Economy and the Market in 2020

As we typically do with our outlook reports,
we start with an overview on the economic environment as we see it in the subsequent
years and then we tie what are essentially those macro-views into what we expect for
the stock market. So, let me start with a perspective on the
U.S economy, which in 2019 had fairly steady growth. Nothing to write home about, but quite frankly
that’s been the name of the game for this entire economic expansion. And we generally expect something similar
in 2020. Probably no significant lift in growth, but
so far, the conditions don’t appear to be ripe to suggest that a recession is at risk. Now, what we had been writing about quite
a bit in 2019, and we think carries into 2020, is that we do have a bit of a bifurcated economy
in the United States, where we’ve had a very beleaguered manufacturing sector, much
stronger services sector. Another way to divide the economy when you
think about this notion of bifurcation is to look at the difference between business
investment and consumer spending. Regardless of how you slice and dice it, the
weakness has clearly been concentrated in manufacturing, in things like CEO confidence
and CFO confidence, weak capital spending, overall weak business investment. Now, although those represent smaller portions
of the economy than either services or consumer spending, as we’ve been pointing out, they
tend to punch above their weight in terms of the broader impact into the overall economy. And much like was the case in 2019, what we’re
watching in 2020 is to see whether, number one, the weakness persists in manufacturing,
in business investment, and whether it starts to morph into weakness in the broader parts
of the economy. So far, that has not been the case. We’ve been talking about this very healthy
dividing line between those portions of the economy, but also what we’re paying close
attention to is the labor market because it’s typically within the labor market that we
start to see that weakness more from the manufacturing or business investment side of the economy
into the broader economy. So that’s one of the things that we’re
watching for. We also focus a lot on leading economic indicators. Those sub-indicators that give you a heads
up on what is going to happen. Those have been kind of a flat trend over
the last year or so. On a change-basis, we are down to about flat
levels. That’s not a recession warning, but something
we need to keep an eye on. What’s been keeping the leading indicators
from moving more into negative territory, of course, has been the strength in the stock
market, the un-inversion of the yield curve, still very low unemployment claims. But we are seeing some weakness in some of
the other sub-indicators. So, I will keep a close eye on those leading
indicators. In terms of the implications that all of this
has had and will continue to have for the stock market, clearly, we have been in a very
strong stock market environment. I think that has been on the basis of all
the liquidity that’s been added into the system via the federal reserve, lowered interest
rates three times in 2019, caused a loosening of financial conditions. That’s one of the reasons why in 2019, although
we had de minimis earnings growth, almost no earnings growth, we actually saw P/E ratio
valuations expand. And that was because the macro-environment
really supported that valuation expansion. As we look ahead into 2020, I think we are
at a stage where we’re less likely to get that boost to valuations from the macro-conditions
of easy Federal Reserve policy, given that the Fed is on hold at this point; which means
we’re probably at or near a stage where the “E” in the P/E, earnings, are going
to have to start to do some of the market’s heavy lifting. Now, expectations are for earnings growth
to pick up in 2020, back into double-digit territory in the second half of 2020. Those estimates may still be a little bit
too high, unless we get a lift in the global and U.S. economy sufficient to bring those
earnings estimates up. But that I do think represents a risk in 2020,
that if we don’t get the expected earnings growth, that we’re not going to see much
valuation expansion, if at all. And the other risk I think we need to monitor
in 2020 is investor sentiment. Courtesy of how well the stock market has
done, and not just the U.S. stock market, global stock markets, really asset classes
across the board over the past year is that investor sentiment has moved into the “extreme
optimism” zone. Whether you’re looking at attitudinal measures
of sentiment, or behavioral measures of sentiment. Now, in and of itself, that doesn’t suggest
risk for the market. The market can continue to do well, investors
can remain optimistic, but it does set up the possibility that if there is some sort
of negative catalyst, that the weakness might be a bit more pronounced given that excess
optimism. Because it might trigger some selling by investors. So, that is another thing that we’re keeping
an eye on in 2020.

How I Turned Thousands into Millions in the Stock Market

– So I would prefer to have zero positions scanning the whole penny
stock battleground. Looking for a good play where
the odds are on my side. (upbeat music) – You started out with $12,000 roughly. Many of the attendees might have that or have less. So you did it with that
12,000 back in ’98. Do you think it’s feasible
today to start out with that small account and repeat or similar success to what you had? – Yeah I think it’s possible and I think that it is
doable if you study, if you have the right mentality– – And if you had a small
account would you do the same thing again? – I would do the exact same thing. I you know if god forbid I lost all my money I would go back to the beginning and it actually
be a good challenge. I would live off ramen, I’d live in a box. I would only miss
air-conditioning and fast wifi. Those are two things I
can’t live without right now but aside from that you
have so much opportunity right now with the bull market and possibly a bear market
in the next few years. There’s gonna be so much volatility. The only question is are
you prepared because sadly too many people are unprepared. Even if there’s a perfect play, they haven’t studied the past so for me I’m basically a glorified history teacher. I have 6,000 video lessons
going back over 10 years now. I show all my trades
going back 20 plus years. Why is something from seven years ago still relevant today? Because again these patterns repeat. And some of you guys– – Sometimes it’s the same tickers. – Same tickers, same
sectors, same patterns. – Five years later it
can be the same ticker. – Cause again it’s greed
it comes down to the media hyping stuff up. The media just wants maximum clicks. So if you start thinking in terms of, not necessarily fake news, but just being cynical with your approach to media and not necessarily believing it. They’re just gonna create click-bait so anything they talk about is gonna be exaggerated. And if you start thinking oh
this article is exaggerated this article is exaggerated
let me see how it affects theses stocks. Or again you have all these idiots who are interested in buying the one you know (mumbles) not doing the research, not realizing that the
company has no cash. And if the stock does go up they’re gonna do a financing so it’s gonna crash. So a lot of people are
just looking at penny stocks the wrong way. And you can take advantage of that by looking at it the right
way and being meticulous. – So I think the number one reason and again maybe many here
I’ve been there before. I think the number one
reason low price stocks get such a bad rap, for
lack of a better term, is people buy that and then they become the bag holder. They buy the idea lots of
times your up your up 50, 100 percent and then it
crashes the next day your red. So if you are a bag
holder we won’t ask you to raise your hand. If you’re out there your holding– – Raise your hand if you ever had a big (mumbles) and you didn’t take it. – Okay so if you– – It’s okay be proud we’re
all in this together. – If you are a bag holder in a penny stock what should you do tomorrow morning? – So for me if I ever have
any big loss well you know I usually don’t because
I follow rule number one and cut losses quickly but I’m human I might make a mistake. I might slip. I’m pretty clumsy and be
in a coma for two weeks and then wake up to a big loss. I would still cut that loss immediately because it’s not just about that loss. It’s not about the money. It’s the mentality okay . If you have to think
of losses like cancer. And you need to cut
that shit out of you as soon as possible before
it infects the rest of your body or your life. Big losses kill your confidence. They kill your account. And while your sitting
on this one loss you know stewing about it like
miserable you might miss a good opportunity because your so focused on something that doesn’t have good odds. For me sometimes the best
trade is no trade, right? So I don’t need to trade all the time. I’m always looking for a good trade. So I would prefer to have zero positions scanning the whole
penny stock battleground looking for a good play where the odds are on my side. If your in a play doesn’t
matter even if this stock is gonna come back. Your mind set is so messed up with that you are not in control anymore. You need to recognize that and you need to get out it’s like a bad breakup, right. Like you have a bad breakup you don’t ask the next person you see
“hey will you marry me?”. No your mind-set is
all messed up after the bad break-up you need to calm down. You need to go to Vegas. Go have fun for a little bit. (laughing) – But yeah that’s one of
the biggest things I think so many you know that’s why penny stocks get a bad rap. People over stay they
have that long term loss. And then it just gobbles
up your buying power. I mean if your down
40% on some penny stock when the next good one
comes along you got a few hundred dollars of buying
power because your all in this grinder that just keeps going lower. And don’t discount the
fact of that mental cap. Hey we’ve all been there. You open up that brokerage
account and your like “god damn it there’s that
big red number again”. Get rid of that . The sooner you end that bad relationship the sooner– – I can make a food analogy. It’s like a heavy thanksgiving dinner. When you have the turkey. You have the stuffing. You have the pumpkin pie. You had another pumpkin
pie because it’s delicious. You have the cheesy bread. And you just feel like
death like you gotta go to the bathroom and
you need to let it out. You don’t want that you don’t want that meal you know soaking you down
for all of December, right? You gotta go to the bathroom get it out and look
forward to the next day. Go to the gym. – I love your analogies, Tim. That one was a (mumbles). – That worked? – Who liked that analogy? – And you got that one yeah! – That one worked that
was one of the best. – Oh what ever that’s one of the worst. – Get out of here. (laughing) – I have to make a lot of analogies because you know I’m self taught. So I taught myself through thinking about penny stocks like these
real world examples. And I mean it exists, right. I feel like crap after
thanksgiving dinner. It’s delicious but I fell like crap and I have to let it out. (upbeat music) Hey Tim Sykes millionaire
mentor and trader. Thank you for watching my videos. I hope that they help you. I want to share everything that
I’ve learned over the years. You can check out more
videos right over there. And also click subscribe
so that you can watch all of these videos, get that knowledge, and become my next millionaire student.

