The Practical Islamic Finance Podcast

Ready to Run!

Rakaan Kayali

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Ready to Run!

In this episode, we will cover:

  • Intro
  • Stock Market & Tesla Weekly Performance
  • Bitcoin’s Key Resistance Level ($92K)
  • Fear & Greed Index—What It Means for Bitcoin
  • Altcoin vs Bitcoin Season—Where Are We?
  • Cathie Wood’s Tesla $8T Prediction
  • Q&A: Lithium Prices, Tariffs, Bitdeer 10x Potential 

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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 I hope you are doing well today is tuesday march twenty fifth and we had a decent day in the markets especially if you're a tesla investor like we are that s p was up point one six percent and not too bad uh the dow jones was up point zero one percent let's call that flat the nasdaq was up half a percentage point The VIX is down. The president managed to not say anything terribly damaging regarding tariffs. And so the VIX is down. The Russell was down point five six percent. now in terms of winners and losers today at the top of the list tesla was a winner up close to three point five percent nothing to write home about but when you look at the other names a lot of them were red uh gold has maintained its level above three thousand Bitcoin is at eighty eight thousand. Remember, I mentioned we really need to break above the ninety two thousand resistance in order for me to have more confidence that the the down the down phase is over. And who knows, we may get that. We'll look at a couple of metrics in this live to inform our view. Dogecoin had another good day, up close to five percent. It's now north of nineteen cents per token. So we'll take that. So let's look at the markets and see whether they are ready to run or not. A lot of really interesting metrics we're going to go over in this live. Leave a like if you enjoy these lives. Without further ado, let's get started. The U.S. consumer confidence fell to levels we haven't really seen since February of twenty twenty one. This is primarily driven, I think, by the inconsistency in policy and messaging that's coming out of the White House. The previous reading was at a hundred. This reading is at ninety two. The forecast was for a ninety four level reading. So we actually underperformed the forecast. and because of that we had we didn't have as healthy of a day in the markets as we did yesterday now if we look at the weekly performance for equities we can see that Tesla has done really well. It's up close to thirty percent on the week. There are other names that have done well. Really, the the Mag seven has done pretty well. They're the brightest boxes here. If you look at Meta up seven point five five percent and videos up close to five percent. Google is up north of six percent. Apple is up north of five percent. So the usual suspects did very well. And in fact, if you look at a consumer defensive utilities, they didn't do very that well so interesting we saw for a very brief period a rotation out of max seven into the rest of the s p uh now it seems like the max seven is reestablishing itself as a leader here now if we want to look at seasonality in the markets and at least what the averages suggest If we look at the last twenty years, this is a very interesting chart. If we look at the last twenty years, we can see that the markets typically bottom in March and April is typically a very strong month. May is a strong month. And then June and July, things mellow out. And then when we get to August, that's typically where we peak and people typically go on vacation. And so we have some chop consolidation until August. around the end of October, and then we end pretty strongly in November and December. That has been the story of the average year for the last twenty years. Interesting to see whether or not this replays this year. We had a pretty tough March, but if we look at the performance on average over the last twenty years, this is par for the course. This is something to be expected. So let's see if we have a rebound in April. I definitely think we get some positive geopolitical news if we get some deals with regards to tariffs and rolling back some of those tariffs, exceptions for countries on those tariffs. I think that that could really feed into a strong recovery. Before I forget, PIF membership is now at a thirty five percent discount only until the end of Ramadan. So make sure you take advantage of that while the offer still lasts only a few days left in this offer. If you look at the fear and greed index, the now I've mentioned before that I thought you know liquidity and bitcoin and I've showed how the two move in tandem with the lag between the liquidity levels and bitcoin's price if you look at something like the fear and greed index they basically move in lockstep you can see the fear and greed index is the colored line the bitcoin price is in that darker gray line on the graph And you can see that we're at pretty low levels here in terms of that is approaching extreme fear. The low this year was on March tenth with extreme fear at around fifteen. Now, this is using the coin market cap crypto fear and greed index. Different sources have different indexes, but we have bounced off of that low. We're now. still in fear territory, but we're not in extreme fear. Now we're at thirty four. But the more fear there is in the market, the better the prices are. And historically, that has been the time to buy. It does seem like we are approaching exiting the fear the fear range here and entering into neutral we'll see if that can happen now as we can see the the two move and