Caturday morning Spaces! Special Guest @Kross_roads Roy! All-in $PLTR like Garcia or add some $PYPL to diversify? Plus more on the market!

Space Summary

The Twitter Space Caturday morning Spaces! Special Guest @Kross_roads Roy! All-in $PLTR like Garcia or add some $PYPL to diversify? Plus more on the market! hosted by cryptocantoncat. The Twitter space with special guest @Kross_roads Roy focused on investment strategies, market trends, and insights, providing valuable information for traders and investors. Topics ranged from all-in strategies on $PLTR to diversification with $PYPL, with emphasis on staying informed and engaging with experts like @Kross_roads Roy. Followers of @evilcantoncat can expect regular updates and videos on investing. Participation in such spaces offers a diverse range of perspectives and expert opinions beneficial for making well-informed investment decisions.

For more spaces, visit the Trading page.

Questions

Q: How important is diversification in stock investments?
A: Diversification helps manage risk by spreading investments across different assets like $PLTR and $PYPL.

Q: Why is staying informed about market trends crucial for investors?
A: Being aware of market trends enables investors to make strategic decisions and capitalize on opportunities.

Q: What benefits can engaging with experts like @Kross_roads Roy bring to investors?
A: @Kross_roads Roy provides valuable insights and tips that can enhance investors' understanding and decision-making.

Q: Where can investors find reliable investment updates and videos?
A: Follow @evilcantoncat on YouTube for regular videos and updates on investing and market analysis.

Q: How can participating in Twitter spaces benefit investors?
A: Joining Twitter spaces exposes investors to diverse investment perspectives, analysis, and expert opinions.

Highlights

Time: 00:15:42
Investing Strategies: $PLTR vs. $PYPL Exploring the pros and cons of going all-in on $PLTR versus diversifying with $PYPL.

Time: 00:30:18
Market Insights and Trends Discussing current market trends and insights to help investors make informed decisions.

Time: 00:45:55
Guest Speaker @Kross_roads Roy Insights from @Kross_roads Roy on investing strategies and market analysis.

Time: 01:00:29
Engagement with @evilcantoncat Benefits of following @evilcantoncat for investment updates and informative videos.

Time: 01:15:20
Twitter Spaces for Investors The advantages of participating in Twitter spaces for gaining diverse investment perspectives.

Key Takeaways

• Consider diversification strategies when investing in stocks like $PLTR and $PYPL.
• Stay informed about market trends and insights to make well-informed investment decisions.
• Engage with knowledgeable guests like @Kross_roads Roy for valuable investing tips and strategies.
• Follow reliable sources like @evilcantoncat for regular videos and updates on investing.
• Participate in Twitter spaces to gain insights into different investment perspectives and market analysis.

Behind the Mic

Introduction

Hello, everybody. Good morning, dad. Hey, welcome. So, good morning, everyone. Yeah, good morning. We got. I was gonna play some rocky music, and I'm a tiger, and I was like. I was looking. I was looking behind the scenes. I was like, is it okay to play copyrighted music? You know? I know. You know, it would have been awesome if I could, but. Yeah. Anyway, welcome. How's it going? Yeah, we've got a. Let me see all the trackers here, too. Let me see if I can. Yeah. Welcome, everybody.

Welcoming Guests

So I just wanted to introduce one of the special guests here, Roy crossroads. Are you there? Yeah. Yeah, I can hear you perfectly. Yeah. So it's been a while. I think I've talked to you before, too. Maybe like a few weeks ago, a month or two ago. I was trying to get you to come on, too, and I'm glad that you're here. I know that you've had a lot of communication with a lot of us about a lot of things, but we just haven't actually had a chance to actually speak. So welcome. Thanks. Yeah, it's going to be fun. I appreciate the invite.

Discussion on Expectations

Garcia, what do you think about that? Well, I would like to temper. I would like to curb everyone's expectations. We've been hyping it up as a. As a huge debate of the ages, but it's really just going to be us talking about our investment theses and just, I'm going to hear him out, and we're just going to discuss the two different companies, but it's not going to be this mean spirited debate, or you're going to be shouting down his ideas. No promises on my end. Just kidding. No, no. Yeah, Garcia and I, we have mutual respect.

Investment Insights

And, you know, like, the honest truth is, he's basically 100% in palantir. Palantir is by far my number one holding. So if you put all the other companies I hold individually, combined, they're still not as big as palantir. So we're. We are agreement on that. But where we disagree, well, that, probably fintech in general, but, paypal in particular. So it's gonna be fun to talk about. I mean, yeah, Garcia did call your stuff investment theses, so I think that's pretty mean. Anyway, I'm just kidding. Well, I didn't want to say thesis.

Introducing Roy

You know. I'm gonna. I'm gonna let. I'm gonna let Roy to kind of, you know, introduce yourself, because I think you're new to. To our spaces. We have a bunch of guys who are mad. We have free. Freedom's also new. We'll get to you, don't worry. I hope you're able to stick around for like an hour or two. But we have a, we have tracker. You know, we have red Fox, who's Seth. So we got a bunch of folks here. We generally do this on regular at like, you know, 09:00 a.m. eastern on Saturday.

Investment Journey

So, Roy, you're welcome back anytime, man. But I just want to kind of let you introduce yourself, kind of let you talk a little bit about what your investment journey is. How did you get to become, like, this, like, whole, you know, influential influencer thing and how do you go on, like, different YouTube shows and things like that? So go for it. Yeah. Made a lot of mistakes. So that's the honest truth. But, you know, that's part of the investment journey is you'll make mistakes, you'll learn. And then I do what I do, you know, not because of the awesome, like $30 or $50 or whatever payout on x, and I'm not on you.

Learning from Mistakes

I'm on YouTube as a guest. So. But it's just if I can help somebody out to avoid some of the mistakes that I've made, that's a good thing. But, yeah, where I'm coming from is basically my dad taught me about investing, but that was more index fund style investing from when I was about 13 or so. And the two times that I tried to do personal investing in the past was basically, I'm older, so I'm 44, but was right around the.com. i was a new adult, and I was like, hey, this is a great thing.

First Experiences in Investing

And, no, I didn't lose much, but I just was like, yeah, I don't get this. This is not something I have time for because I was in college and then later during the great financial crisis. So it's like, all right, those were probably not the most opportune time, so just largely have been for most of my life, just putting in broad based funds and everything. Covid was a little bit different. So all of a sudden, I had no commute anymore and got to pull back from a lot of other commitments, and my wife had encouraged me for a while to dig into stocks and investing, and that was a good time for a lot of us.

Shift to Active Investing

I think a lot of us maybe started around that time or a little bit before. And so I just started reading as much as I could, researching as much as I could, investing in a few companies that were absolute garbage. But they worked because everything was going up at that point, and it was a bull market. And during that time, I was really thinking about, okay, I don't think we're going to have this crazy bull market forever. I need to invest in companies that I think are quality, but have a lot of room for growth.

Identifying Promising Companies

And so Palantir was the first one on that list. And I decided at that point I would just start DCA and add aggressively, especially as it began to fall in the bear market. And I just saw it as a, once in a generation type company. And so that was once I had got that position where I wanted it to be. And it was about 90% of my portfolio, near the lows of the company. So that shows you the level of my conviction. It's. And you, some might call it stupidity. That's fair enough. But, I've diversified some.

Diversification Strategy

I still have a concentrated portfolio. I like to just follow and track a few, different names. And if thesis changes, you know, I get out. But, you know, it's mostly palantir, Paypal and Sofi and Robinhood. I'm in those as well. Of course, Robinhood's doing great. Tesla I've been adding to very aggressively since the beginning of this year. I think it's poised to run. I love that company. And just some bitcoin miners. Basically, that's it. Just clean and simple.

Investment Philosophy

And, yeah, you're at the right place. I mean, I do want to ask about, because, Garcia, you always had this question, and I'm going to call on you. You've always had this question about if you're going to ride a bull cycle, you kind of want to focus on what the major narrative is, right? So currently the nerve is AI. And I think that's what got you into palantir. And you're pretty much all in. I mean, we play around with a little bit of money here and there, but you're pretty much all in, right? Yeah, go ahead and talk about that.

Investment Ideas and Narratives

Yeah, I mean, that's the whole main idea behind my, I guess investment idea is, okay, I kind of like to follow the path of, like, Peter lynch when he talks about concentration is pretty much like the best asset we have. As individual investors like him, he was limited by regulations to not concentrate up to a certain percentage. Like cathy would if she could. She would be all in Zoom stock or peloton or whatever she was in.

Competitive Landscape

But us as individual investors, we have that ability to be 50, 6100 percent in a stock if we believe in it. And that's going to be, at least the way I can see it is the most, I don't know, I guess one of the better ways to compound the money that I'm investing without going into stock, you know, only options or doing these crazy YOlo bets on a weekly call option. And, yeah. So as far as it being the general AI wave, I'm trying to avoid companies that I feel are going to be stuck in competition.

Investment Strategy—Avoiding Competition

You know, with Palantir, every company that they're competing with, quote unquote, you know, it's not really competition. They're, on paper they are, but, I mean, they're winning these bids that are just single. You know, only one company was offered the spot and it was palace here with Fintech. I feel like because there is competition, it is going to be difficult for any one company to stay ahead for so long before other companies start cutting back on prices or starting to develop other ways to take profit share margins and profit margins from these companies.

Avoiding Value Destruction

So because of that's why I'm avoiding fintech or reading the book zero to one, avoiding companies that are going to be stuck in competition, competing their profits away. So that's just been my whole way of approaching it. And then when I just look at the entire history of these companies, I mean, I just have seen a lot of shareholder, you know, value destruction, you know, on PayPal. But I think that's where we will kind of, like, get into, like my whole, just, I'm just looking at it from 2015 today.

Evaluating PayPal

It's just not been a great company to invest in. But a lot of people are starting to put their money into PayPal now, which is, of course, much better timing than had they started buying in 2019, 2020. So. Yeah. Yeah. Yeah. So thank you for sharing that, Garcia. Roy, I'm going to get back to you. Garcia is raising some points in terms of fintech. There's a lot of competition. Sure.

Personal Investments

It may not be the narrative of the cycle, sure. But I'm also personally invested in, like Robin Hood. I have Sofi. I'm thinking about PayPal and also have a actually have a position at firm as well, which you might probably won't like as much. But I don't, I just want to kind of hear from you from the diversification standpoint and try to convince Garcia, if you will, but not, you know, that you don't have to, but kind of wondering about your investment feces in terms of the fintechs.

Investment Cycles

Like, why are you diversifying into that as opposed to other things. And like, what would you like to kind of, you know, specifically about paying PayPal and also the other stocks that go for it? Yeah. So there are cycles and there are seasons. And just to take one step back, I largely agree with Garcia that if you can find a company or a few companies, I don't think there's many of them that have just a substantial moat and where it's very difficult for competition to catch up like you want to be in that, especially at a good valuation.

Valuation and Market Position

The thing with Palantir, I'm not selling it, but it's valuation is a bit stretched right now. It's over 100 to one price to free cash flow, for instance. But again, I'm not selling. I see where it's going in the future. I think that what they do is, has a substantial lead. I had this post back in March 2, 2023. I think Palantir may have just broken into double digits, may have just been a little bit under.

