The Practical Islamic Finance Podcast
The Practical Islamic Finance Podcast
No one is paying attention
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No one is paying attention
In this episode, we will cover:
- Market Overview & Jobs Report Reaction
- Mega-Cap Tech Drives Market: Amazon, Microsoft
- PLL & HIMSS Stock Updates
- Gold & Bitcoin: Price Update and ETF Inflows
- China’s Potential $1.4 Trillion Stimulus
- Bitdeer's New Bitcoin Mining Machine
- Peloton Analysis: Is It Worth Investing?
- Viewer Questions & Investment Advice
- Closing Thoughts on US Debt Crisis
CONTACT US
salam@practicalislamicfinance.com
ABOUT OUR PODCAST
Our podcast is about helping people ethically build wealth. We cover a broad range of topics including stock and crypto investing, product reviews, and general financial well-being.
DISCLAIMER
Anything you hear in this video is an opinion. It is not personalized financial advice. Make sure you do your due diligence before making any investment decisions.
assalamu alaikum everyone interesting day in the markets the job report we got today was extremely weak but the markets didn't care in the dow rally three hundred points by the way today is friday november first the dow as I mentioned was up three hundred uh points today NASDAQ was up point seven, two percent and S&P was up just shy of half a percentage points point. The Russell was up a bit more than half a percentage point as well. While it comes to the muscle. The VIX was down today, but it's still above twenty, so. It's still relatively elevated. Tesla was basically flat. We did get a strong earnings report from Amazon. I think that really helped lift the indices. I mean, we're in a tail wagging the dog situation here where the mega cap technology companies are determining what the indices are doing. They were having an outsized impact on the indices. If they're doing well, then the indices are doing well. If they aren't, then the indices are following. And we saw that this week with Microsoft's weak earnings or weak guidance rather, and how the market reacted to that. And then later Amazon with its earnings and how the market reacted to that. Really, the jobs report was considered noise, and for good reason, I will have to admit, because we did have hurricanes that impacted the job numbers. And we'll take a look at those job numbers in a second. PLL continues to do well for us. HIMSS, as I mentioned, a couple days ago in the live nothing to worry about it will rebound and alhamdulillah in fact it has rebounded I did tell you in the live that I would be here to tell you I told you so I told you so now gold is uh down a smidge twenty seven hundred still though and uh btc is at sixty nine thousand Doge is just under sixteen cents. So let's talk about the jobs report and what we got specifically. So the jobs report, at least today, showed the U.S. economy added just twelve thousand jobs in October, far below the Dow Jones estimate of one hundred thousand. So about one tenth of what was estimated. This marked the weakest level of jobs creation since December of twenty twenty. The unemployment rate held at four point one percent in line with estimates. However, traders were not reacting too much to the jobs figures, believing the dismal data was affected by hurricanes and a Boeing strike. So, as I mentioned, market basically said that this jobs data we can't really interpret. We're just going to ignore it because we had the hurricanes that skewed the data in a big way. All right, going to the race between dumb and dumber here. Donald Trump and Kamala Harris, the difference between them in terms of odds winning has narrowed substantially since the start of the week. And so after having peaked for Donald Trump at around, let's say here, sixty five percent, it's now down for Donald Trump to fifty four percent with Kamala at forty six percent. I'm not really sure what has caused this turnaround. Now, one explanation would be the betting markets were not accurate to start with, and they were skewed to start with. But it is interesting to see, and this is perhaps one of the reasons why the VIX is still higher than . I do think that a Trump victory would probably be more bullish for the market. The market would probably react better to a Trump victory. But the most important thing is that the election goes smoothly. That is, without litigation following the election about what happened and whether or not things were counted right. And so long as that's not the case... And by the way, if Trump loses... A hundred percent, that's going to be the case. He's going to claim that there was some rigging going on in the election and it wasn't fair. So that's another downside to him losing is that there's going to be a lot of volatility in the markets caused by people concerned about what is going to happen with the country. All right, so here's a map of equities and what they did today. Amazon was up in a big way after its strong earnings. And video is up close