Hey, this is Jeffrey with another edition of Stock Smart, the April 1st 2021 edition. Hope you’re doing well. No show on Friday, market is closed. Happy Easter to everyone, going to cut some content for the weekend. So if you’re looking for some entertainment over the weekend probably going to release a couple things on Saturday and maybe Sunday, talk about the NFL, a little bit about the 17 game schedule mentioned it yesterday, talked about a Chewy stock having a big day couple days ago after earnings, whole bunch of other things that are going to be interesting, talk first about QuantumScape. It announced today, QuantumScape, QS, that it successfully met detectable milestone that was a condition to close for an investment of additional hundred million by Volkswagen.
We like QuantumScape as an investment, it’s part of the EV space battery play single solid-state battery technology that others don’t have, could be a potential partner for an onshore developer of batteries. If Apple when Apple gets ready for EV, kind of exciting, QuantumScape located in that proximity and Apple would definitely want someone who could produce those batteries in a local area for them, if you’re a baseball fan you should be excited. I am, I played baseball pretty much my whole younger life until I hurt my shoulder, opening day today.
My team is the White Sox, we’re going to talk about sports a lot on this podcast going forward, White Sox are pretty much the favorite to go to the World Series if not win it and that always scares me because you know, it’s like the dumb money if everyone’s thinking one way it’s going to probably go the other way. So I don’t like that they’re the favorite because the year that they won the World Series which was now years ago 2005 I think it was, no one had them as the winner. So I kind of like it better when you’re the underdog I think, so you can sneak up on people, my neighbor by the way, great guy, he has two kids. For professional baseball players, how do you do that? As a parent? I think if you can do something like that, it’s amazing.
You have some sort of balance where you can motivate your kids into getting into a sport they stay with it because they love it. And how do you facilitate and kind of build that up in a good nesting place where they feel comfortable to do it, but not like the burden to do it, and I met the kids and I know the dad, the dad is the most level-headed guy and the two kids are Braden Bishop and Hunter Bishop, one plays for the Giants one plays in the Mariners, both good prospects, you know both within range of the 25 and 40 man rosters, but how do you do that?
And I think somebody who can do that and I know I’m a big tennis player and big in the tennis scene and I know that the Bryan brothers dad wrote a book about tennis and tennis parents can be a little nutty, you know, they can there’s been great stories about the crazy tennis parents. Of course, we know about the Williams sisters and their father who may be in his own way is a genius and we know about the one-dimensional aspects of how Tiger Woods was raised but it’s pretty interesting to meeting him my neighbor Mr. Bishop. And talking to him about he seems like the most level-headed guy and the kids are really well adjusted good kids and I just think that how you do that. It’s amazing to me.
I had my two kids and they played sports and they were interested for a while and then you know, when kids get to be teenagers. They just don’t want to listen to you anymore. And I don’t know how to keep them motivated, you know, when they get to 13 and you don’t want to be dragging your kids or anybody into doing something they don’t want to do, you want people to be there because they want to be doing it. Anyway, I think he should write a book. I’m excited about opening day. I hope you are too. We’re bumping up today in the market because we were oversold. So I think we’re getting regular norms in the market, when the market gets overbought it goes down when the market gets oversold it gets bought, and I know we’re getting killed a little bit in those stocks those tech stocks but they’re bouncing back.
We have NASDAQ having two very strong days in a row. Lot of those stocks again, positioning into earnings, so loading up on the NASDAQ stocks right now as we get an April, because we’re going to start earnings again, April 15th, bank earnings start, after that we’re going to start getting some of these tech companies. And so this is a good technical time to load up on these, you know or buy some of these, dip some toes into those positions because they are well overdone, you know, I think many of them lost 20-25, EV space 30% and the bank earnings really did not deserve to go up 35% and we’re going to see that, those bank earnings are going to be like the tech stocks when they have earnings, they’re going to fall, most of them. I’m going to bet here right today, that 70% of those bank earnings.
