market actually took the numbers in stride. So long as we met expectations, Jerome Powell seemed fine with these numbers. The probability that the market is giving for interest rate cut in June is still above 50 percent. So 57 percent as of today with a 42 percent chance that the rate cut gets delayed until after June. It's hard to tell. I can tell you from anecdotal evidence, you know, if you go shopping at Costco or really wherever, you can see inflation quite pronounced. At least I can. That being said, CorePC actually excludes food and energy from their calculation. And CorePC is something that the Fed likes to look at. I don't know why or how it makes sense to exclude food and energy, but that's how it's done. And certainly technological improvements, improvements in productivity have caused things like electronics and and other technology related products and services to actually be controlled in terms of their price. Gold and that now I'm going to say this sort of tongue in cheek. Gold is on fire as the gold blogs would like to describe it. But it's and why they say it's on fire is because it's up 10 percent in the last year. So which is I mean, if you're in the crypto world, if you're in gross stocks, that's not really something to write home about. If you look at something like Bitcoin, it's up 140 percent in the last 12 months. So, you know, gold may be on fire for people who are used to watching gold, but compared to every other asset, including inflation, it's not really on fire. Bitcoin halving is in 17 days, which means that the supply will drop. So from 900 new bitcoins mined per day to 450. So we saw the demand shock with the approval of the Bitcoin ETFs earlier this year. And now we're in we're prepping for a supply shock after the having this. Ladies and gentlemen, brothers and sisters, this spells a a recipe for a increase in price. Basically, economics, you have you have supply shrinking and demand increasing. We should be experiencing a pretty healthy increase in price even from prices today, which as of shooting this right below $70,000. Spot Bitcoin ETFs, just to give you an idea of the the supply shock that may be in store for us post halving. Currently at the average rates for these ETFs and at least for the first three months since their existence, they're hoovering up 10x what is projected to be mined in Bitcoin daily post halving. And further still, the even a company like MicroStrategy, which is just one company, if it maintains its rate of acquiring Bitcoin, it on its own could end up acquiring all the daily new supply of Bitcoin. That being said, I don't think with the increase in price that is expected for Bitcoin, that is likely to happen. Now, some things that cause me to raise one eyebrow is the fact that the Bitcoin supply, the last active supply for Bitcoin, which is what you see in red, has dipped noticeably as of late, which means that this supply is being sold by some. It's being moved for the two year last active. We also saw a dip here and we saw pretty much strength or maintaining its level for three plus years and five plus years as well. So some hodlers are taking profits. And typically these dips, if you look historically, they have preceded local tops. Now, typically the dips are much deeper before a local top, certainly much deeper before a cycle top. So I don't think we're nearing a cycle top, but it may be that we're nearing a local top. So, you know, a pullback would not surprise me, especially considering the history of the volatility around the halving. And that's why I mentioned at the top of the live to keep some dry powder. I think that's a wise thing to do. I don't almost never think it's a good idea to be a hundred percent invested because then you can't take advantage of dips when they happen. That being said, if we zoom out a bit and talk about cycle tops, we're well below the sort of red sort of band of danger here for the MVRV score, which starts at around seven. We're currently at around three. However, life comes at you fast and we could get up there pretty quickly. And that typically has corresponded with cycle tops. Also, the Bitcoin stock to flow model suggests that we should probably stay put with our Bitcoin holdings. There's still a lot of upside to go in this cycle, and this is based on the months until next halving. So you can see that really after the halving, things start to pick up price wise for Bitcoin in a big way, even if they are preceded with a small or relatively small pullback. With that being said, do become a PIF member if you're interested in following our portfolios and joining our Halal Conscious Investor community. And with that, let me take some questions. I think he's joking. He says, I said, I thought you said stocks only go up. Well, that was actually not me. That was someone else who said the stocks only go up. They do generally go up. That's for sure. So historically speaking, stocks 70% of the time are going up. May Allah make the last couple of days of Ramadan blessed on everyone. Yes. Thank you for that. I mean, and don't forget your favorite YouTuber when you do your du'as in these last 10 days. Rough surprise as inflation will go up or that it will settle at a higher baseline than expected. To be honest, it's not, you know, something that I don't think it was that big of a surprise, to be honest. I think the numbers weren't that bad. I recall January and February, we came in substantially for the last two readings, we came in substantially hotter than expected. Here we were at expectations. I'm hoping that we can get some relief in future readings. Our margin always combined to Reba even without string trades and funded. So margin is basically a loan and therefore you can safely assume that the loan that's given to you through margin is not an act of charity by the broker. They are benefiting from it. Whether you can see their benefit or not, the benefit is there. So a loan that is associated with a benefit to the lender as Reba. And that's why I stay away. As-salamu alaykum, brother. Can you recommend any good AI crypto low market coins, please? Well, we're actually looking into a number of candidates. Actually, one of our analysts at PIF presented me with a summary of one of the tokens that I asked them to look at today and didn't meet our threshold. We're pretty thorough about and pretty careful about what we add. And so we're on the lookout. I'll tell you that. If it's expected, do you think it's factored into the recent run? I think the market is pretty optimistic that there will be a rate cut. And actually, I mean, you can see exactly what the market is pricing in, as I mentioned, a 57% chance of a rate cut in June. And so that didn't really change based on the recent inflation numbers. So I don't think the market was shocked. Sorry, what do you mean by dry powder? I mean cash. So money that's not invested so that you can take advantage of a dip in price. Option trading. Typically, I stay away from option trading. There are some very rare cases of hedging risk where I think buying options is permissible. But generally speaking, for the vast majority of cases, I would stay away from option trading. You're creating risk that didn't exist in the market based on whether something happens in the future or not. And often these are naked options. They're not written against actual assets. So they become indistinguishable from gambling. Do you think ETH price will go up around $5,000? Certainly if there's an approval of the ETF, that makes the chances of an appreciation stronger. I also think an approval of a Ethereum ETF would be somewhat negative for Bitcoin because people will have another option to allocate money to if they're interested in crypto as an asset class, as opposed to Bitcoin specifically. What do you think about selling a stock as it turns out their CEO supports Israel? I mean, oh, Palantir. Yeah, Palantir. I wouldn't touch. I'm not a fan of Palantir. You were the first person whose video guides me to stop future trading. Well, thank you, Rahman. I hope that you make a lot more money doing something else. On the old videos, you used to mention if you have to make $200,000 net worth, not including home equity, high net worth. So to check out PIC, were you having some sort of reg D offering for PIC mutual? Not sure what you're referring to. Palantir is questionable. Yeah. So yeah, I would stay away from Palantir. Do leave a like if you appreciated this live and until next time, make sure to take care of yourself and tune in for tomorrow's live. We will have a nice little tweet for you for the end of Ramadan. So make sure you tune in until next time. Assalamu alaikum and peace be upon you all.