Okay folks, so we got to give a violent update on the market and plays. And then for the main entree this lovely evening. I want to talk about one specific 23 stock that is turning into a complete beast and you're not gonna want to miss it. And before we get into it, this video is sponsored by the lovely gentleman over at Ziptraderu.

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They say Jerome Powell is tightening something, but he sure ain't tightening that garbage chute because the whole stock market has fallen down it. But hey, on the bright side, we did get a small tech reversal towards closed today. Even Kathy Wood's flagship Arc fund ended the day slightly green. There is an old saying that if a Kathy Wood fund comes up from the ground and sees its own shadow, then that means that we're in for a long winter.

But in all seriousness, the Sacks over Goldman did the market quite dirty today. Real dirty. Bloomberg reports that Goldman said the Federal Reserve will likely raise rates four times this year and will start its balance sheet runoff process in July, if not earlier they originally anticipated December. They cite progress in the U.s Labor market and hawkish signals in the Feds released minutes that we saw last week.

They said we are therefore pulling forward our runoff forecast from December to July, with risks tilted to the even earlier side by runoff there, again referencing unloading the balance sheet and tightening monetary policy. You must first taper your current purchases and then once you've stopped that, you can then start offloading what you have purchased. So instead of providing support, you're now going and taking away the support. So you're not just getting rid of the pace at which you're providing support, but you're now going and pulling support and letting the market fend for itself.

They're basically saying, hey, the timetable for rate hikes is a lot faster We're thinking for this year and you're gonna start seeing offloading of the balance sheet this year in a massive way Earlier in this year than a lot of people are expecting, and honestly saying that the market's been unhappy with tightening is definitely the understatement of a century. But the truth is that if you have a clear trajectory and people trust the trajectory, they don't think that inflation is going to cause the trajectory to accelerate perhaps to a much larger degree. Then people can agree on exactly the valuation that could be matched to the Fed trajectory. But when you get into this environment where a lot of people have different views on where inflation is going, then everybody has different views on how the Fed is going to react and that creates the situation where everything is super super duper choppy.

At the end of the day, it all comes down to how hot pricing pressures are. And on Wednesday we do have another Cpi report coming out so we'll have the latest update and we should get some hints in terms of the trajectory. It should be very hot, but at the end of the day the market likes to over correct in anticipation of things. so when you get the actual data set, if it's not crazy, you may see the market start calming down a little bit.

But what is very, very interesting is that you're starting to see a lot of growth companies that were some of the highest flyers in 2020 and early 2021 that have now completely burnt off almost all of their 2021 and 2020 gains. Many of them are going back into the early 2019 days in terms of valuation, despite making significant waves in terms of value-add over that same time period. many of them are doing much, much, much better than they've ever done before, but they're going back to valuations that we haven't seen in years. Right now, there's a lot of growth companies that are getting very, very oversold from a fundamental level in terms of the business, but also from a monetary policy level.

There are periods in 2019 where you have the effective rates hovering in the twos. rates are likely not going to be back in the twos for the next couple of years At the end of 2023, I'd be surprised if it was at 1.5 yet. Multiples are getting crunched so hard. You think that we're getting back to the stone age.

In terms of monetary policy, it's not going to be a rate anymore. It's just going to be a rock. If you can't service your margin via rock payments, then you're not going to be able to take out a loan anymore. And it is what it is.

The market could certainly stay irrational for very, very long periods of time, and you never really know how long it's going to be in any cycle. But one of the psychological memes that I really enjoy is this one. and you could substitute this for whatever you want. But this one is about bitcoin.

When something like a bitcoin is at a new high at 60 000 and it just reached it. What happens? Well, you have everybody and their mother going and lining up saying i want some, I want some They're not asking well, is this a good deal? They're not asking well, what is it that I'm really buying, They're saying, oh man, it's gone up huge the last couple of quarters. It keeps going and going and going. I want to get in on that momentum.

So they buy in. Everybody's in a long line to buy in at any price, but then when it goes down to 40 000, it's logically a lot cheaper. But nobody cares. It's the same asset, but nobody cares why? Well, because the momentum is gone.

First of all, that's kind of a chicken or the egg argument there, but there's no interest in buying it because people don't see other people buying it. They're like, oh well, it must not be a good asset anymore, because no one else wants to buy it. Right now, the majority of people do not feel confident buying something unless they see everybody else buying it, At which case, it's going up dramatically and very, very fast. They might get that instant gratification, but they're almost always going to be paying a significantly higher price than they would have if they just thought for themselves.

