Do Not Buy Stocks Now | Stock Market Collapse Will Get Worse

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Howdy there folks we’re going to listen to paul tudor jones here i just got done watching this very interesting so paul tudor jones um we’re going to listen to his reasoning but basically in this video this gentleman says that not only should you not be buying stocks right now but basically you shouldn’t be holding stocks okay now this is very very intriguing and

The reason this is really intriguing is first off like who is this guy like why should we even care about kind of his opinion uh paul trudeau jones has a net worth of about seven billion dollars it ran a hedge fund now to to be fair he made a lot of his money it seems back in the 80s okay and it seems like in the 2000s he hasn’t necessarily done great from what i

Could find on him okay but nonetheless the guy’s worth seven billion dollars he’s obviously been the financial markets for a long long time so it’s at least worth kind of hearing what he has to say in regards to this right now when it comes to someone like him uh the reason i like to pay attention these is i like to see what do they say okay and the reason being

Is a lot of times people will try to just like disregard all this and like not even look at it and i i kind of think it can lead to more fear and panic if you keep trying to put this stuff to the side and you’re not at least willing to like hear people like what are you what are you saying here and then you can kind of break it down you realize it’s not as scary

It’s kind of like as a kid you go in a dark room right you go in your bedroom and it’s dark and you’re kind of scared it’s better to just to get over that fear rather than keep like you know pushing it down the road because eventually that comes back to bite you right and so we’ll listen to what he has to say i’ll give my opinion one thing i will say right off the

Top here is when you’re in a bear market which we’re in bear market on the nasdaq and the russell right now a pretty vicious bear market that is right it’s very easy to say don’t hold stock sell stocks it’s kind of like yelling fire when there’s already a fire going on right um these are much harder statements to make when let’s say for instance you’re in a great

Market right and people are making money right it’s like where were a lot of these statements back in october november right and what you’re going to find is these were very few and far between it’s much easier to yell fire when there’s a fire going on versus a situation where you haven’t seen the fire and you’re like i think there’s gonna be a fire essentially okay

Now um like i said the market’s vicious i think everybody knows that right down huge uh you know on this particular day i want to share some thoughts on this um in just a moment here from from my private discord chat let’s listen what he has to say also ftxus thank you for sponsoring today’s video i’m gonna tell you guys a little bit more about ftx a little later

In this video and why you should definitely sign up for ftx alright let’s jump into this you could either be a fly on the wall but maybe more importantly a whisper a fed whisperer what would you be telling jay powell right now oh i’d i’d say looking for look for another job i think this is one of the most challenging periods ahead for the federal reserve board in

Its history and it’s certainly something that we’ve i don’t know if we’ve ever navigated anything like this certainly uh not in your lifetime or becky’s lifetime with the the other codger joe on this group he probably remembers it like i do because i think he’s my age but we’ve just never seen anything like this since the 70s so it’s it’s really uncharted waters

I i like to think of it as a cross hatch ocean you know how normally in the ocean you’ll have one swell that moves one direction occasionally you’ll get a situation where you have one swell moving in one direction and then another swell coming cross hatching it creates this impression of squares in the ocean so imagine trying to navigate that when you’re in a

Boat where you’re dealing with the swell this way and this way and this way and this way and that that’s what we’ve got right now so first off just as you know it sounds like a pretty scare you know what i mean like that’s the best way i could kind of describe his commentary there is pretty scared about uh you know the fed in this whole situation trying to what

Is the the captain of your ship that you’re the captain of it how are you navigating it meaning to the extent that you’re setting up your portfolio to try to get around these swells what are you doing it’s really hard normally i’ve got a lot of very strident ideas on things it’s again it’s really hard i’ll give an example so if you look at how much financial

Conditions index has tightened just in the last month the only other times that it’s tightened this much and just to remind everyone financial conditions index is a composite of the stock market the dollar credit spreads and it’s a very good indicator of the general strength of the overall economy a good proxy for it so it’s moved so much in the last month

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The only other two times i think that exceeded it were in lehman brothers in 2008 as well as in march of 2020 the other time since they began by the way both those times were great opportunities to buy in the market um you know yeah both those times were great times like the fall of 2008 great time to buy in the market market didn’t bottom for a few more months

Do keep that in mind but that was a phenomenal time to buy and obviously march of 2020 was an amazing time to buy stocks too so i’m not saying that like this time is exact same and this is a great time to buy stocks but it is important to remember both those times were i think that index back in 1980 was 81 and 82 uh right after the crash of 80. 80 as the 80s went

On it was a very good decade for stocks evan right after nano right after 87 really good time to buy stocks out of the crash of 87 he just said so that was a really good time to buy stocks uh 9 11 after that um pretty good time to buy stocks you know nasdaq was still a little shaky uh back then but there was a lot of stocks that did really well after that time

Period i think twice in 2002 towards the bottom of the bear market and then three times in 2008 and then march of 2020 during the pandemic so basically every single one of those times is a tremendous time to buy stocks so that that’s important thing that’s why you know paul tudor jones he says something like this right but you gotta understand every single one of

