Text Us: (213) 458-5997
  • Home
  • All Posts
  • Why Elon Musk Sold $40B Worth of Tesla Stock | Twitter Censorship Explained

What’s up guys in this podcast, James and I discussed the Elon Musk deal, the overall market and some current world events, we also go over some steps to use real world events to identify setups in the current market conditions. So stick around, listen up, because you’re not gonna want to miss this one.

Watch

Listen

James 0:17
What’s going on guys, we’re back with another episode of the after hours Podcast. Today, we’re going to talk about Elon Musk, who has been a pretty much a frequent in the news lately. As of recently, he sold a colossal ton of Tesla shares, while the stock has also been collapsing, and I kind of that’s going to be the main main focus right now. So Harry, you want to kind of lead us off into that?

Harry 0:44
Yeah. So first of all, Elon Musk paid around 44 billion for Twitter. Grossly, grossly overpaid. You know. And that was a controversy in itself, because there were a lot of people on the left, who were upset about kind of the censorship being gone and stuff like that. And now that he’s bought it, he has been releasing daily, these Twitter files about what is going on behind the scenes, there were reports that he was releasing that the Biden administration was in contact with Twitter, almost directly all the time, censoring people’s tweets. You know, like, if they didn’t like a tweet, they would text you or not Elon, but they would text the CEOs and people in Twitter and say, Hey, like, this isn’t good for us, can you please remove it? So there have been a lot of controversies like that, as well as there were some stuff about Donald Trump, and stuff like that in the banning of his account and ways that they did it and suspensions. So I mean, it is pretty crazy, considering we had a sitting president in the White House at that time. And people on the other side would text and say, Can we get this removed? So it is a little bit nuts to me thinking? You know, when you hear about it now, you always kind of think, Oh, well, Biden was in power. So it kind of makes sense that they would talk with these social media giants. But Trump was president at the time. So when you have a sitting president at the time and a different political party, messaging, a giant social media platform, trying to get a sitting president out. That’s why I think that the controversy has really come. And you know, it’s really crazy, because I’m just looking here, like, Twitter has definitely struggled to maintain any steady profit, you know, they’ve have 13 billion in debt. You know, that’s just, it’s literally insane. You know, Twitter had just 1.7 billion in debt, but now it will be on the hook for 1.2 billion in interest payments each year. So I mean, there is a lot of, you know, just like, as far as business deals go, this was a pretty bad one. But I think, you know, yeah, he, he’s, he’s been in a situation. And also, I just want to talk about that, you know, in, in, so in, like, near kind of August, he sold $6.9 billion worth of Tesla stock. And now in November, he sold another 3.9 5 billion. And like, a lot of people are saying, like, yeah, it’s put massive pressure on Tesla stock. And also another situation that, in my opinion, is pretty crazy, is just the fact that, you know, Tesla is getting punished for this. And, you know, he grossly overpaid. And now we’re kind of in this situation where he is pretty stuck, just kind of due to like, almost like a joke on Twitter that ended up somehow becoming real, it’s like a twilight situation. And this is kind of where we’re at who’s just selling Tesla to kind of fund his business. And one more thing is that what I read is that in San Francisco on their office, they were a little bit behind on rent as well. So, you know, as when those reports started to come out, the Tesla stock started selling, and you know, he just was on the hook to pay for a lot of stuff. So, yeah, it’s crazy.

