Speaker 1: 0:00

Margin debt just hit a record $1 trillion. Now the market looks solid, don't get me wrong, but imagine a crowded bridge. It looks solid, but too much weight can make it sway. High margin debt is that extra weight, and when only a few big stocks lead the entire market, the market can look strong while most stocks lag. When leverage is high, drops can turn into fast slides. Margin calls don't ask. They force sales and if prices fall, brokers can force people to sell to cover loans. That pushes prices down more and the selling begets more selling. It's like a row of dominoes. Once the first one tips, it's all right, and this is why small dips can become sharp drops during high leverage times.

Speaker 1: 0:53

This isn't a doom and gloom video. My goal isn't to strike fear into your hearts. My promise to you is this In the next 20 minutes, I'll give you a simple playbook how to protect your money now and the signals I use to switch from defense to offense. Clear steps you can follow this week. Plain rules you can write down on one page. No jargon, just what to watch and what to do.

Speaker 1: 1:17

I'm Felix Preen. I'm a former investor and banker. I'm now an educator because I founded the Goat Academy. We have over 20,000 students. I'm also the co-founder of Trade Vision, where we analyze and make data available to you that you didn't even know existed. I translate complex ideas into simple rules anyone can follow. I focus on risk first, then returns, and you will leave with a clear checklist today. Now I want to be very clear. Any camera shaking is caused by these little terrorists. In my house We've got five of them. But, in all seriousness, this is education, not individualized advice. You are the CEO of your portfolio. You got to know the skills. That's what my goal is to give you, hedda.

Speaker 1: 1:59

Let's do a quick reality check of where we are in the market right now. What's actually driving the market? Well, price stock price that is tends to follow liquidity. When the Fed cuts rates, borrowing gets cheaper and risky assets can get support and yes, the Fed has just cut rates. So money and credit are like oxygen for the market. The more oxygen, the easier it is to run for the market. Less oxygen, well, you slow down. So you want to make sure you're watching the tide, not just the boats. The tide is liquidity.

Speaker 1: 2:35

Now, the market right now is up about 14% this year, which is pretty exciting, the Nasdaq's up about 17% and the VIX, which is the fear, is at pretty low levels and it lulls people into taking more risk than they realize. But under the surface, breadth is weak, which means that if you were counting all the stocks in the S&P 500 as equally important, you'd have a pretty crummy market Because only a couple of giants are carrying this entire market. It's a bit like having a sports team where two players score all the points, the rest of the team bloody, useless. It's wonderful, but what if one of those players gets hurt? And the economy? Well, inflation is still pretty lofty at 3%, you know hurt. And the economy? Well, inflation is still pretty lofty at 3%. You know, governments always lie to you. I mean seasonally adjust data. So there is inflation up, unemployment is rising and, yes, gdp growth is growing, but then the US is running the biggest deficit in the history of the country outside of World War II, so that GDP growth is largely driven by government spending and therefore debt. The consumer well, they're not that happy. They're still concerned about tariffs, they're not as confident as they once were and, yeah, politics play a big part of that.

Speaker 1: 4:05

But the calm surface hides the choppy water below and your job as an investor is to plan for what ifs. Not just what is, because guess what? Markets become tumultuous, crashy when nobody expects it. But the concentration, as in the big tech stocks leading the whole rally, is only half the story. Leverage is the real risk. Margin debt of $1.6 trillion means that every Tom, dick and Harry is investing in stocks with borrowed money. It's up 33% this year.

Speaker 1: 4:44

Now what happens to margins when stocks drop? So say, the price of stock drops? What happens? Well, you get a little thing called margin call. It means your broker tells you you've got less than 24 hours sometimes even less than that to either put extra cash into your brokerage, which most people don't have, or we will sell your stocks. Now, when they sell your stocks, guess what happens? Price drops, drops further, which leads to more margin cords, and it leads to this vicious cycle of forced selling which pushes prices down and down, and down, and down and down, and then, on top of that, we've got one of the craziest things ever, and I'm an options trader. It's an amazing thing if you understand how it works.

Speaker 1: 5:36

But these zero DTE options they are same-day options, massive leverage built in, accessible now to everybody out there who doesn't know how it works Well. They can speed up the moves on those big days. They're like short fuses. They can make prices move faster when traders rush into hedge. And if you don't fully understand the risks, well, don't touch zero DTE options. It's a trap for non-experts. You know what the other trap is? Leveraged ETFs. Same problem In choppy markets they lose money.

Speaker 1: 6:12

If you don't understand that, please stop buying them in Google. But a choppy path can also bring returns, even if prices look like they're not moving all that much. But if you don't know how it loses money, just don't buy it. And what are we looking at in terms of actual sectors this year? Well, industrials still look pretty good. Tech still looks pretty good. Utilities which is usually a warning sign we're getting more defensive looks pretty good. But that actually comes from AI. Once again, ai driving the whole energy demand.

Speaker 1: 6:45

Now, before I run you through the defense first playbook, I want to give you something far more valuable than what we have time for here in 20 minutes. I want you to learn the lowest hanging fruit of how to make more money, which is not to lose money, both on winners, because what people do is they have something that goes up 100% and they don't sell it, or they sold it at 20% up and then it goes up 100%, so they miss out on the gain. And then for the losers, they never sell those. They hold on to them until death. Do us part, which is like the worst thing you could ever possibly do. So I'm going to teach you literally when to sell, not because it's sexy, but it's the lowest hanging fruit. If you want to improve your outcomes and I know this from the thousands of students whose portfolios I've looked over If you want to learn that, you can join me on Thursday at phoenixfriendsorg slash training. That's going to be live, about an hour and a half, maybe two hours. I'll walk you through that. I'll literally give you the playbook of how we do that. I even give you a workbook if you show up. But what do you want to do right now is the following, in my humble opinion Check how big your positions are.

