Okay folks, we gotta talk about what just happened today. Mostly deep red from all time highs with the Russies, the Nasdaq and the Dow and S P down. And with all this in the forefront, I need to talk about what you need to know where the sell-offs are going to be the most severe. Then I need to talk to you about what's going to be happening tomorrow in about 24 hours.

The only thing I ask in return for all this is that you hit that ravishing like button And also don't forget to subscribe either. They say the best prescription is a subscription. Okay, let's go ahead and get started with an update on today's market. So today, you saw some of the most concentrated sell-offs in Chinese companies as Chinese regulatory fund spreads like wildfire.

Whether that be Baba Ghoshipa, Baba, Jd, Neo Expevely, you have headlines warning that you need to sell out of your Chinese stocks from the same damn experts that recommended you buy as much of Dd Chinese ipo Dd as possible. Just a month ago, you remember Dd? That was the company that led all the Chinese Sketch Fest regulatory sell-offs. And of course with the media going back and forth telling you to buy stocks one week and telling you to sell them the other week, you may be asking what the heck should you do? Well, here's my take: You can't get massive growth potential without having some looming risk factor. And in the Chinese case, it's this looming regulatory risk factor that comes in ghosts.

But China is a massive, massive economy and massive market to exploit to make money off of. But unfortunately, in order to make money off it, you have to go through that gatekeeper. which is that Chinese Communist Party. Now a lot of people will say hey, wait a second Charlie, That's very un-american for you to say we should be invested in Chinese companies.

I ain't messing with no company that does business with China, and I totally respect the sentiment and idea behind that statement. But the irony is that the same people that say that will then go and in their own lives go and buy and shop at American companies that contract with our own, partially buy or otherwise use China as a big part of their supply chain. Totally fine for them to let Chinese investors make money off our economy, but we aren't supposed to be able to make money off their economy because it's unethical. Okay for me to give money to China, I just don't want to take money back.

I don't want to make money off the Chinese government. Let them make money off us. But again, you have to realize that any company that does business in China has a relationship with China or has investors based in China is exposed to the Chinese Party. Once upon a time, somebody wrote me a very, very long email saying Charlie, Please tell your followers To stay away from Neo.

You need to tell them that they should only be investing in Tesla. Just get rid of your Neo, because with Tesla, at least you don't have to deal with the Chinese Communist Party. And I'm just thinking to myself, what what You got your blinders on? That Deep China accounts for 30 of Tesla sales. Large portions of Tesla's valuation is factoring in, specifically the growth in the Chinese market.

When you're dealing with something like Tesla with a 668 billion dollar market cap, let's just say a quarter of that valuation is based on its massive success in China. probably underscoring it, but let's just say a quarter. How much would that be? Well, that would be about 154 billion at 154 billion market cap. You could fit Neo, Expeve and Lee and still have some room left over for seconds.

Here's the gatekeeper for that 154 billion dollars in valuation. Well, the Chinese Communist Party. So yes, it sounds terrible. Obviously, I'm not a supporter of China, but hey, when it comes down to the massive, massive market there, I think that it's hard to say hey, we're going to purge ourselves out of all Chinese exposure and then at the same breath, say, hey, I'm going to invest in other companies that are American.

And then it's like, well, that American company is either owned, does business with, or has China as part of their supply chain. You don't necessarily want to build a great wall between you and China, nor can you. But I think that when you're talking about a well-diversified portfolio and then you're like, hey, we're not going to diversify into the largest economies, then it's going to be really, really difficult to achieve that alpha on the market. I mean, we've been covering Neo for just a couple years and look how fast it's grown since our first video on it, And since that time, it's had about 50 different regulatory worries and regulatory sell-offs and fud sell-offs and people saying oh no, I should have known not to invest in Chinese companies and it's like hey, maybe if you bought it at a good price, you held through the Fud and you built your portfolio in a way to take those concentrated sell-offs during certain parts of the year and take advantage of their returns when they bounced back, then you would have done really well.

Where you get into troubles where you start putting all your money into one sector and when that sector does bad, you freak out and panic sell everything. Just say you bought a high conviction play at 40 and it goes down to 30 and you're saying oh, I don't believe in it anymore Well, how was it a high conviction play at 40. it's now. at 30, You shouldn't be thinking i don't believe in it anymore, You should be thinking damn, this is a good price.

