Okay folks, so I woke up this morning and let's just say that I thought I was on the Titanic. I looked at the pre-market and everything was deep deep red, deep red and everything from the High Conviction plays the growth sector, the tech sector, the S P, and even the Dow Jones. and then later on we got some rebuying and most of tech ended flat and Arcs Fund actually ended up. And let me just say, when you see the market open deeply red and then by mid-afternoon all the money's back in Reason: the market trades like this has nothing to do with the actual value behind the companies.

If it did, if it was so concrete on what the value of companies actually was that everybody on Wall Street could agree, then you'd see it stagnate. The reason it goes back and forth is because institutional investors are warring with each other trying to figure out what short-term and medium-term capital decision can one-up the other guy. How can we most squeeze the market for as much money as possible today? That's why. in a nutshell, you see the market trade like this.

It's not because it's rational or because everybody unanimously decides that. Oh, on today's day, the market just all recognizes that these companies are better than these companies. or that company is better than this company. No, it's because of warring between institutions.

And speaking of which, shout out to hedge funds who just clocked in their best January to April returns in 20 years. They also cited retail traders as one of the reasons they clocked in so much return. Who knew they bought tons of growth stocks, made tons of money, and then started shorting them on the way down. Who knew they would do such a thing as make money off the backs of retail traders right after they had made money off the back to retail traders.

On the upside, that is just no hedge funds. those are those are saints. Obviously, we should sell into them when they want us to sell to them so that we can buy it back from them at much much more expensive prices. But anyways, folks in this video I want to give you an update on what is going on with this market.

and of course I also want to give you an update on our biggest plays and some plays that you guys have been asking about. But anyways, before we get into it, the only thing I ask of you in return for this video is that you hit that ravishing like button and also don't forget to subscribe. Okay so quick updates. Palantir I woke up in the pre-market and Palantir was down like six percent and I was like up.

Okay, well we're in for it. We had a bad earnings report and then I looked at the price. I had seen the percentage but I looked at the price and I was like 16 and then I opened up a different app and it said 16 again and it wasn't a screen glitch. and then of course you opened up earnings And they did pretty well.

They actually beat my expectations as well as Wall Street's expectations. It met expectations on earnings per share. It beat revenue expectations. It's up 49 in terms of revenue growth for its first quarter, which makes sense given its ever increasing number of major clients that we've been reporting on.

So this was not a surprise to anybody who watches the channel. and it's projected annual revenue growth of 30 or more for 2021 through 2025.. I think that odds are strong that 2021 is probably going to hit that 30 target, but you're gonna start seeing that strong scaling up in the later years of that range 2023, 2024, and 2025.. And look folks, I'm not going to say that this earnings report was like a Whoop-dee-doo massive beat, but it was a record-breaking quarter which exceeded most of Wall Street's expectations while also being at a time period where the stock is like 50 off its highs.

But do not forget that at the end of the day, this is a company whose biggest growth will come down the line. They're not focused on the short term quarter by quarter. This is a company that, to be honest with you, does not care if you invest in it. And the reason is because it's a long term company.

They know that, hey, it doesn't really matter. We don't need retail traders money. We don't need to convince anybody to like us. We know that we're doing well.

We have tons of clients. We're focused on actually serving the clients, not the not the investors. You don't want a company that prefers its investors to its clients because the clients are what makes the company a company. If a company can't service, the clients investing in that company is worthless.

The best companies are the ones that provide value to customers and they do it consistently and they get more and more customers. Not the ones that squeeze customers for short-term profits so that they can report to Wall Street that they did okay. but of course, no good report goes unpunished. And when that dropped, Palantir tanked even more.

Then when the Grove sector bounced back and capital started flowing back in, you saw Palantir recover, and it was actually one of the strongest recoverers of the day. But still. Here's the thing. when it comes to these companies.

you can't look at the stock price to feel good about them. You have to look at what the company is doing. A lot of people forget that there's more to a company than it's stock. If you're having a hard time finding conviction in your place, look no further than the company and what they're doing.

Talent here, in my opinion, is a diamond in the rough. And boy is it rough. but it sure is a diamond. Another play d d d A 3d printing play.

Reported a beat on earnings yesterday after hours and almost immediately tanked in the pre-market this morning before recovering very strongly and ending the day up over 30. The market will reward companies that have actual value when there's actual funds being put into the market, but when funds are being taken out, well, funds get taken out from all companies, both good and bad. People back in January and February were buying Ddd in hopes that we'd have an earnings report like this. And guess what? 3d they delivered on it.

