The Bottom Line:
- The 90s tech boom created a highly speculative investment environment with easy money-making opportunities.
- Cisco’s IPO in 1990 exemplified the era’s explosive growth and subsequent long-term market challenges.
- Speculation around AI today mirrors the hopeful yet uncertain atmosphere seen with 90s tech advancements.
- Big tech companies like Apple and Nvidia have evolved, focusing heavily on innovation and profitability through strategic investments.
- Recent layoffs and dividend policies indicate a shift towards leaner operations and continued high profitability within major tech firms.
Starting Strong: Clay’s $50 Win on a Put Option at 3650
Clay’s $50 Win on a Put Option at 3650
All right, going to go for a put here at 3650 got that and out for $50 in a matter of seconds. Good start to the day. If you blinked, you missed it.
Ups and Downs: Managing Risk in Trading
Started off strong but gave back gains, resulting in being down $20. Ended up closing around $180 with commissions. Managed risk by keeping losses small, emphasizing the importance of risk management in trading.
Lessons Learned: Quick Trades and Adaptability
Made quick $50 moves with ups and downs throughout the trading session. Despite initial losses, bounced back through small losses and quick trades. Emphasized the need for managing risk and adaptability in trading.
Empowering Beginners: Free Class on Options Trading Basics
Understanding Options Trading Basics: Free Class for Beginners
If you’re new to options trading or find it intimidating, comment below “option guide” for access to a free class. The class covers the basics of options, terminologies, and a simplified approach to understanding them.
Trade Strategies: Keeping It Simple in Options Trading
Approaching options trades with the “keep it simple stupid” method for simplicity and effectiveness. Described the platform’s order process and highlighted the quick $50 profit made on trades.
Mistakes and Adjustments in Live Trading
Shares about a trade loss and lessons learned about entry points and timing in trading. Emphasized the importance of being generally correct in trading but also needing precise entry points for success.
Simplicity Wins: Clay’s Emphasis on Simple Trading Approaches
Keeping Trading Simple: Clay’s Focus on Uncomplicated Approaches
Clay emphasizes the simplicity of trading approaches, following the “keep it simple stupid” method in options trading. Describes how options trading doesn’t have to be complex and offers a free class for beginners to understand the basics in an easy and straightforward manner.
Practical Trading Strategies: Quick Wins and Setbacks
Shares experiences of quick $50 wins and losses during live trading sessions. Discusses the importance of managing risks and making quick decisions based on market movements to adapt and stay profitable in trading.
Lessons in Adaptability: Overcoming Losses and Seeking Opportunities
Reflects on the challenges of giving back gains but ultimately closing with a profit through small losses and quick trades. Stresses the significance of adaptability and risk management in navigating the ups and downs of trading successfully.
Managing Risk: Clay’s Key to Ending the Day Up by $180
Trade Management: Clay’s Approach to Daily Profits
Shares the journey of making quick $50 wins and facing setbacks in trading. Emphasizes the importance of managing risk, adapting to market movements, and staying focused on creating consistent profits.
Risk Control: Navigating Losses and Gains in Trading
Details the process of starting strong, facing losses, and ending the day with a profit. Highlights the significance of keeping losses small, learning from mistakes, and staying resilient in the face of challenges.
Lessons Learned: Persistence and Adaptability in Trading
Reflects on the experiences of balancing wins and losses in trading, showcasing the need for persistence, adaptability, and effective risk management strategies to achieve success in the volatile market environment.
Join the Webinar: Revealing Clay’s Insights for Profitable Consistency
Interactive Learning Opportunity: Exploring Options Trading Fundamentals
For those unfamiliar or intimidated by options trading, a free class is offered to help understand the basics. The class simplifies options concepts and terminology for a beginner-friendly learning experience.
Trade Execution Strategies: Emphasizing Simplicity for Success
Clay adopts a straightforward approach by focusing on simplicity in options trading, using the “keep it simple stupid” method. The platform’s order process is explained, showcasing quick $50 profits from trades.
