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Howdy there folks i want to share some big news with you guys and um i think this is really really really important i was just thinking about this and i was like man i can’t believe it took me this long for for it to really hit me on um kind of what i’m seeing out there and why this is so dang important for the markets for stocks for valuations for um if you’re
Expecting a crash in stocks or a big rebound in stocks and all those sorts of things so if we think for a moment about the market right there’s been obviously you know a lot of worries recently the two core worries in the market have been around the fed what’s the fed gonna do right uh first off obviously everybody’s expecting anywhere is between four and seven
Rate hikes each rate hike probably being uh you know a quarter point a quarter percentage i should say um that’s what kind of everybody’s expecting as far as that goes there’s been a second kind of overwhelming worry in the market and that’s been around a possibility of a recession and people are looking at this and they’re saying well could we have an actual
Recession could we end up in a situation where company earnings tank revenues go negative and those sorts of things right and we’ve had a conflicting kind of earnings season out of the big companies if you think about apple amazing earnings like it doesn’t get better than that five billion dollar beat like just amazing tesla’s earnings were astronomically great
Like it can’t literally get better than what tesla reported for numbers andy must said uh you know he’s expecting 50 plus comfortably a 50 plus revenue growth for the company in 2022 which is far above the 44 analysts had at that time that’s great news uh google positive but then we had some some troubling numbers out of guidance out of amazon we had some troubling
Numbers out of uh meta platforms and so those are two massive companies i was kind of like okay paypal had pretty strong guidance but their past numbers didn’t really excite people so you have this confusing kind of earnings season going on where folks are looking at this and like okay you know things are looking pretty good but then they’re looking uh kind of
Worrisome over here you’d ups say on their earnings call the ceo carol of ups says you know the first week of january the business was basically bad as what she said uh she didn’t know where all the customers went but then business came back roaring so it’s like okay things were bad but then they came back roaring but you’ve had this kind of overwhelming kind of
Feeling about could we end up in a recession or something like that right and real fears and i can understand the real fears when you have troubling numbers out of companies like fb troubling numbers out of amazon as far as guidance goes for this upcoming year much below what analysts were expecting um you know and so i can understand that no if we think about
The narrative from kind of the bad side it’s oh you know there’s been there was a bunch of money stimulus money pumped out there in the back half of 2020 into the beginning part of 2021 and because this stimulus money was pumped out there that helped all companies uh basically have much better numbers than were expected right and that’s kind of the narrative of
Of stocks out there right and if we think about the uh the perfect stock the perfect stock that would fit this category of being a stimulus winner right a stimulus check winner in a company that you know could have prospered because that what is that company well corsair gaming corsair gaming there’s no other company that got the whole oh it’s just because people
Are staying at home and just because stimulus money was pumped out there on why you guys are doing good numbers essentially and what corsair just reported i got so caught up into essentially what was going on with the stock price after hours and and uh you know what i felt like was borderline manipulation of the stock price and things like that that was going on
After hours i was so caught up in that and just kind of baseline numbers that i just went on a walk right now and it really just hit me i just realized oh my gosh corsair just guided to be slightly above what analysts are expecting which means the world isn’t ending and if a company like corsair gaming is expecting um likely a midpoint of five six percent revenue
Growth this year roughly that’s pretty darn good for uh if you’re thinking about all the rest of the public companies out there in general because corsair gaming like i said it fits that perfect narrative that that the the short sellers the bears the you know the folks that are pessimistic on the market want to put on these stocks where it’s like hey they’re not
They’re not going to do well anymore their revenue is going to start tanking because there’s no stimulus money out there so what corsair must be seeing clearly in their numbers and their data is that um you know businesses is actually pretty respectable and that they plan on this year being a pretty respectable year and i think that’s really really big for this
Market mentality and if that’s going on for corsair gaming we’re going to likely see that from other companies that are reporting earnings and we’re getting into small cap earnings season now mid caps too but small caps especially most of the uh pretty much all the mega caps have yeah all the mega caps have already reported most of the large caps have already
Reported so now you’re getting into the mids and the smallest which the mids and smalls usually take longer to put their numbers together because this is a big like earnings report then the year one essentially and you’re doing your guidance for the upcoming year so this is like a big deal this is like the biggest quarter pretty much right and so now we’re getting
