Hey everyone Me: Kevin here. Oh my gosh, this Market is just insane. Tesla's down five percent while the Nasdaq's up one percent. It was vacillating. Plus or minus this morning. you got to whack up 65. You've got indicators saying after the inversion of the threes and tens and after elections, things should go green and Peak capitulation tends to come right before elections. You've got a lot of drama about drum Powell being at overly peacockishness and that just wait until CPI rotates. You've got the hopium that China's gonna open up. You've got opium that Russia is finally gonna solve. You got opium that the winter is gonna be a okay in? Europe there's a lot of hopium. There's a lot of weirdness. everything's just kind of a disaster, or it's just another normal day in the stock market. You see, my view here is because obviously we're in a situation where you know we're kind of skidding along bottoms for many different stocks and even stocks that are green like to act up 66. That darn things down to 29 back when I went on uh Newsmax I Told them when it was 145 dollars that the thing was gonna Trend back to ten dollars and probably go to ten dollars Now it only made it back to 15, but still, it's at 29. now. that's almost double since it hit 15. Okay, so what's the madness that's going on? What's driving the insanity in the markets today? Because quite frankly, it doesn't seem to be any kind of like massive news in one sector that is moving. uh, other sectors as well. And so sure, you've got corporations dumping Bonds on the market like crazy. Which when they dump Bonds on the market, you see, uh, all of a sudden, uh, Bond prices fall. Bond yields go up as bond yields go up. What do you have? You have more of an attractiveness to buy bonds rather than stocks, right? Because you have to then assign a greater risk premium to stock. Let me clarify that simply, if you could get four and a half percent on treasuries right now, risk free and they just went up again today, why would you invest in stocks for a six percent return? Potentially right? Maybe a nine percent return. But still, you have to assess that risk premium that you're willing to assign the difference between four and a half and six, or seven, or eight or whatever you expect, The market will actually return now. Hopefully stocks will give us a sweet old twenty percent, fifty percent. maybe even a double trouble for certain stocks over the next year. But Hope is not an investing strategy. But I will tell you something that seems to be very consistent. and as much as I've done so many statistics and reports and prior videos I Want to keep this one really simple and just straight between us? Right before an election you are always going to get Peak Insanity Literally Peak Insanity Every fund manager would be a complete idiot to buy right before the before an election, If they had to answer to Pension funds or corporations or or other fund managers like managing fund managers, why would that be? Why would that be? Think about that for a moment. Why would institutions want to maybe sit this week out? No, it's not just the election. Okay, we'll talk about that, but why would institutions want to sit this week out? And how could things actually turn over the next week or so Now we'll see. no guarantees. I'm not calling for a bottom, but why could some of the insanity we're seeing today be temporary? Let's talk about that. But first, a quick message for Masterworks and then my thoughts. But first: I Want to thank today's sponsor Masterworks Look, the 60 40 portfolio like 60 stocks 40 bonds is down around 34 this year. 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Because there's the belief that Donald Trump is going to announce his candidacy for President, A lot of folks thought he would make way for Ron DeSantis. but apparently Donald Trump is already working out nicknames for Ron DeSantis like Ron Des Sanctimonious? Yeah! So Donald Trump is already preparing his fight against Ron DeSantis. But that could actually be okay within the Republican party, because even if the Republican Party chose to elevate Donald Trump during the sort of primary season leading up to the primaries and throughout debates over the next eight months, that we'll see Ron DeSantis could actually set up his own platform for a potential post uh, uh, other Republican nominee which could be Donald Trump right? uh election in 2028. So this is actually a very typical strategy. Generally, you don't pull off with the Democratic party pulls off where they just collude and say no, no, we will only have one candidate, Nobody will fight anyone else. That's kind of what they do in California Just look at Gavin Newsom and the campaign I ran against him. No, no, we shall have no other options. There is only one the party has decided and everyone has one choice. That is it. Yeah, that's literally what happened in California last year. uh, during the recall election. Pretty disgusting. But enthusiasm over Donald Trump's SPAC Dwac and the stock leading to a basically a 2X rally is such that Donald Trump is willing to accept his invite back to Twitter. However, he says he's found home at Truth Social. and therefore, if you want to be a part of all of the well, let's just say Madness that happens in the election cycle over the next. Uh oh sorry, it's not eight months, 18 months. Uh, actually more be eight months plus a year, right? So about over the next 20 months the crazy Madness that we're gonna see over the next 20 months, then you're gonna have to be on Truth