Market Outlook for June 23, 2024

[@LostDemon]

For a grid play you'd want to be in aluminum not copper. Power lines and substations are composed mostly of aluminum. Downstream of the powerlines and stations is where copper starts to dominate.

[@Oikwtm]

Mark: do you prefer to sell puts during bear markets as well? Or do you generally switch to a different strategy? Thanks

[@johnnash4323]

Hi Mark, can I ask you about position sizes. So for you portfolio, you hold the REITs and you also sell puts using margin (and make it beta neutral by shorting spy). Can I ask how do you size your put selling? is your position limit is 5% of your portfolio value or 5% of margin value (which is about 15% of portfolio value)? For example let's say your account value is 1.35m USD, 5% of your portfolio is $67,500 USD. NextEra drops to $69, and you sell $67.5 puts (30 delta), In this case - would you sell 33 contracts of NEE (6750 dollar * 33 contracts * 0.3 delta = 67,500)? Or would you not take delta into consideration and sell 10 contracts (6750 dollars * 10 contracts = 67,500)?

[@Investing-investor420]

Most of the things you buy appear to be in the "value" style. Do you not hold growth companies (Apple, Amazon, Meta, Google, etc.), or is that just an indexed allocation for you? Thank you.

[@matthewmitten8464]

Great example on the car financing, thank you! So they basically make you pay for it one way or another. A “lower interest rate” (where you’d need to amortize in the extra $ up front to calculate the true interest rate you’re paying), or a normal interest rate, call it 8% or something.

[@rizwanmcfcafridi]

With the CPI report releasing in Canada coming too hot, why was the impact so low on Reits. Whenever you have such readings in the US i see the stock prices move significantly.

[@swbjstl]

Hi Mark, how do you go about choosing ITM vs OTM LEAPS? And the levels of strike price?

[@camdavignon954]

Do you own the applied level outright or is it partially owned by Cerifi? Will that change in the future?

[@Sawubona2007]

Thoughts on WY at this price? Now firmly under $30 and I think is a good value buy or put sell candidate. They can let the trees grow if demand isn't there for lumber and the carbon sequestration has potential.

[@st1lus]

Hi Mark, in the last Q&A you mentioned that the majority of your money is managed externally. How much % of your overall portfolio do you manage yourself? Could you elaborate on why you choose this route over e.g. managing it yourself or simply collecting beta?

[@HectorYague]

I am interested in this as well!

[@MrDeadlyCrow]

He explained this many times. We are going through this again I guess

[@jdinh21]

What's your rationale for selling rather than purchasing to establish your position? You've mentioned in previous videos that you are in favor of going long Dec CME future contracts, but what's the difference between this versus TLT call options for similar strike and expiration date? Also, IYR puts versus TLT puts, any reason you've gone with IYR?

[@amaanmashooq1127]

2 questions 1.) You said that XLU would increase its revenues due to increased assets it would have due to increased power demand, but what about the increased capex it would need? or will that just be comparatively small in your opinion? 2.) I have followed you for a very long time and you seem like you live and breathe the markets. You do so much research and put so much work into everything you do. How do you then balance your family life with your professional life? and what tips do you have for me as someone in my early 20s to balance my work life and personal life?

[@quackdudey]

Hi Mark, just wanted to confirm that the old applied series bundle is the same as the applied level for the purposes of being grandfathered in to "all-included" and new positions?

[@tjloehnert]

Never thought I would have given the great Mark Meldrum investment ideas. Glad to have given you the idea for KHC. Love the content

[@CurtisSmith115]

Compared to 5-6 years ago, would you say you spend more time researching new themes, companies and the economic environment? In your Live Q&A you mentioned you used to do 14 hour days but I assume a lot of that was building the Mark Meldrum CFA business.

[@FolkinFitz]

Hi Mark, I have a question regarding your experience of Canadian politics. Ahead of the imminent UK general election, there is speculation that the governing Conservatives may experience an electoral wipeout akin to Canada’s Progressive Conservatives in 1993, leaving the potential for a prolonged period of centre-left government in the UK. What impact, if any, did Canada’s political realignment following 1993 have on public discourse regarding fiscally conservative ideas?

