Stock Market Overvalued. What's next?
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Today we’re talking about the stock market and not just how it is overvalued at the moment based upon the facts, but also we chat about where the stock market could be heading in the next 1-3 years. Many stocks have gone up so dramatically without any good news, just hope.
The Dow Jones industrial average, S&P 500 and Nasdaq are all starting to get close to all-time highs! Especially the Nasdaq! WHAT IS GOING TO HAPPEN NEXT? This is my opinion.
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Well your yesterday I put out a video on financial education to talking about if we are in a stock market bubble and I went through a ton of facts in the course of that video, a ton of statistics exactly what we’re looking at.
And I came to the conclusion that in my opinion based upon all the facts we’re in a very overvalued stock market right now speaking in general terms that does not mean every single stock in the stock market is overvalued. Let me be very clear about that.
But in a general sense, we are significantly overvalued in the stock market in my personal opinion, right now. Okay, the markets up big again today. Okay, up another 357 points, just as prepping this video and I think it did ended actually up even higher than that. By the time I was done prepping this video, okay. T
he stock market is flat out overvalued right now, in my personal opinion. Okay, so the question is, What is next? And that’s what we’re going to get into this video. Do we have a stock market collapse coming?
Do we have like this Do not a market where the market just doesn’t really do much of anything for like, you know, let’s say a one, two, maybe even a three year span? Or do we have a situation where it continues to go up and up and up? And do we get to a place where we actually end up in a stock market bubble.
Which is exactly where we don’t want to be trust me that is no fun. Okay, and now let me address one thing before we even get into this video. Okay, anytime I even remotely suggest the possibility of the stock market being overvalued or speak in any type of negative tone toward the stock market and valuations and things like that.
Okay, you know, 5% of the viewers out there I see the comments like 5% of them be like you’re just a hater of stocks or something like that in and I understand a lot of people don’t like watch my videos religiously.
Like you know, there’s definitely some folks out there that don’t watch every single video out there. Okay, but let me just be very clear, okay. If there’s a person that benefits massively from the stock market going up and up and up and up it is the guy that is recording this video right now.
Okay, yesterday for instance, when I was recording that video yesterday, the public account one of seven of my stock market accounts was up $13,123 yesterday I easily made I don’t know 3040 maybe $50,000 Okay, probably even more than that here today.
As they’re prepping this video. Just one of my stock Mark counts is up $3,382 so add up all the other accounts in Word it’s easily another five figure day from the stock market. Okay, so needless to say I’m kind of like benefiting big time from the stock market going up and up and up.
I’m not just like some hater that just wants to talk negative about stocks like I have the majority of my wealth in stocks. Okay. So you know, go back to wherever you came from on that little bus Okay, at the end of the day, I have a massive personal brand that I have to care about.
I got this channel I got the second channel right, I have my ID with you know, 57,000 followers on there at the end of the day Why do so many people follow me and then like my content because I speak the truth in whatever my truth is.
I speak it out there whether I feel like this stock over here is a great deal. Whether I feel like this stocks not a good deal. I will speak on it. Whether I feel like the stock market is a great deal or an overvalued price.
I will speak my truth and that’s how you truly build a great personal brand. And I will always speak my truth because at the end of the day, the most valuable asset I have personally you take away the stocks you take away all the real estate owned, you take away everything.
The cars, everything, okay, then the day the most valuable asset I have is my personal brand. And I will always speak what I feel is my truth. And that’s the bottom line with that. And if you can’t deal with it, go like go like I’ll wait for you to leave. Okay, peace.
Okay, now for everybody sticking around. Let’s start getting into this. Oh, by the way, just as I prep those few slides, look at the market now. The market now is at 423 points. Okay? s&p 500. Now is at 1.13% NASDAQ now, point five 3%.
You know, it just keeps going up literally as I as I make this video. And as I prep it, it’s absolutely crazy. Okay, so let’s talk a collapse situation. I do not a situation. I’ll keep going up. And I want to talk about that bottom one first, then we’ll get to the other two.
Let’s talk about if a scenario is realistic, where this market continues to go up and up. So first off, a lot of people feel like Well, you can’t be overvalued. You can’t, you know, be approaching any type of stock market bubble if you’re not at a new high, which technically.
If you look at the Dow Jones Industrial Average s&p 500, the NASDAQ we’re not technically at a new all time high right now. And so for that reason, some people are saying, Well, you can’t really be overvalued if you’re not a new height.
Well, keep in mind we’ve just gone through a once in 100 year event that has devastated unemployment rates as devastated GDP that has devastated corporate profits is putting massive companies into bankruptcy and tons of other companies into very hard financial hardship, right.
We’re going through a once in 100 year event. So the fact is, if you’re anywhere remote Post your all time high in a once in 100 year event, that can definitely mean you’re you’re probably pretty dang close to overvalued territory.
