Were We At The Top Already?

Salaam Alaykum, everyone. I hope you are doing well. We had an interesting couple of days in the market. We're going to go over everything you need to know as usual. And without further ado, let's get started. By the way, today is July 25th, Thursday. Bitcoin is at 65,000, exactly on the dot. Interesting. Last time I said, the last time when I went live, it was 66,000 on the dot. Tesla is at 225, recovered 4% since yesterday's drop after earnings. We'll talk about that in a second. Without further ado, let's get started. Now, financial advice to your own due diligence, obviously, and leave a like. Really appreciate all of you who consistently leave likes really means a lot to me. So yesterday post Tesla's earnings, they missed on they missed on income, but they are earnings, but they beat on revenue. And they had a lot of a lot of bright spots that we'll talk about, although the timeline for a lot of what investors are waiting for has been pushed back. So there's more waiting involved here. I think a lot of the selling yesterday was due to people who may have entered their Tesla positions as a swing trade. So by prior to earnings sell after earnings. So you had a lot of people who were not really long term holders did not intend to be long term holders of Tesla that maybe got in after their delivery numbers and thought, Hey, maybe they'll have good earnings. So they were sellers yesterday. We got a bounce back today. And I think yesterday's sell off was an overreaction to what was reported in the earnings. There was nothing really fundamentally different about the thesis for Tesla. If you are a long term long term holder of Tesla, as we are, perhaps, you know, some things were pushed back, but there was no change in what the plan was. Now there is a number of catalysts for Tesla. So we have the robot taxi event. This was determined to be October 10. So 10 10 is the new date for the event after having been pushed back from the original August date. Now they're planning to announce a low cost car, this as per their conference call, their earnings call low cost car in the first half of 2025. Roadster production is set to start in the new Roadster that is to start in 2025. When asked about when he thought the first robot taxi mile would happen, he said it's highly likely in 2025. I actually think it's probably going to happen in 2026. Several thousand optimist units are expected to perform useful tasks in Tesla factories by the end of 2025 with optimists entering mass production in 2026. Previously, we were told that optimist production would happen in 2025 or mass production would happen in 2025. Now we're told it's 2026. So Tesla stock is a hard hold. I understand this timelines get pushed back, but that being said, what is promised eventually does get delivered in the case of Tesla. And the fact of the matter is, yes, timelines are pushed back frequently with this company, but this company is tackling problems that are larger than usual, a larger than the average problem that a company tackles. So solving for full self driving, this is a change in human civilization to have robots actually drive us from one point to the next. This is a very big problem that they are trying to solve for. I do believe that they have the best chance at solving this problem. And that is, and they've certainly made the most progress towards solving this problem. But there's still a ways to go. I actually have the 12.4 or 12.4 version of their FSD 12.5 has been rolled out to employees of Tesla. And I'm obviously eagerly waiting a chance to actually test out 12.5 and that will give me a better idea of how far away they are from actually having robo taxis. But there's still a ways to go for their full self driving. This is for sure. But the changes tend to be, you know, step changes that are often quite dramatic. So I think it will happen in the next, you know, 12 to 24 months, but, you know, specifying the data is rather tough. And now when this happens, and when investors have a feel of exactly what it's going to look like, you're going to see investors starting to add this component to their models. And that's going to yield a whole different valuation for Tesla. And our hold will be rewarded in Charlotte. In the meantime, we're going to continue to stack. So, perhaps this is a blessing in disguise for those who, you know, were disappointing, disappointed by earnings, not meeting expectations. This gives people longer period of time to reach whatever target level of holdings they aspire to for this particular stock. Now, I mentioned in our last live how we were in a greed territory. Since then, VIX has spiked and this VIX is a volatility index for the market. And yesterday, we were close to 20 actually at one point. And it's since retraced a bit, but this just goes to show you how fast we can go from agreed to fear in the market. Now, perhaps counterintuitively, when the VIX is higher, this has historically been a better time to buy than when the VIX is lower. So, such a golden makes the following observation. VIX has signaled a risk off event when the 10 day rate of change crosses 40. Historically, this has proven an S&P 500 buy signal with forward and six month positivity rates of 84% to 91% respectively. Those are