[@bithal797]

Hey Mark, I have a question regarding the applied series. I am one of your CFA l2 students. Specifically, I would like to confirm whether all the concepts you will be teaching in the series(which we might have studied in the CFA) will cover the basics, or if they will be presented from a practical working perspective assuming prior knowledge.

[@shqipe333]

Do you have an outlook or opinion on the trucking industry? With the “green” initiative taking place and semi trucks transitioning to EV, how do you see this play out? The industry has been in a downtrend following post-COVID supply shock and high trucking rates. Looking at JBHT specifically. Thanks!

[@tjloehnert]

When do you think you'll post your video in the applied series on how to build Aswath Damodaran's valuation model in Excel?

[@CurtisSmith115]

How did you go with the targets on your watchlist? I managed to pick up some GM puts

[@TheFreeRange]

Are we going to see sector rotation now? IWM has not seen as much growth, is it time for IWM to follow the SPY trend now?

[@Teknoman972]

Hi Mark, since there is major escalation in conflict around the world, can you do a sector studies on aerospace and defense industry? Is there potential opportunity in this area?

[@DoorMotely]

Hi Dr Mark, appreciate the sessions as always. For the USDMXN, if there is a positive move in the US economy would this not be considered a risk-on event thus meaning emerging currencies would continue appreciating? Noting this good print maybe we could see continued strength in the short term.

[@tkvunani2832]

Is the Phillips Curve still useful?

[@yoboiDM]

Hi. Would you able to do a comparison of abr, analaly and Agnc? The challenges they face, dividend security, etc. For a parent in mid 50s, low income, any asset allocation suggestions? 200k with maxed tfsa and mostly in individual account. Income isn’t needed at the moment but some high dividend etfs (jepq, schd, reits) looks interesting alongside a mix of equities

[@JakeTheStockGuy]

Hi mark what fundamentals do you consider most important and how do you compile a watch list the Russel alone contained 2000 socks

[@HectorYague]

Hello Mark. One question regarding agency mREITs: The Fed has claimed that they intend to clear their balance sheet of MBS, sticking mostly to Treasuries moving forward. This will, in return, reduce the buying pressure on MBSs, potentially keeping the spread between the fixed 30yr mortgages and the 10yr Treasury wider than what we have been used to in the past. As a result, I could see agency mREITs such as AGNC or NLY negatively affected by this dynamic. What is your opinion?

[@CurtisSmith115]

I think Productivity and Costs (bls) would be an interesting economic report next. Productivity and unit labour costs will likely be a big story for near term inflation and longer term inflation

[@PendulumTrades]

Dr. Meldrum, Your videos and insights are very enlightening. My question is regarding the Jan 2025 or Mar 2025 Fed Funds futures. I have never traded these futures. Could you please explain how much profit one could expect to make per contract if the Fed Funds futures were to drop by 100bps? How much margin would IBKR require per contract? I'm thinking about going long Fed Funds futures to hedge by net short portfolio. Thanks

[@tjloehnert]

Thinking of selling 30 DTE puts on AGNC at a $9.50 strike and on TLT at a $91 strike. Do you think increasing the strike price on these from previous strikes is the right move?

[@andrewderenzio891]

Thoughts on purchasing ATM calls for CAPREIT with a March 25 expiry?

[@tykepope]

How do you get things like this AV research into your radar / news feed? I would like to see stuff like this without having to actively search to find something like this.

[@nex8354]

LSEG says Juniper's ER is Tues 25th when it's actually 25th of JULY but LSEG was the correct one for last week's ER schedule

[@JamesPrescott42]

Hello Mark. What is your opinion on externally managed funds in the private equity space? I do appreciate their diversification benefit and their historical returns above the SP500. However, the high fees (up to 2%) and lock-in periods put me off. Opinions?

[@brunopoles6311]

Mark, are you more optimistic with beta or duration for the next 3-6 months?

