4 Major News Stories Rocking The Stock Market Today | BABA Earnings

Guys, welcome to everything money. Plus, we're going to go over some great stories today. Four stories. You should be seeing this video in four o'clock. A lot of stuff happening in the market today. For one thing, things have rebounded. Just literally minutes ago, the NASDAQ was down 0.8, 0.9%. Bitcoin's down below 70,000 again. So, Mr. Winklevoss, Cameron, or whoever it was, or Tyler, when you said back in November that you would never have another opportunity again to buy under 90,000, the average price since November 14th has been like 75 or 80,000. So, don't predict short-term price movements. It is impossible. Okay, so here's the market right now. This is the heat map going on right now. Guys, big news from Meta. They just decided to stop the Metaverse. Stop paying for it. $80 billion in losses later. Tesla down big. NVIDIA, Microsoft, Apple, not down a lot. Oracle's up. Palantir's up. Intel's up 1.75%. Isn't that interesting? Okay. Are you surprised about the Metaverse? Yeah, I was. Because they renamed the company Meta. And then all of a sudden, they're like bailing them out. And by the way, I think the Metaverse is a good idea. I thought it was a legit thing. I did too. I actually thought it was a good idea. And it's just, you know, they were bringing in like $300 million in revenue on $10 billion in costs. So, maybe- What happens to the people that bought property in the Metaverse? So, I don't, yeah, I don't, you know, Mo brought that up in a group chat yesterday. I don't know who did do that, but just like whoever bought the NFTs, you know what I mean? I have no idea what happens. Okay. So, it's funny that Meta's down because you would think that getting rid of a $10 billion a year expense might change things. Okay, Alibaba reported this morning. Guys, it was down below 122. The lowest point today was 121.17, back up to 125. This is where people can get lucky. Reported earnings today, and they were abysmal. Let me exactly pull up. Did you guys send it to me in our group chat, or is it directly from Tim? Okay. They reported 40.73 billion in revenue versus estimates of 41.26, and $1.01 earnings per share versus $1.73 estimates. And that is bad. Now, let's pull up their report. Not terrible. 9% growth in overall revenue. E-commerce group, up 6%. Cloud intelligence group, up 36%. But guys, obviously missing is not a good thing. You know, this is a company that keeps growing, but it's not going gangbusters. Look at net income. Down significantly. Look in 2024. Non-gap net income, 51 billion. 16.7 billion in 2025. A decrease of 67%. For the nine months ended, decrease of 53%. Revenue growth for the full year over year, two and three. Not good. But remember, companies like this, any company, even if they don't have good numbers, doesn't mean it's worth zero. It's all about understanding what it's worth. Now, in full disclosure, understanding what this company is worth, I think it's to modify your expectations for the future. Now, the immediate future. I still ask the question about Alibaba. Do I think this company's gonna be around for 10, 20, 30 years? I do. Do I think their revenue and profit will be higher 10, 20, 30 years from now than it is today? Yes. So can I pay a reasonable price? Well, let's take a quick look at that in our stock analyzer tool. And let's pull up the last time at Alibaba and make some modifications to the assumptions here. I don't own Alibaba, but because I got very lucky. They had that big shoot up. I lost them on a covered call at 140 a share. It jumped up to like 180. And I was like, oh my God, what happened? This is why I say, I don't know what's gonna happen, but now I could literally go back, buy it back at a much lower cost basis. I've been paid tax on the 140 because my basis was like 115 or 120. So I have a little bit of tax. But right now, if I bought it back, even after paying the tax, I would still be at a lower basis. And I'll show you guys what I can do with options. But here's what I did. Three, six, and 9% revenue growth in the next 10 years. Based on what we see right now, that's probably pretty aggressive. But let's just keep that. Profit margin, free cashflow margin. Well, free cashflow was greater in the last five and 10 years. So I'm focusing there at 15, 18, and 21. Could be lower. PE, 14, 18, and 22. And a 9% no margin of safety desired return. This is just to determine what do I think the company's worth? Not what I'm willing to buy it for. Everyone has their own personal margin of safety. I'm actually gonna go up here to revenue growth and change it to three, five, and seven. Hit the analyze button. 