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Well howdy there folks and welcome into this video here today so uh videos uh like this are every once in a while i just got to talk to the camera and uh tell you guys about a few things to kind of warn you about some stuff that’s going on in the market some things i’m seeing um that i think are definitely worth referencing as somebody that’s been doing this for

A long time so you don’t kind of get caught into a few traps that are going on out there that are kind of being set up so yeah i hope you guys enjoy this as always okay um first thing i just i thought i would address this because it has been something i’ve seen the last few months and i want to make sure you guys don’t fall into this this kind of i call it a time

Suck trap essentially um and it’s also just a bad place to to be mentally is one i see a lot of hate on stocks right now and i see this across a wide range of stocks in like forms or or discord chats or other places where people will come in to hate on a stock and they’re not even along that stock or short that stock they actually have no position but the reason

This goes on sometimes and this is not the first time i’ve seen this in this this sort of market the reason this goes on sometimes is sometimes other folks stocks are doing bad let’s say at a given moment right and so it is it some people it makes them feel better to come in and hate on another stock right and try to bring the people down that that own that other

Stock out there right it’s natural it’s it’s human it’s human stuff right like like some people feel good by bringing another stock down or trying to talk it down and things like that even though they have no long position or short position and it’s much more likely to happen if you’ve been going through a tough time with with other stocks right it’s much easier to

Come out and hate on another stock and make fun of that stock especially if that stock’s doing good at a given period and your stocks haven’t been doing good right and so don’t fall into that trap it’s just that that’s one of those things it’s just it’s a it’s a waste your time and you don’t want to get to that mental place because you end up just kind of becoming

That that mentality of like being a hater right and uh if you don’t have a long or short position like you know and you don’t have constructive points to bring out around that stock there’s just no point in in being there right um that’s just you know that’s not that’s not the right place to be okay second thing i want to tell people about and this is kind of more

Of a warning on something i’m seeing is be careful of a new potential fomo cycle building all right so a new potential fomo cycle building is when you have all let’s say a lot of a lot of stocks uh maybe more speculative ones or whatever right assets in general starting to go up and up and up right and you can start to have a new kind of fomo cycle build which is

A fomo cycle meaning you know fear of missing out right and you can and it seems like the most recent one we were kind of have starting to brew here this was one that’s led by wall street this time okay the last time it was led by actually retail money let’s be very clear a lot of these moves were seen this is being led by wall street this time and they’re they’re

Creating this fomo cycle either on purpose or just by chance okay and it’s up to you for you know whatever your opinion is around whatever that is right but what we know is retail’s actually been very very low on funds very very low on funds when it comes to uh having money to to purchase stocks in other you know let’s call it assets right and so all of a sudden

All this money comes out of nowhere all of a sudden like in in a matter of a snap of fingers the past week or so into a lot of these things and it’s like whoa where did all this money come from that’s that’s big money coming in okay and so you got to be um kind of a little wary of what’s going on there because as soon as that big money decides to get out they’re

Out right they’re cashing and so um you know just just kind of you know think about these things right and this kind of leads me into uh point number three is remember your long-term valuation and stock price goals when it comes to a stock all right and the reason this is very very important in this sort of market especially if you start to have a new fomo cycle

Build is when stocks start going up a lot you know let’s say you all send you up 20 on a position or 30 percent or whatever right you start buying a stock and also and it’s not big and they’re like whoa okay it’s very easy to take short term profits in that stock and the reason being is we’ve been through a tough market and if all of a sudden you start making a

Little bit of money you’re very likely to also just cash right and be like okay i just better take my profit and run remember your long-term price targets if you think a stock’s gonna let’s say you think a stock’s gonna double over the next five years right and so you think it’s gonna go up at least 100 over the next five years and this is because you think it’s

Going to this net income over the next five years and you think it should command you know this type of pe in five years okay right and let’s say the stock goes up 15 very quickly well 15 percent is not very much if you expect that stock to double over the next three years or five years or something like that right and so it’s very important to keep these these


