Market Outlook for Dec 29, 2024 - and 2025 Themes

[@mhershfield]

In the q and a can you do a retrospective of the predictions you made last year for 2024 and what actually happened

[@wannabecompounder]

Better you do it

[@swbjstl]

Canada apt reits are still under pressure, that was his biggest conviction if I remember correctly. Shows how difficult it is to make forecasts

[@WannaBeQuant_SUB]

Ye​@@wannabecompounder

[@MarkMeldrum]

If you had access to Positions, you will see that it was mid-summer I was getting into REITs. CAR went from 42-43 all the way to 56. I dropped my position from 64,000 shares to about 22,000 shares. That was the second time within 12 months that I rode the reits from the bottom to the top. Now, they have dropped again, and I am doing it again. Love the REITs.

[@yoboiDM]

@@MarkMeldrumthis time we have 4-5M people projected to leave Canada next year (expiring visas) . Immigration has slowed a bit it too. No concern? Margins between the loan rate and lease rate have already decreased dramatically in the last few years. Without rate cuts this wont improve, unless they can raise rents, which also can't happen if demand isn't growing.

[@Shivastorm88]

What are the implications of such a large term premium?

[@benjinicholls6355]

Thank you for everything Mark, my portfolio returned 53% this year which is a number I thought to be unimaginable just a year ago. Looking forward to some volatility in 2025!

[@mucousmembrane2010]

amazing. voting for bi-weekly outlook

[@stevenly123]

You are predicting a favorable climate for investment banking. Are you therefore long XLF?

[@sntglobalinvestments]

Hi Mark, I’ve been investing and analyzing companies for a while, diving into their 10-Ks, 10-Qs, news, and presentations, but I still feel like there’s something missing to take it to the next level. How do you approach analyzing a company or deciding to invest, especially between earnings? For example, why are you moving back into cybersecurity stocks now, and how did you choose those strike prices? Are there any free resources you’d recommend for staying on top of company news, aside from the news section on their website? Thanks.

[@npcRegard]

Mark's Khan Academy style board gives me a strong urge to take notes

[@MrYashjha]

Hey Mark! @14:23 Wanted to understand market’s position here, as an investor if I’m bearish on term premium (let’s assume due to inflationary expectations) but bullish on overall corporate health in the short term i.e. credit spreads - wouldn’t HY spreads (which are predominantly shorter tenor) outperform treasuries in this case and that’s what is possibly happening?

[@willwang6260]

Awesome video as usual and really informative! My Sunday is more enjoyable with your video and a cup of hot coffee

[@danielcastro1705]

Mark, is the interest in HY a reflection of soft landing expectations and a booming economy? Or perhaps its a reflection of a realized soft landing?

[@STLSK9277]

Eagerly waiting for your video on Miners, had a question though: Went through sites, 10K for some of them (RIOT, MARA, Hut, Tera Wulf, BTDR etc) .. doesn't look like a huge infrastructure build, some of their mining sites looked like trailers. Most of these miners have less than 500 total employees Compared to data centers for companies like Tesla, Amazon , Microsoft, Facebook, Oracle , Apple and many others are huge in scale compared to these miners, along with number of people. Can you comment on what's holding one of these to invest some money and start mining

[@aaronhornanfinance-bu8ft]

Unreal analysis mate, thank you for your work

[@Randomlearner-i1s]

Hi Mark, Recently found your content and it has been absolutely enlightening. As you have mentioned volatility as the theme for 2025, would you ever consider trading the VIX? How would you best capitalize on this?

[@hayk01]

Do you think it's possible that there will be a fundamental shift in how we evaluate markets? With increasing number of opinions in traditional and social media, market movements will primarily become a narrative based, instead of fundamentals.

[@Gomangoman11]

Mark, what do you think the solutions to economies that are experiencing Japanesification, such as Japan and economies that will likely fall into Japanesification, such as the Euro-area and China?

[@netizenkane2230]

Mark, when calculating the term premium (3m/2y), why do you square the 2y rate for the comparison? Thanks for all you do!

[@zenithlight6132]

Mark, did you see the o3 release? It seems like a fairly big leap forward, in the sense that it shows that you can use additional compute at inference time to get the same results as training the model for longer. To me that opens the door to treating better models as an opex expense rather than capex expense and probably has revenue implications for compute providers.

[@tech4028]

Hi Mark, which videos do I have to watch to understand how you're reading what the market is pricing in for the FED's rate cuts?

[@Shunya...]

Hi Mark, I've been following Jamie Dimon's views on US Bank regulations. He has expressed some strong concerns on regulations citing "The biggest problem I have with all these overlapping rules is that we are not stepping back and saying, what could we do better to make the system work better".

