This is one of those videos you save in your phone to watch every time we are in a vicious stock market. This video is not only relevant to stocks now but will be in future years also.
Folks ho smokers the stock market has been canceled yes it has been cancelled indeed and um today we’re just going to talk a lot okay i don’t have a lot of slides prepped for today uh we just have a lot to talk about in this market i think there’s a lot of questions on people’s minds about what’s going on in the stock market should these stocks be cancelled those
Sorts of things if you look it’s just vicious i mean it’s it’s 52 week low after 52 week low after 52 week low for a lot of these stocks honest 52 week low paypal 52 week low square stock 52-week low teledoc 52-week low russell’s getting close to a 52-week low chef a 52-week low all-time low palantir is right around a 52-week low it’s just stock after stock after
Stock are at 52 week low she’s getting absolutely decimated right anything that is seen as any bit of risk i mean leaving paypal like paypal like are you kidding me like really them you know some of these stocks you can make arguments because they’re younger businesses you could say data but some of these companies it’s just like it’s unbelievable really like
Some of these businesses have been established for 10 20 30 years in our beast business models and um they’re they’re getting put down right so i want to make six core points in this video here today for everybody because i think this is a type of video that is really needed in this sort of market right now where uh it’s just stock after stock at 52 week low and
It’s just devastation i’m sure there’s a lot of people feeling down and out even a lot of the buyers in the market who are usually enthusiastic about a deal in the market right and to see stock prices low even a lot of them have been beaten down and so this is i just think uh the kind of video that’s needed i hope you guys enjoy it as always okay first thing we
Got to talk about do these stocks really deserve to be cancelled so let’s ask ourselves that do these stocks deserve to be canceled kind of like cancel culture right and every once in a while you see somebody got canceled and it’s like did they really do something so egregious that they deserve to be canceled well in most of these companies uh situations they
Don’t deserve to be cancelled at all they actually are great companies that have unbelievable growth prospects over the next five ten years and so in many of these stocks situations they don’t deserve to be canceled they don’t deserve to be put down to a new 52-week low after new 52-week low afternoon 52-week low but that’s what the market does sometimes in the
Short term that’s what happens it happens all the time every other year practically there’s some something crazy happens in the market and it’s always blamed on a different thing oh it’s the fed oh it’s a presidential election oh it’s valuations oh it’s um you know something happened in china it’s always something oh it’s tariffs like i’ve been doing this for 14
Years there’s always something to take stocks down to some irrational prices and cancel the whole stock market right it it never fails and right now it’s the fed in interest rates everybody knows think about this for a moment everybody knows the fed’s going to raise interest rates everybody’s known this so maybe they do it in extra time or maybe they don’t have
We ever thought about that and just because they do it an extra quarter point or a half a point or whatever that doesn’t that doesn’t mean all of a sudden oh my gosh send all stocks down 40 50 percent it’s not the way this works at all and so i’ve been doing this for 14 years and i’ve just seen it time and time again it never fails there’s there’s going to be a
New reason and a new reason then stocks will boom and then there’ll be some sort of new reason again right it’s what consistently happens and usually it just doesn’t make sense to cancel stocks but it happens okay second thing i want to talk about is will these stocks scale revenues and profits over the next three five years in a in a big in a meaningful way right
And i think that’s very important to think about if you’re investing in any of these companies is when you’re buying a stock you’re buying an underlying company and you’ve got to ask yourself what’s going to happen with that underlying company every single underlying company that i’m investing in i believe their revenues in their their profitability is going to
Increase rapidly over the next three to five years and you’ve got to find the type of companies that you believe are going to rapidly increase their their net income and their revenue over the next three to five years and if you’re in those sorts of companies at the end of the day especially when valuations are getting pushed down and you’re seeing new 52-week
Low after new 52-week low that’s usually some of the most interesting times to possibly buy out there but that’s very very important because you got to understand the market’s going to do whatever the market’s going to do in the short term and if the market wants to you know crash all stocks to new 52 below after new 52 week low like so many stocks it’s gonna do
It and you can’t really get it’s just it is what it is but at the end of the day you gotta ask yourself what’s going on with the underlying business what’s going on with the fundamentals of that business and didn’t if i bought a stock and it’s down 30 did the fundamentals of that business really just get 30 percent worse or they have 30 percent less revenue going
In the future and 30 percent less net income going in the future and those sorts of things it’s very very important to uh you know ask yourself that question number three will money return to these growth stocks i think this is the next a really important thing right so as i as i told you i’ve been doing this for 14 years and what i’ve seen consistently is the
Majority of time money loves to be in growth stocks you go through these time periods when um you know growth stocks get get pushed out and it happens every once in a while and then don’t just hope these happen all the time because it you know they’re far and few between but they do happen and every once in a while like people are like i don’t want anything to
Do with the growth stocks investors like i don’t want anything to do with the growth stocks and that only lasts so long the fact is let’s think about it for a moment right what do you want to own do you want to own coca-cola and pepsi or do you want to own um you know the drink company that’s got 40 growth for the next five 10 years right everybody wants to be
