The Stock Market Just Ripped - What's Next? 25-Year Investor Shares His Thoughts!

Today, my friends, is what you call an absolute face ripper. NASDAQ up almost 3%. S&P up 1.66%. Now, we are at 7437. We still need to capture 7480, but Dow Jones also up 1.19%. And check out this heat map. Absolutely insane. The big moves of course are going to be the stocks that have been selling off. I look at the semiconductor names. Micron up 18%. AMD up 13%. Microsoft, this is one of the biggest days ever for Microsoft up 15%. Remember when everybody was telling us that Microsoft is going to go out of business and when it was 350, 375, all kinds of comments on YouTube how Microsoft's a bad company. Microsoft helped save the market. And here's kind of what happened. There's two things. So the first thing, the reason that this kind of started to happen in the first place is you had this situational awareness hedge fund. It was using leverage and it got into some trouble. And if you look at some of these numbers here, actually posted a couple different things in Discord, but following the liquidation of the position, situational awareness had around $10 billion in assets. That's down from $20 billion in May. So a 50% haircut and essentially what happened here is you had Citadel win once again. So Citadel actually right here situational awareness high-flying artificial intelligence focused hedge fund firm sold the bulk of its stock portfolio to 10 Ken Griffin's investment firm Citadel after suffering deep losses. Why? Well, because they were using leverage. And so you can see this morning we had this situational awareness. This and this is Leopold right here. Right. So $20 billion hedge fund, former OpenAI employee on Financial Times. It broke this morning talking about essentially having some problems and had been borrowing to magnify its returns. a popular hedge fund strategy can also of course amplify losses. So essentially you had an unwind of this entire trade because you had too much leverage, you had too much FOMO, everything just got too hot too fast. Once selling starts happen and it accelerates. You hit that first margin call, you get another margin call and another and another and it just snowballs and it can get completely out of control. And so what's happening here, you know, we see SanDisk up 25% today. You see all these stocks just absolutely ripping the ones that were highf flyers up a,000% a year come down aggressively over the last month and now they're ripping again today. What saved it was Microsoft earnings last night essentially saying, "Hey, we're spending money on ROI, but you know what? We're actually showing you that you can make money in AI." And that was what kind of turned the sentiment. Now, what's interesting if you look at the macro situation we had this morning, I posted this in Eric's watch list, macro geopolitics. So, if you can kind of read this, pause your screen, but essentially in a nutshell, this is not good news overall. Market probably should have been down, but it was already down a lot and the market wanted to snap back. The positive is inflation is lower than forecast. It's it was 0.1% versus 2%. The market kind of clinged on to that, but GDP was light at 1.5% versus 1.8%. Of course, you could say, well, the market was projecting that was going to happen. The Fed also told us essentially without saying it, that in order to get inflation down, we're probably going to have to raise rates. So, I think the positive here is the very next day you get this PC inflation at 0.1% which is lower. And if inflation's obviously stays lower, the Fed does not have to raise rates. So that's kind of what's going on, those two things. But I wanted to show you Microsoft really quick. And I had some thoughts, a bunch of thoughts in here. But essentially, Microsoft reached a major adoption milestone. 30 million paid seats with net seat additions nearly doubling sequential. I mean, this is huge. Large scale rollouts underscore. or these are all the different companies. You can kind of read through that. And then on top of it, you've got, you know, Bernstein raising the price target to $647. This was just a $350 stock. And now Agent 365 has nearly 40 million agents registered in just two months. I mean, think about that for a second. This was generally available around May 1st of this year, and it has nearly 40 million AI agents. And so what this is is agent 365 is Microsoft's enterprise control pane plane for AI agents. It's basically a central registry like a a neural network or it's the backbone that you would use for these AI agents. And some people I I think I told you this morning. I did a live stream this morning or a quick audio stream and I told you that analysts will probably perceive this as well maybe you don't need service now because Agent 365 is going to do what Service Now is saying that they're going to do, right? So Service Now is telling you that they're going to be the AI watchtowwer. I'm trying to find it's in the community portfolio actually. How you guys doing everybody? Good man. It's been an absolute crazy few days here. Bought some stocks yesterday. I wanted to show you this really quick on Service Now if I can find it really quick. So right here. So Service Now, they want to be the AI control tower for business, right? And so Aenti AI and of course this stock was doing well when everything else was selling off. And then Microsoft up today, a lot of other names, Service Now down. I think the market will figure all this out with time. I think