Capitalist Investor

Analyzing Black Friday and 4th Quarter Earnings, Ep. 302

• Strategic Wealth Partners

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Welcome to another exciting episode of the Capitalist Investor! In this week's conversation, your favorite co-hosts, Diamond Hands D and Luke Lloyd, dive into a mix of personal updates and prominent economic trends. Below, we've summarized the five hot topics from this episode, where discussions spanned from holiday festivities to the stock market highs, providing keen insights for investors everywhere.

1. Holiday Reflections: Thanksgiving and New Year's Plans

The episode kicks off on a lighter note, with Diamond Hands D and Luke Lloyd sharing their Thanksgiving experiences. Luke mentions gaining some holiday weight and gearing up for his honeymoon, setting a warm, relatable tone. They also discuss the upcoming New Year’s Eve plans, particularly Luke Lloyd’s unique celebration at the Walleye Drop in Port Clinton, Ohio, where a 100-foot glass walleye is dropped to mark the new year. This reflection underscores the balance of personal and professional lives, reminding listeners that even investors take time to celebrate.

2. Black Friday and Cyber Monday Sales Analysis

A significant portion of the discussion centers around the record-breaking sales observed during Black Friday and Cyber Monday. Luke Lloyd highlights that Black Friday sales hit around $10 billion, marking a 10% increase from the previous year. Similarly, Cyber Monday saw a 7% increase, reaching around $13 billion. Despite these impressive numbers, overall holiday sales are only projected to be 3% higher than last year, mainly due to inflation. This indicates that while spending trends appear robust, the broader economic context is more nuanced.

3. Wealth Effect and Market Sentiment

Another noteworthy point of discussion is the "wealth effect" and how market sentiment influences consumer behavior. Diamond Hands D and Luke Lloyd observe that positive market trends, such as a booming stock market and rising cryptocurrency values, can boost consumer confidence, leading to increased spending. This phenomenon underscores how psychological factors play a significant role in economic activities, suggesting that investors keep an eye on broader sentiment to gauge market movements.

4. The Controversy of Politicians’ Stock Portfolios

The episode also delves into a controversial topic: the impressive stock market returns achieved by politicians, notably Nancy Pelosi. The co-hosts question whether these returns could be attributed to potential insider trading, given that some politicians are outperforming investment icons like Warren Buffett. They mention examples like Nancy Pelosi’s substantial gains from call options on Nvidia and discuss how such activities raise ethical and legal questions. The conversation hints at a need for greater scrutiny and possibly regulation in how politicians trade stocks.

5. Market Predictions for the Coming Months

The episode wraps up with predictions for the market trajectory in early 2025. Luke Lloyd predicts a so-called "Santa Claus rally," where markets may see upward momentum into the holiday season, but advises caution for January. He anticipates that January might witness a decline due to profit-taking and the diminishing post-holiday optimism. This forward-looking analysis helps investors prepare for potential market adjustments early in the year.

Conclusion

From personal anecdotes to in-depth market analysis, this episode of the Capitalist Investor offers a well-rounded discussion on timely topics relevant to both novice and seasoned investors. As always, the hosts encourage listeners to stay informed and engaged, underscoring the podcast's educational mission. Be sure to tune in to the next episode for more insights and updates on the economic landscape.