[@Shivastorm88]

My understanding was that Bitcoin was increasingly expensive to mine (energy intensive) the more Bitcoin was mined. Is the cost of mining a function of the value of Bitcoin, rather than the supply left to mine?

[@MarkMeldrum]

Correct. Marginal cost will depend on the price. The higher the price, the more miners, the greater the hash rate, the more difficult the solution, the more inefficient the system gets.

[@vinnuvinay7489]

@MarkMeldrum solution difficulty remains same and it’s preset. If the price of bitcoin falls drastically then only the most efficient miners might find it profitable!

[@MarkMeldrum]

The difficulty is reset every 2016 blocks to keep each block at 10 minutes to solve. Difficulty is NOT a constant.

[@HectorYague]

@@vinnuvinay7489 You are incorrect and Mark is right: the system adjusts up/down the computational complexity of mining a new block every 2016 blocks depending on the observed mining speed of the previous 2016 blocks, in such a way that a new block is ensured to be mined every 10 minutes. In short: the BTC network will pump out a new block every 10 minutes regardless of whether you need a NASA computer or a Casio calculator to solve it.

[@SamWell-Y28]

@@MarkMeldrum Dr. Meldrum, As I understand it, BTC supply remains constant no matter the price. So, the price of BTC is only a function of the greater fool factor (demand). Is this right? On the other hand, Gold supply changes as the price changes. Price is a factor of both supply and demand, for fixed USD. Gold miners can take supply off the market because they control their reserves. Barrick cannot mine in Newmont mines and vice versa. Thanks, I appreciate all the knowledge you have been sharing.

[@TommyJensen-xq8wm]

Have you went through CAIA’s curriculum? Any thoughts on rigor or usefulness?

[@LGTGC]

Thanks Mark. Would it be possible to do a section about fertilizers on the Sector Studies?

[@rajeevshahdadpuri839]

Hello Dr Mark , (Sorry for the newbie questions ) If the 3-month and 2-year forward rates both converge at 4.31%, how should we interpret this in terms of market expectations? Does this flattening of rates suggest that the term premium is diminishing, or could it signal a shift in investor perception about short-term versus long-term risk? How does this tie into broader arbitrage dynamics, where locking in a shorter-term rate might lose its relative advantage compared to a longer-term agreement ? Also Given Trump’s remarks about penalizing nations that devalue the U.S. dollar and the increasing discussions about a BRICS-backed currency, what would be the realistic implications if such a currency were launched? Considering the economic stature of Brazil, Russia, India, China, and South Africa, how might this development influence U.S. markets, particularly in terms of capital flows, reserve currency status, and trade competitiveness?

[@asinine999]

hello mark, ive been through your applied options and pfm construction course. they have both been massively helpful and have offered me a return which is much more than what i paid. just a suggestion for the applied options course, i would love it if you also include the common setups like it could be that youre taking a volatility play because you believe that volatility is too high, i want to know how you assessed that particular factor. As in I know what to do when theres a change in volatility or the underlying price but the problem still remains of forming an opinion on it.

[@andreaardemagni6401]

You mentioned you already explained how to play volatility. Could you provide the link where you explained how to do so?

[@sdfergf]

Mark. thanks for the video. How do you think about the financialization of BTC and its potential to be used as collateral or loaned out? My thought is that many investors will be hesitant to sell their BTC for fiat because they don't want to pay taxes and they may not want to enter the financial system and deal with KYC/AML issues. I could see a situation where they might sell BTC for Tether, loan it out, or loan against it to draw out some cash. I could also see a situation where MSTR or other large BTC holders monetize their BTC holdings to generate cash flow via loans. Just curious your thoughts on whether there is a potential BTC financial ecosystem that could be part of the larger financial system in the future.

[@willmiller2853]

What are some ways retail investors can profit from the increase in volatility without getting into really risky territory (eg MSTR/IBIT plays)? If vol and deal making is coming back, do you think long XLF (and short puts on XLF) is a good play? What are your thoughts on selling options in a higher vol market? Obviously higher premiums in general, but also higher risk comes with that. Can retail use options selling to take advantage of the additional vol or is that best left to the professionals?

[@Shunya...]

Hi Mark, Just curious to know how has the move to costa rica turned out? Its been a year i guess . expectation v reality ? appreciate if you can share some insights if its not a too much ask. thank you once again & happy new year 2025. Any poem upcoming similar to what you shared back in dec 2023.?

