BULL MARKET: JUST BEGINNING?

With US indices up between 13 and 20% so far this year, it might come as a surprise to some investors to see a billionaire trader like Paul Tudor Jones saying the ingredients are in place for a massive rally before a potential blow off top to this bull market. So a blow off top is when things get really exponential where more and more investors, they're borrowing, they're so excited, they almost don't even care what prices are. So things go exponential. And in a short period, what he's saying is there's a potential for a blow off top where things, maybe the market goes up 20%, 50%, maybe even 100% in short order like we saw in the late 1990s. And so this video is gonna walk you through what are the ingredients that he sees that gets to that thesis, how he's currently investing today, and then my own personal thoughts, how I'm investing considering this sort of macro outlook and what it potentially could mean for you as an investor. So we're gonna cover all this, the ingredients, how he's investing, how I'm personally applying it to my own investment journey. As always, if you enjoy educational investment content, I do appreciate you hitting that thumbs up, hit that subscribe button. You're watching Unrivaled Investing. So let's dive right into the ingredients. And I think the most important ingredient, this chart, in my opinion, it looks very simple, but I think this might be the most important chart for you to think about right now. This is from an open AI study effectively showing how their frontier models relative to professionals have gotten significantly better. Last year, relative to professionals across various different degrees, only about 10% of the time parity with professionals. Now their models are closer to 30 to 40% parity with professionals across dozens of different industries. This outlook, this exponential improvement doesn't look like a lot going from 10 to 30, 40% in a year, but that is exponential improvement. And one would suggest that in the next year or two, especially because this is what's driving it. This is the first ingredient. What's driving a lot of this is the investment excitement around this technological revolution in artificial intelligence, that within the next year or two, you're going to have AI that's cutting edge that will likely over 50% of the time be better than professionals, or at least be at parity with professionals across a variety of industries. So this is a big development. So I personally am trying to leverage this trend with this trend with Flash. You could check out the reports on any company in the world, see the link below. Flash is your AI assistant for stocks. And so that's how I'm personally, I'll talk more about that towards the end of this video. I'm one of the co-founders of Flash. And so it's free to check out, once again, any company. And so I think that's the first ingredient. One of the key ingredients when you're looking at this bull market that Paul Tudor Jones is looking at. The second key aspect is that he's seeing potential rate cuts for the continued period, because you're looking at, you know, across Wall Street, the expectations for the end of 2025 or middle of 2026, that the Fed funds rate will go from roughly, you know, 4%, four and four and a quarter, where it is today to around three and a half, maybe closer to three or three and a quarter. So either way, looking at a couple more cuts in the near future. So this is, the reason why this is so important is that liquidity moves markets. You can see that throughout history. I've talked about this with my subscribers when I was reading the JP Morgan book recently. And it's just so important to recognize if you have an easing environment, it does make it easier for asset prices to inflate, even if there's a disconnect from, let's say, the fundamentals. The more liquidity you have, the more potential you have for that disconnect. But at the same time, if you start pulling liquidity out of the system and you don't care what liquidity picture looks like, you can have a complete, you know, swing to the other side. So really just, it's being mindful of what does the liquidity picture look like. And Paul Tudor Jones is seeing an environment of expected continued cuts. At least that's what Wall Street's expecting. I think a third key ingredient is the US government continuing to, you know, just spend without almost regard to the deficit without regard to, you know, will we be able to find supplier of this debt, you know, people, excuse me, buyers of our debt in the future, you know, where, you know, if you look at the deficit relative to prior years, it's really, you know, only lower than the heart of COVID. And outside of that, it's just continued arguably reckless spending. Maybe that'll change, but so far we're not seeing that. And it's not just the US. In Japan, they just elected a new prime minister that seems very clearly, you know, bent on fiscal stimulus and lowering monetary policy, which is the exact opposite direction of their central bank. So the US isn't alone in terms of looking for more aggressive running the economy hot. And I think, you know, Paul Tudor Jones, you know, he's a trader. And this is a picture from a long time ago where it says losers, average losers. It's a commentary about the importance of, for him, not averaging down, but actually thinking about, hey, if something's working out, you align yourself with it. So he's more of a momentum oriented investor looking at the 200 day moving average as a clear, important price signal for him. And so when you're thinking about these ingredients for what's driving the market, he's also looking at what is giving him favorable price signals. And one of which is gold, which definitely makes sense given this environment, because if you have, let's say reckless spending, let's say in the US and then also possibly abroad, then you're gonna have a lot of folks saying, wait a second, there's gonna be a lot of fiat currency being printed. You can't