The 2021 Stock Market Crash Coming? - How To Prepare
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Well guys today I have a beast video for you!! After the great year we had in the stock market a lot of people have forgotten that stocks can go down. So I will talk to you about how there might be a stock market crash in 2021. And the most shocking thing is that nobody is talking about it!!
Hope you enjoy this video where I talk to you about something scary revolving the stock market. I will talk to you about why the stock market can have an average to flat year and also why there might be a stock market crash. But most importantly I will tell you how to prepare yourself for any of these situations. ENJOY!
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Hello, folks, welcome into today’s video, we gotta have a little chat, we must see here we are, we’re coming up on the end of 2020. And this is usually the time of year in the last few weeks when people start thinking about the next year, the upcoming year and people start thinking, What’s going to happen next year?
Will they be a stock market crash? Oh, this is going to be a good year for the stock market? Is it gonna be a great year for the stock market? And we’ve got a chat about is a stock market crash coming in 2021? Okay, I’ve got a gauntlet of stuff to show you here today. So let’s get ready.
Fasten your seat belt, because oh, my goodness, are we going to get into some goodies here today? But what’s interesting about this, okay, is you’re not seeing nearly the chatter you usually see about a stock market crash.
I mean, if you just look like Google Trends doesn’t lie, okay. And if you just look for like stock market crash in Google Trends, it is very, very low. There’s not much chatter at all this year, going into next year about a potential stock market crash or a big fall for the stock market or anything like that. And I don’t know, maybe it’s because the vaccines are common.
And everybody’s hyped around that. So everybody’s like, it’s gonna be a great year in the stock market in 2021. Because vaccines are coming. Or maybe it’s because we’re seeing Airbnb go public here today, and skyrocketing 140% after they’d pretty much just doubled up their valuation rate before when IPO. Does anybody know that? Does anybody know that? Like the valuation is down from like, 18 billion to like 90 billion plus like, Hmm, maybe something like that has something to do with it.
Maybe it’s a fact that everybody’s watched the stock market go absolutely nuts, the last eight or nine months, like you look at the market back the lows in March in the NASDAQ was under 7000. Here Today, we’re well over well over record highs, well over 12,000.
Now in a type of increase in the NASDAQ index that you just can’t even wrap your head around. And so there’s definitely a lot of euphoria in the air. There’s a whole lot of it. Okay, I feel it. I mean, every single time I go on YouTube, I can’t go on YouTube right now without seeing a video recommended to me about the next 100 x stocks the next 50 x stock the next 10 x stock. It’s just what we’re in right now.
Here we are used to be cool to talk negative about the market it did like that used to be used to be the cool guy, if you would say something negative about the stock market and like maybe potentially hint around to the fact that the stock market could go down or something like that. But now Ah, you don’t talk about that right now. You don’t talk about that right now. It’s no no. Okay? We’re flying high right now.
The NASDAQ’s gone up like 70% Plus, in a matter of eight or nine months in everybody’s flying high. stocks have been going crazy. It’s not the time to talk about that. everybody’s like, give me the next 100 x stock, man, I got it. I gotta get that. Oh, that’s what I want. I want the next 100 x stock man don’t talk about a stock market crash right now. It’s only Christmas presents.
No one’s getting cold right now. Okay, unless you’re a short seller, the only person that’s probably been getting cold. But I mean, if you’re going long the market or long any especially growth stocks, tech stocks.
I mean, it’s been nothing but everyday has been Christmas for you pretty much. Okay. No one is thinking about the downside right now. And that is very disappointing, because remember, the market goes up most of the time. But man, the market can go down a lot as well.
And no one’s even contemplating right now. The downside? It’s one of the rarest times I’ve seen in the market. We’re just no one, no one’s talking about it. No one wants to talk about it anything like that.
And I think honestly, this move from from NASDAQ at 6800 or whatever it was to 12,000 Plus, where we’re up 70 80% or whatever. I think this has investors, investment funds, everything across the board kind of feeling bulletproof. Now, at this point where it’s like, That doesn’t matter.
We’re just going to bounce back super strong and market falls, we’re just going to boom Be right back to record highs. I think it has everybody feeling really invincible right now. Like I really truly believe that all the way to my core, okay, in funds now we’re playing catch up,like literally investment funds are playing catch up, because some of them weren’t investing heavy enough, you know, throughout kind of the spring into the summer.
And now a lot of those funds are like having to get in the market and having to buy a lot of these stocks and trying to play catch up in the end of the year gains because they got to be able to show some sort of gains this year was some of their clients are going to jump to some of the funds that were investing heavier in the spring and summer. So you got funds playing catch up, it’s a mess.
