is the stock market a GIANT SCAM?

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Is the stock market one big giant scam that sucks up our money in takes it away that’s what we’re talking about here today guys so many people i find every time the markets get bad every time the markets have weakness i find a lot of people will see comments in the comment section the stock markets a scam don’t invest in the stock market things like that and as

Someone that’s been in the stock market now for ten years i’ve seen a lot of people come and i’ve seen a lot of people go in this game and i kind of want to share my perspective on this kind of give you the four things from my perspective it is so much is so much more complicated that the stock market’s a scam or the stock market isn’t a scam it’s so much more

Complicated than that there’s some truth to that and there are some false things about that right it’s something i think is very interesting is it seems like every time the stock market gets weak i’ll see people you know saying things like the stock market’s a scam donor that’s the stock market i remember when i first started the stock market looking into in 2008

And actually start buying stocks in 2009 a lot of people told me don’t invest in stock markets is a big scam look at how much it’s gone down people have lost the you know x amount of money things like that and i heard all that type of stuff and every time the market is bad every time the markets weak you hear that but when the market is going up and up and up and

Up and up you don’t tend to hear so much of that so i just thought that’s very interesting so i want to go through all four points i hope you guys enjoy this as always hit a thumbs up leave me a comment down there and let’s get into this point number one i want to make about this whole is the stock market a scam do one very very simple thing okay one very simple

Thing buy an index fund and don’t touch that money don’t worry about that money for 20 30 40 years down the road and what you will find is that you made a massive profit on your money you took a thousand dollars and you put into it index fund ten thousand dollars a hundred thousand dollars you just simply put it into an index fund something that just tracks the

S&p 500 and what you will find is you will have made a great profit over a 20 30 40 years span a massive profit you go back any time period over the plat last hundred plus years and you will have find that if you bought an index fund at any time even at times when the market was peaking over a 20 30 40 year span you would have still have made a massive massive

Profit on your money even at times when the market had seemed like it had peaked or something like that okay it is a very very simple game warren buffett did a great a great presentation at his last annual conference that it basically does with berkshire hathaway warren buffett what he went ahead and did he said he bought his first stock in 1942 that was a long

Long time ago warren buffett’s like nearly 90 years old now right he bought his first stock in 1942 he said here’s a real simple thing if you had ten thousand dollars saved away in 1942 and you just bought an index fund and you never touch that money you’ve never worried about what was going on you just put of that money in an index fund in the stock market some

Of that tracked the s&p 500 or the dow 30 or something like that you that $10,000 in today’s dollars would be worth well over 50 million dollars ten thousand into well over 50 million from the time warren buffett bought his first stock tell now and think about all the drama that happened you could world war two was going on you had the cuban missile crisis

You had you know the civil rights movement you had the kennedy assassination you had tons of different stock market crashes 1987 you had the great recession of 2008 you had you know just a year or two ago a member in the north korea versus trump thing and it was like oh my gosh could we have nukes going all over the place you could think about a million different

Dramatic things that have happened over that time period and $10,000 would have turned into over 51 million and think about how petty the things are we worry about nowadays compared to those big monumental things that have happened in the past it’s a very very simple game if you don’t you remember anything from this video other than this one point by an index fund

Stick the money in there 20 34 years are gonna make a massive profit that’s getting number two boeing number two i want to make about is a stock market a scam is if some people try to pick individual stocks which is what i do and that’s what i love to do i love researching companies i love picking individual stocks and trying to outperform the markets overall okay

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And a lot of people like to try to do that and a lot of people fail and so they feel like the stock market’s a scam well here’s the facts okay the three main reasons people fail at picking stocks and why they either underperform the markets for you know year after year which everybody can underperform the market in a short period of time but these people that might

Actually pick stocks might underperform for a 10 or 20 year span because they’re not doing three things or they might actually lose money and here’s what it is okay if you pick stocks you better wore your tail off you better do major major work you want to try to outperform the markets you have to put in massive amounts of work you have to fully understand companies

I see time after time people buy into stocks they do not fully understand that they don’t even fully understand in the business model of how that company makes money and they expect to outperform the stock market they / they expect to outperform hedge fund managers or mutual fund managers or warren buffett or this guy or that guy how would you expect to do that if

You’re not willing to put in massive and massive amounts of work to research a company and fully understand all the competitive threats they’re fully understand the company if you don’t have the work ethic to put in toward picking individual stocks then it’s fine you don’t have to do that just buy an index fund you can still you can still profit plenty of money