Adapting With the Market: My Favorite Pattern Right Now

– [Tim] Good morning, Tim Sykes here. I guess it’s morning when I post this. It’s the middle of the
night when I’m filming this, and the answer is no, I don’t
sleep as much as I should because there’s so much
of information to get out, and I feel like it’s my job to update you when, you know, patterns adapt. As you might know, if you’ve been watching my video lessons for the past few months, short selling, I think, has
gotten very, very dangerous. The risk/reward is great in a bad way, not that it’s great in an amazing way. There’s great risks to shorting compared to the potential reward. So I don’t really short that much anymore. With going longs, I really
like morning dip buys, but we haven’t really seen
any true panics lately. So my third pattern that I
really like is first green days. You know, LTUM had
obviously a few up days, but then a red day and
it consolidated, and then this first big green day
was a breakout to new highs, and a lot of people who just
memorized charts, they say wow, big first green day,
look at the record volume. Let’s buy that and hold overnight, and that’s exactly what I did. The next morning, I was not rewarded. It actually would have paid
to sell into the close. I still made some money,
but I would’ve made more had I sold into the
close the night before. This did not gap up or morning
spike the way I wanted. So RAKR on Wednesday, very nice breakout. A little over extended. You can see all the little green candles, but really the first big green day, and more importantly a breakout. This was the first day on
Wednesday that it broke the previous highs here at 28 cents, but I was buying it at 39. So I recognized that I’m buying this late, but at the same time we see
a lot of these stocks run up. Recently CYDY had a similar
breakout right here, and then the very next
day it was a 30, 40% gain. So there are some precedence. BLOZF also had a breakout right
here over the previous high, and then the next day was a huge breakout. So RAKR, some people were asking why am I buying it at 39. It’s so over extended. I mean just look at CYDY
and BLOZF as recent examples where the first big green day breakout over the previous highs lead
to another big green day, but at the same time I
did not hold it overnight because I recognized that
LTUM didn’t work overnight, and there’s also probably
like a dozen examples if I really wanted to get into it of recent first green day OTC
plays that did not gap up, that did not morning spike the next day, and in fact they actually
tanked the next day where you had to get out right at the open to make a small gain or a small loss, but pretty much all of
them had morning panics, and some people say oh, Tim, you create the
morning panic when you sell. Well, RAKR, I did not hold overnight, and look it was the same
exact morning panic. So a lot of people have all
of these conspiracy theories that I am in control of this whole market. Whether I trade it or not,
the patterns are gonna work. That’s kind of the cool thing here. And no, I did not hold RAKR overnight. I sold it a little too
soon here around 43, 44. It actually went all the way to 46, and if you did manage to hold overnight, you could have theoretically gotten out at 48, 47, 46, 45, 44 all of which would have been better than my sell here in the 43s, but at the same time I didn’t
wanna take the overnight risk, and again, when I trade
with such a small account, it’s not even just trading for profits, it’s also trading in order to teach. So I’m proud that when
I saw LTUM not gap up or morning spike into it’s first green day when it frankly should’ve, I was glad to use that
lesson and adapt on RAKR, and I got a pretty good exit. Like I said though, obviously the exit could have been better had I held a little longer, but I usually error on
the side of caution, and now that brings me
now on a play on Thursday, KWBT where I made a few hundred bucks, exact, exact, exact kind of uptrend. Not an exact science, but the
same kind of price action. Here’s KWBT, big spike,
and it actually dipped, but there was a nice little bounce, and a little breakout here above 415, was the late day breakout, and KWBT, I mean, if you
look back a 100 days, it doesn’t really
matter, but even 50 days, it had one big green day, but
the next day was solidly red. This a nice first green
day, but as you can see from all the times that
it usually has green days, the candle, it doesn’t close at its highs. So that’s what this little
difference in the candle is. If it closed right at its highs, it would’ve been a full candle. Same thing with this green day
back here on December 12th. Green day on January 9th,
green day on January 10th, green day on January 13th,
and green day on January 16th. None of them! So we got one, two, three,
four, five, six, seven examples of green days, and the stock
does not close at its highs! So now, not only am I thinking, okay, I’m not sure if I wanna hold
this kind of play over night because the trend as been better to sell into the market close, but then also do I really wanna sell
right at the market close because seven different examples,
it did not even get there. It did not even finish high. So very speculative stock,
and I specifically said this. I’m not sure if I was
gonna hold it overnight, but it hit my goals. I made roughly over 10%, that
was the bottom of my goals, and even if it had been like
9% or 8%, some people are like okay, so you have to wait
for your goals to get hit, then you sell, it was
not acting perfectly, and when I, like I said, this
is not a perfect science, but I have expectations given
the fact that this stock has failed on first green day seven times they failed to hold their
gains into the close because I don’t know if the
market makers are pushing it or promoters are pumping it, or maybe just some existing shareholders are selling into the close,
whatever the case may be, it’s not finishing that strong, and it does not have a
history of strong second days. Although, some people will
say well, why even trade it? Massive volume, massive volume breakout. So does somebody know something? Is there gonna be news on Friday? Is there gonna be news over the weekend? I have no idea, but for me, buying with the intent
of holding overnight, but clearly commenting that I was not sure if I was gonna hold it overnight, but I wanted to give it a chance because if big first green
day here with record volume, like yeah, it has failed seven times, but all of that volume on
all seven times added up doesn’t even match one
day’s of volume here, or maybe it’s similar, but my point is is that this is huge, massive volume. This is not like a 10 or 20% increase. This thing traded roughly triple more then it has been recently trading. So there were a lot of buyers. So I sold it because,
again, it hit my goals, and even if it hadn’t,
I would have sold it close to hitting my goals just to play it safe
overnight, you never know. And then also I can always re-buy it back. That’s the beauty of trading. With short selling, this
is another bad thing with short selling, sometimes
you go days or weeks trying to find shares to
short of some pump and dump, and you finally find shares to short, and it might not be the right time, and you might start getting squeezed, but you don’t really want to sell, or you don’t wanna buy
to cover your short, you don’t wanna exit your position because you might not be
able to get short again, but with a play like
KWBT, I could buy again if does start running. It still finished up 40%
on the day, 40% plus. So if it looks like it’s gonna
have another 20, 30, 40%, I can just re-buy. That’s the beauty of buying, and that is the beauty of
playing it safe overnight. So I am playing it safe
overnight on all of these plays based on recent evidence. So if you understand what I’m saying, leave a comment underneath
this video saying I will base my trades off recent evidence. ‘Cause that’s what it is. I’m trying to judge the market. I’m trying to judge this pattern. I’m trying to be less stressful. I’m in California right now. So my time zones are all whacked. I really hate getting
up at 5:00, 6:00 a.m. I’m just not a morning guy. I’m filming this in
the middle of the night when I should be asleep. So I’ma take it as stress free as I can or minimize the stress (air whooshes)
as much as I can, and that involves for me right now selling before the close
on the first green day, and again, all because of
all these recent examples and all this evidence. So if you understand it,
leave a comment underneath. I’m curious to see who understands this. I’ll see you in the chatroom, thank you.

How does UK Tax work? – What you need to know about HMRC & PAYE

I get asked a lot about tax codes and how
tax works so we’re going to tackle this topic here and explain it with some quick
examples. Tax in the UK can be a bit tricky to understand
and there are lots of confusing headlines and stories out there to bamboozle you. This
is a basic guide to tax in the UK, check out part 2 if you want to know more about how
taxable benefits such as company cars or medical expenses work.
We are going to discuss personal tax from earnings. Let’s start at the top; HMRC.
HMRC – which stands for Her Majesty’s Revenue & Customs – is the department of the
government responsible for collecting taxes. This is what people mean when they talk about
‘the taxman’. These are some of the types of tax HMRC covers:
VAT Income tax
National Insurance Corporation tax
Capital gains tax Motoring taxes
Inheritance tax Stamp duty
Insurance Premium Tax Air Passenger Duty
PAYE It’s a long list! In this video we are only going to look at
PAYE. PAYE – or Pay as You Earn – is a type
of income tax. It is the amount that is automatically deducted from your salary on your payslip
each month, before you even get a sniff of it.
HMRC gives you a tax code. We’ll discuss tax codes in a minute.
Your tax code determines how you will pay tax and your employer uses your tax code to
deduct the correct amount from your salary each month and give it to HMRC.
PAYE is applied to your normal salary, sick pay, maternity pay, directors’ fees and
pensions. Tax codes. A tax code is usually in the form
of a number followed by a letter and it is a calculation of how much tax you need to
pay in the tax year. You can find your tax code on your payslip or P60 (which we’ll
come back to) and on the letter they write you at the start of each tax year.
Tax codes are calculated as follows: The tax-free allowance for everyone is currently £11,000 This means you can earn £11,000 before you start to pay tax.
This gives you the tax code 1100L which is what most people receive.
Ok, for this example we are going to use this tax code. We will look at how your tax code
can change a bit later. Once you earn over £11,000, you are taxed
at the basic rate. This is currently 20%. So if you earn £20,000 per year, you pay
tax on £9000 at a rate of 20%. This means you pay £1800 tax per year, or £150 per
month. Your employer deducts this automatically from your payslip – hence the term ‘pay
as you earn’. If you earn £30,000 per year, you pay tax
on £19000 at a rate of 20%. This means you pay £3800 tax per year, or £317 per month. Higher rate tax is paid on income above £43,000.
So if you earn £50,000, you will pay: Zero tax on the first £11,000 as above, 20% tax on your income between £11,000 and £43,000, This is £32,000 at 20% which equals
£6400. And you’ll pay 40% tax on your income above £43,000. This is £7,000 in this example which equates to another £2800 in tax. This brings your total tax bill to £9200 or £767 per month. I’ve heard people get this mixed up and think that as soon as you enter the 40% tax
bracket, all your income is taxed at 40%. This is not how it works. The higher rate (40%) tax bracket applies all the way up to £150,000. Above this point
you will pay 45% on your income. Also, if you earn above £100,000, your tax
free allowance diminishes proportionately to zero. If you have any questions about this,
leave them in the comments below but for now, we will assume that most people watching this
channel aren’t worried about this problem. To calculate your tax just remember this; If you earn more than £43,000; the proportion above this amount times 40% and the remaining amount between the two thresholds, – which is £32,000 – times 20% So what if your tax code is not 1100L?
I’m glad you asked. Your tax code may have a different number or a different letter.
We are going to cover this in part 2. Don’t forget to subscribe.
Remember, the figures used in this example are based on the tax year 16-17 and will likely
change from year to year. The basic concept remains the same though. Further information
is available from the HMRC website.