Future Potential of Palantir

But I'd said that Palantir had a good chance of going to 40 in two years, which at the time seemed utterly ridiculous. I normally don't make claims like that, but I was very confident because I've seen this wave. And honestly, I probably should have done a Garcia at that point and been 100% in Palantir at that valuation right now. Again, I've not sold any palantir stock. I did have some leaps that I sold, but I plan to just make that a core holding.

The Landscape of PayPal

Now, as far as PayPal, Garcia is right. Fintech tends to be more agile. And so what that means is when come out with a really great product than like Robinhood often does, they lead the way here. And that's one of the reasons why I think that they're doing very well this year for yourself and for me. But when you come out with a great product, other fintechs see that and they're like, oh, man, we want a piece of that action, too.

Competition in Fintech

And so they're able to innovate pretty rapidly and push out those products. And there is fierce competition in the space, no doubt. Paypal. The thing with PayPal is, so we have palantir one hand, that phenomenal company, and again, I'm not selling it. And if I didn't have any, I would still be buying it right here. It just such a large percentage, but their valuation is stretched.

Analyzing PayPal's Growth

But on the other hand, PayPal is basically trading for almost no growth at all for eternity. And the reality is, I think that within the next two or three quarters, they'll be looking at. And actually it could even be next quarter with the way that the dollar is reacting in double digits. As far as revenue growth, free cash flow has actually never been better. And as far as innovation.

Critique of PayPal's Previous Management

So Garcia had this critique, which I think was 95% accurate on Paypal. It was past looking. I was looking at former management under Dan Schulzman. It was looking at the slowing revenue growth. It was looking at the lack of innovation, the lack of integration, the lack of rollouts. He didn't go into details, but that was fair criticism. Basically.

PayPal's Operational Improvements

The previous CEO of PayPal was like Steve Ballmer from Microsoft, that there was some good things that he began, but he could just never really execute. And so despite that, despite very brisk competition, PayPal still grew. And if you look at not the stock, but the actual company, it's still been growing all this time. Growth is reaccelerating. We see active accounts beginning to reaccelerate.

Reassessing PayPal's Potential

And under Alex, Chris, there's a lot of operational efficiency. So they've grown EPS substantially, and on top of that, they're actually using their one and only moat. Now. What is that? That's their data. They have access to 400 million active users, plus 35 million merchants. So, you know, network of 435 million globally.

Using Data as a Competitive Advantage

And so they have double sided data. A lot of payment processors will have data from the consumer or from the merchant. And so for years they have all this data and they do a little bit of fraud protection, but not too much with it. Alex, Chris comes in and he's like, hey, why don't we actually use our core strength, our data? And so they're using it for selling other value added services like fraud protection, to doordash.

Future Strategies and Innovations

They're rolling out this guest checkout, which my estimation is it's best in class. There's a massive tam in that stripe, has a decent product, Shopify. Shop pay is actually pretty good there. They're rolling out next year to advertising. So the way that this works is based on what you're buying as a consumer, and you, of course, can opt out if you want, but if you buy golf clubs, then all of a sudden you have on the receipt, which for some reason, 45% of people buying through PayPal open up their receipts, a ad for a bag that would go really good with your golf clubs.

Targeted Advertising Model

And they know based on the algorithm and based on what you're buying and based on what others buy, what may sell. And so this is going to lead to a lift there through advertising. They brought a guy from Uber as well to lead this, but basically it's an all new team that is in charge of PayPal and they're actually using their core strength and going back to that moat. Why is the data a moat for PayPal?

Competitor Analysis

Well, let's say that Fastlane, this guest conversion actually works really well. It is best in class. Yeah. Others can copy it line for line, but if you don't have the same quality of data and there's like three companies in the world that do, then you're not going to be able to have the same results. You're just nothing. I think those are some very, I think to kind of summarize it, basically you're saying that evaluation for PayPal is very attractive right now and they're also not really counting to any growth at all.

Potential Catalysts for PayPal

And there's all these potential catalysts that could be coming and they're, and these things are real. Like, they actually have the data, they actually have access to it. And it's just depending on whether or not somebody wants to come in and do something about it. It's, it's actually, it makes it sound exciting. I mean, I don't know. Garcia, you've had any thoughts about that? And for me, like, I, I think I'm going to remain a skeptic until I see those, you know, he's saying that there's eps growth, but I would like to see a couple quarters of actually, of this actually affecting their bottom line, their top line.

Skepticism Towards PayPal

So, and I'm sure, and I think it will. I think it more likely than not, it will, but I'm not going to put my money behind it. But I was sharing, I just shared. One of the posts is right now a lot of people are investing in PayPal for the valuation because it's in the dirt for people who do valuation metrics on companies. I don't really do that. For me, the way I'm approaching investing in Palantir is like, okay, I'm just going to DCA, whether it's high or low, if it's an extremes, RSI is at 100, then maybe I might note, buy shares that week or those next couple of weeks, but I'm still going to buy maybe like 25 shares.

DCA Strategy

I'll still keep adding because my main goal is just to get as many shares as I possibly can. But with PayPal, I think once we start seeing it with their numbers. So in the post, it shows like, the revenue growth, gross profit and net profit over the past almost two years from Q 320 22 to Q 220 24. So you'll see there, side by side, you see Palantir and PayPal, the way they're growing. I know it's not fair to compare them side by side. They're in different sectors, but because we're talking about them, I just wanted to show, you know, as far as, like, the growth, it does seem like, you know, PayPal is growing at a much, much slower rate.

Comparing Growth Metrics

I mean, so I'm just curious if, like, the net profit is going to be growing, you know, from right now. I think it was 1.1 billion two years ago was at 1.3 billion. So, you know, that's a, it actually went down over the last two years. So if those changes that Alex Chris is implementing, if they actually affect the top and bottom line, then I do think that from here on out, it should start performing like an actual company that's growing, not dying, you know, because, yeah, I was looking at the active users and you could see the growth over the years 2015, 2019 and then 2020.

Pandemic Impact on Active Users

During the pandemic, you saw an acceleration in active users. So I'm sure if you put the stock price over that, you'll see that kind of quick rise and that meteoric rise of everyone kind of piling in. But then as soon as it started really turning over, then it started shrinking. I think that's where the stock kind of cratered and people, I guess, really sold off. But it's just incredible to see Palantir's very consistent growth in net profit over time. Quarter after quarter, you see a very consistent, reliable growth there.

Palantir's Consistent Growth

With PayPal, it just seems like it's really stuck in the mud. So I really do hope that they do get things right and they see it in the numbers, not just in announcements or promises that it actually shows up in their top and bottom line. So. Yeah, let me push back on that a bit there. So I don't know what chart or what data you're looking at, do a double check as well. But yeah, they've been growing. The way that their slide deck is.

PayPal's Growth Trajectory

It goes from left to right as far as most recent to less recent. So you may be looking at a little bit backwards, but those GAAP net revenues, even non GAAP revenues continue to grow. They did have one quarter. They have like two kind of different things. When you're looking at PayPal, quarter four is always going to look ridiculously good just because that's holiday. That's one of the reasons why it's useful to compare year over year versus quarter over quarter, because quarter one always looks like it sucks and or looks amazing.

Explaining Quarters

You're always going to get that in this industry. Now the other thing too is last year they did have a deal where they sold off a bunch of their loans just due to risk over to KKR in Europe. And so they had one quarter where free cash flow was, looked like it just fell completely. It was terrible. And then the next quarter, when they realized those loans, there was just a delay between that then all, or the selling those loans. Then all of a sudden they are free cash flow looked amazing.

Analyzing Financial Metrics

Now if you actually, I think as far as net income, theyre doing well and theyre continuing to grow GaAP net revenues as well. Free cash flow I think is probably the best metric for this. And so if youll pull up free cash flow, youll see what I mean. I dont know how to share on this chart, but yeah, quarter two is when it was down. Quarter three is the first quarter. The Alexpert's was here. But realistically, do you have it on your profile?

Performance Insight

I can share on the spaces so everybody can see. Yeah, let me just reshare this and then this will be the most undo repost. I'll just repost it here. There we go. It'll be the most recent thing. You'll see that graph of my own at the very top. So basically, outside of one time boosts, which quarter four had some of, quarter three had some of as well. Quarter one and quarter two are the best two quarters that PayPal has ever had.

Past Performance Review

As far as free cash flow, the revenue is again getting close to double digit growth and net income is doing well. Transaction margins, that's been a concern just because of competition. It actually improved in quarter one, went back down to where it was in quarter four. For quarter two, I think we're at or near the bottom some of the drivers of those things, just the way that they had as far as their braintree, their payment service platform strategy, they've changed that and vendomo as well.

Management Strategy

Like the craziest thing. So just one little anecdote. The previous management was like, hey, let's try to get Venmo to be used as a payment resource, not just branded PayPal, not just Braintree, that's fine, but they priced Venmo cheaper than branded PayPal. So they began competing with their own product. It's just like the analogy for PayPal is basically this, that you have a pretty good team of talented athletes for the most part that just aren't playing as a team and a head coach that, I don't know, maybe he's drunk off his rocker.

Management Change and Its Impact

Then you bring in a guy that actually has had a lot of success with intuit, and he's able to bring these different athletes together as a team, and instead of competing with one another, they actually compete with the competition. So that's where PayPal is. And to add to Garcia, I remember back in December 2022 when Palantir was coming with their earnings and they were promising all kinds of higher growth rates, especially on the commercial side, in 2021, which is during the hype cycle.

Earnings Promises

And their growth numbers have really disappointed and their stock price is plumbing. I remember everybody saying, this is a trash stock. And I went on your YouTube, I was just, basically, I kept buying through. I have a 599 purchase there, too. I wonder if you have to make a company prove that they're turning around in terms of their growth metrics, in terms of EPS, in terms of top to bottom number.

Investment Strategies and Timing

I wonder whether or not that's too late. Whether it's too late as far as. Oh, I see what you're saying. So waiting till they turn it around, the stock price would have already kind of recovered or moved up so much. And, you know, and I think so, and I think that's where that conviction and that, you know, that belief in management, you knowing what you own, you know, I'm the first to admit that I don't.

Investor Perspective

I don't know much about PayPal. You know, it's because I just don't. I don't own it. I'm not interested in fintech, but, you know, I like to share memes. I like to tease. I like to, you know, in, you know, in good fun. It's never, it's never in a bad intent. You know, I kind of throw rocks, really, at everything. You know, I just kind of, I make a meme of whatever I see on the timeline and then I'll share it, you know, but it's really not, I don't really try to attack people directly, but I do think so.

Stock Performance and Future Growth

I think we're going to be seeing that, especially if what Roy is saying, where they're increasing their earnings per share, because eventually the stock price is going to start following those profits, earnings per share. All the fundamentals are basically going to be improving. That was one of the things that shocked me when I learned that they don't really make much money off of Venmo, despite everybody using it.

