 This is St. Tech, Hawaii. Community matters here. Ladies and gentlemen, boys and girls, and children of all ages, we are back. I'm the Prince of Investment. This is the Prince of Investment coming to you live all the way from the beautiful state of Denver, Colorado, via Hollywood, Hawaii. Now, don't forget to hit the Like and Subscribe button if you're catching this live out of Hawaii, but if you're not, if you're catching the playback, whether it's YouTube, the podcast, whatever it may be, check out the description box, follow the show. Catch me each and every other week here on St. Tech, Hawaii, every other Friday at 3 p.m. Hawaii time, and all of the good stuff. But as always, I don't have a lot of time, and I definitely, you guys and girls don't have a lot of time, so we're going to demonstrate it to them. So today's video, as you can see in the description box, we're going to be talking about how Apple Stocks sent shockwaves throughout the market. Tumbling down Apple Stocks from 9% to seeing the market just take the downturn to these crazy volatility. So we're going to talk about how did that happen? Why did that happen? What does that mean for stocks? What does that mean for the stock market? So this is going to be a great episode, great information. Talking about leading indicators, lagging indicators. So sit back, grab the Investors Show Cup, and let's get to it. So the first thing, what is leading indicators? Remember, if you are new to this show, you probably haven't heard me speak about leading indicator versus lagging indicators. Leading indicators are things that happen before things happen. Let me make sense of that. So this pretty much tells you where a stock is going, where the market is going, and things like that. So for Prime Minister, let's say in real life, I know I have a crazy metaphor. So I jump from Apple Stock to my metaphors. But it's like saying, hey, if a person does this, this is what's most likely to happen next. Hey, he has a bad diet. By having a bad diet, it may lead to XYZ. This is called leading indicators. These are what lead to other things. I don't know if that's a good example, but hopefully that kind of makes sense. But that's what a leading indicator is. How is stock market wise and important? Leading indicators will tell you what is going to happen to a company, a security, or whatever it is, maybe happening next. For Prime Example, for a company, if I want to tell how well a company is doing, I can tell what are their factory orders. For Prime Example, if I own the factory, and I look at my order sheet come in, I look at how much a company is ordering, that means if they're boosted up inventory, that means that they are projecting to sale. So I can look at a company's inventory, if they're keeping a very, very low inventory or something, that means the demand is not too high. They're not projecting to sale. And if they're not projecting to sale, that can hurt profits. And if it hurts profits, that can hurt revenue. If it hurts revenue, it's going to hurt the price of the potential stock. Because what makes the stock go up and down? Not because of this current value. Because if you look at the books, you can see they have more money or have more revenue than a Tesla. But it's not off of what's going on currently. It's what's projected out of the future of what that company is projected to be. Now for Example, every quarter, well before I jump into every quarter, so you guys kind of see how a leading indicator is very important because it's going to tell us what has the potential to happen, right? It's like getting that warning light on your car, you know, the oil light comes on, or the check engine light comes on. That's a leading indicator that something is wrong going to do it. And if you don't take care that the car could break down, that's a good example of a leading indicator. So that's why that's important. That's going to be very important on this episode and how Apple sends shock waves throughout the entire market. So this is what happens. Every quarter, a company releases this earnings statement. It's quarterly earnings. Pretty much when you buy a stock, you are invested. Just like you own a home, you may be a part of a homeowner's association, or you may be part of a club. You pay fees to a club. A club has a meeting. The meeting tells you what the club has done or what the stock has done and what it's planning on doing in the future. So when Tim Cook, they released their first quarter earnings for January 2018, 2019. Happy New Year, by the way, first show for 2019. They gave out some guidance. You know, they had to tell what's going on with the company, what happened, and they had to project for the next quarter, next year, or whatever the case may be. One of the things that they cited was weak sales coming from China. They said, hey, the economy is doing weak in China, right? When the economy is doing weak in China, when people don't have jobs, they don't do what? They don't buy. And if people don't buy, that hurts companies' profits. If it hurts companies' profits, it hurts companies' revenue. If companies' revenue slow, then stock price drops. So it issued out saying, hey, you know, do the China, you know, that's a major market force with seeing slow sales of our phones. Not that the actual phones have sales that slow for that quarter. It was saying, look at our factory orders. See there? They did an indicator. They had slow factory orders from China, right? So when you have slow factory orders, wow, what caused that decline? Because of a weak economy in China. That's what Tim took cited, which is the Apple CEO of being looking out into the future. We see potentially slow sales. We have potentially slow inventory of factory orders coming from China. So, you know, this could be a sign of