Okay, in this video, we’re going to talk about three core things. Okay. The first thing that’s going to be the small part, we’re going to talk about the case for the basically no stock market crash in 2021. And it actually would be a good year 2021.
Okay, the bulk of this video is going to be talking about the case for a stock market crash in 2021, or big down cycle in 2021. And I can tell you The evidence is emails. Okay, that will be the bulk of the video. And lastly, we’ll talk about how to prepare for this situation in basically now Okay,
You need to start preparing now if you haven’t, okay? If you don’t mind smash that thumbs up button. This is the type of video that needs to get pushed in the algorithm. I’ll be honest, because we need a little dose of this right now.
Like usually, I’m not super into like the fear type videos and things that could go wrong. But damn, we need this right now. Okay, like I said, I cannot go on YouTube right now, without a million videos about the next 100 x stock, the next tech stock, it’s rig and from YouTube channel. I’ve never heard of these YouTube channels in my life.
Like I’ve been on YouTube for years and years. Now, I don’t know who these people are. I don’t know anything about their track records. I don’t know if they’ve even been in the market for more than a couple years. And yet they’re getting 100,000 people plus to watch a lot of these videos.
And I’m like, dude, we got we got issues to address him. If just people are popping up out of nowhere and putting out these videos and they getting 100,000 150,000 people watching them. We don’t even know who these people are. I’m like, oh, man, this is the type of video needs to get pushed. Because people just got it figured out.
There’s a little reality in this situation. Okay, if you want to join stock hubs absolutely free to do I have this one pinned comments down there. Okay, already. So first, let me start out with making the case for a strong 2021 in the stock market.
Okay, this is what you have, you have the Vax. Okay, that’s obviously a big thing, a good thing, like the vaccine coming out, you know, there’s going to be, you know, 10s of millions, if not hundreds of millions of people around the world, they get the vaccine in 2021. And so that’s obviously a positive, obviously, that can hopefully cut down on Roni, Rona and hopefully dampen the whole Roni Rona talks.
And in all sorts of things. Right, you have a potential of stimulus? You know, when I say potential stimulus, it’s kind of funny, because literally, you know, we thought there might be a big, huge second stimulus package since like, April, right.
And yet, we’re still waiting, like, you know, government keeps arguing back and forth, and nothing still has gotten through as far as stimulus. So it’s, that’s a big mess. Okay, now, we have the economy reopening.
So let’s assume we have stimulus, and then the economy fully reopened. Of course, the economy is kind of open right now, right? But we’re not really open the way we could be open. Okay, so let’s say the economy really fully opens back up in the back half of 21, that would obviously be a good thing, getting money velocity going even more, right.
And if you have stimulus on top of that, that could definitely be a good thing, right? interest rates are incredibly low right now, which makes borrowing for any type of investment, good. As well as if you’re buying anything on credit, you know, a positive, right, a car or a house, anything like that, right? A big flat screen TV,
I don’t know, a new iPhone, or whatever interest rates are really low, you have FOMO in the market, for sure. fear of missing out, because people have seen many of these growth stocks go up hundreds of percent just in the past six to nine months. Okay.
I mean, you could look at a list of all these, you know, like famous stocks in the stock market, okay. They’re, they’re all, you know, 300% 600% 1,000%, just in the last six to nine months, and people are looking at that. And there’s definitely a lot of FOMO in this market.
And then you have people feel bulletproof because the markets been so dang good, so that you have no fear. So, essentially, you could make a case for a pause the year in 2021 when it comes to stock market, but I can tell you, it gets a lot scarier on the downside potential for 2021.
There’s a lot more Okay, let’s talk about the case for a flat or down year in 2021. Get ready, guys. It’s a lot okay. I’m going to start this like the least scary. Okay, this isn’t a video I’m playing for you guys here today.
This is actually a scary movie, you’re watching this is a horror movie. Okay? And we’re just going to slowly start off, and we’re going to build up build up until we kind of get to the climax. Okay. So ETFs and funds have to rebalance because a lot of stocks have been doing very, very well.
And just, you know, like, if you’re a fun, you have to rebalance your portfolio, most of them are forced to Okay, now that could likely happen over basically the last week or two of December. So some of that could be basically in this year as well..
But a lot of them have to do like let’s say for instance, you’re supposed to be your funding is supposed to be 50 stocks, 50% stocks, 50% bonds, but stocks have way outperformed, you’re forced to essentially reallocate your funds Okay, now does that start a situation where the dominoes start falling in that selling breeds more selling?
That remains to be seen but that could potentially right I mean, if we saw a major sell off just it’s the way it is selling breeds more sell no different than the markets been hot and buying has bred more buying and more FOMO Okay, so that’s a situation the NASDAQ is scary, and I mean, downright scary.
