Flagship Pod: Inflation Is Not Going Away

Every single Friday we host a live discussion in our Discord Channel at 12:00pm EST. This gives you the opportunity to ask us questions and hear our thoughts on the things you want answers to!

Here are the 4 key things we went over for this week: 

• Why the CPI still came in too hot

• Why the market still swung positively on terrible inflation news

• How we're thinking about crypto as it still trades sideways

• What stocks can still perform well if this downturn deepens

If you'd like to listen live and ask us questions throughout the next live session, just join the weekly Friday afternoon session at 12:00pm EST.

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Check out a broader summary & transcript below! 

Peter Starr:
From moby.co. This is The Flagship Pod, a weekly podcast about the stock market, the economy, and the various market forces powering the world around you. As always, I'm your host, Peter Starr, bringing you this week: Market Mayhem folks. The CPI came in just a little bit too hot this week and last week we had one of the wildest relief turnaround rallies we've seen in a long time.

The Dow was currently in the process of absolutely shedding that entire rally though. So the only winner in the market these days is volatility. We're going to be talking the macro environment coming earning season, and just how we feel about inflation so far because honestly, there should have been at least some more progress in inflation based on just how badly we've been raising rates right now.

So seeing how the market reacts is going to be pretty wild over the next couple of months, but it all comes down to earning season, which on the bank side of things is doing pretty well. To help me untangle this wild new macro environment, as always folks, I am joined by Justin Kramer, CEO, co-founder and chief analyst here at moby.co. Justin man, how do we even start making sense of this? It is pandemonium post-CPI here in the market, right?

Justin Kramer:
Yeah. The market's moving in ways that I don't think most people anticipated. Happy to dive into our interpretation of what's going on and what's to expect next, but definitely there's a lot going on. 2022 seems like an absolutely insane year.

Peter Starr:
Exactly. And we'll get into all the reasons why and what that can mean specifically in the sporting world later on. But Justin, the thing that I still don't understand, I am currently watching the Dow absolutely shed in a wild 800-point swing from yesterday. Why do the markets rally so hard when the CPI came in so hot yesterday? What is the deal with that? Why would the markets pull off such a weird change like that?
 

Justin Kramer:
So the markets are trying to time the bottom, which is what you'll see in a lot of these bear market rallies. Basically investors, your job as investors to buy as well as possible and sell as high as possible. It's pretty straightforward. And so on the way down, investors are constantly thinking that they're close to the bottom, close to the bottom, and we'll see these rallies for a few days and then investors and the rest of the market will realize that, "Hey, we have more to go." So with month-over-month increase in inflation, with inflation still being pretty high, a lot of investors are actually interpreting bad news as kind of good forward-looking news in the sense that things are still getting worse or they're worse enough where we're close to the bottom. Let me get in now because even if it gets slightly worse, I know that we're almost in the clear of this.

So when we look at the Fed's interest rate policy, which is sure to clear the 0.75 basis point level or 75 basis point level at the next meeting on November 2nd, investors are thinking, they're going to raise again. And once they start getting above the 4% federal funds rate, interest rates for mortgages get above 6%, 7%, we got to be close to the bottom here. So they're looking at bad news as good kind of forward-looking momentum in the sense that we are close to the bottom, we're almost there. I'm going to invest now so that even if it slides a little bit, I'm getting as close to the bottom as possible. And that's why you saw a massive rally yesterday. Again, the market is now very efficient, quickly correcting and getting back to where it should be. Our interpretation of this right now is, yes, it is good to add to your portfolio.

Now markets are down over 20% of the year. Definitely good to capture some of that upside, so when they do rally, you can capture as much of it as possible. But we do believe that there is a lot more bad news to come before it gets better. OPEC is increasing the cost of oil through their policy with reducing the supply of oil, outside of oil and food prices. The rest of core inflation has gone up. So we're definitely not out of this yet. The Fed has shown they are going to aggressively raise rates even if it means putting us in a recession. We can get into our view on that in a second, but long story short, we believe the market will keep sliding. Having said that, like we've been saying this whole time, if there are names that are very oversold, it makes sense to add these positions now. So in that way they do reverse, we're definitely dollar cost averaging down.

