Well, Apple just evidenced something that was really interesting. No, this isn't a new one. this is an older M2 which I guess these days is already dated and yes, I put a little Apple Air tag inside of a pelican sticker on it because I'm tired of losing my travel laptops or leaving them in places and then not being reminded that I left it behind. Almost said that in a restaurant the other day cuz guess what? Kevin's apparently always working but Apple just announced something.

really WI The start of deflation. Yes, this is how deflation works and I Know this might be mindblowing to a lot of different folks, but here's how inflation first starts. Inflation starts with price increases, which can be caused by a numerous different things. It could be caused by a supply chain shock.

It could be caused by a demand shock. Either one of these Supply or demand. Can it lead to price increases When people continue to buy? Well, then companies can self- sustain the cycle here. Price increase.

People keep buying. Price increase, people be keep buying. At some point you hit what's called price shock. And that is when you finally reach Peak pricing.

Peak Pricing is where a business goes. Dang. All of a sudden people are coming to the store. less.

Guess who just reported exactly that? McDonald's McDonald's said. We've been raising prices. We've been doing so well. Don't mind that all of a sudden less people are coming to the stores.

Everything is okay. Fear not, we are managing the business just fine. Everything is fine. No, it probably isn't fine.

In fact, one of the first signs that deflation is coming is that volumes are going down. Price trends are coming down, leading companies to need to cut prices. Which folks is exactly what Apple just did with the new entry level Max MacBook Pro available November 7th This sounds like an ad I I I'm I have I do I guess I am invested in Apple but I'm nobody does ADS better than Apple. You know why? You know how I know nobody does ADS better than Apple because they can so seamlessly compare the M3 to 2year old models and make it seem like the improvements are that significantly large.

They can make it seem like Space Black is somehow a new color, but it is fingerprint resistant. They can make it seem like it is a feature to have a laptop fan that isn't noisy because the computer's now more efficient. They can make it seem like you give a damn about 3 nanometer Euv technology manufactured by machines made by Asml. Samsung runs 3 nanom.

You've got Tsmc manufacturing 3 nanom chips in Intel Just started manufacturing 3 nanometer chips. These are $250 million machines. They can make all that stuff sound so sexy and delicious, but even they couldn't hide from the Beast of deflation reducing the price of their M3 entrylevel MacBook Pro from 1999 to 1599 which is quite fascinating because it follows reports that in China and India Apple is having to reduce the price of the iPhone 15. Now what a surprise when the iPhone 15 was first launched I Said this is not enough for me to actually upgrade and sure enough, I did.

Why did I upgrade well I Explained this before, but to catch you up to speed. the biggest reason I upgraded was there were there were these supposed tests done that the qualcom 5G chip in here is faster by up to 30% compared to the prior phone. given that I mobile film as much as I do and sometimes I'm literally standing on a an airplane or airport tarmac like this, trying to upload YouTube videos with breaking news I do it too much every 30% is useful if I could stand there for 30% less Long Like this: I would look like less of a clown I might still look like a clown for other reasons, but I will say otherwise. the phone is vastly the same, so for some reason you don't need that extra 5G speed, which it's probably debatable and probably only 30% faster in optimal cases.

It's probably also just more delicious marketing, especially since we still don't have the ability to actually capture spatial video which means my trip to Legoland this weekend was captured in regular video which is the same thing my iPhone 14 could have done. and the whole ad was that we'd have spatial video but it would come soon and it's still not out. and I guess we'll have to wait for that. Maybe that's why Apple is cutting prices in China and India as well because they realize you know what.

in this economy it doesn't make sense to upgrade. But this price cut on the M3 is a big deal because it starts the cycle of price. Cuts Once again, just like McDonald's announced that their volumes are declining. What happens after volumes Decline and visits decline.

So either businesses sell less products or less, people come to the stores and therefore they end up selling less products or Services what happen happens? There's a delay. It takes time for businesses to go. Oh, people won't accept even these prices anymore. Remember how there's a delay in how long prices can keep going up and then people are like, okay, okay, okay, I've had it I can't pay anymore I can't keep paying these high prices.

There's a delay in when the consumer realizes prices have gone too high. We've realized it. Now then there's a delay in when businesses go. Maybe we've raised prices too high.

Okay, that is what we have to deal with with the Federal Reserve That is why the FED is telling us higher for longer to speed up this delay. The time it takes for people to become convinced that inflation is no longer here. That is Not the case today. People are convinced inflation is still here.

