🤔 Company Insiders Aren't Buying

Together with Moby

Good morning,

A quick breakdown — in case you just don’t have the time.

1. ⭐ Households have 48% of their financial assets in stocks.

2. ⭐ The President of Shopify spoke w/ us about entrepreneurship.

3. ⭐ Insider stock purchases of S&P 500 execs are around a 13-year low.

4. ⭐ The bull market over the last 24-months has returned +60%.

5. ⭐ Register for our free Q4 Market Forecast webinar by clicking here!

6. ⭐ Join 475 other podcast listeners inside the Rich Habits Network!

Market Overview

Chart of the Week

U.S. households now hold 48% of their assets in equities (stocks).

That’s right. According to the Federal Reserve and Goldman Sachs, U.S. households now have 48% of their financial assets in equities, and only just 15% towards cash.

You could look at this chart in a few different ways. The first way is “holy smokes… a crash is a certainty!” But, the other way is to be a bit more realistic.

Will there be drawbacks and red days? Certainly. However — earnings season is upon us. If companies continue to show that their operating profits, free cash flow, and forward-looking guidance are improving — it’s hard for anyone to argue for a major crash.

If you want to look at it from a different angle, it could be reinforcing the broad-based strength of the U.S. stock market. As we’ll cover in a different section, we’ve officially crossed the 2-year mark of this most recent bull market — and the returns are par for the course.

Together with Moby

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In Case You Missed It…

👉 Episode 86: Building a $100B Company (Shopify) w/ Harley Finkelstein

In this week’s episode of the Rich Habits podcast (linked here) — Robert and Austin were joined by the President of Shopify, Harley Finkelstein.

They discussed the following:

1. Increasing A Businesses’ Chances of Success — One of the ways that Shopify empowers entrepreneurs to be successful is by doing the heavy-lifting when it comes to distribution. Shopify has become the second largest “check-out point” on the internet in the United States. Other value-adds include Shopify Capital for funding, Shopify Markets for expansion, or Shopify Audiences for finding look-alike audiences across social media.

2. The Future of Retail — Shopify President Harley Finkelstein stated that in the future, retail won’t be online or offline — it’s going to be everywhere. He gave an example about augmented reality (AR) being sparsely used in commerce back in 2018, but now it’s built into all of our phones and used by many major retailers. Shopify is determined to stay ahead of the curve when it comes to where and how people purchase online.

3. The Mindset of an Entrepreneur — The cornerstone of entrepreneurship is optimism. If you’re not a positive thinker, it’s much less likely to work out. Other key traits include having a desire for experimentation (instead of fearing it) and becoming a good storyteller.

This was easily one of our favorite Rich Habits episodes ever. Learning directly from an incredible business leader like Harley is hopefully something you all enjoy! Shoutout to Harley and his team for coordinating with us — and give him a follow on Instagram!

👉 Q&A: Paying for Infertility Treatments, Living at Home at 28, & Launching a Consumer Product

Here’s a link to the Q&A episode that was posted this morning.

We answered questions from the following people: Amirreza, Anna, Christian, Lisa, Olivia, and Omar. The Rich Habits Podcast is available on Spotify, Apple, iHeart, YouTube, and wherever else you get your content.

Robert’s Callout

S&P 500 Executives aren’t buying their own stock.

According to Sentiment Trader, corporate executives among S&P 500 firms have some of the least open market purchases in 13 years.

While the market rallies, I’m curious to see if insiders are really being the “smart money” here. Lack of insider buying can often mean there’s a lack of confidence in future performance — so I felt a need to bring this up.

Something else to consider is the fact that after a +60% total return in the S&P 500 over the last 24-months, these executives are likely already “over-allocated” in the stocks of their own companies. Just because you aren’t buying up more of your own company’s shares does not necessarily mean that you are bearish.

As we’ve seen with companies like Apple, BlackRock, Delta, Lululemon and countless others — there’s been PLENTY of stock buybacks this year and plenty of executives that have bought more of their own stock.

Austin’s Callout

Believe it or not — this bull market has actually been very normal so far.

You’ve heard us talk about how the S&P 500 is currently having its best year since 2000 — and from a year-to-date perspective, this is true.

However, this bull market (which started in October of 2022) is now celebrating its second birthday. Since inception, the S&P 500 has increased by +60%. When compared to the +58% average of S&P 500 bull markets in their first two years — that really doesn’t seem that crazy!

I share this to give you perspective. Stocks have been ripping, and the natural reaction from many retail investors is to assume that they will come right back down. Maybe they will, but at the moment this bull market continues to experience broad-based strength.

Bull markets are all vastly different, and making investment decisions entirely based off of history is never smart. You should not view the market today and think that this is an incredibly rare moment in time — as history tells us these returns are normal!

The Rich Habits Radar

• 👉 Sphere will build its second location in Abu Dhabi, capital of the U.A.E.

• 👉 ASML had a disappointing earnings leak, leading to a semiconductor sell-off.

• 👉 Amazon & Google made dueling nuclear investments to power data centers.

• 👉 A random biotech stock rose over +3,000% in five days. Meme madness?

• 👉 Walgreens will close 1,200+ of its U.S. storefronts (14% of total).

• 👉 Boeing will raise up to $25B via shares or debt to improve balance sheet.

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Disclaimer: This is not financial advice or a recommendation for any investment. The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.