Targets in mind so you don’t get caught into the trap of selling a stock way early it’s also important to remember you don’t get caught up in that fomo cycle if let’s say you expect a stock to double over the next let’s say three years right and then the stock doubles already right well shoot now it’s not as much of an opportunity unless the actual fundamentals

Are immensely better than what you had anticipated going in maybe that’s a sign that maybe it’s time to cash a little bit and take a little profits or something like that right so always bring it back to where you expect the valuation to go the stock price to go and don’t get caught up into whatever is going on the market positive or negative because you can’t

You can’t like you can’t have it both ways right if you’re also going to care about what the market narrative is when stocks are going up then you also have to care about when it goes goes down and then if it next time it goes down you have to end up paying selling and selling at really bad prices because usually you get into a peak fear that’s when the market’s

At its lowest right peak fear happens when markets have slower stocks are being devastated so you can’t have it both ways so don’t even get tied up into that all right remember your your your what your expectations are right number four the fourth thing i want to talk about here is during a melt up scenario that’s a great time to cash up okay if you think about

Melt up think about cash up so melt up meaning if you also you have all assets going up let’s say bitcoins going up and ethereum and cryptos in general and let’s say meme stocks and a bunch of other things you know just maybe the whole market in general just all financial assets just also start going up and let’s say they go on a three month run six month run 12

Month run whatever right and they’re just flying you know and it seems like wow we’re back to the the good days again we’re actually making money and we’re making a lot of money all right so during those melt-up periods uh what i personally like to do is i like to cash up a little more it doesn’t mean i’m not going to buy stocks at all because there could still

Be very undervalued stocks out there right but in a in a melt up scenario i’m more likely to cash up and the reason this is important when you’re in a hot market right which i wouldn’t call this in a hot market yet however we have the potential to get into a hot market if you know trends like we saw today continue on next thing you know you’re going to be in a hot

Market right and so if also you get in a hot market and you get in a melt-up scenario those are sorts of time periods where i like to a little bit cash up and so to start to build out a cash position and what we found right especially for a lot of retail folks that just got in the market last two or three years what a lot of those folks found is they weren’t really

Ready to buy the dip right we’ve gotten almost every retail stock out there got slashed between 60 and 90 percent we’ve seen great companies even go down like the pay pals and the metas and the netflixs and companies like that and amazon stock didn’t do anything for over a year and a half and you saw this play out and a lot of stocks get hammered meanwhile a lot

Of people didn’t have funds to buy the dip because they didn’t cash up right they didn’t cash up going into that and they were just buying super heavy as stocks were flying to all-time highs 52-week highs and those sorts of things when you get into a melt-up scenario that’s one of the very few opportunities that you can actually a little bit cash up right and so

That’s something i like to do and once again it doesn’t mean i won’t buy a stocks at all because at the other day if i still if let’s say there’s a stock that’s at five dollars a share right and that stock goes to seven dollars but i expect that stock to go to thirty dollars over the next five years based upon what i have their net income going to what i think they

Could command for a pe in five years from now and those sorts of things right i still have to take advantage of that deal i still have to buy that stock and that’s a very very important thing just because the market’s going up at the period of time you know if if there’s deals i got to take advantage of those deals now for me personally i wouldn’t mind at all if we

Got into some sort of melt-up scenario where a lot of these stocks started to climb of course you know if they stay down i’ll just continue to buy the dip and that’s always the plan right but i wouldn’t mind if we did get any any type of melt-up scenario the reason being is if you know me i’ve been buying like insane from about december through march i’ve just been

A buying beast right and so i don’t have uh you know hardly any cash position now at this point in time because i’ve been buying the dip like really really buying the dip and so i’m in a scenario where i wouldn’t mind at all if we had a melt up and i got to cash up a little bit for you know a bit here that would be that would be uh welcome i can call it that but