Okay, now in terms of thinking, can this go on for longer? Go ahead, let’s go ahead and look back at the NASDAQ. Okay, I want to look at a period, basically about 1996 to about 2004. Okay, and here’s what you’re going to find, you could have started to make a very strong argument that we were starting to reach a bubble territory, or at least a very overvalued.
NASDAQ, back in 1998, you could start making that that, you know, case out there, you can start, you know, putting those points out there, okay. Meanwhile, the stock market kept going up for the next one to two years after you could start making those initial claims of we know, we’re starting to get into bubble territory or very overvalued.
Literally one to two years it took for the market to keep going up, okay. And then from the time where basically the market peak until the time when the market finally bottomed, it was like a three, four year span, okay.
And keep this in mind, from the time where you could have started making a strong case for the NASDAQ being overvalued, back in 98. It took all the way, you know, four or five years before the NASDAQ got undervalued.
Again, I think this is really important to you know, pay attention to if you just think like the market can’t keep going up, the market can keep going up, just flat out even if the markets overvalued.
Even if the market gets into a bubble, literally, the stock market can still keep going up for you know, sometimes months at a time, sometimes a year, even two years. But eventually in the bigger the bubble is eventually it does end.
Okay. That’s just the fact. And the last thing we want is any type of true bubble in the stock market. Because look at this, okay, it took 15 years, 15 years for the NASDAQ to get back to its peak where it was basically around like, like I think was March of 2000 or 99, or sometime around then right 15 years, that is incredible.
And that is the last thing we ever want to see in the stock market. We don’t want to go through a 15 year span, where you know, it takes the market to get back to that place. That’s just that’s just wrong in you know, that is a clear sign that there was a massive.
Massive bubble going on in the market when it takes 15 years to get that asset price back to where it was and to finally go from there. Okay. That’s not what we want to see in the stock market. Okay. And this is a reason why I can’t short stocks.
People say, Well, if you feel the stock markets get into an overvalued place, why don’t you just start shorting stocks like crazy? I can’t short stocks man, what am I going to do, you know, short a bunch of stocks and then you know, get absolutely destroyed because the market keeps going up?
I mean, you don’t know when this is gonna end just flat out just because the markets overvalued doesn’t mean I can go out there and short a bunch of stocks. Here’s a there’s a great saying, okay, Warren Buffett said this a few times. And you know.
I don’t think he’s the one that originated this particular comment. But you know, it’s a great saying markets can remain irrational longer than you can remain solvent, essentially meaning that man, you could go ahead and short something you can bet against something in the stock market, a stock or whatever.
But you know, just because you do that it could keep going up and up and up. And even if the price gets sillier and sillier and sillier doesn’t mean, people won’t continue to pay for it out there. Okay, then there’s this other thing, which essentially.
It can’t fight the Fed. I know, I’ve seen that in a lot of comments. And, you know, that was something I brought out to people before people even started, you know, making that expression popular.
I said that, you know, a few months ago to people in the private group, I was like, Guys, you know, this is why making you know, shorting stocks, buying put options is such a hard game to win. Because you have the Federal Reserve there, you have the US government.
Which puts pressure on them. And essentially, they say do this, they do that you put them you know, they want to buy you know, trillion dollars worth of assets, $2 trillion worth of assets, 3 trillion, 4 trillion, it doesn’t matter.
It’s like unlimited ammo, and it’s so dangerous. And so it’s kind of true, you can’t fight the Fed. And so that’s why shorting just doesn’t make sense. Look at the Fed’s balance sheet, it’s over 7 trillion now.
It is over 7 trillion now. They’ve increased their balance sheet by you know, over like over $3 trillion, just very recently. And here’s the worst part. It’s not even like stopping, it’s still climbing, those numbers are still climbing.
It’s not like oh, it’s done or something. The numbers are still climbing and the Federal Reserve and really the US government, let me be very clear about this case, because the US government that puts pressure on the.
Federal Reserve to do certain things so many people want to point the Fed, it’s like no, no point at the people you guys elected in office across the board because all those people are the ones that keep putting pressure on the Fed to go ahead and you know.
Do this, do that, do this, do that. Okay, now, the feds not deciding anything. Let’s be very clear. So US government and governments around the world that are truly deciding what goes on at the Fed. Let’s be very clear about that. And if you don’t believe that, then you know, you’re just you’re just sleeping in a different timezone.
Okay, let’s put it that way. Okay. The Fed might be creating an asset bubble, okay, an asset bubble and that could get ugly and that’s not something thing we want, okay, that’s a no bueno situation.
And just keep in mind, the bigger they are, the harder the fall, it’s a great saying, right? And at the end of the day, you know, please, I do not want this type of situation to happen us where we get into a massive bubble in the stock market where valuations just don’t add up where Ford peas are at a ridiculous levels.