How to Pay For School | Tips On Saving Money For College

Hey everyone, so college is one of the biggest
expenses you face as a young twenty-something. According to data from, the
cost of college is, on average, anywhere from $4,800 a year for a typical community college
to as much as $50,000 a year or more for a private four-year college. That’s quite a chunk of change to somebody
who’s just graduated high school. So it’s not surprising that the student
loan debt in America is over $1.5 trillion with the average person carrying approximately
$30,000 in student loans. Even with the additional income commanded
by those with at least a bachelor’s degree that amount of debt can really hamper early
progress toward financial success. This is especially true if you happen to graduate
during a time when good jobs are scarce as many people have in recent years. So that begs the question of how we can better
prepare ourselves for the costs of higher education? That’s what we’re going to be talking
about today. In today’s video, we’re going to be discussing
how to save money for college. There is no doubt that college is great for some
people. Higher education is downright mandatory for
certain career paths like doctors and lawyers, but it isn’t for everybody. You can create a very comfortable life for
yourself with or without a degree. So before we talk about how to save money
for college I want to briefly discuss some statistics and reasons why some of you may
not actually need college at all. According to the Bureau of Labor Statistics,
the median income for high school graduates in 2017 was about $37,300 per year. For those with bachelor’s degrees, it was
about $61,800. And for those with advanced degrees, it was
about $75,400. There’s certainly a pretty big leap between
high school graduates and those who have at least a bachelor’s degree, but we also have
to consider the time it takes to get that degree and the cost of college itself. According to the average
annual cost of a four-year college for in-state residents is about $25,000. For out of state residents that number increases
to nearly $41,000 a year. Private schools are even more expensive than
that with the average cost clocking in at over $50,000 a year. Those numbers include costs associated with
tuition and fees, room and board, books and supplies, transportation, and other miscellaneous
expenses. Judging by those numbers a four-year degree
at a school in your state may set you back about $100,000. That’s quite a chunk of change. Assuming that you put the full cost of that
degree on your student loans with a 4.5% interest rate and the standard 10-year term you would
be paying over $1,000 a month after graduation. That’s also quite a chunk of change. In fact, it’s about 20% of the median income
for those with bachelor’s degrees. John isn’t sure of what he wants to do for
work, but he’s been told that you need to get a college education to make it in today’s
job market so he goes to school. He pays about $25,000 a year for his education
and winds up $100,000 in debt by the time he’s wearing the cap and gown on graduation
day. He’s now 23 years old and gets a job earning
$60,000. He lowers his tax bill as much as possible
by investing in his 401K and IRA. After taxes, this would look suspiciously
like $4,200 a month. Not including the student loans he lives on
$2,000 a month. Since his student loans are costing him $1,000
a month, his total expenses are $3,000 a month. Therefore, John has about $1,200 a month left
over to invest. At an average 8% rate of return, John would
have $217,000 to his name when his student loans would finally be paid off at the age
of 33. This is certainly not bad and with his student
loans now gone, he will be able to start aggressively saving for his financial future. However, similar success can be achieved without
a degree. Jane also wasn’t sure what she wanted to
do for work, but unlike John, she decided to not pay for college unless she had a good
idea of what she wanted to do. She found a job at 18 making $36,000 a year
and just like John investing in her 401K and IRA to lower her tax bill as much as possible. After taxes, she takes home about $2,550 a
month. She lives on $2,000 a month just like John. She invests her leftover cash and has a net
worth of $167,000 at the age of 33. If Jane continued to invest like this she
would reach financial independence at the age of 45. That is a little later than John would be
based on these numbers but it is still far earlier than the average person, despite the
fact that she’s only got a high school diploma. Both John and Jane’s situation are good
ones to have. John had an idea of what he was going to school
for and was able to make it pay off for himself in a big way. Jane didn’t have a reason to go to school
so she saved herself from the costs by finding a good job that didn’t require higher education. She could, of course, decide to go to college
further down the road if she found something she really wanted to do that had a higher
education requirement. And with a full-time income, it would be much
easier for her to save money for the degree than it would’ve been in her youth. Bob’s situation is not as good. Like Jane, he didn’t know what he wanted
to do but he’s been told that you need to get a college education to make it in today’s
job market so he goes to school. He spends three years at college (racking
up $75,000 worth of student loans in the process) but never finds what he’s looking for. He doesn’t end up getting a degree and settles
into a job paying $36,000 just like Jane did. Like John and Jane, he lives on about $2,000
a month, but unlike Jane, he also has student loan payments to make. His payments are about $777 a month. That eats into the rest of his income and
then some so he is not able to invest at all. Unless something changes he’s just going
to go further into debt with time. And unfortunately for him, student loans are
incredibly tough to get rid of even through bankruptcy. Ultimately, this is the scenario we want to
avoid. That’s why it is crucial to have an idea
of what you’re going to college for. Your idea may change after you’re there,
which is fine, but we don’t want to just go to college to find our reason for pursuing
higher education. At tens of thousands of dollars a year, that’s
just too expensive of a risk to take. So first thing’s first, try to get an idea
of what jobs you might want to do by shadowing people in the fields you’re interested in
throughout high school (or earlier if you have the chance). If you find that you would love doing a job
that doesn’t really require a university education then you have saved yourself tens of thousands
of dollars if not more by forgoing the pursuit of a degree. If you end up finding a job that does actually
require a University degree, then you can start looking into ways to save on college
costs. This could include many things such as going
to a community college to get your two year degree before transferring to a 4-year University
to get your higher degrees, looking for scholarships or grants, looking for part-time jobs you
can do while at school, and saving early in things like ESA and 529 plans if you have
the time among others. These strategies can make a pretty big difference
in the cost of college and the amount of catch-up work you’ll have to do after graduation. For example, according to ValuePenguin’s
data, the average annual cost of a community college is just $4,864. Heh, and I say just $4,800 as if that’s
not also a lot, but it significantly cheaper than the 4-year university. If you got your two-year degree from the community
college it would run you about $9,700. You could then transfer to a 4-year university
and finish your bachelor’s for an additional $50,000. In total it would cost about $60,000 compared
to going to the 4-year university from the beginning and shelling out six figures. ESAs and 529 Plans are both ways to save for
educational expenses. ESA stands for education savings account. The 529 Plan gets its name from the IRS Code
number that it’s based on. Both the ESA and 529 Plan allows for tax-free
growth and withdrawals as long as you are withdrawing the money for qualifying educational
expenses. While contributions to the ESA are not tax-deductible,
they can be withdrawn tax-free for qualifying primary and secondary expenses as well as
college. You can choose just about any type of investment
you want and can contribute $2,000 per child, per year. ESAs must have a beneficiary listed and that
person must use the money by the age of 30 to avoid any taxes and penalties. If they aren’t going to use the money before
30 you can transfer it to another beneficiary as long as they are related to the original
beneficiary. This is really cool because it means that
if you’re saving for your kids college and they end up deciding not to go you can transfer
the account to your grandchildren! However, there are income restrictions with
the ESA. The restrictions begin with incomes between
$95,000 and $110,000 for individuals and $190,000 and $220,000 for those who file jointly. 529 Plans are offered by most states and are
a little more restrictive with their investing options than the ESA. For most states there are a few portfolios
that you can choose from when investing your money and you can reallocate your investments
twice a year. To make up for this the 529 Plans do offer
higher contribution limits of $14,000 per year and the money is still withdrawn tax-free
for qualifying expenses. There is no age limit for those using the
money. So if you’re beneficiary decides they want
to go back to school in their forties they’re free to do so with this money. Withdrawals can be used for college expenses
including tuition, room and board, and textbooks and supplies. However, they cannot be used for primary and
secondary school expenses like the ESA can. Unlike the ESA, there are no income restrictions
with most 529 Plans. And finally, just like the ESA, you can transfer
from the original beneficiary to someone else as long as they are related. With both of these plans, it’s important
to consult a financial professional as there are sometimes some differences in the fine
print, but this is generally how the options look. But as you can imagine these options can give
your son or daughter a massive head-start when it comes to saving for college. Assuming an 8% return and that you begin putting
money away for your child’s future educational costs when they’re born you could have an
ESA valued at over $80,000 by the time they’re 18. This could grow to as much as $120,000 by
the time their graduate college. The 529 Plan, due to it’s higher contribution
limits could be a great way to play some catch-up if you are starting later on in the game. At $14,000 a year, you could put away over
$110,000 in as little as 6 years assuming an 8% average annual return. However, if neither of these strategies work
for you there are still other options such as summer work. It’s great to be able to work during the
summer to earn money to pay for school. If that’s not enough though, there’s no
shame in working part-time during the school year as well. Your 30-year-old self will thank you for it
someday. Consider if you went to a community college
to get your two-year degree. It costs you approximately $10,000. If you then went to finish your bachelor’s
at a 4-year school you’d be paying about $50,000. In total your educational expenses are around
$60,000 over the course of 4 years. If you worked a full-time job in the summer
(13 weeks) that pays $12 an hour you would earn about $6,240. If you also worked 20 hours per week during
the school year (39 weeks) you would earn an additional $9,360. In total, you would have an income of $15,600. After taxes, this would likely be about $14,000
a year in income. With $15,000 a year in educational expenses
that would nearly pay for your entire degree! Within a few months of graduation, you could
be debt-free and off to the races building your investing portfolio. This may not help you save for college early,
but it will certainly help limit the damage excessive student loan debt can do to your
financial picture going forward. So those are some strategies for saving and
paying for college. Have you used any of them to help pay for
your or your children’s education? If not, what strategies did you use? Let me know in the comments section below.

