The Practical Islamic Finance Podcast

🌟 The Smartest Market Recap 🌟

• Rakaan Kayali

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🌟 The Smartest Market Recap 🌟

In this episode, we will cover:

  • Intro
  • Market Recap: VIX, Dollar Index, and Risk Trends
  • Nvidia Earnings Breakdown: Record Gains and Future Outlook
  • Tesla Optimus: The Rise of Humanoid Robots
  • Bitcoin Miners vs Bitcoin Performance
  • Solana vs Ethereum: Blockchain Fees and Market Trends
  • Meme Coins: Halal Perspective and Investment Risks
  • Bitcoin's Growing Adoption Globally
  • Tesla Stock: Long-Term Predictions and Investment Advice
  • Closing Thoughts and Membership Promotion

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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.

As-salamu alaykum, everyone. I hope you are doing well. Another very interesting day in the markets. The VIX is up close to five percent, still responding to geopolitical tensions, primarily between Russia and Ukraine and some ambiguity regarding how Trump and his administration are going to deal with the Ukraine-Russia conflict, especially as it compares to how Joe Biden and his administration have been dealing with it. The Dow Jones, NASDAQ, and S&P, let's call them flat today, even though the VIX was up. The dollar index, which I'm keeping a very close eye on, was up less than half a percentage point. which is not good for risk assets if it continues to be strong or if it continues to rise in strength. The dollar that is not good for risk assets because that means money will move back into treasuries. But I don't think that that's going to happen. Liquidity is rising. globally. And I think the tide is turning very firmly to being a risk on market, and it will continue to do so, I think, with ups and it'll zig and zag on its way up. But the general trend is still very bullish for the market. I do think right now we're entering a period where we're sort of digesting the gains that we got. We may chop a bit at the levels we are at, but I don't expect a substantial pullback, not until next year, basically. Tesla is at three hundred and forty, which is near its highest for the year. Nvidia reported earnings. We'll talk about those earnings in a second. So actually, I'll talk about them right now. NVIDIA beat QTH earnings in a big way. It smashed QTH earnings. Revenue is up ninety four percent compared to last year. Operating income up one hundred and ten percent. Earnings per share up one hundred and eleven percent. data center revenue, one hundred and twelve percent gaming revenue plus fifteen percent. And it's expected that the that the stock is going to do or the business rather is going to do another fifty percent in growth next year. Now, the reason why it's down after hours, probably investors don't really have a really hot appetite to be buying at all-time highs, but eventually they will, and they'll make new all-time highs. I don't really think you can expect much of a better report than what we got from Nvidia after market closed. As it relates to Bitcoin miners, they continue to underperform when compared to Bitcoin. Bitcoin has had a much more solid and robust run than Bitcoin miners have. Bitcoin miners take two steps forward, one step back, and that can be frustrating for many investors. But I do think that their day will come sort of like MicroStrategy's day. has come and every day it seems. You know, it's making new all-time highs. Today, actually, MicroStrategy was the most traded stock in the United States, beating out Tesla and Nvidia, which is wild when you think about it. They don't actually have a product or service. They just issue equity and buy Bitcoin and issue debt and buy Bitcoin with the proceeds. So it gives you an idea of how much bullishness there is around Bitcoins. But I don't think that this necessarily can continue. It's now trading multiple times what it actually holds in Bitcoin. Now, I understand that the appeal of MicroStrategy is not just what it holds in Bitcoin. Markets are forward looking and they're trying to estimate what can be with regards to MicroStrategy, especially if it continues with Bitcoin. its strategy that has worked for it so well. The issue I see with microstrategy and maintaining these valuations is that other companies can do this. It's not just microstrategy that can do it. So I don't really see why. It's surprising to me that more companies haven't basically copied microstrategy's blueprint. We're seeing other companies start with their own sort of microstrategy approach to buying Bitcoin, issuing equity, issuing debt at very low interest rates and in the case of MicroStrategy, zero percent interest rate and using that money to buy Bitcoin. Other companies are doing it. And those other companies are going to be the target of investors who want to replicate the performance of MicroStrategy in their own portfolios. So I don't really think that the premium that MicroStrategy currently supports is sustainable in the long run. But in the short term, I think it's, you know, probably very enjoyable for MicroStrategy holders. Again, I stayed away from MicroStrategy just because of its business model employing interest-bearing debt in order to operate interest-bearing debt as a material part of their business model. And that's why I haven't invested in MicroStrategy. Looking at gold up a tad, which is to be expected. The VIX is up close to five percent two days in a row now. Silver is pretty much flat. Oil is down point three eight percent. Bitcoin. Ninety four thousand two hundred seventy seven. I can't believe I'm saying that. Actually, I can't believe I'm saying that. But it's finally here. We've been saying for the longest time that we thought we'd get here. And, you know, when it was at sixty and I was saying I thought it would reach one hundred by the end of the year and there was basically two months left. It did appear that that probability was becoming more and more remote. But here we are, a stone's throw away from one hundred K and