Okay folks, so as market tension has been increasing, Kathy Wood has been making some big moves behind the scenes. She has not only been placing some very big strategic buys, but also some strategic sells in a lot of stocks that you probably hold, like for example, Palantir, which she has been dumping. Despite the run in recent weeks, we need to discuss violently exactly what she's doing, why and how you can make money off it. And the only thing that I ask in return for all this is that you hit that ravishing like button.

And also don't forget to subscribe either. Okay, first update on today: you've got the Marquetta. Red, Red Red. You've got bond yields going up to the highest levels since June, these increases just don't seem to want to yield.

This has resulted in not just the punishing of equities across the board, but especially big tech Nasdaq. with the Nasdaq capping off its worst day since March. Abby said, I'm not somebody that gets super excited about a couple percent off all-time highs. This ain't no clearance cell, this is more like a cut out coupon.

I'd say this isn't a market where you need to panic sell, but this is certainly a market where you want to keep some cash on the sidelines if we do get much bigger dips. You also have the traditional drama around the debt ceiling and the media acting like this doesn't happen every year. Oh no, debt ceiling. Who knew this could happen in the United States? We never have problems with this.

Not in America. And of course nobody ever wants to talk about the inherent issues of just infinitely raising that damn debt ceiling and acting like, hey, it doesn't really matter. Imagine for a moment that you couldn't pay off. Say your Mastercard credit card and so you call Mastercard up and you say hey, You know what? I can't pay off the principal here, but I still want to overspend and I want to overspend dramatically.

So can you just like, pretty, please, raise my limit And then just like, yes, you got it. And hey, I get it. The Us gets to dictate the terms of their debt, and as long as Gdp outpaces the debt obligations over the long run, they may be okay, But at some point you have to ask yourself, is there not a more responsible strategy in terms of players? Alfie was back in the headlines today after a partnership with Vista Media where they're going to be providing advertisers and agencies with programmatic access if you are unfamiliar. This was the Sas platform that helps with ride sharing, retail and other public space advertising.

I was very, very happy to see them show some proof of concept this morning. What about Cei this morning I said on its way to blow past previous resistance in the threes and it finally did break that resistance level and the long-term resistance level above that. This is the play that quite simply, we started briefing on on September 7th when it was at like 90 cents a share and it's been a very, very wild ride. So my thought process is when a stock is more than 100 up, I systematically say okay, well this is starting to be a take profit play.

This is starting to be a risk manage play because more often than not when they run that much, they breathe huge afterwards and if they do keep running, they're gonna breathe even bigger. Now do I think that this can go to Five dollars? Still, Well, like I was saying on Sunday, there's no shortage of people calling for that and after the momentum that we saw today, it wouldn't be too hard. I mean, after all, this is a stock that not only just broke into new momentum highs, but also did so on a day where there were massive outflows out of the rest of the market. So this was a risk-off trading day and you saw a lot of people saying okay, the risk was worth it.

let's buy Cei. So my thought process again. I think the best move is to be stoic about it. Practically speaking, that means risk management needs to get tighter as the stock goes higher.

Okay, moving on though. most squeezers breathe quite a lot today during this risk off day, including Bbig, Going back towards that inflection point, you've got Amc suffering from market-wide sell-offs as institutional long sidelines, some dough. I would expect short interest to pick up on Amc and a lot of these other squeeze stocks if the market-wide risk-off trading continues, because when that happens, a lot of hedge funds that were long stocks in the market tend to start selling out on those and then they have more collateral which they can then use to take on more margin, which they can then use to borrow more shares and short sell more companies, including something like say, ooga booga Amc. Worst case scenario, we'll soon be testing some theories of Amc's hidden war chest of buyers at lower price points.

Okay, let's go ahead and get right into the main topic at hand: Kathy Wood. What is she selling? Well, one of her biggest sales in the last couple of weeks has been none other than Palantir, the tear of the Palin. With 1.46 million shares sold from her flagship Arc K Fund and 375 000 shares being sold from her Org W Fund, knocking Palantir all the way down to number 13 on her list of holdings with just over 940 million still in holdings backing up a second. Keep in mind that the growth strategy of Arc Invest Funds is really to go and find innovative companies and then buy them when the market has inefficiently knocked them down.

This is not just me saying that, but this is their published strategy. They know that innovators have cycles of hype and then sell-offs which are then later rewarded once again when they hit mass-market adoption cycles. So what does Arc do? Well, they go and take advantage of that. buying when everybody is creaming their stocks and selling when everybody's hyping them up and then Ritz and repeating.

Rarely do they sell the entire position, but rather they have some parts of the positions that they will sell and rotate to other positions that they think that that capital will be more efficiently used at. For example, if Pallentiers at Euphoria highs and another one of their equally high Conviction plays at all-time lows being hit with really bad Pr for example, then they might go and rotate some of the Palantir into the beat down stock and that would have a more imminent return and a more efficient use of the capital and efficiency cycle. For example, with Palincher they decided to sell it on the 23rd. This is after it enjoyed a period of euphoria cycle from 16 to 27 and based on again, Arcs published trading strategy.