to two percent. We saw semiconductors or at least that sort of group of stocks recover somewhat from the pullback that they experienced earlier this week. And Intel popped in a big way, up at one point close to nine percent on some pretty strong earnings and guidance. As it relates to Bitcoin, our favorite reserve asset, it has experienced the ETFs for Bitcoin, which have been a very strong indicator for Bitcoin's price. They've seen the strongest inflows since March and March is when the Bitcoin price peaked last, so it's quite fitting. and fits with our theory about Bitcoin's price following BTC ETF inflows. We've seen the strongest inflow since March, and this is very supportive of Bitcoin's price, and it typically holds good omens for what is to come as well. Peloton is a stock that I wanted to talk to you about today because it was up to thirty percent, at least before the markets opened. This is what a Peloton looks like, by the way. It's basically just, I would argue, a stationary bike with a iPad strapped to the front of it. Sorry. And. It was at a fifty two week high as of yesterday, and that's why I wanted to talk to you guys about it. But it pulled back a lot today. I was basically going to tell you that I wasn't really convinced with the reasoning for buying the stock at this particular point. Now, the reason why it was up as much as it was. is because they have appointed a new CEO and they think he has a good chance of turning things around. I have to say that the new CEO will have to look at fundamental changes in the business model for this company, because the fact of the matter is, if you look at this company, it's valued at two point seven six billion. I mean, this is not this is no longer a a youthful company. I mean, this is a mature company and therefore you can't really cut it slack for being too young. The business model as it is currently just doesn't work. And you can tell that it doesn't work because You know, you have net revenue of two point seven billion. So basically the company's trading at one time sale. So if you look at that particular valuation metric, Peloton is not really that expensive. It's actually quite reasonably priced. However. I mean, we're we're talking about a mature company here and net income is still negative, and that's just no bueno as the As the youngsters say, it's just not something that is palatable to an investor that knows what they're doing. And so they need to figure out what other business they can be in that makes sense. Because the business model as it stands right now just doesn't work. Cash from operations, if you're looking at the fiscal year, cash from operations is negative. This is something that's burning sixty six million a year. And again, we're not the only real bright spot in its history was when the pandemic happened and there was a big, there's a lot of frothiness in the market generally, but for Peloton, the narrative was extremely strong. And that is, you know, people are going to stay in house and they're going to want to work out in house and therefore Peloton's sales should skyrocket. So that was basically the only, you know, brief window it had under the sun. But then after that reality took over and it really hasn't recovered since. So this is not a company that I would touch without knowing what other business it was going to pivot to because it needs to pivot. It's burning cash. What other business is going to pivot to that's going to have a net income that's consistently positive? So and I was going to I was going to mention it because it was up, as I mentioned, you know, thirty percent at one point this this week. And in case people were thinking about getting into this. But as I mentioned today, it was down fourteen percent. And so the argument for even talking about it, there was a weaker after it pulled back. Nevertheless, this is not financial advice, just, you know. my thoughts on it, my musing, personal musings. I hope you find some benefit in that. And if you do, I would really appreciate if you left a like and, yeah, become a PIF member if you aren't already to follow our portfolios, move for move. Now, the X factor that I wanted to tell you guys about that perhaps not many people are paying attention to is the state of the Chinese economy and the plans for Chinese stimulus, because I do think that this may have a very big impact on the markets and the prices of risk assets that not many people are talking about. So China is considering over one point four trillion in extra debt over the next few years. And this is just one of many stimulatory steps that China may decide to take. And by the way, if Donald Trump wins, the the urgency for China to take these stimulatory steps is going to be heightened because Trump has promised that he was going to impose tariffs on Chinese goods and therefore the Chinese economy right now is kind of in a malaise. And to get it out of that malaise is going to be much harder if there are additional