Reflections on Trading Mistakes: Importance of Precision in Entry Points
A trade loss is discussed, emphasizing the significance of accurate entry points and timing in trading. While being generally correct is crucial, precise entry points are highlighted as essential for successful trades.
The Legacy of the 90s Tech Boom: From Speculation to Stability
Reflecting on the Impact of the 90s Tech Boom
The 90s were marked by a sense of spectacular opportunity in the tech industry where making money seemed easy with investments. However, this optimism led to speculative behavior and inflated expectations regarding future returns.
The Evolution of Tech Giants and Market Speculation
Companies like Cisco, which emerged during the 90s tech boom, experienced significant growth but also faced challenges in sustaining their stock prices post-2000. The era was characterized by a focus on possibilities rather than practicality, similar to the current interest in AI technology.
Shifts in Tech Investment Strategies and Market Trends
The tech sector has seen shifts from a period of speculation and rapid growth in the 90s to a more stable approach involving considerations of dividends and leaner operations. Layoffs, profit margins, and dividend payouts reflect a maturing landscape where companies seek to balance growth, innovation, and profitability.
Cisco’s IPO: A Case Study in Market Evolution
The Impact of Cisco’s IPO on Market Evolution
The 1990s were characterized by a sense of incredible opportunity in the tech industry, where investing seemed like an easy way to make money. However, this period also led to speculative behavior and inflated expectations about future returns.
Challenges Faced by Tech Giants Post-2000
Companies like Cisco, which emerged during the tech boom of the 90s, witnessed significant growth but struggled to maintain their stock prices post-2000. The era was marked by a focus on possibilities rather than practicality, similar to the current fascination with AI technology.
Trends in Tech Investment Strategies and Market Dynamics
The tech sector has transitioned from a phase of speculation and rapid expansion in the 90s to a more stable approach that involves considerations of dividends and streamlined operations. Layoffs, profit margins, and dividend distributions reflect a maturing landscape where companies aim to balance growth, innovation, and profitability.
AI Speculation: Parallels to 90s Tech Hype
Comparing AI Speculation to 90s Technological Hype
The 90s were an era of remarkable technological advancements that fueled a sense of boundless opportunities in the investment world. The period was characterized by a wave of speculative investments driven by inflated expectations of continuous easy gains. Companies like Cisco, which debuted during this tech boom, experienced significant growth but struggled to sustain their stock prices post-2000, showcasing the gap between speculation and practical market outcomes. Similarly, the current fascination with AI technology mirrors the speculative atmosphere of the 90s, where the focus is on the expansive possibilities rather than the practical applications and tangible returns.
Transition in Tech Investment Strategies and Market Dynamics
The tech sector has shifted from the exuberance of the 90s, marked by speculation and rapid growth, towards a more stable approach that integrates considerations of dividends and leaner operational structures. Recent trends have shown tech giants implementing layoffs, optimizing profit margins, and distributing dividends, reflecting a maturing landscape where companies are striving to strike a balance between growth, innovation, and profitability.
Evolving Landscape of Technology Investments and Market Realities
As the tech industry progresses, there is a notable shift towards a more sustainable and pragmatic investment outlook. The emphasis is no longer solely on speculative ventures but also on building resilient business models that can withstand fluctuations in the market. Companies are navigating through a landscape that demands a blend of growth strategies, innovative technologies, and sound financial management practices to thrive in the ever-changing tech investment environment.