Hello, and welcome to this week's episode of the Capitalist Investor. As always, you have me, Diamond Hands D. And Luke Lloyd. What's up? Just the two amigos this week. Tony on assignment. That's a. We are the two amigos. So how was. How was Thanksgiving for you? It was good. I think I put on ten pounds like everyone says. And then I go on my honeymoon tomorrow. Mm. And I'll be gaining another 15 pounds on this cruise ship, so by the time I get back, I might actually be close to 300 pounds. Dude, you have no idea. Well, have you. Have you been on a cruise? Yeah, I've been on four, I think. So this is my, like, fifth probably, cruise. I mean, it's my favorite vacation. I mean, I think it's the most affordable for what you get. I think, you know, all you can eat is something I like because I do like my food. You could stop at five new islands because we're going for 12 days, so five new islands every, you know, a couple stops, and that's kind of like something new every day. We're doing some excursions, and then on the ships, I just like to hang around and sit by the pool and get my tan on. You know, it's just. I think it's the best vacation. Yeah, I'm. I'm. I'm with you. I love cruises. And thankfully, they're supplemented a little bit by the family. But, like, the Disney cruises, they're insanely expensive, but they are that. It's like, the best thing you can do with the kids. Like the obviously Disney World, you know, you'll be building memories. It's pretty miserable for the parents. Well, now that I'm a married man and join the club, I'm thinking maybe next year, or at least within the next two years, I think I'll have my first. I hope to have my first one. So hopefully I can enjoy the luxuries that you all get to enjoy soon. Oh, yeah. Yep. Absolutely. So. So, yeah, you know, we just kind of stuck close to home for Thanksgiving, so that was good. Visit. Some family in PA have my family visit. So. So, yeah, good times. But. But, yeah, between now and New Year's, it's just a, you know, eating fest. Well, it's ridiculous. I mean, you. We had, like, at the wedding just, like, what, two weeks ago we had Thanksgiving. We have the honeymoon now for 12 days. We get back right away. We have, like, two Christmas parties to go to, and we have actual Christmas with our family. And all my mom and dad love to do eat so more of a reason that we have New Year's. If any clients listening, we are going to the walleye drop again. Like we have the past two years, me and Anna, we have actually some clients coming up, actually some big friends clients, you know, family that are coming up. So we're gonna have a big squad for the walleye drop up in Port Clinton. So if everyone, anyone wants something to do for New Year's Eve, I'll see you up there. What is that? In case people don't know. So you know, in New York they drop like what a, like a big ball. Right. In New York for New Year's, Port Clinton, right by Sandusky, they drop a hundred long foot glass walleye. It's like a fish from a crane. It's kind of hillbilly. It's pretty awesome. But I, you know, that's, that's what I like to do is kind of something different. And they have buses that take you around to all the bars and restaurants early before and get you back by midnight to see the walleye drop. And everyone kind of goes to 1 or 2am it's fun. It's a good time. Yep. Well, that does sound like fun. Yeah. Especially when you have buses that take you around. You don't have to worry about anything. It's perfect. All right. Well, well, so, you know, it is obviously, you know, we're winding down the year here. However, you know, the market keeps moving, so lots of stuff to, to talk about. I think today we should definitely hit the kind of Black Friday, Cyber Monday type thing. Yep. Although I guess it's morphing into, you know, even longer than that and kind of how that's changed over the years. We should probably hit on too. We'll talk a little Nancy Pelosi stock tracker and we'll wind up with a couple fun things. So yeah, you know, the, I think it's pretty much, you know, records across the board. Yeah. So I think last year Black Friday, let's hit on that first. Black Friday I think was like maybe 9 billion last year and it was 10 billion or so this year for Black Friday. So it's like 10% over last year, essentially record breaking. Cyber Monday I think was like 13 billion this year. I think it was like 12 billion roughly last year. So I think it was like 7% or so above last or last year. Seven and a half percent. So record breaking online and in person sales. Now as an aggregate, I want to preface this, all the projections are only about 3% above last year in overall Holiday sales. So it seems like people shopped more Black Friday and Cyber Monday than they did last year. But the overall gift buying of, I think it was like $960 billion spent throughout the holiday season on whether it's services, direct goods for gifts, things like that. It's only like 3% apparently above last year, which is really at just inflation. Right. So even though we're record breaking gift sales, I don't think the overall holiday spend is as advertised, as big as people think it's going to be. Yep. Excuse me. Well, you know, we're coming off of. Yeah, I think, I think the wealth effect is a real thing. Yep. And you know, just people's overall demeanor, you know. So, you know, coming off the election, you know, regardless of how you feel about that, it seemed to be, it seemed to. I think what I've been telling people has