Look at this 2019 the NASDAQ was up over 35% this year in 2020. And remember the years not even over, we still got a few weeks left The Nasdaq is up over 40 percentage points 40%
Okay, that is it. That’s an insane two year return there a 35% plus and a 40%. Plus back to back years on real. Okay, so I wanted to try to find the last time we had three great years in a row for the NASDAQ like to have, you know, three straight, great years.
The last time we had three great years in a row was 1997 1998 1999. That was the last time for the NASDAQ when it had three monster years in row 21% 39%. And then the blow off the top 1999. Where was up 85%. And that’s literally the last time we had three amazing years in a row in the NASDAQ K, you’ll want to know what happened in the three years after that. In 2000.
The Nasdaq went up 39% in 2001, the NASDAQ went down 21%. And in 2002, the NASDAQ went down 31%. Okay, yeah, the numbers got really bad. And the funny thing is, is a lot of those those tech companies were actually you know, having their business models improved substantially, right.
You know, if you don’t know Amazon is overvalued, it went to basically become valued in the late 90s, Amazon went to start becoming overvalued, like so much. It was insane. at that particular time, it went all the way over a $10 billion valuation.
After the tech bubble, boom, Amazon went down over 90%. You heard me right over 90%. And meanwhile, Amazon’s business was getting better year after year after year after year. And so their business was doing better.
But yeah, if you bought that stock, you were down like 90% 80% 70% 60% 50%, depending on where you bought it at. But you were likely down massively, despite Amazon becoming bigger and bigger and better and better, just because the stock had ran way too much. Way too fast.
Okay, so you have a little something scary there. If we have a third big year for the NASDAQ get ready for it in epic crash after that. I don’t think that’s going to happen. I don’t think we’re gonna get to that level. Because, yeah, I think it’s likely we could you know, have a down year this year. That would be Yeah, it would make more sense.
Okay, let’s pull up your Dini research for a minute. Let’s go ahead and look at a few things that yarn Dini has for us, okay. I like to look at Ford PS, it was one of my favorite metrics for judging the stock market in general and where valuations are at Okay, valuations are stupid.
They’re just straight stupid. Okay, this is judging off the next year’s earnings. Okay. And, you know, I apologize for using the word stupid because, you know, this is a financial education video, and I’m supposed to always be politically correct, but I don’t know what else to say. Other than stupid. I mean, it’s sky high. This is s&p 500 large caps. Okay. The valuations don’t make any damn sense right now.
I mean, you’re paying nosebleed prices for anything like look at any time in recent history. You never had to pay even close to these type of numbers. That’s insane. Okay, small caps. It’s not nearly as bad, you know, small caps we can deal with those type of numbers.
But here’s the thing about small caps, they’re not the ones that move the markets. It’s the large caps that move the market. And so if you think about how the stock market going to do, I’m definitely fearful because the valuations of large caps are ridiculously high Okay, I don’t mean ridiculously high.
Look at this median forward p for the s&p 500 is scary. That’s the best way to put it scary. You have to go all the way back to around 2000 to find a median forward p for the s&p 500 this high remember this is looking at next year’s earnings once again this is not looking at this past year that was you know obviously hurt in a major way by Ronnie runner that’s why I’m not even looking at current piece because current Pease are kind of irrelevant we had a messed up period this year.
But next year things start to get back online more and more. A you know things get a somewhat be where they should be and they’re just not they’re just ridiculous. Okay. Look at this. Okay, we’re looking at four Ps for the Russell 2000. Look at the Russell 2000 in general. I mean, once again, this is for Pete that’s just that’s a stupid man at 33.6. Are you kidding me?
It’s so far above any time in recent history is it’s ridiculous. And then the growth, they basically have to cap at 60 because it’s so dang high right now that literally the chart can’t even go up that high. So they cap it at 60. I mean, there’s the the prices you’re paying for anything in the stock market basically, like 99% of stocks right now is unreal, is unfathomable.
And it is ridiculous. It is almost stupid. Okay, you know, there’s a 1% of stocks out there that are actually good deals and actually viable. And the other 99% are just rip offs. It’s as simple as that k the value. The valuations Don’t lie. It’s ridiculous. Okay, look at this. This shows you s&p 500 peg ratios.
This looks at price to earnings growth. Okay. I mean, we’re not even literally right now. We’re in 2020. Like we’re the highest ever on this chart that goes all the way back to 1995. You know what I mean? Like, oh, I mean, it’s ridiculous.
Would I be buying an s&p 500 index fund right now? Or something that track the NASDAQ? No, I’ve just wouldn’t I just valuations are just unreal, doesn’t mean they can’t keep going up in the short term, but I can tell you, if they go up more, you better be ready for epic crash. Take a look at this.
