Is there a way this Market can keep going and going and going? It doesn't make sense. How could it keep going like this? And is there a potential reason that it could keep going up? Well, as crazy as it sounds Bloomberg thinks yes, Now I'm going to provide what Bloomberg said, which is quite bizarre. That is the opposite of what we've heard about in 2023. and then I'm going to get into some specific stocks that could potentially benefit from this.

This is wild. So as usual, we're going to go to E E.com Ec.com Household Savings and Pricing Power. What do we have here? Stocks have room to run with consumers relaxed about savings. Wait, that's weird because we've regularly been hearing about excess savings running out.

Well, Bloomberg has three responses to that argument. They say number one. By some measures, excess savings remain around 900 billion dollar. And remember before the pandemic, we all had zero excess savings.

So any dollar of excess savings we have today is extra money. Now the savings rate is just 4.1% today. But Bloomberg actually flips this argument on its head. See, a lot of bears have been looking at this and I've actually seen it as a bearish argument as well, suggesting man, that savings rate is low or people stressed out with all-time high levels of debt.

Bloomberg argues. Well, you know there is a chance people could just have more cash available and then save less as a result That, in other words, spend more of their new money coming in because they've got plenty. Now let's be clear about this. like I starting to choke cuz it's kind of like whoa whoa whoa.

That is going to piss off a lot of people. Yeah, especially people making probably in the bottom 40 to 50% threshold of incomes. Absolutely, That is going to piss a lot of people off who are frustrated at quite frankly, higher restaurant costs and grocery costs and things cost. Everything's more expensive, but just because people are frustrated by that, does that change the fact that maybe that upper 60% has more cash than they've ever had before? It's once again welcome to America the place where the rich get richer.

In fact, specifically targeting the rich Bloomberg provides rationale. Number Three homeowners are in particularly good shape with household wealth in real estate assets at a record and so here I respond and said wow, This is actually really interesting perspective because it's the interest. the opposite of what we saw in 2023. You know in 2023 we were all on about oh, student loan repayments are going to come due, household savings will run out, and consumers will spend.

Uh, you know, consumer spending will essentially crash. Yet that's flipped. You know? now we have upper echelons with more cash. which I argued when I covered Nike's earnings that that's actually going to potentially lead wealthier consumers to see benefits from their stocks and real estate's going up, leading to more spending where wealthier consumers spend.

But the question is, where do wealthier consumers spend? Well, when we look at Ec.com I actually broke this down in my opinion. in my opinion, wealthier consumers. Homeowners remember, homeowners have like 20 times the net worth of a tenant. We covered this uh, many times before on the YouTube channel.

but you can also just click on the link that I have right here. Which brings you to uh, a a piece that actually right now is a little bit old. Oh, it's a New York Times magazine piece Daren it. It's behind a pay.

Well, uh, but anyway. uh, it essentially just breaks down household net worth comparisons and I Know, some people don't like the Nyt, but they data is probably still accurate in this realm. I've seen this Co cooperated in other places as well. So the question now is, where do home owners spend money versus maybe the bottom 40 or 50% who don't own homes remember about 42% of America Rents Now there are also some higher income individuals who rent, so let's be clear about that.

But anyway, look at this home. Improvement In my opinion, this this is all my opinion. In my opinion, homeowners or people with substantially more net worth today are going to spend money on Home Improvement So think Lowe's Home Depot Think Solar Nase Solar Edge Tesla think Cars rivan Tesla think Apple products think business startups think ubiquity think Restoration Hardware for ripoff furniture with massive like 40% gross margins like I can I Could hate the product but like the stock see like I I I know people are like oh Kevin you recommended a firm I did back in the Bull Run I'm like I hate buying out pay later I don't think you should ever use it, but if you're going to use it, it's there. Uh and and I thought the stock was great during non-recessionary times and then of course I sold it going into a recessionary time now it's booming again as we're potentially coming out of a recessionary time, right? But the point is, the U Point here is specifically around: you can like Restoration Hardware stock and you could like 40% margins on ripoff furniture and not want to buy the product.

Don't get me wrong, I walk into Restoration Hardware and I I look at the furniture when I touch it I feel it I Go. These bastards are brilliant. They sell lumber in funky designs to people that ripoff prices. You spend 10 grand on a desk.

they make $4,000 Come on man, that's the business I Want to run I Want to sell ripoff Furniture then again see I'd rather have a win-win business that RI people off. but that's the thing. Restoration Hardware has created this mentality in buyers that you're not actually getting ripped off, that you're getting quality right? Because spending $100 on a desk versus $10,000 on a desk clearly means you're getting 100x the quality. No, obviously not.