Peter Starr:
And yeah, that's the main thing too is that you, the investor need to stay the course because the market is going to just keep reacting in these absolutely wild swings. Yesterday was an absolutely brilliant day to be a degenerate day trader betting the market would go up on the CPA regardless, and now it's a great day to be a degenerate day trader just immediately reversing your strategy as the Dow is given up mostly almost half of yesterday's rally, which is just wild. I guess the other major theme too, Justin, is it's a period of time where we're just completely defying expectations. You think it's still a pandemic, you think fuel costs everything, you're going to make travel really hard, but then earning season has also started and the king of earning season right now is honestly Delta who believes that they're going to see travel volume get back to pre-pandemic levels as soon as the beginning of next year. So things are really hard, but some things are going really well. How is Delta pulling off this completely backwards kind of growth right now?

Justin Kramer:
Yeah. It's a good question because we've talked about Delta for a few years now and if you're reading between the lines, this is something that we've been talking about for a while in terms of Delta being a stock that we fundamentally believe in. So over the summer, the major thing plaguing headlines was that the cost of oil and ultimately then jet fuel were rising month over month like crazy. But Delta has such a strong brand relative to the other airlines that they were able to pass on a lot of those costs down to their customers. And now we're seeing the travel demands start to rebound even further. Even further to the point where now Delta is projecting by next summer, not only will they be back to pre-pandemic levels, but they'll actually be above pre-pandemic levels. So with inflation should cooling down by next summer, which means that their margin should be higher because gas prices will be less and demand being higher than ever. Delta relative to the other airlines as a company that's going to do very well.

And so, when we look at the stock over the last five days, that's why it's trending up 5%. It's down over the last month and it's down year to date, but it's been relatively flat since a lot of this positive news earlier this summer. So again, the market unfairly is going to discount names and companies that are doing very well. It's our job to figure out which ones are going to do well. So when the market rebounds, it has opportunities to go up. So Delta's a name we fundamentally believe in strong forecast going forward, and we believe that record revenues are definitely to come.

Peter Starr:
That's really great way of thinking about it too. It's one of these kind of defy expectations type downturns. I mean with the CPI where it is and the market pricing in another 75 to a hundred basis points rate hike coming in for November. I mean it's really hard to not call this already a recession and it's just we're waiting at the clock to see when the US will actually say, "Okay, yeah, this is a recessionary environment." And so this recession can just be qualified as the great inflation or the great period of like, I have no idea what's going on because supply side inflation is just so bonkers in terms of how it's going to be putting pressure on the system. And just to address an audience question real fast, people keep coming into the comments and saying, "Okay. Did the CPI go up because of OPEC?"
You need to understand that the CPI is a lagging indicator. This CPI, the one that came out in October is for price increases that happened in September. And so, we haven't even priced in the oil price issues that are going to come from OPEC cutting production two million barrels a day until whenever, and how much pressure like Biden administration's about to put on Saudi Arabia for leading the charge on this reduction in production. So a lot of volatility is yet to come folks, but the CPI's going to have a hard time going down next month with supply site inflation coming right back. And especially, since energy prices go up anyway in the winter time as people buy more natural gas, pay for more electricity and buy more oil to heat their homes and do indoor activities and whatever.
So Justin, as we get through this, I guess the most important thing is we're finding those long-term plays, which is why our audience is honestly been really excited about your latest update to our F1 analysis. We've been passing the F1 football back and forth. I initiated our coverage in F1 and you took that and refined it a lot to this latest price target update. Can you take me through Formula One that's FWONK on the Nasdaq, in terms of what we're thinking about in terms of where they're going to go in the next couple of years? Why are they looking even more attractive even in a potentially long term recessionary environment?

