Okay folks. so Kathy Wood just went on an exclusive financial webcast and on this webinar, she dropped some really huge golden Nuggets nuggets of gold that we need to discuss in this video. how do we describe the magnitude of what is about to happen? She warned about how Robin Hood traders are learning a huge lesson. They might speculate, uh, on Robin Hood, but the the beauty of what's going on is they're going to learn very quickly.

She talked about how the trend of innovative growth sector investors is just getting started. As our country experiences the largest intergenerational exchange of wealth ever, there's an intergenerational wealth transfer taking place. She talks about how she thinks index investing is an oxymoron. I'm not crazy about the idea of indexes from an innovation point of view, it's kind of an oxymoron.

And in this interview, Kathy would drop some huge bombshells of why that's a terrible way to go about doing things at least in her opinion as a growth investor and talks about how we can get ahead of the trend. I want to watch some of the big highlights of this webcast with you. We're not going to watch the whole thing because she repeats a lot of things that we've already covered, but I want to watch new things that she specifically hasn't said before, things that directly impact us and our money. and the only thing that I ask in return is that you hit that ravishing like button and also subscribe.

Okay, so to start she talks about the intergenerational transfer of wealth being a major contributor to why so many growth plays are now being accepted in the mainstream over the last year, and how the trend is clear as more and more wealth is passed from the previous generation to the current generation. I think what's going on right now has to do with the baby boom echo. There's an intergenerational wealth transfer taking place. the Millennials and Gen Z's uh, to the extent they are experimenting here.

Uh, they love they. They love learning. They're really excited about the new technologies. uh uh.

learning folks. learning. I don't know folks. I think my generation likes fast profits, not so much learning.

but uh, like Kathy would say what she will, they love learning. They're really excited about the new technologies uh that are evolving today. They're really at the leading edge of them uh and understand them and are comfortable with them. She's basically saying that because the generation that controls the wealth is now changing, the ideas and focuses and priorities of capital in the markets are also changing.

It's evolving the older way of thinking and the establishment way of thinking is starting to transfer, and Millennials are sort of leading that race. They're leading that transformation. I think the real problem with the mainstream establishment right now when it comes to the stock market is that, hey, they prioritize companies that have a hundred years of track record, companies that focus on short-term quarter by quarter shareholder value companies that can report great numbers quarter over quarter. A lot of people would lower their potential returns in order to have the promise of more stability and value in the present.

even if that means that you're going gonna be missing out on a lot of plays that actually run a lot faster over the next five to ten years. And the reason it's gotten to that point is because of previous crashes and previous crises. People who did a lot of risk on in the last 30 years had several periods where that blew up in their faces. So now they might be like, hey, you know what I want, I want more stability, Not so interested in risk, I just want stability and I'm willing to take less of return for that stability.

However, Kathy Wood is kind of flipping this on its head. She's basically saying that that's actually a riskier strategy to employ because those are actually going to implode. Uh, stocks and indexes are there because of their past success and disruptive innovation is likely to, uh, uh, disrupt the traditional world order. So now, while I personally do see some value in index funds, the truth is that with most mainstream index funds, you're giving up a lot of growth potential specifically because you want to prioritize stability.

Or, I should say, relative stability. For example, something doesn't make it into the S P 500 until it's at a valuation and track record where the S P has to include it For example, Tesla, Tesla got rejected from the S P 500. For years, they rejected Tesla until it was too big to ignore. In which case, the mainstream investment establishment paid almost 10x what the innovative players paid just a year earlier.

So in a lot of ways, the mainstream index funds are more so prioritized towards stability and track records than they are towards the future and growth. The traditional world order is going to change. Uh, beware. value.

Yes, there are some great value stocks out there, but a lot of value stocks are in harm's way. We believe that more than 50 percent of the S P 500 is going to be impacted dramatically by all of these changes, and she goes on to talk about sort of this idea of whether government should be stepping in. Obviously, the characterization of retail traders individual traders me, you, your neighbor, Susan is that basically we're morons and we don't know what we're doing and then every stock that we play is just going to explode in our faces because we're stupid. Stocks can go down.

Thus, we need to put that money in an index fund. I've always wondered why the financial media and Wall Street would want us to put money into funds that they control. I know that a lot of um, maybe regulators and and people in the investment business are concerned that, uh, we're going to hurt the the little guy here by um, allowing this kind of behavior. And sure, there's congressional testimony taking place.

I think some this week. Uh, but but uh, I don't underestimate this group of people. They are, uh, actually more progressive. uh, uh mentioned this, uh than I think institutional investors are because they the institutional investors over the last 20 years.

Tech and Telecom bus 0-809 meltdown have to face much more in the way of compliance. They have to jump through many more hoops if they want to stray very far from their indexes. But she goes on to say, hey, actually, individual traders, they're doing the right thing. They just haven't learned about market cycles yet.

This is a good opportunity for them to learn that, hey, taking on more risk to get more opportunity comes with some downside. You're going to have some losses. You're going to have periods where you're going to be tested. They might speculate on robinhood, but the the beauty of what's going on is they're going to learn very quickly because losses impact psychology and sentiment much more than gains do.

It's very true. as traders, we learn more from our losses than we do from our gains. Gains teach us, hey, you did the right thing. You're a trading expert.

