the next 72 hours...

Hey everyone, me Kevin here. The futures market is throwing some sand in the face of the long-term investor sandbox and it stings in them eyeballs and I don't like things in my eyes. Okay, I just finished yet another cup of coffee and yeah, it's the Luigi mug. Why? Because even though futures are red, I personally feel really green about where this economy is going to go, especially after midterms. Keep in mind, people get really nervous going into midterms. And even JP Morgan told us that going into midterms, you tend to have volatility. Duh. There's an opportunity there. There's a play there. We're going to talk about that. Uh JP Morgan reported that 3 months after midterms, historically looking back the last 50 months, markets or sorry 50 years, markets go green in the like 75% of the time and they are green 100% of the time 6 and 12 months later. So, in other words, this is an opportunity to take advantage of dips in my opinion. Except there's a specific kind of dip we can take advantage of, and I'm going to talk about that right after we look at what's actually going on here. So, three things have just happened. First of all, futures are red. That's one. Anthropic says they're going to be profitable for a second quarter. We've got to talk about that. There are some problems in this uh both good and bad. Uh and then a lot, this is the big one. Well, actually, there's yet another thing. So futures are read in part because of in my opinion uh Iran delaying its meeting with neighboring countries on behalf of the neighboring countries who wanted a little bit more time to get consensus. I think a big deal is brewing to be determined and I'm going to explain how I think Donald Trump can kind of separate himself from the Iran situation in just a moment. But you've got to know that within the next 72 hours, and this is the big thing, a lot of change is possible, we might have the first interest rate hike with a now 86% chance that we have seen in the last 3 years and two months. Like chat GPT came out 3 years and four sixish months ago. Yeah, three years and sixish months ago broadly for consumer release. three years and two months ago was the last time we had an interest rate hike. Uh and so there's going to be some nervousness going into oh my gosh, we're actually about to start a hiking cycle again and we might get Allan Greenspan here. You know, he started in 1998 going through 2000. He was kind of credited with marking the top of the bubble with his final blow, his final rate hike. Markets are now pricing in three to three and a half hikes by April. Not ideal obviously, but it's priced in. I actually hope we get fewer than that. potentially only one or two rate hikes and we start getting some evidence that inflation is coming in as this war comes to an end. Hopefully, maybe that is too optimistic. So, there is a strategy around this we'll touch on in just a moment. But, of course, there's going to be volatility between now and these rate hikes actually happening. Is Kevin Worsh actually going to have the balls to put the pants on, or is he going to get on his knees and bow down to Donald Trump? We shall see. Uh so to me the worst case of rates has been priced in. To me the worst case of oil is 107 at least in near-term figures. And that's roughly where we sit at now. Uh obviously we already knew this because we saw oil prices go to 107 on Thursday because of the Saudi pipeline fueling facilities or the pumping facilities getting struck. The pipeline's actually slightly buried. So you generally target the fueling facilities or the pumping facilities uh that are adjacent to the pipeline. Uh, and futures are also red in anticipation of some of this volatility this week. NASDAQ down 1% at the moment, S&P down about half a percent. Actually, I think a lot of this will end up recovering over the even just the next few days, but almost certainly by the election. No guarantees. I can't give you personalized advice, but there's some reasons for this. But first, I'm going to tell you how I think you could take advantage of this. Uh, I'm not trying to sell you anything. I don't even have a coupon code to pitch you. I'm just going to be blunt with you. I I think that volatility is actually going to rise substantially going into this Fed rate hike. That creates an opportunity to sell puts, which is a bullish option on things that have higher implied volatility. Like right now at an at the money sold put on Meta, uh you could get about an 8% yield backing into one of these sold puts. So, we'll be talking about this a whole lot more in the course member live stream, but I just wanted to throw that out as an option for people who are wondering like, hey, you know, what's what like h how can you take advantage of that volatility? That's one way where if you want to own the stock anyway, it's an option quite literally. It's an option to get a little bit of a discount on it. You're basically buying it for like 598 bucks if you get assigned. Worst case, obviously, you collect the premium or you hold the stock. Okay, side note on that. I do think it's very interesting how much advertising is going on on the the platforms right now. I was just looking at uh the advertising going on on the app store and if you type in like Grobbot or Gemini or something like that, what you'll actually find is Anthropic and Gemini and these other platforms running ads essentially against each other. Yeah, Gemini is running ads. Uh Anthropic's running ads. I'll pull them up. And I think it's just hilarious because the ultimate beneficiary of that is Apple. And I've been a big fan of arguing that companies even like Meta are going to benefit from these LLMs plowing money into advertising. That's just sort of another longer term kind of thesis that I have. Uh there they are. I searched for Gemini and the ads came up. But anyway, so I I find that very interesting. Now uh regarding So that's an option for people. But let's now touch on anthropic and then the thoughts on Iran and election and all of that. All right. So