the big thing is having conviction what you own, having a blueprint, having a thesis. Even like Snowflake is up 98% in three months. So I posted in the the main portfolio, you know, Snowflake, nobody's laughing now. You know, $102,000, you know, not up over 111% on this position now. And of course, you know, it it wasn't going to give you a thousand% return like Micron, and it hasn't been a stellar perform over the years, but I'm not complaining about $111,000 profits, and I've already sold some shares and took profits on those. But anyways, looking back at this heat map, you know, if you look at some of these other names, too, SanDisk up 25%. Seagate up big. Even AMD, Nokia is up uh eight 8% here. Microsoft, SoFi, um looking at applied opt electronics. We bought this yesterday in Discord. Got down to like $75 after hours last night. Now it's 90 bucks and it's up another 3.37% in after hours. So you're having now a short squeeze. What happened is you had this unwind and everybody piled in and went short and then and rightfully so because there's a lot of macro sentiment that's negative. Oil prices are still inflated. The 30-year Treasury yield is the highest it's been since what 2007. So, you've got a lot of things working against risk assets, especially growth stocks with higher multiples. A lot of people, institutions, even individual traders went short the market yesterday after the Fed and Worsh had his his uh press conference and then of course it backfires and then now you got a short squeeze. So you see a company like AOI here, you've got a short squeeze where 13% short interest, it goes up 17% and now you start getting margin called the opposite direction. So instead of the bulls getting margin called, now it just flipped to the bears. And this is this is where this kind of market is really hard. I've been saying I hate this market all year. It's a very difficult market to navigate, especially for new investors. If you want help with all of that, we offer it. And we have a private community in Discord and it helps individual investors a ton. It gives you a safe place to be in this Discord community when you can where you can talk to other investors. You can share ideas. We're sitting in this elite stream chat having conversations pretty much all day long. So definitely join us in Discord. You can check out the pin comment. So in the pin comments there's a link and certainly join us there. We'd love to have you. But I want to talk to you about a few other things. Amazon. Amazon up 9%. That's a big move for Amazon when you're talking about these multi-t trillion dollar market cap companies. It has simmered down a little bit up 7.8%. But overall, this was a very solid report. Earnings per share 575. Revenue, you know, was a beat beat. Amazon Web Services 42.2 billion versus 40.54 billion. Advertising also a beat 19.81 billion versus 19.43 billion. So overall the market absolutely on fire. Micron up 15%. Snowflake is back to 300. Some of you own this. You're probably wondering what to do with it. The R3 Fibonacci here is $319. If you look at some of these price targets, you know, you're talking 302 and earnings is still coming up. And so you could you never buy or sell these price targets. It's just to show you, right? 370 is the highest. 250 is the lowest. So, the median 302 for me. I've got 650 shares. I'll probably sell, you know, I'll probably trim some off in this range. There's a chance it can go higher, especially if more buzz gets in the air about Snowflake. And I do think that AI story is finally baking out and come to fruition. I did a quick video yesterday on Meta. Of course, you know the story here if you haven't watched the video last night, but um essentially Meta spending money on Capex. The market really wanted Meta to come out and say, "Hey, we're going to be a Neocloud provider. we're going to compete with NBIS and Core Weave and Oracle. And they didn't really do that. Essentially, what Zuck said is, "Hey, we've invested. We're happy with our investments. We believe we can make an ROI with our core business and we're good." And the market didn't like that. Now, overall, I think Meta is lucky that it reported when it did the timing of it because it's only it only closed down about 8%. And if it were a few days earlier, I could see this being down 15%. So there's still a chance this could drift lower. I still think the market's going to have volatility between now and November 3rd which is midterm elections. So expect you know some volatility and these are weaker months over the summer generally. So August, September, October and looking at you know some of these stocks absolutely face rippers 20% on lamb research. I mean, if I look at some of these in my portfolio. So, my main my top holdings in my main portfolio. Let me just show you some of this. So, at one point it was up over 5%. But this is 3.5 million in the main. It's it's at 5 million. It's back over 5 million. It was slightly below. Now, it's back above five with the three portfolios. So, there's the main portfolio, the community portfolio, and the dividend portfolio. There's three portfolios and these three portfolios combined equal 5 million but just this main portfolio here is $3.5 million. It was up almost 5%. It's wild because I remember when I would make less than a third of this in a year and this is one day moves. Now of course you can tear that apart and say well that's because you were down and this I get it. But the thing about it is long-term investing for me has completely changed