November 14th. You're probably going to have to hold your breath until November 14th If you're at all invested in the stock market and it sucks, it's painful. We all love the beginning part of the Year where it's like yeah, yeah, yeah, yeah Kevin Okay, volatile Nike Swoosh it's just going straight up I Like this. Tell me more.

It's like, well here's the volatile part and the question is, does this last forever? That's always the feeling that we have when we look at stocks and there down since July 19th. That means they're down through August through September not through October That's an entire quarter That's three freaking months of Hell of basically just bleed, bleed, bleed, bleed, bleed, bleed pain, pain, pain, pain, pain. and then you're looking and you're like, come on man. I don't even make as much as I Just lost in a day.

You know that's very natural. It's very human. It's psychologically normal for us to go. What the hell, this causes so much pain? And then of course, what happens when we experience pain.

Well, human nature says fight or flight, but how do you fight? Well, you fight by leaving dislikes on YouTube for stuff or you flee by paper, handing and and selling and ending the pain accepting that you know what? I just I'll just have less than I had and I'll accept I will sell everything and end the pain because by ending the pain, the pain will stop and it will make me feel as though I am making the correct decision. Because after all, if you're experiencing pain and you sell everything, the pain stops. You've already realized the pain of the loss of value. Now you just have the loss of potential opportunity cost.

But in the moment the feeling of pain stops. And so it reiterates the idea of during painful and dark times, we must sell and rebalance. When the truth is, that's often, not always, but often the worst thing to do because there are two sides of being an investor. There's the human emotion side which says I must stop the pain of stocks going down I must end this feeling of Despair this feeling that makes me want to stay in bed, not wake up, not go to work this depression of well I'll just restart at zero.

That is a normal human feeling but it's also detached from the reality of an investor. The best words to consider are those of: Warren Buffett Warren Buffett Who says I don't care when I'm at a baseball game and somebody's throwing pictures at me and every ball is a ball I don't like like in the stock market. it's a price like maybe you're a Tesla investor and somebody's throwing balls at you going. You want to sell it for 100? Want to sell it for 69? Want to sell it for 150? Want to sell it for 500? Oh yeah, I'll hit on that one bing.

That's Warren Buffett's analogy. and it's actually a great analogy. It's that the stock market is this perverse place where we have this daily valuation this Daily Baseball being thrown at us. hey, you want to sell Now, How about now? Come on man, when can I tempt you to sell? Maybe if I go lower, I'll tempt you to sell.

And that was always something that Warren Buffett thought was the irony. Why was it that as people threw worse numbers at you, you were more likely to sell. It's like going to a house and be like sir, your house is listed for 480. Uh, I'll offer you 450 in the seller's like go pound Sand Man, it's let sit at 480.

Maybe I'll give you 475, but not 450 and then you're like 43. How about 400? That's it. 350? Okay, I can't take it anymore here. Take it.

now. The difference is someone's offer isn't the actual market value of the property and the stock market. The value we see today is the actual market value. The difference, though, in Waren Buffett's world, is, well.

the stock market is valued at what he believes it's valued for, and he waits for the market to align with those prices. So why are markets potentially un aligning with interest rate sensitive sectors? Well, it's simple folks. they're giving up. they're throwing in the towel and it makes sense.

It makes sense. And I'll tell you what I'm going to do about it, but it makes sense. Oil is at $93 for the international blend WTI Sitting at $9 we have gold Rising 1% We have Crypto Rising 2.8% on Bitcoin Ethereum 2.4 although that could be related to coinbase suggesting. Oh, we're about to get an ETF approved here for Crypto, which is great.

Uh, but gold Rising Oil Rising These are inflationary fears. At the same time that inflationary fears go up, we are seeing treasury yields at the highest level that we have seen in nearly 20 years. The 10-year touched 5% This is remarkable. The inverted yield curve is getting even more or becoming even more of a sign that we're getting close to the biggest pain.

Yeah, that's unfortunate. I I Really? I Hate to say that, but the inverted yield curve says we're getting closest to the worst amount of pain. The worst amount of pain in the inverted yield curve. This is the famous argument the Bears always have.

It's the inverted yield curve. It's been for a long time. one of the strongest arguments they've had and the hardest one to dispel as a bull. And the reality is is when the inverted yield curve steepens, when the line goes up, pain gets worse.

Pain gets worse when the line goes up. What's been happening for the last 3 months? As you can see, we're now only 17 basis points inverted. and unfortunately, this is not a bull steepening. this is a bare steepening.

What is that mean? Excuse me. A bare steepening occurs when the T 10 year Rises while the 2-year does little. that finally brings long-term rates higher which uninverted this which basically makes that line go up. Okay A bull steepening is when the 10 years is falling but the two years falling faster.

we're getting the bare steepening. We're getting the fearful one. Right now, we're getting the one that says people are not convinced inflation is going away. And don't get me wrong, they have every right to believe that inflation is not going away and they have plenty to site for inflation Not going away.

Why don't we site? Some of the reasons why. Okay, let's just draw it right here. Let's make it simple: Oil prices. Let's start there Okay, wow, we can't type oil prices.