barriers to trade with China that are put on by China's biggest trading partner, the United States. So China is considering approving next week the issuance of ten trillion yuan, one point four trillion in extra debt in the next few years to revive its fragile economy, a fiscal package which is expected to be further bolstered if Donald Trump wins the U.S. election. China's top legislative body is looking to approve the fresh fiscal package, including six trillion yuan, which would partly be raised via special sovereign bonds on the last day of a meeting to be held November fourth days, said the sources. So one bullish scenario for the markets would be if Trump had a clear cut victory next week. And and stimulus was approved by China. then I think the markets would react very positively to that. And that's something that not many people are talking about. Another piece of news that I wanted to tell you guys about related to Bitdeer. Let me see if I can find the article. And this was basically just one day ago. So Bitdeer launched a second generation Bitcoin mining machine, SEAL Miner A-II, and this was yesterday. What is noteworthy about this is that Bitdeer not only launched its own mining machine, but it's equipped with Bitdeer's independently developed second-generation chip. The A-II series achieves further breakthroughs offering, so this referring to its mining machine, offering higher power efficiency ratios, enhanced technologies, and improved stability compared to the A-I. The A-II series includes two models. So they have air cooling and they also have the hydro cooling seal miner. designed to meet mining needs in various environments. So if you, the power efficiency of sixteen point five joules per terahash, that's actually the leading sort of on the leading edge of what's available right now. And they already have plans for their next generation with the power efficiency of thirteen joules per terahash and the generation after that ten joules per terahash. So they're really firing on all cylinders here with regards to their development. And I'm not really sure what's going to be the home run for them, but I do like the pace of action for this company and it's quite aggressive. And so this is, I think, something very bullish for it. I also saw a report by JP Morgan that said Bitcoin miners basically have ten months to sign contracts with high performance computing and AI companies. because this is the period that it thinks the backlog in the power grid is going to maintain or persist as it is today. So the Bitcoin miners will have the most leverage in this environment to get those contracts signed. And when you look at the Bitcoin miners in terms of their access to power and the plans to access their power and the timeline for that, if I was someone who is looking to do high performance computing or needed help with data centers, then Bitdeer would be would be first on my list if I was considering Bitcoin miners. Bitdeer and IOS Energy, I would say, would be top of that list. So I think this is a very positive development for Bitdeer. And by the way, Bitdeer did something funny this week. So on Monday, it was up twenty five percent. And basically it showed investors the potential that it has. And after showing investors the potential that it has, just out of being very gentleman-like, it wanted to give people opportunity to buy at the previous price. And so it just retraced its gains, basically telling investors, hey, you've seen what I can do. Perhaps you didn't know that before. And now I'm going to give you an opportunity to buy at the price that you had before I showed you my potential. And so I thought that that was kind of interesting. All right, so let's go to questions. I like how committed, Adel, you are to working out so that even when you pose for your profile pic, you were working out. So no time wasted. So respect there. Ahmed says, Assalamualaikum, Jamal Mubarak. Wayakum. Bought some iron and bit here today. Shalom. Please take a talk about super micro computer went down. So I actually talked about a super micro computer yesterday. Sorry about the live and the technical difficulties we had with that. I'm kind of hesitant to post it now because we have a new life. So I don't want, you know, posting the old life to take from the views that the new life gets, but perhaps I will post it if you're interested. And as it relates to super microcomputer, the issue with super microcomputer is that its margins are low. That's why I passed on it in the first place. Its margins were low. Now its PE is actually quite reasonable. But the problem that it's having is that the auditor resigned. And therefore, is its PE what... we think it is or are there some accounting shenanigans that were causing numbers to be inflated so it's very hard to invest when you have doubt about the numbers so with super micro computer even though I love investing in names that are distressed at the time with super micro computer since the