Okay. s&p 500. For p e ratios, growth versus value value. It’s like okay, 17 we can deal with that growth. 27.4 you have to go back to 2000 once again to find numbers this ridiculous. Okay, that’s how unreal, insane we have gotten in the stock market around valuations and Ford peas, guys,this is this is a problem.
And I mean, a big problem. I don’t mean like, Oh, it’s just a little like, this is big stuff, guys. Okay.Let’s spend a moment talking about Tesla, my SRK Tesla. So let’s talk about Tesla. Okay, this is a very important stock to talk about.
The reason is, I feel like Tesla has been the face of this epic run up in the NASDAQ and in the market in general. And especially this whole like comeback, okay, and tough stuff that company everybody looks at and they say it’s, it’s growing like crazy. It’s a beast company, in you know, it is what it is.
Tesla is going to be a dead money stock in my personal opinion from 2021 to at least 2022. I think it’s a very high probability this stock could downtrend in 2021 through 2022.
I, like I said, I’m very confident this will be a deadly stock, I’m not selling it because at the same time you don’t make if you’re a long term investor, like I am in a company like Tesla, you don’t sell it just based upon the fact that it could be dead money for a couple years, you still end up holding it, okay,
But I think Tesla’s going to be a dead money stock regardless, regardless of what numbers they put up in their numbers, they get to put up or ridiculous Okay, the next couple years, but the where the issue is going to lie is Tesla’s going to be I think stagnant or going down.
Okay. And, in Meanwhile, the numbers are going to be amazing. And everybody’s gonna be seeing more model wise and cybertruck. But all that’s been priced in and all that’s been priced in like for a while, never mind the latest run up in that stock. Okay, all these numbers that you’re going to see over the next several years, all priced in Okay, everything okay?
So I feel like regardless, this stock is going to be a dead money stock. And I think it’s going to lead people to complete disbelief because they’re gonna be like, Oh my gosh, Tesla just grew 60% this quarter and your stocks going down after hours? What the heck No, this can’t be happening. And that’s what ends up happening.
And people that don’t know what they’re doing in the stock market is beginning to get disbelief because they’re like, I don’t understand. Why is my stock doing bad when they’re reporting amazing numbers? Well, dude, the stock ran like over 1,000% going to all these great earnings. Okay.
So it kind of aided prepped up for like, you know, beyond perfection, that’s the best way to put it prepped up for beyond perfection, it leads to disbelief and it can lead to a situation where your stock price can get crushed. Like a so full.
Okay, that’s what can end up happening. Elon Musk said it best last week in an email to employees saying guys, you know, get ready for the stock to potentially be getting crushed, like a soulful, if we don’t hit our profit targets and things like that. Honestly, I think no matter what, I think no matter what, that stock will be a dead money stock or downtrending stock in 2021 2022. And we’ll see what happens in future years.
Okay. You know, that’s just what I’m willing to say. Like if you had to put me on the spot and say, I had to buy call options for the next year or two in Tesla or I was forced to buy put options on
buy put options up,be honest, if I was forced into one of those situations, okay. Now, let’s go ahead and talk about the weight of the s&p 500. Okay, so Apple, Microsoft, Amazon.
These talks have already priced in great earnings in 2021 and 2022. Apple is going to be reporting some amazing numbers around iPhone I mean amazing numbers around iPhone, they’re going to be epic. Okay, but remember, like most of that, if not all that has already been priced in like Apple stock has added over a trillion dollars worth of market cap in literally just like the last nine months over a trillion dollars. Okay. Microsoft, same exact situation.
Amazon stock, same exact situation. The stocks have ran immensely. They’ve priced in a ton of great news.
And so even though it’s stocks, you’re going to report some amazing numbers. Don’t be surprised if the stocks for the move or maybe even dare I say go down Do not be surprised at all okay. We have so much more to give into Okay, if you didn’t know Joe Biden will be president and, okay, basically a little over a month.
Okay. Now, if you don’t know what Joe Biden’s tax policies are, there are a few policies that could potentially hurt the stock market. Okay. Not the least of which which are people are thinking about is taxing rich people, okay, guess who has a majority of their, you know, guess who dictates the stock market rich people, okay.
That’s who dictates the stock market like, like, you know, the richest people in the world, the 1%. They dictate, like almost all the money in the stock market, everything else is very, very miniscule. And so by taxing them, that’s less money they can be putting in the stock market, right? But that’s little stuff, okay.
corporate taxes are supposed to go from 21% to 28%. That’s the biggest negative, and that’s going to be a huge overhang on the market. Taxes aren’t going up and 2021. But the problem is the markets always looking forward.
