Speaker 1: 0:04

here and welcome back to the pre-market life. I hope you enjoyed your labor day and pre-market is looking pretty bleak, but that's not actually what I want to talk about here. I want to talk about and I want to make you aware of the top 10 things that probably the best trader on wall street is talking about, and that is Goldman Sachs' top tech trader, and I want to walk you through literally the 10 things. He's looking at the stocks he likes, the trades he likes and what he says we should basically be investing in until the end of the year. That's our mission here and, of course, then I'll do my best to answer all your questions and everything else. So pop them in the live chat here down below and I will get to those.

Speaker 1: 0:47

But let's just start off with what's actually going to happen this week. Well, we've got ISM data out today, which is manufacturing data, which is sort of like you know, are we heading for the doom and gloom recession or something better happening there? And a bunch of other data the Fed's Beige Book, the Germans Big, big, big on Friday. Us non-farm payroll that's the biggest unemployment metric that the market looks at. That's coming out on Friday and you might say does it really matter? As I spilled half of my drink over my desk? Well, shall I show you what happened last month when we got the same set of data out. This is what we got last month, and last month started here. That was the 1st of August, 1 August and then the market took an absolute dump and, yeah, a little bit of that from the 5th onwards was this was Japan, right, this was the Japanese. We blame them for that, that, but before that we already had that gap down here, pretty nasty setup. Why? Because we were worried about the hard landing, and the hard landing is basically a euphemism for a recession. So if this manufacturing data comes in today super soft, then people are going to go through the same worry again and note the similarity in setup. We had a previous high. We're at basically the same high again. So not saying it's going to happen, but it's definitely something to look at. Witchcraft, indeed Witchcraft.

Speaker 1: 2:21

So what did we do in August? You know what? Honestly, not a lot. This is literally our trading portfolio and this is pretty much the beginning of whoops there. That's the beginning of August and, as you can see, we did pretty much bugger all. I think we made like $300 in August or something. We did very, very little, but that doesn't account for about $7K in open trades. So I could have closed them out on the end of the month and then shown you a nice August chart, but that's not really how I do it. I just do it to profit maximize and nothing else. So we're still up $24,000 on our $30,000 teaching portfolio.

Speaker 1: 2:57

If you're curious about how we do that, I'll teach you the three steps that I use literally in 57 minutes. All you got to do is go over to whatever it is. What is it down below FelixFrontsorg slash workshop? It's also in the description. Click on that and you can literally join us live. We'll be on YouTube, be private and for about 90 minutes or so I'll walk you through our setups. We'll do some actual, real trades together and my goal is that you walk away with a ton of information, ton of useful info that you can actually implement and it'll make you better. And that's intended for beginners, by the way. So if you know nothing, it's perfect. If you know a bit, I think you can also get some value out of it.

Speaker 1: 3:40

Now, remember the 5th of August when the Japan thing kind of blew up. Well, you might think, ah, it's not going to happen again, right? No, no, no, that's not going to happen again, don't worry about that. Well, it might just happen again. So T Rao and the manager who predicted it the last Japan shock on the 5th of August is saying it's going to happen again, and he's saying that Japan is going to keep tightening and therefore the yen is going to increase and therefore the carry trade is going to get blown up once again. So that's a bit of cheerful news there, isn't it? I thought I'd throw that in just to cheer you up, just to cheer you up. But let's get into the actual top 10 things that are going to decide the market until the end of the year, according to Goldman Sachs' top tech trader. And this guy is no fool, otherwise he would not be in that position. I'm not saying he's the nicest human being, but he's probably a very, very smart human being, otherwise he wouldn't be getting there.

Speaker 1: 4:40

Is the chat working? I think it is. I lost a PKK. It does seem a little. I think people are a little bit stiff still from the Labor Day. You know relaxation. So smash the like button. We've got about what any 12% like ratio so far, which is pretty harsh 88% of people watching this are going. What a load of bull this is. Anyway, this is what he says going what a load of bull this is.

Speaker 1: 5:01

Anyway, this is what he says. He says look, item number one to look at is IT, it, of course, tech, right, and he's saying a handful of data points, support things are stabilizing, which is Dell, costco CRM, who also had pretty good results and management was generally upbeat, and which lines up with enterprise tech services, which are doing better than semiconductors in the last two months. And then we've got a huge number of software conferences and events coming up in the coming weeks. We've got CRM and Oracle and Intuit and Crowd and a lot of the tech and software space is gonna be super active going into the end of the tech and software space is going to be super active going into the end of the year. So that's basically what he says we should watch out for. Now we round this up with what he says we should actually be looking at which stocks is actually his favorite. So I will show you that and, of course, give you my perspective on that as well.