Social. So you're going to see a lot of reporters flock to Truth Social when a lot of reporters are on Truth Social, they're going to report what Donald Trump said on Truth Social and that is going to literally be the greatest free advertising for Donald Trump's social media platforms. Or Social even. I'm talking talking about it I Think if you took a shot every time I Just said Truth Social, you'd probably die. Don't do that. So that's one thing. So you know when we go over here and when we look and we're like, oh yeah, okay, Truth Social Dwax at the top at 66 Sure, Is it a money-making business? Is it a good investment? Probably not. But it leaves, you know. Then again, I Don't want to say that at 29 because look, you know, this is the kind of stock that has low liquidity. Uh, and fundamentally, it might not make sense, but even you know low liquidity stocks that are terrible with fundamentals will do very, very well because they just get more attention. Think about it. just the fact that it's up 66 is going to lead to more people you know talking about. Oh, Donald Trump's stock is up double in the last few weeks and then more people Pile In it's the crazy herd and sheep mentality. This is just so typical. So why then are we seeing? For example: Tesla down five percent. This is a year over year low. A 12 month low for Tesla Why folks, it's simple: this is a referendum on Elon Musk Bloomberg all day long really over the last about 20 hours because they started this yesterday afternoon. Sunday afternoon. Uh, basically the entire 20 uh uh hours we have had the Elon Musk lamb basted on Bloomberg suggesting that Elon Musk is somehow insane because he fired thousands of workers and now he's calling some of them back. He's apparently only calling back like maybe a few dozen which is like yeah, I mean if you just type in I mean let's just type in a few dozen 48 divided by 3750, right? That's one percent. Hey, sometimes groups get fired and you're like oh no, that person was actually good. You know, like we'd actually take them back and we know we'll pay him a little bit more. Like that's not a terrible thing, but what everybody's trying to do is blast Elon Musk to make him look like an idiotic leader. Oh, let's fire everybody. Oh look, you're losing advertisers left and right. In my opinion, it's just straight up slander. like give the man a chance obviously. I Think things should be run a little bit differently at Twitter I think Elon Musk should have come in and said listen, all advertisers done. Nobody gets advertisements on Twitter Now all of a sudden all the users are happy. It's temporary. It's just a temporary gift and you tell all the advertisers we'll let you know when we get our stuff back together. Because the problem is if you want to go back to the advertisers in three months and they already said I'm done with your platform, you go back to the advertisers like hey, we have this new system, Will you come back there Like dude, we made a public statement that we're done with you like maybe in a few years. It's hard for people to save face and actually come back after they made a public statement that they're leaving your platform. Sure, they can flip-flop, but we all know that flip-floppers get land-basted even more, you know. I Had this great idea that I was going to become a pilot over the next three months and I promptly flip-flopped on that idea. although I learned a lot. Um, true story. Anyway, so um, yeah. look. I mean we're in a we're in a very painful era right now. Does it make logical sense that Open Doors down 14? Yeah, that's one of the few that makes logical sense. Does it make logical sense that Carvana's down 98? Okay, probably a little overstretched. I Mean the used car market has popped right? You had no cars to Sally so You weren't making any commissions. Now we're seeing used car values plummet so your margins are getting even Tighter and you spent all these money all this money on used car vending machines and now people are demanding more customer service not less. see back when there were no cars, your model worked great Carvana because people didn't care to test drive, they just wanted a car. Now buyers have buying power and you have to support test drives which you didn't build into your infrastructure before as well as you could have or as well as you would have expected. uh with with you know what was deemed to be this sort of changing consumer Dynamic that they'll buy cars from a vending machine and uh yeah, oops Yeah no but look across the board, it's paying main end face. Phenomenal freaking earnings down to 270. Now and phase I'm a little bit concerned about going into uh, residential and Investments declining as we saw in the last GDP report and we expect that to continue for q1 Q2 Q4 will probably actually do very well for end phase because you get the end of the year tax credit rush but uh q1 Q2 are the ones that I'm concerned about for uh for for end face. but it this is a very very very difficult time and what I would say for those of you who are in the market. first of all, if you're shorting the market like congratulations, you've just continuously been killing it all year long because you haven't been fighting the FED right, You're patiently waiting. You're doing the right thing. Which is, you're patiently waiting for the Federal Reserve to actually U-turn We're not talking about pivot. We're not talking about going from straight to left which is a pivot or from straight to 45 degrees which is a pivot. Think basketball. We're