we'll probably get there, inshallah, by the end of the year and probably more than that. Doge is at thirty seven cents. Again, I think it's digesting some of the gains that it gained, but I think that there's more upside here. And Solana, two hundred and thirty six dollars. Something very interesting about Solana is that its seven day fees have actually exceeded Solana. Ethereum's seven day fees. So the seven day fees for the blockchain, let me see if I can pull that up. The seven day fees for its blockchain have actually exceeded, generated by the Solana blockchain, have actually exceeded those generated by Ethereum in the last seven days. So you can see here, Solana, sixty two million Ethereum, sixty million. And keep in mind, Ethereum is valued around four times as high as Solana is. So you can kind of see the writing on the wall here with regards to price action and But really, it's going to be a continuation of the price action that we've seen in the last months, wherein Solana is gaining ground against Ethereum. I fully expect that to continue. Now, as it relates to MicroStrategy, we mentioned that it was the most traded stock in the United States today. You can see Nvidia and Tesla following behind MicroStrategy. And in terms of return year to date, it's up close to six hundred percent again. This is not something that wasn't on my radar. It was on my radar, but I chose not to invest in it because of its use, using interest-bearing debt in its business model. And whenever you leave something for the sake of Allah Subh'anaHu Wa Ta-A'la, Allah Subh'anaHu Wa Ta-A'la will bring something that's even better than it for you. And I fully believe that that's the case here. Something very interesting that Elon Musk has been saying in the past couple of days is So in two thousand twenty six is his prediction that we'll have AGI. So this. So this relates to basically a general intelligence intelligence solution. Twenty twenty six, I mean, we're talking and he mentioned at the latest, so. you know, it's very close. Optimus is really going to be next level. It will be able to pick up your kids from school. It can be schools for your kids. Humanoid robots will usher in a new age of abundance. That's hard to imagine. There will be no shortage of goods and services. Optimus will likely cost twenty to thirty thousand at scale. It will cost less to make an optimist than a car. And the ratio of humanoid robots will be more than one to one, probably ten to one. So there will be in excess of ten billion humanoid robots. So imagine a capable humanoid robot that is equipped with AGI. How useful that would be. You basically have a servant that is, you know, very very capable in every way imagine what the demand for something like that would be if it cost twenty to thirty thousand I mean people would take out loans to to buy it so this just goes to illustrate the upside that tesla as a company has Basically, the demand for Optimus, if this turns out true, these forecasts turn out true, the demand for it will be infinite. As much as they can make, that's what the demand will be. And really, they have very strong pricing power as well. So the margins will be very good as well, because if it is as useful as it is being advertised to be, then people are going to pay top dollar for it. So I really think that we are approaching these coming months are basically the remaining months that you have as an investor to build up a full position in Tesla. If you haven't been prioritizing that, I think you should. Not financial advice, just my thoughts, sharing them out loud. I was asked yesterday, do I think that Tesla will reach five K by the end of, or in a decade, in ten years, will it reach five thousand dollars per share? And I actually think it probably will reach that in the next, probably by twenty thirty. So almost five, six years. And so, yeah, very interesting times. I think there's, I think as it relates to Tesla, having a sense of urgency is appropriate with regarding to filling your bags there. I do think you have a few months before, you know, things get really crazy. So maybe it takes until the second half of. Twenty twenty five. But. something that I'm certainly prioritizing in my mind. So with that being said, by the way, I would be remiss not to mention, we do have our promotion going on, thirty five percent off premium and elite plans, basically all of our paid plans for PIF membership. With the elite plan, you get access to our course and that promotion is ending soon. And so if you're interested in becoming a PIF member, make sure to sign up in the time remaining to become a PIF member. We'd love to have you in our community. And with that, let's take some questions. Apparently Michael Saylor will be meeting Microsoft with regards to buying BTC, that would be interesting. And that's certainly in his favor for as many people to be interested in using BTC as a reserve asset as possible. And really we're seeing the dominoes fall here in terms of corporate treasuries resorting to Bitcoin to preserve their purchasing power, which is currently being held in cash. And on the level of sovereign states, we're seeing this as well. So candidates for positions of power in many different countries are talking about using Bitcoin. The president-elect in this country has promised many things with regards to Bitcoin and crypto generally, and they've been talking about having a White House position that is just dedicated to crypto. So they're very serious about it. And you're going to see this cascade into countries across the globe. And so twenty twenty five is probably going to be a really crazy year for Bitcoin and other risk assets and a really, inshallah, great year for. Our investments business, so very excited about the upcoming Should we be worried about the dollar index showing strength given that this level increases the real interest expense paid on the US debt? I do think that the dollar index is something to keep an eye out on. That being said, I do think the path that we're on is