The Problem With the Twitter Acquisition

James 4:30
So, so I have a few things. So I think, I think the problem with the Twitter acquisition was I think Elon Musk was kind of front the front of the movement of this freedom of speech idea, and he loves Twitter you want is always a platform for himself and if anything, it’s only benefited him and I think that he really liked the concept of this town square where people could come in, it’s what he calls it to, to come to beat have a have intellectual conversations with one another. And I think that he had intentions of potentially buying Twitter when he made the joke. I think that he realised quickly that I mean, listen, he’s a smart guy. And when he made when he tweeted that, he could have easily said, like Not through with an offer, like he didn’t have to make an actual offer, just because he tweeted it. He doesn’t have to do that, right. But it kind of sparked this whole thing. And I think it got his brain moving. I think he realised quickly that he did overpay for Twitter, because I think at the same time, the war in Ukraine was kind of starting. And I think that he realised that the stock market was probably going to come down. He probably could have paid like 10 billion or maybe 20 billion if he just waited a couple months. And I think he’s one of the smartest guys on the planet. I think he knows that. It If you followed up with Tesla for a long time, he is said for a very, very, very long time that that Tesla was highly overvalued as a stock, right? He’s always said it like when when Tesla was trading at $1,000 a share, like pre split. Like, he was always saying like, we are highly overvalued, you know, and it’s not a bad thing. He’s they are a car company. Yeah. So I think the thing is like, I think Elon sees the playing field. And I think he understood like, I don’t really ever think he’s making a move, that he doesn’t understand what’s going to come next. I think he’s boxed himself in a little bit here. Because yes, Twitter, he says it Twitter has not been making money for a very long time, right. But I almost feel like in this scenario, he has taken on the the, the burden of like this company, and like maybe losing money himself personally, to turn it into something great. I would bet a large sum of money that Tesla will end up buying Twitter. i That’s honestly a theory that I really have. And I mean, Twitter is a private company now. And I think that’s what’s gonna end up happening. Because I think I think in a whole, Elon has this giant idea of a company that will be sustainable energy cars, speech, you know, able to connect with each other, and all of that. So I do feel like he has a direction that is going I think it’s a little using for guys like us to see the playing field because I I’ve met guys who have worked with Elon Musk. And they say that his brain works at a level that just we can’t compute. You know, and if you follow Elon in the past, yes, he’s selling Tesla shares to pay for this. He’s personally taking a massive wealth hit. And if you follow guys like Barry Ritholtz on Twitter, who is very smart guy, but says the same thing we’re watching guy blow up tons of his personal net worth, which might be the largest like slope of net worth on a single individual in history. That is not something that’s uncommon to Elon Musk, he, when he sold his first company, he then used all of his profits to go into PayPal, when he sold all when he sold PayPal, he has all of those profits to go into solar city. I mean, I’m, I’m sorry, into SpaceX and Tesla. And, you know, he’s gone from being a wealthy man to a non wealthy man on, you know, overnight before, and not saying that that will happen this time. But when he goes into something, he goes full force and full into it. And if I’m gonna bet my life on somebody, it’s probably going to be Elon Musk to be honest.

Controversy Around Elon Musk

Harry 8:35
Yeah. And I also think just from, you know, from a standpoint like that, you know, there has been a lot of controversy, you know, just just all over, like, I’ve never seen this much negative attention in a long time. You know, as far as business dealings go, you know, like, this has been split. Now you have, like Congress, maybe trying to get him to testify, you know, because they’re mad, because, you know, he’s more, you know, right wing. And it’s interesting, because, like, I don’t even know if he’s necessarily right wing, like, it seems like right wing nowadays is that you want free speech, and that you want people to have different types of opinions. And that, you know, it just seems like that to me. But I do think like, he’s, it’s not going to be an easy one for him. And, and what I think is, as wild too, is that, you know, the White House, like, they don’t even mention Tesla at all. Like, they say, oh, you know, there’s GM has been making amazing strides in the electric car market. And they don’t even come close to Tesla, you know, and Tesla’s an American company, like you should be bragging saying, Wow, Tesla’s doing so great. Like we’re selling these cars are going all over the world. Like there’s Tesla’s now probably in every city, but instead they’re like, well, GM has been making good strides. But that doesn’t really make sense to me. You know, despite, you know, Elon Musk not liking you, it doesn’t mean that you’ve just completely ignore him. Like, I feel like that makes a situation a lot worse.