Can We Predict a Market Crash Like Michael Burry Did with the Great Recession

hi I’m Jimmy in this video we’re gonna
look at the Great Recession was it possible for everyday investors to see
the trouble ahead before it happened because if we could do that well imagine
the money that we could have saved or even the money we could have made sort
of big short style so each month on this channel we do an analysis of the US
economy where we go through a handful of economic indicators to see if we think
we should invest now we’ll wait for the stock market to crash this is what our
scorecard looks like from the most recent video and clearly we mark this
one is neutral we got three points for the Bulls three
points for the Bears and then we got one neutral group that’s
what we call the way up both in the middle there now I got some pushback on
using the S&P 500 as an indicator since it’s not we’re not really trying to
predict where the movement of the economy ultimately we’re after
predicting the movement of the S P itself so let’s cross that one off the
list okay so what we’re gonna do in this video is we’re going to perform this
exact same analysis this is what we do each month but this time we’re going to
try to perform this analysis as if today were right before the stock market
crashed in 2007 this is what the S&P 500 had done leading up to the Great
Recession and I know we’re thinking this looks very similar to today but either
way our analysis is going to happen as of right here
this is the very peak of the stock market if we had done this analysis at
that point well what would our results have looked like being as objective as
we could possibly be okay so let’s go through each of these items on the
scorecard fairly efficiently and fairly quickly first up we’re gonna look at the
yield curve so this is a chart of the difference between the ten-year Treasury
and the 2-year Treasury so here’s basically what we’re looking for
clearly the ten-year Treasury should pay a higher yield than the two years
Treasury does so at this level here well the ten-year Treasury was actually
paying 1% more than the 2-year Treasury would have been we expect this number to
be positive well when the yield curve invert
sublimate which they call an inverted yield curve well that’s when this spread
goes below zero which means that the two year
was actually paying a higher interest rate than the 10-year Treasury once this
happened a few times back here now this is crucial because every recession that
the US economy has gone through has been preceded by this inversion of the yield
curve now interestingly at this point in time
well the yield curve is positive so we actually have a very similar situation
today that the yield curve is no longer inverted but it was inverted a few
months ago in that this this spread was negative a few months ago so where do we
mark this on our scorecard well in the last video I actually gave this as a
neutral point because it’s no longer inverted and some people pointed out
that because the yield curve was inverted a few months ago this should be
a negative point but for the sake of trying to be as objective as possible
since I did it just last month I’m gonna stick with this being a neutral point
although you feel free to adjust this in your own analysis and call this a
negative one if you’d like so for now we have one neutral point for the economy
right bet the peak of the grade right before the Great Recession okay next up
we have manufacturing now once again manufacturing in 2020 is negative we’ve
marked it as a negative point but when we look at the ISF manufacturing
indicator back in 2007 well clearly we can see that this is trending lower
which is a negative thing for the economy if the economy was getting
stronger we would expect for this to be at least steady if not moving higher so
this looks like this is clearly going to be a point for the Bears
now the key level on this particular indicator is 50 anything above 50
implies growth albeit in this case slower growth compare that to back here
when it was below 50 well that was actually negative growth so that’s worse
now that was coming out of the tech bubble crash so best-case scenario we
can call this a neutral point because it’s above 50 but because this is
actually trending lower I think that this is a potential problem for the
economy at this point in time so I think we have to give the points to the point
to the Bears okay so on our scorecard we’re showing one negative point in one
neutral point next up for our indicators we have an indicator that tracks the
percentage of car loans where people are 90 days or
more late on their car payments and the fact that this chart is moving higher
right now is certainly a negative thing for the overall economy now this chart
actually covers one of the shorter time periods of all the charts that I have
because that’s as far as as much data as I could find I couldn’t find anything
going back further than that but either way this point stands for the Bears
since this is a negative thing for the overall economy so jumping back to our
scorecard we can give another point to the Bears over here okay next up we have
consumer confidence in modern times consumer confidence is actually a
positive thing for the economy this is where the consumer confidence is today
in 2020 but if we eliminate that well to me
consumer confidence seems to be somewhat of a negative thing it seems like
consumer confidence is falling leading up to this particular point in time but
on the flip side we could also maybe want to say it’s not as bad as it was
back then so maybe it’s trending higher sure it broke that trend line right here
but if we were looking at this chart today I would say that I’m concerned
about the confidence of the consumer as of this point in time but I would
probably end up giving this one a neutral point so on with that goal of
being as objective as possible I think on the scorecard it makes sense to go
ahead and give this a point on the in the Nutri column but I am curious how
you would mark this one up or even the yield curve would you have gone with the
neutral point on the yield curve or on this particular indicator would you have
gone a negative point I doubt we would have gotten positive but I guess hey
anything is possible please let me know what you would have
done in the comments below okay next up we have CEO confidence and when we look
at this chart well clearly this is a negative point this is a point for the
Bears this is a negative thing to me it’s quite clear that this is trending
lower and this is actually a really easy one so jumping back to the scorecard
well once again this is a point for the Bears so right now it seems that our
scorecard is leaning towards the Bears which is likely a bad sign for the stock
market going forward okay now we’re gonna look at our housing indicator now
housing stock is how many new homes are being built in
a given period of time and given that the Great Recession was preceded by a
housing boom so the time period we’ve been analyzing is in theory at the very
peak of a housing boom I was actually quite curious to see how this indicated
how this indicator look at the peak of the stock market before the Great
Recession so this is what housing stocks would have looked like in October of
2007 well clearly this is negative and this is going to be a point for the
Bears and much to my surprise housing starts had peaked more than a year
before this particular analysis and it was getting rapidly worse so if we were
paying attention back in October when we’re doing this analysis well at this
point the stock market was at its peak well it may have been obvious that
things were in trouble now you may notice that on each of the
charts it said September and that’s because I’m assuming that we’re
analyzing this in October and the October’s numbers haven’t been published
yet so we would have had September either on a monthly basis or quarterly
basis depending on what the indicator does that’s why each of these sub say
September but we’re actually looking at it as if we were in October so when we
go back to our scorecard well we can see that clearly there were troubling signs
ahead for the economy and since the stock market tends to lead the economy
well it wouldn’t have taken a rocket scientist at this point to at least
guess that there was trouble ahead for the stock market and if we’re curious
this is what the S&P 500 actually did by the end of 2008 and clearly it wasn’t a
good thing now I know that I mentioned that this video is designed to look at
the effectiveness of our monthly invest now or wait series well we do this very
same analysis each month and we’re trying to objectively gauge where the
economy could be going and where the stock market could be going so if you’re
curious well that series could be a good next
video to watch might make sense to keep up with that if you are investing or if
you’re considering investing and I want to thank you so much for sticking with
me all the way into the video I really appreciate it I hope you found this
interesting thanks and I’ll see in the next video