The reason that we love growth stocks is because you have so many frequent massive sell-offs that are then accompanied by frequent massive gains. So that gives you that ability to take advantage of the panics and then take advantage of the upside Some might take on the Chinese market as hey, we're in deep fud Right now, we're going to be in deep fud for probably a while. So if you have low conviction Chinese plays that you're holding, go ahead and cut them loose. But for high conviction plays, this is yet another opportunity.

My high conviction Chinese plays are Neo Expeve and Alibaba Baba Goshipa Baba. I also like Lee and Jd and Baidu, but my top three are of course Neo Expeve Baba. Okay, next so the big event tomorrow. The Feds meeting tomorrow.

The Fed will be giving us their latest update in terms of tapering in terms of outlook on the economy With this new variant and what it says tomorrow will dictate the pace of the stock market. Now leading up to this meeting, what have we seen? We've seen cases increase, mass mandates, roll out of major metropolitan areas and huge government agencies. A few months ago, we were hearing from Wall Street that we would never see restrictions come back. We would never see a roll back or a back track of cases.

And yet here we are and we're seeing a lot more economic anxiety. I understand that a lot of folks watching this video may be in places where you know the whole restriction idea is just totally off the table now, but in very, very large economic areas of the United States and of the world, that's not the case. You think about some of the more lockdown friendly states like California, New York, It's like, hey, that's a massive economy right there. If cases keep going up like they are, this could be a very slippery slope.

Now I'm not saying that's going to happen and I don't know what the hell is going to happen, but what we're talking about is just overall market anxiety and market anxiety is going up. We have to deal with what the potential ramifications are. When you have a stock market that's at all time highs and you have an economy that's starting to look like it's slowing down and there's new risks for it. Look at countries like Australia where they have 13 million people, they just lock down half their country.

They're only at 164 cases a day. They're locking down like six and a half million people because of a hundred people getting sick every day. So it's like, well, hey, if a lot of countries start going lockdown friendly again, What does that mean for the international economy? What does that mean for the travel industry? What does that mean for our trading partners? What does that mean for factories Where factories had to shut down and cause a lot of these shortages that we're experiencing now because they shut down in 2020.? So when you're talking about the Fed, the Fed has to balance. Okay, well, what about international economy wars? What about domestic? What about what is the damn deal with this variant? And so tomorrow, the Fed has to address two big problems.

Number one is that pricing pressure and inflation concern that's still on the table. People are like, okay, consumer pricing is going up, Inflation scares are still heavy, conversation on inflation is transitory or not. it's starting to pick up again and a lot of people are pressured in the Fed to say hey, it's okay if you crash the economy, but we need to reign in inflation. People are like, okay, let's taper asset purchases.

Let's maybe raise interest rates a lot sooner, But the Fed's like, wait, no, we need to get through this recovery and we're not seeing inflation get out of control yet. So let's wait and see. As that pressure increases, you could certainly have the Feds start leaning more in that direction. Number two, which we just talked about was, hey, the economic worries.

The reason that we have easy money policies here in the first place is specifically because of the recovery. We're trying to see ourselves through this recovery. We're trying to incentivize the economy to get back on a healthy track and with economic growth slowing down and the Delta variant breaking out and some other different flood around supply chain concerns tapering asset purchases too soon or even talking about doing it too soon is going to be a huge mistake. it could order the last chance we have of a very strong recovery.

Fact of the matter is, we're in a very, very delicate situation. What we are really going to learn tomorrow is exactly what the Fed's outlook is on the economic drawbacks of this variant situation. and as he has as of late been signaling that asset tapering is on the horizon. I would like to see him start walking that back and actually double down on saying hey, Well, we're going to keep our strong easy money policies in place until we're out of this lingering effect of the pandemic.

but if he decides the other way, expect massive sell-offs in all of your favorite stocks. Very, very tight bridge here and we have to be prepared for any outcome. Anyways, folks that caps off today. If you have any questions, feel free to reach out to us below or join us on the lovely Ziptrader Circle Facebook group 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 of our favorite catalysts each and every single market open morning. Well, we'll go ahead and put a link to Zip Trader you below. Fudstopper50 will get you 50 off before checkout and if you're wondering what brokers would trade these stocks on, well we like to send new traders over to Weeble. They have a great free stock promotion, They have a great platform and you can get all of that just by clicking the link below.

Anyways, that caps off the video and I'll see you in the next one.