Okay folks, we've got a lot to talk about. Number One: we got to give a quick update on the market and plays, including a breakdown of what the Fed just did today and how it affects the outlook of the market. Then number Two, we need to talk about one of our high conviction plays. They got beat down heavily on earnings today.

We need to go over their earnings whether this still deserves conviction and my outlook for 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, let's go ahead and start with some updates. So Ocgn ran it cycle.

This was the play on an anticipatory run up to who approval of Kovacsen and it showed some lovely proof of concept mid last week running up with that prior anticipation, and then got decimated on delay of said approval. On the video discussing that delay last week, we said hey, it got pushed to next week and we projected another pre-anticipatory run. That did happen. And then midway through the uptrend on Monday, we said hey, I'd take some profits off the table and increasingly play with house money because pre-anticipatory runs don't last forever.

That's why they're called pre-anticipatory because they're anticipating a catalyst. And then this morning I gave the last heads up in the briefing. I said, be careful of a dramatic post euphoria dip it's already pre-anticipatory ran solidly, and then shortly after it concluded this round of a run-up Now, I'm not a magical garden gnome. The reason that I made these projections is because this has happened dozens of times before.

with Ocg. This one was pretty cookie cutter. A pre-anticipatory ran up to the Catalyst, and then post Catalyst people took profits. That's pretty much how you see these trade.

But anyways, give yourself a pat on the back if you caught this one. It was pretty insane. I mean, doubling in a week. Even more if you got that earlier trend.

Whether you found it through me, or you found it somewhere else on your own, you should be proud. But anyways, we'll let Ocg unrest until the next catalyst. Okay, moving on Fed statement today. So they are going to be moving forward with the much anticipated slow tapering of Bond purchases about 15 billion a month.

His expectation is that supply chain bottlenecks and shortages will persist well into next year, and along with that elevated inflation. but that as the pandemic subsides, a lot of these supply chain concerns in bottlenecks will go away. and then when that happens, inflation will subside from these elevated levels and on the current schedule, the idea is that bond purchases will conclude somewhere around July 2022.. Now, in terms of interest rate hikes, the market and many, many analysts and many, many funds have factored in about two or three rate hikes.

A lot of sand three rate hikes in 2022. But one of the things that seemed a little bit more dovish from the Fed based on what I saw today is they're factoring in at most one rate hike. so you have the average Wall Street analyst. That's like, hey, we're gonna have two or three rate hikes in 2022, so make sure that you're selling off in anticipation of that.

And then the Fed's like, wait, no, we're only going to have one, So that's the one area where I'd say a lot of investors were happy to hear that. Of course they could still change that if that transitory ends up being a lot more inflammatory. But still. If you're wondering why the market's doing well today, I think that it has a lot to do with that.

What we had today was basically a Fed saying, hey, we're leaving the pandemic It's a slow process, the supply chain shite is terrible. It's persistent a lot longer than we expected, but these things are going to fade away eventually, and we're not going to be super reactive to inflation. We're going to slowly taper, but continue our massive asset purchases, and by summer of 2022, it'll completely stop. Now, it turns out the market reacted today.

well, pretty green. This entire year, the market has been looking at the inflation data and freaking out that Fed Chairman Jerome Powell was going to go and choke equities everywhere, especially Growth Tech and even Big Tech. During a period of uncertainty, People didn't trust what he was saying. People said, hey by the end of the year, you're gonna see he's gonna dramatically dramatically try to curtail inflation.

When uncertainty is present, people assume the worst, and then when you actually get a clear trajectory, whether good or bad, the market says okay, Well, at least now we know what we're up against. I think that in this situation, the market liked it, because hey, number One, we no longer have that uncertainty. We have a lot more certainty now about trajectory over the next coming quarters and really, next year. And at the same time, he's not really doing much to curtail this inflationary pressure.

He's saying, hey, it's still transitory. It's supply chain based. Supply chain based concerns are going to continue into the winter, but but eventually we're going to see the other end of this now. Hopefully eventually.

Doesn't mean 2023, because that creates a whole nother picture. And I don't know if you necessarily even agree with Jerome Powell's read on this, but he seems to think that at the end of the day, it's all gonna go back to that target price at two percent inflation. And if you are an institutional trader in this market, you have a problem because hey, wait a second. Your job is literally to go long or short and move money around for clients so they don't redeem their money from your fund and go put it in something like the S P your job is to figure out.

Okay, how do I get that alpha on the market by betting strongly on one direction or the other? And the supply chain crisis and inflation narrative has been the big looming threat that institutional traders have been trying to play off all year. But for short sellers in Growth Tech, for example, almost all of the money on that narrative was already made in the beginning of the year. Funds trying to short into the broader market saw even less luck. Big Tech was the biggest disaster for short sellers.

So all these funds were like, okay all year. Okay, Inflation, Inflation, Inflation narrative around supply chain concerns. Okay, let's short everything. Well, they're not making too much money.