So the market is going to be thinking, Okay, tax changes are probably going to come in 2022, or maybe at the latest 2023. And that’s when corporations are going to have to go from a 21% tax rate to a 28% tax rate. And if you’re talking about going to the 28% tax rate, if that does happen does not for sure it happens.
But if that does happen, the fears out there, that’s all that matters, the fear in that overhang of Wow, corporate taxes could go to 28%. That’s going to take away another seven percentage points away from corporations and go into Uncle Sam’s pocket at the end of the day. Okay, that’s a big overhang.
Okay, but not just that there’s a lot of talk about he will also raise capital gains tax rate, okay. So if you’re going to also you know that you’re going to have that overhang on the market, people are going to end up cashing out games to avoid higher taxes. And guess what happens when
you cash out gains, you sell your stocks, and if you sell your stocks, that’s going to likely lead to more selling and more selling in the market.
And people don’t often say shoot the market downtrending I gotta sell my stocks because I want to pay a less tax rate than I had to pay in the past. It leads to, like I said, selling breeds more selling. And we’ll see what the capital gains rates end up coming out when they get all that approved and things like that.
But you know, that’s definitely something that will make I’ve seen it before in the stock market just in my 12 years of being in the market. I’ve seen many times before with where changes were happening around taxes and all sudden next thing you know, there’s a big dividend payout or something like that, because I realized capital gains tax is about to go up in a major way a cake,then oh, gosh, guys,we have analysts saying the markets gonna surge 25% next year.
I mean, you know, whenever you see that get a little scared. Okay. Oh, analysts Oh, we got markets going up. 25% next year. Okay. No, definitely get a little fearful whenever you see. Okay.
Let’s look at s&p 500 for just a moment, okay. Three of the last four years have been really good year for the s&p 500. Remember, the sp 500 traditionally goes up 8% per year roughly. Okay. And three last four years have been really good 2017 marker was up over 19% 2019 the market was up almost 29%. In 2020, the market was up 13.6% or so far it is okay.
We’ll see where everything shakes out. Usually, there’s a little Santa Claus rally. Usually the market kind of drifts higher in the last few weeks. So don’t be surprised the number ends up going to 15% or so.
That’s just you know, traditionally what happens and the December is just I don’t know, euphoria in there something like that. everybody’s like, oh, Christmas. It’s happy time. Okay, needless to say, it’s been pretty good times recently. But not just that. Okay, here’s where things get really interesting.
Okay. Did anybody notice that the markets like up really, really nicely last year? And like, this is like the worst year ever? And like the economy like and any time in recent history, and for business profits and all those sorts of things. And yet we’re having a great year.
I mean, if if the Roni Ronen never happened, never ever happened. A 13.68% gain would have been a good thing for this year. Okay. Like straight up like flat out like it would have been a good year if Ronnie run and never happened. Never mind you have a once in 100 year devastating economic event in the markets up almost 14%. Like, wow, okay, that’s all I have to say is wow, about that. I’ll be completely honest with you.
I expect to the public count to potentially be down thisyear, whenever things started breaking around Roni and it was like we’re gonna shut down the economy and blah, blah, blah. I was like, man, guys, I think the public count might might definitely end negative this year, and it’d be up $670,000 up 135%It’s too good. It’s too good.That’s just the honest truth. Okay, it’s too dang good. I could have never expected that in a once in 100 years. Okay.
That’s just like the way it is sometimes the stock market sometimes you think it’s gonna be a horrible year, like a lot of people obviously expected. I mean, it’s a once in 100 year event,and then ends up being way better. And then sometimes you go into a year like this year,where everything’s good news, all vaccines are coming out, economy’s reopening.
Hmm. I wonder if the opposite could happen, because that always happens. Okay, Fed funds rate. So one of the reasons why people are buying into the stock market buying in the stock market of plow money in the stock market? Who cares about valuation, plowed annotate interest rates is so dang low.
So if you got money, and you’re thinking about putting your money in a savings account, you’re getting like nothing on it. And I mean, literally nothing. Like they don’t even give you a candy bar for opening a savings account right now. And with the money you make on it, you can’t even buy a candy bar, man.I mean, it’s rough out there.
When it comes to savings, the Fed Funds rates at point two, five, okay. But here’s what’s going to end up happening, okay. Obviously, the economy is going to probably get better, everything’s going to strengthen, all sudden, there’s going to be fear about, oh, maybe there’s a market bubble,blah, blah, blah,indexing, you know, there’s going to be talk about raising the Fed funds, right. Okay.
And so that’s another overhang on the market that you have to look forward to essentially, is the fear that the Fed funds rate will start to rise, interest rates will go up. And all this activity has been going on around refinancing of mortgages and buying a house at extremely low rates and go buy a car because the interest rates are so dang low, all that will end up coming to an end eventually. And I can feel I just feel it maybe even happens in 2021 a little bit, but I especially feel like 2022 high probability of interest rates starting to go back up.