Those times was a great time to buy stocks and in all three in all those situations you just went over you know there were great times by stocks there was a lot of stocks very very discounted so that’s something to keep in mind once again it doesn’t mean this is a great time to buy stocks right now in 2022 but uh every single time he just named dang man you bought

Stocks you made out like a bandit so every one of those instances were all associated with cuts federal reserve board cuts within 24 days on average literally some of them within two or three days now all of a sudden we’ve got the same kind of reaction in the markets which is a clearly a risk off cred spreads have blown out stocks are down 13 percent in the year

The dollars up significantly nasdaq’s down over 22 year to date russell’s down a little less than that but russell and and nasdaq are both bear markets just so everybody knows sb 500 as of today down probably almost 14 year to date so far all that normally has provoked or evoked or a fed response of cutting rates and yet we’re probably on the cusp of 200 basis

Points arises in a race by mid-september so it’s it’s it’s it’s uncharted territories where we’re going and but you do do you look at it hold on let me make a point here so first off you know i would like to take a moment to thank ftx us which is the official crypto partner of the channel for sponsoring today’s video if you have not used ftx us and signed up for

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News out there in the crypto community and there’s always a lot of breaking news out there so the things that many ftx users love about the platform is the fact that you can set up recurring buys so let’s say every two weeks you want to buy a certain amount of a certain cryptocurrency you can do that through ftx so make sure you sign up for ftx check out the pinned

Comment down there and make sure you use my referral code which is holy smokers to get free cryptocurrency when you place trades through the app and make deposits so definitely enjoy that check that out everybody’s assuming like the fed’s going to do certain things uh the fed has said they’re going to adjust as they go along right and so let’s imagine a scenario

Where the rate of increase of inflation starts coming down the fed will adjust to that and they will not be as aggressive um if obviously the rate of of increase of inflation continues to go up and up and up and also we’re at nine percent 10 percent and that’s a different scenario the fed’s going to continue to be more and more aggressive in that scenario so it is

Important to remember that the fed can adjust and this is something powell said yesterday they’re going to continue to adjust they’re going to monitor the situation and at the end of the day the fed’s going to try to do everything in their power to keep employment full right yes they want to bring down inflation but i think inflation is going to take care of itself

Pretty much no matter what as we did we go into the back half of this year um that’s my personal opinion we’ll see obviously how all that plays out but the fed’s a job they want to also you know keep employment obviously in a healthy place as well so that is something i always kind of keep in mind there well and say to yourself that a recession is coming do you

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Say everything’s on sale i got to buy things do you say that i gotta short this market i mean what’s the what i know you say you don’t have a stride in view but you must be telling i mean look clearly you don’t want to own bonds and stocks you start clearly you don’t want to own bonds and stocks he just said um you know so i mean basically that’s a statement of

Like you know you should’ve known bonds and stocks that’s literally what the man just said right first off the timing that’s timing in the market right you know you’re talking about not owning bonds and stocks especially when they’re going through a tough time that’s basically saying you’re trying to to time the market from a perspective of like sell out of stocks

Right it’s a tough thing to do when you’re already in a bear market for the nasdaq right um doesn’t mean it can’t go down more always can always can right and we’ve seen in in some vicious markets where s p ends up falling 30 40 50 and that’s always a possibility right but that’s a tough thing to tell folks to try to time this market out don’t own stocks don’t own

Bonds um you know it’s a very very tough thing and especially in a time period you’re going through where there’s lots of inflation which we all see it right in front of us right so you know when there’s a lot of inflation going your your dollars are being devalued right and so that’s a tough thing you know to say don’t own stocks don’t own bonds you don’t want to

Own those right now it’s like ugh and then that’s also giving kind of the message of like not buying when it’s scary and what we do know is usually you’re going to make out like a bandit over time if you if you essentially buy when there’s a lot of fear in the market and dang there’s a lot of fear in the market we looked at the aai investor sentiment recently last

Week it was among the most bearish we’ve ever seen in history in history okay um you know one of the most bearish times we’ve ever seen and one of the least bullish times we’ve ever seen in the market so these are things to obviously consider that it’s going to be a very very uh a very negative situation for either one of those asset classes right you can’t think

Of a worse macro environment than than where we are right now for financial assets and again one of the reasons i think maybe the biggest differentiator between now and those other periods over the past 40 years is look at the level of overvaluation that we were both in rates as well as as um as stocks so that’s one reason why even with this tightening in financial

Conditions we still the fed still probably has to raise rates to get inflation under control heck we had cpf greater than eight percent maybe it comes down to four percent this year maybe it comes down to three percent if they stay the course and stay tight in 2023 if you’ve got inflation greater than three percent on average your purchasing power declines cuts in

Half in 13 years it’s why uh i wish we could go back to those halcyon days of sub two percent inflation when you didn’t have to worry about the value of your money you didn’t have to worry about what you were doing with regard to pay raises and you didn’t have to worry about a whole pricing a variety of things that all of a sudden become that much more important

In trying to again just have a normal business that you didn’t have that you have to think about when inflation’s three percent and higher and you don’t have to think about when inflation is two percent and under be careful what you asked for mr paul you might just get in next thing you know you got deflation let me pull you up something here for just a moment all

