This video is brought to you by extra go to medkevin.com extra to learn more hey. Everyone meet kevin here we got ta talk about the two big elephants in the room, the catalyst that are hurting our markets right now. Now we have good news and bad news. The bad news is a lot of stocks rotated down substantially this morning.

Stock indices fell everything to the point where everything was down almost over one and a half percent bond yields were down at the same time. Signaling this flight to safety and people are starting to talk about gold again, and you know when people are talking about gold. It usually is a sign that you got a lot of weenie baby, pansy babies who are trying to sell out of their stock positions and go to something that just feels a little bit better. I know this because literally the same exact thing happened back in march of 2020.

Back in march of 2020, literally we had a rotation to people getting so tired of pain in the stock market that what did they do they rotated over to gold and started commenting. That's it i'm getting out of the stock market and rotating to gold. It's fine! It's fine! This video is not to bag on gold. This video is to talk about the two big catalysts that we have creating fear, uncertainty and doubt in markets right now and we're bought beyond the level now of really discussing interest rates.

We do know that we have quad witching day today, which increases volatility and the market increases volume in the market, but volume and volatility are not necessarily associated with negative days. In fact, the vast majority of witching days that we've had over 70 percent of witching days that we've had since the beginning of 2020, have ended up positive. So we have a greater chance of having a a closing positive day on a witching day than than you. Otherwise, do uh part of the reason why i bought the tip this morning, but anyway uh.

We do have two large catalysts that we do have to talk about and again they they rise above and beyond uh interest rates. Now i've regularly been saying that i think we're mostly out of catalyst. I've said this the last few days - and now i know here i am talking about two catalysts again and that's specifically, because if we go back to the beginning of december, so i date my little notepads here and we go back to the beginning of december. We're like oh yeah, that's right! What were the catalysts we talked about november 29th.

Will we know congress, cpi, fomc, profit-taking, loss-taking and omicron right now? Fortunately, here we are now three weeks down the road and we know that omicron is one of the two catalysts, but we know that omicron leads to more mild symptoms, and we also know that there's a chance omicron could be the beginning of the end for coven. So yeah omicron is, without a doubt one of one of the concerns, but take a look at some of this okay. This is just a quick little consolidation of some of the core facts that we have. We know that omicron is up to four times more transmissible.

We got that we know that, and we also know that you have a 40-fold reduction in antibody effectiveness from the alpha varium. We know that if you only have, if you're only double vaccinated or you've had prior illness, you're really only 23ish percent protected with antibodies. Instead, if you have a booster or recent illness, you could potentially be closer to 70 to 75 percent uh. You know protected from omicron.

Now. Omicron, fortunately, though, is is leading to more mild symptoms, but it's creating a lot of fear. It's creating a lot of fear. Uncertainty and doubt the the positive i see in all of this is you - do have disease modelers like over at ha at harvard suggesting that look, omicron is likely to displace delta, and that would be a good thing.

Why could this potentially also be a good thing? Well, because the bloomberg just reported this morning that south africa is seeing hospital cases inflect down substantially, we actually started seeing this inflection point four days ago. I reported about that on this channel that hospital cases were going down in uh in south africa, and this is why i've also been talking about this. This weird transition that we're going to see in covet cases in america, where you're going to be in this situation, where you're going to see delta lead to hospitalizations and deaths spike at the same time as case counts spike. But we're going to see this taking over of omicron, the green being, let's say: omicron, yellow being delta and that should lead hospitalizations and deaths to actually come down, even at the same time we're peaking and right.

This is going to be our opportunity, in my opinion, to buy recovery stocks, especially if omicron does prove to be the beginning of the end, which who knows maybe then there'll be another variant, that's more severe, hopefully not. Hopefully it's just omicron. Hopefully it's just mild. Look.

You don't want it, but if you get it, hopefully you don't get long covert from it. But yeah look all me no matter what no matter, how many comments we get about. It's just mild. 99.95, all the crap we get in the comments.

It is still something that people are going to fear now. Why are people fearing omicron? Well, it has to do with the second catalyst, and that has to do with global gdp gross domestic product growth. We have issues here. We've got many reports coming in that economists are now reducing their projections for global growth, for not only the fourth quarter of 2021, but also the year of 2022.

