Account Info
Log Out
English
Back
Log in to access Online Inquiry
Back to the Top

$Russell 2000 Index (.RUT.US)$ I need to put this out there ...

$Russell 2000 Index (.RUT.US)$ I need to put this out there for anybody that's willing to listen. and let me first start off saying that Tom Lee I think he's brilliant I think he's a genius I've made a lot of money over the years by listening to him but I think this time it's not going to be a perfect trade that he's looking for and he's looking for a 40% rally in the Russell by the end of summer.
this might be several parts so bear with me but I think it may be worth your while.
I believe being ahead of the curve is important I think by the time smart money is into something it's already made a 20 or 30% move and then they initiate by is Wall Street Big wire houses that type of thing and they're pushing it higher at your expense at any time they can start selling to you and then your left holding the bag if you will.
so I started buying a year ago in June when I started hearing you know look rates will be coming down all right well then you need to be in those sectors utilities small caps you need to be in real estate you need to be in the ones that have underperformed the regional Banks everything and I made some money and then they pulled back and we had problems back and filling last year and I traded him a couple times I started building a position. and every time these bozos on TV started pounding the table about the Russell and I was trading The leverage ETF so you know TNA every time they're pounding the table that basket TNA was around 41 42 and would collapse.
this tells me that the people on TV and I know this but it proves to me the people on TV are followers they're not leaders they're just in the right place the right time they dress well they got a nice tan they know somebody and they get on TV to make them look like there's some big swinging dick that can do no wrong and everybody should bow in their grandiose projections and follow them implicitly
so now Tom Lee saying 40% rally by the end of this summer let me explain why I have a little bit of faith in him but why I don't believe it's going to do that.
he's ahead of the curve I like that he leads with his own models they're not always right but recently the past couple of years he's been ahead of the curve for some big swings so he has credibility he's not a one hit wonder like marry meeker and this dates me for those that don't know who she was she called the crash a long time ago before most of the people were even born. and she can never get anything right ever since like a broken clock she was right once and never again
so here's the thing all day long I'm looking at these numbers and it shows how much the consumers tightening you look at McDonald's you look at Domino's Chipotle you look at some high-end retailers they're missing their numbers and they're wanting the consumers cutting back they're downsizing we are a nation at least in the United States of consumption that's why we're called consumers
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only. Read more
5
Translate
Report
123 Views
Comment
Sign in to post a comment
  • 10baggerbamm OP : part 2
    someone consumers slow it's important that you understand small cap companies and some of these small cap companies are micro cap in the Russell and 70% of the Russell by the way they're losing money they're not even profitable which means they also carry a ton of debt and we're talking debt at 12 13% interest rates that's the going rate at this point in time. so small cap company so you understand are very much dependent upon interest rates coming down but they're also very cyclical as a basket and there are biotech that are not cyclical they're dependent upon FDA approvals and test results so let's get rid of the biotech companies out there although they need money and they tend to borrow so if they can borrow it lower rates it lets them borrow more money so it gives him the ability to push more testing through that type of thing but without getting into a category let's talk a whole basket
    small cap companies are a lot more dependent upon a strong economy if the economy slows and what is slowing consumers not spending McDonald's Domino's Chipotle high-end retailers okay you following me

  • 10baggerbamm OP : pt 3
    the economy is slowing the basket of the Russell they're not going to do well because many of these companies are dependent upon the consumer which means they're going to miss earnings. and over the past 4 years or so the earnings for the Russell basket as a whole has declined it's gone down. the people that are on TV pounding the table on the Russell are going look these estimates are so ridiculously low that one rates come down they're going to do very well
    and here's the problem let's suppose September we get not a 25 but a 50 basis point cut that's a half a percent 100 basis points would be one full percent number one most people now are starting to say that if pal cuts by 50 basis he sees something that the economy is slowing much faster than what it should and it's going to scare the shit out of investors and people are going to pull a plug on the small caps first because they're most dependent upon a strong economy

  • 10baggerbamm OP : pt 4
    many people now smart people that have been a business a long time that I do respect for Saint Paul needs to cut right away he can't wait because we're slowing much quicker he needs to do a 50 basis point cut not a 25 so if he does a 50 he's going to scare the shit out of the market people are going to exit the Russell right out of the gate they're done because those companies are very dependent upon a strong economy not a week economy the potentially could go into a recession now what is a recession well I have an economics degree of course all of this means shit now because under the first year of the Biden administration he had two consecutive quarters of negative GDP which is what everybody was ever tested on that took an econ 101 class but the old Billy goat you know inflation is transitory I am not even going to bother mentioning her name she added the fact that well you need to have slower employment in order to have a true recession so everybody with economics understanding for the history of the United States is now useless because they redefine what a recession is under the Biden administration. because they didn't want him to have a recession as part of his legacy.
    so pal cuts 50 it means the economy is much worse consumers have already stopped spending you see it McDonald's chipotle high-end retailers go right down the list Domino's right it means all these companies are going to miss earnings because they're very dependent upon a strong economy so now he cuts 50 . 50 basis points doesn't do shit for them to get money at a lower interest rate

  • 10baggerbamm OP : pt 5
    you need 150 to 200 basis points minimum in order for it to be financially beneficial for you to refinance your debt at a lower rate because just because rates have fallen doesn't mean they're going to qualify for the best case scenario where you're going to ratchet down that 150 basis points from the rates you're at so if you're at 13 at 150 bp you're at 11 and a half now it's not that big of a savings to you..
    we went up over 500 basis points so if they start to refinance on $100 150 basis points in order to get that amount of cuts it means the economy is really slowing which means you don't want to be in small caps because they're depend upon a strong economy which means chairman Powell has overshot by raising his rates cuz he's a Keynesian and he thinks he can control the economy by raising and lowering interest rates it doesn't work supply side works. so you need realistically 300 basis points three full percent cut to make a significant difference of debt service where that money translates into bottom line profits what are we talking about 18 months away minimum best case scenario probably 24 months. that's why I don't buy into Tom Lee's or anybody else on TV that's saying it's the summer of small caps now.

  • 10baggerbamm OP : pt 6

    I will tell you when I said this the other day I bought out of the money call options on TNA the January 2025 60 calls I bought a bunch of contracts at $2.30 I think that's what I printed at you can go back and look at my prior comments because I'm the first one to admit I don't know everything and I do respect this guy Tom Lee so if it goes up 10% from here 15% I'm still going to make a nice profit but I don't believe for a minute that we're going to see anything close to what he or these bobbleheads on TV are now bandwagoning about.
    if you haven't fallen asleep by now I hope you got something out of this it's my opinion I'm not always right that's for damn sure I'm right more than I'm wrong I have gotten my ass fucking handed me in the past 13 days but going back to that Gloria Gaynor song of the seventies I Will survive.

35+ yrs in the trenches, raised tens of millions for start ups, syndicate ipo's, yrs on trading desk mkt maker.
1330Followers
14Following
9141Visitors
Follow
More from 10baggerbamm