doubt is out about the of the numbers that it's been reporting, there's really no way to actually verify if it's a good deal or not. Assalamu alaikum, brother. Hope you are doing well. What is your opinion on crypto prop firms? I mean, I don't think necessarily that... The devil is always in the details, as they say. I don't think necessarily there's... Anything inherently wrong with the concept of a prop firm, but what do they have you doing? What are you trading? All of that impacts my answer to that. Yeah, Midas, I think that's actually quite accurate. So Midas says, an interesting perspective from Arthur Hayes, essentially risks of trying to trade the election greatly outweigh the gains. And so that's why we're not trading the elections. Our picks are what they are. And he says that macro factors impending quantitative easing are much more important. Yeah, that's exactly what I've been saying on this channel. Assalamu alaikum, Brother Khan. Thank you for your well wishes. I really appreciate that. And thank you, Khaled. Really appreciate that as well. Assalamu alaikum. I sold NVIDIA on a profit as soon as I realized it was marked uncomfortable on PIF. Do you think I should keep the profit or give it away? I think you can keep the majority of the profit, inshallah khair. You know, when you invest it, you are comfortable with it. And And I think to a very large extent, NVIDIA is a decent company. There are some infractions, specifically as it relates to its doing business in Israel. And so that's a reason to be uncomfortable with it. But that doesn't mean that its revenue in its entirety is uncomfortable. It's a smaller portion of its revenue. So I'll try and figure out what that portion of its revenue is and give that to charity. Wilson says, I hope you take some rest and get better over the weekend. Well, thank you, Wilson. That's really nice of you. To be honest, the lives are one of the funnest things I do all day. So I really enjoy these lives. So to me, this is having fun. So I really appreciate you guys coming. Shrive says, thanks for your lives. Well, thank you for coming, Shrive. I really appreciate that. AMD is a good candidate to take a closer look at, so perhaps I'll do that. Do you think the temporary FDA allowance of compounding for semaglutide will stay review as the cause of HIMSS pullback? What are the chances it goes back down depending on the outcome of the review? I think it will be very sensitive to the outcome of the review. sorry, in the near term, it will be very sensitive. So a positive outcome will be positive for HIMS and that positive outcome being they can still compound. And the negative would be negative for the stock. And because it is a heavily shorted stock, these movements are going to be exaggerated in either direction. Zoom out, though, and look at the longer term prospects of this company. And I think the earnings are going to cause people and the growth of those earnings over time are going to cause people to just forget about these things and start focusing on the bigger picture here. And what is the business opportunity here? Because I think it's actually a very compelling one. Do you think Bitcoin will be going lower in the short term? No, I don't think so. I think it's set up right now to do very well. I told you guys previously that I thought that there was going to be resistance at seventy three and it was going to take a lot of back and forth to break through that in a sustained way. And so that's what's playing out. And. And so I think, I think we'll go higher in the near term. I tried to not predict, you know, near term movements, but right now everything seems to be lining up to pointing higher and not the least of which the BTC ETFs and the inflows that they're getting. Uh, Assalamualaikum, brother. Forget stocks. You got to explain that amazing hair transformation. Alhamdulillah, brother. Alhamdulillah. What did the Habib do? That's what I got to say to that. All right. As-salamu alaykum. Thanks for the insights, Hakan. Is there any future candidates for a small cap semiconductor stock to be added to PIF small cap portfolio? Well, Sammy, I am actually very close to a semiconductor company, but it's not a small cap. Well, depending on your definition of small cap. It couldn't be in the S&P. It's smaller than what would allow it to be in the S&P. But it's in the low double digits, billions market cap. And it's kind of checking off all the boxes for me. So I might add a new name in the semiconductor space soon, inshallah. So stay tuned for that. Really excited about that one. Any other questions, guys? Like I said, it's Friday and I really enjoy these. So if you have a question, I'll take one more. And just because I missed you guys all day. I can just talk about whatever the heck I want to talk about. All right, let me talk about what I want to talk about, guys. We need to stop. We need to stop having khutbahs that are biased against men, okay? Can we do that? The khutbahs