Anyway, read their last earnings call. It's fantastic. RVs Pets All of these things are things that homeowners spend money on. Notice: What people don't spend money on with their homeowners? You might be surprised to hear it.

But Nvidia Chips, clothing Staples Like Costco Walmart Target None of those things benefit from rich people having more money. And and when I say rich I You know people get offended by that I Just mean wealthier. Okay, so like if you're not in the bottom 40% you are wealthier than that other 40% But that doesn't make you rich, right? Okay, whatever. semantics.

So I wrote some other considerations here at Ec.com Uh, one of the most important ones that I saw is that Carnival Cruise Line see stable demand in Q4 Now they're still underperforming inflation, but this is a leading indicator of consumers being willing to spend more money. This is incredibly important and highly understated. I am looking for Bare arguments every single day and I will provide them to you again. The biggest bare arguments right now: I'm not trying to be perable like I'm I'm a big fan of what came first, the chicken or the egg.

Well, what came first was my analysis and then I allocated to Tech and chips. Now I'm probably misbalanced heavily to Tech chips and energy. Actually, if you include n phase, that means I'm underweight Restoration Hardware RVs and pets. Uh, and and including Home Improvement and I think that actually deserves further evaluation.

You know, maybe I'm missing an opportunity in some of those sectors. and I'm always trying to look ahead like I'm not trying to see what did well last year. I'm trying to think about what's going to do well going forward. and I personally don't see a real estate Crow I mean look, we get an inventory Spike every single spring.

But who says this inventory Spike this year is going to be substantially more dramatic than any prior years. I Do think there is going to be excess inventory this spring I think there is a like inventory was low in October and November I could buy deals all day long. Inventory is like non-existent in around Christmas I'm like man I Was hoping to see some more distressed deals, but they will come. Just wait until January and Feb they'll start flooding out, flooding the markets again.

It's very normal. The real estate market is surprisingly emotional in the short term. If you could graph it it would. It would look just like the stock market.

It's pretty remarkable, but you can't graph it so anyway. I Find all of this incredibly fascinating because it's a perspective that even as people who are more bullishly positioned I have not considered this idea of household netw worth, potentially actually leading to the next Bull cycle. But beyond this, consider this what happened when we get back to a refinancing or HELOC cycle. I mean consider that people who owned real estate have probably paid down principal of about let's say $1,000 a month.

So that's $36,000 of principal pay down over the last 3 years. Well, that's extra money they could tap into if they want to go refinance. Where does that money go? Well, in my opinion. Stocks boats RVs Home Improvement I mean do your own research like where do people spend money right and and I'll research this as well.

and I'll post more updates on Ec.com Free Forever. Uh, what's not free forever? You already know this. I've got a bunch of new lectures dropping for the Gold course, courses on building your wealth over at Me, Kevin.com and we're going to raise the price January 1 going into 2024. So if you've got any questions, email us at Staff Atm.com Uh, but Eack Is is sort of our free news platform and and really it's it.

has been such an incredible tool for me just to be able to refer to some of my other thoughts like I love the fact that I could write a piece today and then I could go. Oh yeah, what did I say about Nike Click Boom There's exactly what I wrote about Nike it's right there. it's It's like the coolest database uh ever of of financial research. and and I don't even have to click around I mean I guess I did just click a link, but it's all technically one giant page I wonder when that's actually going to create loading issues? So far, it hasn't Maybe because it's cashed and I have to clear the cash when I update That's okay.

So anyway yeah, hey, um thank you thank you so much for all of your support I love you all and boy I might be mispositioned here, but uh, this is very interesting and I'm looking for more bearish arguments. Oh yeah, quickly. what are the bearish arguments? Number one: 10 to yield curve Okay I always want to give the bearish side uh as as little of one and I'm concerned when the Bears are flip-flopping that's usually a sign at the top. It makes me nervous, you know.

Mike Wilson Again, he always. he always becomes bullish when you're at the top. He did it this summer too. You know in July we 45 basis points inverted q1 earnings around the corner I Don't know man.

if guidance is bad, it's going to suck. Why 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 wait to get your take even though I'm a licensed financial adviser, real estate broker and becoming a stock broker.

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