They likely looked at that and said okay, Right now, Palantir is in a euphoria stage. Let's go ahead and sell out now and then we'll cycle back in if it goes back into another dysphoria stage, which in hindsight has been a good strategy since Valentine started selling off again today. If you look at the trading history of Arc which is all published, you can see very very seldomly does Arc buy high Conviction stocks during uptrends. But what you do see and you see very often and you see with Valinter is them taking money off the top of their highest conviction plays when they are in Euphoria cycles.

One of the other big inconsistent sales over the last month has been Tesla stock. People often criticize Kathy Wood because her fund's biggest winner in the last five years has been Tesla, and her price target for its future is obviously through the roof. If you haven't heard yet, she has been known for consistently and systematically selling and locking in profits on it. And people of course say your paper hand and you say it's great, but you go and sell it lol.

You don't even put your money where your mouth is, Kathy. but of course it's a little bit more nuanced than that. As Tesla has grown over the years, it has become a larger and larger weight in Arcs funds, and with its recent rebound from its main lows in the 500s, it's once again become overly weighted in Arc fonts, and you look at the insane price fluctuation of Tesla stock in yellow over the year, and then you look at the weight in the portfolio in purple. Pretty damn clear that Arc tries to keep concentration of Tesla stock below the mid sevens over the long run.

Every single time it's at risk of going heavily over 7.5 you start seeing selling pressure, especially if Tesla is in its Euphoria cycle and she can lock in some profits. He takes the profits off the table, exploit the inefficiency, and also keep weight exactly where she wants it to be. When you get to a point where Tesla stock gets really, really heavily weighted in the fund, it's like, okay, well, why not just buy Tesla at that point, this is a growth fund. You want to have a lot of exposure to a lot of different companies with a lot of different potential.

Obviously, clearly there are issues with Tesla and the chip shortage and short-term supply chain issues, but I don't believe despite what analysts are saying that that's the reason she's selling. And truth be told, over the last couple of days, people started saying, hey, these ship shortages aren't gonna last forever. Okay, next for Sales Lending Club. So Lending Club was one of Wall Street's most favored to fail firms during the pandemic, and even after the pandemic.

Really? Because during the depths of the recession, a lot of people switched to more traditional forms of credit and also reduced a lot of consumer spending above things that hit Lending Club very hard. but Arc Invest liked them over the long run. So what do they do? Well, of course, what Arkhamvest always does, they go and buy it despite everybody telling them not to. Now not only has it recovered from pandemic lows at 432, but it's gone all the way into the 20s and 30s, which is where they've started unloading.

Pretty classic arc bind when everybody's creaming their stocks and selling when everybody's rallying them up. I would guess though, that based on the numbers that Lending club is doing with a scaling growth trajectory, especially considering their strategic Digital Bank acquisition in February, I would argue that this is something that on the next dip, you're going to start seeing Ark plow back into. Okay, now it's getting extra juicy. What about Chinese stocks? What is Kathy Wood doing with China? Well, throughout the summer, as you know, Kathy Woods started selling a lot of Chinese companies whether that be Pdd, Jd, Baidu, Baba Tencent, even Eevee Company Byd.

And while she has started nibbling back a little bit in September with some purchases of Jd, overall, it's been very, very net negative. There's very little concentration of China in the Ark funds. So what is her thought process here? Why is she moving away from China? Why is she buying some specific Chinese companies? Still, and what's the overall outlook? Well, the Financial Times reported that she said this Ark's sharp strategy shift was because the environment in China was quite different from the one that many global asset managers had poured funds into late last year Chinese authorities. This is the important part.

We're now focusing on social issues and social engineering at the expense of capital markets aka market intrusion on a dramatic level. Who would have thunk that could happen in China? Anything deemed by Beijing as too profitable was at risk of being torpedoed. Oof. If a company's too profitable, China's like, okay, wait a second.

This ain't good. This is. this is a threat to us. She goes on to say we have not eliminated our positions, but we have reduced our positioning in China dramatically and we have swapped some of our holders which became losers into companies that we know are courting the government with quote Common Prosperity.

My takeaway here is something that I kind of agree with. She's pivoting away from Chinese companies that she believes don't have political tailwinds in their favor. She's basically saying, hey, I still like the Chinese market, but I'm not gonna buy any company that's not getting on their hands and knees and rear end kissing the Chinese Communist Party. I don't like the game, but I don't set the rules.

That's how it's played over there. I totally agree with that. and I've tried to find stocks that generally have shown to be in favorable tailwinds with subsidies with political favors of the Chinese Communist Party because those are companies that are more likely to be favored by them in the future and more likely to succeed into the bigger market like Neo Expeve and Lee. in my view.