recently, I mean, I went to a khutbah. You guys didn't think I was going to talk about this, did you? I went to a khutbah. The sheikh was talking about, hey, men need to be, you know, stronger men. And this is why marriages are failing. It's because, you know, the sisters can't deal with men who are weak now and men aren't being masculine. And then he goes on to say, you know, he gets himself to the ayah, And then he says, guys, and just observing him, you can tell that he's getting nervous at this point. And he's like, guys, you guys are really, you know, abusing this verse from the Qur'an. You're not really giving it, you're not understanding its meaning. And the whole time I was like waiting. I wanted to hear what he was going to translate Al-Rijal al-Qawm al-Misa' to. Okay, here's what you guys are understanding it as, and here's what it is. And then he just says, you know, you guys are misunderstanding it. You're misunderstanding it. And then he never translates it. He never says what it means. He just says, oh, you guys are misunderstanding. It was like he was scared to even say what it actually meant. And so we need to stop, you know, every sheikh, every commenter. I shouldn't say every, but a lot of sheikhs. a lot of people who are giving khutbahs, they're going after popularity. And we need to stop with that. We need to prioritize sincerity and closeness to the and closeness to the truth of the matter and closeness to the actual principles of Islam. I'll tell you a funny story. At least it was funny to me. So anyway, the summary here is that the whole Khutbah was about men need to be stronger men. And then it appeared to me like the Sheikh was afraid to actually translate the verse from the Quran and tell people what it meant. So that was kind of ironic. But then there was like another, this was a different khutbah. And Shaykh was talking about, again, men are terrible, they're monsters, whatever. And then he's talking about, oh, well, this story, and this kind of seemed like an Indian Bollywood film. So he's like, oh, yeah, this guy comes home and he didn't like what his wife cooked for him. So he started like yelling at his wife and then his wife was like, OK. And then she, you know, was sad. And then she goes to sleep and she doesn't say anything. And already I'm like, is that really how these types of things play out? And then he's like, and then so the guy, he felt he felt bad. after he said that. And he was like, you know, when she wakes up in the morning, I'm going to say, I'm going to say sorry to her. And then she goes, and so he wakes up in the morning and guess what? You'll never believe what happened. She died. She, she didn't wake up. I was like, what is this? This is like a Bollywood film. This is, come on guys. Um, So I don't know. I'm pretty sure you guys didn't expect me to talk about that. But I mean, we just have to take out the... the celebrity from the the position of and and the competition for popularity uh from the from religious positions because I think this is causing people to pander too much and this is very you know concerning um That was my khutbah for today, and today is Jumu'ah. All right, we got a bunch of other questions, so let's talk about them. Like I said, I'm just having fun here. Sami says, Assalamu alaikum, thanks for the insights. And by the way, I mean, don't take what I said too seriously. I hope you found it amusing. Thanks for the insights, Rakan. Is there any future candidates for... Okay, I'll read that again. I will... Taskeen says, Khutbah, I hear all are the opposite. Well, it's good that there's balance, then, I would say. Lubna says, Assalamu alaikum, Jamal Barak. Do you think of AMD stick buttons when it was down yesterday, when I heard you talking about it? Well, great, Lubna. I appreciate it. I think so. AMD is going to recover. It's a good company. Zuhair liked that rant I'm glad how existential is the debt crisis affecting the US, UK and much of Europe I think it's as existential as it gets to be honest because this is unsustainable and really the systems that are built in the UK the US, Europe largely our democratic systems wherein people get to decide legislators who then decide legislation. And when choosing between legislators, they're always going to choose the one that is promising them more, more benefits, less taxes. And so over time, if you play this out, what you have is too much spending and not enough revenues. And so democracy and interest bearing debt are almost incompatible because over time, the democracy is not going to last. It's only a complete prohibition of interest bearing debt that gets you out of this situation where you can have a society that chooses its legislators, but because those legislators are restricted in terms of they cannot borrow money, then they cannot overspend. And that's the only way to solve this. But so long as there's the option of interest bearing debt, legislators are going to opt for that because that's how