Justin Kramer:
So right now, the key for honestly a lot of platforms, if you really read beneath the lines or between the lines rather, is content. You think about the most popular platforms in the world right now, one of them being TikTok. Yes, they're not creating content themselves, but it's user-generated content which is keeping people on the platform. And so, if you're looking at a lot of these tech companies that are now starting to get into streaming, they're looking for unique content. Amazon now has NFL ticket, Paramount has NFL ticket, Hulu has live sports, Netflix is buying up more like original content around the globe. And that is really the key to differentiation. Not to dive into it too much, but advertising just isn't as effective as it once was. Original content, original brand is a true differentiator. So Formula One is a perfect example of original content.

If you look at soccer, there's leagues across the world. You look at basketball, there's leagues across the world. Yes, there's NASCAR in the US, but Formula One is one of the biggest racing stocks or racing companies in the entire world, and it has market share in a way that a lot of other companies don't have and it's car racing, it's very unique. So that's original unique content which forms a lot of the base of what we like. And that went into our original analysis on them, and we have all of this on the website or through the app, so I won't dive into it too much for the background on why we liked them in the first place. But going forward, a few things happened that we really liked. The first is that a lot of their revenue comes from broadcasting. They sign deals with massive broadcasters and those broadcasters then have the rights to ultimately broadcast these races.F1 just walked in a massive contract with Sky, and that represents almost 45% of their overall revenue. Sky will then be producing or showing their content mostly throughout a few European countries, which is great. And F1 likely got the very good side of that deal, which is really exciting. Past that is we know that they recently signed a deal with ESPN this summer from $5 million a year to $85 million a year, which is an insane increase. And coming on the heels of this Sky renewal, we know that now in the US market, in about three years from now when they renew with ESPN or whoever it is, they're going to have insane ability to upsell how much they're making. Five to 85 was a massive jump, just wait for three years from now when their contract expires, they'll have ESPN, they'll have Amazon, they're going to have these major tech companies like YouTube trying to bid for the rights and obviously their ability to do so.

They have some pretty deep pockets to say the least. So we know that massive, massive revenue pushes are going to be coming for F1 over the next several years. And then on top of that, F1 is doing something that's also very unique that they've never done before. A, they're adding in more races next year is set to be the most races they've ever had in the history of F1 and they make about a $100 million to $150 million per race. On top of that, now they're going to start promoting their own races starting with the Las Vegas Grand Prix. Basically today, not to get into the details, they don't do all of the promotion and all of the hosting themselves. They use other third party partners. But today, given how much popularity there is, yes, there's more upfront capital needed, but by promoting the Las Vegas Grand Prix, they're going to have a lot more upside capability, which does come with risk, but we see this as much higher reward.

And so, if this is done successfully, this would definitely be rolled out longer term to several more races along their calendar, which ultimately again, promotes more upside that isn't priced into the stock today. So we're really excited about F1. Their margin growth is amazing, their revenue growth is amazing and they're really just flourishing in popularity. If you look at the stock, they're actually up over the last year and they've done really well over the last several years. And when you're looking at other stocks just in general right now, any stock that's in the green is showing how well it's doing relative to the market. So this is a company we've liked for a while and now given the updates that just happened, we think it's severely undervalued. And when they start making more progress and start renewing deals in a few years from now and also start promoting their own races, we think we can get into stock early now and they'll have massive upside over the next few years.

Peter Starr:
Because the name of the game is this differentiated content audience. It's also owning the audience in relationship you have with your customers on a one-to-one level. So the one thing we're really excited about F1 too is how they are managing to take advantage of the insane amount of interest that has been developed by their Netflix series, Drive to Survive, and turning that into something super valuable for their really high targeting customers with their own content arm and their own website experience. If you want to understand more about the nuance there in what we're thinking about in terms of F1's growth and their growth potential, you can head over to moby.co/go. Sign up for a free trial if you're not a moby.co member. Instead of getting a detailed view of our analysis over the next couple of years because they've managed to take a niche sport and the passion surrounding it, those really high-intent audience members and turn it into something absolutely massive.

Peter Starr:
It's really incredible the turnaround they did in the past three years and how that's exploded in effectiveness in the last six months specifically. Justin, you did mention before, our audience is now asking us based on news. You mentioned advertising is ineffective anymore. Are we done with ad-supported media or just ad-supported anything at all? And the answer to that question is pretty complicated. There are still a lot of ways that you can utilize advertising if you own a lot of data about your customers, that is very effective, which is why I'm still putting together a potential bowl thesis for Paramount and Paramount Plus, but I haven't really convinced the team just yet.

