A Sign to Go Risk-On?

As salaamu alaykum everyone. I hope you are doing well. Today is Monday July 8th and Bitcoin is right under 56,000, 55,900. And Tesla is at 250 holding up nicely. Today we're going to talk about some major indicators for macro, what sign in macro is flashing risk on. And then we'll talk a bit about Tesla and our game plan for the rest of the day. So, without further ado, let's get started. As always, this is not financial advice, so be sure to do your own due diligence before making any investing decisions. All right, so we had unemployment is now at its highest since November of 2021. And just basically adding to the mosaic of data points that suggest the economy is slowing down. And with that, hopefully inflation will be coming down as well, at least that is the historical relationship. The wage growth is also slowing down, so this is more directly related to inflation. So we had a reading for wage growth that was in line with market expectations, June on the annual basis, the wage growth was 3.9%. And the September rate cut is now more probable than ever. Well, at least since the start of this year, we have a probability of a rate cut at around 75%. So 5% for a 50 basis point rate cut, 70% for a 25 basis point rate cut. And I tend to agree with this. I think definitely if we get some cooler than expected inflation prints this week, then the September rate cut. But maybe a done deal in child law. The macro that the macro indicator that is flashing risk on is the US dollar index. We've now had close to seven weeks of weakness in the US dollar index. This is typically associated with a risk on or macro suggesting risk on for investors. The reason for this is that, you know, when the the dollars often viewed as a. As a safe haven, perhaps less and less with time, but it is viewed as a safe haven by many. And when the dollars getting weaker demand for it is just suggesting that demand for it is weaker and the price of it falls. And also, with regards to interest rates, when interest rates are higher or the 10 year US treasury is higher demand for us dollars becomes higher as well. The demand will fall when the interest rates or the yield on the US treasury's fall. And that's what we've seen as well. So when yields on US treasury falls, then they become less attractive. Equities and risk assets become more attractive. So right now we have the US dollar index telling us that. Hey, there's a lot. There's a move here towards risk on assets. And we've seen that in the returns. We've seen basically the major indexes have been reaching new all time highs all the time. Our portfolio has been doing quite well. And I think that there is more of this to come. Hopefully, if we get, as I mentioned, inflation prints that are headed in the right direction, there's more of this to come. More weakness in dollar and more upside for risk assets. Speaking of upside, Tesla stock has now surged close to 45% in the last month. And that is after basically chopping away for the last three years. And as the saying goes, the wider the base, the bigger the break. And we've had a base of around three years of consolidation for this stock. And so I think there is a lot of upside left here. Now, we're kind of in a unique position that we could make a lot of money on, which is that Tesla is surging at a price when Bitcoin is falling. And I think there's a lot of catalysts for Tesla coming up. I can think of at least three. And so we may have continued strength in this company until the August 8th event, a Robotax event. And typically, with these types of events, when there's a lot of anticipation, the stock will retrace. That is fall after the event. And so it could be a classic, you know, by the rumor, sell the news situation. Now, if we are lucky enough to have Bitcoin continue to exhibit weakness up until the August 8th event. This may be an obvious opportunity for us to move some of our Tesla holdings into a bit and take advantage of the really exogenous impact that is exerting its influence on Bitcoin's price, which is the selling's related to Mount Gox. And the selling's really related to the US government liquidating some of its position and the German government liquidating some of its position. So things that have nothing to do with the actual macro environment, we could take advantage of that with rotating some money around. So we'll see that. And so we'll see what we end up doing with that. But that's something that's on my mind. The shorts for Tesla are getting burned. And I show this because the shorts really peaked right before the delivery numbers came out, which was the start of the Boran that we're seeing right now in Tesla shares. And these shorts were mainly by hedge funds. And so this is just to say, just because someone is a professional investor, it doesn't mean they know what they're doing at all. So don't let professional investors convince you out of a position that you have a strong conviction in. And one of the catalysts that I think is perhaps close, perhaps we get an announcement on it during their earnings on July 23rd or perhaps on the August 8th event. But Tesla, as of April, was in talks with one major automaker about licensing for self driving. So perhaps we get an announcement about that soon. And this will cause a lot of analysts who have not built in their models, the revenue from FSD licensing to start building that in and what the implications for that will be on the company's value. And as many analysts mentioned, including Elon Musk, the valued