Speaker 1: 7:59

Are the positions so that you can sleep? Smart money, wall Street risks, risks maximum 1% to 2%. That doesn't mean the position can't be bigger than that, but the risk has to be managed to 1% to 2%. That's really the key thing here. So check whether or not your portfolio corresponds with that, I would also upgrade the quality of the stocks that I own Strong balance sheets, steady cash flow and avoid companies that need perfect execution to still keep going up, because perfect execution is one of those things.

Speaker 1: 8:34

It's a bit like, you know, immaculate conception. It's a nice concept but seems a little hard to do in reality. And then we want to always hedge a little bit right. We've been going into gold and silver for weeks as insurance and also because it's so bloody profitable. If you've been watching my channel, you'll see me talk about quite a lot of gold companies, for example, those are never sponsored, by the way. You will never find a single sponsored mention of any company on this channel, ever. That is a promise.

Speaker 1: 9:03

But if you're holding physical gold, that's getting a little bit more dangerous, isn't it In a lot of places in the world where the world is getting a more dangerous place? So sometimes exposure to gold can also be a good thing. There are gold miners, there are gold ETF certificates all sorts of stuff that could be also something that might work better than having to sleep with it under your pillow. But the real needle mover is disaster prevention. Stops set on all your broker and all your stocks before you buy them. Stop averaging down blindly on stocks. It's usually a very bad idea and you want to have absolutely zero leverage in your portfolio. That means no leveraged ETFs, absolutely none and ideally, a little bit of cash in your portfolio too, so you can take advantage of those opportunities when they come.

Speaker 1: 9:53

Now, defense doesn't mean doing nothing. We want to wait for high probability setups, so let me give you some. You want to watch out for a bunch of things, and this is going to be a lot of information in a short period of time, so take notes. M2, what's M2? M2 is basically money. How much money is the government printing? If they print more, stocks are likely to go up. You want to look at credit conditions and general financial conditions. At the moment, those are looking good. So it's not like we want to pull back. It's not like the end is near. We want to take advantage of this rally government-fueled rally, money-printing-fueled rally but we also want to understand that it's going to cause inflation and therefore we want to position ourselves accordingly.

Speaker 1: 10:35

But do watch the breadth. How many of the S&P stocks are actually going up? How many are actually going down and going nowhere? That tells you a little bit about the risk and watch for the VIX. Basically what I always say a VIX below 20. Is good. Above that, so greater than 20, you want to worry a little bit. It's a good thing to worry a little bit, and if we get too many Fed cuts, you better be worried about the economy, because that's the only reason the Fed cuts rates because they start to get worried about the economy. So then you're going to ask yourself well, what sectors would get really hit hard if the economy were to slow down? Right, what's the sort of stuff that I buy that I would probably not buy? Well, that's exactly what you want to avoid. Like car manufacturers, for example, people can put that one up pretty quickly. So my goal for you is to have a risk framework and we're going to break this down in a really specific way, much, much easier tailored to your portfolio.

Speaker 1: 11:29

If you join me on Thursday at phoenixfenceorg slash training, the one thing I hope you take away from the whole thing would be no single idea should sink the ship. Secondly, decide, sell rules before you buy. And I say write checklists to cut emotions. I would go one further. I would say automate the whole bloody thing. And again, I'll teach you that on Thursday if you decide to join me at phoenixfencilorg slash training.

Speaker 1: 11:52

But if you want to, just if you enjoy this, if you want to stay on top of the market, well, there are a couple of things on the screen here that you might want to actually watch out for. Only a few indicators you can watch, but just don't chase the peaks. Let the reset that's inevitably going to come give you better entry points and pick the shovel sellers in a gold rush Not only the guys digging for gold in a gold rush, not only the guys digging for gold. Quality and selective momentum tend to do very well in markets like this. Let the money of Wall Street tell you what to buy. We follow the market. We don't marry a stock. We date the stock. That's basically it. Marry your wife or your girlfriend, but do not marry a stock. We have no affiliation for any particular company. We don't really care where our money is coming from. At the end of the day, it is just money. Money is there as an opportunity to make your life better. It isn't there. So you become part of the Tesla club or the Palantir club or whatever If you want to keep an eye on the margin debt, because that really concerns me.

Speaker 1: 12:55

Finra puts that out. You want to find that. What do you do? Go into Google, type in FINRA margin debt and there it is and they'll tell you right. They'll tell you how much is going up. The more that goes up. Look last year. This time last year we were at 800 billion. We're now at almost 1.1 trillion. That's a pretty scary thing. So the more that goes up, the more volatile, the biglier the next down move will be and there'll always be a down move. There's a 10% drop every other year, the 25% every five years or something like that. So you want to be prepared for those. But in the meantime, your individual stocks might be doing that, and if they are and you're not comfortable with that, then what you need is what you need to know when to sell, lock in the profits, lock in the home runs and sell the losers before they become big losers that actually impact you.

Speaker 1: 13:51

If you want to come and join and learn that with me, my friends, then join me at felixfriendsorg slash training and we're going to go deep on that one. Still beginner friendly, by the way. It's probably a lot easier than this particular video here, because I really tried to get a lot of the stuff in here. Keep it simple for everybody, but also, if you're already more experienced, give you the real nuggets and the real data indicators on the screen here. So that's always. The balance with our community is, we teach people at all levels, from absolute zero beginners to people who are at a really, really high level. Now, my goal is for everybody to get to a level where you are skilled, and it isn't rocket science. People on Wall Street are not smarter than you, but they have better skills than you. I'll give you those skills if you let me. If you got some value out of this, my friends, share it with a friend. No-transcript.