probably not going to be changed In the next few months, it'll take longer than that. And the path that we're on right now is one of increasing liquidity globally, not just in the US, and a very acute need to reduce the interest expense that the United States is paying and therefore lower interest rates even further. in order to accomplish this. And this will mean lower interest rates will mean a weaker dollar. There's something, so Rashad mentions, in addition to effective tariffs proposed by Trump. So the combination of tariffs and if we had something like a mass deportation of illegal immigrants, that is inflationary. the tariffs will be inflationary, the deportation of illegal immigrants will be deflationary, and that will work against any movements to reduce interest rates. Now, because reducing interest rates is inflationary, all else being equal. Like I said, for the next few months, I think that we are safe from the impacts of these policies. Since these policies have not been implemented yet, they will take time to be implemented if they are indeed implemented. And also, we don't really have much detail about how they will be implemented. So I think it's probably premature to act on them at this point in the market. Dr. Bassa, assalamu alaikum. Does Berkshire Buffett huge cash pile give concern for increased risk of major correction? Well, if you'll notice that Berkshire's cash pile is not anything new. It has been accumulating for years now. And I do feel like there's been a lot of opportunities that have been missed because of this sitting on the sidelines with all that money yeah you're earning five percent on your treasury bonds risk-free basically but there were I think a lot of compelling investment opportunities during this time but I think what is holding berkshire back is it has so much money small opportunities don't really make sense for it to bother with them in the first place you know if something is sub ten twenty billion it's almost not even worth berkshire's time when you're dealing with hundreds of billions in cash it's not worth berkshire's time to even consider that as an investment and and you know, take on the risk of buying it and so on. And also Berkshire and Warren Buffett's discomfort with things that are technology related in terms of investing really limits the opportunities that they have to consider. So when you look at things like Elon Musk's predictions with regards to AGI, You can surmise that there are a lot of opportunities that are related to these developments in technology that will start suggesting themselves on the investment scene. And they will grow many Xs in the next few years. And if you're discerning with regards to where you put your money, I think that you'll be, you'll do very, very well. If you're investing in these fields in a intelligent way, it's just the case that Berkshire has so much money and it's naturally interested in investing. this dynamic, investing in technology, this dynamic has caused it to have a pretty large cash pile. And in some areas of the market, sure, I will admit that some areas of the market are frothy. But if you are discerning in where you're putting your investment dollars, I think there's an abundance of opportunity out there as well. So as it relates to meme coins, my very sort of succinct position with regards to whether I'm comfortable or uncomfortable investing in them from a halal perspective, my position is that meme coins are means of exchange and they exist, they're actual assets that are being traded and therefore, and speculation in and of itself is not haram. There's no objective measure of how much speculation is haram versus not. Speculation and gambling, this is something that people get mixed up a lot. They are not the same thing. Every type of trade almost involves speculation. Gambling... relates to wagering money in a zero-sum game where there is no good or service being exchanged in the case of trading meme coins baseball cards rocks anything this is totally fine even if the thing involves even if the trade involves trying to predict what the future price of it is going to be. This is what trade is all about after all. So I don't really see anything fundamentally wrong with trading meme coins. At the very least, in terms of utility, they are means of exchange. I can send... a meme coin on the Solana blockchain to someone in Egypt who did a service for me and pay him for his services in that manner. I can send it to Indonesia. I can send it across the globe in seconds and pay very little fees and and make a payment that way so in in this regard it is something that is useful and trading it I don't see anything fundamentally wrong with that being said ninety nine point nine percent of meme coins especially nowadays are just scams they're they're they are Well, I'll say not scams, but things that will eventually go to zero. And so you're taking on a huge amount of risk buying a meme coin, especially the meme coins that I would say stay away from any meme coins where the founders are not known, how it started is not known. It didn't have a fair launch. It's very concentrated in terms of its supply and a very small number of people. Because then you're basically taking, I think, a huge risk with your money. And it's very likely that you get bitten. You get hurt by investing in that way. So I'm... while I'm comfortable with meme coins as a concept in terms of you know their halalness if you will I think extreme caution needs to be exercised when you are investing in that space hannibal says do you still think holding bitcoin miners is betting better than holding the underlying asset well I think it depends on the Bitcoin miner, but I do think that they still serve a purpose if you're looking for a leverage play on Bitcoin itself, and that's why we hold them. I can't say whether Solana is going to surpass ETH in the near future, but what I can say is that certainly the trend is in this direction. and I don't see any reason for this trend to not continue solana is