Venmo's Financial Impact on PayPal

Everybody knows what Venmo is. Almost everybody uses it. I don't know if Roy, is that still true that PayPal struggles to make money with Venmo, with the way they're pricing it, or with their margins. Some truth to that. Some has changed as well. The peer to peer portion, I'm sending money to you through Venmo. Usually they don't make anything off that. There's always going to be a bit of that.

Pricing Strategy Adjustments

They ended up pricing Venmo now equally as far as their margins, as far as their rates with branded PayPal. So that corrected the major mistake. And there was a lot of brouhaha over Amazon initially. I think two years ago or so, two and a half years perhaps Amazon and Venmo was a thing that you could use Venmo on it. When Alex Chris came in, there wasn't a discussion on the reason.

Management Shift and New Strategies

So we don't know for sure. We can only speculate. But Venmo and Amazon announced at the exact same moment, basically that they were no longer on each other's platform. And so I'm guessing that part of that was just under Dan Schulman's strategy. Like he would use Braintree, which is their payment service provider in Venmo, and be perfectly fine sacrificing margins and even losing money on it if it meant increasing volume and users, which is a very dumb strategy.

Reflection on Previous Strategies

Its so dumb. I dont understand what he was thinking. Theres a bit of a drain. The highest grossing product for them is the cross border payments. Branded PayPal is next. And then Venmo and Braintree are just going to get lower margins. Its the nature of it. But theres some growth there. They actually mentioned that Braintree and Venmo transaction margin percent increased over this quarter.

Positive Developments

That was a surprise to me. Wow. Yeah. So they were trying to use Venmo or these Braintree almost as loss leaders I guess, to try to get people in, but I get. Yeah, and I guess I'm kind of curious as far as how they were going to try to make money off of them afterwards. You know, if they were losing money per customer once to bring them in or to get active users up, I wonder what their plan was to actually start monetizing them.

Revenue Strategies

Yeah, so I don't, they did make money off of Braintree, but in some cases there were rumors. And now with Alex Chris's transparency, the new CEO, he's just, he's awesome. Unlike Shulman, it was a little bit of a black box and you know where that phrase comes from. But they ended up, there was a lot of companies that said that Braintree was being offered at basically a loss as a loss leader and that they thought PayPal strategy was to try to make up that with other value added services.

Partnerships and Their Impact

So perhaps if they're working with Uber and they're using this Braintree all of a sudden as their main payment service provider, then maybe Uber will also use their fraud protection or something like that. And that strategy wasn't really panning out. So I'm very glad that Alex Chris has gone away from Dan Schulman's strategy. It just didn't make sense. I see.

Assessing Past Decisions

And that's one of the things with this company that I got very wrong. I was looking at this back in April. I didn't get in. I think May of last year, late May or June was the first time I actually bought some PayPal. And I was looking at it just as a trade. We didn't know who the new CEO would be. I didn't think things were as bad at PayPal. And it's disorganized.

Evaluation of Current Management

You look at the balance sheet and everything is like, it's fine. There's some things to fix here and there. There's some efficiency issues for sure. But no, when Alex Chris came in, he came in and he's like, hey, this is trash. Not quite. But he came in and the earnings call was very frank, was very direct and I had not heard of him, honestly, when he came in, he was announced in late August last year.

Confidence in Leadership Change

I had to do some research. I'm like, oh yeah, he's into it. Maybe I have heard of him, maybe not. But just looking at his past success, I probably went through like, I dont know, 15, 20 hours of video interviews, read a bunch of articles that he had said. Im like, this guy is actually brilliant. And you see what he did into it. I'm like, okay, hes being brought in.

Implementing Effective Strategies

Well see what his strategy is. And as I got to know what he was going to do and hes going to make PayPal more efficient. Hes going to make PayPal. So it actually focused on its strengths instead of just, hey, let's do as much as we can and hope it works out. Throw a spaghetti at the wall and see what sticks like under Dan Schulman. And then with these first look products that were announced.

Expectations for Future Products

And I know the world laughed at it because he said shock the world. And he didn't mean that like the next day or the next announcement or the next earnings. But the shock was the world had written off PayPal and was thought, hey, these guys are going extinct. And the reality is they had not been using their core strength at all. It just had not been well managed.

Preliminary Results

And so the strategy that he's rolling out seems like it's already working. You see just phenomenal EPS growth, 36% year over year in quarter two. And frankly, quarter two is good. But look at quarter one. It was freaking fantastic. So what he's able to do, even before Fastland is really fully rolled out, it was just in a pilot program.

Competitors and Market Structure

They've launched it here in August 1 of the really interesting things that happened this week is there's three big payment service providers in the world, stripe agin, that probably nobody has ever heard of if you're not in the sector and then PayPal's Braintree and there's some smaller players and such, but so one of their two big competitors in the space, Adiande, announced this week that, hey, we're going to partner with PayPal and we're going to push out fast.

Industry Trends

And so I know that PayPal's getting something for that, but when one of your two competitors basically says, hey, we're going to use your product, yes, every single payment service provider does use each other a little bit. They just have to. It's the nature of the space. But you don't make a big deal about it and you don't make big announcements about it.

Market Dynamics

This is the first time we've ever seen something like that between Agilent and PayPal. It's significant. Wow, that's pretty cool. And what you're saying is true as far as whoever's leading the company is very, extremely important. As we know, we're both invested in Palantir for the same reasons. It's having a CEO that's going to have that vision and who's going to implement, execute those decisions to actually push the company forward, keep innovating, keep growing.

The Importance of Leadership

You can have a CEO who's going to keep writing the company into the dirt, you know, not using it to its full potential. Yeah. Because, you know, you do see like the actual, you see PayPal, you know, how much revenue they actually get, you know, quarters. I mean, it's insane. It's in the billions. So it's to have a CEO that's going to actually be making the company leaner, you know, actually start growing the company again.

PayPal's Revenue Potential

I mean, that's where you'll start seeing it. And that's my biggest thing was just when talking about people who had invested in PayPal is the only thing I guess I wanted to remind people is that I think they're seeing more of the people who kind of recently started investing in PayPal over the last year or so. But I guess I'm just, I wonder if there are any left who are still holding from 9th 2020.

Investing History

From there, we're at 300 a share. So anybody who dc eight even responsibly is. I don't know if they either sold off, but I just really haven't really heard anyone on Twitter, on x talk about being under on PayPal. So I guess for me, I just wanted to, I'm just kind of curious if they, if every single person who was underwater just sold or they're really just not sharing, you know, just.

Market Sentiment Analysis

But yeah, I think it's probably 90% to 95% just gave up and rightfully so, you know, if they cut, you know, their losses at 100, like they're probably like, man, I really dodged a bullet there. Former management was, you know, worse than I expected. I thought that they were okay until Chris got in. And it's like, okay, yeah, that big issues there.

Management Evaluation

I have talked to a few people that have held on and they like what they see under Alex Chris like that basically. So for PayPal bulls, there's a couple of different camps. There's a lot, honestly, that are just in here for a trade, and that's fine. That's where I was initially until Alex Chris came on the scene. I got to know his strategy as planned.

Long-term Perspective

I'm like, hey, this will be actually a long position for me. It's not just a trade. I'm not out. Robinhood for me is just a trade. Man. That's worked out well. But with Alex Chris, just a lot of innovation implementation. And that's where a lot of PayPal bulls are. They're like, hey, Alex Chris has this great plan.

Diverse Perspectives

Hes using these core strengths and then theres a valuation piece as well. And some people just purely look at valuation, but you can find a value trap. And a lot of people accuse PayPal of being that its been an opportunity cost, but I think its way too early to say value trap at this point. We can see consistent growth, top and bottom line.

Current Financial Strategies

We see innovation, we see operation efficiency. And yes, Garcia, buybacks, $6 billion of buybacks. It does form a base. First time that I mentioned, it's not a core thing to thesis, but it provides a margin of safety there for PayPal. And so the main thing for me is this would just be a trade if it was about valuation.

Investment Thesis

But since I find it more compelling than that there's a story here. Now, if you were to say, what do I think will grow the fastest over the next five years? Palantir or paypal? Probably Palantir. I'm positioned accordingly. But there's a lot of forward growth priced in, and there's a measure of risk there with Palantir. Even though the company itself is great, it's not inexpensive.

Future Uncertainty

I'll just say that, yeah, all it would take is just one quarter of even either slowing or something happening. One quarter for a lot of the growth to get priced out of, you know, and the stock to tank for a couple quarters more before they start, if anything like that happened for Palantir. So, yes, a lot of that is, you know, getting priced in.

Investment Allocation

And for me, like, the way I see it is I'm only really all in because there is no limitation on how much I could be concentrated. So, I mean, if I were to, if I had to diversify my portfolio between, like, 1020 different companies, I think PayPal might be one of them. PayPal might be one of the ones that I'm maybe one 5% allocated into if I had to. So I do think from here forward, it is going to be growing faster than some other companies.

Addressing Misunderstandings

I think a lot of the things that I was saying was getting misconstrued, or I probably didn't word it correctly. I was really just shooting the shit with Kat and, you know, when I was getting tagged in the post. But, yeah, then we got quite a few different PayPal bulls kind of, you know, tearing my comments apart. So it was very interesting back and forth.

Memes and Reactions

But, Garcia, it's hard when you're known for, like, these hardcore memes, you know, like, when you're known for awesome memes, it's hard to get a reaction out of it. No, I know. I know. Yeah. And I should have expected. I should expect it, you know, but I am willing to take it back.

Discussion on Future Investments and Company Valuation

You know, I'm not gonna block anyone for telling me anything. So you're gonna swing it by PayPal maybe potentially in the future. No, no, maybe. Unless, unless once Palantir hits 504 a share and, you know, they're a top, they're a top 20 company on the planet or something. You know, just when thesis has really played out and there's really, you know, that I can see that. Okay. You know, their growth is, like, gonna start slowing down. They're, they're a mega cap. Like, they're really, like, you know, then I would start kind of diversifying or start moving funds into, like. I mean, I'm kind of waiting for Andrew to go public so I can start really investing in them. That's probably the company I'm looking forward to the most, that SpaceX. But I think Andrew, man, like, once Andrew goes public, I'm just. I'm very looking forward to putting at least 2020, 5% of the portfolio into them, especially if they go direct, just like Palantir did.

Plans for Diversification in Investments

If they do a DPO and they allow retail to buy in that at a lower valuation than if they went through a dpO, or is it ipo, then that's probably the main one that I would look into diversifying. Interesting. I'm going to try to pass the mic around a little bit. But, Roy, I have one more question for you. So a lot of the fundamental folks, they don't really believe in technicals, do you? What do you, what are your thoughts on technical analysis? It's useful to it to an extent. I rely on it and use it a fair bit less. But the reason why technicals work is because a large number of people, and even algorithms, are set up and believe in technical. So if enough people believe in something like it becomes a self-fulfilling prophecy, at the very least. But I think that there's more to it than that.

Technical Analysis vs. Fundamentals

Catalysts trump technicals and performance Trump technicals, but not right away. PayPal has been executing under Alex Criss quite well for three quarters and has been largely ignored. And so technicals would have told you probably, to wait until close to this time, a breakout here. And that might have been the smart thing to do. So, you know, it can help, you know, when to get in and when to get out of a position or when to be careful versus, you know, if you give yourself time. And we, in retail, we have that advantage for most of us anyway. We don't have to show amazing results every single year. So, like, 2022, for me, honestly, which is terrible. It was 90% in Palantir. You look at the stock, it was garbage. 2023, very different story. 2024, different story. 21 different story. But, yeah, we can give ourselves some time.

