IM SCARED! *Stocks Overvalued* (Debt out of Control)…

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I’m scared i’m really scared there’s a lot of stuff going on right now that is frightening me a lot of valuations are starting to get absurd in the stock market we have credit card loans that are out of whack we have auto loans that are out of whack we have so much stuff going on that i believe is going to start really affecting us in 2018-2019 as you know i’ve been

On record many times on this channel that i do not believe there will be a recession in 2017 i’m sticking by that i do not believe the o’berry recession in 2017 in the united states of america but the behavior i’m seeing across the board in in in real life like what i see with my own eyes and then when i look at numbers they’re correlating and that’s when things

Really scare me when what i’m seeing in real life is happening and what i’m seeing on the number side is correlating with that there’s so much we got to get into some of this guys so let’s talk about stocks valuations first off you know i’ve been on record times saying we need a stock market correction we need the ten fifteen percent down move in the stock market

To get fairly valued i believe we’re at the highest end of fair value if not the slight end of overvalued at this point you look at some stocks right let’s just look at some simple big companies right coca-cola is trading at a trailing p/e of 32 next company should be trading under 20 trailing p/e that is absurd to be trading out of 32 you look at pepsi so trane

That are 25 trailing p/e so a company that should be trading that in eighteen seventeen this is not a big growth company at all this is a soda water that’s been around for eight million years colgate palmolive like where’s their business going this a very steady business they have a chilling p of over 27 right now i look at these big companies and i’m like these

These companies should not be trading at these valuations these are the type of valuations that growth companies should be trading at and what we have is growth companies trading at absurdly ridiculous teams you look at the amazon’s of the world netflix in the world the tehsils of the world they have unbelievably out-of-your-mind valuations on it right now if so we

Won’t even touch on those that’s just like an given those type of companies but let’s look at this chart here this is the s&p p/e ratios this is goes back to the last five years look at how the p/e ratios are rising and rising you go back for about 2012 2011 of time we’re under a 15 and then we popped up popped up and look at this chart it’s just getting higher

And higher and now we’re well into the low 20s at this point and i look at this and i say and that by the way that charts not even accurate as far as it’s not even all the way up until today’s date so we would actually be the highest of any of the last five years at this chart all the way went up to literally what we’re when this video is posted and i’m looking at

This i’m saying okay stocks are getting you know like i said i think we’re at the higher highest end of fair value if not into the starting getting into that low range overvalued or we had an extreme over valuation like we were in the tech bubble in 2004 some of you guys who might not be around there was a tech bubble in 2000 it got real ugly i remembered i wasn’t

Participating in the market back then but i do remember you know seeing it on tv and whatnot and all these stocks that were so high just got killed or we have something like that absolutely not we’re not as something like that that’s a ridiculous over valuation situation but are we at a low type over value situation i could definitely make a case based upon what

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Companies are trading at for pe ratios guys it’s really absurd but that’s not the only thing that worries me you know stocks is just one part of the game the part that really worries me is the part that has to go do with the consumers the stock market that goes up and down doesn’t really affect the economy overall not really too much government do i worry about

The the debt and those kinds of things a little bit but that still isn’t what worries me what drives the economy in the united states of america in every developed country out there in consumers and consumers taking out debt if we wiped out all the debt as far as if we said you can’t use your credit card tomorrow if you can’t take out a home loan on our loan if

We did that tomorrow the entire economy would collapse in such a rate it would be way worse than the great depression like way worse than any time in history would just decimate the economy overnight on you and me going and spending money on stuff we can’t really afford in taking out debt that is how the us economy works in most developed countries work so let’s

Look at some numbers here so we’ll talk about credit cards first off before we even get into the numbers i’m going to show you here i can tell you in this where i look at like you know what’s going on in my real life like what am i seeing not just what the numbers are and we’ll look at the numbers in a second but like what am i seeing i’m seeing a mailbox i go to

Every single day full of credit card offers from every single company out there you’ve been pretty fruit for this credit card you’ve been pre-approved for this credit card come take out this credit card here’s a lot of line of credit blah blah blah i walk out to the and i just throw these away boom boom boom boom it’s like i stole the whole trashcan out by the

Mailbox full of them it is all absurd my wife gets these credit card offers the pre-approved credit card offers she doesn’t even have a job and they don’t know that and they don’t care it’s ridiculous my wife just got whatever credit cards just up the balance so instead of her maxing out at $3,000 spending which she doesn’t spend any money on the credit cards

Thank goodness anymore but instead of being able to spend $3,000 on this credit card it just got next to $10,000 she can spend now she doesn’t even have a job she doesn’t have an income she has no right to like have an increase like that they’re doing no due diligence anymore another one of her credit cards just got bumped from 3,000 to 5,000 dollars she’s able

To spend now she has no job like there’s no reason i should be getting credit card offers like crazy like i took the last what three years two to three years off from working i just started my businesses last year like the i was and i hardly made any money last year so and now i’m finally making money but they have no clue that i’m making any money they’re just

Judging off of what my you know was making when i applied for loans back in 2014 2013 things like that and i’m just like they’re doing nodi diligence they’re just giving money to whoever the hell they want to give money to and i see it in my my own life i see people getting aligned to credit credit cards that oh my gosh it’s risky guys but let’s look at not just what

