Speaker 1: 0:00

Felix and Winston here, and there are just four sectors sorry, five sectors that the market is actually bullish on. I'm going to explain to you what they are. You can buy them, but before we do, we need to unwind what is causing the chaos, the drama, the fear on Friday. So we're going to jump straight into that. I'm going to share my screen with you so you can see what I can see, and not just lovely golden retriever noses here. This is the jobs data, both from the government and also from ADP, which is a private company. You can buy shares in it. It's actually a very good business if you ask me Not that you didn't ask me therefore, you shouldn't run out and buy it. And you can see in red here the ADP payrolls and in blue the labor department, and you can see the labor department is always a bit off, but they have something in common they're both falling pretty significantly. So what does that mean? It means the US economy appears to be slowing. At least the jobs market seems to be slowing. So why, then, is unemployment not exploding? Well, to understand that, you need to understand why the supply of labor people who are looking for work is slowing down, and it's not something mainstream media is going to talk about much because apparently it's politically incorrect. Well, here comes me going to put his foot in it. Here we go Native versus foreign-born workers.

Speaker 1: 1:21

I'm sure some people are offended just by the headline, but it is a data set which is very, very telling that this is actually US government policy. So the US government is enforcing if you hadn't noticed immigration laws much, much more strictly. And what is the result? Maybe not the result, but it's what's happening. You're actually creating in the US jobs for native-born workers and you are losing significant number of jobs for foreign-born workers. Now, I'm not saying one is better than the other. There must be some lovely foreign ones and some horrible native ones, but you get the picture right. Some lovely foreign ones and some horrible native ones, but you get the picture right. So what's happening here is the government is intentionally destroying jobs that are held by immigrants, possibly illegal immigrants.

Speaker 1: 2:15

Undocumented workers is apparently the political term for it, politically correct term for it, but I'm not really going for that. If you haven't got papers, you're illegal. It's very simple. If you want to make them legal, make them legal. That's up to you. Anyway, that's actually what's explaining that.

Speaker 1: 2:29

So this catastrophe in data, in my opinion, isn't as significant as some people think. It is actually policy. Why then is Trump firing the head of the BLS, who puts out this data? Well, the BLS data has been bollocks for many years I mean, not just under Trump or under Biden. It's always nonsense. But it allows him to. He actually quite likes the less jobs because it will push the Fed to actually lower rates. So in a sense, he's doing the smart thing. He is tanking the jobs market on paper. He's blaming somebody else for cocking up the data previously and then he fires that person so that it doesn't look like he planned it. I think that's a Trumpism. I think that's the way the man thinks. It's a bit odd, but you know, got him elected.

Speaker 1: 3:27

Now, if you can hear some noise, that's a kitten. Actually it is the mother cat. In fact, she does that, I think, when she can't find one of the kittens or something, she does that. But here is a bit of a warning. August and September are not usually good months in the market. This is August and September, right? This whole column here. So typically it isn't a very good August. Typically it isn't a very good September. Why is that? Well, all the bankers are on holiday, so no one's making any decisions. Nobody. The grownups are around, they're all in Nantucket or Martha's Vineyard or Bahamas, or in Europe, apparently, because you're you know all that stuff. So, yeah, don't have enormous expectations for August, and September is generally a rule based on data.

Speaker 1: 4:12

Now that you know that, the question then becomes well, what do we buy? Well, here is a screenshot from somebody very, very smart. Winston wrote that research. I put out a doc every Sunday to my students of how I see the market in my research and so on, and I share with you here a key part of that, which is bullish sectors like aerospace and defense, write it down.

Speaker 1: 4:34

Biotechnology, write it down gold stocks, sea semiconductors and then utilities, but only the electric ones. They stand out as good industries and sectors and apparently the kittens back there agree. You see that the kittens agree. So how do you then buy these sectors or how do you buy these stocks? There is Tabitha. I'm getting distracted, aren't I, by all the kittens on the screen. Well, there is an easy way and there's a hard way. The harder way it's not actually that hard, but the harder way potentially has more upside. But I'm going to give you the easy way, because most people let's face it are lazy, right. Otherwise Ozympic wouldn't be doing so well. I'm not saying that my audience is obese. Always a good move Offend the audience, felix, so you could get an ETF for each of them.

Speaker 1: 5:25

Now warning, they're not super cheap. They all have relatively high expense ratios, but they are there. Aerospace and Defense you could buy ITA For biotech. You could buy XBI For gold stocks. You could buy GDX that's probably the worst move, I think, gold stocks, but you could think about that. Semiconductors, smh, there are others We'll talk about maybe some individual stocks in a second as well. And then there is a utility ETF, which isn't brilliant because it isn't just the electric utilities, it's sort of a little bit of everything. So therefore, maybe not super brilliant, but gets your exposure up very, very simply to a sector that actually looks good.

Speaker 1: 6:16

Morgan Stanley, the mighty brains at Morgan Stanley, the brightest of them all, with a white, shining noses, they are saying that spending on can you see that? You can't see that, can you? It's the kittens are blocking it. All right, less kittens, more chart. They're saying that spending on essentially chips and a bit of hardware, but it's mostly chips is actually going to go up next year to $445 billion, $512 billion thereafter, $575 billion thereafter. So if you are with Morgan Stanley on this one, then I mean it's stock worth looking at would surely be Nvidia, right? Laggard would be AMD. Now, they might both have a bit of a pullback, but if this spend continues this growth, then it's hard to see how these companies don't make a boatload of money. Yeah, there'll be some other competitors and so on, but at the moment Nvidia owns the space essentially, right, kittens the kittens agree, they're playing with Winston. No, they're playing with a ball. Good, they're a bit mean to Winston. Sometimes he gets bullied.