Right what i have you up here because he mentioned about valuations of stocks things like that okay first off i agree with him in the respect of uh you know large cap stocks were obviously massively overvalued and mid cap stocks were massively overvalued and small cap stocks were massively overvalued okay now when it comes to large cap they were mainly overvalued um

Kind of in the beginning part to middle part of 2021 same exact thing with mid caps kind of a little more into the back half of 2020 same thing with small caps okay this is forward p’s now the one thing i will say uh you know and i don’t even think this takes into account today’s drop i think this was as of this morning before the big drop but large caps are in

Line with kind of where you would expect them kind of in the 15 to 18 range mid caps are insanely low right now and small caps are just off the charts low right and so something important to remember is a lot of the let’s call it past overvaluation you saw in the market a lot of that has gone by by now okay and so that’s something important to keep in mind right

And i wrote this for the private stock group um i don’t know maybe an hour ago or a couple hours ago i said i was just doing some thinking about who was hurt most in the market like this i know a lot of folks think about this i’m 32 years old i’m down multi-seven figures in the past seven months that sucks but at the end of the day i’m 32 years old not planning on

Retiring anytime soon i’m happy to buy the dip and the cheaper stocks uh you know uh and the cheaper i buy stocks the more my long-term gains will be i would say the average age in the private groups maybe mid 30s we have some folks that are in their 20s 40s 50s however most are in their 30s from what i have seen the vast majority of you guys aren’t considering

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Retiring for 10 25 years i would say the lower stocks go the more shares you get to buy the more ownership of companies you get the more money you’re going to make long term the folks that are really hurt in a major way are folks that who recently retired or planning on retiring soon think baby boomers they already got hit in the housing crisis 15 years ago think

About it imagine you had a million dollars in a retirement fund at the beginning of this year and you now likely have eight hundred thousand eight hundred and seventy five thousand retirement funds are usually s p 500 and bonds both have been a disaster uh yeah the bond market’s a whole mess that i don’t even get into obviously uh if you are already retired you

Can’t buy the debt since you have zero dollars of income retirees are also usually on fixed income so inflation hits them very hard the only thing those folks have going for them is mainly if you own a home right many of those folks do own a home and real estate’s been really strong if that were to fall you get the trifecta for everybody reading this right now

Remember this time period we’re going through some day you’re going to be near retirement keep this in mind okay and so i just kind of wanted to kind of give those words out there because you know in this sort of market that’s that’s the folks who are really hurt the most okay that’s the folks that are really hurt the most in this sort of market or or folks that

Are in retirement are about to retire and um you know because they can’t buy the dip they can’t buy the dip especially if you’ve already retired and i know there’s a lot of people that have retired early because stocks were doing so good and the market was doing so good and most folks have a lot of their net worth tied up in the market right in real estate as well

So those have done tremendously well but if also you’re taking that away you know that can get pre be pretty vicious pretty fast and for you know those of us that have jobs right and you have more income than expenses you get to buy the dip and you know whether the market dips for another month another three months another six months another nine months another 12

Months another 24 months which is completely unrealistic but you never know okay and in the market you always say you never know right whether whatever time you get to buy this dip for right you get to continue to buy buy buy if you’re retired you don’t have income you can’t literally buy the dip right so you have to just kind of sit there the whole time it goes

On like seeing your account balance go lower and lower and you’re never able to buy cheaper right and so for those of us that are able to be in this situation right we’re able to continue to buy shares buy shares buy shares and however long it goes down for is however long it goes down for and then as the market starts going back up we’re able to buy buy buy as

Well so it works out great for us but for folks that are retired it’s this is this is kind of worst case scenario and especially if you’re close to retirement age you know also when your account balance keeps dropping and dropping and dropping next thing you know you’re like i think i might work a few more years uh you know because the numbers aren’t quite there

Like they were before and so that’s the you know the baby boomers unfortunately are the ones that kind of they they do get hurt the worse in this this whole situation there’s no doubt about it if you’re young it doesn’t matter you get to buy shares for cheaper that’s just the bottom line for for everybody that’s you know under the age of 50 watching this right now

The best thing that could ever happen to you is we go through a a multi-year bear market uh the worst thing that can happen is like stocks just go to the moon and then you’re never able to buy stocks for you know relatively cheap pricing right and right now we obviously have really really cheap pricing on stocks and we could get even cheaper and so i look at it

As you know yeah it sucks you see your account balance down you’re down you know five figures six figures seven figures multi seven figures like me right and a lot of other big investors in the market but at the end of the day it’s just like get to buy more and more shares for cheaper prices and i get to increase my ownership bigger and bigger that’s that is what

It is okay so anyways guys hope you enjoyed this as always let me know your opinion on what paul tudor jones said there love to hear from you guys as always make sure to check out ftx that will be the pin to comment down there and don’t forget to use my referral code which is holy smokers much love and have a great day

Transcribed from video
Do Not Buy Stocks Now | Stock Market Collapse Will Get Worse By Financial Education

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