And while the company was there to deliver on their promises, guess what? The investors build because they can't take a little bit extra risk and also because hedge funds decided to massively short it. So congratulations to Ddd for doing very well on earnings And also too bad. So sad for the hedge funds who got squeezed today on it. Now do I think that Ddd will hold on to these gains? Probably not.

Hedge funds are going to end up winning because the overall market condition is to push fud on everything and sell anything but in the long run. Actual value. Delivering value matters. Look at riot.

This accelerated a downtrend before bouncing back a bit midday. This is at the same time that they reported nearly doubling Bitcoin production in April. This is at the same time that Bitcoin's valuation has stayed relatively stable. Historically stable.

Imagine if you were, say a gold miner and you reported that you're able to mine twice as much gold and let's just say gold prices stay the same. Well, that would be an obvious obvious win for your company, you'd be making a lot more money. Riot is trading far down from highs. At the same time, that Bitcoins priced what it mines and stayed stable.

But at the same time they've been able to scale up production. They've been building up their infrastructure. They've been in acquisition mode as well, trying to build it up as fast as possible. They say the market can stay a rational longer than you can stay solvent, and I think that Riot is a perfect example of that.

In terms of analyst price targets, I mean, they're similar to what I have. We have Riot at 64 dollars and Mara a little lower at 50. Mara actually reported some bad earnings, so they're down a little bit. But I still see Maura and Riot as the two leaders in the crypto race.

Crypto mining race. That being said, I do see crypto miners as being one of the most open to more downside risk. and the reason is because we haven't really seen a massive bitcoin sell-off in a while. and combining a Bitcoin sell-off with the interest rate scares in the stock market would be very, very rough.

In terms of Joomia, I know we've had a lot of questions on that one. They reported earnings today, and I was also satisfied with their earnings. One of the things that we talked about when we originally presented on Jumia is that yes, it's going to be a cyclical stock that goes up and down with the cycles of the market and the cycles of growth. but Jimmy, the company, is on a strong uptrend.

They're in a market where they're going to dominate. they're going to have a monopoly over it. In terms of the earnings report, they reported a gross profit increase of 11 year-over-year a gross profit after a fulfillment expense of 149 a year over year, and they're adjusted losses decreased by 24 year-over-year And just to be clear, the reason that I'm reading this is because the Bearish argument for Junior was that you'd see a massive drop in use after the pandemic, bringing gross profits down, bringing revenue to a plummeting level, and, of course, skyrocketing losses because of the massive expenses that the Bears say that Jimmy is going to incur trying to build an infrastructure in Africa, But this report is the sixth consecutive quarter where that hasn't been true. Keep in mind that the region that Junior is in the process of taking over in Africa has a similar consumer spending market to the main economies of Central America, South America, and Portugal combined, so this plan, in my opinion, is well worth the volatility if you have the conviction for it.

And look folks, when I say, make sure you have conviction, I'm not saying hey, you put in the work six months ago and now you're going to have this everlasting faith that you're going to go ahead and take Julia to the grave with you. You're going to bury it in the family graveyard. No, that's not what I'm saying at all. Companies have to earn and grow your conviction over time.

You could have that growing, budding seed of conviction, but you have to plant it in water. You have to keep up with the company. You have to check each earnings report. What are they doing? Are they meeting their goal posts? What is going on? If you have a girlfriend or a boyfriend that you've had for maybe a couple weeks, you don't automatically assume that they're long-term material just because you had a good couple of weeks.

Hey, that's the honeymoon phase Everybody loves the first couple of weeks of a relationship. You could build that conviction in the beginning, but you have to keep up with it. You have to make sure you check in with it down the line. If it lets you down, go ahead and cut off that relationship.

There's more fish in the sea. Look folks, I get it. the trend is clear: growth, stocks and tech, and maybe even the broader market is looking more and more like a falling knife. But keep in mind that every sell-off looks like a falling knife until it isn't anymore.

So be patient, dedicate yourself to the process. assume the worst so that you're ready to be set up with your high conviction plays no matter what happens. But keep in mind that eventually this too shall pass and I will be here with you every step of the way to make sure that we keep you updated throughout the process. Okay folks, let's get to the crux of the issue.

What is going on right now? Well, if you're Wall Street, you have a lot of concerns on your mind. You're worried about inflation. We have a gasoline pipe issue that just got hacked. You're worried that oil and gas prices going up is going to cause transportation to go up, which is going to cause everything else to go up, which is going to cause upward pressure on prices that were already in an upward direction.

You're worried that worker shortage and material shortage and a ton of other different bottlenecks are going to put massive pressure on prices and the Fed's gonna have to come in and step in with these massive interest rate increases. If you're Wall Street, you're probably also worried about taxes. Aren't you? Biden wants to raise both capital gains on investments and corporate taxes on companies. That means that companies in the stock market are going to have to fork over more of their profits to the Us government.