been it's given more of a clear direction on kind of where we're headed. You know, it hasn't felt like that in the past. And that's really not even a political comment. So you get that and then you get, you know, a big pop in the stock market. You get crypto running like crazy. So when people are feeling good and they got, you know, a couple extra bucks in their pocket in America, they're gonna spend it. Yeah. Or they see their house appreciate, they see their accounts go up in value from the stock market because of the Trump rally and the confidence, like all that stuff, like it all definitely. I know when I feel good, I spend more money. Like when I'm like, oh, I'm excited, like, just I feel good about life. Like I want to go out to eat, I want to go, you know, have Anna go out and shop around like she likes to do. Like, it's just, it's a lot easier for sure. So I think you have to kind of realize, though, and think about, though, is this false, is this false confidence or is this real confidence? Like, is this long term sustainable confidence is what I think the question we need to ask. Because again, I always say this term because it's true. Perception means more than reality. The perception feels good right now. The perception that things are looking good, things are good, we maybe have a future ahead. For a lot of our clients, a lot of us, we just are excited to see what maybe the Department of Government Efficiency does and all these other things that they are talking about doing. But when you actually peel back the screen and implement some of this stuff, what is the actual ramifications, what is the actual outcomes of These, it takes years for these outcomes to play out. It is all, not all rosy like I have talked about before, hitting the reset button for government spending. That's disinflationary, deflationary, that offsets maybe some of the tariff stuff that might be coming and things like that. But, you know, is this confidence gonna last into next year? And my kind of mindset is we'll get back to realistic expectations next year when they actually get into the office and start cranking, you know, changing things up. Yep, for sure. And, you know, running at all time, highs seemingly every day. You know, that, that obviously can't last forever. Well, you saw the jobs report even come in hot. Like it makes you even think, like just a few weeks back after our companies now, like they have now a vision for the future. They know that taxes might not be rising. They made. They know that corporate taxes might go from 21% down to 15%. So with that, that kind of certainty or that kind of more, at least knowing the expectations, maybe they're looking to hire more people. Right. Because they have this. So I think that maybe even reflected the job market because we had some pretty hot numbers, I believe, on Wednesday. Yep. For sure. Yep. So lots of positive signs right now. For sure. Yep. Including. And you know, I just want to say this. It's not just Nancy Pelosi. Okay. It is not just Nancy Pelosi. It is a lot of people here. Yeah. Nancy Pelosi is up 21% this year. Looks like Dan Meuser, I think he may be a Republican actually. Yeah, he's up 40%. Donald Byers up 20%. Josh Gottheimer's up 25%. Berkshire Hathaway apparently seen an average annual return of 20%. So all these people are rocking above Warren Buffett, one of the best long term investors of all time. What does this tell you, D? When you have these politicians are just rocking their portfolios, it seems to be. At least worth a conversation to see if they're getting any kind of information prior that might be affecting some of these investment decisions. Yep. Obviously Nancy Pelosi's have been been highlighted throughout this year, for sure. But you know, again, it's not really political discourse. It seems like they're blatantly using inside information to make trades. It also, I mean, one thing I kind of think about too is, you know, less is more sometimes. So, you know, these politicians look like some of them are day trading. Like the fact that they're like day trading and they're trading in and out a lot yeah, like, and they're still outperforming tells you something there as well because usually when you do that, you have more of a chance to actually underperform. Yeah. Because you're more active. Like the. It's good to be active and like maybe trim some here, sell some here, buy some here every few weeks, every week. But like when you're like taking large option trades like Nancy Pelosi, I think buying the video call options and stuff, like the fact that they're still rocking and it kind of like the only way reason you go leverage that much like millions of dollars in options is if you are so confident that's going to work out on the timing as well. Not just the actual movement to either the upside or downside, but the actual timing of it. So it just a lot of red flags and I think something needs to be looked at definitely within there. Maybe the Doge department could actually look at that. That could be something maybe on their kind of list, but we'll see what happens with that too. Yeah, I heard it was on their list. But you know, it's an incredibly bad look and I don't know if they did a better job of hiding it in the past or the Internet didn't talk about it as much. But it really seems to be like in your face really over the past two years for sure. And yeah, you know, people. People don't like that. That's not, I think, I don't want to get too deep or down a