potential market value that FSD alone can add to Tesla is perhaps around $5 trillion. And that's alone. That's just FSD. We haven't talked about the humanoid robots or all the other businesses that Tesla is in. So this would be big. This would be a, this would be very informative with regards to how to actually build an FSD into the valuation of this company. Now, the closest competitor to Tesla, I believe is BYD. And they are being quite aggressive in their growth. However, there's still very little evidence that BYD has a competitor to Tesla's FSD. And BYD is not really in a lot of the other businesses that Tesla is in. However, I caught my attention that BYD was opening a plant in Turkey. And I know that Elon Musk has made a number of visits to Turkey. And so I wonder if this increases the probability of Tesla doing something in Turkey. I would certainly love to see that happen. So the upcoming week. So Tuesday and Wednesday, Powell makes some comments and I really don't care about them. New investors will care and perhaps the market reacts, but I really don't care. CPI comes out on Thursday. That's what I care about. I care about data. I don't care about the interpretation of that data by others. And PPI on Friday. And so if we do get some inflation numbers going in the right direction, then I think that this could add fuel to the rally that we're experiencing right now. Perhaps Tuesday and Wednesday, Powell comments. Actually, because I already, I already know what Powell is going to say. He's going to say, we've made a lot of progress on inflation. We'd like to see more data. That's basically a summary of what he's going to say. Some people may react to that. If the market reacts by retracing the little, this may be a good time to buy. And so we may do some of that. And then we'll see what the data, the actual data on Thursday and Friday tells us. With that, if you'd like to follow our portfolios, we made a new stock pick last week. If you'd like to follow our portfolios, be sure to be sure to join and become a PIF member. Our community is growing every day and we'd love to have you. Oh, yeah. And before I forget, I would be remiss if I didn't mention do leave a like. Thank you for giving our last life to 100 likes do leave a like. So we do the same with this like I'd really appreciate that. Let's go to questions very quickly. Hany says, can you please comment on cipher mining in terms of comfortability? In terms of comfort alone, I think it's fine. Very quickly. I'm just going to see if this is something that we cover. We don't cover it, but I think it's actually fine. At least last time I looked, it was fine. Thanks, Abdullah. Appreciate it. There are lists of books courses that you recommend. We do have our own course for hello investing. So check that out. I believe you're actually a course member already Abdullah, but if you haven't checked it out, do do that. See inflation will stop anytime soon. Yes, I believe it's headed in the right direction. Exchange rate for USD is pretty high for some currencies. Yes, but as we saw the US dollar index is actually weakening, which is good for risk on assets. Samalika McCann off topic. What are your thoughts on non compulsory home insurance? Generally speaking, I don't have a problem with the insurance. A lot of the commentary on that topic is very superficial and really doesn't understand deeply what's going on. Just want to thank you. Your videos have made me $600 approximately $600. Sorry, approximately $750 USD in the last six months. That's great. I'm really happy to hear that. Thank you. I really appreciate that. I made a lot put back on and every dollar you made in Charlotte. I only have 10 shares of Tesla so far. How much do you think we have to push more before the robot taxi on August? Considering that I make $8,000 per month and my expenses are $5,000. I do offer consultations for the type of personalized review of your finances, but as it relates to Tesla, I can tell you our sell price right now for PIF on our watch list. I sell prices around 320. I actually think we could get up into that range pretty quickly, like 320. If we get up there too quickly, I would consider shaving some of my position. Another question from Abdullah regarding crypto versus stocks. Would it be to sell B2C and altcoin for profit when things become better and put that into stable stocks? Or should we hold crypto as long-term assets? I think definitely Bitcoin is a good long-term hold. Crypto in general, I think you need to be very sort of selective with what you have. Although I think that you have to keep your tap shoes on at all times because things change all the time. Definitely book profits when you have them for altcoins and make sure that you're keeping track of the projects that you have money in. That's on J&J. J&J has been a consistent underperformer. We held it once in our portfolio, but then we got rid of it. Something about management there has been underperforming. Let's see here. How's it doing? It's kind of down right now. Last month, it's basically flat. Six months, it's down 10%. There's so much opportunity right now in the market. It's really a matter of management, why a company this size continues to under $100 picks for dividend stocks have been performing well. At least four out of five of them have been. Inshallah, they will continue to do so. For J&J, as I mentioned, I sold my position in that a while ago. With that, leave a like if you haven't already and subscribe. Inshallah, I'll see you in the next one.