Those stocks go down because they’re so overdone, 30-35%, VIX is down again today nearly 5% around 17-18, and this is a great tell and no one is talking about it. I am, though. It’s a great tell on the retail investor pulling out of the market a little bit. Maybe they’re back at work and I talked about this whole phenomenon how companies their IT departments are going to block sites that became the addictive sites during Covid when people were working from home. So when they go back into their network operation center, the IT guys are going to like we’re blocking eTrade. We’re blocking Robinhood. We’re blocking CNBC. We’re blocking all these sites. And so those people may not have access and may not have the time really to spend and watch the stock market move on a day-to-day basis like they were doing, so the VIX
Is a good indicator because it relates to the options being purchased and naturally the VIX had sat for years at 10 to 12. An elevated level in the VIX would be 20, now for the last year the natural or the baseline level for the VIX was 20 and then an elevated level in the VIX would be 30, 35 or 40. So maybe we’re going to new norms, maybe it’s not an indicator right now of just the market being safe, but it’s an indicator of less options activity. If you’re watching on YouTube, thank you very much, hit the Subscribe button below, appreciate all the subscribers and people who are getting notified about the new podcast, big announcement is coming on this show I think next week.
I can talk about it a little bit and I’m really excited about this, we’ll explain why we’re talking about sports and stocks and betting and all those things, 10-year note is down a little bit about 4-5 basis points, right around 1.69.
Going to talk about a company here. We’re going to do the marketing language. Here we go. The company develops, licenses and supported a range of software products, services and devices, the company’s segment includes productivity and business processes, intelligent cloud and more personal computing in the tech space for me, now who is this, right? Who is this company? It’s Microsoft. Good old Microsoft. In the tech space to me. I think this is one of the safest stocks, took about two and a half percent today to 241, looking to take out the highs
Here, the 52-week highs of 246 and I think it’s going to do that, bumped really hard and hot off some really big news. So won a deal with US Army, the Pentagon essentially for 22 billion dollars over the next 10 years and they’re going to be building these prototype integrated visual simulation systems it’s called IVAS, integrated visual augmentation system, it’s for training. So people can get real scenarios about how to compete in battle and that’s a really cool thing, so this is Microsoft again, boring kind of old Microsoft, but I raise an argument about this about which stock, which of the most safe stocks you can have that everybody holds and I know this and I was talking to my partner about this and it’s like what is our safest stock? What’s the one stock we can never sell, to me
It’s like Microsoft because I think it should be in everyone’s portfolio. It’s a great company, has so many ways to generate revenue and income and then the other one will be like a Battle Royale, well Battle Royale has a lot of people but this would be like the battle of the century and there was a great movie on last night. I didn’t watch it yet. But when I grew up as a kid, I loved King Kong. That’s my favorite kind of just see King Kong all the time in my head. I made a King Kong cake when I was like eight for Boy Scouts. It was the highest-bid cake because my mom bought it, it’s not a joke.
I actually bought the cake that I brought for the bake sale and my mom bought it because I wanted it so much and it was a King Kong on the building in New York, the Empire State building and he’s standing there and he’s got this blonde doll in he’s kind of got to put a coat hanger in there to get him to sit in there, and those days you didn’t have Michael’s so you can’t have all the arts and crafts to do these amazing cakes, this is like a cake.
We did like four layers of pound cake and stuff and white frosting and it was the Empire State Building with King Kong and I bought it but I love King Kong, and they just had the King Kong versus Godzilla movie that was released yesterday at AMC theaters, they had a lot of people that went to see it and it’s also on HBO max if you have HBO Max, so I’m going to see it, but this would be the battle of two warriors, it would be Apple vs. Microsoft, two of the legends who have crossed paths so many times in the past history like when Jobs and Gates were going after each other because Jobs was like pissed off at Gates because Gates stole the Windows operating system from Apple, great story stuff, but I would tell you, Microsoft vs Apple.
You can’t really lose, both are great companies both should be investments. Just hole them, people have made so much money buying Microsoft years ago when it was $10 and just holding it and having it split and go up and split and go up, and this stock was dying a little bit until Gates left, they had a transitionary period sort of like what Apple did, both companies kind of mirror each other in a certain way, there is a transitionary space anyway, so the battle is Microsoft vs Apple. I will tell you right now, our clients not only want Apple on their portfolios.