[@FinanceInvestmentsEconomics]

Correct me if I'm wrong, but for long-term Treasury yields to rise as much as they have since early December would require some major asset managers to liquidate those assets. I have a couple of questions about this: Could you talk a bit about where you think the money being liquidated from Treasuries is being directed? They don't appear to be going into 3-7 year Treasuries and I would think anyone managing that much capital would not be putting it into equities given valuation levels. So what's left? Is it even possible to track where massive outflows of capital from an asset are directed?

[@dianakaufman390]

I get confused every time yield and credit spreads are discussed are there any videos you can direct me to to get a good understanding of how it forecasts what the economy may be going thru next? Long curve bear steepening rates etc?

[@108987]

This could help you understand the duration sections better: kzbin.info/www/bejne/gn7LaWifoqmNZ6s Mark covers the curves/duration (and relationships with the economy) in more depth in his Applied Series.

[@amaanmashooq1127]

Hello Dr. Mark, When you say you long large cap by +SPY/-IWM, how much of IWM relative to your SPY position are you short? Is there a ratio you found on regression analysis or something similar? Thanks a lot.

[@alexovercashier9496]

in the Applied Level (Top Down Factor Investing video) you talk about how Small Cap tends to outperform LC during a boom. if sentiment is bullish following the election, why do you expect LCs to continue to dominate?

[@HectorYague]

Mark, you are correct in that the computational difficulty to solve each block will adjust down if mining activity tanks should BTC price drop significantly, so much so that a new block is solved every 10 minutes. What I dont get is... if, regardless of the computational resources deployed, a new block is pretty much "mandated" by the system to be solved every 10 minutes, then why was the network designed to force the energy-wasting mining activity at all? Why not simply "issuing" a new block every 10 minutes by default? I struggle to understand the WHY behind the rationale.

[@MarkMeldrum]

Security.

[@DIB-z3o]

If a company currently has floating rate debt, do you see a reason to interest rate hedge via 1-mon SOFR swaps in case rates pivot? Or just sit back and ride the curve down/absorb the lower cost of debt as rates are cut? Wondering if there is an active strategy for companies with floating rate debt to utilize as rates are dropping.

[@aniketh2724]

Hi Dr. Mark, If I purchase applied series before Jan 15th, will I get your position updates videos as well?

[@tjmasilo7147]

Can you expand further on the term premium and how to play it? How does the ccc returns been so profitable this year?

[@benjaminmader400]

Do you still see Mexican and Indian equities as good investment theses (apart from the potential weakness of the peso)?

[@andreaviola8898]

Thanks, Mark! Great content, as always.

[@spoonkies]

Considering the rate dynamics in treasury yields and fed cuts anticipated to come more slowly along with your thesis on the small caps, what are your views on private credit, specifically BDCs that are publicly traded?

[@tech4028]

Hi Mark, if you were 20 years old today studying finance, what would you do? What kind of job would you pursue right after your studies? Also, would you say it is smart to do the CFA as early as possible in the career stage (parallel to one's bachelor degree for example) ?

[@SamWell-Y28]

Dr. Meldrum, I know this is pure speculation. Just putting it out there. Do you think another Plaza Accord could be an option to weaken USD? He probably doesn't know that yet, but somebody may suggest it to him and then, he might definitely want to pursue it. Any idea how the yields and commodities would react to such an event? Thanks

[@STLSK9277]

Sir, went through the comments and your response on Cost, can you please include this in the Q&A Response. From RIOT 10-Q, their cost per BTC $35,376, some similar number for MARA. If price goes to $100 won't these companies crash quickly? Also their convertible bonds if I am not wrong was private placement, and I am sure the person paying these companies in Millions are much more intelligent then any retail investors and have a team of CFA's/Bankers advising them, what am I missing?

[@jjjjkkkk2828]

The rate of bitcoin hitting the market will remain contanst due to difficulty adjustments to maintain a constant hash rate BUT there is the halving policy meaning the new supply created for each block solved will decrease over the long-term. So while supply is almost constant no matter what the price is (since marginal cost fluctuates with price) in the short term, the long-term supply still remains finite. Could this finite supply be a price support for bitcoin in the long term?

[@daneomegan]

If the convertible debt arbs are delta hedged how does the implosion play out? Or is it the unhedged participants that get rekt when the converts fall way OTM due to the value of the collateral (BTC) falling?

[@whatsalltheway]

Regarding S&P 500 valuation: is historical valuation relevant? The tech sector (a growth heavy sector) was a much smaller part of the index let's say 20 years ago vs now. Increasing tech sector allocation would naturally lead to a bigger valuation over time, right?

[@unfettered1]

I have applied series but haven't really picked up positions. In which video I can learn of your BitCoin and Volatility play?