And that would cause a situation where it’s gonna be a big overhang on the market. Okay, you know, if we didn’t have enough overhangs, look at this, okay, the FB Facebook faces us lawsuits that could for sale of Instagram, and WhatsApp.
This is a another massive overhang. Okay. And when you have something like this happening, okay, it’s going to be an overhang for guess why the other stocks that have like helped the market out so much like Google, Apple, Amazon, Microsoft, if anything actually happens here, where you know, Facebook could be broken up. Get ready, they’re coming from Google.
After that. They’re coming for Amazon. They’re coming from Microsoft, and they’re coming for Apple, because all those companies are massive conglomerates. And they can all you could make an argument that all of them have monopoly take market shares.
I mean, look at the the market share that Amazon has an online e commerce traffic, look at like the market share that Microsoft has of overall businesses using them. Look at the market share that Apple has of smartphones, the United States of America, it’s at the great look at the market share that Google has for search results, and maybe even video streaming. Okay, I won’t say too much. Okay, I make a lot of money off YouTube.
I can’t say too much about that one. Okay, but believe me, and the government comes after the FB all those are right after, okay. And that’s another huge overhang on the market, the fear of all the big tech being broken up, Kay. Remember when I don’t know if you guys remember this, but back in the day, Microsoft had a big case, okay.
And basically, that case was decided in 2001. Okay, but it started in 1998. So it was multi years of drama there at Microsoft, okay, in that big case back in the day. So this, this whole FB thing, this could be ongoing for years, if you think this is just going to end real quick, and they’re going to come to a conclusion, you got another thing coming, this is going to be an overhang for a while.
And if it’s overhang over FB, it’s likely going to be an overhang for all of big tech. Now, I’m curious, has anybody really thought about this? Okay, talking about like money and spending money and doing things with your money and things like that. Like, I can’t take the family Disneyland right now? Well, I don’t know.
Maybe Disneyland is back open. But who the heck is going Disneyland right now, right? You don’t go to the movies right now, you’re not going to the club, I would never go a club anyways. But you know, a lot of people have to go to the club, you can’t go to that concert and buy those concert tickets for 150 bucks and then spend another 50 bucks on some beers and then go to a club afterward and spend another 100 bucks and you know, you’re spending money left and right, right? You can’t do that right now.
Can’t go that football game, or that that basketball game or that baseball game and spend a bunch of money on the tickets to that. And then Uber ride the Lyft ride and spending all that money doing this and that, right? Can’t just like go to another country right now. Like, no one’s doing that, right.
And you have all these massive amounts of things that people usually spend money on that they’re just not spending money on right now. And they just can’t spend money on right now. Right now.
Right? And so you have all that, which means essentially, you have maximum amount of money to invest in stocks. Because the appetite for you being able to spend money out in the world right now is just very, very limited, right? It’s like, Okay, what can you do right now? I don’t know, order. Some, like Uber Eats and buy a package from Amazon.
Like, you know what I mean? Like, what can you really do right now? Like, what are people actually doing? They’re not spending, like the way they could be spending obviously, cuz so much stuff is shut down.
And people just don’t feel comfortable doing it if they even could. I mean, think about like, shoot, I know in the city. I mainly live in Vegas, right? I think there’s like 25% like, like 25% limitations now. Like restaurants and a ton of different things in Vegas. You know, in California, it’s a crazy situation.
I don’t even know what’s going on in California, okay, which means essentially, people have maximum amounts of money to invest in stocks right now. Because you look around you like I don’t have money to spend like you want Am I gonna do I just buy some stocks with the money What the heck man can’t go to the concert that I would usually go to can’t go that festival I was used to go to let’s just buy some stocks man.
And so everybody’s got like, like maximum amounts of money to invest in stocks right now. And that’s just a whole thing. Then on top of that, you got weeble and Robin Hood, these have been blowing up this year, the amount of new users on weeble and Robin Hood is at epic proportions. Okay. And these two, you know, brokerages have gone crazy amounts of people in interest in the stock market and investing in the stock market.
And you I mean, typing weeble looks like Join now earn up to $3,700 access for free stocks
worth up to $3,700. And everybody’s like, oh, shoot, let me set up a weeble account. I don’t know anything about stocks, I don’t know anything about stock market.
But man, I got like I do set up an account, I can get $3,700 let me do that. And it’s led to a situation where there’s been millions of people that have gotten in the stock market in March through May, specifically that maybe hadn’t been market participants in the past. But they they saw what happened in the great financial crisis.