How to Deal with Unpredictable News in the Stock Market

– What’s up? Tim Sykes, millionaire, mentor,
and trader here in Tulum. Look at how beautifUl this is except that it’s freaking pouring out. Can they see that it’s pouring? – (Cameraman) Yeah. – They can see this? – (Cameraman) Pretty sure. – All of our friends are
going down to the beach. We can hear them screaming and squealing like little children. Leave a comment underneath. Would you stay inside during a rainstorm or would you go out into the
wild Mexican unknown beaches for possible death but also possible fun? (rain pouring) I don’t know which is gonna happen here. It’s gonna be interesting either way. I have a feeling they’re
gonna come back up in about five to 15 seconds
’cause it is pouring. But we’re also in this tropical
area so it’s kinda nice. I wanted to film this video specifically because I wanted to show
you that you can plan, you can be as rich as possible in an area, you can do everything right and yet something can still go wrong. Mother Nature, for example, in this case. I was gonna film this happy video, look how beautiful this is. Obviously that’s not happening here. So you gotta be careful a little bit but understand that’s what make life, that’s what makes stock
trading so much fun. It’s unpredictable, okay? You can’t control everything. It doesn’t matter how much money you make, it doesn’t matter what you do, how much planning you have, sometimes stuff is just
gonna happen, okay? And they’re having fun out there. I’m not going out there,
I have a sore throat, I don’t wanna get any sicker. We’re visiting 10 of my libraries
with my charity tomorrow and I just want this to be
kind of a visual reminder, (bleep) is gonna happen to you, okay? Whether you’re in a trade
and it’s not going well and for whatever reason, your website, your broker shuts down and you can’t exit. Sometimes you’re in a trade,
unpredictable news happens and the stock starts going the other way. Don’t blame yourself, okay? I get a lot of discouraged
students where they lose money, they make a mistake, and
they can’t get over it. And what you have to understand
is that (bleep) happens. But I want you to see that
this is gonna happen to you and you can’t be discouraged, you just have to get over
it the best that you can. I wish that I wasn’t stuffy right now. I wish that I didn’t have a sore throat. I wish I could go out there
in the water and have fun too but guess what? I’ve been working too hard,
burning the candle at both ends, you know, I just came from Art Basel, raised a bunch of money
with Mat’s art show. The prints go to the Karmagawa
Foundation, my charity. So I have no good news for you, okay? I just wanted to get on
camera and say this happened. I was gonna say like, “I
didn’t make money today,” but that’s a lie, I actually
made like 600 bucks. Just gave a webinar, the
Wi-Fi actually worked, so I think the lesson here
is when bad stuff happens, when stuff that you can’t control happens, look to the bright side. I know this isn’t the most technical video but it’s still useful, okay? My job is to try to teach you, try to get you having the right mindset. I hate seeing discouraged students where you lose money or you make a mistake and you stop studying. And you punish yourself. Like, don’t punish yourself
when you make a mistake. That should encourage
you even more, right? Like, I have some students
who break my rule number one about cutting losses quickly. If you break that rule and
you don’t cut losses quickly and you have a big loss, that
shouldn’t discourage you. That should be like, oh,
this is a wake up call. Let me actually follow
Tim’s rules next time so I don’t have that big loss. What you have to understand
is that life is a marathon, trading is a marathon,
getting rich is a marathon. There are no quick answers
and if you do happen to have something that happens too quick, like a lot of these like
athletes or child TV stars, they get screwed up in their heads because they don’t really
appreciate the journey that it should have taken to get there. Or trust fund babies, right? Like, they have all this
money, they have no idea. For Karmagawa, I’m very
fortunate with my partner Mat who’s a great designer and
he has connections galore and we just created this
new charity apparel in Japan and we just had an opening at like the number one store
in Japan which thousands of other real, like, you
know, merchandise companies. Like, you know, we’re a
charity merchandise company, like we still make good merch
but that’s not our main focus. But like there are thousands
of hardcore designers who are working nonstop, trying to get their clothes into any store and we just leapfrogged all over them and we’re in the number one store and I felt like a trust fund baby, ’cause I didn’t really earn it, but I just picked a good partner in Mat. So long story short, you
gotta at the positives. Look for that journey. Get excited for the journey. Get excited when something goes wrong. That’s part of this all, okay? If everything goes perfectly, if everything’s just rosy
all the time, that’s boring. You’re not gonna appreciate it. There’s a great quote from
the movie “Vanilla Sky” and it’s probably from somewhere else too but I watch a lot of movies. “The sweet isn’t as
sweet without the sour.” So I, once upon a time,
had a $500,000 loss. You can read all about it and
my haters still bring it up. It was over a decade ago. I’ve made it back many times over but at the time, I was very depressed. I turned to drinking for several months. You know, I didn’t know
if I could get back up but then I got back to my main strategy where I had made millions
of dollars not investing where I had lost money and
I focus on rule number one. Back then, I didn’t even
have rule number one. I didn’t have risk management. So the loss, while it sucked,
it helped me define my rules. It helped mold me. So use these negative experiences, use your losses and mistakes, to help mold you to learn what not to do. This isn’t that bad of a mistake. I mean, it was just
raining for a little bit. It just kind of screwed up my video but I wanted to make a
video about that, okay? So many of you cry when you have a loss or you have a mistake. That’s part of everything. Use it, learn about it, remember it. Don’t just hide it, don’t
pretend it doesn’t happen. We all make mistakes. Stuff that we can’t plan
happens to all of us. It’s all about how you react to it and keep moving on and overcoming it and then when you eventually find success, you’re grateful for those
mistakes and those losses and those setbacks and
obstacles along the way. That’s today’s lesson. Leave a comment underneath, again, whether you would go
outside in a rainstorm in a tropical area like this or would you sit inside like
a Jew with a sinus infection? You tell me. Hey, Tim Sykes, millionaire,
mentor, and trader. Thank you for watching my videos. I hope that they help you. I want to share everything that
I’ve learned over the years. You can check out more
videos right over there and also click Subscribe so that you can watch all of these videos, get that knowledge, and become
my next millionaire student.