But the one thing that we're really are excited about is Netflix finally announcing they're going to be launching their $6.99 ad-supported deal, bringing the Netflix bowls back. Justin bringing ads to Netflix, good user experience or not, how do you feel about that in terms of supporting a languishing stock right now?

Justin Kramer:
Yeah. I mean Netflix, it's a long overdue for them. They had to do it. I understand from a company why they didn't want to, but they're a victim of their own success. They lowered prices so much for getting original content years ago that ultimately it hurt them in the long run because they didn't have another lever for growth. And they grew so quickly that now they've maxed out a lot of their audience they've captured so much and now there's other platforms and it's hard to differentiate. So it was great to scale, but ultimately now that they're at saturation, they need new forms of revenue. They've tried doing gaming, I mean it's still early days there, but they haven't been able to monetize that fully. So supporting ads, they're going to have to do that. Yes, I said earlier that ads haven't been as successful, but people are still going to spend money in ads.

It's not going away by any means. You need to get your name out there and get in front of people quite often. And especially on these streaming platforms, the data they have and the ads they can deliver is much more personalized, so it totally makes sense to do it. And for Netflix, this should help ultimately really give them some upside. Having said that, this ads platform has been expected for a while, so until it's fully ramped, we have expectations on how it'll scale. A lot of this is really priced in for the foreseeable future. I mean with the stock down almost 65% over the last year, the upside is clear, but at the same time, they're really not in a position over the immediate future to have really scalable revenue line items that can help because they're already making $30 billion, $40 billion a year in revenue and they spend a lot in order to get that. So long story short, we do Netflix over the very, very long run, but over the next year or two, it's going to be hard for this stock to rebound strongly above what the market does.

Peter Starr:
Exactly. And so, that's the main thing too, is just finding these long-term plays, right? That's going to be the main thing we're always thinking about when we're trying to find what's going to work and what's not going to work. And so, like we're saying it's exciting seeing company developments, but at the same time we're going to be seeing probably a lot more short-term pain. But I think the one thing that is finally making a little bit of sense, Justin, is as we run into earning season, right now, leading the charge and earning season is all of the banks. So JP Morgan, BlackRock, Wells Fargo did really well, right? My main question for you is when you're looking at earning season, how are banks doing? JP Morgan is literally reporting right now and coming in pretty hot. How are you seeing earning season play out? Do you see only banks doing well and then everyone else suffering as is to be expected? Or how do you think earning season is going to play out this Q3 now that we're really deep in inflation season?
 

Justin Kramer:
Yeah. It really depends on the financial institution and where they're exposed to. So a company like Morgan Stanley reported yesterday and their investment banking revenues, which is a primary source of their overall revenue, is down significantly, which makes sense. There hasn't been really any IPOs this year for the most part. And then overall, M&A activity is down as well. So given that's a large chunk of their revenue, it's going to be hard for them to do well. But a company like JP Morgan, which yes also has a large investment banking presence, also is the nation's largest retail bank through Chase. And Chase has a large lending business, they have a large checking and savings balance business. And so, companies like that that can diversify there should do pretty well as interest income from loans do really well. And that's why they're beating earnings expectations today even, and that's why we saw the stock jump up.

So you need to be smart about getting involved in finance companies because some will do well, some won't, depending on their underlying kind of businesses like finance companies are very, very differentiated in how they ultimately derive revenue. So we talk about all our favorite ones on the website, so I won't dive into it too much today, but this is something to really watch out for because rising interest rates affect these companies more than any other company. They're interest rates sensitive in a way that really no other sector is outside of maybe tech and that's more from an evaluation standpoint. So this is something to watch for going into earning season, how rising interest rates are affecting each and every stock in the finance industry. These are the ones that can potentially have the most upside. So definitely something to look forward to. And for those of you who've been on the site or through the app, definitely check it out. We got a lot more details and information there.
 