The Role of Technicals in Trading Strategies

Technicals, if you're a trader, you have to use them. But most of what I do is not trading, it's just buying and holding. I'll sell some options here and there. I'll buy some for short-term trades, but it's like maybe 5% of my portfolio. Yeah. Thanks for sharing that perspective for, I think there are a lot of fundamentalists are really not even wanting to engage, like, people who did technical analysis. So I'm glad that, I'm very glad to see, like, a few of you amid, like, a few people are just really friendly to us, like our technical analysts. So we appreciate you coming on and talk to us about this. I do. Eventually, I do want to circle back to you about your thoughts on bitcoin miners, because it's interesting that you're also involved, but I'm going to pass the mic around a little bit.

Insights on PayPal and Market Trends

Freedom, are you there? Yes, sir. Thanks for having me, cat. Appreciate it. Yeah, thanks for joining the crew, man. Kind of wondering your thoughts. You know, I saw that you posted the palantir chart. You're kind of expecting, based on Elliott Wave, you're kind of expecting probably retrace to the upper twenties. I don't know whether or not you've charted PayPal, but I kind of wondering your kind of your thoughts in terms of technicals, if you can kind of compare the two and kind of share with us what your thoughts are. Yeah, yeah. First of all, yeah, thanks again for having me. And thanks to crossroads and Garcia, I am more on the technical side. So, you know, it helps a lot to learn this fundamental piece. That's kind of why.

Short-Term and Long-Term Outlooks

Why I joined in, and I get to learn from people that are more on the fundamental side of definitely interested in both companies. PayPal, I gotta admit, I'm a little bit. I'm just so impatient, which I know is like, the number one rule of making the most wealth, but it's just so slow for me. But I do. I do have a very bullish outlook long term for PayPal, as I do palantir, but short term PayPal, or, I mean, palantir, I do expect a little cool off because most of the indicators are pretty overcooked right now. So I just expect, you know, nothing insane. But, yeah, mid to high twenties before probably 50 or 60 going into, you know, late 2025 and then PayPal. Actually, I'm expecting probably even as high as maybe 150 over the next two years, and then probably a cool off there, too.

Concerns About Moat and Competition

So I probably look a little bit shorter term than most people on this stuff, but long term, I'm super bullish on both PayPal and Palantir. Now, I don't know the fundamental side on these, but I do. I mean, the charts look great. So I'm sure there's going to be some catalyst. I'm particularly interested in what PayPal is going to do because I have it going. It sounds crazy, but, you know, over 1500 by like 2035. So I don't know what's going to happen, but hopefully something does, especially for you. Crossroads and anyone else investing. So that's kind of my quick thoughts on the technicals. Was it more just based on the fact that it just retraced so much and that if you do like, kind of like Fibonacci sequence, you think they could go a lot higher just because retrace so hard so much?

Technical Analysis and Market Strategies

Is that kind of like the thought behind that? Yeah. So like really, it's just, I can, sorry if you can hear the treadmill, by the way, I'm trying to kill two birds with 1 st, but I'll post a PayPal chart long term. But yeah, it's just a, it's a really bullish chart. It's just been in a huge downtrend for a long time. And I think there's, we're basically starting a new five wave sequence. So I think it's going pretty high. It's just, for me, it's just so slow that I feel like, you know, like I said, I'm probably in the minority here, but I just don't have the attention span for it. But I do think it's a great long term play. As with Palantir, obviously, Palantir moves a little bit faster. But I think they're both great. But I'll actually put my money where my mouth is and put some charts in here once I get back.

Evaluation of PayPal's Recent Performance

So sorry about that. No, don't be sorry. I mean, I was, I kind of agree with your sentiment. I was looking at the 20 month moving average. That's usually kind of how I look in for a longer-term trend, whether or not there's like a potential trend change. And it looks like, you know, PayPal actually, finally this month got back above, like the 20 month. And actually 20 months is actually starting to kind of flatten a little bit here. So there's something great to say about that. I think the same things happen in Chinese stocks, too. I just look at them and now everybody's losing favor. Now the technical is actually turning a little bit positive. So it's kind of interesting, I think.

Concerns Over Financial Performance

Heidi, you have a question for Roy? Go for it. Hi, Roy. Hopefully you can hear me. I am wondering, like, when I'm looking at some of the fundamentals for PayPal, I see decreasing net operating margins and increasing operating costs. And I wanted to hear your response to that when I see it. From 2022, 2023. From what I can tell in 24, they've increased that by a mere 1%. And that would be my concern from a fundamental standpoint, as well as the moat that you had spoken about earlier. I know you said that they're putting things on receipts or on tickets, but I'm concerned about. There's no moat there. And there is constant new competition that's coming in with new and more advanced. And so I was hoping you could address both of those points.

Analysis of Transaction Margins

Yeah. So on the transaction margin piece, a lot of that is a mix shift. What that means is they get their highest margins from branded PayPal, especially cross-border payments, and then Braintree, which is that white label payment service provider. They have some other products as well. Venmo is one of those PayPal complete payments. Those are lower transaction margins. So under Dan Schulman, there was a lot of growth for Braintree. And so it's growing at 33, 34, 35% year over year. And what that was, and branded would grow like 6%, 7%. And so all of a sudden it looked your margins were decreasing and actually decreasing rapidly. Undershuld, there's a little bit from competition, it's always more complex, but basically, I would say that's 90% of what's going on there.

Addressing Competition and Scale Issues

You do see, if you look at the quarterly, that there was an inflection. So quarter four looked like it bottomed. Quarter one had improved. Quarter four again, or not quarter four. Quarter two went down a little bit as well. But as far as the moat, what that is most payment service providers like Addyn, they just see one side of the transaction. So add in is all about merchants. There are others that are just really focused on the consumer. There's not many, especially that are global, that have both the merchants and the consumers. Block is one of those that does. But it's largely here in the United States. And so, yeah, competition is out there. But you look at the scale of PayPal again, 435 million active users, 35 million of those are merchants. It's a global system.

Leveraging Data for Competitive Advantage

They have data that basically rivals JPMorgan Chase and they've not leveraged it well. So all of a sudden they're using this very rich qualitative data on a massive scale with their users to drive. Actually, there's seven different products. I just mentioned fast lane, because I think that's the one that's going to be fastest to hit the ground. The guest checkout service, which about half of people out there, I think it's 44%. Don't quote me on that, but prefer guest checkout. And it's a massive tam. There's actually a little bit of a race towards that. And in this space, yes, there's competition, but the TAM is so immense. And frankly, a lot of the early competitors, like bolt, like they just, they failed.

Challenges Faced by PayPal

They didn't do what they needed to do. Mastercard and Visa tried. They felt the reason why they failed is because they, for bolt, they didn't have the size and scale of PayPal. And for Mastercard and Visa, they do not have the double-sided network that PayPal does, where you have both merchants and consumers, and you really need that to be able to push out that guest checkout process. I have a whole long post in my portfolio. I think it's maybe like the 6th or 7th most recent one, on why I think that is actually best in class, the conversion rates and everything. But then you also are starting to use this data.

Advertising Factors and Revenue Generation

The other two I mentioned that I'm most excited about are the advertising factors. So a lot of time advertising is just, you clicked on something at one point, maybe you bought something at one point. You put eyes on something at one point, it'll offer you an ad. PayPal knows exactly what you bought and they know what others like, you bought. And you are then offered through PayPal on the receipt. You also offered these advanced offers as well, these products from different merchants. And it just, it's a little bit different style of advertising. It's not like Uber is doing. It's not traditional meta or Google type of advertising. And the interesting thing with all these products is it doesn't really cost PayPal much at all to implement.

Exploring Future Financial Opportunities

Like, they're not having to build these things out. They already have the data, they can roll it out really quickly to their user base and these merchants. And so it was just sitting there ready for the plucking. And if somebody else tries to do what PayPal does, they can copy line for line, but without that high-quality data on that large scale, it's going to be tough. Now, let me give you one other piece, too. This is one where it's more of like the moonshot or the long shot. You might have heard of the PayuSD Py USD stablecoin that PayPal rolled out about a year ago. It's now on the Ethereum chain and the Solana chain.

Investment Prospects and Future Initiatives

PayPal does not own its own payment rails. And so what they're doing is they're paving new digital payment rails, which is going to be a substantial boon to their margins. That's not a guaranteed thing. I would actually rate that as maybe like a 25% chance of really widely being successful, though it is something that they're using with our Zoom product already. It's going to take time to build out on web three first and then scale adoption. But if they hit that, and again, I'm a bull, so maybe I'm even seeing it too optimistically. But if they are able to do this, margins are just going to look ridiculous because all of a sudden they own their own payment rails.

Final Thoughts on Chart Trends

And it's a whole lot cheaper to do things on Solana than traditionally paying somebody else and paying all these toll booths with the cross-border payments or any time that they need to issue a payment. Heidi, did you get your question answered? Yeah, somewhat. Yeah. Do you have any other. Do you want Roy to expand? Anything else? No, I think I'm good. Thank you, though, Roy. It was really a thorough explanation, and it's my turn. You know how I've been trying to cut out, cut off someone talking all show? No, I'm just kidding, guys. Now I just want to put in some two cent real quick on a PayPal chart, weekly and monthly comparison to.

Market Sentiment and Predictions

To a palantir. Everyone knows I have a bunch of palantir, but. So PayPal, man, I don't know. I have such a strong bias to this company, but this move looks really good. Like all my indicators, like freedom was saying, flip. The extremely bullish on the weekly chart picked up a bunch of volume. If this next week continues to increase and, you know, whale activity, I would say this thing can definitely shoot into the hundreds. But right now, it's got a lot of sell orders at this 70 to 76 range. So that's going to be its biggest area of resistance on, like, the weekly chart.

Resilience in Market Trends

And once we get past that, there's really nothing stopping this from, like, entering the hundreds. I'm not sure. About 150, maybe. But with it moving so slow, I would say it's more likely to retrace at some point and find higher support. But either way, this chart looks like it's starting a nice move where I agree with freedom again, that Palantir looks like it's probably going to start to cool off here in a bit. But on the weekly chart, on Palantir, indicators are already coming down a bit. Still not selling here. So even if we retrace back into the 20, the double like that, like 24, 25, I'll be okay.

Market Dynamics and Investor Behavior

Because with Palantir on the weekly chart, if you notice it really doesn't have. It really doesn't stay down for long. Even when it comes under the ten and 20 EMA, that's typically the sign that you should probably enter an increased position right there because it protects this area pretty good. All year, since actually 2023, it's kind of been moving in this, like, staircase formation. So weekly looks fantastic. And then on the monthly chart, there is. Yeah, it still looks pretty good on the monthly chart.