At the end of the day in the short term maybe people want to flood the pepsi in in coca-cola but the other day people really want to be in that growth stock and the money will rotate back over that growth stock and it’s kind of like a ticking time bomb where it’s just like tick tick tick and it’s just a matter of time before the money rotates back over the grow
Stocks because the fact is that’s where people want to be no one wants to be hiding out in a few of the biggest companies for all of eternity that’s just the bottom line they go through these little time periods where money rotates to maybe dividend stocks or some of the value stocks but the fact is that’s not where money likes to be money likes to be in growth
Stocks that’s that’s just that’s the way it goes because the growth stocks are what gives you that big roi potential right in times of a scary market a volatile market where folks are scared i don’t know what’s the fed going to do but in the short term all sudden money can can go to the the value stocks and everybody wants to be in those right when i got started
In the stock market in 2008 2009 there was a time period when uh you know i what were the stocks i was buying my first couple years of being in the market kimberly clark can agra foods walmart uh you know like the most basic companies walgreens stock like the most basic simple companies because at the end of the day that was what was seen as safe in that sort of
Volatile market and so those are the stocks i got into obviously this you know looking back on hindsight what i should have been doing is buying gross stocks because guess what in 2008 2009 you know there was 52 week low after 52 week low for growth stocks and a lot of those growth stocks ended up going to you know 2x 3x 4x in the matter of a 12-month span after
The market bottomed in march of 2009. it was insane and meanwhile i was hiding out in in what was seen as the safety stocks making very little roi and then just watched all these uh you know growth stocks go up massively in in their terms of their value right so the end of the day keep in mind if you own a great growth business and that company just keeps growing
Year after year the money’s gonna flood into it i’ve never seen it not i i’ve yet in my 14 years of being in the stock market i’ve yet to see a company put up impressive numbers year after year after year and just have insane growth and like you know money doesn’t flood in that stock it never fails they all the money always comes in and next thing you know that
Stock doubles up triples up quadruples up and it’s like it happens quick that’s the thing that i think a lot of folks don’t understand in the market things happen really fast you go from an ultra bullish market to an ultra bearish market a snap of fingers you go from an ultra bearish market to a bullish market and snap of fingers it happens really quick and and
It happens so quick that people even forget it happened they’re like what oh i remember that there’s so many there’s so many reasons that the stocks went down over the last 14 years since i’ve been doing this i can’t even remember them all like there’s been so many corrections in there there’s been so many times where also you know gross stocks got thrown out for
A period or value stocks or whatever right it never fails uh fourth thing i want to bring up here is a lot of folks are wondering is it the perfect time to buy right is that the time to buy stocks right now and i would answer that question like this so in in terms of how i think is there ever a perfect time to buy stocks i think that’s a fair question is there
Ever a perfect time to buy stocks and i will tell you the answer as somebody that’s been doing this 14 years no there’s never ever a perfect time to buy stocks there’s always reasons why you shouldn’t buy stocks always and there always will be if it’s not the fed and what the fed might do it’s a presidential election if it’s not a presidential election it’s
Whatever’s going on in china if it’s not whatever is going on in china it’s valuations if it’s not valuations it’s this thing nothing it’s always something there’s never been a time period since i’ve been in the market where it’s been like the perfect time there’s always things to worry about year in and year out regardless of what the fed does or what the fed
Doesn’t do always things there’s never a perfect time to buy the way i look at it is very very simple are there companies out there that i love and i think are going to go up a ton over the next three five years and if there are and there’s great prices i buy those dang stocks and that’s the bottom line i don’t get caught up into all the the oh what’s this that
Because at the end of the day if you’re getting caught up in all that then you’re trying to do the cardinal sin which every great investor truly great investor who had unbelievable track records over a 10 20 30 year span what does every single one of them say don’t time the market every single one of them there’s not one that you would you respect there’s not one
That says time the market not one every single one says don’t time the market and if you want to go against that you’re going against all the greatest investors in what they’ve said throughout history at the end of the day the greatest investors look at it like this is this stock a great deal and going to make me a ton of money over the next five years and if
It is they buy the stock and if it’s not then they don’t buy the stock and they get caught up in a it doesn’t make any sense it literally doesn’t make any sense if you if you’re buying into a great company that’s going to thrive in the future years that’s what it’s going to do and to waste time trying to time it out oh well maybe i’ll wait till june to buy some
Stocks or there could be something happening so maybe i’ll wait till april or you’re just you’re playing a game of time in the market and maybe you get lucky maybe you get lucky and you time it out perfectly but i can tell you 99.9 percent of the time you’re not going to time it out perfectly i i don’t know i had a friend who he uh sold out of all his stocks the
First week of march toward the end of the first week of march of 2020 because ronin was starting to go crazy it was all some talk about potentially shutdown. right and for about the first two weeks he looked like a genius he timed out you know in terms of he got out and stocks kept going down and then after that stock started bouncing back and bouncing back and
Bouncing back and he ended up missing out on six figures of gains in that situation six figures of gains because he had sold out of his stocks trying to time it out and be like well i’ll buy back in when it looks a little safer that’s just not the way you play this game at the end of the day if there’s great companies at great prices and you’re seeing 52 week lows
