Tech-Blight
Tech stocks tumble, Meeting Dhar Mann, Maneuvering the 2023 recession and Changes to credit score
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You want to know what I think actually happened? Sometime in 2021, Mark Zuckerberg perfected the Metaverse, snapped his fingers and we are all living in some alternate reality.
There is no reasonable way to explain recent events other than us being in a simulation that is stress-testing reality. Last week, we saw the richest man in the world purchasing Twitter at a price nearly twice the GDP of Iceland and then walking into the headquarters with a literal sink to recreate a ‘Let that sink in’ meme in real life.
A problem with the alternate reality hypothesis is that Meta is doing terribly right now. Their stock price has fallen more than 70% from its all-time high and Zuckerberg’s personal wealth has dropped by more than $100 Billion in 13 months. More concerningly, Meta’s troubles in the stock market are symptomatic of the broader underperformance of tech stocks this year.
Amazon issued a disappointing fourth-quarter forecast and missed revenue estimates. They are trying to combat rising expenses by closing warehouses, axing experimental projects, and by temporarily freezing hiring for corporate roles.
Microsoft’s revenue from Windows has fallen as worldwide demand for PC shipments declined ~20%. To make matters worse, their cloud revenue growth also slowed to a five-year low.
Google reported weaker-than-expected earnings in the third quarter due to an overall decrease in online ad spending. The company also announced that they plan to cut headcount growth in the next quarter.
Without question, there is a blight in the tech industry and an overall negative sentiment about the market outlook. Sinking markets are difficult to maneuver, but they also bring opportunities to create wealth. Let’s get up to speed on what I covered last week.
How To Use The 2023 Recession To Get Rich
There is a popular saying that ‘Riches are made in recessions’ and a casual look at the headlines suggests that we might be on the cusp of another recession. 9 out of 10 CEOs are bracing for a recession, CFOs are cutting costs and we’re seeing an increasing number of instances containing the ominous keyword, ‘since 2008’.
Now, in almost all recessions, we see a significant rise in unemployment, a drop in wages and earnings, and an overall loss of consumer confidence. However, crucially, we also see a drop in the price of major investment vehicles like stocks and real estate.
A key path towards taking advantage of a recession is by taking advantage of the low competition and purchasing assets that go on sale. In this video, I explain how the major investment vehicles are affected during a recession, the importance of holding cash as an asset, and why it is important to act quickly before the opportunity goes away.
Meet The $100,000,000 Invisible Man
So, this week, I had the privilege of meeting and interviewing Dhar Mann, and listening to the incredible story of how he went from losing nearly everything at the age of 30 to building one of the most successful channels on Youtube with more than 40 Billion views.
Mann’s story is a perfect example of the American dream starting with his parents moving to the United States as poor immigrants living in a shared home and then finding success in a taxi business. Mann’s first business was selling baseball cards and CDs and his inspiration to start the channel was understanding how listening to motivational stories about other entrepreneurs helped him get through the lowest point in his life.
In this video, He also gave me a tour of his brand-new 50,000-square-foot studio that recreates apartments and shopping complexes, a description of his schedule, and tips for struggling entrepreneurs, so don’t miss this one!
The Fed Just Reset The Housing Market
With 53% of Americans having been turned down for credit cards and loans due to bad credit at some point in their life, Congress and Big banks are trying to develop new credit scoring models that would help folks get mortgages without the traditional credit score. The move marks the end of nearly 20 years of relying on FICO scores to determine creditworthiness, which typically used metrics like on-time payment history, utilization rates, the average age of credit, and the number of credit inquiries made.
The new proposals would allow banks to use alternative data, like their average account balance over time, history of overdrafts, and timely payment of utilities like cell-phone and rent. The objective here is to enable nearly 45 Million Americans who don’t even have a credit score to be able to access credit.
With critics already arguing that the new model would make millions of borrowers appear safer than they actually are, there are valid concerns that this could overstretch the balance sheets of banks and lenders. In this video, I take a look into the recent decline of the housing market, how the recent proposals will increase access to mortgages, and some overall pros and cons of the move. Have a look and let me know what you guys think!
So that’s it for my Sunday round-up. For the new folks here: In this newsletter, I give a quick recap of whatever you may have missed over the week on Sunday, and on Wednesday, I will be doing my deep-dive article on one of these topics.
See you next week with another bunch of exciting videos! If you found the article interesting, please help me out by clicking the like button and sharing this article.
Comments on FB/Meta:
The Emperor Has No Clothes
There is a condition that is worse than being blind...that is believing one can see (in the first place).
Is there any other non-dictator who is vilified more than MZ?
Good