Why The U.S. Government Pays Lockheed Martin Billions

Lockheed Martin is the top grossing defense
firm in the world, and the U.S. government supports that business to
the tune of over $37.7 billion. It surpasses its closest
competitors, Boeing and Raytheon, by nearly $20 billion in arms sales. These funds are granted by Congress
to provide equipment that enables the U.S. military to protect the
country at home and abroad. So why is Lockheed the
defense darling of the U.S. government? And how did it
beat out its competitors? One of the top priorities of
all administrations is the protection and safety of the American people. To ensure that, politicians work
with defense contractors to provide equipment to the military. This partnership provides a unique
opportunity for private corporations to execute the will of the government
and requires a delicate balance. President Eisenhower, in his farewell
address, coined the term military-industrial complex. And what he was talking about
was the close connection and collaboration between arms contractors
and uniformed military. In the councils of government, we
must guard against the acquisition of unwarranted influence, whether sought
or unsought, by the military-industrial complex. The political incentives of the U.S. Congress and the Department of Defense tended
to work together in a way that created enormous incentives
to increase military spending. For example, when there’s a major
weapons program like, say, the F-35, which is the current Air Force
combat aircraft, is being purchased, members of Congress might have questions
about this plane like is it performing well? Are we getting a good
deal for our money and so forth. They are reluctant to vote against it
because it means going up against potential jobs in their states. The Congress people in whose district
those companies are located and the Defense Department that then gets to
use the equipment that is purchased in this way. And Eisenhower believed
that that complex of the military, the industry and the government, the
Congress in particular, created a tendency for the United States
to overspend on national security. For most of the defense industry, their
biggest source of business is the Department of Defense. So they kind of
live and die with the defense budget as it increases, the revenue
increases, as it decreases, the revenue decreases. Waging an actual war is
a very expensive project. The 9/11 attacks in 2001 were a shock
to the American psyche, led to a substantial ramping up of U.S. military spending in the years after
2001, partly because of the immediate issue of terrorism and partly because
of the closely related but second order problems of the wars that
the counterterrorist program led to in Afghanistan and Iraq. The price tag gets huge. And so American defense spending has
grown radically since 2001 and remains very high. And Lockheed Martin is the
top-contracted company by the U.S. government. In 2018 alone,
the company sold $37.7 billion worth of contracts
to the U.S. government, making up 70%
of their net sales. The other 28% came from foreign military
sales and 2% came from commercial and other customers. Lockheed’s total revenue in 2018
was about $53 billion. By contrast, Lockheed’s next biggest
competitor, Boeing, was awarded about $23 billion from government
contracts the same year. So even though Boeing is a much
larger company with $101 billion in total revenue in 2018, only a small portion
of its business relies on defense contracts. Boeing might be a prominent example
where they do get a lot of revenue from the commercial business falling,
in fact, it’s about two thirds of its revenue from commercial
aviation, about a third from its defense business. Boeing mostly makes
planes for commercial airlines, but it also has a robust business
making military aircraft and other weapons. The next largest
competitor is Raytheon. Raytheon is a prominent defense firm
that offers services in everything from cybersecurity to
missile defense. 68% of Raytheon’s net sales
came from the U.S. government in 2018, which
means about $18.4 billion. They list
their principal U.S. government customer as the U.S. Department of Defense, as
does Lockheed Martin. However, before Lockheed Martin got
this very crucial customer, it struggled to define its identity. Glenn L. Martin opened his aviation
company on August 16th, 1912. The company went on to become one
of the earliest suppliers of the U.S. military, making aircraft for both
the army and the navy. They went on from success to success
through the twenties and the thirties pioneering all sorts of new
aircrafts, but particularly military airplanes. In 1961, the
second Glenn L. Martin Company merged with
the American Marietta Corporation. It was renamed the
Martin Marietta Corporation. The same year, Glenn Martin
launched his aviation business, the Lockheed brothers launched their
aviation business, the Alco Hydro Aeroplane Company, which was later
named Lockheed Aircraft Company. Lockheed, L-o-u-g-h-e-a-d, is
pronounced like Lockheed. People had a hard time pronouncing it
that led to the brothers legally changing the spelling of
their surname to Lockheed. Malcolm went on to start a
successful car hydraulic brake company, and Alan resigned after the company
was bought by Detroit Aircraft Corporation. But the company didn’t last
long and fell into receivership under the Title Insurance and Trust
Company of Los Angeles, officially killing Lockheed Aircraft Corp., which was a subsidiary. Its assets were sold off to Robert
Gross and other investors who went on to form a new Lockheed
Aircraft Corporation of Delaware. Lockheed Aircraft Corporation changed its
name in 1977 to Lockheed Corporation to demonstrate they offer
other services besides aviation. Those two companies, the Martin
Marietta Corporation and Lockheed Corporation, were two prominent competitors
in the defense marketplace. However, that marketplace has never
been completely independent of the government’s actions, just as President
Eisenhower had warned when he spoke of the
military-industrial complex. Military procurement had declined around 52%
from 1985 to 1997 in current dollar terms. Before 2001,
many people believed that national security had become a lot easier with
the end of the Cold War and that the United States could take what
was referred to at the time, a peace dividend. The much larger defensive
efforts that the United States had made during the Cold War when
we had to fight Soviet Union weren’t necessary anymore when the Soviet Union
collapsed and the Cold War ended. So defense budgets tended to decline. Leadership at the Department of Defense
inferred that the defense industry would have to shrink around 40% in
order to save the industry from collapsing amid declining demand
from the department. Officials encouraged companies to consolidate in
an effort to save each other. At the end of the Cold
War, there were concerns about whether the Pentagon budget, which was going to come down
about 10 to 25 percent or so was projected in real terms. Could that smaller budget sustain
the same number of contractors? And William Perry, the secretary of
defense, in the administration felt the answer was no. In fact, in
1993, the government asked specifically for less competition among
defense contractors. Look to your left.
Look to your right. One of your companies is not going to
be here in a couple of years. And then you also had
the infamous Last Supper. We think there are too many companies
in this business and we want to merge and combine with one another at
reduced costs to us, overhead costs at the corporate level. Norm Augustine
kind of engineered the whole series of mergers. Infamously or famously, Norm Augustine
who at the time was the head of Martin Marietta was at the
table with a bunch of other industry haters. And he was one of
the most aggressive executives taking that guidance and running with it. And he became CEO of the
combined Lockheed Martin and also consolidated and purchased lot of other
companies. Lockheed Martin absorbed large companies like Ford Aerospace
and Loral Corporation. Basically the big winner and that
consolidation after the Last Supper was Lockheed Martin. It was after that
that Lockheed aircraft and Martin Mary had emerged. In 1958, Lockheed Martin
proposed to Northrop Grumman and the government actually told them
not to do that. They cancelled that transaction. They said they wouldn’t approve it
and the idea was dropped. So that was that’s kind of, if
you will, the sort of the generally accepted end of the the
Last Supper consolidation era. By 2000, the industry had consolidated
into the marketplace we know today with Lockheed on top. So the way
the industry is structured now, the barriers to enter are huge. Unless they
brought up some of the existing companies, you’re only going to have
a couple of competitors for most things you might want to
do. Lockheed Martin now stretches into four business segments:
Aeronautics, Missiles and Fire Control, Rotary and Mission
Systems and space. It’s a company that has combined with
other companies over time to gain its current market position as the
largest company in the world. In 2019, Raytheon and United Technologies
announced intention to merge to have a better edge
on the defense industry. To protect their profits, companies like
Lockheed Martin also sell their aircraft to American allies when
cleared by the State Department. When the defense budget in the U.S. started to fall, a lot of companies
really amped up their work to sell products overseas. So depending on the company, that’s probably
now like 25 to 30 percent of their revenue may come
from international sales. That’s one way the government
controls the defense marketplace. Another way is through direct
negotiations with industry CEOs. In the 2017 fiscal year, the
then president, Barack Obama, proposed a budget of $582.7 billion for the
Department of Defense. The following year in 2018, President
Trump proposed a budget of $639.1 billion. For the fiscal year 2019,Trump
proposed a budget of $716 billion for national security, with $686
billion for the Department of Defense. And looking to the future,
Trump proposed a budget of $750 billion with $718.3 billion going to the Department of
Defense for the fiscal year 2020. The company was well positioned in the
Obama years as well because, you know, he actually spent significant money
in this decade, which includes most of the Obama two terms. We’ve spent a trillion more on the
Pentagon than in the prior decade, which was at the peak of
the Iraq and Afghan wars. President Barack Obama appointed Lockheed
CEO Marillyn Hewson to the president’s export council in
September of 2013. Marillyn Hewson from Lockheed Martin. Obviously, one of our greatest innovators
and one of those innovations is the F-35 fighter jet. It is the most advanced
fighter in the world. It’s stealth. You cannot see it. Is that correct? That’s correct. Better be correct. Right? A single F-35
can cost over $80 million and the government hasn’t always been happy with
the F-35’s performance and price. Then President-elect Donald Trump thought
the F-35’s program delays and high costs were bad for business. This one from the president-elect based
on the tremendous cost and cost overruns of the Lockheed Martin F-35, I’ve
asked Boeing to price out a comparable F-18 Super Hornet. This caused Lockheed Martin shares to
fall around 2% and sent Boeing shares up 0.5%. In January 2017, Trump commented on
the tension of his negotiation with Lockheed Martin. Look at
what’s happening with Lockheed. Number one, we’re cutting the price of
their planes by a lot, but they’re also expanding. And that’s going
to be a good thing. Ultimately, they’re going to
be better off. Hewson is actually in this very
interesting sweet spot where the defense budgets never been bigger
under any presidency. So that gives her company a lot of
leeway to snatch up a lot of those contracts. I don’t see any realistic
chance that there’s another company that’s going to exceed Lockheed Martin
in the next five years. Lockheed Martin will be delivering 478
F-35 aircraft to the U.S. government under their biggest deal yet,
a $34 billion contract with the Pentagon. In 2019, the U.S. government also approved the sale of 32
F-35 jets to Poland for around $6.5 billion so the company is poised
to be successful among allies as well. When you look at Lockheed’s diverse
portfolio and you pair that with a defense budget at a tune of
$700 billion, of course Lockheed is prime suited to pick up more government contracts
and to ride even more of a successful wave.

