Crazy things incoming

As-salamu alaykum everyone, I hope you are doing well. An uncommon Sunday live but I figured since I've been MIA for the last almost a week because of illness, which alhamdulillah I've recovered, just the cold, nothing serious, alhamdulillah I feel much better. So I figured I'd do a live today, go over what happened in the last week and why I think we are in a closing window to do something really special for our future selves. So let's talk about that. And without further ado, let's get started. So not financial advice as always, be sure to do your own due diligence before you make any investing decisions. Checking in on Bitcoin, Bitcoin is currently at around 61,000 and it's kind of been boring investors to death. It has been doing a whole bunch of nothing for the last month. And we talked about this on this channel before, that post halving. What we've seen is for the next 60 days post halving, there is a steady drift downwards and we're already 30 to 40 days post halving. So I expect two to three more weeks of this unless we get a catalyst in the meantime, before Bitcoin continues on its run. Now, having said that about Bitcoin, altcoins are doing much worse. It's definitely not altcoin season. And this means that you should be thinking about what are the altcoins that you think have the best fundamentals, because the prices of today will likely not persist into altcoin season, which I think will eventually come. However, you have to be very picky about what you add to your portfolio. The net unrealized profit and loss for Bitcoin is now at 50%. Typically in previous cycles, we've seen this net unrealized profit peak at above 70%. So we're well off of what has historically been a peak for this particular data point. And we haven't actually breached that 70% euphoria slash greed area in this cycle. So I do think that we're pretty consistent with previous cycles in terms of our behavior price wise for Bitcoin. In terms of Bitcoin ETFs, we've seen that after the parabolic run that they went on, and in fact, you know, prior to the Bitcoin ETFs, an ETF called JEPQ held the record for fastest time to reach 10 billion dollars in assets under management. This record was completely demolished by IBIT, who reached that amount of assets under management in just 49 days, as did FBTC Fidelity's BTC ETF, which reached that amount of assets under management in just 77 days. But then when you look at these orange and blue lines to the left of this graph, you can see that after that run almost vertically upwards, they've kind of been chopping for the last period. And this has reflected itself in the Bitcoin price. So the Bitcoin ETFs and the Bitcoin price in terms of the assets under management, total assets under management for all BTC ETFs has correlated quite nicely, actually, with the price of Bitcoin. Now, speaking of Bitcoin and reserves and places that investors are thinking of fleeing from the dollar into, the U.S. is on a trajectory that is simply unsustainable, if I want to be generous with my wording. So it took us 220 years to add one trillion dollars to the national debt. But since then, in just a few years, we've added another 34 trillion. And now every 100 days or so, we're adding another trillion in debt. So it doesn't take an economist or someone with a 160 IQ to figure out that this is not sustainable in any way. So investors are looking for exits from fiat currency, the U.S. dollar being the strongest of these fiat currencies. Now, even if we were to compare the debt to the GDP, we are at levels that we've never seen before. And in fact, we haven't seen this level of debt to GDP since World War II, and we're not in a world war. So this is quite concerning. Now, perhaps the silver lining here, perhaps not, is the fact that with debt to GDP being what it is, I wonder if policymakers have much less appetite for war, considering how tight our financial situation is. Other countries, other investors globally really are looking for safe havens for their money. We saw this in the interest recently in gold spiking. So you can see here, Shanghai Futures Exchange gold trading volume spiked in a big way as of late. And the price of gold is doing quite well for itself as well. I think until now, there is a large contingent of the human population that sees gold as a safe haven. Eventually, these people will start seeing, I think, Bitcoin as an alternative safe haven, which means that we are still early, which means that there is still X's to be made as investors in terms of return. Now, the big piece of news from last week in terms of data was the consumer sentiment report, and it really surprised to the downside. We expected something in the high 70s and got something in the high 60s instead. So you can see that reading on this chart. And what's noteworthy is that this reading, even though it's surprised to the downside, is not a head turner if you compare it to other readings that we've gotten as recently as 2022. What's also noteworthy is that even though the consumer sentiment report can be a leading indicator for the economy, it's not necessarily a leading indicator for the market. So for example, you can see in 2022, the readings were much lower. However, the market did quite well in 2023. So the market is not the economy, the economy is not the market. But when consumer sentiment is low, you can expect consumers to spend less and postpone big purchases and really tighten up their spending, which will reflect itself in company earnings. And that could bring the prices of equities down. So that being said, historically speaking, the correlation between consumer sentiment and stock market performance has been just 0.2. So positive 0.2. So they do move in the same direction, but it's a very tenuous relationship and cannot really be relied on. The lowest amount of correlation would be a zero. And it ranges from zero to one, with one being perfect correlation. And here the