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If not it’s it’s one of those things i’ll just continue to buy and buy throughout the year right um and that’s the important part to always be in a position of power right you always want to have more income than you do expenses every month so you can always buy the dip right and always be in that sort of position where you can take advantage of deals in the market

And when you get a melt up scenario where everything starts to fly high that’s when you can back off a little bit of the buying you can start to cash up and start to build a little bit of a cash position because you know those melt-up scenarios only last for so long you can get in like a three-month six-month twelve-month scenario where you kind of have a melt up

In the market right and a lot of stocks go on some epic runs but you know that ends that’s the thing like every time it ends and the next thing you know stocks chill for you know a a period of time it could be three months six months could be a year could be two years depending upon the different stock right we’ve seen stu you know stocks like tesla go on like a

Five six year chill out period we’ve seen stocks like you know amazon amazon was basically around the same price it is today you know like 20 months ago like that’s insane to just think about right that’s been on a long chill out period and so it’s important to kind of think about okay next thing i want to talk about is since the market has been let’s call it

Um you know risk off a lot of people haven’t been wanting to take risks for a bit here until maybe very very recently uh dividend stocks have gotten back to the forefront right and a lot of people are focused on dividend stocks now why is that why often people care about dividend stocks well if all of a sudden you’re not making any money from your stocks right and

You own let’s say growth stocks and they’re not they’re not the stock price isn’t going up the stock price is going down and let’s say on top of that you also maybe don’t have any extra funds to invest well shoot you start thinking about man look at those dividend stocks they’ve been performing pretty dang good and on top of that you can always have money coming

Into your accounts every three months right because mostly great dividend stocks they pay out you know dividend money every three months to you and so you start thinking oh boy no i fully understand that you know a dividend stocks can be very alluring for that reason okay but you know there’s some very important factors to remember here when you’re thinking about

Dividend stocks one is not all dividend stocks are created equal okay uh there’s going to be certain dividend stocks that are trash or garbage right and there’s going to be certain dividend stocks that are truly great but you got to remember dividend stocks come with risk too and i’ve been in many dividend stocks in the past that got hammered and i’ve seen a lot

Of other folks get into some dividend stocks in the past that have gotten absolutely hammered just because it pays a dividend doesn’t mean it’s a safe stock okay this is very important these business models can get disrupted as well all right now one of the good things with dividend stocks this is a good and a bad thing is they don’t usually take a lot of risk with

Their business so they’re not likely to start up some costly project that you know is going to take five years to get the payoff or something like that like a growth company might right but with the downside with that is those business models or will be ripe for disruption over time it’s just it’s like a kind of a ticking time bomb where they’re just they’re right

For disruption it’s just a matter of time before they start getting disrupted and if they don’t have that sort of company culture to innovate to grow then there’s they’re stuck with their feet in the sand essentially just kind of like oh let’s hope you know we can defend off everybody for as long as possible so we can kind of keep our little monopoly on this

Industry or the sector or whatever it is going and so you’ve got to understand dividend stocks come come with risk as well a very important thing to think about if you’re considering dividend stocks and always remember this is payout ratio in terms of you know if a company has a dollar of eps how much of that dollar are they paying out in the form of dividends and

Sometimes these dividend companies will pay more listeners they’ll pay more in their dividends then what they have coming in eps right which and do you think that’s a very responsible thing do you think that makes the the company necessarily a safe company no it doesn’t it doesn’t make it a safe company right and so you know and you never know what can also come

And disrupt one of these dividend stocks for instance i’ll give you a good example of a stock probably my worst or second worst stock i ever had in my life okay was carnival cruise line ccl i started buying that rate before a once in a hundred year pandemic now ccl was a great dividend payer i can’t remember the yield that one paid me but i think it was like four

Percent or something like that right um their balance sheet was in a plenty good situation for them at that moment in time right they were consistently profitable it was a profit machine people loved going on cruises it was you know it was a beautiful business model and a beautiful dividend stock right and then also in a 100 year pandemic comes out of nowhere in