James 10:18
Yeah, I think the problem is that, first of all, with these other car companies, there’s never been an individual. Like, since someone like Henry Ford, who like actually ran his car company and wasn’t icon and like face of a company, there hasn’t really been something like that in a very long time, especially connected to so much personal wealth. And I think the problem is that Elon Musk poses a threat to to governments, because he almost has attained a wealth level. I mean, he could have, without this Twitter acquisition, he almost was going to attain a wealth level of that of probably a trillionaire, which is ridiculous to even think about, but that’s probably the direction he was heading. And at some point, there are people that almost are richer than when not richer, monetary wise, but like, wealthier than governments in the fact that like, he’s so rich, he could just leave and just do whatever, and people trust him. And I think that he poses a real threat to them with this twitter thing, because he’s a lot. He basically is saying, like, not even just government to news to like, he’s almost saying like, you know, you don’t have to watch Fox, you don’t have to watch CNN, you come to this personal town square, and you get accurate information that will be you know, treated with respect by each other. And you can debate and you can have this, this, this is how it should be. So I don’t think governments love that concept. Because government’s new sources, a lot of them kind of run on the concept of fear. And like news mongering and like all that fear mongering and like news, just oversaturation and all that stuff. So I think a lot of people don’t like that. And I think that, you know, it’s funny when I talk to people who aren’t too familiar with the, with him, and like his situation, most people jumped to saying, like, they don’t like Elon Musk, without actually understanding what he’s doing. You know, I mean, like, oh, he was at the World Cup in Qatar, you know, with the Saudis, and like Jared Kushner, and like, all this stuff, and I think people jump to, to all these crazy conclusions and all that stuff. And, you know, I don’t know, I personally am a fan of him, you know, I if I’m wrong, I’m wrong. I think he has good intention. I think he’s really smart. And I think that all in all, like if you are a Tesla, Tesla shareholder, or SpaceX, like you’d like SpaceX like it, and you know, they’re not privately public like that. But you’re you’re believing in Elon Musk, you’re believing in the guy, not the company. So that’s kind of my whole take on on his his positions on on these companies right now.

The Media’s Programming of People

Harry 12:47
yeah, no, I mean, same here , I think that I’m definitely cheering him on. And I definitely feel like the media has kind of been programming people like, certainly, like they did with Trump. Where like, with Trump, it was like, Orange Man bad, you know, and now it’s like Elon Musk bad, like, you know, so I definitely see the same pattern. I just hope that he can kind of, like, get through it and manage it. Because, you know, I mean, to me, like, I know, a lot of people have been, like, trashing Elon and stuff like that. But to me, I think, you know, it’s definitely important to, to have someone like him, especially. He’s not, he’s more like, moderate, like you said, he voted Democrat, like, for a long time, you know, but he just can’t anymore because he sees the way that the situation is going. And like, I think that’s where a lot how a lot of us feel as well, where it’s like, you know, I can’t vote in the States. But, you know, I see, you know, two parties on either side, very, very extreme. But, you know, you have to look like what’s the lesser of the two evils, you know, like long term sustainability. As far as spending goes, as far as, you know, management goes, as far as culture goes, you know, I’ve definitely probably be leaning more towards Elon Musk than some of these other characters right now.

James 14:10
Didn’t and like, now he’s getting attacked by by senators like Elizabeth Warren and him kind of had a little spat on Twitter. And he she basically was asking, like, Have people been affected by it? Like, it has to have Tesla shareholders been affected by Elon Musk, in his acquisition of Twitter? And the reality is like, when when he bought Twitter, right, I mean, the market was doing decently well. We hadn’t really started this like massive collapse that we have yet. Like, obviously, we’re coming down, but it wasn’t as drastic. So reality is like the stock market is coming down. There’s not a single stock, like in the s&p that is performing like incredibly well, this year. So Tesla stock was coming down regardless. And then as a shareholder, you kind of had to know that his attention was going to shift so you had ample opportunity to sell your stock had ample opportunity to get out. And again, same Same thing I, one of my largest holdings in my personal portfolio is Apple, Apple’s gotten clobbered, right? I mean, we’re trading in the 130 straight now like it, every single stock of every single high performing company has come down. So I can’t stand this, like this narrative now that like, things are getting affected. I think Elon Musk probably has the biggest bandwidth of any single human being. So I don’t think for a second, he’s allowing Tesla to run to the ground or anything like that. And I just again, I’ll never understand them, and I’ll never understand the hatred towards towards a guy who is a building, you know, cars for sustainable energy. And I mean, with renewable energy, solar panels, trying to get us to space and cares about free speech. I mean, I, I just don’t understand it. It drives me nuts. Again, I don’t think any single person on this planet is perfect. And maybe you know, he, he is the richest guy in the world. And so maybe he does some shit for profit. But you know, what, the end of the day, I don’t see other people doing it. So it’s easy to throw stones, right? But it just drives me nuts, man, and just further drives are what we always talk about with how people nowadays are just way too obsessed with like, everything that they can’t control and like people they hate and all this shit. It just drives me crazy, you know