pretty good odds. So, if you have a three to six months time horizon and you have some cash to invest, the odds are in your favor at this point, at least if you look at this particular metric. And I happen to agree with this. I actually think perhaps there will be volatility, but there's a lot more room for upside here. One of the reasons for this and perhaps the main reason is the forecast for liquidity in the United States and globally. So, the markets are actually pricing in a rate cut in September as a certainty. So, 87% is the probability of a 25% or I'm sorry, 25 basis point rate cut, whereas 12% probability for a 50 basis point rate cut is being priced in currently. We're going to get the new inflation numbers on Friday or tomorrow. We got GDP numbers today, which were 2.3 for the last quarter versus the 2.6 that were expected. So, the economy is slowing down. Obviously, this gives the Fed more incentive to cut rates. And there are anecdotes of data points that point to the fact that, you know, rates can't come soon enough, including consumer credit card debt, which has now reached levels. We haven't seen in 12 years in terms of the amount of debt that is passed due, or the number of accounts that are passed due, whether that's on a 30 day, 60 day or 90 day basis. So, for consumers, the Fed cannot cut rates soon enough. And I think the Fed is getting this picture. Now, what are the stocks that are going to benefit the most? I've been saying this for a while now. I think the small cap companies are going to do the best in the near term in the immediate period that we're facing because they stand to benefit the most from interest rate cuts. They're operating leverage since to benefit the most from a decrease in their interest expense and the better availability of financing for these companies. So, I think it's been about 10 of 11 days as it has been in the last 11 days. This has happened 12 times since 1979. And in each of the 12 times, so 12 out of 12 times, if you look at the one month, three month, six month, or 12 month time horizons, the Russell has been higher following that type of movement. So, historically speaking, the data tells us that the Russell is set to run. That is smaller cap stocks. Perhaps we don't see or we see profit taking in the S&P 500. This is expected, considering how much it has run, how good the S&P has performed year to date. And a lot of that profit, I think, will rotate. They'll continue to rotate funds from the larger cap to the smaller cap that tend to do better in this environment. Especially considering that, you know, contrasted with the S&P 500's movement, positive movement as of late, the small caps have really lacked. So, there's ample opportunity for these small caps to start a really healthy run. The Bitcoin conference started today. Now, there is a pretty impressive lineup of speakers. So, Donald Trump will talk at the Bitcoin conference on Saturday. And there were rumors about him announcing something related to Bitcoin and incorporating it into perhaps the US asset reserves. Other noteworthy speakers, some of them being obviously a lot more morally corrupt than others. I won't go into naming who is who here. Let me stay out of politics as much as possible at least. But there's likely to be a lot of headlines made during this Bitcoin conference. And perhaps this is why coin has remained relatively resilient in the face of yesterday we had the worst day for the NASDAQ in a long time. So, perhaps anticipation of this event has acted as a backstop for Bitcoin and some of the crypto assets that are strongly correlated with Bitcoin. So, we may have a, you know, contrary to popular belief, we may have a dip following the conference, or we may actually have if we do get to a announcement regarding the Bitcoin being added as a strategic reserve or the plans of Donald Trump to do so, if elected, we may have actually, you know, a smaller dip followed by a really strong run up after it. I actually think that that's the more likely scenarios that we have really strong Bitcoin performance, even if it's preceded by a smaller dip following the conference will have a really strong performance for Bitcoin in the week and a couple of weeks following the conference. So, we may even break all time highs in this period. I said it last week. I said, you know, within a week or two things are going to go northward for Bitcoin and with the rest of crypto. We'll see how that plays out. I still think that that's going to be the case. So, yeah, so getting exposure to Bitcoin or Bitcoin proxies, perhaps smaller cap Bitcoin proxies may be a good idea. Not financial advice. Now, Wyoming Senator Loomis who is a outspoken proponent of crypto has mentioned, or there are rumors rather that she plans to announce legislation to compel the United States to actually hold Bitcoin as a reserve asset. And announcing this legislation in the Bitcoin conference. However, you know, just because, you know, Senator brings up legislation doesn't mean it will pass. Now, but the headline itself, I think, is enough to provide some buying momentum for Bitcoin. So, some pretty exciting times that we live in right now. I would not get shaken out by the volatility. I would try to have a contra view in terms of when you sense