125 is the share price. Guys, this is why it's interesting. I have a low price of 110 to 135, a high price of 290 to 340. Middle price, assuming 5% revenue growth, 182 to 219. I still think it has attractive options here. You have to be comfortable with China. You have to do your own research. Because this thing was gangbusters years ago, and now it has absolutely suffered. So if I wanna go back and maybe sell some options, some puts on this, I can go to June 18th. And if I wanna buy, look at this. If I wanna buy a 110 put, that means I'll get the shares if it's below 110. Somebody's gonna pay me $4 per share. I'm gonna make a 14.5% analyzed return. And I'll get to buy Bob at 110, minus the $4 I get. So essentially I'm paying 106 for it. And I'm getting paid to wait. That's not bad. Get to buy 100 shares at a time. So unless you're gonna put over $10,000 in Alibaba, that's an issue. But this is something I've been doing for a while, and I wish I'd been doing it for 30 years, because I could have made a lot more money being patient and being paid to wait for companies to sell at the price I would like them to sell at. So let's go on to the next topic. Why did the market tank this morning? Well, Moody's came out. Recession is once again a serious threat. Zandi said recession odds were uncomfortably high before the Iran conflict. Gas prices have risen about 80 cents a gallon since the end of February. White House insists gas price pain will be short-lived and economy is solid. I wonder why the White House is saying this. Why do you think the White House is saying the economy is fine? Is the economy fine? Guys, there's a thousand, a billion metrics to look at. At the end of the day, on the surface, we have very low unemployment rates still. Yes, it's higher than it was last year, but it's still very low historically. We've got growing wages. We've got inflation, which kind of sucks. We've got consumer spending kind of struggling a little bit, like all the premium stores are seeing a decline in consumer spending. So it could go either way. I don't know whether the economy is good or bad. All I do know is recession, when was the last time we had a recession? I don't even count COVID as a recession. And I'm not saying that you have to have a recession in order to, by the way, besides COVID, when was the last time we had a recession, like a real recession? 2008. Was it 2008? I think so. Because do you consider the 2022 a recession? If it was, it was two quarters and done. That is the technical definition of a recession. They changed that a few times. I don't know if they qualified that as a recession though. Did they? They changed the formalities a few times, yeah. Yeah, because the technical definition of a recession is two quarters in a row of negative real GDP growth. Negative real GDP growth, which means it could still be growing, but after taking inflation, then it would be negative. That's what's interesting. So you can still have nominal GDP growing, but guys, why do I not care? Not because I'm heartless, not because I don't realize people are gonna lose their jobs and it's gonna be tough. As an investor, it's not gonna matter 10, 20 years from now. Look at me now going, hey, when was the last time we had a recession besides COVID? I didn't remember. If I pulled 100 people on the street and asked them that question and said, excluding COVID, when was the last time we had a recession? I wonder how many people would get it right. Hell, if I was in the street, I'd be like, I don't know, what does that mean? Tim's just said 2022 and I forgot about that. I don't know. So I think he said the recession odds are 50-50, but we hear this stuff all the time. Who knows if it's true or not? S&P 500 slides, oh wait, I wanted to go to this one. The US fixed 30-year mortgage rate hits a three-month high amid Iran war. Yeah, but guys, the three-month high is 6.22%. It got as low as like 5.97 or something like that, which is high compared to COVID, after COVID. But overall, it's a pretty good rate. When I bought a house in 2003, I was ecstatic because I got a five-year fixed for 5% and I was ecstatic. And rates were really low back then. I was like, oh my God, I'm never going to see this rate ever again. Boy, was I wrong. And I was talking to my wife the other day. I was doing her taxes for her because I'm a little bitch boy. And well, I am. I basically just do, like, I don't even do my own taxes. I can't even tell you what my taxes look like. I just sign away. But, and I was looking at my wife's rental property because she owned a house in 2019 that she paid $320,000 for. And now it's worth 500. And she collects 42.50 a month in rent. And she put $20,000 down to buy it. And she made $34,000 last year on it. Yeah, so she made 150% return on her money in one year. Lisa should be teaching you how to invest. Yeah, I should have gone back to 2019 and bought every single house I possibly could have. Good God. That's exactly right. And that's good timing. I told you, you're never going to get that kind of investment ever again. Like, don't think you're a big shot. Yeah, we need to have Lisa on the channel and teach the folks out here. Wouldn't it be funny if we had Lisa on the channel saying, Lisa, teach me about real estate. I did tell you this, though. One time, Lisa pulled up chat GPT to analyze a real estate deal. And it actually wasn't bad. It actually did a pretty decent job of