This is a problem because if global growth shrinks - and let's say you have negative quarters in a row in countries like germany and brazil, which we're now projecting negative, a negative fourth quarter for germany and brazil - and then maybe you get another negative quarter for germany and Brazil guess what you get: two negative quarters of gdp, essentially contraction in a row. You have a recession, so you could literally have this. This post pandemic uh recession. Essentially following uh the the recession that we had, the um i mean it was.

It was deep, but it was short, the short recession that we had in march of 2020 and that's going to create and fan the flames so to speak. Growing. The fire of of of global growth concerns for america, for the united kingdom and and really for uh. For just countries throughout the world anytime, you get gdp inflecting down.

You get fears that gdp is going to continue to inflict down and then you're going to get people with their creative uncertain minds who are going to say things like wait a minute. If gdp falls, what if we have to go back to stimulus and if we go back to stimulus, is it possible that we're going to fan inflationary fears again right? So you get all this fud and when i say fun, i don't want to remember. Fudd is different from fake news. Right.

Fud is real news, but it creates fear, uncertainty and out, and people in markets hate uncertainty. That's something that's super super important to know, but take a look at this. Some of this is actually normal, because if we look at the san francisco fed they put together this piece on how markets respond after wars and after pandemics. Oh but first, a message from our sponsor getting into real estate is the best way to build your wealth.

But getting into real estate requires having a great credit score and you got ta stay out of consumer debt for those of you who are young or may have run into some trouble in the past. Unfortunately, there are so few ways to actually raise your credit score. Other than getting a credit card, which often times if you mess up on even just once, ends up ruining your credit score, even more, which hurts your ability to build wealth and that's where. Fortunately, the extra debit card comes in see.

The extra debit card is unique in that it allows you to build your credit score without incurring debt, and it gives you one percent back in rewards. The best part about extra is that it's super easy to use, because it connects directly to the bank account that you already have here's how it works. You connect extra to your existing bank, account make purchases like you would on a normal debit card and boom extra spots. You for the purchases pays themselves back the next business day and then reports the balances to the credit bureau and now guess what you're building your credit, while using the extra debit card and they're taking care of helping.

You build your credit score for you, learn more by going to metkevin.com extra and, what's really interesting is if you look at the response of real gdp after a pandemic. Look at that we zoom in very closely here. The bottom one is, is wars, so after a war, you have devastation, so you get a longer term gdp decline in the longer term. You know five, plus years after a pandemic, you tend to get a substantial boon in gdp, but it stays flat and uncertain for quite a while and, and that to me is a little bit of what we're seeing now.

Is this continued and these notes here just ignore them? I wrote them quite a while ago uh, but you also see wage growth after a pandemic after a pandemic, the real natural interest rate - this was fascinating. Look at this the real natural interest rate, which, which basically means you take what your interest rate should be and then subtract inflation right. So the real natural interest rate uh actually rotates up initially, but then you get this this inflection down and what you're looking for is. Let me try to highlight this.

What you're really looking for is the blue line right here inside the green. Let me circle it right here and then, if we go in a little bit more here to zoom in look at that, you get the rate goes up. This is kind of like that inflationary impact that you have initially and then you actually get this flattening and decline and, in the longer term, uh over 10 20. 30 years.

I know this sounds wild to think like in that long scope. Oh, i almost just destroyed my desk uh you. You actually tend to have this, this decline of somewhere between one to two percent and real natural interest rates over time, because productivity's gone up, people have gotten, like things, have gotten more efficient uh the the inefficiencies have been removed from from society and manufacturing processes by By force, because of the supply chain issues or whatever, now these this research really goes back, i believe, to about the 14th century. So we're really going pretty far back here.

Uh - and i know you know all we all this time is different, but when you look at this sort of research, it's like okay, like this is basically to say that in all of these charts here, no matter what, after a pandemic, things tend to do well Over time, but you're going to go through a bumpy start, so wages expected to go up over the next decade. Uh inflation expected to go down over the next decade, real gdp expected to go up over the next decade and decades. Uh. This makes sense again.

Things have become a lot more efficient, but in the short term, we can't look at these charts that give us this zero to ten year outlook and then ten to forty year outlook, because right now we care about. Oh, my gosh. My amc stock is going to the moon right now, kevin. That's all! I want to talk about.