[@CurtisSmith115]

When you hedge your foreign currency exposure, do you just buy or sell the front month futures contract? I am from Australia and own US Equities and I want to hedge against a strengthening AUD. I want to hedge around 120K so does this mean I should buy 2 AUD.USD futures contract and then roll them over each month?

[@Obolix101]

Hi Mark I found this really interesting considering your personal decision to leave Canada but Canada ranks fourth in the world in terms of net inflows of millionaires in 2024 what do you make of this?

[@MikeK-jr4bj]

Hi Mark, can you give some details on what the financial crisis will look like? Would the impact of the disaster change guidance to retail investors of the long term buy and hold strategy of a diversified portfolio or do you think the U.S market will continue to bounce back?

[@user14890]

Hi Mark I am a digital nomad, living the dream on WFE (everywhere) in affordable countries of Asia and Latin America. My main message for your audience is - do not top up your IB account from different countries, even if IB accepted your change of address with supporting documentation - visa permit, utility bill etc. At some point they will block you and require you to close your account as they did it with me. Learn from my mistake. Thanks.

[@l2amzZ]

Curious about your thoughts on the talking heads on Bloomberg: When watching its shows over the last couple of days it strikes me how fast the topics move day by day. If you listen to the show for one or two days it feels like everyone one the street focuses on particular concern - two weeks ago it was the inflation report, last week AI and index concentration, now almost all the interviews today on Wednesday talk about economic slowdown/tipping point etc. However the ai conversation could go on since the issue is not resolved It really feels like an “agenda” - change the topic so often and get so many talking heads on that the audience feels that there is so much to worry about and things move so fast that its worth tuning in… How do you manage the news flow and stay on top of things while not getting biased - you just go by the economic calendar, interesting price movements and the press releases of your watchlist - I.e, avoid secondary sources and try to consume only primary information?

[@tjloehnert]

Did you ever remember the name of the Clemson professor you referenced in the Q&A who believes AI growth has plateaued due a number of constraints? Would love to research him more

[@JosiahLeverich]

I did very well on the cattle/hog spread last year after hearing your thesis and doing my own research, TY. 1) It looks like it’s doing the same again this year. Cattle supply seems to be slightly lower this year but the divergence for the December contract is still quite high, I’ve performed a detailed analysis over several years, and it seems like the price is definitely out of alignment. What are your thoughts? 2), HO/RBOB also looks like a seasonal play where HO gains relative to RBOB from July to Oct, then reverses course In Oct. I’ve begun trading this since last fall, curious on your thoughts on this one as well. Thank you again, a loyal listener since the beginning.

[@tjmasilo7147]

Hooray, got assigned GT as well and engineered assignment on khc.Definetly going to outsource from you here. What's your outlook on ALB it's been hitting 52wk lows?, and the 90 put has nice premium and appealing IV. They're in the basic lithium products, can there be a situation of benefactors and loosers with batteries or your looking at the miners only?

[@Shivastorm88]

I believe that you already explained why utilities have a guaranteed return based on their assets, but is that specific to U.S. utilities? I've been considering starting a Canadian utilities position now that rate cuts have begun, and do need to do more research.

[@mihail4391]

Question re margin required. I noticed the increments of say 1, 5, 10, 30, 100 contracts don’t necessary have a proportionate margin required. One stock that I follow, had the best ratio of premium per margin required when I selected 28 contracts. I’m on IBKR. Have you noticed anything of this kind in your experience?

[@jiangzhu3263]

What is your view on office REIT during rate cut cycle?

[@tkvunani2832]

Do you think the Taylor Rule is still relevant in today's economies?