Buying an index fund as we just talked about in point one but if you want to actually have the audacity to try to outperform the markets pick your own investments take your you know will your financial life in your own hands that is great but you better understand you’ve got to put in work nothing in this world comes without a lot of work you must understand that

Unless you have rich parents that you inherited a bunch of money from ok you’ve got to put in major work toward anything in life number two you’ve got to focus long term so many times i get people that will buy a stock then they’re trying to be a long-term investor and they’ll trade out that stock constantly or something like that or they worry oh my gosh did you

Hear the big news on cnbc today or bloomberg oh my gosh they said some sort of such-and-such this guy came on then said oh my gosh the markets going down or something i need to sell out my stocks if you’re in this game you’re here especially if you’re trying to be a value investor you better focus long-term in quit trying to you know worry about all the short-term

Stuff it might be fun to talk about but the difference is when it goes from fun to talk about say you’re actually making investment decisions based upon short-term stuff that might be going on or might not be going on that’s when you get yourself into a lot of trouble you have to take massive massive losses and the number three thing is you gotta stay disciplined

In this game it’s a great thing if you have the right strategy okay you couldn’t you couldn’t you know warren buffett could tutor somebody up okay warren buffett arguably the greatest investor ever he could take somebody one-on-one and tutor them and say you need to do this you need to look for stocks that have this and and some most people unfortunately probably

Still wouldn’t even be successful investors probably still wouldn’t even outperform the market or something like that because they are and they’re just can’t say disciplined okay when i look at when i look at my two biggest failures in the stock market over the past you know decade i’ve been the market the two that come up were both undisciplined moves the first

One i got involved with margin in 2015 i started marginally up money investing money that wasn’t even mine and i lost a ridiculous amount of money in a six to nine month span it was insane i got super undisciplined i knew not to do that i got an indiscipline okay and the second thing was there was a stock i bought as a spec stock named gopro and i ended up turning

This into a massive massive investment even though they were losing money and one of my things is i don’t buy stocks that are losing money unless it’s a spec stock and you don’t turn a spec stock which is fine everybody can buy one spec stock it’s a small part of your portfolio some you don’t go ahead and turn that into a massive investment and one of your biggest

Investments and i went ahead and do that so if i look at my two biggest disappointments i’ve had in the stock market both them were because i got undisciplined okay and almost every single person that has not been successful at picking stocks they fall into one of these three categories they don’t stay disciplined and they make you know big mistakes or they don’t

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Focus long-term they get to shut up and caught up and whatever is going on in the short term or they just honestly don’t the work ethic and that’s fine like that one’s easiest you don’t have the work ethic you don’t the passion for actually you know research and companies listen conference calls like just put your money in that’s fine that’s fine point number

Three number three i want to make is actually two different parts the first part is trying to time the market out the second part is letting someone steal your shares okay let’s talk about timing them work it out this is what i see a lot people are like oh i’m gonna buy rate at the bottom oh i haven’t bought stocks yet i’m gonna let it fall all the way down or

Something like that i’ve heard this consistently for pretty much all ten years i’ve been in the stock market i’m not buying in yet because i feel like something might happen in the market and i can get sherriff’s for a lot lower i’m gonna try to time out the market most people never even end up buying stocks in the first place they like to say they’re gonna time

Out the market they never do a thing okay let’s be completely honest about that well you have other people that literally think they can time out the market they can buy and sell all their portfolio all at once and just perfectly time out things let’s be honest about this if warren buffett can’t do this unbelievably successful investors can’t do this how do you

Expect to perfectly time out the market no one has ever in the history of mankind timed out the market perfectly over the long term okay maybe some people have got lucky here and there maybe they felt like older recession was going to come and they happen to sell off all their stocks and go shorter something like that it’s never happened in the history of mankind

Where somebody consistently over time timed out the market perfect got out of the stocks at the perfect time bought in at the perfect time it’s never happened in history maybe it could happen it’s very very very unrealistic like like you have a better chance of winning the powerball like 10 times in your lifetime then then perfectly timing out the market is so

Unrealistic it’s not even funny okay and the second part of this is you let someone steal your shares there were people there were retirees and just different people that were selling off their stocks in 2008-2009 and near the lows of the stock market because they felt like it might get worse and the stocks might go down a lot more they let people steal their shares

Literally sold out of their entire portfolios they sold all their stocks figuring oh you know what it might get worse basically trying to time things out they’d let people steal their shares at the end of the day okay remember every time you go to sell a stock there’s somebody on the other side that’s buying that stock right a lot of people have sold warren buffett