Of course, the only other high conviction Chinese stock that I have is Baba, which is pretty much done the opposite. A company that's been critical of the Chinese Communist Party and got the the whip. But I gotta say, hey, Alibaba has been nothing but obedient over the last couple of months, investing 15.5 billion for China's Common Prosperity Fund, immediately moving to stop selling crypto mining machines. The rule in China is that if you want to make money off their economy, you have to bend the knee.

If you're going to invest in China, which is up to you right, you have to follow companies that are either playing the game correctly or are at least trying to fix their mistakes and playing the game. And I hate that system. but it's certainly something that's been gamed a lot. Even Tesla knows that you look at what Elon Musk has been saying.

Just this week alone, people criticized Elon Musk for praising China relentlessly this past week with headlines everywhere showcasing his so-called kind words for the party. You go back even to mid-summer this year and you have Elon Musk praising China's economic prosperity on the 100th anniversary of the Chinese Communist Party. Do you think he likes China and their system over there? No, but he loves growing his business and he knows in order to do that in order to be a player in that market, you gotta kiss a little rear end. Okay, bye.

So what are some of the most recent and biggest buys of Arc? Invest? Well, Robin Hood has been one of their big buys, which unfortunately Kathy Wood just lost all of her ooga booga fans. What else has she been buying? Well, she's also been consistently buying Uipath, which is another one of our favorite companies, and has been scaling huge as a workplace automation system. She's also been buying Triple D 3d printing stock. She's been picking up shares of Draftkings, the king of Drafts, which is notable since all of these buy orders came after Draftkings made that 20 billion offer on Uk sports betting company Entail and two of them actually came the day after.

So that's symbolic to me that hey, Kathy Wood approves of this merger idea. Teledoc. She's been buying a lot of Nvta. She's been buying a lot of coinbase she's been buying a lot of.

But overall, you look at almost all the buys, they all follow a similar trajectory. They have two things in common: Number one, they're stocks that have huge growth potential in their industry. the industry itself has huge growth potential, as often in the early stages, And then number two, they're stocks that have either been plummeting or are stagnating. None of these stocks are in strong uptrends.

Why doesn't she just wait until they get into euphoria stages? And they're much higher priced? Well, because she's trying to get in before the crowds get in, right? She buys based on what the company's value is over the long run, and she tries to time it based on when the stock's not seeing any inflows, or when people are selling the stocks. And that means nearly 100 of the time she's not buying stocks that are popular. Right now, Coinbase isn't considered the hottest stock. People think Coinbase is shite right now because it's not running the minute it starts running again, everybody's going to come out of the hills and say wow, I knew this was way way way undervalued.

but right now people say it's shite because it's not moving. Her thought process is she doesn't look at the chart and say, oh, it's a good company because of what the charts doing She says, hey, wait a second. I understand the crypto market. I see growth in the long term, and Coinbase is one of the top trading platforms for crypto And she says, okay, well, there's the value there, so I'm going to go ahead and buy it when people aren't paying attention to it, and when they start paying attention to it, I'll start taking some profits off the table.

Then quite frankly, in terms of what we can take away from this, a lot of people will dis on her strategy, but if you're somebody that's going to start liking a lot of these companies, fundamentally, all of a sudden, when they start running again, the question is, wouldn't it have been better to just start liking them before they start running? I think that oftentimes one of the biggest mistakes that I see in retail trading communities is people like to treat long-term trades as short-term trades. If it doesn't do what they need now, then it's a scam and a trash company. And at the same time they treat short-term trades as long-term trades. They buy something that has no fundamental value because it's running and then it went down and like I'm going to keep holding it until it goes to the moon, even though the company behind it is shite.

If you're going to buy a company that's shy, it needs to be a short-term trade. If you're going to buy a company that's a long-term really high conviction play, then you got to wait for the long term for that to be realized. The best thing you can do is if you're trying to add long-term plays, is to start looking at them before they're showing any proof of concept. With short-term trades, it's all about finding what's flashy and controlling your risk.

but you can't just mindlessly hold those. And quite frankly, I think that by looking at folks like Kathy, what we can learn a lot about proper trading habits and not having emotion in our trading. Anyways, folks that caps off the video. If you have any questions, feel free to reach out to us below or join us on Zip Trader Circle if you'd like to learn how to trade.

With our step-by-step lessons, our private chat, and of course our daily morning briefings where we brief on all the favorite catalysts that we like each and every market open morning. Well, I'll go ahead and put a link to Zip trader you below coupon code fudstopper50. We'll get you 50 bucks off before checkout and if you're wondering what broker to trade these stocks on, well we like to send new traders over to Weeble and they will get you two free stocks when you both sign up and deposit with our link down below. Anyways, have a good one and I'll see you in the next video.