Future Price Targets and Growth Potential

I just want to see a monthly close over 31, which is right here. So we'll see if we get that monthly, maybe 30.5. But overall, still pretty bullish. Chart looks like it's going to charge up and then go take out those higher digits. But overall, both charts look good. Can't really go wrong. But I don't think I could trust Palantir or not. Trustee, I don't think I could trust PayPal. I still have to see what their new management and what that dynamic brings to the team. But, you know, fintech I typically stay away from, and my main portfolio is AI.

Comparative Analysis of PayPal and Palantir

But overall, both charts look good. Congrats on anyone who has these. Yeah, I mean, I'm looking at the charts myself, too. And I do think that PayPal is probably going to hit some retracement from like 75, 76, 77. It's probably going to come back down to like, maybe like the mid sixties and that I might actually be interested in start buying around there. Okay, me too. You convinced me. Stop it. For long term, for. As a trade.

Investment Decision-Making and Market Trends

Yeah, yeah. Because, I mean, people think I don't talk about nearly any of my portfolio, but I do have stuff on long term. But I. I guess, you know, PayPal looks good. And with this new management, I guess I have to look over the CEO and do some research on how he's run previous companies. That would mainly be my biggest. My biggest points that I need to hit if I'm going to invest in this company. So I'll look into that later. Man, if Roy was able to convince you to buy PayPal, that's like. I don't know, he was hitting some good points.

Discussion on Investor Dynamics and Sentiment

He was hitting some good points. You know, these spaces are dope because, you know, you think you hate a company. Like, remember I. I had macro to micro, we. He hated me, blocked me because he was like, q 120, 24. He was like, about the blast off and I'm like, all right, just for that one by puts printed. And then I forget. Sky got him to unblock me. But ever since that dilemma, I really didn't look at PayPal and I had a little animosity towards the chart, but today that animosity turned into, let's.

Evolving Perspectives on PayPal

Let's do some research and possibly add it to the hodl. It's a slow moving train, but it's a train that moves. You know, the chart looks good. That's amazing. That's absolutely amazing because you're all, you're you coming? You're all like, team palantir, Team Garcia. No, I'm just kidding. Yeah, well, I'm Palantir Moby Dick, so it's so hard to shift my conviction to that. Or, you know, for me right now to even start a new long term position in the middle of a bull market is something I wouldn't consider doing.

Future Outlook and Market Reactions

But like I said, if we can get a pullback in PayPal, like freedom said, 150 looks pretty, pretty doable. 100 for sure. But this momentum that it has definitely can't be overlooked on the charts. Yeah, I still think it might take a few months to play out. I'm not sure if PayPal is going to hit triple digits by, like, the end of the year, but I think early, like 2025, first half is possible. Yeah. So negative in the sixties might be a deal.

Technical Analysis Insights

Yeah, I think so, too. So that's kind of what I'm eyeing on, too, technically speaking. And also, it's great to hear about, like, I have. I actually do, like, you know, agree with a lot of the points that Roy was making about the fundamentals. The question, the biggest question is whether palantirs do better. I mean, it's ran a little bit high. I do think that. Not a question. I would, I would. I would think volunteer has a lot more.

Comparison of Versatility in Business Models

It's a lot more versatile than fintech. Like, I think Garcia touched based on this. Sorry I was so quiet. I was taking my dogs on a walk and stuff, but I definitely was listening. But, I mean, the concentration of, I would say the versus, like, fintech is so saturated, in my opinion, where Palantir is in a saturated AI world, but it's dominating. There's a complete difference. And with PayPal, you have this technology that hasn't thrived in so long because you have quick pay, Apple Pay.

Challenges in User Experience

You know, there's other fintech and other payment crossboard stocks that are a lot easier and simpler to use. Like, I've used PayPal one time, and it was to pay for my subscriptions, for my indicators. And I was so confused using it. You know, it seems sketchy. So hopefully their interface. That's one thing I hope the team can change is the friendliness of their interface. To use it is really what turns me off with this product. But you know, with Palantir I don't use the product, but, you know, fundamentally you see what people are doing with it and that attracts me more than like what fundamentally people are doing with like PayPal.

Fostering Innovation in Technology

Like, you know, like it's like an XRP type of coin in my opinion. Like the technology is there, it's good, but if you don't have the marketing, you don't have the team to put a push it, you don't have the retail to want it. It's going to be kind of hard to attract, you know, long-term investors where PayPal or Palantir is not even trying at this point and they are overloaded with boot camps and, you know, they're getting these contracts that, you know, are hard that are, they're getting, they're doing everything right and they're not even trying. So that little effort, or I'm sure they're putting a lot of effort, Alex is making it look effortlessly comes off very attractive compared to PayPal with their previous track record.

Anticipating Changes in Leadership Impact

But hopefully the CEO can turn it around. Obviously the charts look, it can't be ignored. Yeah, I always love to bring out the fundamental side of a and their long-term investment side of a because he's trying to do this trader kind of appearance. That's kind of what your branding is. All of us, we have things that like, even if they're out there, you know, talking about their trades or they don't really share their long-term positions, but they have like very sophisticated thoughts behind the scenes.

Highlighting Investment Opportunities

So Matt, speaking of XRP. Oh, yes, I'm here. I'm XRP. Take the micaways. You're about to lose your coho spot. But this is not an XRP space. So I don't know if I should talk about. You're about to lose your spot tomorrow on my space, brother. Don't do it. Don't know. But Matt. Yeah. Way to lose engagement. I think you just gained like well like 2000 followers over the last month anyway. But, but dude, please share your thoughts in terms of what you think about PayPal.

Insights into PayPal's Potential

So, like, I'm basically the opposite of everybody else. Like Roy and everybody. Like I'm ta first and then I like glance at the fundamentals and stuff and I think with Paypal it really was tonight a bullish signal. Like three weeks ago after like that major crash and I'm like, it was holding levels very well during that crash, and that was like the sign that it just wants to go higher. So, but in regards to the fundamentals with PayPal, like, they're building more and more crypto on their balance sheets too, and like, bitcoin and stuff like that.

The Future of Cryptocurrency Involvement

So, like, that's ultimately could be a good crypto play in the future, which could also catapult everything going up further as well. So that's the only fundamentals you'll ever get out of me for PayPal. But. But essentially I posted that chart, I think, what is this, a second photo in the chats or whatever? Yeah. So I posted like Palantir on the left. It filled that gap from a long time ago, right? That gap was very after the IPO, basically it just topped and then it never got filled until now.

Assessing Market Price Levels

Right. So usually when that happens, that could be like a little bit of a spot for resistance. And sure enough, it can't really get above it right now. So we'll see what happens in the future, but in the coming weeks. But I think what's really the most likely situation, it's going to probably cool off a little bit to maybe retest the low thirties or even the high twenties, right. I think that would be a great opportunity if that did happen, because this chart is still very bullish. There's nothing bearish about it at all. It just hit a little resistance level.

Navigating Resistance Levels in the Market

And in regards to PayPal, the chart on the right, it was a long term support, right? You can see how long that support line was. And then it broke. Right? It broke. And then 2023 had that low. And then basically now it's back there and it flipped it to a resistance. So it's still going to be resistance until it flips back to a support. So that could take some time. I don't think it'll happen overnight. I don't think it'll happen next week.

Forecasting Future Movements

So we'll see. And not only that, I didn't post a chart of it, but on my gan levels, there's still more resistance with an arc above, around like the 73, 74, 75s, like that zone. So I think even if it does trying to poke its head, it might just be turning into another wick for the following weeks to probably consolidate. But the true opportunity for PayPal, I think, is if it does get back into the sixties, maybe mid to high sixties, because this chart is finally officially bullish after, what, three years or something?

Market Trends and Historical Perspectives

And nothing really else matters to me except for this is like, telling us that it's about to go much higher. Right when something is in a three year downtrend and now it's finally bullish again, it's not going to just reverse and go back to bearish. It's going to go retest levels and maybe a few times, and then after that, it'll probably break out. But, yeah, longer term, I see PayPal as a very good opportunity here. As. As a swing trader. Not really a day trade, you know, just a swing trade.

Evaluating Future Performance and Price Targets

I can see it getting back up to the hundreds easily. And I think the really, the line in the sand for me is if it ever can get back above 100, 4142, then I think it can make new all-time highs. But if it can't get above 140 or 142, then I think it'll not make new all-time highs. So that's just really the line in the sand for me that I'm watching for. For PayPal. Yeah, I think it's very interesting because I swear, none of us like freedom, myself, Matt, like, none of us really talk about, like, the PayPal chart.

Collective Insights on Market Trends

Like, he'll be, like, in the seventies and it's going to go out in 60. Like, none of us really talk about that, but we all see the same thing and we all use different techniques. So it's very interesting. Yeah. I mean, you can't deny the strength in PayPal, but you also can't deny the chart that I just posted, that it was a long term support level, and now it's resistance. So anybody buying that resistance, I think, is just taking a gamble.

Investment Strategies and Market Analysis

So I think the better opportunity is just to wait for a retest of maybe some levels in the sixties if that happens, you know? So that's what I'm looking at. And I think the future does look bright for both, but just got to be patient with both right now because they had some good runs recently. And. Trekker, are you there? I'm here. You're here. So you're a big PayPal bull, right? You also. You also like Rivian as well? I'm just kidding.

Insights on Rivian and Market Predictions

Please share your thoughts about all this. Cat's making fun of me because I drew a chart, like, I don't know, four months ago showing, like, predicting when Rivian would go bankrupt. Bankrupt, basically next year. Yeah. No, I don't think. I don't. I'm not a big. I'm kind of a Rivian bear. And PayPal. For the longest time, I just looked at it. The chart looks terrible. And I'm like, this. This could very well just go extinct.

Considering Market Sentiment

But you know, I'm hearing a lot of nice stuff about PayPal from this show, this particular episode. So I might have to change my thesis on it and draw some fib extensions on it. I don't have any technical analysis for you today for PayPal, for Palantir. I don't have a chart to show you. You can see any of the charts that I've drawn though if you just search my handle on X and then put the ticker you're interested in next to it. So if you put like if you search and put a space and put pltr.

Evaluating Future Trajectories

You can see, you can see my last palantir post there just sort by most recent. But I am looking, I kind of have, you know, been stuck, been trying my hand at Gantt charting here and I've got this really, I've got a big black circle around $35.76 on September 23. It's kind of neat. Kind of neat. An intersection of some Gann lines here. But I like the way he looked at Palantir, how it, he thinks it kind of goes down by $5 up by ten.

Identifying Key Movements in Market Trends

Tests back by five, up by ten. So just look forward to round each five dollar level. Yeah. I love that you said that, brother. I literally was talking to someone yesterday about it, that Palantir moves in waves of five. But I'm actually with that being said, guys, I think I am going to sell my 4000 shares here and buy back in the twenties. Think it's time? Oh, 25.

Portfolio Adjustments and Market Movements

Yeah. I moved like 4000 shares of my 28K into a separate account. I almost sold at $29 and Danny convinced me not to. Thank God I was talking to him because I had sold 2000 shares at $27 a few weeks ago. I feel pretty stupid. I would advise you just hang on a little while longer. Let me look at Palantir from, look. At the quad, which is.