locks up the fear and greed index reading and the bitcoin price and so if we're able to break out of this fear zone now we should see a greater recovery in bitcoin as well And if you look at, if you're wondering why your altcoin portfolio is in the dumps, well, it is certainly not altcoin season. We are firmly in Bitcoin season. That's that range in orange here. In the bottom, anything above seventy five is altcoin season. We are now at seventeen. Anything below twenty five is Bitcoin season. We are firmly in Bitcoin season. Altcoin season typically follows Bitcoin season. So we'll see if that pattern holds. Now, if you look at gold in the last year, it is up thirty seven percent, which is quite remarkable. Bitcoin is up only twenty six percent. Now, it's important, I think, when looking at these things to understand that the range that you choose, the time period that you choose is going to give you. is going to determine the results that you get. If you look on average though, over the last few years, Bitcoin has far outperformed gold. So it's important not to be a hostage of the current time and actually zoom out and look at returns over longer periods of time. I don't think one year is enough. Gold did outperform, but I do think that Bitcoin will return to outperforming. Now, if you look at the yellow line here, so this yellow line is actually Robinhood stock and it has outperformed gold, which is this gold color and Bitcoin, which is the orange color. Now, for the last year, at least a good part of it, Bitcoin was outperforming gold. But recently in the last at least year to date, gold has outperformed. If you look at Robinhood, it has outperformed both gold and Bitcoin. Now, there's a lesson here, which is that sometimes you don't want to invest in the asset itself. Sometimes you want to see what is the second order impact of a certain phenomenon. And, you know, if you're bullish on gold or you're bullish on Bitcoin or you're bullish on the markets, then someone's selling the picks and shovels for people to actually act on that on their trading desires on their investing desires, someone who is selling the picks and shovels will often do better than the assets themselves. Something that I always like to remind investors, always like to remind myself, is that really you don't want to be where the crowded trade is. You want to think, okay, if this happens, then what is the first order impact? That's where... biggest crowd is going to be what's the second order impact from that there's going to be less of a crowd there you'll probably get better bargains there so something to keep in mind here now bitcoin has broken above the two hundred day moving average typically in bull in bull phases of the market now whenever we go below the two hundred day moving average this has been a clear signal to buy And we briefly broke below the two hundred day moving average. And now we are above it, which is good in terms of. in terms of giving signal that we're still in a bull market, typically in bull markets, the dip below the two hundred day moving average is very short lived. This is, in fact, what we are experiencing. It also means that probably the deals aren't as good as when we were below the two hundred day moving average. But nonetheless, now we are well off our highs still with Bitcoin and there's probably more room to go here. If we look at the Bitcoin monthly returns, now previously I shared the S&P monthly returns over the last twenty years. If you look at the Bitcoin monthly returns in the March of April, which has been strong for the S&P, as I've mentioned, the Bitcoin returns on average have been close to thirteen percent, which is the third best month of the year and behind only November and October. So on average, there's reason to be bullish on Bitcoin during the month of April. Obviously, a lot will be decided by what headlines come out during the month of April. But from a seasonality perspective, April is a good month to be owning Bitcoin. And in other news, Cathie Wood came out with an interview suggesting that Tesla will TenX reach eight trillion dollars in valuation. The interesting thing about her prediction is that it does not include bots. It does not include perhaps the biggest, their valuation doesn't include the biggest contributor, I think future contributor to Tesla's bottom line, which is their Optimus robot. Ninety percent of the X that she is predicting comes from a robotaxis. So This is a good return versus risk profile because you know that even if one of the many lines of business that Tesla is involved in doesn't turn out exactly as predicted, then it still has the potential to Tenex, which is quite remarkable for any company. Now, it is very reassuring. I found very reassuring that the new Model Y is basically selling as much as they can produce in China. This is very reassuring because the competition is the fiercest in China. And when you look at the weekly sales of their new Model Ys, it is growing week after week. their sales are very healthy in the most competitive market in the world. Yes, they did stagnate with the old Model Y as people were anticipating the new Model Y. But now that the new Model Y is out, it seems like they are basically supply constrained, which reassures me as an investor that, in fact, the Chinese models are not superior and Tesla has know maintained its appeal in one of the most competitive markets on earth if not the most competitive markets on earth on earth as far as evs are concerned so with that being said final reminder only six days left thirty five percent off for your pif membership all the details are in the