my life. if it allow me to do this to quit my job at corporate at 42. There's no guarantees that's going to happen exactly for you, but that's that's my story, right? I started investing in the late 1990s, been investing for 25 years. But, you know, call your mom and this is earlier today. I think some of the Astero Labs, of course, that stock ripped to $4.99 and then pulled back hard. So, up 17% today. It's all relative to when you buy. And that's the thing too is we've been trying to tell you on the channel, no FOMO. Don't FOMO chase. I don't want you buying Palunteer at 200. I don't want you buying Rocket Lab at 150. I don't want you buying a Stereo Labs at $4.99 or really anything over $150 for Sterilabs. $150 or less DCA was kind of our target. You know, Micron, you're not buying $1,200 a share on Micron. Microsoft, you're buying it probably under $400, right? and all these stocks. I mean, if I look at across the board, portfolio is doing really well. And what I want to do with this portfolio is I want to take some of these profits. I want to trim those profits and I want to convert those profits into the dividend portfolio. And that dividend portfolio essentially is passive income. And so that I can live off that passive income. And so say you have a million dollars and you have 5% yield. Just as a hypothetical example, I I don't like going that high. Well, it's 50 grand a year. And you can see you need a lot of capital, right? Because for most people, 50 grand is not enough. You might say, "Well, I need 100 grand." Well, you need $2 million at 5%. If you don't have 5% yield, say you want 2.5% yield instead of five, you got to double that number, right? So, where's the market headed? What's, you know, what's going to happen next? Nobody has a crystal ball. What I can say is that if you're in the right mindset and days like yesterday, you're in our Discord. I'm doing live streams. I'm telling you, hey, this is where the market could go. Don't panic. Don't panic. Sell. Think about the long term. The thesis is still there. Here are some things that are happening in the market. And it's a lot there's a lot more clarity today after seeing this hedge fund unwind. We knew yesterday that there was a lot of momentum that had to be unwound. In other words, too much margin, too much FOMO, and it's healthy for the market to reset. You know, looking at the S&P 500. I'm going to pull up a chart here, S&P. I said I mentioned this earlier, but you really need to capture 7480, really 7500 in order to have a bullish bias. And right now, we're at 7437. So, we broke this $7,400 kind of line in the sand. That was the floor. We said look for 7340 and 7235. We kind of got down in those ranges. Now we're back above 7,400, but we're going to need to get to this 7480 to confirm for upside. And if that happens, you know, the Fibonacci R3 up here is 7876. No guarantees this happens. This is just what the chart showing. And I don't think it's going to be a straight line up. And I think there could be more volatility. You could even see the market come back and retest. I said yesterday, I wouldn't be surprised if you see 7,000 or 6,900 at some point in the year, but at the same time, there's a lot of cash on the sidelines. There's still earnings are really good. Solid solid earnings in the S&P 500. The AI story is there. If you listen to the Microsoft earnings call, it's showing you that you can make money off AI. Amazon's proven the same thing with a with Amazon Web Services and and their core business. Meta, it's more about, you know, it's the same story. The free cash flow is dwindling. They're essentially not doing what the market wants it to do with that capex. Whereas Microsoft saying, "Hey, yeah, we spent a bunch of money on capex, but we also signed 30 million people to pay for this service, which is an AI service. It's a a new revenue model that we can bolt on to our existing customers." That's what the market wants to see. And Amazon and Microsoft are really well positioned to do that. Google as well, but Google is going to have more advertising revenue. It's going to have more BTOC. They're all conglomerates, all three of those that have a combination of B2B and B2C, but Amazon Web Services and Azure are the two largest for cloud services. And that's where a lot of the money is going to lie with enterprise and like with Office and the Office suite bolting on um you know, Aentig AI onto Office 365 and so on. But I do think that the big lesson here is don't try to time the market. Don't stare at your portfolio all day. Don't get too excited when your stock's up 10%. Don't get too discouraged when the stock's down 10%. Think long term. Try to build a plan. Build a blueprint. Think very long-term focused. Try to buy best of breed stocks that fit into a growth portfolio. For example, where these secular growth trends you think that AI is going to be big and of course AI is evolving. You have to understand how that evolution is going to take place into more physical AI and so on and from training to inference. You look at space exploration, you think that's big. That could be 2% five 5% 10% of your portfolio, whatever you want. Your portfolio, your blueprint design is about your DNA. But you need to build a blueprint. And that blueprint will basically tell you this is what I need to own. This is why I I want to own it. And what it's going to do is it's going to allow you to have conviction to hold stocks when the market's down, when it's getting beat up, versus if you just buy something