It's amc going to move right now, and this is great. Don't get me wrong, like nfc is going up 20. This is great uh and you've got you've, got a lot of volatility that you had today, rivien lucid, falling substantially and a lot of tech stocks starting the day out very red only to recover substantially. I mean look at this arc this morning was at 89..

Now it's at 96.60, you bought the dip this morning, you're up uh, eight percent uh on an arc from the bottom right. But what is happening - and these are the two big catalysts is you have omicron, creating continued fear that global gdp is going to decline in 22.? In fact, if we look at an average of uh global gdp estimates right now, we are expecting that global gdp will actually only grow 0.7 in q4. That's right now, uh, that is down from 1.4 percent of the prior quarter. That's half half of the growth! That's not good, that's not progress right and uh.

This is lower than the one percent of gdp growth that we had before the pandemic. Again, you have contractions in germany and brazil, you have less than one percent growth in mexico, south africa, south korea, italy, france and the united kingdom. The united states is still strong for now, but we're going to see a slowing of gdp even in the united states. The federal reserve sees gdp slowing from their projection of 5.5 percent in 2021, which you could see right here to four percent.

They did revise up their projections of gdp growth, and so this is good. The bond market is also indicating that there's going to be a limit to how high interest rates are going to be able to go in fact, go back to that summary of economic projections. For a moment see this over here under the 2023 chart see that 1.6. The federal reserve thinks, by the end of 2023, we're going to get to 1.6 percent well, according to the financial times fed funds.

Futures traders right now believe that by the end of 2023 we're only going to get to 1.27. This is less than where we were when we were on federal reserve day at 1.33, but in both cases the bond market is saying yeah. No, no, no, we're not going to be able to raise rates that much part of that is because of the fear that rates going up too fast is going to slow the economy too much and we're going to have to reintroduce stimulus measures just like japan is Doing and to some degree like the ecb is doing the european central bank so bottom line out of all of this, is you got to know a few things? The first thing so multiple bottom lines. The first thing that you got to know is all of the bears come out when there's fud, i shouldn't really say, bears equal fud.

I should say: fudd leads to bears there. We go. Okay, fud creates bears. So when you're talking to other people who tell you things like, oh my gosh you're catching a falling knife or oh my gosh tesla's, going to 200 or uh - oh you know this is the beginning of the end.

Welcome to a bear market. You know all these stupid comments from from uneducated folks that we get uh all the time uh it it it's important to to place uh a chance on what they're saying. This is not me saying that we cannot have a very bad bear market, but what are the odds right, and so this is, i think, the easiest way to evaluate look at this. What are the odds of a 5 s? P decline.

A 10 s, p decline. A 20 s, p decline and a uh similar to pandemic 33 s p decline. What are the odds of this? And so when you hear the bears and you see the red and you feel the fud, it's like, oh my gosh, i just i just got to sell, i got to get out. I got to go, get my gold or you could use some logic and try to assign odds to this five percent uh five percent decline in the s p.

Quite likely. We i i would say this. This has easily a fifty percent chance of happening. A ten percent decline in the s p, my guess somewhere around twenty percent chance of happening - could happen absolutely but remember, folks, there's so much money floating around in the system.

Remember how much uh, how the federal reserve chairman jerome powell tells us that household leverage is actually at historically low levels. Business defaults are at historically low levels. That means there's still capacity for borrowing. We also know that yeah margin levels are high, but all levels levels of everything are high right.

Yeah, yeah valuations are still elevated, but the amount of money we've created is insane. So this money is floating around somewhere. We know that reverse repos are at all-time highs, but remember that's excess cash that banks have. They want to lend it out, so they want to give people money to go, invest so anyway.

Uh for, in my opinion, the odds of us getting a repeat of the end of 2018, probably closer to like a 10 chance that we're going to see a 20 selloff in the s p and then to see something like a 33 off. I think we'd really need a severe variant, a severe black swan event. I would i would say this has less than probably a three percent chance of occurring, so this is where, in my opinion, if i think there's a 50 chance that we're gon na see a five percent uh decline in the s p, 500 or 50 chance that We won't to me it's like whatever i'm gon na take advantage of buying the dip on my favorite companies. Uh money losing companies are going to get hit.

The worse we've been talking about that for six months six weeks here we know that software companies are getting hit. The worst uh valuation compression is hitting those hard. But i'll tell you. There is a silver lining in software evaluation.