[@Slayer17606]

In the positions section

[@pennyether8433]

27:50 - I think you got it backwards: Russia previously did allow mining, now they banned it.

[@graywolf2600]

Hello Doctor, @34:14 you mention that even at a 1¢/bitcoin you'll still have 18.75 bitcoin/hour hitting the market. But wouldn't at this low price per bitcoin the miners would not be able to afford the energy cost and therefore stop their mining operations?

[@MarkMeldrum]

The difficulty adjustment would get so easy some node would be able to solve it. It’s algorithmic. It can’t be stopped. Even if it is only 7 nodes solving 1 hash a second each. 3.125 new BTC every 10 minutes on average. All the ASICs would shut down - it would just be CPU nodes left. Hobbyists, collectors, that’s all that would be left. And it would keep spitting out new BTC all the way to 2140.

[@pennyether8433]

​@@MarkMeldrum Would love to hear your thoughts on miners (pureplay -- eg, non HPC). I've been screaming how overvalued they are for over a year. It's clear to me it's a race to the bottom of profit margin -- if/when it's profitable to mine, more hashrate, margins fall. Forever. Add to that the increasing efficiency and lower costs of hardware (basically an arms race -- buy more or your own revenue decays as difficulty increases). Finally, add to that the halving of top-line revenue every 4 years. Doesn't mean it isn't profitable to mine -- but would I pay 10x EV/EBITDA for it? No thanks.

[@vincenthor]

With Trump back as president, Bill Ackman is talking up fannie and freddie again. Something about restructuring its ownership to unlock value. Seems complicated as the treasury is also a large beneficiary. If you have thoughts on this, please share for us to learn and understand. Thanks in advance.

[@gscorsone]

Wonderful, thoughtful commentary thank you!

[@es_888]

In order to price options, is the 3-month or 1-month SOFR forward curve used?

[@MartinoTonini]

Happy New Year Mark, 2 questions: Did you change your view on gold? Any view on nuclear and quantum computing as themes?

[@Slayer17606]

Hi Mark, can you please make a video maybe in the applied level or youtube where you explain how do you go about thinking of an investment theme, what news source would you follow to get the idea, how do you do the research( basically getting the idea of an investment to monitoring it)

[@Trollingology]

Hi Mark. In regards to the decrease in the CCC - BB spread, I've heard that the demand for USD denominated fixed income instruments have been high in the Eurodollar market. Perhaps the strength of the USD has forced the Eurodollar market (or other sovereign nations) to dump, or not purchase as much as before, US treasuries to slow the weakening of the leverage/currency?

[@pitprofe]

Hi Mark If the Fed has lowered rates in recent months but the long-term yield curve has risen, does this outcome align with the Fed's dual mandate of price stability and maximum employment? Could the steepening reflect market optimism about growth, or does it signal concerns about inflation or fiscal imbalances? How should the Fed interpret and respond to this dynamic to ensure its policies remain effective?

[@Slayer17606]

It is probably due to concerns about long term growth and inflation rising therefore investors are demanding a risk premium

[@pitprofe]

@@Slayer17606 I agree. But doesn't that mean that the Fed doesn't want to keep lowering rates?

[@jemjustice]

Can one say that the more stable price of BTC (which is assumed at a higher price) the more easier we can price goods using BTC? Is that a bad argument perhaps because we can price goods using any stable ish thing?

[@jemjustice]

As a counter argument to Dr Mark saying that higher BTC price doesnt matter? Or is that argument sort of cope?

[@jemjustice]

(As a counter argument to Dr Mark saying that higher BTC price doesnt matter) Or is that argument sort of cope?

[@evanbeauchamp7450]

Can you get us another koyfin discount?

[@boukherssiefeddine7245]

thnk u so much for this

[@ukulayme2]

Thoughts on MMT (Modern Monetary Theory). Based on some things you say, you sound like someone who follows MMt principles

[@MrDeadlyCrow]

1. Could a crash in MicroStrategy's stock significantly impact Bitcoin's price, given the company's substantial Bitcoin holdings? 2. How do you like comparison the current dominance of mega-cap tech stocks to the Nifty Fifty era of the 1960s-70s? Both periods feature companies with substantial earnings and perceived market invincibility and lofty valuations. 3. Over the past 10-15 years, U.S. yields have often been higher than those in major European economies. Is this primarily due to the European Central Bank's (ECB) lower interest rate policies, or are there other factors at play? 4. RPP and Reserves - where TGA is in there? How are they interconnected?