description let's go to questions muhammad any updates on that stock that we have in our portfolio for PIF members. So yeah, it's, it's pretty, it's pretty expected to that a company that's in biotech and the research phase is going to, is going to need to raise money. So there's no surprises there. I think we'll have to, We'll have to see more detail coming from the company, but this is par for the course. It's tempting for me to actually reallocate some or if not all of that investment, even though it's a very small part of our portfolio. It's tempting for me to reallocate that to something that's running now, and then we'll see if we revisit it later. So maybe I'll have more on that for PIF members soon, inshallah. Ali says, Not fully confident the downtrend is over. We'll see. Let's wait and see. I'm waiting for SPY and BTC to hold. So we'll see. I think the fundamentals are there. We just have to make sure we don't shoot ourselves in the foot policy-wise. But I think the fundamentals support our recovery here. We'll see if tariffs get actualized. That will, you know, to the extent, obviously the extent of the tariffs exceptions, those will all impact. I think they're going to be rolled back a bit, won't go in exactly as advertised, but we'll have to see. Now, Salam brother, I have a friend obsessed with following charts. Can charts really predict the future based on human behavior, creating patterns? Well, that's a question that I think that And you can ask yourself and see what you're leaning to logically. I think that if I charted out your moods, let's say I chart out your moods during the day, will I be able to predict the next hour or two of your mood? I mean, it's possible there's some correlation, but Would you put money behind it? You know, I think that maybe they factor in to your decisions, timing decisions. But it's a matter of weightings. So how much would I weight the chart in my decision making? I don't think it should be more than. Ten percent. If I'm being generous, I think more important is things like liquidity cycles, things like fundamentals for the particular asset. That's more important than a specific company's chart. Salam, what are your thoughts on increased tariffs have significant effect on lithium prices? I mean, I keep hearing, I think today we had another headline about the United States wanting to bring a lot of critical mineral production onshore. And so if that's the case, then I think this will be very good for companies that are in mineral production that are based in North America. This should be very bullish for them. So we'll see if this plays out. This could change in a second. But I love the fact that this is an area that is completely slept on by investors. I don't think pessimism could be worse. uh as it is reflected by the price I mean there are a lot of great deals out there so I think I mean if you look at the market this is one spot in the market where there definitely isn't overvaluation you could argue you know max seven may be overvalued you can argue. Some other spots in the market could be overvalued, but when it comes to lithium production, for example, it seems like the market has completely given up on it, at least for the time being. And that's really where you can find some alpha. Said Bitdeer, well, Tenex, what timeframe do you see? I think probably in five years. So similar to Tesla. It has the potential to do that. And maybe even more than that. It has the potential to do that. But this is not financial advice. Obviously, my thesis will change as market conditions change. But I really like the fact that they're rethinking the mining rigs. And this is something that really hasn't been done. And I just, you know, going back to the picks and shovels that we saw with, you know, Robin hood, providing picks and shovels for people who are interested in investing in bullish on markets and, you know, different parts of the market and how good Robin hood did. I think a bit there as okay. Bitcoin is going to become You know, it's climbing up the ladder of most valuable assets globally, and maybe it actually reaches the number one spot. A lot of Bitcoin enthusiasts think that it will and surpass gold. So if you are the number one or number two company providing mining equipment for this asset that is You know, the number one and most valuable asset in the world or close to it or climbing the ranks or getting there. So multiple trillions of dollars we're talking. If you are number one or number two in providing mining equipment for that, what should be your valuation? What is the size of the market for that? And so. I think that it has an opportunity to Tenex. I don't know. Obviously, I think it has a good founder. It has a good management and they seem to be doing the right things. That's, you know, Allahu Alam. But I think that there's a distinct possibility that this plays out in a good way. There's going to be a lot of fluctuations as we saw. I mean, we were north of twenty six. Now we're at ten. So there's going to be a lot. That's why we always take profits. We took profits on the way up and then we bought back on the way down. So I think we're doing it right. So there's going to be a lot of volatility. It won't be a straight line. I wouldn't suggest betting the farm. That's why we have diversification. But I think there's a distinct possibility that this plays out. All right, so hopefully that was useful. Leave a like if you enjoyed this live and make sure to take advantage of these last days of Ramadan. Make dua for yourself and make dua for the PIF community. Love you all. Take care. Assalamualaikum and peace be upon you all.