Peter Starr:
And it's also important too to find as these kinds of companies get a little bit hurt by just lots of these mayhem moments, just finding these long-term plays too. And that plays into the crypto market as well, because like you said, Justin, these inflationary situations are also affecting crypto. Bitcoin finally hit 18K again very briefly yesterday as the market turned very temporarily bearish on the crypto site because crypto just reacts way faster. Crypto is once again hovering around. Bitcoin is now hovering around 19K again, it's staying a little bit stable but going down with the rest of the market so to speak. So one thing we also did this week audience for our members is we updated our bear market crypto portfolio. We are watching a situation with Solana very closely. Solana has gotten a little hammered in the past couple of days as their DeFi protocol.

Mango has suffered one of the worst hacks in crypto history, not necessarily in the terms of the amount of money loss, but the amount of control the hacker now has over the DeFi protocol Mango. I'm going to be talking a little bit more about that later. But basically, Solana is being cast in a bad lab because the hacker who stole a hundred million dollars worth of Solana from Solana is now using that voting power they have to basically say, "Hey, I need you to pay back people who lost money on Solana and then I'll give you your hundred million dollars back. It's honestly kind of wild. But things we're doing, we're still holding onto our Solana position because it's just good to be differentiated in those kinds of blockchains. We're excited that the Ethereum merge went pretty well. And so instead of just holding onto blanket Ethereum, we are now staking 50% of our Ethereum as well as 50% of our Solana and 50% of our Polkadot in the bear market portfolio.

Just because we're trying to make APY gains along with the actual price movement, just in case crypto winter lasts a long time, we want to have a lot of dry powder once the bull run really kicks off again. But the one thing we have initiated coverage in using 1% of the actual weight of the portfolio, leaving only 1% of liquidity left, is we've initiated a position in gmx.io, which is a crypto derivatives protocol. Essentially just a place where people can trade crypto derivatives and during the bear market there is some interest there, but that's not going to really pop off until the bull runs. So just a major question is for you, what are your feelings on crypto derivatives? Do you think that's going to be a super fun market or going to be just actual mayhem once people actually start kicking off in that?
 

Justin Kramer:
Yeah. It'll be interesting to play out. A lot of this is very cyclical with the markets themselves, but people don't realize about the derivatives market in general is that it's actually significantly larger than the underlying market itself. It's similar to the bond market, there's a bunch of stocks out there, but of those stocks, there are calls, there are puts, there are different maturities at different prices. For lack of a better term, there are so many options for derivatives that it ultimately ends up being a bigger market itself and has a lot of interesting players in it. More so than most people realize. Like I said, similar to the bond market in the sense that Ford can put out debt that expires every year for the next 30 years in different coupons, in different tranches of different seniority and different classes. So one company can issue thousands of different types of fixed income.

One stock can also have thousands of different types of underlying derivatives against it. To bring this back to the crypto market, ultimately if you're invested in Bitcoin, you're invested in whatever crypto, there's going to be so many underlying derivatives that if you're betting on a play like this, you're betting on ultimately the adoption of crypto further or at least the trading of crypto further because these markets have the potential to be bigger than crypto itself in a certain sense, especially with how expensive it can be or profitable for these companies to trade derivatives. So like you said, the company we're looking at right now and it's underlying token is something that we believe has a ton of upside, but like anything in crypto, it's coming with a ton of volatility and it's coming with upside over the very long run. So this is a small bet we want to make now and we'll continue to either add to our position or add to other positions that are very similar depending on how it shakes out over the next several months, if not several years.
 

Peter Starr:
And the important to their audience is because when you are investing in crypto, you're not doing it as a stock person, you're doing that as a venture capitalist. And so, we are very serious about that being a 1% portion of our bear market portfolio. So if you have a thousand dollars in your portfolio, we are investing straight up 10 bucks in this just to see where it goes because that's the main thing you do with alt coins. You make small diversified bets and if one of them pops off, it covers the losses of all the others because again, there is no guarantee about where crypto is going to go in each individual cycle. And so, you only really invest in crypto as a speculator and as somebody who is willing and able to watch these investments closely, especially once bull season starts again. And you have to pay attention to technical analysis and market cycle so you can take profits at the right time, if you want to make sure that you have air quotes guaranteed long-term value.