You know how to predict the markets. The losses keep us grounded. They say, hey, you may think you know what's going on, but nobody knows the market perfectly. Key of surviving in the market is being humble and accepting that.

hey, you're going to get slapped in the face sometimes. And so this period of risk-off risk on I think is going to be very good in terms of teaching, uh, especially Millennials, those who have not had, uh, any training in the financial world. It'll teach them quickly that there are risks. Uh, sure.

opportunities that's been the last year. there are risks and you can lose a lot of money. Uh, if you take too many risks. So I think they'll learn quickly and I'm not as worried about that as others are.

This is such an important topic to cover because a lot of people say that like, oh, if you buy a stock and then it goes down, you fail. You know, I hate to bring up Mara, but this kind of reminds me of Mara. So as you know the story of our Amara play back the first day of the trading year January 3rd I believe it was. We said Mara is going to be a very, very huge opportunity, but it's very risky because it's super volatile.

I said there's a lot of upward potential, you're going to see a huge run in Mara, but that its potential came with a lot of risk. This was a play that many days had the ability to go up 10, 20, 30 percent. But when you get that extreme upward potential, what do you also get? You also get the ability to go down 10 20 30 in a day. So obviously a lot of people look at that plan and say, hey, it failed because it wasn't stable.

But if you want those sorts of runs, you're gonna have to take on more risk of volatility in stomaching things. So I mean, if you're looking for stability, you're not gonna get that in these growth sectors. It's just it's not a thing because these are emerging technologies emerging companies that nobody has valued properly yet. So if you want rapid growth, you also have to take some rapid dips.

You have to take some time to where you're tested. If you're not willing to withstand that, you can't be trading these stocks because you're just going to be panic selling every single time. So I think that what Kathy would said, it was very, very good that if they're going to be taking advantage of a lot of these risk-on positions that have a lot of upward potential, they have to be willing to take some short-term punches to the face. They have to be willing to have a broken nose.

How many of you had a broken nose over the last month? I had to go to the plastic surgeon and get it put on. Again, you got to take the punches with plays that you believe in. Over the next five to ten years we will see more innovation than we ever have in the his in history. You have to go back to the early 1900s telephone, electricity, automobile to get even a sense of what's about to happen here.

Which is interesting because what we're hearing from the mainstream folks is, hey, the next 10 years you're not going to see much technological innovation. What you're going to see in the next 10 years is only stocks that did well over the last 100 do well if they weren't a big player in the last hundred. Don't invest in them because the future is not coming if it is coming and ain't coming for the next 30 40 years. Okay, the other thing I want to cover is her thoughts on deflationary pressures outweighing inflationary pressures.

Basically the market condition we're in right now is being scared of inflation. But Kathy, what is taking the approach that? hey, we're gonna see some short-term inflation as the recovery starts. but then we're gonna have huge deflationary pressures. Why? Well, for two reasons: Number One technology is going to bring costs down dramatically.

Looks like a thumbs up, but it's not. It's just the number one. Number Two technology is going to disrupt a lot of major companies 50 of the S P 500. Basically, in order to stay in business, force them to lower their prices to get rid of useless inventory, thus causing deflationary pressures.

Two powerful deflationary forces uh at work in the global economy. One is good, one is bad. Uh, the good. deflation is associated with innovation.

and we're seeing some massive deflationary forces just looking at Dna sequencing. 40 Cost declines for every cumulative doubling in the number of sequences. Uh. industrial robots 28 Cost declines for every cumulative cumulative doubling in the number of industrial robots.

Uh. battery pack systems. Likewise, Uh 28. So powerful deflationary forces.

That's good. Deflation is going to stimulate a lot of demand going forward. Remember, cost declines are how technology creates deflation if a battery is cheaper today than it was yesterday. That means that your dollar is buying more battery today than it did yesterday, and thus is worth more aka deflationary.

adding to the cyclical momentum out there. And and uh, being sustained. Far beyond this. the cyclical moves.

Uh, the bad deflation is coming from companies and and this will intensify we believe over time who spent the last 20 years catering to short-term oriented shareholders who are demanding profits and profits now. So what they did and some people call this financial engineering they leveraged up to buy back their shares, pay dividends. They did not invest enough in Innovation and the innovation explosion we are seeing now is going to put them in harm's way. That being the case, in order to service their debt, they will have to cut prices to clear inventory of what will be potentially obsolete.

Uh, uh, products. So that's bad deflation. So anyways, very, very interesting perspective here. I think that the big takeaway here is, hey, look mainstream investors, if you think that you're investing in stable funds that are going to prove valuable over the long term, well guess what technology is coming whether you like it or not.

And she's saying that the market is realizing that more and more and more, especially with the intergenerational transfer of wealth. Anyways, folks that caps off the video, if you have any questions, feel free to reach out to us below or join us in Zip Trader Circle. If you'd like to learn how to trade, would like access to our private chat and daily morning briefings. We'll go ahead and check out Ziptraderu in the comments section below or in the description below.

I have a link if you'd like two free stocks and you're wondering what broker to trade these stocks on? Well, Weeble is a fantastic broker and I'll put a link to them below and as always, have a great day and I'll see you in the next video.