Elon Musk and the Stock Price of Tesla

Harry 16:14
Yeah, yeah. And I also think Elon Musk definitely had a little bit to do with stock price coming down of Tesla. But, you know, that’s, that’s just life, like when you when you sign a deal. And you use Tesla, as like collateral. As far as like Tesla stock is tied to a couple different things to number one, they bought a shit ton of Bitcoin? I don’t know if they still own that or not. But, you know, for a while, it was like big bitcoins going up. So, so so it’s Tesla. And then now it’s kind of tied to the overall market. And as well, you know, Elon Musk is on the ask once in a while, fuckin absolutely hammering them. So there’s that, which I mean, like, at the end of the day, like, when you own a stock, and you own a lot of it, you have the right to sell it off, you know, or you, you know, despite you being in a company or not, it’s not illegal to sell your stock. And also, I’m sure he put Tesla running on autopilot. You know, the top engineers, the top people in America are working for that company right now. There’s no way that that’s not on autopilot. So I think, for me, I just, you know, I really think that, you know, as far as the overall company goes, like, not the stock price, it’s fine. As far as the stock price goes, though, you know, it’s still pretty high. You know, like, I mean, yes, it’s trading at like, 100, or whatever dollars now. But there used to be, like, 1000, you know, pre split. So, this baby is pretty high.

James 17:53
Yeah, no, I don’t know. I just, like I said, we could go on for hours kind of on the Elon Musk debate. I just, I think either you choose to believe in the man behind the machine, or you don’t, you know, and you know, and you don’t have people don’t have to stay on Twitter. I’m so tired of seeing the tweets that are like, I’m leaving Twitter, I’m leaving Twitter. Like, you don’t have to stay on Twitter. You don’t have to pay the $8 a month or whatever, to be a verified user. Like, you don’t have to do any of that. You know, but again, I do I choose to believe it. I drive a Tesla. So I, I’m the same way. I like the guy. And I think that, sure, maybe he’s in a corner right now. But I think I choose to believe he’s gonna box his way out of it.

Harry 18:34
what did you think of the Twitter blew? Just real quick?

James 18:38
Like the verification thing?

Harry 18:40
Yeah.

James 18:41
You know I liked the concept. I mean, personally, I did pay for it, whatever it is, it’s like eight bucks a month or something. I think it’s a little, it’s a little funny, because it kind of just like anyone who was verified before it kind of just, like, takes away from that. And like, I think that it’s like, it almost be like, if you went on Instagram and just made everyone verified, like it would like, it almost like ruins that that idea. But at the same time, I kind of like it. It’s because it’s like, we’re getting rid of the bullshit, right? We’re making sure that there’s actual human beings behind the computer, and not some bot. I mean, like, Twitter got to the point where it, it almost got obnoxious. I would, I would put out a tweet. And just random people be like, buy this, this crypto, you know, monkey coin and I’m like, the fuck are we thought like what happened? And I like what he’s doing with that concept. I think it’s it’s very green. I think it’s very new and it has a lot that they have to do. I think he’s he’s posing around ideas that only verified humans can actually place votes. So only people with Twitter blue can vote on the polls that he puts out like, he’s interesting because he puts out polls and he actually abides by them. Like he’ll say, like, should like he had the whole Doxxing issue, which is a whole nother thing that we skipped over but the Doxxing issue With the guy tracking his jet, and he’s like, should I should I unsuspend? This guy? They voted yesterday. He’s like, okay, he’s unsuspended. Like, I, I like this concept. I like the ideas. I do want to touch on that real quick, in my opinion, and the fact that people were upset that he didn’t like someone tracking his personal whereabouts, where he has kids, children, all of that I thought was ridiculous. I think it’s insane. I think that if I was stalking a celebrity, like Justin Bieber, about his whereabouts with his wife, I think I would probably go to jail or be put on put on a watch list. So I think he’s not the president. He’s not a world leader. You know, I just I think it was crazy to you that drove me absolutely insane

Should Elon Step Down From Twitter

Harry 20:44
Ya know, and I think another thing that Elon actually put out over the weekend, I believe was, he said, Should I step down from Twitter? And overwhelmingly, people actually voted. Yes.