we will probably in the next se well maybe not probably but there's a good chance within the next 72 hours not only are we going to see that first rate hike but we'll also end up seeing the anthropic S1. They are currently circulating the S1 that was expected to get released last week. Say it right here. Expected to unveil its prospectus last week. Instead, the company shared its documents with a small group of investors and will field questions from them before making them public. So, in other words, they're kind of like testing the waters with, hey, how does our, you know, rigged uh IPO document look? And the reason I say I think it's rigged is because even though the headline, you know, front page news, the Financial Times, Anthropic tells investors it will be profitable for a second straight quarter, when you actually look at the fine print, it's exactly what we've been talking about on the channel. The measure strips out certain costs including stockbased compensation is going to get stripped out. So all the riches the employees getting assigned from this IPO distribution costs for basically paying AWS you know their commission or extortion fee or whatever it is or or Microsoft or whomever it is and the cost of of training the models. So, basically, distribution costs, the costs that got you to where you are, and the costs to give your employees the lottery ticket for getting you here. They're going to strip all of that out, and then they're going to go, "Hey guys, we got 80% margins." Oh, finance is such a clown show. But uh yeah, this is this is what a lot of people are nervous about because they look and go, man, can this company actually sustain its spending? If they can sustain their spending, this party, this bubble can keep going on for a lot longer. We will be very early in this party. I actually just made an analogy. Uh and I I think it's good. I haven't said it on the channel yet, but I've been thinking about it in the background, and I'm like, I kind of think this is the analogy. All right, so there's a house party going on. Okay. Uh, and uh, the house party started at 700 p.m. You know, it's it's the house party. We started at 7:00. Michael Bur showed up early and he's kind of like, "Man, there's nobody here. This party's a bust." So, you get Michael Bur who actually shows up earlier on time to a house party. And so, he's like, "Man, this this party stinks." Then he goes outside and so he stays sad, but the alcohol starts flowing and the party really starts cranking around 900 p.m. You know, we might be up here at like 1000 p.m. when people are like, "Oh yeah, we're feeling good. Everybody's a little loose. You know, the lips are flowing. Everything's going a little kooky dookie." We haven't gotten to the vomitorium stage yet. The vomitorium stage is up here at like 12:00 p.m. That's when things start going downhill. That's when people start knocking over the bottles. They start doing stupid things, right? And then this is like the danger zone, right? This is like the one p 1:00 a.m. Oh, I got drugs in my drink. Oh my gosh, the cops are showing up. Am the cops are showing shutting down the party. Meanwhile, like this right here, this was a freaking blast. The music is pumping. The party is going. And he got the losers still standing outside going, "Man, they they don't even know that that the party's going to end. No the party's gonna end, but not yet. Why you got to be a loser about it?" I don't know. I actually think it's a pretty good analogy. Uh but anyway, so like this is like a pro and a con, this IPO document coming out because it's like, are they going to be sustainable? Are they not going to be sustainable? I don't know. To me, it's going to look like they're losing a lot of money and it's not going to be about the IPO doc that will increase volatility, but it's going to really be about their second, third, and fourth quarter earnings after IPO. So, we could see trajectories. That's when we'll know is their software really taking off or they getting commoditized away by the open weights. Uh open weight obviously has compliance risks. So, there are a lot of firms that have to use US-based companies and can't use open weights. Uh and a lot of firms don't want to use their own enterprise hardware. They don't want to make the investment in that. they just want it to work, right? So, um this is a pro and a con, but it is something that's going to increase volatility along with this delaying of this Iran uh negotiation. I think, and this is just like pure speculation at this point, but I do think a Donald Trump will have some form of a deal to announce even if it's a worse deal than the JCPOA or the memorandum of understanding, he'll have some kind of deal before the election because he needs to have that. Uh, the second option is Iran strikes a deal with the Saudis, Bahrain, Kuwait, Oman, and everybody in the region, and then Donald Trump just goes, "Huh, looks like they figured it out. You know what? They're going to make sure Iran doesn't have nukes. Uh, we're just going to pull our troops out of there, and um, we won. We win. Nobody's going to call it a victory, but it would be an end to the conflict. And the straight of Hormuz and Red Sea for the Saudis would likely open. And so that's where I actually think we rocket post midterms between now and M. I don't know what day we rock it, but between now and midterms, buying the dip, buying short puts, you know, blocking my way in, backing my way in. I'm optimistic. Maybe I'm too optimistic, but that's where my head is on anthropic. That's going to increase volatility. the Fed that increases volatility. Delayed meeting with Iran increases volatility. That's okay. More time to buy, baby. >> Why not advertise these things that you told us here? I feel like nobody else knows about this. >> We'll we'll try a little advertising and see how it goes. >> Congratulations, man. You have done so much. People love you. People look up to you. >> Kevin Papra there, financial analyst and YouTuber. Meet Kevin. Always great to get your take.