Speaker 1: 7:22

So what about something else to buy? Well, so what I do mostly on Mondays is I buy stocks. Well, I set them up on Sundays usually, but sort of it happens on Mondays or happens a few days after, depending on how I set it up. I usually split my money in half, so I take one half of the pie and I buy the stocks that I think look absolutely brilliant. I'll give you one, actually putting a video on that later.

Speaker 1: 7:51

I can't remember the ticker. This is in the biotech space. Subscribe if you haven't already. You'll get that video notification later, and to me that tends to outperform massively. But I also have some really good mentors and I kind of learned what to do with that. If you don't know what to do with that, you're probably going to pick the wrong stocks. And then, secondly, I put the other half in some sort of index fund. Why do I do that? Because it keeps my family happy and they worry that if I'm going to lose the plot one day I'm going to buy some crazy stuff. Hasn't happened yet, but it is a possibility that I wouldn't rule out. And if you look at what Goldman Sachs here is putting out, they're saying buy the dip in quality. The drawdown in quality looks that cat is noisier than a Scottish backpack. It's pretty inexpensive.

Speaker 1: 8:44

Quality Now, what's quality? So quality stocks are stocks that have things like high ROIC, that have things like high gross margins. So these are the good businesses. Your Microsoft, your Nvidia, would qualify. Your Coca-Cola would qualify. Probably some pharma companies would qualify would qualify. Uh, probably some pharma companies would qualify.

Speaker 1: 9:10

Um, what's the uh? What's the box store? You have the membership thing in the us. Uh, can't think of. It starts with a c. Somebody put it in the chat, please. I think it starts with the g. You know you pay membership so you can buy wholesale uh, can't think of the bloody name, but that one would probably qualify. And obviously there are a bunch of others high quality stocks with good business models who just make money come what may. That's kind of what that is.

Speaker 1: 9:31

Now how do you buy all those stocks? I think there is a decent ETF to buy for that, which is what I'm looking at is SPHQ, and it attracts exactly that sort of thing. Q stands for quality, so it attracts the more quality stocks. And if you look at from the February highs where that stock is right now, it's actually down, whereas if you look at the S&P from the same February highs, we're up. Did I put that in the right place? We're only up a little bit, 1%. It's not a huge difference. It's not a huge difference. But you see the pullback on Friday which was something like 2.5% on the S&P. Well, we also had a bit of a pullback there. But yeah, it's just. It's a bit safer than the S&P. It's a bit more concentrated towards the better names. I don't think it massively outperforms in the long run. So maybe just buying a cheap VU or something is also a decent thing to do so that's essentially my plan for the day is to buy some sort of ETF and put the rest in the stocks that I'm picking.

Speaker 1: 10:35

Speaking of stocks that we're picking, it's a big, bigly day today for earnings. It was a very big year for tech stocks today and the kittens are excited by it, as you can tell right, that's the mother scrapping with tabitha. Now palantir hymns, mercado libre. Anything else, don't make icons yellow. It's just cruel to people who wear yellow glasses. I feel discriminated against.

Speaker 1: 11:03

Caterpillar be interesting. Amd be interesting. Amd will be interesting. Super Micro Arista tomorrow. I guess Opendoor will matter. Weirdly, do I care about any of the other ones, not particularly Uber, shopify for sure, maybe. Oscar, the Danish fatties, good old MacD, fortinet, duolingo are interesting. Draftkings, I think, are interesting. Jovi are interesting.

Speaker 1: 11:30

So it's a pretty, pretty heavy week, right? What else have we got here? Anything else? Kratos maybe, um, I don't know. I guess Wolf might be one worth watching as well. So, yeah, it's a big week for earnings. Not the really huge names, but the sort of the second to huge names. So the week could turn out one way or the other depending on these numbers, and so far the earnings have been very, very good the best earnings beat in four years. So I wouldn't count this rally out yet, but I would also be careful and cautious because there's no point in buying stuff that's about to collapse. So there is my wisdom for the day, and you might be wondering why this isn't life.

Speaker 1: 12:11

Um, one of my kittens not this one one of my 18 year old kittens is um, unfortunately in her sort of last days, weeks or something with us. So I'm gonna spend a lot of time with her um, because she's very, very sweet little creature and, yeah, it sucks when they don't live as long as us. It really does. So I'm lucky I've got these guys to cheer me up, but yeah, it needs cheering up. It's Cholula, by the way. I'm sure a lot of you have seen her on the channel Our chief financial analyst.

Speaker 1: 12:45

She's one of the brightest little things, um, sweetest kitten really ever, just like complete teddy bear and has been for 18 years plus never got over her sister passing away last year, unfortunately, despite. I mean, we really do everything in terms of supplements and homeopathy and um got an amazing energy healer who's helped her tremendously. But um, at the end, it's, it's a will, isn't it? It's a will to live, and I think her will to be with her is stronger than to be where she is at present. So there we are. I wish you a beautiful day and, um, I hope to see you live tomorrow. Take care.