I hope you had a relaxing weekend because we're in for a hell of a ride today we have some insane stories to cover so buckle up. Don't click, nothing, don't smash! Nothing! Don't subscribe to nothing! Just listen up. The only thing i need is your attention in this video because we're talking about some serious stuff, kathy wood and elon musk, going at a chat on social media, alibaba news after the fine, quite surprising, not what you expected. Microsoft.

Massive news and john powell goes on tv again talking about inflation rates, interest rates, all that good stuff is coming up in a second. But first, let me just say hello. If this is your first time here, my name is tom. I used to be a senior financial analyst now i'm a full-time youtuber talking about the financial markets, the stock market and economics and, as you can see, i'm freaking passionate about what i'm doing, and i want to help you understand better.

What's going on so stick around with me for the next five to seven minutes, it's gon na be a banger and by the way, if some of you want to own a piece of clothing with some of the stupid, i say in these videos now you can Actually do it the merch store launched yesterday, the link is gon na, be below go get it now, let's get to the news. Okay, so i'm about to blow your mind about what's going on with alibaba. This is insane unprecedented. I've never seen anything like this now, as you heard, alibaba got fined by 2.8 billion dollars by the chinese government.

You probably heard this before. In fact, i did a video about it, so i'm sure all of you heard about it, but those of you who haven't now you know now. Here's the funny part when something like this happens when you have a record-breaking 2.8 billion dollar fine on the company, you'd expect to see the price of these shares go down, but this morning in asia, the shares of alibaba were up at some point by eight percent And closed over six percent up right now in pre-market, the stock is over six percent up. This is insane now.

Why is this happening now? As i pointed out in my own, video 2.8 billion might be a lot of money for 99.9 of companies, but for alibaba it's really not a lot of money. You have to understand that alibaba is generating over 100 billion dollars of revenues per year. They're sitting on the pile of 50 billion dollars in cash, that's literally point 17 of their entire assets with the chinese government, not saying anything else about breaking apart ant and alibaba, and any structural changes, and only saying at this point that there's going to be a 2.8 billion dollar fine, which is immaterial financially for a company like alibaba investors, assumed that that's pretty much it that's the end of it and that's pretty much the best case scenario for alibaba coming out of this, and that is why the share is going up. And if this is in fact the end of it, 2.8 billion is a slap on the wrist and it's a gg we can go forward.

The stock probably will go up. However, i do anticipate that the chinese government will keep banging alibaba. I do anticipate that they will try to break apart and in alibaba and restructure the group in the future, so any positive feeling that you may have now. You got to be careful with it and i'm not saying it's a good or a bad investment.

I honestly don't know, but i will warn you that this euphoric kind of this is the best thing that could have happened. We're done with this crisis. Alibaba is moving on up i'll, just be careful because you never know what the chinese government has in store. For this company it's been known to get a few kicks in the nuts, so just be careful and again this is just my opinion, so it might be, inaccurate might be even wrong might be the ramblings of a bad man.

Who knows you got ta? Do your own research, allegedly blah blah mother effing blah by the way, there's a shirt in the merge store that says blah blah blah go get it you've asked for it come on and for the second story of the day. This is insane elon musk, cathy wood drama, who would have thought elon, musk tweeted, that kathy wood, basically saying hey kathy? What do you think about market cap to gdp? Is it too high, and for those of you who are not familiar with this indicator, that's essentially the warren buffett indicator, in other words, essentially what it does. It compares historically how much the ratio between the entire market cap of all public companies versus the entire gdp, the gross domestic product of the us, and when you go back in history and you compare it, you can see how much this market is overpriced, overvalued versus. Historically, other comparables, now here's the thing this market cap to gdp we have right now is probably the highest in history.

I haven't checked it recently, but it's pretty much up there way over what we used to be calling an overvalued market. So, there's no doubt that this indicator is showing over value market. Now elon musk asked kathy wood what she thinks about it and she went on a crazy tangent talking about phone lines and things from the 1900s. Whatever some crazy nonsense now, i honestly don't know why she would do it because i definitely don't agree with this whole deflationary market thesis that she actually broke.

