Hey everyone meet kevin here. I was wrong in this video. I'm going to tell you exactly what i was wrong about, what difference it makes what change i'm making why it's happening start with the background. What i projected, which bear in mind most folks in finance, will never give you a projection because they are so fearful of being wrong.

Most of you know - and i think that's why you follow this channel - i don't care about being wrong. I'd rather have a plan and a just direction as needed, and in this video i admit i was wrong about something: let's break it down in december and january uh. So last december, so december of 2020 in january of 2021, i made numerous videos talking about how we were going to have a lot of coming. Inflation fud fear, uncertainty and doubt there would be a lot of what i called clickbait articles about how bad inflation was, and that's because we'd be comparing to this whole of 2020.

And we would see this massively large inflationary reading on year over year levels and that we would have a summer potential reopening boom and we would see inflation surge, especially if these two things overlapped and that would likely lead to supply chain shortages or product shortages. And we would either be paying. I said this almost a year ago, we would be paying with our with increased money, aka inflation, or we would be paying more with our time as we wait longer for products or services like airplanes deal with cancellations or whatever these things have turned out to be. True, i also, though, suggested that we would have a stock market rally in the last quarter of 2021..

I said we would have this rally at the end of 2021, in my opinion, because markets would begin to realize that this inflation will not last forever and will probably have an inflection to the downside in inflationary readings when we get our september and october data. The reason i said that was because i knew that in september the unemployment boost would expire. People would go back to work. I expected the summer spending boom to go away.

I expected supply chain shortages to soften out. I expected spending to somewhat fall as you go into the fall, because first you have your reopening boom people like yay, i'm living life again and then you're like wow. I spent a lot of money now, i'm gon na, like save a little bit again and not go back to being as frugal as we were during the pandemic, because a lot of people saved a lot more during the pandemic. We also got a lot more stimulus payments than that, but that we would we would go back to some sort of normal level of spending, maybe normalize back to a 2019 level of spending right.

So those were my projections and they're documented in many dozens of videos that i've made updating you along the way over the past nearly year, talking about 10 to 11 months that i've been talking about this crisis coming and this potential end-of-year rally upon an inflection point. In inflation, but i was wrong - we did not get an inflection point in inflation. Inflation instead has stayed longer more persistently and been larger than expected. That's because supply chain crises have been worse than expected.

The amount of monetary and fiscal support that our country has gotten has been insane. In other words, the money printer has been rolling really fast. Okay, people have more money than we've ever had before in a weird way. We also thought that there was going to be an inflationary fear, because we expected the velocity of money or how much money circulates in our economy to go back up.

It hasn't a lot of people have been taking their extra money and actually investing it and building their wealth. They're buying real estate they're buying stocks, they're investing in cryptocurrencies, which we're going to talk about in this video as well, and a big change. I'm making my portfolio they're learning everything that they can they're taking things like the zero-to-millionaire real estate, investing course, or the stocks and psychology of money course linked down below with that 41 off coupon code, expiring on the 29th of this month, which is in like two Weeks, which is all great, but even though the velocity of money is staying low, which should dampen inflation, we're still seeing prices go up. I expected that in october and november of this year we would start to see inflation inflect down, but we're not seeing it and it's partially, because companies haven't been able to pass along the full cost of product increases or product price increases.

Yet, for example, let's say i'm gon na make an ipad and i'm gon na sell you this ipad, for let's call it a thousand dollars this one's less than a thousand dollars, but we're gon na call it a thousand dollars right. Let's say it cost me five hundred dollars to make this ipad well, if my costs went up to seven hundred dollars and i still want to make 500 profit, i have to raise the price of this ipad by 200, because at 200 of supply-based inflation, uh price Is going up for supply costs and therefore product costs, my margins get squeezed, i'm no longer making 500 i'm making 300.. What most companies are indicating is that they've only been able to raise prices about half of the increase of product costs, which means that, if the cost of manufacturing this ipad went from 500 to 700 or 200 increase, i've only actually been able to raise the price Of the product from a thousand dollars to eleven hundred dollars, which is only making up for about a hundred dollars of the difference, that means we actually have delayed inflation still baked into products and prices have not gone up fully yet, which means we're actually seeing inflation? Longer than expected, and it's going to stick around more than anybody thought. No, i don't want to say that anybody thought, because i know that there are many people who believe that inflation is way worse than what the government's telling us, which is true.