James 20:59
Which could have been a bot driven vote that that is the one thing it’s a little, a little suspect. And that’s why I think that concept came out of should only verified users be able to vote. Yeah. No, but he’s stepped down. He did say once he finds a credible See, dude, no CEO in their right mind wants to take over Twitter right now or wants to work at Twitter. They are they are a sinking ship. It is He says it they have not been making money for a long time. They’re under immense scrutiny. And so is he who the fuck is gonna take that job? ,

Harry 21:31
yeah, no, I’m just I’m just like, looking at this. Right now. I just decided to like scroll through his feed, because I’m like, Okay, why not? You know, he’s like, should Congress approve the 1.7 trillion ominous spending? Bill 71%. Vote No. And then he says, I’m in favour of small a small spending bill to keep things running. But common sense suggests that it should be the least amount required through the holidays. Yep. railroading through a giant spending bill like that, that almost no one has read is unlikely to be in the best interest of the people, which is very interesting.

James 22:09
I haven’t read some of the details of the spending bill, read some of the key points on where the money’s going. And as as a country that I just came from, I was just sitting in New York City as a country dealing with crazy homelessness. Safe people push savings of the middle class dwindling. Credit card usage, starting to pile up delinquencies starting to pile up. We’re sending more money to foreign countries, we’re sending more money to other people. And we’re not helping ourselves. So the American people on Twitter spoke, they said, We don’t want this. We don’t want to keep spending money that truly we really don’t have. But like Elon said, or like I forget who commented on I actually think it was a QTR. There. He’s it’s like they’re not no one’s gonna listen anyways, like the American It’s this. It’s not really a democracy that way.

Harry 22:59
Yeah. And like, you know, who said should I stepped down as head of Twitter, it was 57 to 43 votes, or 57% to 43%. And final votes was 17. Mil. And then he said, down below, I will resign as CEO, as soon as I find someone foolish enough to take the job. After that, I will just run software and server teams. And it’s interesting because Mr. Beast also commented on that. He’s like, if you keep doing stuff like this, yes, it was basically like the promotion of Instagram, the promotion of Facebook, the promotion of all those other social media platforms that they released over the weekend as well, those kinds of terms of service and violations of the policy. So to me, it was quite interesting how, you know, different people all over had been kind of weighing in on this and saying, Well, if you’re going to do stuff like this, you know, you should step down. And if you’re going to kind of, you know, keep trucking along on this kind of path, you should do this or that. So, to me, it’s very interesting that you have someone like Mr. Beast as well, weighing in on this, you know, who wasn’t necessarily too too active on Twitter before Elon Musk took over, he now seems to kind of be trying to come up with ideas and stuff like that. So, to me, it’s interesting

Running a Small Business Is Hard

James 24:12
Dude I feel some people too, And if you’ve never run a business Big or small, I don’t think a lot of people have as much of an understanding. Like I run a small business, and do you know, every single day, every single day, pretty much in the last 10 years that I’ve had it, someone gives me someone’s like, Oh, you guys should do this. You should do this. This is what you should do. Okay. It is really easy from the outside to say this is what you should do. When you’re the decision maker. And you’re looking at the realist the realist thickness or you know, you’re just trying to sift through your own ideas in your own head. It’s, it’s really hard. It is really hard to do that. So Elon Musk, what single man, entity person is taking the ideas getting ideas. by the droves, millions of people are tweeting at him every day Do this, do this do this fucking hard that is like sick. And you know what some ideas. I have ideas all the time that I implement in my business, and sometimes they flop. Yeah, sometimes it’s not a great idea. Like, I don’t necessarily agree with his idea on the terms of usage. And with the whole, you can’t promote your Instagram or anything like that. I mean, I don’t have any reason to do that. But I know businesses that operate there link trees, all that I don’t necessarily agree. And you know what, I think that idea will probably be backtracked, or revised or edited. But it is really hard every single day to make a decision and have them hit 100% of the time, I’ve had a million ideas that have flopped, and I’ll have a million more. So this this, this attack on everything he says and tweets, to me is ridiculous. Again, it’s a town square. It’s where you give ideas and you talk about it. But he’s not going to be perfect.