analyzing the deal. Actually, I was pretty impressed. She's going to open us up to a whole new market. Yes. So, let me pull up what other conversations we're supposed to have today. Bob earnings, Moody's, recession at 30%, U.S. mortgage hits, oil, inflation. Guys, the Fed kept inflation, kept rates the same. Yesterday, big news, our video had over 10,000 views because of that. Inflation is stickier than people want to admit. I think the future of inflation is not going to look like the past 25 years when we had, from 2003, 2002 until 2020. It's going to be hard to have that kind of low. I think we were in like the 2% range, if that. We're printing a lot of money, and that money's going to people's pockets. And you see the things we're doing now, the things we're accepting as real costs. You know what I mean? I, you know, that old Instagram post where it's like what I thought a million dollar house would be when I was a kid and what it is now. You know, my cousin, he lives in Calgary. He's a fan of the show. He watches a lot. And I sent him a house from Texas that was like 1.2 million. It had a pool, jacuzzi, basketball court. And it was like, it's like on the border of Mexico. And I go, this is 1.2 million in Texas. Like a house in Calgary for him for 1.2 million, it's like a dump. And I'm not trying to be rude, but it's not a nice house. Like it's a house that in Ohio would be 300, 400, which is not a bad house. But the whole point is like, it's absurd, the cost lately. But you know, home prices tend to go up over long periods of time. We're just remembering the 2008 financial crisis when prices fell. And so people think that's gonna happen forever. I doubt that. But remember, inflation's a friend to those who own real estate. If you don't, it might be a short-term problem for stocks. But long-term, people, you know, income goes up, revenue goes up, profit goes up, and companies have debt. That debt is fixed at old dollar values, not the new ones. So if you have a million dollars in debt on your house or whatever it is, and your income doubles because of inflation, guess what you owe on your house? You still owe a million dollars. Your mortgage payment's still the same, but your income is a lot higher. So you're paying past debts with current money. Nothing in the world is always good. Nothing in the world is always bad. But it's just for you to think about. I don't want you to think that inflation's just always a bad thing. Does it affect families? Absolutely. Big jumps in inflation affect families more. We can accept it and go, okay, three or 4% a year, and then we increase wages that way. It'll happen. So it's a lot more acceptable. But gas prices being up, I mean, look at gas prices. Tim, what are oil prices right now? It's not 110 right now, though, is it? No, I think it fell. Yeah, it's 95. Yeah, that's what I mean. I mean, it's crazy. And it might have been like a, oh, Brent crude briefly tops 119 per barrel before pulling back. How, when? We didn't see that. Guys, it's incredible, the volatility. So, oil, guys, I think everybody should remember oil. Oil is in everything you see in this room. Oil's not just for cars, not just for airplanes. It's everywhere. Look in your room right now, look around. Everything in it has oil. In fact, it's Dalton's favorite beverage. Beverage, yeah. It's oil? I think it's an IV of oil. So the joke is, Dalton, who everybody in the community probably knows, because he works for us, he's a great advocate, but he loves oil so much, and it just drives me nuts because he literally, you know what he is? He's a CrossFit member. He does anything possible to bring the conversation to oil. Yes. Just like CrossFit was back in the day. Oh, yeah. Yeah, he has a quote in there. You miss 100% of all the oil and gas investments you don't make. Michael Scott, anonymous slash Michael Scott, or Wayne Gretzky, it's pretty funny. But the guy literally talks about oil like he adopted oil. Every conversation, hey, Dalton, what'd you eat today? Oh, you know, I ate this, and I went to the store, and I used the oil from, like, oh my God, here we go with the oil again. It's just like constantly- I think he's always Jed Clampett for Halloween, Beverly Hillbillies, yeah. That's a good idea. All right, guys, so a couple things I want you to do. If you're new to the channel, stick around. We do earnings results, we do news, we're gonna try to do, we do a video pretty much every day during the week to kind of update you on what's going on in the markets and to remind you that the short-term noise doesn't matter. If you've been with us for a while, I want you to do me a favor. Check out our community. Has great people, has great software, helps you make better decisions, helps you sleep better at night. At some point in the future, whether it's a year from now or 10 years from now, we're gonna limit the members in there. So go check out our seven-day trial. It's everythingmoney.com, or it's the link below. And I assure you, it'll change the way in which you invest. Thank you for your time.