And it’s so unsustainable that we end up in just an ugly situation, guys, we’ve got to really see what happens here with the economy, how it opens, how does unemployment come down? How long does it take for it to come down GDP to get back on the right track?
How many bankruptcies are we look really looking at, for big companies, small companies, midsize companies, all these things, it has to play out, we have to see what happens here. And the markets just running like insane ahead of all this.
And it’s like, we don’t even know how this is going to shake out. This is a once in 100 year veteran we’re going through, okay, so you know, could it keep coming up, it’s possible, let’s talk about the next situation, which is the stock market being in a do not a situation, let me be very clear what to do not a situation, okay.
This means essentially, the market goes nowhere for like a one to three year span, essentially mean the stock market goes up, down, you know, it’s volatile, up, down, up, down, up, down. But essentially, at the end of the day.
It doesn’t really go anywhere for a one to three year span. Okay. And so this is the, you know, very professional chart I wrote out for you guys here. But you look at this stock chart, right. And let’s say that’s a over two year span, or three year span.
Yeah, it has some ups, it has some downs, it has some ups and some downs, blah, blah, blah, and it still ends up at pretty much the same place. It was okay. And this, in my opinion, is kind of the most realistic scenario.
I see for the stock market currently, where essentially, we just end up in a market for the next one, two, maybe three years, where as volatile, it goes up, it goes down, it goes up, it goes down, you know, it’s bad news, it’s good news.
And we get into that type of environment. But then you look back in two years, or three years from now. And it’s like, well, the markets really not any different than it was and we’ve gone through periods like this, you go back to 2014, s&p 500, you know, approaching 2100, then 2016, you know, two years go by and in that NASDAQ hadn’t really gone up that much.
It was still like 2100, like under 20 202,016. So you have this volatility between 2014 and 2016. And not really much happened in the market. And there were no major recessions that happened during that time or anything like that.
It was just, you know, volatility, and a whole lot of nothing, a whole lot of nothing for about a two year span, in the stock market. Okay. And that’s definitely very, very possible. So if we were to look back, let’s say a year from now, two years from now, three years from now, we could very much be looking at, you know.
Indexes that are somewhat similar to where they at, okay, we can go through a period where this market keeps going up, and then it drops in, and then it goes up again, and then it drops again, and then it goes up again, then it drops again.
But at the end of the day, you know, 123 years from now, we could be looking at stock market that’s very similar to where it is, which is another reason why pays to be an individual stock picker at the end of day because you’re able to find the best opportunities.
Because regardless if the stock market has around here, 123 years is going to be some great companies that continue to grow their business, it will not be all them, I can guarantee you that. But there will definitely be some companies that grow their businesses substantially increase revenues dramatically increased profits over the next one to three years.
And those companies will be rewarded handsomely. Meanwhile, a lot of these other stocks out there are not going to be in the best position. I don’t know if you guys ever watched some old school football from like the 1930s. Right?
You know, the old school football, there’s a whole lot of movement guys smashed into each other, there’s not much happening, man. There’s no like long runs or long passes. It’s just a big, you know, bunch of cloud of dust at the end of the day.
And and that’s the type of situation sometimes you can get in the stock market. And this is very much a realistic possibility, in my personal opinion. Okay, let’s talk about the collapse scenario. What are the chances the stock market could collapse? We could go back down to where we were in March, which was essentially dow 18k, s&p 500 was around 2200.
Right, Nasdaq fell into 6000 range, what are the chances we can have a stock market collapse back down on those levels? Or let’s say even lower levels? Okay. Well, first off, we have to be honest with ourselves, let’s be very honest.
If it was not for that fed backstop, and bailing out essentially the stock market, we would have gone down a lot more than the stock market actually went down. Okay, now, that probably would have went down to 5000 range or maybe even 4000 range, if the Fed had not stepped in in such a massive way with just buying trillions of dollars of assets.
And it’s not just about the fact that we would have went down even further. The fact is, we wouldn’t went down for a longer period of time. I mean, when you look at how short the time period was when we felt big, right?
It was about a three to four week span, which is ridiculous, right? You go through once in 100 year event, and all you go down for in a big way at least is for like a you know, a three week span. Essentially.
That’s ridiculous. It would have been way longer, way longer had the fence had not stepped in, let’s be very clear about that we would have been, you know, having a down market, you know, where you could have bought assets for good prices for at least six months, 12 months, maybe even 18 or 24 months.
But here, you you had your one little opportunity for like a two, three week span, it was ridiculous. Okay. And you know, this is at least free market ever, let’s be very clear about that. We’ve never had, in my opinion.
The least free market as we do today. And that’s just facts, okay. And so at the end of the day, the Fed may not even let the stock market go down big again, that’s the craziest thing with this all not be allowed to go down in any massive way for any extended period of time, because the Fed might just bail him out.