Obviously, we're going to be in this for the long term because we've been investing in crypto for a long time and so have a little bit of dry powder from success from the 2017 bull run onwards, so to speak. But that's the main thing we're doing is we're sticking with the cycles and we're just trying to make sure that we have as much of a diversified portfolio as possible so we can hold through what's going to be crypto winter. Don't try to actually trade derivatives in the crypto market right now. That's just pandemonium. Justin, we are literally about to run out of time. So the other major question our audience has, Russia just announced while we were on air that they're trying to get, there's soldiers to evacuate Kherson in the southeast of Ukraine.

So the Ukrainian army is still having a lot of success in terms of pushing Russia out, whereas a lot of the bluster from the Russian forces kind of been words only type deal. How do you think this is going to be keep playing out? Do you think we might actually see an end of this conflict this year? Or is this one of those things where it's just the sort of last gas before a long winter of just being consolidated, so to speak?
 

Justin Kramer:
Yeah. We talk so much about the markets, the economy, but something that you need to factor in, and it's hard to truly know how to factor it in is what's going on in Russia and Ukraine. I'm not saying this will happen, but should Russia drop some nuke or chemical warfare on Ukraine? That'll fundamentally change the entire world, which ultimately then fundamentally changes the economy in the market. So if things weren't confusing enough right now, you have a potential nuclear war or some sort of chemical warfare that is also just on the sidelines of how the markets are reacting right now. So it isn't priced in the sense that that's why the markets are trading down, but that is something that could throw things sideways overnight. So that is something we're actively watching, talking to our folks on the ground, trying to understand where Putin's at.

But that's something that's going to be very, very difficult to forecast. We'll do our best to keep you guys updated. Right now to Peter's point, the Ukrainian army is doing a fantastic job. It's really in large part due to how involved America is. I don't think people fundamentally realize that America is more or less fighting this war against Russia right now with Ukraine, they're just not the one pulling the trigger. They're supplying them with guns, supplying them with military plans. For example, like Ukraine wanted to invade an area and the US came in and completely changed their battle plans and told them what to do, what weapons to use and how to use them. So the US is highly, highly, highly involved in what's going on right now. So it's really something to watch for because at any moment things can change. But the Ukraine army is doing a tremendous job in terms of trying to defend themselves.

I think the number one question that needs to be answered right now is clearly Putin is losing this battle, but how does he lose this battle and also maintain his pride and not lose face with his own country? Because I think that is one of the largest issues right now is how does he back down but do so in a way that at least internally for his own sake, he can look good and continue to have a grip over Russia and there are peace talks going on. So that's something again we need to watch very closely.
 

Peter Starr:
But don't anticipate an end this year. Again, the number one rule right now is delay, delay, delay. So we're guaranteeing that they're going to be digging in for a long winter, not being able to move much until the springtime. But that's when things are going to get really volatile again, because the question is what is the end game? How can there be an end game that isn't catastrophic? The good news is that a lot of what US policy has done is kind of helped Russia back down from the aggressive stuff. And obviously, the fact that all they did was fire a couple of measly rockets at Kiev after the Ukrainians blew up the key bridge from Crimea to Russia to the mainland Europe, whatever. It's really hard to say because Russia and annexed Crimea, even though it's definitely Ukrainian territory. Long story short, Ukraine blew up a really key bridge on Putin's birthday and Russia's only response was launching a few rockets and continuing to lose.

And so, the fact that we're seeing the end game be kind of like a whimper from the Russian side is really encouraging signs so far, but things may get a little bit more volatile once we get back to the spring. What we're probably going to see is people locking in for a long winter and that it's just hard to do war stuff when it's super cold outside, especially again in a part of the world where fall is not a process, it's a light switch where it just goes from Indian summer straight into the dead of winter very, very quickly. So really interesting to see that and hoping for a quick resolution though, because this is one of those things that is also dragging down the world economy. It's making energy prices stay up even before OPEC did their mayhem, it's making food more expensive.