Nobody ever wants to be the trend breaker. People like to accelerate the trend when it's going in one direction or the other. When everybody's buying, that means bullish to the moon, never going to go back down when everybody's selling. That means okay, yep, scam, Never going to go back up.

But then you get something inevitably that switches the trend if you pick the right asset. And when at the end of the day, the trend shifts, the people that actually have the courage to buy stuff that they believed in at lower prices than to make extra alpha on the people that didn't put any company asset, whatever that you believe in in this category. And it's the same deal during the Kobe Crash two years ago. Now the stock Market.

Everybody said it was so easy to buy the dip, Everybody knew it was obvious it was going to recover quickly. But when we were actually there during those weeks where it was dropping so quickly, what did we hear? Do Not Buy it. This is going to go down 90. This is the pandemic of three four hundred years.

Your great great-great-grandkids are going to be in a bear market. There's always a reason why you can't buy the dip. Oh, monetary policy is going to tighten forever and then growth is never going to come back. Tech is never going to come back.

Oh, this virus is going to keep getting bad forever and the stock market's going to be irrelevant. Oh, you know this housing crash is going to make it so that houses never come back. At the end of the day, everything is cyclical and patience pays off. but patience pays off a lot extra for folks who find good value plays at good value prices.

Okay, But moving on to the main entree, I want to talk about Fort. So we did talk about Ford on and off. Last year we spoke about their Lightning pickup truck. We spoke about how they were poaching some talent for some of their Ev initiatives, and we talked about how them being a Legacy Automaker with a lot of manufacturing capacity would be a decent edge if they continue to pivot towards Evs.

And then last week while I was out, that story developed a little bit more and they had a nice Gamma squeeze on a doubling of their planned production of their Electric F150 and it made it all the way up to 25. and it's given up a few dollars of ground, but overall it's held up pretty well. But all these new Ev companies coming out like for example Rivian, who are valued really based a lot on story potential because they don't have any manufacturing history or really brand awareness yet. it's very, very easy to kind of throw out the traditional metrics of how to value companies.

and when it comes down to a Legacy automaker like Ford, it's also very, very easy to discount it because it doesn't have that same story value as something like a new entrance startup like a Rivien or Lucid. But if you actually look at Ford as two different components, a Legacy Automaker and also a startup in the Ev space, you start seeing that there's a lot of value here that people are overlooking. So some bullet points on the situation that Ford finds itself in: Ford was the number two top seller for electric vehicles in the U.s market in 2021, second only to Tesla, and the exec board over at Ford made sure very, very clearly to put in their latest presentation that they were second only to Tesla. Of course, Tesla is ahead of them by a major margin, but in terms of the stack up, Ford is still number two.

and this is, despite the deliveries for their Electric F-150 Lightning, and E-transit van meaningfully starting deliveries in 2022, so they haven't even really meaningfully started yet. Ford is going to be going from one full Ev to three full Evs. and one of those Evs is going to be the alternative to Ford's most popular Ice car, which is the Ford F-150 And we've already seen reservations from Ford look very, very bullish. They said earlier that they raked in nearly 200 000 reservations for that one vehicle.

200 000 is almost 10 times the electric vehicle sales that they made in 2021. Now, on top of that, at this point, they are one of the fastest selling car companies overall, but electric vehicles take up only a small growing portion of their total sales. Their Ice or Internal Combustion engine vehicles make up the backbone, and their new models are incredibly popular. the Maverick, which is a lower priced hybrid pickup truck, the Bronco, their Lincoln not you list or however the hell you say that and their commercial Transit van drove huge sales last year and new models brought in new attention and that converted into more sales.

And if you look at Ford Motor Company sales in 2021, it was 1 million, 905, 955 some odd vehicles and of that, only 27 140 were fully electric. and those were mock ease. Now, obviously, as the Lightning, pickup trucks start doling out in 2022, that percentage is going to be significantly higher. But right now, it's only about 1.4 percent of total sales.

And even with that with 1.4 percent of total sales, Ford is still number Two for Ev sales in the United States. Meanwhile, of course, their regular Ford F series is the best selling truck for the 45th year in a row, and the best-selling vehicle for the 40th straight year. and I firmly expect their electric pickup truck to benefit from this legacy demand. If you compare Tesla's total numbers to Ford's Tesla's total deliveries overall in 2021 were about 936 172.