talking about full long. Got the ball out of here, right? That's a 180. Uh, that's that's a U-turn That's what we're looking for. u-turns are 180s. So uh, it's gonna be another hot minute. So earlier in this video I said that I don't actually think if you're a fund manager, you should be investing before this week. So why is that? Well, think about it folks. you've got an insane amount of earnings coming out. You've got consumer data coming, data coming out like crazy. Uh, you're gonna have data on, for example, a firm. How are those buyers doing? Uh, in terms of, uh, their buy Now Pay later. How's Gen Z Doing a huge consumer base using Buy Now Pay Later Like crazy. How are you going to buy a firm or really any companies in consumer discretionary without knowing how those buying Trends are doing in the latest reports? Why would you buy those right now? You wouldn't Because not only are you waiting for that earnings data, but you're also waiting for the election tomorrow. What if Democrats maintain in some fluky way full control I Mean you could trust the polls and say no. It's definitely going to be split, but we tried that in 2018. Uh, sorry, we tried that in 2016 and trusting the polls just didn't work. Y'all remember 538 I'm surprised they haven't rebranded themselves to 5 30 lie. But anyway, look, we have no idea what's going to happen with the election. If we get a split election, it should be good for stocks. That's why Elon Musk is now as the CEO of the Free Speech platform that costs you eight dollars coming out and tweeting that you should vote for Republicans to purposely split Congress So nothing happens again the referendum on Elon Musk as a leader because he's now all of a sudden becoming a political figure. Anyway, it's fine, it's fine. I I Don't get me wrong, like I never want to come across as an Elon hater because I'm a big Elon fan I think most people know like heaven, you're one of the farthest things from Elon hater. Uh, but I I think of myself as like slightly to the Elon side of the middle. but I'm not like oh Elon could do no wrong there. He makes mistakes. He's human, totally normal, understandable. the things I think he could do better if he had somebody by his side. you know, just to kick him in the butt every so often. That's okay. I'm probably like that myself anyway. uh, to some degree. I see a lot of similarities in that and so I I Love Elon Don't get me wrong, but you know, why are you seeing Tesla stock down Elon Okay, it's that simple. So uh, I mean fundamentally, it's not like, okay, okay, well okay, well well well. fundament I Was gonna say fundamentally, it's not like we're not expecting to sell all of the vehicles that Tesla's manufacturing. but I will say those delivery time frames have basically compressed to like zero the lead times and that's something that I've always said is like a red flag I hate saying this. but Peloton when I when I sold it like really high at like 113 I sold because the lead times compressed to like zero and now pretty much every model on the Tesla website is November delivery with the exception of the Uh Model Three long range which they're just not offering deliveries on right now and the Model Y uh, long range which gives you uh December delivery. the Model Y performance is available for delivery in November Maybe that's because they're getting ready to slash the price and they probably will have to and the market is pre-pricing that in. but I think a lot of the action we're seeing now is a referendum on Elon Musk and that just happens to be adding the story because if growth does slow down for Tesla Okay, yeah then then we got even more oopsie-doopsies But we'll see uh I'm optimistic that uh, tassels will continue to be sold I Do expect a price cut at some point here in the near future and uh, that'll that'll prop us right back up. I would assume when the backlog gets to, you know if we need to do if we're doing 450 000 vehicles in the next quarter 450 000 vehicles uh, divided by three is uh on Pace to about 150 000 Vehicles a month. I would say we're probably good through the end of the year with order backlog. Uh, which is fine because it's tax credit season anyway. I Would think that in January there's a good shot at seeing a price drop and that'll really I think Propel Demand Right after that sort of tax benefit lapses, it doesn't go away. but it's just the benefit is realized really at the end of the year. uh, for the next tax season coming up. So if you take it in January you're not really getting that until the April following which is like 15 months later, right? So you do the price cutting. January Probably the most strategic and ideal time, but otherwise this is just. this is a market that should not be investing at the moment. With expression, especially because you have CPI data coming out on Thursday Thursday We're expecting a 0.6 month over month, a bump in CPI which is like a 7.2 percent Pace Really, really strong. Very very high. And so again, going back to the manager mentality: Why would you be investing this week? You have an election Tomorrow you have earnings coming up you have uncertainty about CPI It's a disaster. You have nothing good to look forward to this week until you actually get the facts. And if the facts say it's good news, maybe then we can actually have a sustained bottom under this Market But if we get bad news, you go into the downside and you look like an idiot if you bought this week. Oh or any time before this week watching. We'll see you next one. Good luck everyone! Bye.