Alpha Report Issue #92

• Current read is 50 on the fear greed index vs 74 last week.

• This index moves very fast and I feel like it should still be on the high side of the greed category…

• The market is still lofty and greedy IMO.

• Market Fearful = Potential Opportunity/Deals. (buy calls/sell puts/buy shares)

• Market Greedy = Potential Over Valuation. (buy puts/sell calls/sell shares)

• Remember, I like to be bullish when there is extreme fear & bearish when extreme greed.

• So right now, I am being VERY careful!

• Opportunity will come. BE PATIENT!

• 30 year fixed mortgage rate falls to 6.58% Today, vs 6.84% last Sunday.

• 10 year treasury bond yield falls to 4.25% Today, vs 4.39% last Sunday.

• 2 year treasury bond yield climbs to 3.71% Today, vs 3.92% last Sunday.

• Interest rates fell this week which is usually bullish for the stock market.

• As interest rates/bond yields DECREASE, stocks become MORE attractive because bond yields go DOWN.

• This drop in interest rates is largely because of the weak jobs report and more interest rate cuts are expected to help support the economy.

Let’s keep this simple and break down what actually matters right now for the stock market and to make some money!

What’s up everyone!
Hope you’re having a great weekend!

I am going to type some thoughts in my head so you know where I am at for this week!

• Market's a little expensive, 10% ish.

• Earnings have been great so far, but the market went up faster than earnings did, so that indicates becoming more expensive even tho EPS is going up.

• Jobs number we got was kinda soft, but again that can be for 2 main reasons.

• 1. Jobs could actually be down straight up because the economy is weak.

• 2. and/or AI is taking jobs and CEOs simply don't have to hire as many ppl cause Ai is becoming so good that it is now taking jobs.

• You all know my thesis that I laid out a few months ago that I expect the unemployment rate to be higher in 10 years vs what it is right now.

• Why? Cause Ai is taking jobs.

• This is why it's so critical to invest as much as you can as fast as you can because the future generation like my 6 month old son for example is going to be living in a MUCH different world than we are right now.

• I want to deal with those new challenges from a strong financial position.

• Money is not everything, but it gives you flexibility.

• We are living in one of the most important points in human life right now with the AI revolution and it's just getting started.

• It will be very volatile, the portfolio swings might make you sick, but it's a part of the game.

• You gotta deal with it!

• Buy great companies at good prices and thats the best hedge you can ever do against Ai replacing you.

• My current allocation in my portfolio is a cautious offensive position.

• Now is NOT the time to YOLO anything Ai.

• Keep ratios in check and only strike when it makes sense.

• We made a huge move and things need to take a breather.

• There is a reason the best investor of our lifetime (Warren Buffett) is sitting on so much cash and nit buying back and BRK stock... Cause there is not too many deals.

• Of course the deals he needs to move the needle are different for us.

• We have an unfair advantage over him caus eif we make a million buchs for example, thats great. But if he makes a mil, that does not move the needle for BRK.

• J pow is prob out next summer and a new fed will be in that cuts.

• I expect inflation to be bumpy for the next few CPI reports but the clear trend down will likely continue which will point to cuts coming which is good for the market.

• The market kinda already priced that in (some rate cuts)

• If interest rates go down, bond prices will go up. (they move inverse)

• Me buying some BLV is a bet on that and also a hedge against the market falling now too.

• I may build a position in that of about 100k ish. We will see how things go.

• I continue to tax loss harvest when I can.

• UNH is going to be fine IMO, you just need to be patient and stop looking at it.

• Overall, its a great time to be alive and an investor.

• I am VERY bullish on the market in a 5+ year time horizon

• But the short term (under 5 years) is going to be a bumpy ride.

To Summarize🤝

• The market is a little expensive now fundamentally.

• If earnings hold up and interest rates trend down, we will most likely be ok.

• If something cracks, whether that be inflation to the upside, earnings to the downside, labor market, economy, ect… Expect downside correction.

• I have said it a million time but I will do it again.

• I am prepared to capitalize on upside and downside.

• My portfolio is 100% long/bullish the market.

• But when it comes to leveraged options exposure, I have that low ish now.

• ALWAYS KEEP YOUR RATIOS IN CHECK

• ESPECIALLY IN THE LOFTY ENVIRONMENT WE ARE IN NOW.

I bet you lose money with Stocks & Options or you have in the past...

Most ppl do...
The most ironic part...
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It's not rocket science.

But you need a system that is proven to work.

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