correlation is only 0.2. So very weak correlation. So to summarize here, I would not necessarily use this as a leading indicator for the markets. What's going to move the markets in this coming period are the interest rates and our outlook for them. Now, the market isn't buying what the Fed is putting out there in terms of number of anticipated cuts. So the Fed, when it meets, it releases a dot plot for how the different Fed members see the interest rates in the future. And it turns out that the market is now expecting less number of interest rate cuts than the Fed itself is expecting. So the market has gone really bearish on the prospects for interest rate cuts. And for good reason, the previous three inflation reports have not met expectations. They've been hotter than expectations. This could change this week, actually, on Wednesday, when the new CPI numbers come out. That will have a big influence on the market if it comes in colder significantly or hotter significantly than expectations. Now, in some good news, Tesla has cut the interest rate on its Model Y cars to less than 1%. And this is only available for a limited time until the end of May, which means that not only do you get, if you're in the United States and you're looking for a car, not only would you get a$7,500 tax credit for buying an EV if this is your first time, you'd also get the obviously estimated gas savings, but also an interest rate that is less than 1% if you get financing from Tesla, which translates to, depending on how long your loan is, between $5,000 and $15,000 in terms of savings if you compare it with some of the other auto loans out there, which are ranging between 8% and 13% right now. So right now, Tesla has a very compelling offer on its Model Y. And this is after the price cuts that the Model Y has experienced. And then when you add to all of that, the fact that full self-driving, and by the way, the only people who don't believe full self-driving is coming are the people who haven't experienced the latest version of Tesla's full self-driving. Those who have experienced it are confident that it is very near. And so if you're looking for additional conviction, I would highly suggest going on a demo drive in a Tesla to actually experience the full self-driving yourself. And so these cars, the Model Ys and other models from Tesla, will eventually have this full self-driving, so they may end up being an asset for their owner. So really, if you're in the market for a car, it's hard to make an argument for any other car other than Tesla at this point, especially considering the latest incentives. As far as the stock is concerned, Tesla has a 77% win rate in June. And since its IPO on average in June, 77% of the time Tesla goes up in price during June and its average rate of return is greater than 10%. So yes, we've had a tough time with Tesla stock as of late, but that may be coming to an end. And this really may be your last chance to get in on Tesla stock at these prices. We have June, which has historically been a very strong month for Tesla stock. And then we have in August the Robotaxi event. We have the possibility of a colder than expected inflation number. Then we have humanoid robots, which are already being employed in Tesla factories and are expected to be sold to consumers at the end of 2025. All of this on the backdrop of Tesla having its fourth consecutive red quarter, its longest losing streak since 2015-2016. So we have this prolonged period of underperformance for Tesla stock juxtaposed next to a slew of very robust catalysts that are on the horizon basically. So I think the window for entering Tesla stock at these very attractive prices is closing quickly. In our growth portfolio at PIF, we've loaded up on Tesla shares. Alhamdulillah, we have reached our target in terms of a number of shares, and we'll probably add even more. And we were able to add the average price that we were looking for. If you'd like to follow our portfolios, move for move, trade for trade insight for insight, then do become a PIF member. And with that, let me take some questions. Some Halal crypto coins to invest in right now. So I would say the coins that are related to artificial intelligence and specifically making compute more accessible, I think those offer a compelling argument, especially during the period that we're in. We're in, you know, compute may become the most valuable commodity on earth. Yusuf says as much as the US dollar is doomed to fail, there is no actual real currency available to fully replace the USD. I do believe that that is correct currently, but things change. And I also don't believe that Bitcoin will be a currency, it will be a store of value. I think that perhaps we have another cryptocurrency that gains a lot of traction. And you know, followers of this channel know that I am bullish on Dogecoin. How much weight would you give the BRICS coming potential currency? Not much, honestly. Although today on my morning walk, I was thinking seriously about the Turkish lira and how there may be an opportunity there for investment, considering just how much it has fallen in relation to the US dollar. Perhaps I'll make a more in-depth or I'll take a more in-depth look at that. But it was on my mind this morning. The Turkish economy is a dynamic one. They have a lot of talent in that country. I think eventually that they're going to get their currency situation figured out. And so I think that there may be an opportunity here to diversify one's portfolio. Recently liquidated my entire Amazon Google positions due to Project Nimbus. Also liquidated PG due to their support of Israel. Thoughts on sacrificing these key holdings and S&P exposure in general? Yeah, so we actually have taken a number of steps in that direction as well. I think that you'll find for all of the names that you mentioned there are better alternatives. And as you know, the hadith that you'll never leave something for the