Felix Prehn, who started Goat Academy, explains his thoughts on the stock market. He says that recent world events might not be as important for the market as many people believe. He explains that even with ongoing conflicts in the Middle East, the US stock market remains largely unaffected. This is because most oil and gas from the Gulf region is shipped to Asia, not the United States or Europe. As a result, disruptions in the region have little direct impact on US stocks.
Prehn points out that Wall Street fund managers are currently “underweight” US stocks. In simple terms, being underweight means that these managers have invested less in US stocks than usual. This is surprising because the US is the world’s largest and most innovative economy. Prehn believes that as the year goes on, these managers will realize that US stocks are performing better than those in other countries. Tax cuts are coming soon for big US companies. Felix Prehn thinks this will make fund managers want to invest more money in US stocks. This could make stock prices go up.
Another important topic Prehn covers is the recent dispute between two health companies, HIMSS and Novo. Novo has accused HIMSS of using unsafe ingredients and misleading marketing. HIMSS responded strongly, saying they will not compromise their standards or be pressured by outside companies. Prehn notes that the market did not react much to this news, showing that investors may not see it as a major issue.
Prehn also warns investors about a large, planned sale of US stocks by pension funds at the end of the month. Pension funds often have a set mix of stocks and bonds. When the stock market rises, they may need to sell some stocks to keep their balance. This can lead to big sales, even when the market is doing well. Prehn explains that this strategy can sometimes hurt long-term returns, as it forces funds to sell winners too early.
Finally, Prehn highlights that many large US companies are about to enter a “buyback blackout” period. This means they are not allowed to buy back their own shares before announcing earnings. Buybacks can help support stock prices, so when they pause, there may be less upward pressure on the market.
Felix Prehn’s clear and simple explanations help investors understand what is really moving the market. He shows that while headlines can be dramatic, it is often the actions of big investors and companies that matter most.
For more about Felix Prehn and his educational work, visit the Felix PrehnGoat Academy page.