Technology Is Frothy Even With A Marijuana Sunrise | Greg Schnell | Market Buzz

* music * Welcome to the next decade of Market Buzz.
I’m Greg Schnell the, Canadian Technician and the host of this unique show. We look
for long time fair trades on weekly charts. Please follow me on twitter at
@schnellinvestor, go check out my website at, and hopefully
follow me on on StockCharts on the blog’s tab under your ChartWatchers,
Don’t Ignore this Chart and the Canadian Technician. So we still got ourselves a
bull market lots going on. I’ll be doing it a little bit of public speaking over
the next week so I just thought I’d let you know I am participating in the summit. There’s about 90 speakers for that one I think. I’ll be presenting
Tuesday morning at 9:00 a.m. it’s totally free and I don’t know if you can
see this on my screen but it’s
and you can click on there and and find my name and register or just register
for the whole conference whatever you’d prefer. Anyway should be a great one lots
of good speakers there lots of ideas and it’s all free. And as well I’ll be on
that afternoon and I’ll be on with David Keller on The Final Bar and that will be
a 4:00 p.m. Eastern so just as the market closes that one’s kind of funny
because I used to do The Final Bar that used to be this you know I had at the
end of the day, so anyway it’ll be nice to be back. Should be exciting so looking
forward to that. And our agenda today is the technology XLK and XLC those two
groups, I know ones communications, are they
unstoppable and then we got a bounce in marijuana names today or or somebody
just lit up in marijuana and finally we got some something more than a spark.
So we’re gonna go through some of the marijuana names and just check them out.
I don’t think, don’t think you’ll be missing any rally by any stretch but if
you’re a trader that might be a place to hide. Go look for something so if the
overall market rolls over maybe these MJ names can’t continue to run. So we’re
gonna look at the confusion on the trade deal, you know, it’s been
so quiet as to what’s actually in this trade deal and I know there’s a couple
hundred people gathering in Washington today to talk about the signing of the
trade deal. I think the real question I have is why aren’t the charts kind of
confirming that? So there was a pickup in in some of the industrial names last
week some of the industrial metals but the industrial metals chart hasn’t moved
a whole bunch yet so we got a whole bunch to try and shoot through. So let’s
do that, we’re gonna jump in to the overall market here. Let’s just hit the
refresh and make sure. I look, I learned something new this morning one of the
things that happens is on on the market movers over here this OGI is a
marijuana name and it was up 20-some percent to start the day and it’s now up
38 percent but it was on the most active list but not on the percent up list and
that I did not understand and I found out the reason for that and one is that
the percent up list the stock has to have a price of at least five bucks
where is the most active it has to have a price of at least a dollar.
So anyway, learned something new just there’s a little bit of a parameter
setting there that that can change it. But if you notice just looking on the
homepage today so this is Aurora Cannabis, this is OrganiGram, this is
Hexo which is also a marijuana name, this is Aphria which is marijuana name,
that’s a Canadian bank, but this is Canopy Growth Corporation so in the U.S.,
the ticker symbols CGC, Charlie-Golf-Charlie. And two oil
companies and then another marijuana name here
Cronos. So lots of marijuana on the most active list and you know finally
somewhat of a heartbeat. I mean these names have been really beaten down. So
we’re gonna cover that in a bit. I want to go back and just talk briefly about
the indexes because I think it’s it’s at a remarkable stage and so we’ll just
cover that off. So first of all I’ve been highlighting on the PPO
how high this is getting. So this is the the run for the last 10-days and it’s
you know Nasdaq was 86.50 to 90.75 so it is that four hundred
and some points in just a a week or so. Anyway so what we could see is this PPO
on the daily levels, I’ll put a pretty high level up around two percent but on
a weekly level we’re up, way up here over four percent now we’re exceeding that
January spike high in 2018 and this is taken on a whole new level of surgency.
So with that the real question would be you know who’s going to add more money
into those big names at the top here and so far the index trackers are doing a
fine job of that. But if we go, I’m gonna just flip over to my other, whoops, not
that one, this one my other look for these stocks and I’m
gonna put up the XLK and what I want to show you here, these are the
technology names and this PPO is over five percent and as you can see in 2018
on that sudden surge, we didn’t get anywhere near that high and now if I
just unwind the tape, whatever we can go 20-years, what we’ll see here is that you
know getting over 5% is a pretty rare beast and we’ll just put a horizontal
line on that, whoops, did something wrong for some reason that’s not opening okay
there we go and I just want to take and go horizontal line, on the wrong line so
nothing there, the horizontal line on this one and you put in 5.0%, 5.0 to 3%
just to show you that this and we’ll pick red or something. Okay and now what
you see here is this red line and so coming off the ’09 lows that
significant surge off the ’09 lows we got to this
level same thing in 03-04 and briefly in 2012 touch that level also. So usually
I mean we’re at a I’ll call it a pretty healthy run rate, so the real interesting
question is, is this normal? Are we at the new normal, where these
stocks can just levitate or or is this a little bit overdone. And so I would just
say make sure that you’re aware of how flamboyant or how enthusiastic the
market is. This probably isn’t a place to add new positions into already run up
names. Ah, XLC, what we see on this one this chart not nearly as bullish. So we
still have that 5% line but this is only sitting at around 3% and so with that 3%
level, I think what what the important message here is the the communication
sector may not have run as much but let’s face it it was a relatively new
sector. There’s still lots of good stocks performing over there, but I think the
important thing to be aware of is just how much these top five names have
started to drive the bus. Now if we look just let’s go pick the new percentage
names today and and what’s getting beat up
I guess toys weren’t a very big seller this Hasbro chart looks particularly
hazardous as it’s starting to break down. On the other side I just want to go back
to this ChartList, what did I do there, sorry wrong tab, what I want to point out
here is you know this is how many stocks are in negative territory today and they
just continue to surge and so with that sort of price action, I mean I don’t
think you want to fight the tape, but you sure want to be careful with it because
we we are so extended. Now you know when we look at the big five so here’s Apple
and obviously we know it’s and running on a bit ,it’s up another
percent today, let’s go find Netflix on here, search, and the point I want to make
on Netflix is that when we look at this chart one thing to be careful of here is
the PPO is right around zero and if this rolls over that’s a pretty hazardous
condition. So, well everything else has been relatively enthusiastic and the
chart is starting to improve in SCTR ranking I think just be aware of how
sensitive we are, and and maybe I should explain that a little bit more, so what
happens is when when momentum goes below zero we call that the winter position
and the big thing about that winter position is obviously when that’s
breaking down that’s a relatively large hurdle. We have so much negative, we have
so much momentum ,or weakening momentum that it’s actually pushing down below
zero and just in here that was a pretty important place to be aware of, back in
July, that was a pretty important place to be aware of. And now here we sit in
January just barely above zero and we’re gonna have Netflix report sometime over
the next couple of weeks probably and and when they report I think the thing
we want to be most in tune with is how sensitive we are here. If this rolls over
right away that’s probably gonna be a major signal for Netflix so try and and
be careful there. If we go look for Microsoft it just keeps going. It’s
almost crazy how much how these big companies have rallied but this one’s up
another 1.46 percent this week and you can see the PPO way up here at five or
six percent that that is very lofty. Now it can stay up there for a long time as
it did in 2018 and and then remember 2018 was a pretty choppy market, we made
a big high and then went sideways and then broke down hard in the fourth
quarter. Microsoft broke down a little bit in the
fourth quarter from 113 to 92 so that’s about 20%, maybe 15%, but I think the
bigger thing to keep in mind is this is really heavy up here on the right
inside and just be aware of of where we’re at. Amazon is a different one. What
we see with Amazon is the PPO is rated 0 also and so I would just use that same
cautionary situation and again, I would not want to short Amazon, it’s a beautiful
stock. I’m just saying that the momentum can be fairly tepid here and if it’s
rolling over at 0 that’s probably a good place to pay attention and make sure
that you don’t get caught offside. So as much as my confidences is soaring for
what the company’s going to be doing in on-time delivery and all that kind of
stuff, the one-day delivery with drones and and that whole build out, I think
that’s probably going to be a great company. And all the warehouses they’ve
been building have a reason and that’s just to get closer. So anyway, just
careful with Amazon. I do want to show Skyworks because I think this stock is
a beautiful example of 5G and it’s been running up very very nicely and the only
thing I will say is that the momentum is starting to wane here, and again, if I was
gonna pick a 5G stock ,this is probably one of the ones I would like to be in.
If you get a pullback to the ten week or something like that that might be a
better entry and that would also line up with prior highs, so pullback to support
and then take off again. Anyway, some of these names look a little frothy and if
you had the chance to take a little bit off the table that would be a good idea.
So we’re gonna take a quick break here we’ll be right back and when we get back
we’ll jump into the MJ names. * music * Okay, so one of the things that’s
happened is just in the last few days the marijuana names have started to
surge and that’s obviously a nice thing. But you need to be ready for that and so
one of the things I’ve done is I have all of these ChartLists created under
different groups and so when something happens I can jump in and I can just go
specifically to that group. So here’s biotech and pharma and then here’s China
stocks we could go look in there and just see how they’re doing since we have
the trade deals being signed today. We got cloud sector and coal industry and
copper mining, whatever it is that you want, cyber security but by breaking them
down into groups the most important thing is that when something happens and
you you want to see if that is happening across the group the easy way to do that
is to have it already set up. And so in this case I have the marijuana names all
set up and very quickly you want to sort them based on the strongest stocks. So
what I’ve got here is SCTR ranking set up for these and you can see that,
you know, we have a few stocks with a SCTR ranking above ten and even
Canopy Growth after it’s big move this week is still 9.1 so it’s
still pretty suppressed or depressed. I think when you start to look across
these there’s a couple that are more interesting charts and how do you build
these names. One of the things you can do is you can Google whatever top ten
marijuana names, or you can Google top ten marijuana REITs or top ten
marijuana growers, or you know, follow, go into some of the ETF’s.
Seed is an ETF that has marijuana stocks in it so you could go in and just check
what they own. That’s kind of how I do it and so I’ve built it over time. So, as an
example, one of my friends on Twitter the other day was talking about this IIPR
which is a real estate company, industrial real estate and I think I
think it builds warehouses for marijuana. So anyway he mentioned it as a marijuana
name so I just put it in my list, doesn’t mean I’m gonna trade it, but it’s in here.
So I have about a hundred stocks in here and most of them don’t have a SCTR