That's going down because what i want you to do is i want you to look at a company like docusign. Docusign shows you the best example of valuation compression, so valuation compression takes you from a 285 share price to about a 130 140. and over the last two weeks, we've had a lot of fear, uncertainty and doubt, but take a look at what docusign has done. It's hit a floor and i think that's very interesting.

Docusign has hit a floor and it's not exceeding, even though fear it to some degree seems like it was worse this morning. The floor is not getting worse. Look at lemonade the so the 140 floor at docusign is not getting worse. The 40 dollar floor at lemonade is not getting worse and the sofa floor is pretty solid.

At 14, though, we did hit 1366 briefly this morning, so i don't know that we could say it's definitely hit a floor here yet, but it's it's finding its floor here, even though the fud keeps getting worse and worse, where some of these stocks are finding their Floors and that's a good sign that some of that software compression software valuation compression is coming to an end, uh elon musk, i think, is probably done selling for about a month, given some share blackout periods that tesla has uh, which is, i think, bullish for something. Like tesla and we've seen a lot of the deep red that we saw this morning, turn turn to pretty nice greens uh. So, okay, the first thing again in terms of bottom lines is we got to understand the bear fudd and the odds of of real pain. It's always possible sure, beginning of the great reset all this garbage whatever.

But personally, i believe those are low odds. Okay, that's just me! I i could be wrong. What do i know? I don't have a crystal ball. I really got to buy a crystal ball, so i could say i have one.

The second thing is you have uh, you have to recognize the catalyst that we have. Omicron is going to create a lot of fud, but, in my opinion, is going to actually help us lead to hospitalizations and deaths going down, even as millions of people potentially get omicron over the next month. Now, i think the end of the end of december and much of january is going to be pretty nasty and that's why i'm staying away from rico's uh recovery stocks until we get to sort of that peak level of fud uh with with recovery stocks, which i Think we still have a way to go on those. I could be wrong i'm, but i'm also not like dying to get into recovery stocks.

I'd rather buy some of the tech companies that are at a discount now remember, you know what the market always usually comes back to, especially if we have a slower gdp environment - and this is the next thing to know right. The next catalyst is really that slower gdp growth. You know what happens when fear goes away, so, if fear gets eliminated and you want more growth, so you're fighting a slower gdp or potentially even deflationary concerns. You know what does well during those times folks it is tina.

There is no alternative and tina generally relates to growth stocks to the mega caps to uh tech stocks. So tina always seems to come back and and it's times of pain that you want to be building your position in in growth stocks, not in times of euphoria, because you want to be able to get that discount. Otherwise, you're you're going to end up following the herd and and then you you give up a lot of the potential returns that you could be getting buying the dip buying low. So if i look at the stock market right now, look yeah a lot of things.

Doing really well right now i mean amc up. 20 is amazing, but look at some of the relative prices that we have here: yeah draftkings up seven percent, but look how far down this thing is. I mean draftkings you're selling on draftkings you're selling for may of 2020 levels over here you got some massive freaking fear over here i mean tesla is down what 25 from some of its some of its highs over here. What 950 is the new number divided by 1243 yeah you're down 24 from its peak? Look at roku roku's had a big reset loaded, the boat on this one at uh at uh right around 198 to 201.

As always, every time i buy or sell something, i send alerts to those of you in the stocks and psychology of money group which of course you could take advantage of with that a coupon code for xmas linked down below but uh yeah i mean even sofa, Is still at a relatively good price, uh sitting just around that 1470 number, it keeps rubber banding back to and face bought this this morning in the dip at 180, it's sitting at 190 now, but beautiful beautiful valuation reset here, and i think it's valuation resets like This that are going to really help us rotate to new highs. I even bought uh bitcoin at peak fear this morning, bitcoin aida, solana, uh. You know i don't mind picking up kryptos during periods of peak fun. It doesn't matter.

I love investing when there's fun and you want to become that honey badger and that's like peak fear. Let's go give me the fallen knife. You know what i keep knives around with poison tips on purpose to catch them, just feel it hold it because then, after the pain, i'll take it, and i show off my attendees to everyone because i can clean you know i can cut my attendees really nicely Anyway, these are some of my thoughts. Uh on uh l, market and uh, be a honey badger play some odds on your fud before you freak out and uh yeah.

Let me know what you thought about this one take rant all right, we'll see in the next one. Thank you. Bye.