Harry 25:54
No, no, I completely agree. Maybe we can transition to kind of like the overall market and what’s kind of been going on there because that has also been kind of the bigger story. Yeah. We had spy try and break 400 Both it for a little bit. And then, you know, we’ve kind of pivoted back down. What do you think is gonna happen? I’ll say what I think but

James 26:18
I think we’re gonna head a lot lower. I mean, I again, we’ve I’ve said this in the past, I think some some stocks have bottomed. I think that there’s a few that will hold but I do think the least spine everything like I’m getting this, this feeling we’re going lower. People keep saying and I’ve noticed in the past, same thing, right, the VIX has really yet to spike. I think that the VIX has yet spiked because nothing has happened that we’re not understanding. There’s there’s nothing that’s going to that we’re we’re not getting scared by anything like the VIX usually spikes when something colossal happens, which we talked about in the last podcast, when something finally breaks, I think we’ll see the spike. You know, like a crazy company like an Enron or, you know, crazy company going belly up or something like that. That’s shots, Max fear and Max pain, then we’ll see it. But until that I think we’re gonna slow bleed, and I think it’s gonna get worse into 23. When we really, I mean, it’s, I think it’s foolish to admit that we’re not in a deep recession, and it’s not going to continue. I think when the numbers come out from the holidays, on spending, I think they’re going to be incredibly low. I think revenues are going to miss I think earnings are going to miss on a lot of the major companies. Again, we’ve talked, we have guys like Jeff Bezos saying, don’t buy a fucking TV right now. Don’t do this don’t do that. Elon Musk is tweeting, you know, if the if the Federal Reserve keeps raising rates, we’re gonna go into a really harsh recession, if not worse, a depression. So I really think that’s what’s kind of down the pipe in 23.

Harry 27:55
Yeah, for me, I also agree with you, I definitely see it going a lot lower. Can you imagine though, the company that goes belly up with Tesla and Twitter. I would delete everything. Oh, my God, bro. Just funny.

James 28:09
It’s not out of this world out. So Alex and I were at lunch on on Saturday, we said that we’re like, what if it’s fucking Elon Musk that breaks? Like, I would cry? I would cry?

Harry 28:20
Yeah, one of that’s where that they try and squeeze them out. And they tried to fuck them. And they they keep trying, you know? Also, that was just something that came to my head because you were like, one company that’s gonna break. I’m like, shit, we’re doing an entire podcast on Elon Musk and Tesla.