They made a lot of money on growth early in the year, don't get me wrong, and some of them made it in rolling cycles downward. But overall, most of that money hasn't been made since, like February and March. For all the months after that, growth has been basically stagnating in the same region, and Big Tech and the broader market has been going up and up and up and up and up to new highs. So if you're an institutional trader, you're looking at the market and you're thinking, hey, wait a second.

So I've been shorting this market all year on this narrative, and now people aren't even scared of the narrative anymore. This ain't working. And if you're an institutional trader that stayed on the sidelines, which barely ever happens, they're literally paid to move your money around and say I did all these fancy things to get your massive fees. Well, if you did stay on the sidelines this year, you're like, hey, wait a second.

I massively underperformed the market and what did I stay in Cash. Cash is losing value, Institutional traders can't find Alpha. And the downside? What happens while they start having to push it in other ways and the only other trajectory is the upside. And I think that's why you see a lot of these high, multiple stocks starting to rally Because institutional traders are like, hey, wait a second.

These are the only areas of the market that are deeply, deeply down from all-time highs. Starting to see this turning point where the market's like, okay, wait a second. So shorting's not working. I'm not gonna make my Alpha by shorting, and with a strengthening economy, a clear fed policy, a fairly slow taper the year end rally folks could definitely make the argument that a lot of people right now are being more incentivized to go long than they are to short or to stay out.

Okay, moving on. So Skills had a nice update today. going as high as 13 6 on anticipation of earnings and then wham, Earnings came out and it went down. But as we've been talking about with Skills, the two big metrics that we've been looking forward to on earnings are number one: the cost of customer acquisition, as well as the overall customer growth and to some extent, of course, how much money each customer is bringing in.

So let's go ahead and start with the good. They reported a quarter of record revenue and accordingly record monthly paying active users. Monthly active users as a whole aka Mau's are up from 2.4 million to 3 million. Paying monthly active users are up from 460 000 to 510 000.

Quarter over quarter average revenue per paying user is up slightly. Gross marketplace volume is up slightly. So what happened in effect? Well, the three categories that we were worried about did retake an uptrend. Last quarter's report showed them on a downward trajectory based on year over year.

Now we're back on an upper trajectory quarter over quarter and year over year, which is good. and to some extent you could argue that this isn't a terrible report, but I think that the market is really, really hung up on this one line. Here they are looking at average revenue per user which actually went down sizably. Now, how did average revenue per user go down so much When average revenue per pain user and paying monthly active users as a whole went up and revenue for the entire company went up well because monthly active users as a whole increased which means you had more free users join that haven't converted yet into paying users.

So when you take both the free users and the paying users and you add them all up and you take an average of how much is being generated, the free users are going to drag down the paying users. When you have 600 000 new active members in a quarter and only a few trickle into being paid members during that same quarter, most are going to trickle into being paid members quarters down the line. Well, it's going to distort the average revenue per user. The reason I mention this is because I've seen oodles and oodles of analysts attack Skills because of specifically that line item, which is completely ridiculous because it's an average of everything.

It's not relevant at all. You want to analyze the actual average revenue per paying user, but the good news is, hey, Skills has gotten itself back on a track upward. A track. Not an exciting track, but a track upward.

And worse yet, sales and marketing expenses have continued to balloon, which will probably go up further as the holiday season and competition comes through, but those are probably going to go down dramatically in Q1 of 2022, so I'm not super worried about that. I'm disappointed again, but I'm not super worried about that. I think that if you look at these user growth trajectories and then you consider the high likelihood that ad spend goes down a lot in Q1 of 2022. If Skills continues this trajectory, then it could still very very very very well performed.

But the negative is that in order to really hit my sales numbers in 2022 and 2023, it's really gonna have to pick up in the upcoming quarters. It's gonna have to haul some ass. It needs to accelerate even more than it needed before because this quarter didn't perform as much as I wanted it to. I would say with Skills on this earnings report, it didn't break my conviction, but it did the bare minimum to maintain it.

But at the same time, when we're looking at Skills in Q1 of 2022 and Q2 of 2022, is it still going to be disappointing when ad spending is down when a lot more of these free users start actually becoming paying customers and you get a lot more users as a whole joining as we get into the fall holiday season when people have more time off. Are we still going to be looking at bad numbers or is that trend going to accelerate and we're going to see a turnaround Right now? The market's screaming. No, it's screaming. This is shite.

Go home. But quite simply during a struggling period of uncertainty is when you get the value in a stock and I'm very, very interested to see if Kathy would continue to buy the dip on this after today's earnings report. She's been buying it a lot in the last couple of weeks and I would not be surprised. I have a very, very strong feeling She's going to continue to do so.

that caps off today's video. If you have any questions, feel free to reach out to us below or join us on Ziptrader Circle if you'd like to learn how to trade. With our private chat, our daily morning briefings as well as our step-by-step lessons where we will walk you through everything that you need to know in order to learn how to better trade and manage your account in the stock of market. Well, we'll go ahead and put a link to Zip Trader you below.

This is not the type of course where you can buy it and get away without doing any work. This is something where you're expected to put a ton of work in and effort to get any sort of result. When I buy something, you better bet that I get every single dollar worth out of it and I expect the same from you Anyways, have a good one and I'll see you in the next video.