Speaker 1: 5:58

Now the next thing is generative AI. What do you think happens to NVIDIA beyond 2025? Are we just going to keep building bigger and bigger and faster and faster data centers? And how much are these hyperscalers? Which is your Microsoft and your Facebook and your Google and your? Are they going to keep spending forever, or is that going to slow down at some point? And that's ultimately what's going to decide the top of this rally. It's literally that amount of spending, which we get to a little bit more detail in just a moment.

Speaker 1: 6:38

And then the second part is how do we feel about the cost of these models? The models are getting better. We use them in my various businesses and it's getting insanely better, I'd say, month by month, like absolute, massive shifts. If you don't use any LLMs yet, seriously, do you are really, really, really you'll be gobsmacked by what it can do. So what's the ROI? At what point do they make money? Right, most of them are more or less free. They are raising money. They're spending money. When do we get to that monetization point? Well, we're going to circle back to that in a moment.

Speaker 1: 7:20

But a big thing everyone's looking at right now is US election. Right, and I mean whatever I say about presidential elections one side gets upset or the other side gets upset. People just are not able to have a conversation about it. But does it actually matter? Well, some people are saying you know, trump win would be good for the stock market. I could see the argument lower taxes, less regulation. It's a typical, classical thing. The market should, in theory, prefer a Republican president. In theory, but does it matter?

Speaker 1: 7:51

So what I've charted here is since 1996, just so you can actually see the data. This is 1996. And each of my line goes through July of that year because I did quarters. So after each line, the next bit was the presidential election. Can you see a pattern? In 96, we went up the following four years In 2000, we went down Very little to do with presidents and not much to do with the dot-com bubble. 2004, we went up 2008, we went down and then up. And then what's that? 2012, we went up 2008, we went down and then up. And then what's that? 2012, we went up 2016, we went up 2020, we went up, and then we had COVID, and now we're up again. So what's the trend there? Honestly isn't really one.

Speaker 1: 8:37

It doesn't really matter much who the Muppet in the White House is or what color he or she wears, and the policies are also largely irrelevant, I mean, unless they're really extreme, like something we haven't seen before but unlikely to happen. So I would worry a lot less about presidential elections and worry a lot more about stocks election. That's what I'm saying. What would happen if Kamala and friends started taxing unrealized gains? I don't think it's the end of the world. I mean. I think it's a stupendously idiotic policy. But the way they're proposing that right now, it would touch almost no one and they would probably find loopholes and I don't think it would really matter. All you would see is they'd have to just cycle their positions in and out a little bit more. That's really all it is. So I don't think it really matters. Honestly, I think it's idiotic, but I think it has a pretty minor impact.

Speaker 1: 9:41

So the two things we had in the earnings season that we've just come out of, and that is we had strong guidance from Uber, from Amazon, doordash and Meta, and then we had softer guides from Expedia and Bookingcom and Airbnb and Pinterest and Snaps we're basically sort of saying we're worried about the consumer and that kind of thing. And now what he's saying is did these guys with the softer earnings, did they just guide conservatively, as in did, they just sandbag us, which might well be true, and that they might therefore come out swinging in the next earnings round, and that's always something to think about when management has been conservative. Are they just being conservative, or is it actually bad right? So I think you have to sort of read between the lines there a little bit. I think there is a reasonable chance things could turn out quite nicely and therefore there could be some more upside in that. But really what it's about is does generative AI make money? Is Meta's AI assistant or CRM's agent force, which is a particularly idiotic name, or the Microsoft co-pilot, which I think is probably a little bit of a smarter name? Are they actually going to make money? Now, microsoft gave us some pretty encouraging data, but we are yet to see what Meta and CRM does. This data is so incredibly important to keep momentum going.

Speaker 1: 11:06

So the only thing I'd really watch out for in the next round of earnings is pretty much these three companies. And what do they say about their co-pilot type AI things? So, oh yeah, like, like, so far you're right. Noto always soundbacks, right, a lot of good managers soundbacks, and this one, yeah, I was almost not going to include this because it's a little complex, but I thought. I thought it's actually probably the one of the highest value things he actually said and he's saying is ai spending crowding out the usual software spending.

Speaker 1: 11:47

Because what's happening is that, this little chart here and it's a bit of a confusing one, I grant you that the blue line are semis okay, the ticker is SOX, which is the semiconductor ETF. The white line can I have a whitish pen? Yeah, so the white line down here that's a really fat pen is software. And what do you see and I've been saying this and screaming this off the rooftops pretty much all year is that software stocks are lagging the AI, the semiconductor stocks, and there is therefore a reasonable argument to be made that software will ultimately benefit from the semiconductor spend. Right, because why are you buying all these GPUs? To make better software. Therefore, the software companies will get higher revenue through their co-pilots or whatever they call them, and therefore software should actually outperform semiconductors to fill this particular gap here in the chat. That gap here is the gap between semiconductors, which are done really, really well, and then software, which is done very, very little. So definitely one to watch, I'd say, is to maybe position a little bit out of the semis.