What else do we have War How much does that affect Supply Chains Are we increasing commodity prices because we're using metal for guns instead of butter? This is the Old World War reference of guns and butter. Anyway, point is, cars become more expensive to manufacture when raw materials are more expensive because they're used in war. The question is, is that actually true? Or are we just making the same amount of crap that we're making anyway at Lockeed Martin and these other military defense contractors and shipping the stuff overseas so we could just continue making new stuff for ourselves? Probably that that's what Joe Biden suggested in his speech yesterday. We're just restocking our own stock piles and this is a united front.

Israel Ukraine It's the same. Fight Against Terror Just an interesting combination of Wars especially as Israel discusses their three-phase plan for escalating the war to not only now evacuate towns in the northern portion of Israel suggesting maybe there'll be more conflict with Lebanon, but also suggest that after strikes and precision Commando infiltration to attack and Rescue res hostages attack Hamas and rescue hostages, there will be some phase of Israeli occupation chaos and Hell awaits the Gaza strm. This adds to fear: inflationary fear. Anytime you have geopolitical uncertainty, you get inflationary fear.

Add to that a potentially conf potentially confused Nation over what direction are we going to go in We have no speaker of the house, we have no functioning Congress Who's going to be president? We have no idea. Polls are basically a coin toss for Biden or Trump right now. and quite frankly, there are plenty of people going to say if Trump gets in I'm leaving the freaking country again. But you know what? There are plenty of people saying that about Biden right now.

Less probably because it's maybe less extreme. People see Biden as a little bit more of a placeholder, but then people wonder, well then, who am I electing? Maybe it's KLA Okay, probably not. But anyway, the point is, uncertainty is extremely high right now. But not only is uncertainty extremely high, we're not done with the inflation fight, so we have to mark a date on our calendar and this is very important.

The date. No, No No No No no it is not. November 1st November 1st As you know is Fed day. It is also the expiration of the 20123 fund raise.

Uh, for house hack at a one toone valuation. You want to be involved in my real estate startup go to House Act.com and read the offering circular. Okay, what you actually want to do is mark your calendar for a different date and there's a very specific reason for this date And this date is probably one in which you will continue to experience hell in the markets until because this is the true driver of pain right now. November 14th Why let me let you think about what is on November 14th.

5% of you probably already know. Congratulations! But Inflation CPI Release day. Why? Who cares? Come on, it's just another rigged report, right? Everybody knows there's so much inflation, right? I Mean uh, food and and beer at the grocery store? Everything's up 35% since 2019. Ra Inflation So high.

Actual people who study the markets Know this is not true. Actual people who study the markets know that this is not truly the representation of what is ahead of us, rather is the better way to put it. We do know that inflation has averaged 18 to 30% in different segments since 2019. That part is true, but the concern that people have is the following.

and it's something Jerome Powell told us about yesterday. The concern is that the summer we had softed inflation reads, but in September we had high inflation. Well, we had a sudden peak in core. Services X Housing That's the bad one.

Okay, that's the one that's driven by wages. Now the Federal Reserve believes there's a chance this is a onetime. Remember how one time doesn't make a trend? Well, this onetime High may not make a trend. And yes, we have had 18 to 30, 18 to 35% inflation at Food and Hospital or uh, what? Actually Medical Care in some regards too travel entertainment, you name it.

Absolutely. We have to remember that when you have $100 of uh of a product and it is now selling for $130 Yes, that equals 30% inflation. Yes, there has been a lot of inflation. absolutely.

But when that $130 product goes to $133 the very next year, how much inflation are we down to? This is why people say, is there really that much inflation anymore? The people who get upset are like, of course your res. There's so much inflation. There's been so much inflation. Yes, that is true.

But it's also true that when you go from a buck 30 to a buck 33, you're actually sitting at 2.3% inflation, which is roughly getting to the Federal reserve's target. It's not there yet though. But what's most important? What's most important is again, that November 14th date. Why is that November 14th date.

so important? It's so important because we are going to see if that onetime Spike was a beginning of a trend or if it was a one-time anomaly. That's the question. Are we going to face a spike of core? Services X Housing We already know that number One Goods is down. Goods Inflation Solid.

We're good. We're probably facing deflation on that. Uh, number two. We know that housing is supposed to roll over and it's starting to roll over, but we haven't seen the big part of in housing disinflation yet.

In terms of rents stabilizing year-over-year this doesn't actually mean rents going down a lot. Rents are going down slightly in many parts of the country, but they're still way higher than where they were in 2019. We know that. and the third one is the Xh Housing Services This is very wage sensitive.

Nick T and Jerome Powell Yesterday told us that wages were actually coming in Consistent wages consistent with 2019 growth job. Changers Regular wages. Wages are coming in consistent with 2019. This is good, and this reiterates that we could have this one-time spiking.

Trend But here's the problem. What if it's not a one-time spike in Trend then you have two potential realities. And that's one of those is the reality the stock Market is preparing to for today. Whether that's via Tesla via the solar sector, you name it.