[@janysoontowin]

Vance was making a point in the past about dollar being to strong and how it punish US economy and deindustrialize country

[@rnegoro1]

Thanks proffessor.

[@Happymz]

What do you think of quantum computing’s future? Google’s new release?

[@TomVenuto-z5h]

For bitcoin, there is an electricity cost to mine bitcoin which I believe has been rising as the crypto mining space gets more competitive. Not sure how significant the cost is but there is a cost.

[@har_d_rocks9987]

Hi mark! Can you explain in detail why we live in a deflationary world?

[@HectorYague]

His overall argument is that technology is deflationary (true) and, since technology progress is inherent to humankind (true), we therefore live in a deflationary world (questionable).

[@MrDeadlyCrow]

@@HectorYague How is this questionable?

[@HectorYague]

@@MrDeadlyCrow policy (monetary but specially fiscal) can turn the organic nature of society from deflationary to inflationary. Read Russel Napier on "financial repression". Mark believes that technology ultimately trumps everything (thus deflation), whereas others believe that policy can upset any fiscal/monetary balance, letting inflationary preasures take hold.

[@RG-zq2dw]

Happy New Year🎉🎉🎉

[@student2980]

The AI video generation looks promising for cutting cost for marketing spend. I think the AI is called sora

[@Mrpikkebaas]

If real GDP is falling than its very hard to get into deflation with the current M2 money supply growth trajectory (MV=PY). Also in any recession governments default to their playbook of printing money to save their voter base. Both lower real GDP and higher M2 growth will lead to higher inflation.

[@iQeLabs]

Happy New Year

[@josephkoh1562]

I agree. Overleveraged companies mismanaging BTC-backed debt risk defaulting when BTC prices drop. Bondholders receiving BTC as collateral may unload it on the market, triggering a cascade of forced selling and further price declines, leading to a domino effect similar to the 2008 financial crisis 😂

[@Blashmack]

More numbers coming soon.

[@M.2000-v2g]

I think this is a classic buy the rumor sell the news situation. Once Trump gets into office and nothing traumatic happens, people will sell off. Those treasury yields look like a no brainer for next year winner.

[@Nothingisfinal]

So I bought some DJT shares. lol

[@WasteSecond]

16:23

[@TheFabulousNacho-iq5ux]

BTC is going to cause the next financial crash? Wow I am not bullish enough on BTC. Send it.

[@WasteSecond]

9:32

[@boccobadz]

Trump = twitter-driven economy.

[@daneomegan]

Can I push back on your Trump take - Is Trump really that smart or powerful as to manipulate markets downward before taking office? Perhaps you are giving him way too much credit? From my perspective he kind of bumbled his way into where he is today and there was a healthy dose of good fortune involved rather than any level of sophistication. On the Trump theme what is your take on Trump's attempted assassination? Would you subscribe to a notion that perhaps there are larger forces at work that didn't/don't want Trump in office? Is that a plausible tail risk? Where would SPY be if Trump "slipped" and hit his head on a golden toilet seat and died? They got Epstein with the whole world watching did they not? BTW, it would seem based on your outlook a Truth Social account is required to monitor events - what's your handle?

[@anon69669]

Mark Meldrum is a silly Billy. I wouldn’t take anything he says seriously as advice.

[@lucasszymkowiak6765]

​@@anon69669 I think Mark is adding tremendous net positive to people lives despie him not having to do sheeet, what do you think you added with your comment?

[@anon69669]

@@lucasszymkowiak6765 what did i add with the comment you ask? I added by warning people that this guy is a silly billy, not someone who should be taken seriously for market advice 😂😂 what did you add with your comment?

[@M.2000-v2g]

​@@anon69669 is a silly billy, I wouldn't take anything seriously from him😂

[@daneomegan]

​@@anon69669lots of butthurt crypto lurkers in the chat these days 😂

[@Treypac16]

So trump has the power to manipulate both yields and the markets perfectly and then revert both on his first day just like clicking a button 😂

[@bloatedtonydanza7798]

Im getting you’re being sarcastic but anyone that thinks this way needs an urgent brain 🧠 assessment

[@preston1382]

I think MM is maybe ascribing too much intentionality, but also it’s undeniable Trump was moving markets pretty regularly just off tweets in his first term with at least some level of intent.

[@mikesmacedo]

Hi Dr. Mark, with respect to Trump 'hoping' for an increase in longer term rates and a decrease in SPY - I made a comment a couple weeks ago about Biden decreasing Treasury spending prior to his exit to cause turmoil in the markets and you stated this train of thought may be conspiratorial. How is Trump's 'hopes' any different? Or is it the same train of thought - conspiratorial?