[@TheFinanceLad931]

Hi Mark, is $1 spent in a retail store counted in the GDP calculation in the same way as $1 spent in online retail? What’s behind my question is that a colleague was sharing some thoughts that the UK GDP could be understated because the transition from brick and mortar stores to online may not be fully captured by the way the GDP is calculated

[@user14890]

Hi Mark Regarding crypto and where it is a solution. I used to live in Argentina for a while. USDT is a must in that country if you stay there for longer. It is needed to buy pesos at the "blue" market rate. Otherwise you pay more than twice (at official rate) for every single price tag with your foreign credit card, same if you withdraw pesos in ATM. Inconvinient alternative is to bring a brick of freshly printed last series dollar bills (up to 10k USD per person) to convert some of them into pesos for your weekly expenses. Old series or used dollar bills are discounted; green dollar bills with smaller heads of founding fathers and bills with handwritings are difficult to exchange.

[@WesleyYappy-n1m]

1:34 - 4:21 4:21- 6:07 11:23 - 17:18 18:40 - 19:30

[@CurtisSmith115]

Pool Corp revised its guidance lower again today, there is some strong resistance at the $300 mark however I expect it to break through through over the next two months, perhaps could set up a nice entry point. Unfortunately the options are not liquid. What do you think the drivers for outperformance are? I assume it would lag the homebuilders because they are more discretionary so perhaps a low 5 handle on the 30 year? A potential risk I see is the younger generations that are looking to buy homes just don't have the accumulated wealth or savings to include a pool in their home purchase and the generations that do have wealth aren't that interested in swimming in pools. Not sure yet

[@CurtisSmith115]

Are you still selling $14 calls on ABR when it rises to the $14.20 mark?

[@Shway09]

The preface: last week I went up (north) and up (+7000 feet above sea level). About 2-3 times a year I like to go hiking/camping, sometimes remote, sometimes not. This time I had no internet/cell coverage for about 4 days. (Q 1/3:) Have you ever been in a situation like that or similar -- meaning being away from data/the market? And (Q 2/3:) If you have, how did you deal with being away from information? I know that in your courses you talk about conviction in your trades but still... Lastly (Q 3/3), any tips on how to overcome this form of insecurity? Or doubt, what ever it may called, in my trading schemes? I think I am right but when there is no data to back me or prove me wrong, I find it disconcerting.

[@camdavignon954]

Do you think investing in private assets is ever suitable/necessary for retail investors? These private equity firms have created products with like $1,000 minimums and it looks like a lot of younger affluent people are flocking to alternatives. Seems to be overcomplicating things for no good reason because public equities can provide returns that are just as good and are significantly more liquid and transparent.

[@chh8086]

How’s your Spanish coming along? Still Duo Lingo?

[@MrDeadlyCrow]

8:47 Mexico Economic Activity higher YoY and lower MoM then forecasted?! How this is even possible? These FCs are inconsistent!

[@freshmanatlife8971]

I still see risk in cutting. if inflation rips back up, Powell and co. will look very foolish. You want to be a Volker not a Burns.

[@skaks-nm3oz]

I’d like to earn some return on the cash I have set aside as collateral for my cash-secured puts. Do you have any recommendations on how to achieve this, if it's even possible?

[@PlungerBull]

Is there a particular reason why you talk so much about GM and not STLA or Mercedes who also have huge buybacks/dividend programs?

[@tykepope]

The new triple witching event is all 3 data providers agreeing on earnings dates

[@PlungerBull]

I’ll be static very happy if JPow cuts in July

[@chrisantrim925]

Both Carnival and Juniper are reporting Tuesday, so I guess everybody is wrong.

[@LightSwitch7790]

It's been over 700 days since the yield curve inverted, a reliable indicator of an upcoming economic recession. Are we really headed for a deep and prolonged recession given this prolonged inversion? Are we already in a recession? I can't understand why the S&P 500 keeps reaching ATH almost every week. It seems overvalued to me, and a 5-10% correction wouldn't surprise me. Unemployment is worse than the official numbers projected. Their figures seem skewed, likely motivated to present an overly positive view of employment. The Fed should start cutting rates ASAP, what are they waiting for. What should be the next move of a common retail investor ? Almost 85-90% of my investments are in equity, mostly mutual funds. In general, How do you view the current scenario, and what are your projections for the next 5-6 quarters?