I mean to some degree, if there's more inflation built into this product, and it has not been realized yet then, even though the government report could actually be correct in the way they're measuring it, it would actually be wrong in telling us how much inflation to expect Going forward because it has not all yet been realized in product prices or the reports are just rigged both in fact, you could have a combination of both to some degree right, but that doesn't matter so much. I think most of the market right now is in agreement with what we believed a year ago. What we believed a year ago was, we were going to see inflation spike and then eventually taper down, and this has not started happening. Yet we are right here and unfortunately, this little shelf here is lasting longer, we're still hoping that this goes down, but this inflection point that i thought would be realized in october and november of 2021 has not happened yet and now it's anybody's guess is it going To be march, or should i say q1, is it going to be to q2 or the summer of next year? We don't know, but what's really interesting is two big.

Things are happening in the market and they're, affecting the way that i'm investing number one has to do with crypto and number two has to do with what the market actually thinks about inflation. So let's talk about crypto first, i believed that if we got an inflection to the downside, two things would happen, one cryptocurrencies would fall and technology stocks would go up. That's what i believed. I believe that cryptocurrencies would go down because cryptocurrencies uh a lot of folks invest in cryptocurrencies because they want an inflationary hedge.

This summer, when used, car prices were going down before inflecting back up when lumber prices were going down before inflecting back up when oil prices were going down before inflecting back up, guess what cryptocurrencies were doing falling the 10-year treasury rate was low this summer it was Down to like 1.25 and cryptocurrencies were low at the same exact time, because inflation expectations were falling, we thought, that's it we're on trajectory. The inflationary curve is going down, but unfortunately, the reason we got this curve down was in part due because of the delta variant. In a very brief kind of slowdown and all of a sudden commodity prices started going up, used cars, lumber, uh, aluminum uranium, every commodity essentially has been skyrocketing. It said lithium, you name it and now.

Supply chain issues are even more strained under high product costs and shipping issues, and port congestion is worse than it ever was before to where the port of los angeles and the port of long beach are going to a 24-hour shift to try to squeeze out another 60 hours of work a week just to try to get product moving, it's nutty right, and so what have we seen over the last three to four weeks as we've seen, inflation be more persistent and longer line it up with when jerome powell started talking about when Inflation started being recognized as being longer lasting and more persistent, and you will see cryptocurrency prices go up, and so what i have done over the last six weeks is i've actually increased my cryptocurrency portfolio to be larger than anything. I've had previously previously my max cryptocurrency holding was about 580 000. There were some fluctuations over the last uh, eight or so weeks, where i did a little bit of selling and then buying back. So i was able to lower some of my cost spaces, but in addition to lowering my cost spaces in crypto, take a look at my coinbase pro now right now in my coinbase pro, which doesn't represent all of my crypto, i have some over.

I know this sounds crazy, but i have some at robin hood because coinbase was down, and so i have like 70k of ethereum and a little bit of bitcoin like 40k of bitcoin over there, but anyway uh - and it is so i mean okay, so that would Take me to what uh 40 plus two it's just under 1.4 million in cryptocurrencies. So, anyway, you could see that i've actually placed a lot more money into cryptocurrencies than i ever have before, and and i'm doing so because i recognize at least for the time being, the inflationary fears are going to stay and i want to be on that ride. So i'm increasing my allocation to cryptocurrencies to about six to eight percent of my portfolio and i'm considering raising that to eight to ten percent and i might shave that back down once we get to that inflection point now. Don't get me wrong, i love cryptocurrency.

So i don't want anybody, think, i'm like paper handing it's trading, i know i'm going in to make money and to trade right, there's fundamental. There are fundamental ways to invest. There are technical ways to invest, and then there are momentum ba ways to invest. This is part, momentum, part technical and then part inflationary, hedge kind of trading.

So it's a little bit, in my opinion, a mix of all, but anyway, i'm going in with a very clear mindset that i'm increasing my position here as a head. But at the same time, there's something really interesting and weird that's happening, and this is the second thing that's happening with price action and it has to do with tech stocks. Folks, tech stocks are starting to blow up again, and this is really weird because remember the whole point of me saying i think, there's going to be an inflection to the downside was to suggest that tech stocks would do well. So i'm like 80 invested in tech stocks or fintech stocks, a firm i'm in on this thing, at a cost basis of like 95 uh, maybe even less.