clearly winning and if you look at daily active users if you look at number of daily transactions and now recently something that used to that ethereum used to always hold the crown for recently solana has beat ethereum in fees as well so I don't really see any reason why Ethereum would be valued more than Solana. In the short term, the market is a voting machine. In the long term, it is a weighing machine. So eventually the true weight of these blockchains will express itself in the market caps for these blockchains. Yeah, so bonds are a type of debt and this debt is issued for a benefit for the lender that's the reason why the lenders are issuing this debt and and when a debt is issued a loan is issued in order to benefit the lender not as an act of charity this is a loan with riba allahu alam So at current, this is a good question. And Hannibal asks, Assalamu alaikum, alaikum salam. How profitable are the Bitcoin miners at the current Bitcoin prices? Depending on who you ask, the average all-in cost for mining a Bitcoin right now is between seventy and eighty thousand for the public Bitcoin miners. Right now, at ninety five thousand, they're printing money. Alaykum salam Abdullah, nice to see you. Thanks, Niz. I really appreciate it. Niz says, I'm all glad I snagged a discounted renewal on Elite. My family has found the education content. And of course, the stock calls hugely beneficial. Alhamdulillah. Jazakumullah khair. Wayaikum. Niz, it's awesome to have you as a member. And thanks for saying that. I really appreciate it. Oh, and like the live, guys, please. Let's get this live to a hundred likes. That would be awesome. Sami says, Salam Erkan. Wa alaikum salam, Sami. In case of a nuclear attack happens from Russia or NATO, is the right move to sell everything and cash out or wait out a bit to see what will happen? Well, I think that would be very unfortunate and tragic. Let's hope it doesn't happen. And I honestly don't think it will happen. I think it will be probably the dumbest decision ever in history for anyone to use a nuclear bomb in these conditions. And there's absolutely no need to at all. Neither country is threatened in terms of its actual existence. Their stated goals are a stretch of land that isn't even that desirable, if we're being completely transparent. So, yeah, let's hope that doesn't happen. But in cases of extreme panic, Like what I was very aware of during the two thousand eight, two thousand nine crisis and the stock market crash there. I'm thinking about buying, not selling. Because eventually a recovery will happen and the sources of wealth for humanity have been these companies that have these are basically the sources of value creation for humanity. And so if they go on a discount, I will be thinking about buying them, not selling. Yeah, but I do, I am thinking about taking a look at SMCI, but you know, I don't, the number one goal in investing is preservation of capital. So unless something is screaming back up to truck, I'm not going to. and the risk profile is clear, I'm not going to risk my capital. I've been hearing hype about XRP for years, years. And if you look at its performance, even if you, let's, So if we look at XRP, let's say in the last year, it's up eighty two percent. And if we were to compare that to Bitcoin, for example, it's up one hundred and fifty percent. So yeah, it had a pretty noteworthy spike and I understand why people are talking about it right now. But last time I looked at it, I wasn't really that impressed. I didn't really see the appeal. And so I passed. And until I look at it again, that will be my position. Yeah, I think, Sammy, BYD is the most credible competitor to Tesla. And it's not even close. It's going to be BYD and Tesla. Where Tesla has an advantage is in all of the other things that has its hands in, including full self-driving, which I'm sure BYD is working on. I mean, they have to be, but I haven't really seen any demonstrations of their capabilities. But in terms of the future, it is becoming more and more apparent that the leading country for the EV companies of the future will be China. It's not going to be Japan. It's not going to be South Korea. It's not going to be Germany as it was in the previous century. The leading country is going to be China. And in the US, there's basically only Tesla. But BYD is a close second, I think. Thoughts on Ethereum? I don't like it. It's expensive. It's slow. It's clunky. It's just a engineering monstrosity that is overvalued. Yeah, I think if you participate in something that you know is a pump and dump, of course that this is something that is haram, of course. I mean, just use your common sense. That's my pleasure. Tassero says, Jazakallah for answering the question. When do you think S&P five hundred companies will start having Bitcoin on their balance sheet? I think very soon. I think probably. I mean, obviously, Tesla already has it, but now you're going to see companies start to compete, countries start to compete, and it's going to be, you know, every other day you're going to get a headline where once this game theory starts kicking off and this snowball gains enough momentum. It's going to be like every other day you hear another company, another country is adding Bitcoin as a reserve asset. I really think that we're approaching that. And that's why I think twenty twenty five is going to be an extremely exciting year for investors. And I think there will be a lot of gains to be made in twenty twenty five. I'm very excited about it. If you'd like to join us on our investing journey. Then. Be sure to do so in the time remaining in our promotion. It's in the description. If you use the code Buran, you get thirty five percent off of our premium and elite membership plans. So do that and join our community while the promotion lasts. If you haven't left a like, please do leave a like. I'd really appreciate that. Subscribe, hit the notification bell. And until next time, make sure to take care of yourself. Assalamualaikum and peace be upon you all.