Ford's total deliveries overall in 2021 were one million, Nine hundred, Five thousand, Nine Hundred Fifty Five. a little more than two X for Four in terms of corresponding revenue. full year, finalized revenue hasn't been released, but you're looking at somewhere around a 52 billion dollar full year revenue for Tesla and a 126 billion dollar revenue for Ford, give or take. And of course, you got to remember that Ford trades at less than one tenth of Tesla's valuation.

Now, there's good reason for that, because Tesla's factoring in a ton more exponential growth in terms of production and sales over the upcoming years, But still, when you look at the comparison between the two and the overall market potential, it's very, very easy to think. Well, Ford may have a lot of growth opportunities ahead of it. Ford plans to generate 40 of its 2030 revenue from Evs. If they were generating 40 of that right now, they'd be neck and neck with Tesla in terms of demand.

In the present day, we already know the Electric F-150 is a huge hit, and they've recently announced they will be doubling their F-150 Lightning Electric pickup truck production to 150 000 vehicles per year. Now that's it. Ford is a completely different beast than Tesla, and I don't really want to compare the two of them anymore After this point. When I think about Ford is you have a legacy Automaker that is trying its hand at beating a lot of these startup companies that are going into Evs.

That's how I would look at it in terms of evaluation standpoint, and if you look at it from that standpoint, this is the edge that Ford has. Only three percent of new car sales in the first half of 2021 were Evs, and while growth in the Ev industry is very fast, it's not going to be the majority of sales for many years still, So, Ford can benefit from this by exponentially scaling up production alongside the electric vehicle industry's organic growth, while also benefiting from selling what is popular right now which are ice cores which are ice cars internal combustion engine cars. Unless you are a company like Tesla that can do almost a million in deliveries in the Ev space entirely, then there's an advantage to being able to move slowly into it while still making money. It's easier for Ford to convert 40 percent of its already very, very healthy sales numbers to Evs than it is for Riving to go out and build a completely brand new brand name from scratch to try to reach a similar level of sales.

While Rivien is struggling to build this, Ford will be plowing ahead and Ford will have a huge backbone of currently solidifying demand on Ice vehicles. They also, of course, are a legacy automaker with huge manufacturing capacity and distribution networks already built and it's going to be easier to adapt to mass scale production given that they already do that in the Ice space. I hate to continue to pick on Riving because I really do like Rivien over a long enough time horizon. But when you're looking at Rivian vs.

Ford, you see a lot more value in fort again. For most of Rivian's time since ipo, it traded at a strong premium to fork. But essentially, Rivien offers only one segment: electric pickup truck and Electric Suv. and they are for all intensive purposes, barely coming out of the womb.

yet Ford has 100 years of manufacturing some of the top selling vehicles in the world, a full year of huge Ev sales, and most importantly, the number one selling pickup truck. This pickup truck going electric is going to have a huge edge right from the start. You compare the two in current demand. There are roughly 55 400 Rivian pre-orders for their electric trucks.

Ford has already over 200 000 for their Electric pickup truck. Rivian says they won't be able to deliver on those fifty five thousand four hundred, even by the end of 2023, where Ford says they can boost manufacturing to 150 000 per year by 2023. Now, it's unclear whether either will meet these expectations, but still, by every stretch of the imagination, there's a lot more value that Ford is providing in the upcoming years than Riviennes. It's providing better demand, better manufacturing capacity, better backbone in terms of having an actual business model already attached to it that's making money instead of just losing money.

And in total, if I was going to define Ford in one sentence, it would be that Ford is an innovative growth company with a backbone of current day success. It's building on a level of success that is going to allow it to really, really push into the Ev space. When you start talking about what you're getting for your dollars and you're comparing forward to a lot of its startup competitors, you start realizing that if Ford does a halfway decent job with their Evs, they're gonna be out competing a lot of these players very, very quickly. But anyways, folks, that is my take on Ford.

What do you think about it? Let me know below. If you'd like to learn how to trade with our step-by-step lessons, our private chat, our daily morning briefings as well as of course our full price target list, I will put a link to Ziptrader you below coupon code goodbye 2021 is still active for a short amount of time. If you would like a sizable discount before checkout, make sure to type in that coupon code and it will apply it when you hit that apply button before checkout. Anyways, folks that caps off the video have a good one.

I'll see you in the next video.