ranking because they’re relatively new. And so that gives us a problem when we
try to sort them because what we’re also trying to find out is if some of these
names could be improving, right, but I’m not really gonna trade a penny stock, a
$0.14 stock, or whatever, so I want to stay on something that’s got a little
bit higher growth. So what I’ve done is I started off clicking on the volume, then
clicked on the close, and then clicked on the SCTR ranking, and by doing that, so
if I click on volume, then click on the close now I’m gonna get the highest
price first and then get the SCTR ranking. What happens is when I don’t
have a SCTR ranking then it will default by price. And so that gives me a
method of making sure that at least I’m looking at the companies that are you
know are trading much better than than a penny stock or whatever. So when I create
that sort, you can scroll down to the very bottom and you’re gonna hit “number
in sorted order”, I’ve already done that so they’re already sitting in the sort
order of either price or SCTR ranking. So now we’re going to go back to the top
and and if you have any questions about that I’ve done a lot of videos on
SCTR ranking sorts, a lot of the Market Buzz shows are on there but every
now and then I’ll jump in and actually start again at the beginning. But what I want to do today is just go look through some of these names and
StockCharts was having a little bit of trouble with some charts loading this
morning so if we get some blanks, we might have to hit some refresh, but we’ll
see. So here’s marijuana companies inverse ETF. So this was going up when
the marijuana names were falling and this is the top-ranked SCTR in the
area or in the the industry group, and what you see here is it’s rolling over
pretty hard. And that might suggest to me finally this is the first time it’s gone
below zero on the PPO, so this probably looks like, at least if you wanted to
trade in a space, this might be the place to look. So here’s Corvus Pharmaceuticals
and there’s a couple of things I like on here so let’s just go and, okay annotates
turned off, so I have to fix one thing here and what we do on this annotation a
couple of things I like to keep track of is just what is the big trend in
momentum well we can clearly see this has been breaking so that’s a something I
like and again if we wanted to put that on price, whatever it would match in here
with this relatively short trend line something like that, or we’ve got a long
trend line that’s just broken in the last week or so. Anyway the bottom line is
it’s starting to break out and that makes it much better. We’re starting to
get new three-month highs on relative strength. All of these are good sort of
basic scan ideas before trying to find new leaders, this one’s at four-month
highs getting on to five-month highs. RSI is getting up around 60
we’d like to it to get all the way back up to 70 to kind of confirm it but,
anyway this this Corvus Pharmaceuticals looks like a pretty nice chart and what
I like about that is it it’s starting to you know take nice shape.Now you know $4
to $6 it was only $9 high, there’s lots of charts that have been beaten up much
more than that. Here’s Scotts, and this is just the
basic fertilizer company, and you can see it hasn’t really pulled back but it is
spring and so lots of things, you know, you could have people adding plantings
and all that kind of stuff, so Scotts fertilizer could could take off to the
upside here and it wouldn’t take much to break through PPOs giving a buy signal
starting to turn up higher. This name has been choppy for a couple of years, ePlus, and
what you see here is, you know, it has the sudden thrusts and then nothing for a
long period of time so maybe it’s about due for its sudden thrust. The only thing
I would just say is it’s so spiky both ways it’s not really something I want to
trade. Here’s that Innovative Industrial Properties Tom Bruni pointed it out.
What you see here is a big downtrend and it’s starting to turn up PPO is starting
to give you a buy signal. I like it that this is at least four to six months, that
helps me I don’t like how straight down this is but you can see that this has
been a pretty good performing REIT and all of a sudden it’s starting to improve
pays out a 3% yield not bad. GW Pharmaceuticals this one’s clearly
gapping up but notice this already it’s already been up 10 bucks and back this
week. Starting to get a buy signal down here and, don’t get me wrong I mentioned
it earlier, but there’s only a few stocks that even have a SCTR ranking worth
looking at and I like them when they get above 30, so something sitting at 14 is
pretty weak and this one’s even in the U.S. so it’s it’s really weak. And then
here is Fire and Flower Holdings starting to turn up and as this one
starts to pick up in strength here, I think one of the things that’s more
interesting is it’s breaking through, you know, kind of an 8-week area of support.
PPO’s trying to cross up so perhaps there’s something there
full stochastic has just gone above 20 so that’s a bit nicer. The difference
between this chart, this gray background or graphite ChartStyle, is weekly and
then daily if it shows up with this brown frame usually. So what you see here
is we’re hanging right around the 200-day moving average for this Cardiol
Therapeutics don’t have a clue what they do, they’re in my marijuana list that’s all
I know, and up sloping is just starting to break
and it’s rolling over a bit here. Doesn’t mean I’d own it or wouldn’t own it,
I’m just suggesting it’s in the group. I do like the fact it’s finally broken the
downtrend but it it I peeled roughly a year ago we’ll see if it can bounce off
this 200 area and start to accelerate higher. So Canopy Growth is the one
that’s been in the news all week and it’s it was one of the bigger names out
there and Constellation Brands had taken a position in it. And on this chart we
see a couple of things and I mentioned this in Don’t Ignore This Chart article
this morning, that’s sitting on the StockCharts website and what you see here is
the relative strength is starting to break down in this name so that’s, that
was a problem and it’s now turned up here we’re at 3-month highs so that’s
your first step on a a bullish look. The full stochastic broke out here early
December, late November and started to push up and that’s looking
nice and it’s broken above the last two months or three months so, all of a sudden
where we’re at three-month highs in price in the stock is coming off a
pretty big base here. This is when the CEO left and, I think it’s when they left,
and and now the stock is starting to migrate higher. In terms of the PPO there’s
still a big long down term trend line that hasn’t been broken but I do like
the fact that this six-month one from June to December is now breaking and
starting to turn up so at least you’ve got some change in the weekly momentum
enough to to get you interested all of these names and I mentioned it in the
article this morning was you’re still dealing with stocks that are just having
one good week so let’s not get too excited I like the fact that the whole
group is trying to move up that is much more encouraging. The one thing I would
say is set your stops and if you get hit just let them go because these things
they still haven’t made a lot of money. Aphria popped yesterday and then today
was down, or popped two days ago and then yesterday was down. Like this still very
volatile space but volatility gives you upside and downside.
So here’s Pyrus International. This stock was over 50 bucks had a big super surge
and everybody thought it was well on its way to whatever and October 2017 was
what we called weed Wednesday in Canada when marijuana was legalized, but this
thing took off to the moon and then has never been there since so from 52
dollars back to 8 or 9, you know, it’s finally above the 10-week moving average
so that looks good and we’re starting to break this year long down trend, so a
little bit of hope for that. Aphria this one big down sloping
trend line in price, trying to finally break through here, again topped around
weed Wednesday and a two-year 18-month pullback, starting to turn up again
finally that would be a nice thing to see.So if you’re interested this you
know some of these names are here but again they’re going to report earnings.
All of these, check when their earnings dates are because they’re gonna be extremely
volatile through earnings and I think right now we have a lot of grow ops that
could more than supply the legal demand in Canada and the U.S. so, so just be
careful because they’re still an underground economy competing. Here’s
CLIQ.TO and you can see this one is a downtrend line here if that was to start
to break that one to be bullish, trying to bounce off their lows of four bucks.
This was all the way up at, you know, ten or eleven during the actual legalization
of that. So Cronos, big downtrend here, having a nice push this week up 25
percent and then you can see that this downtrend here starting in March and now
finishing in December. At least the stock has finally higher it’s moving above the
ten-week moving average for the first time since, really since, the downtrend
started. Wouldn’t mind waiting for a weekly close
to kind of get there. This is the Marijuana Life Sciences ETF and what you
see is a big downtrend here hiding under the ten-week moving average just using
that has been a pretty good force. So finally the average stock in the medical
marijuana is pushing this thing above above the ten-week moving average so
that’s quite comforting. PPO is finally changing and on a weekly chart it makes
it look to me like I’d be interested in trading in these names. But I remember
two years ago thinking you know gee these things are just starting to
repopulate and then they rolled over into January. So just be very aware of
the earnings dates coming up because I think you could get ripped both ways.
Canopy Rivers, this one super surge and then nothing. We’ll just leave that here.
SEED, another ETF, pretty much down trending and finally a little move above
it, somewhat hopeful on the daily. The PPO was it a big downtrend and starting to
try and break through that, so that’s a little bit of good news. CannTrust
Holdings, this one popped two weeks ago above the ten-week
and has migrated sideways and is now starting to follow on. Again this thing
was a thirteen dollar stock down to a buck thirty, yeah, you get the idea
ninety percent off so maybe there’s a bounce in there to three bucks and get
back to the 40-week moving average. Insys Theraceuticals big
downtrend here trying to push back up, again, penny stock. Charlotte’s Web
Holdings big downtrend you know SCTR ranking of 0.5 that
means 99.5% of the stocks are behaving better than that so if you’re if you’re
buying down here you’re definitely bottom fishing. I’ll call it the rotten
fruit at the grocery store and we’ll see if they can start to turn up again. If
you’re a trader these are pretty interesting places to look on the chart
if you’re not a trader I don’t think that they’re ready for long-term
stability. OrganiGram is up 43% this week but from, you know from a two-year
low and all of a sudden it reverses so the shorts covered you got a down
sloping trendline here. I get it it’s a nice move. I think the real question is
you know do you want to buy it after a 40 percent move already so that’s a hard
one. Hydropothecary, HEXO, a big downtrend
here starting to work its way higher again it’s not even above the 10-week
and we got a downslope PPO. If you can start to see all of these turning up I
think that’s helpful obviously an industry group is gonna give you the
most part of the biggest part of the move is when the whole thing is lifting.
So if that was the case you could either play it through the ETF or you could
play it through these individual names. Again, volatility huge. Make sure you know
what you’re doing on the stop side. I wouldn’t let them get too big. Canopy Growth
chart didn’t load, let’s just try that again, so this is the one I
wrote the article about in Don’t Ignore This Chart, so you can go there and see
that. Anyway all of these charts are trying to pop today or this week there
aren’t weekly closes yet so when that happens then you can kind of investigate
it but you’re not late to the party you’re very
early and again a little bit of volatility off the lows might help kick
it up. So thanks for taking the time to join me on Market Buzz. Market Buzz airs
Wednesdays and Fridays at 10:30 a.m. Eastern Time you can also see the
recordings on StockCharts TV YouTube page and you can also find my U.S. and
Canadian market information on the StockCharts YouTube page and lastly don’t
forget about the schedule where I’ll be presenting next Tuesday * music *