Market Patterns and Future Predictions

I think we're going to some serious volatility in September because I think seasonality is really going to play a part in how the charts move. I know a lot of people don't believe in seasonality, but September typically is not going to be the best month. And then let's see how the market reacts to the rate cuts. What if they overcut with 50 and then the market gets scared? I mean we know the market needs a cup, but if we don't get the 25, I think it's going to react pretty bad in my opinion.

Volatility and Market Reactions

It's, it's tough to say just because we already had Vix, like gone about 60. So I almost feel like maybe that was kind of like the front ran correction. But you know, who knows? I think, Roy, you have your hand up. Go for it. Yeah. So as far as seasonality, there's seasonality in contracts, too. So I know a lot of people are focusing on Palantir right now and like S and P 500 inclusion and that can be a short term boost.

Contract Seasonality and Market Focus

I don't know that it happens in September or not, but what I am looking for in September is we usually, especially towards the end of the month, get a lot, and I mean a lot of government contracts that are announced. And I think this year we might even see more of that just based on some conversations and what's been happening in that government space here recently with Palantir. So just be on the eye for that. Not saying sell or don't sell. I'm just long.

Market Sentiments and VIX Levels

As long as I see Vix kind of chill out, I will be feeling okay. But if I see Vic start to spike again and you know, start to cause have some movement that's going to be a little concerning for all markets in my opinion. And Vix is at creeping up at 15 eight. So I mean it's not bad, but those candles shouldn't be ignored. So that's good that you posted that.

The Performance of Small Caps

But I think what it really means to me personally is that small caps are kind of outperforming, you know, because you saw the IDBM 3% up compared to some of those bigger names. So maybe that's what he means by that. Yeah. What do you think about small caps outperforming right now just because the rate cuts? I mean, we know they're sensitive to them. So what if they're moving in correlation to like front running these like rate cuts already that, you know, are kind of already being priced in my opinion.

Growth in Small Caps

I think that's why we're seeing the strength again in the small caps because there's a lot of talks in the rate. Yeah, I see that too. And also when I look at IDVM, I always look at Arkk and Arkkinde for a monthly candle close is looking like it's going to be the first like kind of bullish monthly candle close in three and a half years. So I mean those two going hand to hand is just proof that it might be a big rotation into that. And then after that, possibly what Kat always says and everything rally after that's but it just looks to me that while some things are cooling off, other things are just heating up right now, and that's growth in small caps.

Anticipation for Bull Run

Yeah, but the bull run is really going to start like everyone's anticipated. It always seems to around October. There has to be. I'm. When everything is. We need to see them. We need to see a lot of. We need to see a huge, kind of like a huge down, down movement and stay down for probably the whole month for the real bull run to start. But that's just how I've seen all bull run start. So it'd be kind of hard, in my opinion, for them to continue an upward trajectory.

Concerns Over Market Movement

And then we get, like, a real bull run. If they continue at this pace, then I say that this is the bull run. If we don't get any liquidation event leading up into October, then I'll be really scared and honestly start selling a lot of my. A lot of my positions. If we don't see a huge dip, that can, you know, potentially bring the buyers in to push the prices to start a catalyst that real bull run. You know what I'm saying?

Market Reactions and Historical Perspectives

I hear exactly what you're saying. And wait, I just want to say, I think we just had that big event. That's what I was just going to say. You took the words out of my mouth. Yeah, we just had it on that three Mondays ago. Yeah. Because I really don't think so. Because with those v shape recoveries, that. That shouldn't be considered a. That shouldn't be considered, it wouldn't be a v shape recovery. And that's what happened three times already.

Understanding Recovery Dynamics

It needs to be for a little bit. Look at Covid. That was a v shaped recovery, and then it soared, you know, but it. Lasted about a month, and it was like a month and a half or two if I wasn't instant, in my opinion. Right. If. Let me look back at the chart. But I believe it wasn't like an instant within weeks recovery. Like how we kind of have had these last three dips to 58, 556 five and 49 five.

Market Realities and Emotional Responses

I think pretty instant and automatic. I think things are so much more exponential now. Like, the way markets move. Like, maybe that Monday, that week of that Monday was basically the bear market. So, like, we had a weak bear market and then just catapulted up. You know, it's just insane. What? It's just insane, in my opinion here. And I think with Arkk and altcoins, they move almost hand in hand and they're going together again.

Everything Rally Potential

Right. So it's like, we got to keep an eye on that. And if they move together, then I think we might be closer to an everything rally than most people think. Really? Yeah. I've been buying alts, and then one thing that I've been taking in consideration, that we lost the negative volatility with bitcoin when the ETF's came into play. And with that negative volatility, you lose those aggressive moves up and down, like.

The Change in Market Dynamics

So with the ETF, they brought a lot more stability, I guess, you know, to the community in crypto. So that's one thing I've been thinking about, if that's why, you know, they've been so swiftly recovering instead of, like, hitting those nasty, like, weak downtrends. And I hope that's the case because then that would be. That would be awesome. But I think that might be the case that we're not seeing. But then I start to wonder what.

Investing Approaches and Market Trends

How these indexes swiftly recover so quickly. But I don't know, I guess I go down the rabbit hole with trading and thesis is all the time, so. And that's kind of where I'm. That's kind of where I'm leaning towards. I'm kind of. I'm a long term investor. I'm not going to be selling any pounds here into any, you know, month long downtrend. But I do think just because it was literally like an intraday recovery, it was just like, it immediately got bought back.

Individual Reactions and Market Sentiment

Thank you, bro. Thank you. That just, I just think it was kind of like a mini, it was kind of like a tremor. Like people got kind of shaken out of, but I'm kind of leaning more than not that we're going to get a pretty scary couple of weeks where people are going to really start thinking, oh, my gosh, this is the recession that everybody was talking about. And you're going to start seeing, like, the doom and gloom in the timeline and for a couple of weeks.

Emotional Reaction to Market Moves

And I think, and I think that's. And I think it's just going to the, you know. Cause people are emotional and they're going to get scared. And I think you're going to see a couple weeks long of a bunch of fear porn, you know, where it's just going to be like, you know, there's going to be a poll back and then I think that's where we're gonna see, like, kind of like some type of melt up, you know, after September.

Market Sentiment Reflections

Well, you're still already, yeah. You're still already seeing that with meet Kevin and he was drinking a stella, talking how he's still bearish like seven, 8 hours ago. I know that. I hope they, I hope they stay that way. I hope they keep doing that for months. I hope they keep staying in cash while youths keep going down. I hope, I hope they keep doing that for like a year, two, three, four years.

Optimism Amid Concerns

So the market can go a lot higher. Seth, you're going to say something. Hey, good morning, everybody. Hey, morning. What's up, man? Oh, I'm just waking up, having some coffee and it's 06:00 or 07:00 in the morning over here in the west coast. So it's, I get up pretty early for the meeting, so I'm a bit dead to the world, so forgive me.

Seth's Perspective on Recent Events

Good morning. Did the Paypal discussion wake you up, Seth? Yeah, it was pretty good. I learned a lot. I actually know nothing about PayPal and I don't invest in PayPal, so I learned quite a bit. So thanks for that. And I mean, it's just not my cup of tea. And that's what makes the market, everybody's different.

Market Trends and Historical Context

And, you know, somebody was talking about how the markets, we're going to do this and markets are going to do that. The discussion is all about where are we headed? And I've been doing this for 28 years and I don't want to bore anybody with another history lesson like I did on the last spaces when I talked about black Monday.

Engagement with New Market Participants

I love history. You could talk about it. Yeah. Well, I mean, I've just been in the markets for so long and I love all the new people and the young traders because it really just sort of invigorates me again and their enthusiasm and the charting and just the general excitement and it just keeps me sharp.

Historical Reflections in Trading

And I've just been doing it for so long that I don't really react the way people do right now because everybody's just got a handheld device in front of them and everyone's just so hyper focused on the up and down movement. And I just sort of look at the broader picture and that's just the way I am. Like, I find that our personalities really reflect our trading and our investment.

View on Fundamentals and Charting

And that's super important because like, someone who's got like a type a personality or someone who's just a totally different person, that really will affect how you react to the market. So I'm just a super chill guy and I really look at fundamentals. And I used to be like freedom by 40 and a and I used to just be all about the charts.

Evolution from Charting to Fundamentals

And when I first started in 1987, I was really all about charting. And I grew over the decades to really understand fundamentals and realized, in my opinion, that the fundamentals really drive the story. The stocks move on narratives, and whatever narrative is happening, then that's what's going to drive the growth.

Narratives in Market Growth

So, you know, I don't want to bore you guys with an old guy history lesson, but I just think that we're really in this AI narrative. And AI is going to really move, it's going to continue to move the markets. I think by 2030, AI will add $16 trillion to the world's gdp, boosting it by 14%.

Historic Events and Market Reactions

So what happened three Mondays ago? Everyone's talking about what's, the markets are going to do this, the markets are going to do that. I think everyone just needs to calm down and just look at history. Like, what did history show us in the past? History is fascinating.

Attention to Current Economic Leadership

Like, if we really look at what has happened before us, it really reflects what's going to happen in the future. So, you know, like, who is our Fed chairman right now? It's Jerome Powell. And in my opinion, I think he's probably one of the best. He's just been doing a fantastic job.

Evaluating Recent Fed Actions

And granted, he probably should have cut by 20 basis, 25 basis points on the last Fed meeting. But, I mean, they're really data driven. And, you know, whether, what data is real, what's not real, there's an argument for all of that and what, you know, but I just think that he's doing a phenomenal job.

Critical Analysis of Past Rate Cuts

Like, for example, in 2001, the Fed started tightening, and we've been, sorry, in 2021, the Fed started tightening, and we've been in that environment ever since. Right? So we had Janet Yellen before Jerome Powell in 2014 to 2018, Ben Bernanke before her in 2006 to 2014, Alan Greenspan in 87 to 2006, Paul Volker before him, William Miller, Archer Burns, Thomas McBride, and then rob Young in World War Two in 1936 to 42.

Leadership in Economic Affairs

And they're there. There's an argument for all of them. But Jerome Powells is doing a phenomenal job threading the needle. And I think he will just sort of create this soft landing. And everybody's different. Every, that's just my opinion.

Personal Experience and Investment Strategies

I've been, I'm just an old dog and I purchased four homes doing this. And I've just become sort of numb to a lot of things. And what happened with the Fed. Sorry. With the carry trade three Mondays ago, it was totally awesome.

Recent Market Events and Personal Investments

I thought it was just super unreal, like, and everyone is panicking. And the 1929 doom and gloomers, I call them, were crawling out of the woodwork. And that's when I just started loading up the boat on margin. I'm a professional with margin trading.

Approaching a Bull Market

I don't advise it, but I've just been doing this for so long, that margin, I only use it in those circumstances. And we're still in a bull market. And the yen Kerry trade was, you know, it's been going on for 30 years and I know quite a bit about it.

Understanding Market Trends

And I knew that when the Japan increased their interest rates by 25 basis points, the market basically hemorrhaged. And that was just a huge buying opportunity. And we just had this, you know, whether you want to call it v shape recovery, it was just a massive buying opportunity because I knew were still in a bull market and I just loaded up the boat and I'm like fully invested now.