And they were like, man, next time, there’s a major stock market crash I’m gonna jump in. And then you had something like a weeble and Robin Hood just blowing up like and becoming way more popular here in 2020. And you you lead, it leads you to a situation we got crazy amounts of retail investors that have limited to no experience, have no clue what they’re doing.
But they’re getting confirmation bias. This is what’s really interesting, you have a bunch of people just throwing money in the stock market coming in the stock market. And they’re getting this crazy confirmation bias, because they made a bunch of money on the stock market because guess where the stock market’s gone for the last nine months, six months, whatever. Up and away, we looked at that NASDAQ look at the s&p 500.
I mean, it is just crazy. And never, not just that the retail names that a lot of these people are getting in, like they’re up huge. I look at where apples gone. Look where Tesla’s gone look, resume stock has gone like look good, countless of these stocks.
And these are ones that retail investors love. And they’ve just gone crazy. And so you get a confirmation bias. And so these people think, Oh my gosh, I gotta put even more money in the market even more money, because look at all this money I’m making over here.
And they think they know what they’re doing. Because they’re basically getting this confirmation bias. Because they look at their account, and they’re like, Whoa, I just made 200% on that stock. Why did I only buy with $10,000. When I have $30,000 in savings, I should pull $30,000 in that stock.
Cuz now I would have 60,000 or 90,000 or whatever. That’s the way people start looking at so they pile more and more in.
They think they know what they doing just because Hey, man, you’re throwing money in you know, it’s just looks easy. I mean, just stocks go up and up and you’re like, Oh, this is so easy. Okay. And here’s the thing with s&p 500.
These investors, likely a lot of them weren’t even they didn’t even go through the whole 2020 drama. A lot of them got in right after that, or during that drama. Okay, so that was an experience.
They didn’t experience 2018 the back half of 2018 was ugly, October, November, December especially, that was an ugly time in the market. A lot of people got shook out in that whole situation. I remember that one. Okay. There was a lot of people that got shook up scared, didn’t know what they were doing.
And I can tell you, there were deals everywhere. It was like shooting fish in a barrel in December 2018. That’s some of the biggest positions I got built in 2018. Like FB, skyworks, solutions, Cirrus Logic, a lot of my, you know, huge winners nowadays, right? A lot of them were built in 2018.
And in the back half, especially okay. And people didn’t experience that, especially a lot of these new people, okay, they didn’t experience 2015 when 2015 a lot of people thought it was gonna be a great year in the stock market, we were coming off some really good years in the market. And you know, just kind of like, a lot of people thought 2015 was gonna be a very good year, including myself, I honestly wonder that year and I was like, Oh, you know, everything’s going good.
You know, I got I got some stocks, I love blah, blah, blah, and no, that didn’t happen. Okay. And there was some scary times in 2015. I mean, some really scary times, that really shook up a lot of investors. Okay. 2011 was one of those years that, you know, the economy was getting better and better.
And yet, the market didn’t go anywhere. And, you know, sometimes you got to experience those type of markets. And the fact is, a lot of investors have only seen the NASDAQ go up 70% Plus, in a nine month span. And looking at this and like, easy, easy money. Oh, my goodness, this is just so easy.
Why would I invest in the stock market and pass this cake? I’m going to be a millionaire tomorrow. I’m going to be a full time stock market investor. I’m knocking out a ballpark in my very first year.
And you know, it’s just not the way it works. guy said I don’t know what else to tell you like this just not sustainable. Okay, so what we need and we’ll probably get in 2021 in my personal opinion, is we need at best case scenario breather here where the market does almost nothing.
I’m talking about like a 3% up to 3% down year, a breather year okay, but what we honestly really need is a down year for the market. We need a down year for the stock market in 2021. We need a lot of these valuations come down, a lot of these stocks come down, we need some reality to come into the market.
And I wouldn’t even mind a crash here, whether we get a crash your true stock market crash in 2021, that remains to be seen, okay, you need a lot of different events to kind of play out to get an actual stock market crash where the whole market goes down. 25% or so I could definitely see that happening. If the market stayed really red hot for the next several months and going into 2021. Like imagine the first few months of red hot, I could actually really see a true stock market crash happened.
Because like I said, when when the dominoes start falling in a real way, it’s gonna happen.
Okay, the sell off will happen very fast. Because a lot of people have a lot of games they’re gonna be looking at, they’re gonna be like, let me let me catch it. Let me catch it.
Okay, another huge up here. And I might cash everything. I’ll be honest, I’ve never done them before, but I might, I might do it. Okay, like if this is a crazy year, again, where the markets up 20% plus NASDAQ up 20% Plus, s&p 500 up 20%. Plus, all cash, man, all cash everything. And I’ll be like, you guys can have fun.