Big Tech’s Shift: Embracing Innovation and Profitability
[Music] well and I’m going to throw a chart up real quick um this is uh this this is a monthly chart of the 90s and so as a reminder uh for folks that you know if if you weren’t around during that time the 90s were spectacular it was like oh this this is where throw a dart you make money and it’s it’s it’s just that easy of course I started myself investing in 1997 and you know straight out of college and you know didn’t have much money but I thought I was a genius you know because and and of course what I did was I extrapolated my returns and said well if I can just continue to do this for the next 10 years I’m gonna retire and I’m G to be Filthy Rich uh of course that’s not exactly how it worked out just so you know um but you know the the the 9s and I’m I’m just going to go throw up Cisco too because you mentioned Cisco and of course uh that came out in 1990 with its IPO and I believe it had like a 75,000 per move from from its first base uh it was kind of a double bottom ShakeOut plus three base down here 75,000 per move but uh here we are top in 2000 and it still hasn’t gotten back to those highs uh from from 2000 you know and even though CIS Cisco was still being widely used um there was certainly this level of speculation that happened during the 90s as it was kind of like oh all of the things that could be possible and I guess is that where we’re at with AI right now still in that oh all of the things that could be possible but we haven’t quite figured out I mean because again like you know in the 90s we weren’t thinking of phones necessarily I mean yes I had my Nokia phone you know strapped my hip but I wasn’t thinking of apps I wasn’t thinking of all of those things that came along with it so um is that what you’re kind of getting at yeah exactly I mean it’s betting on that growth rate to continue and it’s going to be very hard for that growth rate to continue unless there’s this virtuous cycle right like if these companies that are buying from Nvidia now are going to be buying this much from Nvidia every year I’ll be shocked right it’s got to take other businesses coming in and buying from Nvidia and it’s got those businesses need to show returns right what we’re seeing right now is companies spending a bunch of money on Nvidia gear and investors are kind of like okay well where’s the this investment getting us and so they have to get to the point where they can show here’s what it gets you and and it will get you that consumer dollar it will get you that business dollar it will get you multiple dollars right and that’s the the question that still is there in in that in this moment is are we going to get to that place or or is it farther away than we expect now um Ju Just to kind of follow along with the the the cycle here that that that we’re laying out um of course you know after the dot burst uh the the the bubble burst we had a 79% correction in the NASDAQ so I mean phenomenal on the way up not so much for folks on the way down um but I I will say um you know before Apple came out with the iPhone you certainly had 2003 there was Research In Motion right with the Blackberry and okay now we’re doing email you know via mobile um and 2007 that’s when the iPhone came out and I’m showing that on the chart here um but of course we didn’t really kind of get the we didn’t get the O 2008 happened right a few things happened in there yeah we had a we had a rough time in 2008 um but again we recovered there and then you saw you know Apple come back in a strong way and and let’s not forget I mean Apple was already doing well because of the iPod and how you know it was changing the music industry um so I’m just gonna you know continue forward a little bit um because you you mentioned um you know Nvidia and certainly you know Nvidia was getting a lot attention as you mentioned in 2016 when it was kind of like okay you know the the graphic Processing Unit the GPU what else can you do with this you know I mean it’s great for video games because that’s what Nvidia was at first it was oh these chips are great for the the the graphics for video games but it really turned into this you know what else can it do and so yeah it seems like we’ve been talking about Ai and a lot of these things that are possible for a while um so you you mentioned a little bit of of of kind of a landscape change here and I mean I mean you were talking in the pre-show a little bit about how layoffs are happening um Dividends are now happening in in our big tech companies like that’s not something we had in the 90s it was always about oh we got to put this money back into the into the company so we can grow oh Steve Jobs was so against dividends right and that became kind of this Silicon Valley mentality of no we do not send our money back to Wall Street we keep it here and we put it into the next generation of devices we put it into research and development that has always been kind of the thing but then yeah once uh Facebook and Google laid off all of those workers last year and their profit margins just exploded they didn’t really have an excuse for not establishing a dividend anymore you know they’re basically saying we’re going to be profitable now for good and based on their businesses yeah they’ve made a lot of profit over the past few years and like even before they had those layoffs they were not unprofitable right their margins got squeezed a little bit but they still were making massive profits and now those profits are even bigger but that you know I have always taken and this is this may be and maybe you can tell