Apart on twitter, she wrote a whole manifesto for me, it's quite simple. Why do i think that market cap to gdp isn't necessarily the best indicator for overvaluation of the stock market, and i think that's what she should have said is because the world has really changed over the course of the last 20 years, while 20 years ago, the Entire profits, the entire gdp of u.s companies was in america right now. As i pointed out my previous videos, because of transfer pricing, a lot of u.s companies are shifting their products to other more tax. Favorable countries such as ireland, such as switzerland, singapore, hong kong there's a lot of other countries and these countries are actually accumulating that gdp because of transfer pricing.

So i would say at least 30 to 40 percent of the us. Gdp is now going outside the us. Through transfer pricing and less companies generate us domestic gdp. The problem is that this causes a skewed market cap to gdp.

That's why the overvaluation that you see in this indicator right now isn't as bad as you would think, because historically, we've never had so much money. Getting shifted out of the u.s to other jurisdictions, in fact, in the 1980s, who would have thought about international tax planning, offshores transfer pricing? This is pretty much a new creation, so this all indicator should get a new basis points. We should be comparing it year to year not decade to decade, because it's just not as relevant, and i think that kathy wood should have just said that, but instead she went on this crazy tangent about alexander, graham bell phone lines. All this nonsense, doc brown, 1.121 gigawatts - i don't know what she was talking about.

She should have just actually answered this answer, but again it's her opinion. It's my opinion. I honestly don't think that the market is as overvalued as some people think. Okay.

So the next story of the day is jerome powell going on 60 minutes and doing a full interview. Where he's talking about the fact that he's really happy with the rate of progression of reopening and the economy, growth he's looking forward to six seven percent gdp growth, which is phenomenal. But he's saying that, because of the economy being so skewed, that the recovery is only partial in certain industry, while certain under industries are underperforming, the rates are not going up in 2021., he was very specific about it and he said interest rates are not going up. This year, no matter what he pretty much said that unless we have aliens come down from mars and completely rejuvenate our economy to new levels that we have never seen before, rates are staying, as is which is good news for tech stocks for growth stocks.

For anything with future prospects, but again he's been very consistent about saying the same goddamn thing in every interview. However, the markets - don't always take this man at his word and looking at the bond yields right now at the current rates below two percent. I pretty much think that the market believes him at this point and we're gon na see a nice tech boom. But here this i don't think there's gon na be a lot of tech booming happening in small cap stocks.

I think we're going to see a huge boom in the big tech, the googles, the microsoft, the facebooks, the amazons. That's where tech is going to actually push forward this year, not the small cap speculative stock, so be careful and for the next story of the day. Microsoft is working on yet another acquisition. This is insane microsoft already acquired linkedin a few years ago for 27 billion they're about to acquire discord for another 10 billion, and now it seems that they're trying to get new ones for about 16 billion on their own.

The trash they can't get out of the gate, however, this is a prime example, when you take a company that doesn't really performing on their own and you add them into the microsoft ecosystem with their whole network effect. I think it's going to be massive. That and discord are really two great purchases for microsoft and by the way we spoke about microsoft. Let me show you on january 17th, i posted this on our patreon group and i told you hey this.

Three companies are going to go up this year. I told you that i think microsoft, oracle and salesforce are about to have a great year oracle. I told you will go to 70 sales force to 260 and microsoft to 225.. Now in all that jazz.

Basically, what happened is that all companies went up. We have oracle going up by 22, microsoft by 20 and salesforce by 9. Now, while you can see here, we still have a little bit more upside left in oracle, based on my existing target prices, which you can see right here by the way this chart is available to every single patron and channel member we have so, if you want To see it you can subscribe, i told you oracle, i'm getting out at this price, i'm selling microsoft, i'm not only keeping i'm raising my target price for microsoft. I'm gon na release a separate video with my own full dcf.

Why i'm raising the target price? My entire calculations, everything but i'm staying in microsoft and i'm really happy to see that with it 22, 20 and 9 from january to now, it's a really hot market for these companies. I told you that i'm gon na see big tech doing some huge things this year and we have not been disappointed and the bottom line here is that i think microsoft is moving way upwards than the current share price they're about to get discord. They're about to get nuanced, if these things actually go through, if these deals happen - and i think they might, the share price is definitely not staying at 255. I think there's a whole different target price about it.

So hang on for my video, but i'm keeping microsoft, i'm selling oracle and i might be selling salesforce when it hits my target price in just two. More percent hang on for that now, as always a huge shout out to our patrons our channel members for making this happen. Thank you. So much we'll see you guys.

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