Stocks countless times over the last you know 50 60 plus years that he’s gladly bought up and he made ridiculous profits on and they let him steal those shares from them okay and he voluntarily they voluntarily sold those shares off they voluntarily sold off their portfolios because they thought maybe it could get even worse and they they they are way behind the

Times they sell off a portfolio and guess what somebody just got to steal those shares this is what wall street loves okay there’s a great expression about the stock market the stock market is a place that transfers wealth it transfers wealth from the impatient to the patient it’s as simple as that so it’s a transfer of wealth from people that are very impatient

To people that are patient that’s the bottom line in this game so remember you you sell off all your portfolio because you feel like it might go down you’re basically just voluntarily letting someone steal your shares okay i remember back on friday when the market you know when that massive dip on you know december basically the day before christmas or whatever

That was actually monday i got a lot of comments from people either on youtube or my private stock market membership group that they completely sold out of their portfolios well here now you know the markets dramatically higher than where it was i mean the dow is probably up fifteen hundred points since where was that basically we’re dropped out at the lows that

Day now hopefully you know things get much much worse and they can say all they were geniuses for selling out but unfortunately most times people do that they never even area able to buy back in a lot of people that were selling in 2008-2009 they didn’t start buying back in till like 2012 because that’s when they felt like the economy was actually getting decent

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Again and they could buy back stocks again and that’s just not the way to play this guy’s because guess what happened the stock market went up dramatically from its lows in march of 2009 to over the next two three years and by the time people got back in the markets were already very much elevated and they had missed a ridiculous profit okay that’s what ends up

Happening don’t try to timeout the market don’t let someone steal your shares if you own great shares and a great company that you believe in a ton over the long term don’t let someone steal those shares just because they might go lower because guess what they also might go a lot higher especially if you believe in that company a lot over the long term that’s a

Bottom line let’s get a point number four number four i want to make is if you buy stocks without any care to what the valuation of that stock is you will get a 100% scammed okay you can maybe get lucky a few times by just basically buying a stock and hoping it goes up over time you love you know a stock abc so you buy stock a b and c and you without even looking at

The valuation without caring what the pease at the four p’s at any of that type of stuff what the revenue growth is what the profit growth is you buy this stock okay you might be again get lucky once or twice where you you know like vegas you can maybe hit it once or twice but guess what if you don’t care about valuations you’re not paying attention to valuations

You’re gonna get scammed okay let’s say i went down to a store that sells levi’s jeans and levi’s jeans at that store sell for five hundred dollars and i’m like oh i don’t care about valuation i like levi’s jeans i’m gonna buy this pair of levi’s jeans just what in the end you could say i was scammed for buying levi’s jeans 450 or 500 bucks when you can go at base

Any store out there and buy levi’s for less than 50 bucks right yeah i could say oh i really love those levi’s yeah i really love them but guess what i got scammed in the end because any other store sells them for 50 bucks or less okay that’s a bottom line if you’re gonna just buy stocks without looking at valuations you’re gonna get scammed a lot in this game and

That’s just the way this because in the stock market you what you have is you’re gonna have a massive amount of stocks that are undervalued at any particular time you have a ton of stocks that are way overvalued at a particular time and you’re gonna have a fair amount of stocks that are at a fair valuation that’s you know fair to buy in okay that’s a stock market

Consistently throughout time sometimes there are more stocks overvalued then undervalue sometimes there are way more stocks undervalued and overvalued and that’s just the way it is but if you’re just buying stocks because you like a stock guess what you’re gonna get scammed in this game because sometimes you’re gonna get into a stock that’s way overvalued that’s

Oxy gonna fall dramatically you’re gonna sell for a massive loss or a hold a position that’s down you know 50 60 70 percent or something like that it happens with ipos all the time people get really hyped on an ipo they love some company or some service that came out and they buy into this ipo and we could go you know it’s across a million different companies like

The gopros the fitbit’s the snapchats we go across a million different companies that ip owed somebody loved their product or service and they just fell like a rocket ship down 90 percent from their highs you know right after the ipos or something like that okay so the stock market can be a scam place it also can be a place where you can build up massive amounts

Of wealth the question is what are you doing if you want to buy individual stocks you better have work ethic you better have discipline and you better focus long-term and if you if you don’t just buy an index fund 20 30 40 50 years down the road you’re gonna made a massive profit you won’t have to worry about anything it just depends on how you want to play this

Game it can be a scam place or it can be a place where you build a lot of wealth over time it depends on how you treat it anyways hope you guys enjoy this hit a thumbs up if you did thank you for watching and have a great day share this with somebody you care about

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is the stock market a GIANT SCAM? By Financial Education

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