Markets are not yet convinced that inflation is gone. That is part of the Nike Swoosh inflation. The volatile Nike Swoosh says it is going to take hard hard work to get people unprogrammed. From the mindset that just because we've had 30% inflation over the last 3 4 years does not mean we're going to have 30% inflation again going forward.

It doesn't even mean we're going to have 3 or 2% inflation going forward. Those are detached. but it takes a very long time to get people past. but everything's more expensive to actually understand that.

So what does the market do? The market prices in pain? The market prices in that Jerome Pwell says rates are not too high and you know what if inflation ticks up, we will keep going and people truly believe that inflation will keep going. So what does that mean it means? As Bosk said this morning, probably not looking at rate Cuts until later in 2024. Certainly not before the middle of 2024, maybe even per him the end of 2024. What does that mean? It means Interest rate sectors, interest rate sensitive stocks get reamed.

Solar gets destroyed as we saw via Solar Edges earnings yesterday. Not only does Solar get destroyed, but Autos get destroyed. Everything interest rate Sensitive gets wrecked. The only people who actually invest in those stocks are people who have a long-term mindset.

And I'm not talking a long-term mindset of like carry this all the way to bankruptcy I'm talking about a long-term mindset. that says we know when rates go down the these are stocks with massive growth potential cash flow, potential, margin potential uh, preference, potential style of pricing power right? People prefer one over another and so the question is on November 14th Which direction will we go? Will we get a hot read on November 14th? On November 14th Will we get a read that says that's it Inflation is coming in so high and now we have two months of pain ahead of or we have now a two-month Trend solidified of pain and inflation. Stocks go even lower into the end of last year. And do we then potentially revisit the idea that uhoh, now we have a bearish tax loss harvesting winter which potentially rolls us into recession in 2024? Entirely Possible.

Shallow deep doesn't matter. Entirely possible. and that November 14th date is going to be really important. Now on the flip side, if we do not get an inflationary trend to the upside and we actually start confirming disinflation again, what can we start seeing? We could start seeing a rollover of Treasury yields, We could start seeing a relaxation of the FED where maybe the FED finally says okay, hey, look, if we stay on this trend, we might be done.

Then of course we'll go into December and we'll realize okay, like are we still on a three-month trend of maybe inflation? you know, averaging down again because we take the three-month averages and kind of see the moving averages entirely. possible. The problem now, though, is there is so much uncertainty that people do not believe it is possible for inflation to go back down. If people don't believe it's possible for inflation to go back down, They stop spending, especially on interest rate sensitive items like cars and solar.

They stop spending. And when they stop spending, they kill earnings at companies. They kill growth. At what were once growth companies, it's a big problem.

It's a big problem for those sorts of stocks, and again, the only way you can stay in them is by believing that at some point in the future rates will be lower, but in the short term, selling will always feel better. So what's my vision in my game plan? Well, my vision is that it makes a lot of sense to be 50% Diversified to real estate. For exactly this reason, when you're 50% Diversified To real estate, you can soften the pain. Jack Come over here, say hi, say hello, we're not live, but just say hi.

So perfect you could soften the pain when you're 50% Diversified To real estate. That doesn't mean that real estate market is insulated, but it does give you a different cycle that you're on that can then enable you to actually make bets when other people feel pain and that circles back to Warren Buffett Be greedy When people are fearful, be fearful when people are greedy. We have not seen in my opinion, the true greed of a stock market again yet. We saw it at the end of 21, but we have not yet seen it ahead of us.

It will come when rates start trending down I Believe we'll see Bond I We don't know when that's going to be. That could be in three months. It could be in six months. It could be in a year.

It could be in two years when rates start trending down and treasuries bottom out. which mean treasury yields start plummeting I Believe we will see true Peak greed in markets again. Unfortunately for those of us holding on to stocks today or feeling pain today, that doesn't make things better for us today. it just means more patience.

But unfortunately, more patience mean you have to suffer through more pain for longer and it hurts. So if you want my perspective or more of my perspective, make sure to check out the newers pro courses at Meetkevin.com Also, make sure to go to House Haack to read the offering circular so that you can get Diversified to real estate. Anything else you want to say Jack like And subscribe? Um yes and also his coffee mug is broken. Yes, this coffee mug is broken.

Thank you for pointing that out I Don't know how that handle broke but now it looks more like a Pokeball we should finish breaking it anyway. Thank you so much for watching Remember folks. uh that even though I'm a licensed financial adviser and becoming a licensed stock broker as well as a licensed real estate broker, this video is not personalized Financial or real estate advice for you, nor is it tax, legal, or otherwise personalized advice and it shall never be deemed reasonably sufficient information for the purposes of making an investment into a particular security uh that I may mention. Thank you so much for watching.

We'll see you in the next one. Goodbye and good luck not advertise these things that you told us here I Feel like nobody else knows about this? We'll we'll try a little advertising and see how it goes. Congratulations man you have done so much People love you people look up to you Kevin P there financial analyst and YouTuber meet Kevin always bit to get your take.