Navigating Seasonal Changes in Market

So a's right, we're going where there's some seasonality hiccups coming up in September. Seasonally, you know, if you believe in the seasonals, I think, you know, Exmas rallies starts in October, goes and we sort of grind up towards Christmas.

Engagement and Relevance of Discussion

Am I boring everybody? I am loving? No, please keep going. Yes. I'm sorry, what were you saying? Yeah, exactly. Right. I'm just kidding. Keep, keep talking, Mandy.

Sharing Insights and Market Experiences

So, you know, I don't know, I'm just an old dog and I've just got a memory of an elephant. And I love all the new guys. I mean, it's so cool and that you guys are just so sharp and interested and that's what really makes a good market is there's going to be times where you learn.

Reflection on Learning Opportunities

And the carry trade was just a huge learning curve for so many people. I was just getting messages after messages and people just saying, I'm scared and I'm just like. And I could tell how, I can tell how young people are and where they're at in their trading and investment careers.

Personal Investment Decisions

And I personally was just, I leveraged myself to the max because I felt, and just all my experience that we're in a dollar cost average environment and the fundamentals, you can look at the charts all day long, which is an awesome tool for your toolbox.

Investment Strategies During Market Conditions

But if we're in a shitty environment, like if we're in a bear market and your dollar cost averaging, well, you're just catching a falling knife. And like, a lot of people did that in 2008. And when the Fed started cutting in 2008. Hold on, 2001, January 3 was the first rate cut.

Comparing Rate Cuts and Economic Responses

So we're coming up to the first rate cut in September, which was what Jerome Powell just announced. We had a sell off the day before the Fed chairman was to speak at Jackson Hole. And that's just normal stuff. Like the markets will sort of start to price in what's to come.

Market Expansions in Different Sectors

And that's sort of a healthy environment. Like we have this market expansion into small and mid caps. And that's another thing you want to see in a bull market. You don't want to see like the seven fang stocks just leading the way and there's no growth for anything else.

Broad Market Growth Indicators

And you really want to, you know, you really want to see everyone rise with the tide going up at the same time. And that just sort of tells you that there's also a lot of growth. We've, you know, we've got an election year coming up. So on January 3, 2001, we had the first rate cut.

Historical Context of Market Behaviors

S and P fell by 39% over the next 448 days. And that was the.com bubble. And then in 20, and then 2007, on September 18, we had another first rate cut. So people are scared that this first rate cut is going to be another 2008 and another 2001.

Significance of Market Context

And in 2007, that first rate cut, we fell by 54% over 372 days, and unemployment rose by 5.3%. Obviously, that, which was the housing crisis, so we're not in those environments, is my point.

Concerns from Historical Perspectives

Like, we still have all these 1929 doom and gloomers, and so we've got Nvidia earnings coming out on the August 28 after the print we've got, the feds are going to start cutting, which will increase liquidity and the m two money supplies coming on.

Relation Between Bitcoin and Historical Events

Bitcoin sort of was born out of 2008, in my opinion. Whoever created it, I don't know. I think probably, in my personal conspiracy opinion, I think Elon had something to do with it. But who knows?

Final Thoughts on Monetary Policy

The fed's going to start printing money going into Christmas. Bitcoin is super cool. It's just amazing. I wish I had bitcoin when I was younger. Instead of buying homes, I would have just continued to buy bitcoin.

Personal Journey with Bitcoin

And I started buying bitcoin in 2013. I can't remember what I paid for it. It was $595 or something. When I bought my first bitcoin, I had no idea what it was, and I just was, you know, someone was talking to me about it.

Initial Thoughts on Bitcoin

I go, that's ridiculous. Get that out of my face. And then I just started becoming more and more orange peeled. Am I, am I being pedantic? Sorry, guys. Just yak in a way.

Endless Discussion Around Market Topics

I can go on for hours. You're fine. No, you're fine. I think the important point is it's good to hear your perspective from the mecha economic standpoint.

Integration of Personal Experiences

I also think that I agree with your sentiment because it's just like, I remember back in, like 23 years ago, I have a shower for a whole week, and then all of a sudden I shower because, like, the world's crashing.

Reflections on Public Perceptions

Like, around me. Nobody wants to be around me. Yeah. And, like, I go shower and everybody freaks out. Oh, my God, you're finally showering. Like, this must be really bad, you know?

Historical Lessons and Market Reactions

And then the same thing happened about, like 15 years ago. You know, I didn't shower for like, five days and, like, did the whole thing. The whole thing's crashing, right? The same thing.

Public Responses to Market Changes

Right? I went showering. Everybody's freaking out. Oh, my God. Like, are you gonna go find a job or, like, you know, are you going, are you gonna be okay? And then, like, now I just haven't showered for like, a day or two.

Perceptions Behind Personal Actions.

And then, like, I jump in the shock. Everybody's freaking out. Like, I don't understand. Like, the whole, like, rate cuts gonna bring to a recession argument. Like, it doesn't really make a whole lot.

Evaluating Economic Strategies

Well, the rate cuts will, like, when there is a rate cut, the, like, Jerome Powell isn't just gonna start slashing. It's. It doesn't work that way.

Steady Approach on Monetary Policy

Like, he's gonna cut and then see what happens. Right? He's gonna see how the market digests. He's going to see how the markets react.

A Call for Calm Amidst Uncertainty

He's going to look at all the data. Like, people have to just relax. It's not just like, oh, my God, Jerome Powell's going to cut and we're going to see another 2008 housing crisis.

Analysing Historical Trends

Well, the 2008 housing crisis was totally in a different environment, and we are. You have to look at the fundamentals.

Investment Decisions Based on Fundamentals

So why am I. Dollar cost averaging because of the fundamentals. Like, why am I loading the boat? During the carry trade? When stocks fell, Nvidia fell by.

Recognizing Market Responses

It was an incredible amount. Yeah. It fell down to like 90, 92, 93 or even 90. Yeah. And it was, it was the entire, it was the entire net worth of what's his name?

Impact of Major market Players

Old fart Warren Buffett. Higher market cap and market cap in one week, like, it fell and then it wrote. And then the huge buyback from institutions was just, which just was unbelievable.

Fed Responses to Market Fluctuations

So, so the feds will cut and then they'll see how the market reacts to that. Like they're not just going to keep slashing and slashing. It doesn't work that way.

Expectation on Rate Cuts

Like, we're going to see a cut of probably 25 basis points. Like all these people, everyone keeps talking about how it's going to be 100 basis points.

Future Planning and Market Dynamics

Well, if that was the case, if they started cutting by 100 basis points, that's just going to show the market that there's something really fundamentally wrong and the markets are going to completely hemorrhage.

Perspective on Jerome Powell's Leadership

And so Jerome Powell's not that stupid. They're going to probably cut by 25 basis points. We'll see how everything reacts and behaves, and then they'll probably cut again.

Market Sensitivity to Changes

And the market will digest that. The market is uber sensitive. Yeah, I already think that the market is already digesting it.

Understanding Market Conditions

The rates have already topped in October 2023. If you look at real yields, which is what really matters, because that's really what's really drive the liquidity is what the two year, ten year, and they already peaked in October 2023.

Role of the Fed in Market Dynamics

They already did the work for the Fed. So I think they're just kind of falling through the market conditions and just kind of going through with the motion.

Impact of Employment Data on Fed Decisions

And I interject, I just want to point out, too, that if their decisions are based on job performance, job growth, job losses, then that is going to be lagging everything anyway.

Concerns Over Economic Responses

So even if they're, like going to wait and see, like, they do a cut and then they're going to wait and see how things are going, the job losses will keep mounting. So then, of course they're going to keep cutting because, oh, no, we've got to keep cutting because the jobs are.

Understanding Economic Cycles

And then it just keeps getting worse because, so they keep cutting because the job losses take a lot longer to process through the whole cycle than their Fed meetings.

Market Behavior Insights

So I do think that we'll see a series of consistent cuts for a while and then they'll cut, you know, of course, then they'll cut too far too fast because they can't. It's like being on the highway, you're going somewhere and there's congestion and you get all that start and stop traffic just because cars are being added to the back of the line faster than they can peel off the front, that kind of thing.

Market Dynamics and Volatility

Yeah. But I do think that the market's already digesting all that. I do think that the yields and rates are already kind of market condition based anyway.

Outlook on Future Markets

So I think it's going to be okay. You're going to have a lot of volatility going, but I don't think it's like 2020, 2000. I don't think it's 2000 or 2008.

Distinctions in Market Events

I don't think it's necessarily like that. There's really no, anyway, that I digress. I do want to eventually circle back to Roy and ask him about the minor position, but I do have somebody who requested to speak.

Engagement with Audience Opinions

David, if you want to take a few minutes to kind of share your thoughts. Thank you very much. Thanks for having me. I just have to call out a.

Experience and Learning in Trading Spaces

I've been doing space for like six weeks. I did my first YouTube video recently. Talk about young guys. I'm like twice as old as everybody here.

Appreciation of Trading Skills

Okay? There is nobody else in all the spaces I've listened to. That's a pure natural trader than a. He's able to see both sides of the trade. It's a nearly impossible skill.

Processing Market Trends and Trades

Okay? There is no such thing as creating a divide between trading and fundamentals. Companies themselves have their implied volatility.

Impacts of Government Policies

That's a wave function. It's been suppressed by the government's policies. And so he's telling you, he's seeing the wave restored towards its natural volatility.

Significance of Awareness in Trading

Wider ranges, okay? This is such an important skill. So when you have, you know, bright people on here talking about history and context, we can give you context every single time they cut rates after a period of extended, protracted policy interference, whether it's rate hikes or quantitative easing, they reset the liability structure of banks, which are somewhat rigid at a level above their income, which will show up when they cut rates.

Historical Evidence of Economic Downturns

That's what caused the bankruptcy of Fannie Mae in the 2007 GFC. That's what caused the bankruptcy of $1,500 in savings and loans in the eighties. That's what caused the bankruptcy of continental illinois, the largest bank that had ever gone bankrupt at the time.

Examining the Federal Reserve's Market Role

When they say the Fed has a dual mandate, that's not at all true. They don't have a mandate of labor or price stability. They have one mandate.

The Real Mandate of the Fed

It's to keep the banking system functioning. And there are 20 times. It's one of our highlighted peaks where Citigroup called the Fed and said, you need to cut rates now or we're a going concern issue.

Market Challenges and Federal Responses

This is not 2008, of course. It's much worse. Add up the market cap of Citigroup Deutsche bank and BNP Paribas, it's less than $230 billion.

Counterparty Risks in Banking

Okay? Do you know how many trillions of dollars of counterparty risk they have? And when does it become a problem? It only becomes a problem when the yield curve inverts a.

Monitoring Critical Yield Levels

And it doesn't mean that it's inverted by one basis points. It means the level where Continental Illinois blew up was one level. The level that Fannie Mae blew up was a different level.

Understanding Liability Structures

When you go below the level of the inversion that caused Fannie Mae to go bankrupt, because you can't stay in business when you pay more for your liabilities than you can generate in your income.

Market Conditions and System Instability

And so when you start to have a say, I'm seeing the malignant seven, as we now call them, when you see them, have a problem.