me a little bit more from your perspective Justin out here in the valley the thought is always if you establish a dividend it means you’re done growing it means you’re done innovating you know that has always been kind of the the thing that you hear you have nothing better to do with your money than to give it back right exactly and and and it’s almost an admission in part that we have reached the end and and you know I think there is a level there and I think apple is the example here that once Apple just started making so much profit they couldn’t not give a dividend right Steve Cook Steve uh Steve Jobs died Tim Cook took over Tim Cook was the one who made the call to reestablish a dividend you know but the fact is like the profit Apple was making just they couldn’t get rid of it enough they weren’t making Acquisitions like that I understood meta and Google establishing a dividend is quite different and and it shows that they expect to continue running lean they they this is not part of a cycle and that was a big question I had when the layoffs happened last year is this just a cycle you know and and are they getting rid of all these people so they can invest in AI um move some of that money to hiring Ai and buying Nvidia gear and all of that kind of stuff or is this a permanent change where they’re going to try to run leaner that dividend that tells me they’re trying to run leaner and I wonder you know especially with something like Google where the the onus has always been like let’s develop the next new thing let’s let’s find let’s build wh within alphabet right let’s do all of this and and now it just I don’t know if they’re going to be doing that and it’s a real question but it is fascinating what what is happening here I mean just to to boil it down to the bare facts big Tech laid a bunch of people off made a bunch of profit and are dumping that profit into Nvidia gear and dividends and how does that pay off for the future is a huge question for me do they get our return on investment for the Nvidia gear are they able to keep their headcount low and continue to make enough money to pay off Wall Street those are huge questions that they they’ve answered for us in the past year but we still have to see the proof as we move forward yeah and and I want to you know as you’re kind of talking about that getting lean and stuff uh of course you know people think immediately of profit margins and one of the things that you were saying is okay I mean the S&P 500 had such a you know I mean look 2022 was ugly it was no fun uh to be investing in 2022 it was a bare market and arguably it really kind of started in 2021 but it was almost like this stealth bear for a little while growth was getting hit um you saw like you know Ark K we we’ve talked about how AR K being you know a little bit more on the speculative side really you know started coming down on in February 2021 through uh 2022 but a lot of this was being masked to a degree by the S&P 500 and especially in 2023 how strong it looked um and how that that kind of profit margin thing you know was was was changing can you talk a little bit about that yeah I think you know if you put up a a chart of the S&P 500 and their the S&P 500 profit margin you’ll see they’re they’re correlated by about three to six months when we when investors could see that the profit margin was about to rebound the stocks went higher um and what we saw 2021 the profit margin for the S&P 500 was far beyond anything we had ever seen um and there was a lot of calls of greed flation at that time where the inflation was was crazy and the profit margins were expanding and everybody went oh these companies are increasing prices and it’s all going to their bottom line which was the case but in a.
Lean Operations and Dividends: Indicators of Tech’s Future
[Music] Well, I’m going to throw a chart up real quick. This is a monthly chart of the 90s. For those who weren’t around during that time, the 90s were spectacular. It was like throwing a dart and making money. I started investing in 1997 straight out of college with high hopes. The 90s were filled with speculation and inflated expectations. Companies like Cisco emerged during this period, showing significant growth but struggling to sustain stock prices post-2000.
There was a focus on possibilities rather than practicality, similar to the current fascination with AI technology. The tech sector has transitioned from a phase of speculation and rapid growth in the 90s to a more stable approach involving considerations of dividends and leaner operations. Layoffs, profit margins, and dividend distributions reflect a maturing landscape where companies seek to balance growth, innovation, and profitability.
Tech giants have laid off workers, increased profit margins, and established dividends, showing a shift towards running leaner. This change raises questions about future returns on investments in Nvidia gear and the ability to maintain profitability while keeping headcounts low. The evolving landscape of technology investments demands a balanced strategy between growth, innovation, and financial management practices for sustained success.
Profit margins played a crucial role in market dynamics, particularly evident in the performance of the S&P 500 throughout bearish periods. Despite market challenges, the correlation between profit margins and stock performance highlights the significant impact on investor sentiment. The tech industry’s journey from speculative ventures to sustainable growth models emphasizes the importance of adapting to changing market realities for long-term success.