There’s a do not sell on Apple, people want Apple because they have 7, 8 Apple products in their house and they’re going to buy the car, that’s why if Apple is really making this car, this stock is probably undervalued, Apple is definitely making inroads and we’ll see, we’re going to hear more and more, people are going to buy that because they want the integration between all the other Apple products they love and Apple is great. I remember when I was younger I had creative iPod player. They just called it like I don’t know, what did they call it? They called it like a digital music player or something, didn’t have a good name, didn’t have a cool name like the iPod. It just had some stupid name, it was a great piece of technology.
Actually, it’s kind of heavy and bulky, but it played mp3s which is essentially what an iPod does, but didn’t have a good name, Creative. They just had a name it was like music player, wow that’s genius. So Apple clients love Apple. So that was a good argument and my partner said to me, Apple is better probably, Apple is the one that people want to have in their portfolio all the time, Microsoft, good technicals, the RSI, relative strength index, neutral. So it’s good buying time and Microsoft into earnings late April, technicals on the chart look strong and it’s heading towards taking out its 52-week high of 246 and it might do that maybe Monday, the market again is closed tomorrow. Maybe takes it out on Monday so a stock you may want to get in,
So I got a question, and this is kind of funny, and Rich wants to know why do I call people who send in questions
The average investor, well it actually comes from a joke, when I was taking my licensing exam, there was a section where we would go through information and I watched a video from one of the instructors and he said, the average investor and I’m thinking that’s really funny. I mean that’s like a terrible name for someone but he kind of just means mom and pop and a lot of what the regulations that are in place are really to protect the average investor meaning someone who is putting and investing their retirement money in the stock market. That’s what the average investor is. And so it’s not a term of disrespect.
It’s a term of actually it’s a term of caring and thoughtfulness about protecting people because as what I am in my business is a fiduciary and my obligation to my clients is to look out for their best interests before mine and we can have a whole segment about broker-dealers and how they’re not fiduciaries and they’re the ones who are going to sell you annuities and they don’t have an obligation to protect you so we can talk about that more and I don’t want to necessarily call out, you know, broker dealers or agents who work for broker-dealers or representatives who work for them, but what I do as a financial advisor, is I watch my clients and their back and the most important thing to me is how they’re doing.
Not how much money I can make from selling them some product that they really don’t need. So that’s what the average investor is. It’s about protecting the little guy. So here’s what a couple ways to look at the average investor, the average investor is relying on the stock market to help with their retirement, you know, because they know that saving the money under a mattress like the old kind of thing that you see in movies doesn’t work. Does that meet your future needs? Most average investors don’t have time to research a thousand different options and stocks and I’m not talking about options but investment options. The average investor uses like a simple tool like there be like, oh what mutual fund should I be in?
Maybe I’ll spend 15 minutes over the weekend and I’ll look at Morningstar, see what ratings they have on mutual funds and I’ll buy one, the average investor also would probably not know what a load is and may accidentally say I want XYZ mutual fund which has a 6% load and the average investor doesn’t know that right off the bat if they make $100,000 investment that load that $6,000 that comes right off the top.
So the average investor doesn’t know that, the average investor sometimes wants to do it for themselves and doesn’t want to pay someone like myself an advisor to manage their portfolio because high fees, but really across the board for a financial advisor the fee should be around 1% unless you’re offering some other service and this is one of the tricks about investing, what people don’t realize, my mom sat in these American Funds for years. And I’m not saying anything about who was representing her, but my mom didn’t know that American Funds had a 2 to 3% cost to buy them a yearly management fee. And on top of that my mom had to pay 1% to their advisor. So you’re paying 4%, 3 to 4% to an advisor to put you in a mutual fund? I’m sorry.
Well that’s why ETFs were created, the mutual fund industry is really kind of a wack thing too and we could talk about that on a future show. But how a lot of people who you know, if they invest if they’re in four or three bees or different retirement account. They can’t even invest in regular, you know funds they are in these mutual funds. It’s kind of a system that is really unfair, and a lot of these mutual funds people go into, you know, they’re diversified and they’re okay, but they’re paying a lot of money in the system for all these fees and everybody who has to touch it, you know, so that’s kind of what the average investor is, and it’s a term of actually it’s a term of caring. It’s not a term of disrespect. So hey thanks for the questions.
Keep them coming send them to Jeffrey@JeffreyKamys.com. I will see you again next on Stock Smart.
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