Okay, I’m cashing out essentially, I would have no issue doing that at all. If it’s another huge up here this year. Okay. So let’s talk about how to prepare for this whole situation. It’s probably going to be a breather year down year or crash here in 2021.
How do you prepare for Okay, so first question is, do you have cash? Do you have cash? do you have? Like, let’s say you have $100,000 it like in stocks? Do you have another 10,000 or 30,000? around like cash to deploy in the market? If not, it could make sense to take some profits essentially.
Okay, and kind of raise some cash because you want to have some cash around valuations are extremely rich right now, a lot of stocks have run immensely. And we’re going into Santa Claus rally, which usually means the markets probably going to go up even more, you know, it’s not for sure.
But a lot of times, that’s what happens last couple weeks of December, it’s like even up more and more, it’s not a bad idea to potentially take some profits, cash a little bit and say, Hey, man, you know what, this has been amazing.
I made a lot of money, I got no cash around. And there’s a stock over here that I’m looking at. And I don’t really like that stock that much. I made a bunch of money off of it. But you know what, maybe I’ll cash a little profits on that. So have some money that lets you sleep better at night. And you know what else? It allows you to take advantage of deals if we get some in the market in 2021.
Okay, there’s nothing wrong with that. All right. Also, do you know what you’re doing? Do you know what you’re studying for when it comes to stocks? So you really got to ask yourself, there’s more to stocks and just like, Tesla stock buy Tesla stock, I bought Tesla stock I made money.
Like it’s I wish it was that easy. But you know what, it’s mostly easy, okay. There are certain time periods, you can get really lucky in the market. But that’s not the way it works. The last nine months is throw money in any major growth stock and make bank literally as simple as that you could have.
You could have been like, the least smart person in the world and like to throw money in some growth stock, you’ve made a bunch of money, okay? It’s as simple as that the last nine months, I can promise you that’s not the way it stays. Okay? growth, stocks just don’t go to the sky. It’s not just all grand forever. They have some hot periods. And we’ve been in a dang hot period, one of the hottest periods. The hottest period I’ve seen in my 12 years been the stock market straight up the last nine months just been absolutely insane.
And you throw money at any growth stock in the last nine months you main bank, you made so much money Good for you. It’s not the way it works. Okay. all good things must come to an end. all good things must conclude if you didn’t know that. Okay, you have to ask yourself, did you get in the market in 2020? Okay, Was this your first year of investing?
If it was you’re kind of lucky and kind of smart. Okay. You’re kind of smart in the sense of Hey, man, you knew to get in the market this year. You saw the market going down? You’re like, Hey, man, I’m almost started throwing some money in here. Hey, you kind of got lucky too. Okay? I’ll be completely honest. The Fed backstopped everything, we end up having a great year.
And you know, like I said, you throw money in any growth stock last six, nine months, you made a bunch of money. Okay? That’s a kind of lucky situation. It’s a kind of smart situation. Okay. But do you know these things? Do you know about portfolio diversity?
Do you know how to identify winning businesses over the long term? Do you know how to identify competitive threats? Do you know about position sizing? Do you know what to look for in a 10? k? And how to do research on a 10? k?
Do you know how to identify a good CEO from a bad CEO? Do you know about valuations and how to value a stock? Like kind of important? Do you know how to value a growth stock? Do you know how to value a value stock? Do you know how to value a speculative stock? Do you actually know any of that? Or have you just been thrown some money in stocks and been like, hey, Tesla’s growing it’s gone up a bunch I’m gonna throw some money in that.
These are real questions you got to ask yourself because otherwise, you’re gonna be you’re gonna get yourself into some trouble. If you’re not you don’t know what you’re doing in the market. I can promise you that and it happens every single time.
And last thing I want to do is see this generation of investors get absolutely wrecked, like people did in the tech bubble toward the end and then it’s you Where no one wants to touch market for a long, long time. That’s the exact opposite situation I want to see.
And if you don’t know what you’re truly doing, you will be in that wrecked crowd you will get destroyed and you’re going to think the stock market’s a big rip off and a scam. And that’s the exact opposite of what I want to see from investors out there.
Okay. And so if the answer is no tables, questions I just asked, you better get on it, man, you’re gonna need it, you’re gonna need to know what you’re doing in this market or you will get your data right. So hope you guys enjoyed today’s video.
As always, don’t mind if you don’t mind smash that thumbs up button helps you to channel on massive way this video needs to get pushed.I want every person to see this dang video I put together here today because man we need it.
Last thing we need is another video on the next 50 x stock and the thing we need most is a little bit of reality, a little bit of snapback to be adding me and K to try to apply for my private stock group that’s gonna be linked in the description down there almost I might also have that on one of the pinned comments that teaches you every single thing I know in the stock market. Thank you for watching and have a great day.