market fear. I think you should be thinking about buying in this part of the liquidity cycle. So, as I mentioned many times on this live, the most important metric to keep an eye out on is the liquidity cycle, liquidity levels in the United States and globally. Where are we in this liquidity cycle? And right now it appears that we are at the beginning stages of rising liquidity levels that are set to peak second half of 2025, maybe the first half of 2026. And this is going to raise asset prices in my assessment. So, dips are buying opportunities. Now, not all assets are created equal. There are certain times where certain assets will be hotter than others. So, keep that in mind, as I mentioned in this live, I do think that small caps, this is the time for them. So, I'm certainly going to be focused on buying small caps in this period as opposed to larger cap assets. And if you'd like to follow my portfolios, then make sure to become a PIF member and join our PIF community, where we are halal accounts investors looking out for one another trying to help one another build wealth in a halal conscious way. And with that being said, let's take some questions. Chocolate will allow us a salam alaikum, alaikum, salam nice to see you all this. Samir Munajit says, salam alaikum, what is your view on XRP? I'm not really a fan of XRP. So, one thing that you have to keep in mind with regards to crypto is that utility is one piece of the puzzle. Another very big piece and what's going to determine the appreciation potential of that asset is the amount of dilution that the project allows for. And XRP seems to be a centralized project with no limit on dilution. So, I would just not dabble in it. But that's me. They're a website that simply sums up the investment climate as either greed or fear, like just one landing page on the website and with a single word displayed. I actually think if you go to CNN finance, they have greed and fear as a gauge that you can go, you can go to. Malaikum Sam Abdullah, nice to see you. A friend of mine was asking if HLAL stock is halal. I'm assuming not since the warhead product itself turned out to be problematic. Yes. So, I don't agree with all of their classifications for what is comfortable versus uncomfortable. You have met Ammar Mustafa asks us Malaikum really beneficial stream today. I'm glad you liked it. Side note, awesome haircut. Well, thank you. I appreciate that. I am a human, sure, I believe you. Asks, would it be wise then to hold Bitcoin now or sell it? Well, my position is that now is a good time to hold. Not financial advice. And to buy, if you haven't filled your bags up yet, not financial advice, do you own due diligence? Jay Perez says, Samarikum, Malaikum Sam, thoughts on simply DCing into BTC on a platform like Robinhood for the next three to five years or so. Also, any sources or books recommended for learning to trade crypto. So, I would actually be more aggressive in buying now. Now is the time to buy. And I think 12 to 18 months after the having is perhaps a time where you could consider shaving some of your position. This has historically played out well for investors. But obviously history doesn't isn't required to always repeat itself. So we'll keep an eye out on that. So there's a more optimal strategy than just holding through everything. I think when the liquidity cycle seems to be reaching its peak is a good time to be lessening your exposure to assets like Bitcoin. Obviously, I will keep you posted on my position as it as my reading of the liquidity cycle evolves. And my understanding of where we are in it evolves is waiting on BTC DC until after conference a wise choice. It's tough to say. As I mentioned, I've been buying my favorite Bitcoin miner right now. I've been buying yesterday the day before it and I will continue to buy. I'll probably buy today as well. Which are the top five coins to invest in? Well, as I've mentioned on this channel before, I think I'll say my top three are Bitcoin, Dogecoin and Solana. So I work and reinvest in copy paste what you have in a PIF portfolio. This is for a new investor. Yeah, so that's one of the benefits of PIF membership is that you can follow exactly what we buy when we buy it, what we sell when we sell it. And then perhaps we make a move that you don't agree with and then you don't copy that trade, for example. So you can use it for inspiration, see exactly what we're buying and selling at every point in time. And I also think really the community is one of the biggest value ads for the membership yesterday on our Discord. We had a member who was like, okay, today's not a good day to be watching the markets. Let me go spend some time with my family, put the phone down, go spend time with the family. And that post got a lot of reaction from other members, basically agreeing with him. So it's nice to be part of a group that's going through the same emotional ups and downs that come with the market. And I really think that's very useful. So, you know, and our community becomes better, the more active and sincere people join it. So if you think that you would be such a member, then I encourage you to join. Alright guys, leave a like if you haven't already. Until next time, make sure to take care of yourself. And peace be upon you all.