print gold easily. Hence why there's, you know, this bid for gold and it's up so far about 50% this year. Another, you know, asset that has, you know, also had favorable returns so far this year that he's also saying, hey, this is part of a basket that he's thinking about or that he owns is also with crypto. And you can see Bitcoin year to date up over 30%. I, you know, I called out to my subscribers, you know, this thesis, by the way, of this might, the economy might run hot and, you know, you might have this sort of blow off top. It's actually something I've called out in our exclusive discord, you know, just a few months ago, that this was very much a possibility reminding me of the late 1990s. So it's not the first time I've seen or considered this idea between gold, crypto and then the third piece of this basket that he's looking at is the NASDAQ where it's, you know, sort of the most aggressive, most bullish, you know, sort of indice, most forward thinking indice, you know, relative to let's say the Dow or the Russell 2000. So the NASDAQ's up around 20%. So these are the key baskets of how he's currently investing. Keep in mind, he is a trader and things can change. And I think this does, you know, raise an important point, which is, wait a second, if he's talking about investing like the late 1990s, didn't, you know, they have a dramatic fall? Like, isn't this like the equivalent of dancing right next to a cliff? Isn't there a lot of downside risk, you know, comparing it to the late 1990s with this, you know, stimulus and then it is important to recognize, yes, the NASDAQ did have this blow off top where in a short period, it did go up over 100%. This is in the late 1990s, early 2000, boom, where things were going up a lot each year. And then it really did go exponential. And this is what he's saying. The ingredients are there for this, but then because the liquidity drove prices to have a severe disconnect versus the underlying fundamentals, when liquidity ultimately was pulled out, then the ensuing crash was even worse. And so you could see, you know, through the beginning of 2003, it actually got even worse that even if you were to say, hey, I wanna participate in this rally, I wanna participate in this. If you had that mindset there, you still would have been underwater a few years later. So a lot of investors are, in my opinion, are right to go, wait a second, I need to check myself. I, you know, I'm either gonna be a trader where I'm buying and selling, and I'm hoping to participate in this, and I'm not gonna, you know, get caught in the downdraft, or I'm gonna stick to an approach that's gonna work, and I'm comfortable with dealing with sort of volatility. And that's sort of the next key point that I wanna talk about, you know, in this video. But first of all, none of this is financial advice. Also, just a super quick plug. Last week, Mohammed D wrote, I've been a member of Unrivaled Investing for over a year now. Although the positions you have covered have more than covered the membership, my return on investment is what I've learned through weekly letters. He's saying that, you know, yes, the positions I've talked about have more than covered his subscription, but what he really is getting is what he's learning from these different letters. I'm really glad to hear that, because I really do view myself as a teacher. So, and we're all students in this together. That's the truth. And this follows Andre S, who said, since I've joined, my portfolio keeps on growing without me having to worry about it, which is what I love to hear. If you're looking for compelling ideas, come check out Unrivaled Investing. And so I think it is important. As you're considering Paul Tudor Jones, he is a trader. Stanley Druckenmiller, another famous billionaire trader, he is a trader. So their timeframes, their ability to change their perspective will change dramatically. And it's important to recognize macro can change significantly in any given week period. And just earlier in this year, in April, May, Paul Tudor Jones was saying that he expects to see new lows, even if there were favorable developments with President Trump and tariffs. That did not come to pass. So he made a call, and it was based on what he was looking at from the direction, the trend, the liquidity. And he was saying, okay, these tariffs, that's gonna sap the economy. And he was looking at the US indices being well below the 200-day moving average. So he thought, okay, I'm not gonna bet against these trends, so I think we're gonna see new lows. That's what he was expecting. Personally, I was buying during the heart of the tariff panic, and I added to some of those positions, some of my core positions, because if you find something that I find to be compelling, if you find a company that you think is unrivaled, you're looking at the price, and you're saying, hey, is this reasonable? And so I think that that's sort of one of the key highlights from this video is if you're gonna follow and take the pursuit that Paul Tudor Jones is taking, you have to have that mindset where you can go a complete 180 in a short period based on either macro developments, some macro news. Like if there were some news that where you were to see clearly a reversal in Fed policy, where they're saying, you know what? Inflation's picked up. There's no way we're gonna be cutting going forward. And if you were to see President Trump effectively say, hey, you know what? The bond market's giving us trouble. We're gonna really have to cut spending. That would be exact 180 from the picture that Paul Tudor Jones is currently seeing. That could happen in any given week, and I suspect he would completely change his portfolio in that situation. I suspect other prominent traders would as well. So I think it's important for you as an investor, if you're a participant in the markets, to ask yourself what type of journey are you looking to have? Are you looking to be a fast-acting, quick-dancing investor trader like Paul Tudor