different rabbit hole here. But. But we've talked about it before when, when this country was constructed. And when it was built, it was not pub running for office, being, you know, a senator or you know, someone in the House, that, that wasn't meant to be your career. Right. It was originally designed where you would like take a break from your career to go serve the public. And, and it seems like something that's. That we've been talking about our whole lives as well. Like term limits. Like how is that not a thing by now? Well, it almost feels like the really only way to become wealthy quickly in this world is not just to create a business and leverage yourself and understand the economics of a business, but just become a politician. Like you're teaching these young people like, oh, politician is a career. And if I become a politician, I can make 150 grand a year, 200 grand a year, but I can have $100 million like Nancy Pelosi. Yeah, like, it just doesn't really mathematically add up. Right. I mean, look at AOC Right? Yeah. She's worth like now five, I think, million dollars. Oh, I thought it was like 20. It's average. I think it's. I think that's kind of off. But yeah, it's maybe five or $10 million. Yeah, but she's only been in politics five years. Six. Well, I think it's the way the world's going to. Is instantaneously when you become a politician, especially if you're an outspoken one and kind of a divisive one, you become popular. So then you get speaking engagements, you get paid $25,000 to go speak somewhere. Right. And that's all usually government money funding the speaking engagements, especially if you're talking like to public institutions. Like a public university could pay you 25 grand. And that's actually coming from maybe the state government. Right. So like you get popular, you can get speaking engagements, you can endorsements, you can get TV advertisements. Like, you can get like, instead of the income you're making, you can start use. It's like an athlete, like an athlete may make more money in endorsements and advertisements and speaking, whatever it be, than they actually do from their actual athlete career. Yep. It's the same thing with. So it's the brand, like, you know, Gary Vaynerchuk talks about it best and he's like one of the first to kind of started really hammering down on this branding of this world when social media first came out. Like, this world has changed. Like, it's all about your personal brand. Yep, for sure. And yeah, we can. I can't even really wrap my brain around like how much these, you know, quote unquote influencers, you know, YouTube people who I have absolutely no idea who they are, all seem to have, you know, unlimited money just from their, just from their YouTube channels. Yeah, we're messing up, man. We're not doing it right. So. All right, well, anything else you want to close the show with here today? I think we should talk about real quick just what our expectations are. Maybe in January, February next year. Yeah, you know, I think the Santa Claus rally will happen. I think that we'll continue to see market momentum either like sideways to up over the next three, four weeks just because people are on honeymoons like myself or they're on vacation with the family. I'm just kidding. It's mainly vacation with families. Right. But you know, they're, they're out of the office, they're spending time with Christmas time and New Year's, so there's not going to be much activity volume and usually that's kind of good to the upside. Usually the volume that is. Does exist usually is buying volume. So I think the Santa Claus rally will exist. I think January will actually be a down month. I think it's kind of similar to what we saw maybe in 22. I think January, it was either 22 or last year. January was a pretty rough month initially just because everyone, all the optimism kind of faded since start of the new year. People are taking some profits and whatever be starting the new year. So I'm kind of like hesitant towards January. I think we should maybe get some, get more cautious. Cautious come January. Yep, I completely agree, completely agree with that. And, and yeah, you know that that's kind of how it goes down every year. You know, I think this was a little bit of different year since there's. No tax loss harvesting done this year because everything's just made money apparently. So it's wild. Yeah, it's not gonna be much selling. I have nothing to harvest in a lot of my clients accounts. Well, I was looking at, way I was looking at, I had a review meeting yesterday with somebody and we're talking about like, oh, you have 24,000 or whatever being realized gains this year just from this taxable account. And I'm like, well, let's see if there's any losses so we can maybe reduce a tax burden. There's four positions, I think they were in the red and it added up to like 1,000 bucks. Yeah. So it's just like everything's up. So I can't really offset things when you don't have any losses. Yep, yep. All right, well, good stuff this week. If you guys have any comments, questions, show ideas, hit us up@infowconnect.com and we'll talk to you next week. Satan. The opinions expressed in the podcast are for general informational purposes only and are not intended to provide specific advice or recommendations for any investment, legal, financial or tax strategy. It is only intended to provide education about the financial industry. Please consult a qualified professional about your individual needs.