Break Even Inflation rates. That's basically just a fancy freaking Finance way of saying that. Oh, the Bond market thinks inflation is actually trending up, not trending down. That delay takes time.

And unfortunately it is only after that delay that we start seeing the beginning of deflation and disinflation. And there are a few different ways to experience deflation and disinflation. Number one is straight up price cuts for a similar product that you can now purchase at a lower price. That is one way you get a similar product.

Maybe a few different things change. like the M2 to the three. here. few different things change.

Take a few cores out, lower the starting price you know, back and some of your upgrades. So you're basically saying hey, but you want to fully load it, it's going to be 7 Grand That's just a perfect way for capitalist to extract the highest amount of value somebody's willing to pay from a product line. It's kind of like if you put 10 different video cameras back when I was a child and going to Best Buy it's called line item pricing. You put the $300 camera here, the 600, the 900, the $1,800 the $4,000 the $10,000 camera.

all in a row. The people with the ability to pay start at the right side, the people without the ability to pay start at the left side, and everybody spends what they're capable or willing to spend. That's what capitalists do to extract the most amount of profit from you. This is very normal and so there in you actually have the two things that you can do.

One is just straight price Cuts right? The Big Mac goes to five bucks, then it goes to 450. Even though it used to be four, you still have a price cut in there, still net higher than what it used to be. but you're starting to Trend back down. right? That's an example of a price cut.

same Big Mac The second thing second thing which we built into this is you separate out features. Maybe the Big Mac shrinks right in size and then they lower the price. so you're kind of just getting less food at a smaller price. But ultimately the trajectory of the economic cycle is as soon as that disinflation and deflation Trends starts, you end up getting Savvy Consumers who say I'm tired of it and businesses start saying we have to cut prices to promote demand.

Again, that's what Apple is doing. Apple is beginning. This is an inflection point. It comes at a time when the stock market is in a complete disaster right now.

And it's worth noting that these disasters in the stock market happen all of the time. I Want you to think for a moment just how frequently the stock market collapses? You want to know how frequently there is a 5% draw down in the S&P 500. Every on average 1.1 years, there's a 10% draw down in the S&P 500 every 1.6 years and the average draw down lasts 342 days. Co Was an outlier where we had an over 20% drop that lasted just about 33 days.

That's very, very rare that almost never happens. The average is takes a long time to get through the cycles and they happen often. In other words, imagine that it's a cycle. The real estate cycle long and slow.

which is why I Like real estate. In fact, we have a fund raise closing soon here 2023 Fund raise closes November 1st 2023. But more importantly, stock market cycle very very narrow goes up and down with a lot of volatility. But this Apple event is the beginning of disinflation and deflation actually showing up in our faces.

It reiterates the price Cuts we're seeing on iPhones in China and India It reiterates what almost every single company is telling us about price increases. Let me give you the short list of companies that are not cutting prices yet You ready? Ski resorts High-end okay ski resorts. They they appeal to people with money. Aerospace Although that's finally starting to soften those sectors prices.

still experiencing some inflation? Okay, go to almost everything else. Hotels Airlines Consumer goods, credit card companies, cars, houses, almost everything is starting to see the turn. Stock Market sees it a little earlier. But the point is this Apple event told us a lot more than Yay! there's a new M3 chip It told us that we have an inflection point in the economy.

we are beginning to Trend towards disinflation and deflation. That means unfortunately until the economy realizes that you'll have pain in the stock market. but I think it means the end of the pain is near and as soon as interest rates start trending down, interest rates sensitive stocks with true pricing power I think will do exceptionally well now. I'm going to read you this because I run an actively managed ETF you could learn more about all the crash courses I have on building your wealth and everything about me by going to Meetkevin.com including my real estate startup.

But in the meantime, even though I'm financial advisor licensed real estate broker and becoming a stock broker, this video is neither personalized advice nor real estate advice. Keep in mind that this video shall never be deemed reasonably sufficient information for the purposes of evaluating a security. It is not tax, legal, or otherwise personalized. Financial Advice tailored to you I Do have a long position in Apple, not a short position in Apple.

but I will tell you. Look, if you're going to go buy a new laptop, you may as well get the latest. M3 Okay, I've almost just gotten accustomed to this idea of am I really going to just get a high-end version of these all the time? No cuz they just refresh them so often. The lowest end newest ones are usually the way to go.

That's my hack when it comes to Apple the exception of the phone cuz I want the bigger screen anyway? Thanks for watching. We'll see you in the next one. Goodbye 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 PA there financial analyst and YouTuber meet Kevin always great to get your take.