🤑 The Truth About Viral Money Advice

What’s on the Menu 🍴

Bulls vs. Bears…

The timeless battle.

That’s what today is all about, with a slight dash of realistic advice around financial influencers!

• The Truth About Viral Money Advice 🤑

• The Bull Case For The Rest of 2024 🐮

• A Thrilling Earnings Season 😲

Today’s newsletter is a 5 minute read.

The Truth About Viral Money Advice 🤑

I've got a bone to pick with some of the financial "advice" floating around on TikTok.

As a certified financial planner and author of Do This With Your Money, I can't help but react to some of the absurd tips people are sharing.

Let's set the record straight on what not to do with your money.

Can You Write Off a Private Chef?

Some TikTok influencer claimed that by hosting business meetings every night and having a private chef cook for their family and friends, they could write off the expense.

H&R Block was quick to comment, warning viewers not to try this at home.

And they're right.

The IRS is pretty clear: to be deductible, a business expense must be both ordinary and necessary.

Do you really think having a private chef come in every day is ordinary and necessary for your business?

Spoiler alert: it’s not.

Sure, maybe a one-off special dinner for actual clients might pass, but daily gourmet meals for your inner circle? The IRS will see right through that.

Create a Millionaire Child?

Next, I stumbled upon a video claiming you can make your kid a millionaire by investing $1,000 at birth and $850 every month thereafter.

Sounds great in theory, but let’s be real: how many of us have an extra $850 lying around each month, especially with childcare costs and other expenses?

For high-net-worth individuals, this might be feasible, but for most families, it’s just not realistic.

If you do have the means, great! But make sure you're using the right accounts, like custodial accounts, and understand the nuances involved.

Day Trading Riches - Or a Fraud?

Then there's the young day trader boasting about making $8,000 in two hours, claiming a 54% return.

It’s classic: show off your wins and conveniently ignore the losses.

Day trading can be a rollercoaster, and for every big win, there are plenty of losses that don’t get the spotlight.

It’s a skill that takes time to develop, and it’s certainly not the get-rich-quick scheme some make it out to be.

Key Takeaways

So, what’s the takeaway?

Be skeptical of flashy financial advice on social media. There’s no substitute for sound financial planning and realistic, actionable steps.

If you want to learn more about managing your money wisely, grab a copy of my book, Do This With Your Money.

Trust me, it’s a much better investment than following dubious TikTok tips.

The Bull Case For The Rest of 2024 🐮

Fear is everywhere in market sentiment right now.

Scroll through social media, and you’ll see endless discussions about the bear case.

But here at the Daily Dough, we like to look at the other side of the coin. That’s why today, we’re diving into the bull case for the rest of 2024.

Let's explore why the glass might be half full after all:

Disinflation: The Silent Hero

We've been seeing persistent disinflation, which is like a slow but steady pressure release valve for the economy.

Prices aren't rising as fast, meaning that the purchasing power of our dollars isn't being eroded as quickly.

This stability can help fuel consumer confidence and spending, two critical components for sustained economic growth.

The Economy: A Resilient Beast

Despite the naysayers, the economy has shown remarkable resilience.

It’s like a heavyweight boxer taking hits but still standing strong. Various sectors are adapting and evolving, proving their dynamic nature.

We're not just surviving; we're thriving in many areas. This adaptability keeps the gears of the economic engine well-oiled and moving forward.

Consumers: The Unsung Warriors

Consumers have been remarkably resilient and dynamic.

Even with inflationary pressures and other economic headwinds, spending has remained robust.

This indicates a strong underlying demand that can support businesses and drive further growth. When people are willing to spend, it keeps the economic cycle in motion.

Labor Market: Rock Solid

The labor market continues to defy expectations. With unemployment rates still near historic lows and job creation on the rise, people have money to spend.

A strong labor market is the backbone of economic growth, providing stability and confidence for households across the country.

Markets: On the Up and Up

Both stocks and Bitcoin are in an uptrend.

This momentum indicates growing investor confidence and the potential for continued gains.

When the markets are bullish, it often signals a broader economic optimism that can spur further investment and growth.

Rising Forward Earnings

Forward earnings estimates are on the rise. This is a clear sign that businesses are not just surviving but are expected to thrive in the coming months.

Rising earnings expectations often lead to increased stock prices as investors anticipate higher future profits.

The Bullish Outlook

Given these factors, we remain bullish for the rest of 2024.

Disinflation is easing pressures, the economy and consumers are showing resilience, and the labor market is strong.

Softening helps keep growth sustainable, while market trends and rising earnings forecasts paint a positive picture for the future.

A Thrilling Earnings Season 😲

Why do we care about earnings reporting season in stocks?

Here are two major reasons:

1. We get new information on the fundamental financial trends at individual companies

AND

2. Individual stocks often have HUGE moves in response to earnings

Right now, we’re only 2.5 weeks into the season, but we’ve seen some serious volatility on both the downside and upside:

Here’s a brief recap on some of the bigger post-earnings moves thus far:

RECENT EARNINGS WINNERS

Spotify (ticker: SPOT): the music streaming service posted better than expected profit margins as cost cutting plus 20% annual revenue growth led to a $500 million positive swing in free cash flow versus last year. The stock gapped up 12% on the news

ServiceNow (ticker: NOW): the IT SAAS company’s stock jumped 13% after earnings beat expectations and revenue rose 22% versus last year. NOW also raised its annual EPS guidance

Coursera (ticker: COUR): this beaten up edtech stock that we highlighted here in the Daily Dough back in June delivered better than expected growth in profits, added new AI content partners, and bought back $30 million of stock in Q2. The stock rose 20% after hours on the news

Other Notable Winners: DHR, THC, ENPH, VKTX

RECENT EARNINGS LOSERS

Lamb Weston (ticker: LW): the french fry producer delivered lower than expected profits and lowered earnings guidance for 2024 as it raised prices too aggressively which led to market share loss. The stock gapped down more than 30% after earnings

Ford (ticker: F): the automaker reported 3% higher revenue but slightly lower profit in Q2 due to higher warranty costs, an issue that could linger through this year. The stock responded with a drop of 18%

Dexcom (ticker: DXCM): the maker of glucose monitors for diabetics saw its stock plummet almost 40% after reporting disappointing guidance. Even though revenue grew 15% in the quarter, the company is currently losing market share to cheaper products from competitor Abbott Labs

Other Notable Losers: TSLA, UPS, ALGN, EW

Stay tuned because next week is the busiest week of Q2 earnings season!

Food For Thought 🧠

"In the business world, the rearview mirror is always clearer than the windshield.”
- Warren Buffett

DISCLAIMER: We are not investment advisors, and this content is for educational purposes only. We don’t offer financial, legal, or tax advice. Nothing we say is a recommendation to buy or sell any assets. Trading and investing are extremely risky, so please be careful and do your own research.