blindly, especially if you just buy it because somebody said, "Hey, this is this is a good buy and you saw a YouTube video or you saw an expost." That's going to get you in trouble every single time. So, if you come into Discord, go into Eric's portfolio tips and scroll up here. I know I've got this right here. This is an example of the fired up wealth blueprint methodology. And so what we like to do is is say you're eight out of 10 risk. And this is pretty aggressive, right? And you can adjust this to whatever your risk tolerance is. But if you're a growth investor and you're you're trying to accumulate wealth over a period of 10 20 years, you know, this is a what you call eight out of 10 risk. So you're you're willing to take on risk but not like a 10 out of 10, right? And so we like to buy growth stocks and we might put 40% in our portfolio. And you'll have different types of growth stocks. You're going to have hyperrowth, regular kind of growth and then mature growth that it doesn't pay a dividend yet. And that cycle goes from spec when you think of spec stocks. So it starts here. If you can buy a company when it's a spec stock like an Amazon 30 years ago and you can ride that all the way until it's a mature company and starts paying a dividend, that's where you can make a ton of money. You know, you can make compounding, right? And there's never a guarantee, but if you can find a stock like that, that's where a stock could compound and do very well for you over a long period of time. So spec is going to be companies that don't have profitability, for example. you know, they're highly speculative. They have a high PE ratio. It could be something like a ion Q or something like that where it has a high high price to sales. It's not profitable, but you think there's there's a big future in quantum computing. That's just a hypothetical example. I don't own the stock, but you want to have, you know, several stocks in here, not just a couple stocks. I might want to have 10 stocks, 1% each. And you can do it however you want. I'm just sharing you how we do it. Cash is always part of the portfolio 5%. So if I have a $100,000 portfolio, I want to keep $5,000 in CA in cash at all times. And the reason for that is if you get big drop like yesterday, you've got some cash to put to work. We bought some AOI as as kind of a spec stock in the community portfolio. Started buying around a little over 80 and bought at 76 and now we're up 15% on new position. and you know growth 40% ETFs 25% this could be VU it could be SMH it could be QQQ try not to get too involved with thematic ETFs stay more in the S&P 500s and maybe the QQQ NASDAQs and then DJIF these are dividend stocks but they have growth too right so there's five criteria to it and really what these are is they're going to be growth in the dividend as well as growth in the share price right so like a Microsoft would be a DJF it pays a nice little dividend it compounds you reinvest those dividends if you can do drip But yesterday and we just recently came out with a couple different things. Um, a deep dive on photonix. And so this was the first one. It was a write up on Patreon, talked about XML, but also went into these other AI optics companies, right? Photonix companies. And so it broke down, MXL, AOI, Lum, Coherent, and Corning. And then this second one is a video showing you the charts and everything saying, "Hey, if these come a little bit lower, I might be minding myself." Now, I did have several orders in and not all of them filled, but I did I did fill out a new position or started a new position, I should say, and AOI. And if you you can see that we bought some, you know, here's the different DCA levels. And DCA works, guys. You know, dollar cost average. It works. So, you can see now it's a smaller spec position. And this is what we want. We don't want this to be, you know, a huge position. It's about risk management, right? We're money managers. You're a money manager if you're managing your own money. And the last price on at 90, of course, you know, average cost basis, it blends out to about 79. Not perfect. You know, you didn't sniper time the bottom at exactly like $7562 or whatever it was, but you started buying. You nibbled some prices that you thought were getting attractive, you know, based on both fundamentals as well as the chart. And if you watch that video, it shows you, you know, this is a quick chart just to kind of give you an idea. This stock ripped from, you know, nine bucks, 18 bucks here all the way to 233 and then a massive selloff. I mean, $233 to 75 bucks. That's a big big sell-off. So, broke the 200 day moving average, broke the Fibonacci S3, the previous S3, came all the way down this red zone. This is the area we said, hey, we want to buy. I personally want to dollar cost average in this red zone and build a position, a speculative type position. And if I'm holding it for long term, there's opportunity here, right? If it goes back to the previous highs, well, you can see the numbers, right? And there's never a guarantee it will happen. But these are the kind of riskreward opportunities I'm looking for. I don't want a FOMO chase here. I want a buy opportunity down here. But I hope this is helpful, guys. If this kind of content is useful to you and you're an individual investor, definitely subscribe to the channel. It costs nothing. Click that bell for notifications. Drop me a like. Drop me a comment. And of course, join us in our Discord community. Have a great rest of your day. We'll see you.