Allah, except Allah will replace it with something even better. And I firmly believe that. Will XRP have a larger role? I'm not bullish on XRP. I just think that there's just too much dilution ahead. There's no real limit to dilution there. And that's one of the main things that you have to take into consideration when investing in any cryptocurrency is the amount of dilution. You have to have a strong story. You have to have utility. But also you have to have a very clear picture on dilution and that picture need not be controlled by a small number of people because then those people may change it. So dilution is a key factor that XRP has really not performed that well this cycle. White Dogecoin, it doesn't have a cap number of new coins minted within a period of time. So what this means is that its inflation rate is always going down with time. We normally see a big sell-off following Tesla events. Do you think we will see it again following the August Robotaxi unveiling? It's very possible, but this would require a run-up leading up to the Robotaxi unveiling. And we haven't seen that yet. To the extent that there is a run-up leading up to the Robotaxi unveiling, it may make sense to take some profits before the event because, as you mentioned, there may be a lot of by-the-rumor, sell-the-news investors. Do you agree with FOCA rulings against derivatives trading? Yes, in general, I am against derivatives trading. Thoughts on dot crypto? I'm just not, I'm no longer a fan of, you know, these layer zeros, layer twos, layer threes. I'm just, layer tens, I'm just not a fan of those. And to be honest, you should use Occam's razor when you're investing in cryptocurrencies. The simpler the value proposition, the more likely it is to succeed. The more complicated it is, I think the less likely it is to succeed. So yeah, that's what I'll say about that. Thoughts on all the noise about Elon's shareholder vote, where shareholders seem to be divided about votes yes or no. I think shareholders should vote yes. The fact of the matter is he had a compensation package that was based on performance. And at the time, by the way, when this was set up, it was an outrageously high bar to set for the performance of the stock. I think it had to do like a 10x before he got paid out. And so they reached that very high bar. And so it makes sense that that the agreement be upheld. And I think most shareholders think that way. Now, if you took the opposite scenario where that bar was not met, I don't think anyone was going to be necessarily arguing, oh, pay him anyway. So I don't think it's fair that he met it. And this was a bar that was set years in advance. He met this high bar. I think his agreement should be honored. And I think most shareholders agree with that. For Zakat on stocks, do we pay it every year or when we liquidate? I have a post on that. I have a pretty deep dive into Zakat on stocks. Check it out if you'd like. What's your piece of advice for Muslim professionals first entering the workforce following school regarding portfolio and money management? Thank you for your time, Mubarak. My advice for Muslim professionals would be that one thing to focus on is maximizing your income, your income earning potential, especially when you are younger, because that is ultimately what is going to yield wealth for you over your professional career. I do think that you should get started early because I think that in terms of investing, even if it is with a small amount, because you should learn the lessons of investing and acquire the temperament of a successful investor with these smaller amounts. And I think it takes around two cycles to really get the right temperament as an investor. So starting early, the lessons that you learned earlier will pay off throughout your investing career. So a lesson learned that, you know, 20 is a lot more valuable than a lesson learned 60, although when you're 60, although both of them are valuable, because the lesson you learn when you're 20, you have way more years to apply that lesson. So it's important to get started early. But I would also say that so that you acquire the right temperament and learn the right lessons as an investor. But I would also say that it's very crucial that you work on maximizing your income, because that's what's going to yield the best return on investment for you. So invest in yourself is another way to put it. In terms of deciding where to work, it really depends, especially in the beginning. I would not accept a job based on what they're paying you, because it almost doesn't matter in the beginning. You should accept a job based on where you want to be in the future. And does this job lead there? That's the most important thing. So have an idea where do you want to be in the future? Does the job lead you there? If so, then take it. If not, then do not take it, regardless of how much they're offering to pay you, because eventually the money that you make when you get to that place that is naturally fitting for you is going to make the small differences in income between the different choices that you had starting out after college, it's going to make those differences really not matter. So make sure you have a vision for where you want to be in the future. Choose a job that gets you there logically, is going to give you the experience needed to get you there, and then focus on maximizing your income in that path that is right for you, in that profession that Allah created you for. And then along the way, I think dabbling with investing, getting started, getting the right temperament as an investor, doing these things, being consistent, I think you'll have a very prosperous financial life inshallah. So with that being said, do leave a like, I'd really appreciate it. Subscribe, become a PIF investor to follow our moves, and join our Halal Conscious Investor Community. Until next time, take care of yourself. As-salamu alaykum and peace be upon you all.