James 28:36
Delete this podcast, if he goes bankrupt

The Fed and the Fed Who Lost to Inflation

Harry 28:38
Yeah, hopefully we don’t speak it into existence. Yeah, I think that for me, I think the Fed is going to keep going until they can’t go anymore. you say all the time. I think every podcast like Jerome Powell does not want to be the Fed, who lost to inflation. So when ego gets in the way ahead of kind of facts and stuff like that. The thing is, is that, like, if you want to raise rates, you should have done it in COVID, you know, like, just the way they went about things is completely wrong. Like, if you’re a fed and you’re making policy, your policies are not going to come into effect right away, like you’re not going to be able to see data from your policies coming in right away. So you know, you do something, it’s not going to be shown for three or four months, you know, you’re not going to see how good or how bad, what you’ve done is for three to four months, and in COVID, we had, you know, record high inflation. We had housing prices through the roof, we had all these things, consumer spending way, way, way up. Like all those things are not even close to what was being fed to us, considering it was being fed to us that, oh, we’re in a depression. I know times are tough. I know things are hard right now, when that seems to me to be like a small minority of people like when I talked to people about COVID The only people that were really really struggling Were people like you who were boxed out by these restrictions, like you couldn’t cut hair, like, how are you supposed to be able to manage and work and pay your rent and shit like that? Because you were boxed out by those restrictions. So the only people who were really suffering, were the people who the government chose to suffer. You know, so I think that’s one thing, that’s important because the majority of people, like teachers could work for Home. Nurses, definitely, they have to go to hospital, obviously. But you know, a firefighter like they’re not doing things virtually, you know, they’re going out and they’re, they’re earning a living. So there are a lot of people who were still working, like the world still ran, it just either ran from home, or a, you know, it, it ran from people coming in, or you weren’t working at all, because the government restricted you out, you know, so I printed all this money drove inflation through the roof. And you know, it’s so funny, because you look at the people in Canada, and the people in the United States, and they’re saying, Oh, well, we’re not going to raise rates till 2023. Well, they’ve already started, you know, at the end of 2022. You know, I really do think that, you know, it’s probably orchestrated, like, there’s no way that they don’t know what they’re doing, they know exactly what they’re doing. And to me, it’s just, you know, I just, I just shake my head on it, because it’s like, you guys look like idiots right now. Because, you know, to me, what’s done is done, like, food prices will not even come close to coming down until the diesel price starts to come down, you know, because those trucks that we get our food on rely on diesel. So if there’s any hope in food prices coming down, it’s not going to be whether the Fed raises rates or not, or whether people can buy it, it is going to be the simple fact that the world runs on diesel right now. And right now the price of gas is coming down. So yes, that helps. You know, overall, people like you and me who drive cars. But the price of diesel is still very sky high. And last thing I checked our friggin food and our carrots and our whatever is not being delivered to us on a goddamn Tesla. It’s being delivered to us on a diesel truck. Yeah, so that’s something to also look at as well. And I also think they’re just going to keep raising, keep raising, keep raising. And the thing that breaks could be that people can’t pay their mortgages anymore. Like I got an offer. I don’t like I don’t have a mortgage right now. But I got an offer. And it came up on my phone and it said, Hey, we’re locking people in at, you know, a 5% rate in Canada. Like we’re looking to lock you in at on a fixed rate 5%. And we’ll pay you $1,000 for it. So immediately, people think when the bank pays you $1,000 Oh, man, it’s a scam. Oh, man, it’s a scam. But then I was kind of doing some more digging, at least here in Canada, the banks are hurting so bad right now that I think that if they raise rates too, too much, because like the the level of debt in Canada is insane, just as it is in the States. But, you know, America is kind of like land of the free. Like, you can go out, you can get a job. Really, you can like if you work hard enough, you can really get a job like, you know, definitely easier than Canada. I’ll say it’s definitely easier than Canada, you guys have more people, more companies, more things to do. Canada is a little bit different, where it’s like, it’s not the most easiest, because if you live in a small town, even for a Burger King, sometimes it’s competitive, although not right now. But yeah, I think I think that the bank in Canada is paying people that $1,000 to lock it in. Because they know that rates are gonna go way fucking higher. You know, I saw a bunch of people on Tik Tok come out and say, Oh, they know that the rates are gonna go back down and they’re trying to scam people and they have the best interest of the bank. Sometimes the best interest of the bank is saying, Please walk in this goddamn right because if the housing rates go higher, you will not be able to, like afford your mortgage. Like, we’re fucking bribing you so that you don’t lose your house. You dumb ass

First-time Homebuyers and the Fed

James 33:54
In America, there’s so there’s a first time homebuyers programme here and, and I’ve heard that there are some companies offering seven year arm so like basically, like if you’re a first time homebuyer, they’ll lock you in at like three and a half percent right now. But on the flip side, after seven years, it can go up 2% A year for X amount of years or whatever it is. But obviously at that point, the The hope is that you’d refinance and blah, blah, blah. And a lot of people say why the hell would they do that? Why the hell would they do that? It’s just what you said they want to guarantee cash flow and money coming in. It’s just the same reason why American Express has like the highest cash balance they’ve ever had. Because they’re they want to save against delinquencies, they need to protect themselves. Everyone needs money, the world operates on money. So they have to protect themselves. And in the last thing I want to say kind of on this whole subject is the Federal Reserve has a mandate on inflation. It’s to 2%. And, you know, I think it’s I think it’s fool’s gold to think that we’re gonna get interest rates under 5% and hold them there for a long time. So I really think that we’re just headed for, I don’t want to say I think it’s going to be like a stagflation era and I think that’s kind of what’s coming for us.