things to come out, you know, slow our revenue in the future, hurt the stock in the future. This would lead to a shareholder's no. Now, Prince, good. How does that affect the whole market? What does Apple have to do with the whole market? Excuse me, I had to do a little sip of water. My mom gets dry a lot of pee and dimmer. But the thing about it is, now you have to open up the question of, this says what drives the market fear and greed? When someone says this, what is this called? Or what is this cause? Fear. People start to get scared. Whoa, slow sales. Slow sales come out. Hey, Apple could be having some issues going in the future. And why is Apple so important? What happened to, what record did Apple break in 2018 in August? They broke the first trillion-dollar company, Market Value, right? The first trillion-dollar company, Market Value. So, this is a huge deal. The first trillion-dollar Market Value company ever in the history of the United States, right? So, this is our first trillion-dollar company. And it's talking about, it's having slow sales. Coming out of China, China has a weak economy. The first thing people start to say is, well, who are Apple suppliers? For Prime Minister, who are the people that rely upon Apple? If Apple has slow sales, it starts to decline. It's a domino effect. Who are the suppliers? So, guess what? If I'm the person who makes the battery for Apple, just for simplicity purposes, and they sell less phones, that means that I'm going to make less batteries. That means that my company is expected. So, you're doing that with people that make the battery, maybe the cell parts, maybe whatever the case, they may be making, right? And whatever they are making, they are, all these companies are affected. Then they say, well, if Apple is excited of having slow sales in China, who else relies on sales out of China? So, any company, there are a lot of companies in America that are required, not required, but that are relied upon sales out of China. Now, so that means that everybody is scared. Wow, you know, if you're selling battery, they rely on sales out of China. This company relies on sales out of China. So, that means that everybody's practice is going to be slowly. So, that causes fear, that causes people to start to sell, which results into a shockwave. Not only just because of Apple, but now you have to cope with what's going around the world. What is President Trump administration has been saying lately? What have been the big thing you probably heard me speak about in the past? Tears, tears, tears. Trade war, trade war, trade war. In the trade war, our biggest competitor was who? China, right? We was going tick-to-tack, tick-to-tack, back and forth. So, America says, hey, we're going to impose a tax on anything that you bring into our borders. They said, wait, we're going to attack on you, go and tick-to-tack, right? So, now, we're already in the trade war. We already have these tears going on. Now, here comes China, but here comes Apple saying they're experiencing slow sales out of China. Oh, my goodness. Things are starting to get very scary. Also, what happened in October? I like to call it re-in October. 2018, the stock market was performing nice going on, making a nice run. October comes around. The full quarter of the year wipes away all the profits from 2018. So, everything is already fearful anyway when you look at 2018. Create all this volatility coming into the market in 2018, at the end of 2018. Now, you've caught that on top of the trade wars that were going on with China. Then you have the largest company in America, first trillion-dollar company in August of 2018, saying they're experiencing, they're projecting slow sales to come out of China. Now, people look at the tears. It created a fear throughout the market. This fear created Apple to drop 9%. They were announcing information Wednesday afternoon, I think that was January 3rd, if I'm not mistaken. Don't shoot me if I got it wrong. After the market, they closed. When they did this, this is shock waves throughout Asian markets, which has been a different time zone. They market started to decline because, hey, Apple said they have slow sales. Everybody's relied upon sales, right? People don't like salesmen, but salesmen will drive companies. Companies need to sell something in order to have some type of revenue. So what ended up happening was, what ended up happening with this situation was, with China flowing out and creating these shock waves throughout the market, it caused the next day when the market opened up on Thursday for Apple, the stock dropped from $157 down to $144. Wiping away $67 billion worth of market capitalization. Market capitalization goes with how many shares and how many outstanding, how many shares plus pounds, how many, the price of the stock. So the price of the stock drops, so does market capitalization. So it went from being this big $20 company to a little bit up under $680 million, right? And Google was able to become, take its place. So now we have this, this is the first time you've seen a slow, in order since 2014. First time they ever seen a slow come in 2014, and this is the first time the CEO said this during a conference call since 2007, right? So when you see this, this calls the Dow Jones drop. You see the S&P 500 drop 2%, the NASDAQ drop over 2%, and the Dow Jones, all the major United States indexes drop 2%, right? So also when you heard the Trump administration come on national television and blatantly say, hey, guess what? We are, you know, this is not the only company that's going to see a decline in sales. This is what the Trump administration said. You know, we have, so they're in a trade war. You know, they're trying to renegotiate trade because America, we spend more than we make. I mean, we export, we