Into the mids and the smalls and if we consistently start hearing this from the mid caps the small caps that it’s not the end of the world and then uh business is actually hanging in there pretty decent what’s going to end up happening is we’re going to start seeing small caps in the mids start to move up and move up quite fast let’s just put it that way they’ll
Start to move up quite fast and we’ll start to see a rotation into those stocks i think today in the market was a perfect day where you saw some of this actually play out where the russell finally finally severely outperformed the nasdaq s p and dao and i’ve been keeping track of this lately and it’s been hard to come by for the russell to outperform and on many
Days over the past few months even if the markets were up the russell lagged the s p and almost always lagged the nasdaq and now we have this kind of reversal going on right where you see some some of these big big companies that have prospered kind of having some some troubling guidance right meta and amazon uh apple didn’t really want to get into guidance very
Very much at all google really didn’t right and so you have those companies but then the smalls if it’s not the end of the world and a lot of these stocks have been already hit 60 70 80 those would be the first stocks to come back and at the end of the day if these companies are seeing their numbers come in through january remember we’re already into the second
Week of february now right we’re in the second week of february if these companies are are feeling pretty darn comfortable giving the guidance they’re giving then that means the world isn’t ending and that’s pretty amazing when you take into account how high the ronin numbers have been they went astronomically high in the back half of december and into the uh you
Know basically january and now they’ve started tanking down which is obviously a great thing for the overall economy because there’s no doubt that had to hurt the economy in some some form or fashion right and so now we’re getting in this situation where you could actually start to see smalls move up and meanwhile it doesn’t mean mega cap has to move up necessarily
In this situation menu caps could chill out large caps could not go much of anywhere they don’t have to follow through like that and with a lot of the smalls you know it doesn’t take that much money to really funnel into those and usually every single time you’re in a market cycle uh you know if you’re in a down market cycle the first thing that’s going to get hit
The more speculative stocks the more risky stocks right the more russell 2000 related stocks smaller cap stocks in general those are always the ones that are going to get hit first but as you start to come out of that and the market starts to flip guess what’s the first thing to flip it’s always the essentially the the stocks that are the smaller caps seen as the
The more speculative stocks those ones start to flip then the mids start to flip and then the last group that really starts to accelerate the run is the mega caps and the large caps and guess what’s the last stocks that have really gotten hit in this whole um kind of i don’t want to call it a crash we’ve been through but a correction situation right we technically
Hit bear market in the russell a couple weeks ago where it was down over 20 percent from its peak which puts you in technically a bear market right the the last stock to really started falling was the mega caps it was uh the large the large companies right and apple held decent because their numbers are so good google still is several hundred dollars away from its
52-week high meta’s at right around a 52-week low i believe it did hit actually a 52-week low today right amazon is still not in a great place with the stock price it’s still several hundred dollars down uh you know from it’s basically uh 52 week high you know i think probably 500 plus from its 52 week high now right and so we know what’s happening with paypal we
Know what’s happening with square and so you’re looking at a lot of those stocks that have still been hammered and um i think i think you know as long as things don’t worsen with overall economy right in any significant manner i think we’re going to start to see small start to flip and mid start to flip and uh be in a situation where those stocks will start to
Move up so as far as me and positioning when it comes to situation like this i’m not going to try to do anything like call options in in this situation like oh i’m gonna play some calls because we’re about to flip or something like that i’m not playing that game because you never know the market can stay irrational for for long periods of time we know the market’s
Trading uh small cap stocks irrationally low right now but it doesn’t mean it can’t stay like that for a few months or something like that so i’m not going to play anything from a shorter term perspective like options that expire you know super soon or something like that i’m going to still stay ready if any of my stocks drop in any meaningful way i’m going to
Be ready to pick up shares in those stocks and i’m just kind of playing it from that perspective but i think this corsair earnings is uh so much better of news than i think uh the market’s gonna even really realize right now and um i’m pretty darn excited nonetheless so hope you guys enjoyed this as always make sure to subscribe the channel if you’re not already
Subscribed to the channel we also got a massive valentine’s day sale coming up for the private stock group financial fortress is a great time to take stock market investing very very serious if you are not already done that you don’t know how to read financial statements how to research stocks all those sorts of things and get around a group of investors who are
Very successful in the market so if you want to basically have that deal sent over to you as soon as it drops check out the pinned comment down there much love as always guys and that’s about it have a great day
Transcribed from video
THIS IS HUGE for the STOCK MARKET (DEVELOPING) By Financial Education