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I’m seeing i realize let’s look at some of these numbers here so indebted households today have credit car balances averaging over $16,000 are you kidding me just shy of 2008 tie which now we’re going in 2017 we’re probably higher than 2008 i this is based on upon 2016 and total household debt including mortgages has ballooned to a hundred and thirty-two thousand

Up from eighty eight thousand and two thousand two unbelievable you look at that chart here credit card debt year-over-year it’s literally the highest since it’s been in since 2008 right before the great recession guys it’s it’s just it’s very worrisome when you look at that you look at the breakdown here and this this is just makes me sick to bridge a gap many

Americans increasingly rely on credit cards one of the most expensive ways to borrow currently the average credit card interest rate is eighteen point seven six percent on believably sad in the average household pays a total of twelve hundred ninety two dollars in credit card interest per year ridiculous credit cards that it comes for seven hundred and forty seven

Billion dollars of us consumer debt and that numbers going up this year both me on that mortgage is eight point three five trillion auto loans which we’re going to talk about in a minute one point one four trillion student loans any type of other debt it’s getting ugly guys in this credit card epidemic is bad it’s really bad we see over sixteen thousand dollars the

Average household that is that is mind-blowing to me mind-blowing but unfortunately i already kind of knew that and it just makes me sad and what i’m seeing in real life and what i’m seeing on the numbers they match up there they the credit card companies are just giving money to whoever the hell they want to give money to hoping everybody pays it back on time and

When the hits the fan and some people to start losing their jobs guess what’s not going to get paid the credit cards and they’ve got massive defaults and we’re going to banks go under and it’s going to be a huge financial crisis once again those are good auto loans here americans racking up auto debt last year americans bought more new cars than ever given auto

Sales make up around a fifth of all retail spending 2016 thinner year is being hailed as a sign of the burgeoning consumer confidence across the country look at the chart here guys look at the chart nowhere hasn’t been even close as far as the amount of auto loan money taken out ever on that chart and this goes back to all the way 2003 we’re at 1.2 trillion dollars

Now and you look at back in let’s see right before the recession started oh 607 we were at about 1.1 just over one trillion dollars back then and now we’re over 1.2 trillion dollars and that numbers going up and i see a situation that i’m just like the auto loans is getting absolutely ridiculous and this is one of the reasons i can’t go out there and buy out any

Automakers not only do they have the huge threat of tesla coming over the coming years right that’s like the biggest threat to come an auto industry in a long time but then you look at the amount of auto loan debt and what’s going to happen when some people start losing their jobs and the dominoes start falling the wrong way whenever that does happen maybe it’s

2018 maybe is 2019 maybe it’s not 2020 guess what’s going to happen people are going to start defaulting on those auto loans and they’re going to there’s going to be a massive amount of autos out there that are available for very cheap which then why would anybody buy a new auto when you buy one two years old that’s $15,000 cheaper than the new one at that point

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The last piece of the puzzle here that scares me is the amount of people making too easy of money right now whenever the money is just flowing it just seems like everybody’s just making money any anybody that knows anything about investing putting money anywhere just about seems like almost everybody i know is making money right now from stocks from doing this i

Know somebody that a friend of a friend who’s like put a thousand bucks in some speculative like bitcoin thing that is kind of like a scam like penny stock right they put a thousand bucks in that now they have thirty thousand dollars and i’m like like why like there’s some going on that’s so bad right now guys when the money’s dna too easy that’s when you win the

Like warren buffett’s great saying goes warren buffett’s like most famous saying of them all be fearful when others are greedy and right now a lot of people are greedy and be greedy when others are fearful and it really really scares me when everybody just seems to be making it too easy money i get comments i mean a million comments on this channel you know that

Are nice you know they’re people are glad i’m helping them out and those kinds of things but they say things like you know i need ten percent my very first month is that good like that’s so you good like that’s too good you shouldn’t be able to make that kind of money every month like that should be like your first year return if you’re getting on your first month

It just proves that we’re kind of in such a goldilocks period and then i see things that like the other day that happen when the jobs numbers came out 138 thousand non-farm payroll versus 185 thousand expected and the markets went up that stuff scares me guys that stuff scares me we’re wheezing when bad news is good news and good news is great news it’s scary it’s

Really scary for me so for all those reasons i’m very scared about how all this stuff is going to play out in 2018 and going forward i’m sticking by my prediction i do not believe there’ll be a recession in 2017 but man you know sooner or later the dominoes are going to start falling and when the dominoes do start falling it gets worse and worse and worse because

When somebody lose their job because somebody else will lose their job and then the dominoes start flowing the other way so we’ll see how this plays out over time we need a stock market correction in my opinion that would definitely help things out and then from there we need consumers to you know cut it off with this credit card stuff and auto loans and i don’t

See that stopping anytime until something bad happens and when that bad thing does happen it’s going to get ugly guys it’s kind of really ugly so we’re just going to keep you know i’ll keep updated on this you know over three to six months and kind of give you my opinion on how i’m feeling about things and based upon what i’m seeing in real life and based upon

The numbers hope you guys enjoy the stay if you just came across this channel you may want to subscribe we talk personal finance unfortunately most americans have no clue of personal finance we talk entrepreneurship most people have no clue about that stock market we talk about that and you guys know a little bit about stock market so i’m happy about that thank

You for watching guys and have a great day

Transcribed from video
IM SCARED! *Stocks Overvalued* (Debt out of Control)… By Financial Education

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