Jones? Or are you looking for things that you can comfortably hold for, let's say, years at a time? And I should call out that he's not alone with some of these calls. Ray Dalio, another prominent billionaire investor, has called out similarly that non-fiat currencies will be stronger stores of value. And he's saying it's probably better to own gold because of that, because of the amount of money printing or the amount of deficit spending with fiat, effectively fiat printing, that you'll see that it's better to own gold. But even there, it's important to recognize it's not Ray Dalio isn't saying, hey, put 80% of your portfolio in gold. He's saying maybe 10 to 15% of your portfolio in gold, you know, maybe 20%. But still, that leaves the vast majority of your portfolio to be allocated to other asset categories. So I think it's super important to recognize, even someone like Ray Dalio who's been pounding the table for a long time over gold, and I think he's right. I definitely think there's a lot of merit to gold. Would not surprise me if that keeps going higher. But I think it is important to recognize the bigger piece of the portfolio is these other assets that Ray Dalio is considering. Personally, for me, I would rather focus on the other, which for me is unrivaled companies. And this is the checklist that I'm following, which is that even if there's a turbulent macro picture, I wanna have the same checklist over and over again, because it makes my journey more enjoyable. Top of the list is management alignment. Because if I know that they're sharing in the upside and the downside, I just sleep better. And I also like it, ideally, when they're founders. They have some sort of mission that they're working on to build. And I go, okay, this is their baby. This is what brings their life joy. And so if this is their mission to build this company, I wanna align myself with that. You know, the others are obvious growth, a compelling valuation, and limited blow-up risks. So I would say this is the key elements of this checklist. And most companies don't pass it. If you watch this channel long enough, you'll see most companies I review, I generally give it the thumb sideways or thumbs down. So it is important to recognize that. So I'm not looking to do the Paul Tudor Jones, oh, liquidity's this way or that way. I'm aware of it, and that might influence how comfortable I am paying certain valuations. And if I saw liquidity pulling out of the market, I might think to myself, hmm, maybe I can get much lower valuation on some of these things. But at this point, what I'm seeing is, you know what? There's plenty of liquidity, so I wanna get fair prices. Now, these are dynamics to consider based on the macro, but this is the philosophy for me personally that's not gonna change, these core tenants. And so another way to think about potentially finding management alignment is to leverage AI. And so once again, this is one of the tools from Flash where I can see the latest insider buying from various different companies. So this is gonna be on my list because this clearly is management alignment when I can see, oh, okay, first guarantee bank shares. You know, insiders recently bought nearly $2 million or W&T Offshore recently bought half a million or CELC recently bought nearly $10 million. So I will then review these reports, and these reports are free to understand, there's clearly the potential for alignment here. Does this make sense to consider this from my personal journey? And so this is an important first step. This is leveraging AI to make my life easier. So it's pulling the insider buying, but then the AI is running the initial report. Once again, we already know from the beginning, AI is not as good as professional investors. So I recognize it'll make some mistakes, but I do expect in the next year or two, it'll likely be just as good as professional. So I view it sort of as a junior analyst. So that's how I'm thinking about it, looking for potential ideas. But if you're looking for one example of a company that's currently fitting my profile, I have called out Oscar before on this channel. You can watch my prior video on it where you have very clearly aligned management where management was, you know, you have one of the co-founders aggressively buying shares previously, you know, tens of millions of dollars worth of stock. What I thought was a compelling valuation, even though the stock is up a bit since I called out that video, arguably it's still a compelling valuation. And then management has called out very clear growth potential, you know, suggesting significant, let's say 20% type of compounding over time. So yes, Oscar is gonna have some sensitivity to what Congress decides with the healthcare market, but I share this as an example of how I'm personally looking to invest, even if the underlying macro changes, like even if there's a recession, even if liquidity changes dramatically because Oscar still has these pieces where I go, oh, you've got this management, you have these founders, you have this, you know, this CEO that's done it before, Mark Bertolini. I'm gonna say, okay, you know, even if the tide's going out or even if liquidity is going out and it's getting tougher and, you know, valuations are coming compressed, I like companies where they've clearly articulated, hey, we have tens of millions of dollars in stock on the line that we've invested in ourselves. This is our baby, we're founders. And by the way, you know, here's why we still think this business could be worth or could be much, much bigger in the future. Here's this opportunity that we're looking to tackle. And then it's the compelling valuation component, you know, and that's, you know, each company is gonna be different or you're gonna have to size it up, you know, differently each time. So I hope this video has been helpful for you. I'm grateful that you tuned in. And if you have any, you know, comments, I'd love to read it below. Thanks so much for watching Unrivaled Investing.