I could because something like 88 dollars, because i just kept adding adding adding adding i bought a little bit. Then i bought more and i bought more and more more anyway, so uh the thing's at 150 dollars right now. It's insane, it's just run run run run, run it's crazy, uh, end phase. I've added like crazy to this in the dips over here now we're coming back to 173, we're on a run again.

I've got over uh somewhere around nine and a half million dollars of tesla. This thing has been on a straight run up in just the last two months and you're, seeing it over and over look at sofi, another fintech company. That's blowing up here recently, you got a nice trend up, look at matterport another one of my massive favorite holds. This thing has totally left its summer channel over here.

This was ipo insanity and momentum, but it's finally getting a fundamental liftoff in its pricing and so we're seeing this really cool transition, which you're not seeing in everything like you, look at something like docusign you're, actually seeing a little bit of a bleed down. As coveted fears are going away and the stay-at-home traders are kind of exiting positions like docusign, that's okay! I mean i'd like docusign to be cheaper, so i can actually build a real position in this, but uh otherwise you're seeing some good growth in some of my favorite favorite stocks. So, in a weird way, it's almost as if we're potentially still seeing the start of an end of 2021 rally, even though we didn't get the inflection point in inflation, yet which is crazy, because it's like wait a minute. We thought the inflection down in inflation would lead to a rally.

Instead, what ended up happening is the catalyst, the major fear catalyst of things like evergrand uh, the debt ceiling, the budget deficit, the infrastructure packages, the taper. All these things happen and uncertainty escaped our market like now, there's nothing to really be fearful of anymore, at least like near-term. There's, really nothing where people are like. Oh, this is it.

This is the next big catalyst for a crash right. A lot of fear and uncertainty has escaped so we're seeing this sort of rally, but the other thing that's crazy, and this blows my mind as well is the 10-year treasuries and 10-year break-even rates are starting to rotate down again when they've certainly capped. So take a look at this. If we go over here to a one-month chart, we can kind of see this capping of the 10-year treasury yield with a dick with a peak around 1.61, which is way lower than that 1.75 ish that we had at the beginning of the year.

So we never got back to those levels and more recently, which is amazing, we're seeing a decline after getting higher than expected cpi data. Why? Because folks the market knows yes, yes, inflation is here it's going to last longer, but we're not going to hyperinflate. We've got a very strong and efficient economy: let's invest in the tech companies that have high profit margins that have cleaned up their workforces and have a more efficient workforce that are investing in better supply chains. Because i'll tell you we're going to look back at 2021.

We're going to look back and go damn that was the year to just buy, buy, buy because, in my opinion, in the years going forward, we'll look back and go man. How did these companies get so freaking efficient? How did they get their margins up so high? No guarantees the market could fall, it could slow down and all this, but i've put almost all of the cash i have into technology and crypto about six to seven percent crypto 80 in tech stocks and uh. Then then, of course, a little bit of cash uh to pay some taxes, but uh folks, i'm very very, very optimistic. I'm optimistic about what i'm seeing in the bond market for treasuries predicting that slowdown in inflation in the future.

The market's accepting that inflation is going to be here for longer and while inflation's going to be here for longer we're pushing crypto up. That makes sense, and this is the cool thing that i love - we're actually also participating in. Potentially that end of 2021 rally in tech stocks going up because of tina, there is no alternative, tina like. Why would you invest in a dying company or something that's not innovating, when you could invest in a big fat innovator, something that has really good profit margins? Now, that's not to be confused with a company, that's losing money hand over fist and is speculative some of the newer specs, the newer companies dangerous.

You got to be careful, but the big boys, the ones with really good profit margins, particularly some of my favorites and phase etsy tesla's margins. Their gross margins are amazing, affirm even though they're losing money. These are companies to pay attention to very, very excited. I i can't be more excited for your future and i'm really happy with all the decisions that i made so far, even though i was wrong about the inflection point in inflation, the market is reacting better than i could have expected.

So there you have an update. If you like, my thoughts and perspectives check out the programs link down below on building your wealth and folks we'll see the next one thanks so much bye.