Everything is more expensive when there's a big war in the world when we're supposed to be having this big global partnership. So we're really hoping for a quick end of this conflict as soon as possible. But Justin, that has taken us way over time. Audience, we really appreciate you sticking with us even though we stay on way too long. Justin Kramer, CEO, co-founder and chief analyst here at moby.co. Any final thoughts from you, man? I mean, again, I'm amazed we covered as much as we did in the time we did, but anything else that you want us to keep thinking about as we look forward to the rest of earning season? How do you think tech is going to do in all that, dude?

Justin Kramer:
Yeah. It's a good question and I know a majority of our listeners listen to this, for the Monday release via the podcast for the people who are joining us live now. And I mean also for the people who are listening to this at a later date. We say this every week, but if you're new to the markets, which a lot of our users are either new to the markets or just trying to seek more information, this is a part of market cycles. It feels crazy because it hasn't happened in over a decade. The last time there's been this sort of fear was 2007, 2008, which was obviously a long time ago. And for many people, maybe they weren't invested back then, but just like 2007, 2008, things feel bad and they feel like they can't reverse, but things will get better. And like 2007, 2008, there's going to be opportunities that you are kicking yourself over in a few years from now for not getting involved for example and this isn't the same.

But in 2007, 2008, they were giving out subprime mortgages. There were so many defaults and people ended up, I'm sure everyone's heard stories of this, but ended up scooping up real estate for literally pennies on the dollar and built serious wealth over the next decade by having those prices appreciate and buying them at rock bottom prices. And so, to answer your question, we're seeing a lot of the same kind of happen with tech stocks right now. Valuations 100% were out of control for the last few years. Everyone knew it. No one seemingly cared up until this year when it came crashing to a halt. Having said that, there's still a handful of names that are doing very, very well. Even if their valuations have gotten slashed, there's plenty of semiconductor names that are down 80% that will have long term good outlooks.

There's cybersecurity names that are growing like crazy. If you know the right places to look and you see the ones that have been indiscriminately sold off, you'll know that over the long run, the upside ability for a lot of these stocks is going to be insane over the next five to 10 years. And so, we really urge those people who are listening now just to stay invested in names that will rebound, stay invested in the overall market because like I said, things will get better. And ultimately, this is where the most wealth seemingly is derived, even though it seems impossible right now.

Peter Starr:
As a 33 year old investor, I can tell you my number one regret of 2008 was big. A broke-ass college student. I was literally a year away from having a job and being able to deploy a lot of capital in that market and just the amount of wealth people manage to make from buying at the bottom, buying Amazon, buying Facebook at the... No, not Facebook. Buying Amazon and other stocks at the bottom is just absolutely wild. And so, if you are new to investing and don't quite have enough capital to deploy, number one rule, make a wishlist right now. Companies you think are going to do well, just no matter what and just mark the stock price right now and just keep looking back at it just to give yourself that sort of sense of education.

And if you have capital to deploy, carefully, obviously try to buy some of these bottom dollar prices for stocks you think they're going to do well no matter what. That's our main goal with our analysis right now, is finding the stocks that'll do well in these kinds of markets. But that's the main thing. You want to set yourself up for as much wealth as possible. Not buying too much like taking your life savings and deploying in the stock market right now because nobody knows when the bottom will actually hit. But it's really important to understand that this is the time of opportunity. Buy when people are fearful, sell when people are greedy and you'll do quite well.

Either way, audience, we really appreciate you being here with us. That's a pretty solid place to end it though. Let me go ahead and read you all the credits. Just so you know, audiences, podcast was produced, hosted and voiced by me, Peter Starr. All of the intellectual value from this podcast comes from our analysis team, which is led by Justin Kramer, CEO, co-founder, and our chief analyst here. If you have any questions for us, you can hit us up at [email protected] or join us over at our Discord. Otherwise audience, we really appreciate your time and as always, we have to leave you with peace, love, and incremental gains. Everyone, be well. Thank you so much.