import more things than we export. That's called a deficit. It's like spending more money than you make. You're operating on a deficit, right? So now you've got to cope this. Let's add in the fans. Don't offend them. What does the fans do? Their job is to deliver government interest rates. So now they're talking about the interest rates. We've been in an interest rate society where the interest rates have slowly climbed. They just raised interest rates, I think, 2.25 in December. As interest rates go up, that means that money becomes harder to borrow. If it's a more expensive to borrow. On top of that, the dollar is pretty strong. When the dollar is strong, that's good for us. That's good for when anybody here in America, if we go to China to buy something with a strong dollar, that's good for us. But if you live in China and you're trying to buy things from America, not so good. So the strong dollar is also a downside to your economy because that's a little sales, if that makes sense, right? So all these things come together. All these things, the working parts of the economy come together. You have a standard one in. You have the US dollar one in. You have interest rates. You have projected sales. You have tears. You have politics. All wrapped into a nice big bubble. And this is what calls shock waves throughout the whole stock market on yesterday. Now, today, on Friday, the fifth, if I'm not mistaken, the market had a great rebound due to a strong job support. So due to this very strong job support, the market rebounded 700 or something points. Apple regained 4% of its value, market value. So even though it financially has happened to the company, they just projected out what was going to happen. They created shock waves. So now we ended up very strong, which is a lot of volatility going up and down, up and down. But we ended up, at the end of the day, we finished the week very strong. So that's how it happened. So people were sitting back looking and saying, wow, Apple tears it down. The market is all red, tears and interest rates. But it can start with one little company with the CEO of a major, major, major company saying, hey, I'm seeing a slow sales or whatnot. Then you start to look at all the companies that are affiliated with that. Well, who would allow Apple for their profits? It would be, for a prime example, if I lost my job, I can't afford to pay rent. I can't afford to pay rent. Or if I can't afford my mortgage, that means the banks don't get their money. The banks don't get their money. That caused the financial situation for them. But that don't affect those on and on and on. So that's why it's very key when someone sees something and looking at other things. Those are leading indicators, right? The lagging indicators, the lagging indicators are things that are like side effects of what happens. It's the strong dollar is a lagging indicator. The interest rates are lagging indicators, right? The interest rate can be used as a leading indicator too, because it can tell you what it's about to come, but there's no guarantee. So those are the things you need to look at that we just talked about. This had to happen. The CEO had came out of Apple since 2000. I'm just doing a recap. The leading indicator of U.S. factory data, which led to Cook's speaks about this. You know, Google overtakes Apple in market capitalization. They did the forecast. They downgraded themselves. This is the floor's orders since 2014. We've got the tariffs in the place. Also, the strong jot reports. And also, not only the strong jot reports, also the strong jot reports. And the China and the United States are supposed to sit down and talk about their tariffs on Monday, which I think is going to be a very volatile day. And volatile means that the stock market will run up and down. Prince, how can I profit from this? You can profit from this short term. It's looking for volatility. VIX, the VIX index, which measures volatility. It increases volatility in the market because depending on how that trade talks is interpreted, it can also market go up and down, anything like that. So that's one. Two, you're going to be talking about... Second thing is, you're looking at a company like Apple, which as of yet financially nothing has happened. They just put out a downgrade in their forecast. This could be a great sale, right? This could be a great sale. The stock dropped off 9%. If the stock just returned back to where it was, you earned 10% automatically. Plus, it pays dividends. Plus, it's a strong financial company. But you can look at taking advantage of a sale, looking at getting earned some, buying some Apple stock, lowering the downside. You could, you know, the forecast could be true because it's something that Jeff Bezos, I lead with this, from what Jeff Bezos said. He said, hey, one day Amazon will go bankrupt and disappear. He said, big, large companies last for about 30 years. They don't last for hundreds of years. So when you're a big company, nobody... Amazon is saying they're not too big sales. Who else can say that, right? So, you know, that's what people are looking at. But that's always a risk. But anyway, that is my time. That's today's episode about how Apple stock costs the shop way throughout the market. A very current thing that's going on. And what's caused the rebound. We talked about what caused that big drop. How to take it to the stock market. Please, that you can take advantage of it. And how the economics of machine ties with the play with interest rates, the strong dollar, median indicators, what the factory data means. Why don't people pay attention to it? And how does that affect your money? But as always, until the next video, podcast, cartoons, or whatever else you see me do, crazy around the globe. Peace, be safe, I'm out, and thank you.