The US government might just you know, put pressure on the Fed and the Fed do this do that in the Fed might just end up having to never let the stock market go down for any extended period of time, which is just crazy. Because I mean, imagine you got you got this guy here, okay?
Imagine he says, Man, I don’t want to ever have any short term pain, which no short term pain is anytime the stock market goes down big in a real way for an extended period of time, right? That’s short term pains.
This guy says I don’t want to ever have any short term pain. So from run, I’m never going to do any type of physical activity. I’m just gonna, you know, sit on the couch and lay in bed all day, every day, because I don’t want to get tired at all.
I don’t want any type of short term pain. Okay. So over time, obviously, he gets really overweight, he has a ton of health situations, right. And he creates a huge long term problems, because he doesn’t want to go through any short term pain, because the short term pain is just it’s too tough to go through.
Okay, so he creates his long term massive problem. And, you know, this is, this is kind of what I feel like is going on right now. So government, you know, once again, everybody wants to point the Fed, the US government might never allow this to happen again, let’s just be very honest.
Because look at what happened in the stock market dips, the stock market truly dips for, you know, a couple weeks span, and they just put, you know, the Fed behind them to buy everything in sight, backstop, everything in sight.
And you know, it’s just it’s craziness at the end of the day, and it could be creating some real long term problems out there. Let’s just say for a moment, you, me and everybody else, we all decided to go ahead and you know, sell our stocks tomorrow.
I’m not even sure the stock market go down. I mean, the Fed might just buy everything up. This is crazy. Okay, this is why, you know, the stock market is so fishy right now came. Stock Market is so fishy right now, because we’ve seen a lot of the most famous investors right out there pretty much looking at the stock market, as as you know, not attractive right now, right.
Warren Buffett, the oracle of Omaha, you know, one of the greatest investors ever. He doesn’t want to put money in the market right now in any way, you know, especially in any substantial way, but really at all.
Don’t you think that’s a little concerning? Like maybe a little bit concerning, right? somebody that’s perma bullish Warren Buffett, 140 billion on the sideline doesn’t really want to put money in the market.
Do you think that’s a little concerning? Do you think it’s also a little concerning that the fact is that in terms of billionaires dollar share of the stock market right now, it’s the lowest it’s been in a time in recent history.
But yet retail investors right now own the biggest share of stocks in the history? Don’t you think that’s a little light? Like fishy? Don’t you think that’s a little like, concerning out there. So if you’re thinking about what is the next play with the stock market.
You know, as much as I would love to believe that it is possible for the stock market to fall in a major way and for you know, an extended period of time, it’s hard to believe it is really hard to believe because I’m just not sure it would even be allowed to happen, which is crazy.
And so if anybody thinks we’re truly living in a free market economy, we’re living in, you know, anything really, but a free market economy at this point in time. And I understand like, nobody wants to go through short term pain, and nobody wants to wake up tomorrow, and see their stock market account down 2030 40% I understand that.
But sometimes, that is what you need to have some real great long term gain in this game. And just we aren’t being allowed to have that type of environment anymore. And so that takes the whole stock market collapse, potentially off the table for any extended period of time, because these guys, which is the you know, essentially let’s just call them the government, okay?
It’s supposed to be you know, separate entities, but essentially, those guys, the government, you know, guys, I don’t know what to tell you, like, you know, the stock market collapse, it might not just be allowed to come, let’s be very, very clear about that.
And it’s just so fishy, because, you know, the big guys aren’t really buying and so at the end of the day, you got to ask yourself, who who is buying lately? Who is who’s who, you know, the stock market, I think ended you know, by the time.
I was done, you know, prepping this video, I think the stock market I think the Dow was up 500 and something points I think was up like 530 points or something like that, you know, somewhere around there roughly. who’s buying, you know who’s really buying today, whether that sent the Dow up 530 points.
Because I can tell you to get the Dow to go 530 points There needs to be ridiculous amounts of money put into the market to make a move like that happen. And so who’s really doing that, who’s really doing that? Who’s pushing the NASDAQ up to almost all time highs now, who’s pushing the s&p 500 to within what now?
300 points of an all time high. After you know, this massive gauntlet of bad news, we’ve gotten without, you know, very much good news at all. Like, like, who, who’s really doing this, because it’s, you know, ridiculous sums of money to make this happen. There has to be is so much buying pressure on the market to make a move like that happened.
Like who’s doing it because most of the big investors aren’t doing it. And so most of the big investors that could actually move this market aren’t doing it, who’s doing it? Just like let that sink in for a minute.
Okay, so anyways, hope you guys enjoyed today’s video. As always, make sure to smash thumbs up and leave me your opinion in the comment section. Thank you for watching and have a great day.