Harry 34:59
Yeah. No, I definitely I definitely think so. And, you know, I think things are going to be sideways for a while. And, you know, that’s just where we’re going to be at, I think, although I do think the sideways is coming. You know, when I talk to normal people, the thing is, is that they’re always saying to me, Oh, well, it’s gonna go back up. Oh, well, it’s gonna go back up. My neighbour called me in October. She said, Harry, what do you think the market is going to do? Because she knows, like, I trade and like, she knows that, like, I’d like to full time. So she was saying, What do you think the markets gonna do? And I was like, to be honest, I think it’s gonna go a little lower. And she’s like, Well, shit, I can’t retire, then. You know? It’s like, what? What can you do? You know, like, I think we’re definitely gonna go lower. And, like normal people, when I talk to them all the time. Oh, it’s gonna go back up. Don’t even worry. Don’t even worry. Like, people are not scared enough right now. To like, there’s been no real like liquidation move. You know, we’re still trading above like the COVID kind of highs. Like there’s no really fear to kind of liquidate. Like in 2021, we got that big bounce. A big part of it was number one, the Fed, a big part of it was to a tonne of people liquidated. And they were able to kind of run and like, right now, like, during COVID, it was more so like, oh, well, it has to crash. It has to crash last crash when you get like Long’s like who don’t want to trade and you get shorts, who are very, very confident. Those are always going to be the best long trades that are honoured percent all the time, because shorts are overconfident. They’re willing to keep going and going, going back to more. Now we’re in a situation where the Fed is not on your side, we have Long’s who are complacent we have? You know, honestly, to me, it’s like a long and short battle we have I’ve heard the bear case in the bull case. 100 times over from both sides, both people. So to me, you know, I I personally think that we’re definitely in for lower just the sheer fact of, there’s no one’s here. Oh, it’s gonna do this. Oh, it’s gonna do? I don’t know. Um, yeah. But, you know, like, people, people just think that it’s going to go back up magically without, you know, any real knowledge of what’s going on, because they saw what happened in COVID. And they’re like, Oh, this is definitely going to happen again. COVID is over this, that and the other thing. So, to me, I think that we’re in for a lot lower, and I’d love to see it. You know, I’d love to see. I just love to see it, because that’s kind of what we need right now.,

James 37:35
Agreed, and I mean, I think we should wrap it up here. But you know, we we really are, we’re in a crazy time. And you know, we’ll continue to kind of monitor and talk about it every week. And same as always, guys, if there’s any topics you’d love to hear about, please let us know in the comments. And yeah, please and thank you for listening. Alright, perfect. Thanks, guys.

About the Author
113 posts
James F.

James Freedlender is a driven day trader and entrepreneur hailing from Boston. Since embarking on his trading journey in 2018, James has honed his skills and specialized in trading penny stocks, with a focus on longer time frame moves. His dedication and sharp instincts have contributed to his success in the competitive financial world. In addition to his day trading accomplishments, James is a thriving business owner, running a popular barbershop and collaborating with his family in the design and renovation of homes and businesses. His entrepreneurial spirit and keen eye for detail have paved the way for continued success in his various ventures. Outside of his professional pursuits, James is an avid golfer and hiking enthusiast, always eager to explore new trails and perfect his swing. His love for travel has taken him to many corners of the world, enriching his life experiences and providing inspiration for his work. A firm believer in giving back, James is passionate about helping others achieve their financial goals and guiding them on the path to success. His wealth of knowledge, combined with his dedication to uplifting others, makes James Freedlender a respected and admired figure in both his professional and personal life.