Identifying Warning Signs

When you see Nvidia go from 140 down to 90 pre market, that's a problem. That's so much market, captain, you've got Nvidia at 11% of GDP.

Impact of Major Companies on Economy

You've got these seven companies 60% of GDP. There are two more. They're sucking all the life out of the economy.

Analyzing Past Market Crashes

And when they're going up, they push rates up, they push credit demand, they push confidence, they push excitement.

Historical Context of Tech Stocks

What happened to Amazon in 1999? It fell 95%. What happened to Apple? It fell 82%. What happened to Microsoft? Over two waves, it fell 75%.

Understanding Market Credit Structures

What happens is the structure of credit demand has been deteriorating since the beginning. And now you have the ten year treasury at a level where if the Fed didn't start cutting, you'd have mortgage rates collapse and the banks would evaporate within weeks.

Consequences of Rate Adjustments

The whole system would fail. So what's going on right now is the Fed is actively trying to disinvert the curve.

Forecasting Future Fed Actions

And the only question is whether they go a linear or they go a nonlinear pace. Because where did the ten year close at? 38379 whatever in the cash market, that's critical support.

Market Dynamics and Mortgage Rates

But what if it gets to 350? Where are mortgage rates then? So mortgage rates, which everyone needs to follow because, you know, you guys are trading equities, which some of you are like, so amazing.

Significance of Mortgage Rate Fluctuations

And the best of which is a, they're short volatility instruments, you know, so when you see volatility, you get to one side of the band, then you go to the other side of the band.

Trends in Market Volatility

Some great traders say, hey, my band is widening. It's doing, you know, extra, extra wicks. There's more of a broadening out because I don't have enough policy suppression of prices.

Understanding Bank Responses

But when you get rates going down and mortgage rates going down, what does a bank do? So when I finish talking, I'm going to send over a chart from the savings alone crisis.

Historical Insights on Banking

The savings alone crisis. When Volcker, who was a maniac, raise rates to 20%, that caused a lot of health and maturity losses, a lot of what they call unrealized losses.

Analyzing Bank Failures

A few banks blow up, kind of like a Silicon Valley first republic. But it was not a systemic problem. Rates came all the way back down.

Inflation and Economic Benefits

That started the problem, because inflation is great for banks, high rates are great for banks. It's great for the economy.

Revenue Generation Dynamics

It's great for the stock market. More revenue. Beautiful. The problem isn't high rates.

Understanding the Impact of Low Rates

It's always and forever low rates. And that's why Silicon Valley bank's stress test at the time only focused on lower rates.

Banking Sector Preparedness

They never focus on higher rates. Usually companies have some kind of hedging, which Silicon Valley bank just literally paid the guy off to not admit publicly that they didn't have the hedges on.

Consequences of Inadequate Risk Management

They paid him a $6 million severance package. But lower rates are the death. It's the end of nominal growth, and then you lose the revenue and you lose the whole story.

Market Reactions to Economic Signals

So when you have a ten year at 3.8%, and you had, on August 5, you had a mortgage rate of 6.4%, the Fed had an emergency meeting.

Strategies in Response to Sell-Offs

They said, we've got to stop this sell off. How do we stop the sell off? We've got to tell everyone we're not cutting.

Critical Timing in Federal Decisions

We've got to push down the liability on the balance sheet of leveraged traders. Remember what caused this. People are talking about the yen carry trade.

Understanding Market Mechanisms

That's nonsense. The yen is only one little piece of what's going on. There's the 30 year treasury carry trade.

Recognizing Diverse Market Strategies

There's the ten year note carry trade. There's the five year carry trade. Everyone is short these at record amounts.

Analyzing Market Behavior

Just look at the commitment of traders reports. There's historic shorts across every treasury, everywhere. How about shorting of XLu, XLV, XLP?

Part of the Carry Trade

Those are part of the carry trade. The carry trade is just another word for leverage. Now, if you want to know about August 5, we're right back there.

Market Sensitivity and Awareness

Where's the end? Today, I haven't heard one person talk about the end. The yen is right back at the level it was when it's supposedly started this problem that the Fed, in their emergency meeting, they didn't say, oh, let's cut.

Strategic Planning Post-Intervention

Like Jeremy Siegel says, no, we've got to stop the rise of the price of the liabilities on the balance sheets of leveraged hedge funds. Because when you see utility staples in healthcare, which last year were the source of funds, everyone was shorting every single one of these things.

Market Adjustments

And they said, hey, why would I not short a utility? They're making 5% a year. I'm making 30, 40, 50% growth in my tech.

The Timing of Position Adjustments

I'll close out my position when the growth differentials, when the peg ratios converge, I got plenty of time to get out. Well, guess what? They started getting out.

Shifts in Investor Behavior

You've got utility. We get staples in healthcare at all time highs, okay? Since July 14, when Apple hit an all time high, we've had one new high in any of the malignant seven.

Market Comparisons

Since then, one meta on yesterday, okay, you've had over 100, maybe 200 new highs. And staples, healthcare, utilities, these are people that are having to be short and cover their shorts, okay?

Market Dynamics with Rate Changes

If rates go lower or, excuse me, when rates go lower and the fed is trying to stop rates from going lower, when they do, you're just going to see more of a rise in staples, utilities, healthcare, home builders.

Impact of Current Economic Conditions

How about rocket mortgage? Rocket is carvana. But instead of going from excess inflation to normal inflation, which helped Carvana have a better business, and they killed the shorts.

Identifying Investment Opportunities

And that was the only long we would consider out of the top ten lists because typically you have the miners with heavy shorts, some biotech, and then Carvana was the first, like economically sensitive one.

Understanding Market Responses to Economic Changes

Now you have rocket united wholesale. These guys have very heavy short interest. And what happens when mortgage rates go down?

Financial Dynamics in Mortgage Lending

They don't hold the paper. They don't have a big problem. They just make more money. They get more volume.

Prospects of Lower Mortgage Rates

What's going to happen when mortgage rates go to 599? Every single broker is going to call everyone. I can get you a rate, you can refinance.

Market Behavior in Changing Conditions

People say, well, no one's going to refinance their two and a half to four and a half percent mortgage. Who cares? There's 3 trillion above 5%.

Market Opportunities with Rate Changes

There's 3 trillion that could refinance. So the problem is if rates go lower, it starts to lift further and faster in an accelerating way.

Consequences of High Leverage in the Market

The liability on people with leverage who are shorting, how many people said, you know what, I'm not making enough money in my value, I'm diverting that passive investment to growth funds.

Shifting Investment Strategies

How many people said, my growth funds are beating my s and p by 100%? Let me divert that money to a growth fund. What happens when the differential compresses and you get a few people shifting from growth to the s and p from growth to value.

Understanding Investment Flows

And then these things are at a high. You're squeezing the system now. But the yen, I mean, the yen is going down for 13 years.

Long-Term Trends in Currency Valuation

People are shorting the yen. They don't even care. They don't mind if they buy a pet rock. That's an old reference.

Investment Strategies and Market Speculation

They don't mind if they buy. Whatever they buy. They're shorting and they're making money on their liability. These are called liability driven investments.

The Market's Focus on Short Positions

They make money on their short. The yen stop going down. November of 23, Powell signals at the press conference.

Forecasting Economic Signals

Okay, go town. Start buying the euro dollar, the sulfur, the one year out. It's called the red pack.

Understanding Market Timing

The first four quarters are the white pack. The second four quarters. The correction isn't correcting if you'll notice.

Meeting Timelines

That's like one year. One year forward. That's the meeting that starts. Let's say today is August. The meeting that would start in August of 2025 would be the start of the red pack, and the July of 2026 would be the end. So you have people buying our redpack, driving down our implied rates. While Japan is fairly stable, the interest rate differential starts to compress using the convergence of the red packs going out one year. It's the most liquid financial instrument there is. And then the yen stops going down six trading days later after the Fed signals. Okay, buy some of our paper. What happened seven weeks later? The Fed has a panic. What happened on August 5 was going to happen on January 5.

Fed's Challenges

It happened on January 3, 2001, when they had an emergency meeting and they cut 50 basis points and the Nasdaq rose 17% that day and they blew up people. So they said, we cannot have a refi wave right now. That's it. So what did they do? They went out there for the next three months and they started screaming, higher, for longer. We're not going to cut Michelle Bowman and Kashkari K two. They were talking about raising rates as recently as June 25. Yeah. David, I'm sorry to cut you off. And I want to say a couple of things. First of all, I think I can speak on behalf of a lot of us. We can listen to you for hours. I just want to let you know. Like, we can listen to you for hours. I have to go in like ten minutes.

Wrap-Up and Market Insights

Can I get 1 minute to close up? I appreciate it. Yeah, I just wanted. Yeah, please, please. Yeah. If you want to take like another minute. Okay. Thank you. Thank you. I'm just trying to get you to understand it's the greatest opportunity in history to make money. There's $500 trillion out there. Stop with the narration. Do the observation like a, when you see something weak, maybe there's a reason, and then go back and look. Maybe why there is. And for that reason, when I noticed the weakness, you know, when you start picking up on, like, Warren Buffett being the most cash heavy he's ever been, seasonality. I've gotten burnt with trade. So the best thing to do is sit on your hand sometimes and really thoroughly analyze the market and let it play out for a little bit longer.

Market Strategy and Caution

So you get compromise of the direction, because right now there's no confirmation of any direction. Not down, not up. And this would be the most dangerous time to enter a position because the wrong position could have you sitting in it for weeks, months. So with that, you know, I'm just very cautious at the market right now. If everyone would record what he just said and play it over at bedtime every single night, you'll get rich. If you don't listen to him, you'll give all your money away. He just told, thanks, David, for speaking, man. We learn a lot from you. Okay, it's my pleasure. Yeah, I mean, like, you can do a whole space just by yourself. And I think a lot of people on here would love to live.

Future Predictions and Market Behavior

Open up space, David. I'll co-host it. We'll let you. What do you mean? You. You set anything up, I'll be there whenever you do it. August 5 was the first wave of a whole series of waves. And when you see the rise of the rebate, the things, whether it's yen, dollar, bond, it's gonna be yen, bonds, utility, staples, healthcare, home builders, all time highs, that's the money leaking out into other things. And the bubble is deflating. And someone with cats whisker eyes like a is saying, I'm not seeing what I expected. I'm taking it out. That's all. You've got to do that. You can't use structure. You can't use timeframe, you can't use history. You've got to use price wrapped into your fundamentals. Okay, I'm done.

Technical Analysis and Market Sentiment

It's really, it's really interesting, actually go through such long, you know, historical perspective. And ultimately it depends on what's happening. It's all the same. It's all the same. Why two KFC? Why two KFC was one episode divided by Bernanke and Greenspan driving the dollar from 121 down to 71. Those two things are going to happen simultaneously now. There won't be an interface anyway. Thank you. Thank you, David. Let me know when you have a spaces. Send me a link. I'd be delighted to join and give you my thoughts. We would love to do that. Thank you so much, David. Thank you, David. Have a nice day. Record a follow a. If he's not taking risk, and you're taking risk, you're making a mistake by disagreeing with him.