The stock falls 70 percent if not more than 70 percent and think about that for a moment it was one of those things like you i even went into that and i thought about a recession scenario right i thought well if we get in a recession there’s still going to be a certain amount of people that want to take cruises company can probably still make a small profit at

Least yeah their earnings will go down but they’ll be okay the stock would get hit in a major recession but it wouldn’t be that bad and then here you are also you get a once in a hundred year you know health situation around the globe and also in their business is completely shut down the stock falls 70 plus percent and so don’t ever think that can happen to other

Companies that are dividend stocks some of these companies are not very responsible they’re not responsible to their shareholders they’re just there to pay out the biggest number possible and to attract an investor base that just wants the biggest dividend possible but think about it this way right let’s say you hold a dividend stock over a three year span let’s

Say for instance and let’s say you make uh you know a certain a pretty good yield on your money each year and let’s say over that that you know three year span you you make 10 on your money from dividends right awesome well what if the stock fell 15 over those three years right the company started to kind of deteriorate it’s not commanding the same pes they used to

Command because their revenues are maybe are starting to fall they may be their income’s starting to fall their margins are starting to fall because they’re being disrupted right well ultimately that was still a horrible investment decision because now you’re down 15 percent over a three a three year span on the stock price just because you made 10 on dividends

Over there three years you’re still down in the stock over a three-year span right and so this is something important to remember that people don’t think about and sometimes people get caught into the trap when it comes to dividend stocks is like oh they see like a let’s say a seven percent yield or ten percent yield they’re like oh my gosh you make seven percent a

Year in this stock or ten percent just for holding it a lot of times those same stocks will fall seven to ten percent of that year as well and think about it this way even if the stock price uh doesn’t move you basically just kept up with the market right because the market you can usually expect to go up like eight percent per year roughly right and so remember

You know the higher the yield is especially once you get over a five percent yield definitely be very very careful of those lastly when it comes to dividend stocks remember there’s been a lot of money right that has flooded into dividend stocks over the past six months or so as the market got rough where do people like to hide out they like to hide in big tech a

Lot of the bigger companies in general and a lot of the dividend plays right and so that puts all their valuations up and you might say well you know this is this is a this is a good place to hide out well the market doesn’t stay in those risk off periods forever and so all of a sudden you can end up in a situation where those stocks actually start to underperform

The market underperform the benchmarks actually quite substantially and meanwhile growth stocks kind of go on a flying race generally speaking when the market is in a a hot period it’s going through a melt up it’s usually when you might want to think about at least flocking a little bit of money to not just cash but also some dividend place and then when the

Market is risk off and no one wants to take risk anymore in the market that is usually the time that you want to say hmm now’s the time i need to be in somewhere where the growth plays because those are usually the ones that are already beaten down if no one wants to take risks grow stocks are the ones that are sold off the heaviest and so do keep that in mind in

The future because you’re going to go through these time periods where the market’s melting up that’s the time you need to maybe lay off a little bit of the gross stocks go a little heavier to divs in cash and then you’re going to have these periods where the whole market just is getting obliterated that’s where you want to be a little more aggressive actually and

It goes against conventional thinking because conventional thinking says oh my gosh you know everybody’s scared i need to be in dividend stocks in a safe place when actually you know if everybody’s already scared you’re likely close to a bottom which is going to rebound and the growth stocks are what rebounds first right and usually what you conventional thinking

Would think is everybody’s excited there’s fomo in the market all these stocks are going to 52 week highs all-time highs i got to be in the the grow stocks i got to be in the you know the riskier place and that’s actually the time you need to dial back because if everybody’s already in that mindset of just pure excitement and euphoria you know you’re just a snap

Of fingers away from that baby flipping okay so yeah i just said a bunch of stuff there that need to be said i hope you guys enjoyed this always hope you got some good value out of a video like this let me know in the comment section if you did and other than that guys much love as always thanks for joining me don’t forget to subscribe and have a great day

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THIS NEEDS TO BE SAID.. By Financial Education

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