they're going to get elected by promising more and more. So unless people come to that realization, these countries are going to go bankrupt. And by the way, the U S the UK are in much better shape than a lot of other countries, including China, by the way, like I'm still I'm Zuhair. Shoaib says, but it's kind of true. Men in general are becoming a bit kind of feminine. Yeah, I do think that there is an issue with that, with men becoming more feminine. But I think that a masculine thing to do is to say things how they are. And, you know, if you're coming across the ayah, maybe actually having a translation for it and explaining it, I think that's a sign of masculinity to be able to say your opinion and to explain things as you see them and shying away from it is not masculine. which is kind of what I saw happen, at least my interpretation, at least. Do you have any thoughts on SPWO ETF? I was wondering if I should add it. Well, I wouldn't say I have looked too deeply into it. Perhaps I will. I'm glad Tuskeen you found humor in that. Gold went up twenty five percent. What is going on? Is it a good time to buy physical gold? So I think physical gold is actually a good. It's a good investment. And. I think that I think that, yes, OK, the upside for gold is perhaps not as dramatic as the upside for Bitcoin. But it is more stable than Bitcoin is. So if you're seeking something with decent upside and something that's going to be more stable, something that's tried and true that you have full understanding of and something that does well in periods of crisis, then having some allocation to gold, I think, is a good idea. And I think that, you know, it's... It's not a bad idea to buy gold, physical gold as, you know, as an investment and even If you're going to buy your wife something or, you know, you want something that's going to maintain its value over time, then consider buying actually, you know, physical gold because this is something that she can use, but also should retain its value over time. How can one invest seventeen K? Well, interesting you ask that because I have an email that goes out every Monday morning to members. If you're not a member to become one and it answers the question how I would invest one thousand and then you can use that to invest whatever amount you want. Qasim asks about leasing. Generally speaking, leasing is just a long-term rental contract. I have no problem with that. Just as a concept, I have no problem with long-term rental contracts. Now, some people say, well, you're similar to leasing a house, for example. Now, some may say that you're indirectly paying the interest-bearing loans that are on those cars when you lease it. That may be true, but you're indirectly paying for interest-bearing loans that your local supermarket may have on the property that it's using. So indirectly paying is not really the measure to use. I think the measure to use is what is the contract that you're signing on? And if the contract that you're signing on is a long-term rental contract, then I think that's fine. That's my two cents on it. This is an interesting question. Would you prefer buying Tesla stock or Tesla car? Well, it depends on your financial situation. Sorry about that. In terms of appreciation, a stock would do better. I think a stock will do better than a Tesla car. But if you're sort of... And so I wouldn't stretch myself to buy a car unless I needed it. So if you need the car for transportation, then you have to buy a car. And to be honest, right now, the only car I would consider buying is a Tesla because of full self-driving. I wouldn't really consider buying a car that doesn't have full self-driving. It would be like buying a horse and buggy in the nineteen twenties. It's like these are clearly going extinct. So I think that cars that don't have full self-driving are going to go extinct. I don't know how quickly it's going to happen. It's going to take some time, but. The average time a person holds on to the same car is about five years. So you have to think, okay, if I'm buying a car that doesn't have full self-driving now, I'm going to have to sell it in five years as a car that doesn't have full self-driving. What's going to be the market for people looking for cars that don't have full self-driving in five years? Probably not a great market. And I think right now Tesla is offering a zero percent APR, so zero interest on Tesla vehicles, at least in the US. So I think it makes a whole bunch of sense to buy a Tesla car versus any other car. But if you're able to... Get a car that maybe ran for a few thousand miles at a discount. That's probably optimal. And then use that discount to buy Tesla shares. I solved it for you. All right, guys. I hope you found this live useful and fun. And because... That's how I found it fun and hopefully it was useful. And if you're not a PIF member, become a PIF member. Until next time, make sure to take care of yourself. Assalamualaikum and peace be upon you all.