All over the place and you’re like this company’s gonna go to this valuation over the coming years that’s when you buy the day in stocks there will never ever i can promise you there will never ever be a perfect time to buy stocks there will always be reasons on why stocks could go down why stocks could have a hard time okay so fourth thing fifth thing i want to
Talk about here is uh irrationality in the market now this is a point i touched on in a video recently and essentially if we go back a year ago we were in a very irrational market in january of 2021 a lot of stocks trading at ridiculous valuations you know just valuations getting pushed up to the moon it didn’t matter what your business was didn’t matter what you
Were doing your valuation was getting pushed to the move and and what was you know the riskier the stock the more speculative the stock it seemed like the better it was doing and you know it was it was for some folks it was frustrating because we were looking at it and i was like man some of these businesses don’t even have a business model but yet their stocks
Are outperforming even great companies right well them that market got very irrational and here we are in january of 2022 and we’re on the flip side of that where the market’s now very irrational and it doesn’t matter what your business is doing doesn’t matter what you got going on you’re getting pushed a 52-week low after a 52-week low right now i went through all
These companies right and i could have had i could add a hundred companies up here that are truly great companies and it doesn’t matter what teledoc’s doing over the next five years right now in this market they just want to send it to a new 52-week low it doesn’t matter that honest business is in a great spot for the next five years doesn’t matter what’s going on
With paypal and the fact that venmo has a huge deal coming with with uh amazon and all that doesn’t matter square it doesn’t matter the chef has got two doors coming now into in target stores doesn’t matter what palantir is doing none of that matters in this sort of market which means you’re irrational when no longer the fundamentals of businesses matter that’s
When you know you’re in an irrational market and last year at this time we were in a rational market and this year at this time here we are in another irrational market when you know you’re in it you’re you’re always in an irrational market when it doesn’t matter about the business model it’s just buy it up or sell it down and that’s the sort of market we’re in
Just like we were in last year and the thing you got to ask yourself is how long does this last something we do know is the market does not stay irrational for very long it doesn’t just as you know everybody thought stocks were to continue to go to moon and the riskier the stock the better off it was right back last year at this time we knew that wasn’t going to
Last forever just as what’s going on right now this won’t last forever i can promise you that and at the end of the day also what’s going on with these companies what’s going on with the business model start to matter again and oh they just grew revenues 22 oh they just grew revenue 32 percent they’re expected to do dot number over the next year and their gross
Margins expect to go this number and all of a sudden the conference calls start mattering again and the business and the underlying fundamentals start mattering again and all these things that get thrown out in this sort of market they all start to matter again because you know why that’s what actually matters in the market all this other crap is just a bunch
Of other crap out there okay sixth point i want to make here is i think it’s a very very important one because i think some folks see low stock prices and they think it means danger when all along it literally means you’re taking less risk in a stock if apple let’s say you know use apple because that’s the biggest company in the world i think everybody can wrap
Their their head around apple right if apple was 50 above its current price that it’s at right now or 50 below its current price and nothing had changed in the business model what is safer for me i hope everybody watching this says well if it was 50 lower that’s a lot safer but in a lot of people’s minds the fact that a stock price is high it signals to them for
Whatever reason it’s just human psychology where we’re very flawed humans right a lot of people see a high stock price and they think that means good that means safe when all along that means danger and you’re setting yourself up for a lot more risk the more my stocks go up over time the more scared i get the lower my stocks go over a period of time the more uh
Enthusiastic i get it right the safer i feel in the market i feel extremely safe buying honest at six dollars i would not feel very safe buying honest at sixty dollars i would feel scared uh out of my mind if honest with sixty dollars well i already already sold out of stock but buying at six dollars i feel extremely safe also it means your gains are just going to
Be a lot bigger in the future if a stock continues to go up and this is something i actually explained with tesla in the past right tesla you can’t expect the type of returns we’ve had in tesla over the last few years you can’t expect those in the future right because tesla’s pulled a lot of those gains forward now and so to get to go from a 1 trillion now to a 5
Trillion that’s a that’s a pretty difficult process versus going from a 40 billion dollar mark cap or so when i was buying in to a 1 trillion mark cap right so you you start kind of if you’re pulling returns forward if your stock goes up more and more and right now if stocks are at new 52 we glow after new 52-week low you’re not pulling any returns forward and now
Your your chance of getting a very very high roi just went up exponentially okay and so i think these are the important things to rem to remind yourself in this sort of marketing come back to this video this is one you want to save put in your notes on your phone or something like that and whenever the market gets bad in the future whether that’s in a week from
Now a month from now a year from now or five years from now come back to this sort of video because this is one that i think these points are going to be relevant it doesn’t matter what type of market you’re in but when stocks go in a new 52-week low after new 52-week low these are these are the things that are actually important to keep in mind okay much love as
Always guys hope you enjoyed this stay focused out there and have a great day
Transcribed from video
THE STOCK MARKET JUST GOT CANCELLED By Financial Education