You're worried about the lack of workers and how that's going to affect a lot of the recoveries of a lot of these recovery stocks. There's ample reason to be concerned. if you're an analyst on Wall Street, and if you're a hedge fund, while you're accelerating this trend massively by hedging your bets with short positions today, we continue to see strong evidence of hedge funds piling in using their profits from previous short sale successes, which they've had over the last couple of months. and they're using that to accelerate downtrends even further so they can make even more money.

And you combine that with the fact that right now the S P 500 and the Dow are also starting to get a little bit of that fud while being at all-time highs. Well, obviously there's a lot that we need to put behind us. Hey, if you look at the data, we're seeing a lot of lagging in a lot of sectors. Obviously, tourism and hospitality is coming back, which is great, but because of a lot of supply chain issues, you're seeing a lot of jobs being lost in a lot of sectors like manufacturing.

You're seeing stagnation and construction, which that should be booming, as well as some structural changes in professional and financial services as well as the transportation sector. And what if we have a slower recovery than expected? Well, you'd expect the Dow Jones and the S P to have a bludgeon and they are at all-time highs. But of course we're still in a much, much better situation than we were in last year when we had massive lockdowns and we're in an economic recession. But the market is trading like we're going into a new recession.

and the reason is because it all comes down to one thing. and that's interest rates. The Fed's policy towards interest rates, and I know I've said this a million times, but it's still everything is around those interest rates. Historically low interest rates set the stage for the stock market do really, really well.

and while the Fed has promised to continue that through 2023, the market just doesn't believe it. and you've heard this before. But I just want to put this in perspective because I feel like it's a concept that a lot of people don't grasp. The Federal Funds rate right now is at a Fed benchmark between 0 and 0.25 and as of April 2021, it was sitting at about 0.07 But let's just take the upper benchmark at 0.25 Let's say the current interest rate is 0.25 Well, if you're going to go from 0.25 to 1, that's 4x in the cost of money and the cost it takes to take on risk.

If you go from 0.25 to 2 percent, which is what we saw in 2018, well, you're 8xing the cost of money, the cost to take on risk, and then on the other side, if capital gains tax goes up, well, what does that mean? Well, it means that you're taking on a lot more risk. You're paying a lot more for that risk, and then you're getting to keep a lot less of those profits. And then on top of that, if you have corporate taxes going up, what happens? What companies that you're investing in risks that you're taking to invest in companies? Well, they're seeing less profit. The good news is the growth sector doesn't have a lot of profits, so it shouldn't affect the growth sector, at least the corporate tax side.

Everything else is affecting the growth sector with the interest rates. But you get my point. Gross stocks are early stage, so they very very seldomly have profit. But and when you see some prominent news outlets pushing a 4.5 percent interest rate at peak over the upcoming years, you could see why people would be so scared.

A 4.5 interest rate would be like 18 times what the current interest rate is if it's at 0.25 And so if you don't believe the Fed and you believe that we're going to be in this out of control inflationary region, then obviously a lot of the selling pressure makes sense. People don't want to hold through that inflation. A lot of Wall Street is very, very scared to hold through the Fed's decision on whether they change their interest rate or not. In terms of when we can get this behind us, we really need to see inflation data prove to the stock market that it's not going to be out of control.

and with all the extra inflationary pressure coming onto the table right now, obviously, there's a lot of pressure on the Fed, and whether the Fed's hypothesis that inflation is going to be transitory, it's going to be on the uptrend for a while and then it's going to start steadying out. Well, only time will tell, but once that starts coming out and if they are proven right, you're going to start seeing a lot of cycling back in to these tech stocks, to the growth sector, and then eventually to the rest of the market as well. It's also true that if the Fed doesn't step in and they let inflation run a little bit higher than expected, then you'd actually start to see a lot of these companies get money back in because it becomes very unprofitable to hold cash. People pull out of the market because they don't think that we're going to have hyperinflation.

They think the Fed's going to step in before we get that hyperinflation pulling out because I think we're at risk if they don't So thus, the Fed's gonna be forced to. So if the Fed actually lets inflation get a little bit higher than they are predicting it's gonna get, then hey, that would actually be good for equities as well. But in the meantime, we're still dealing with this fuddy duddy market. So anyways, that caps off the video.

If you have any questions, feel free to reach out to us below and join us in Zip Trader Circle which I'll put the link to below and of course quick plug. This video is sponsored by Ziptraderu. Let's be real. A lot of folks struggle with growing their account because they don't have a clear process.

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