The Market Crash - How Bad It Will Get
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Well, guys today we are going to talk about the market crash. How bad will a stock market crash get? I’ve been getting a lot of questions from people in my DMS and in the private stock group about the stock market crash. People asking about what they should do. So today I will talk about what exactly to do in the stock market crash.
Also will talk to you about what to expect in this market crash and if its going to get worse or not. Remember to mentally be prepared yourself to red and see your stocks drop and do not panic sell just like you shouldn’t panic buy. Stick to your fundamentals of long term investing in any stock market crash. Always buy the dip!!
So hope you enjoy this video! I hope to help any viewers that are in full panic mode because their accounts are going down. Like always, when buying a stock always do your own research in the stock especially during a stock market crash. What are you doing during this stock market crash? Are you buying heavy or have you sold out of your positions? Also let me know if there is a stock to buy now or a stock to watch now.
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Well folks it’s getting really ugly out there too Macho Man Randy Savage and yeah man market holy smokers guys This ain’t no joke this se esta por lindo fail amigos okay. The market is getting ugly again ugly fast Hey, NASDAQ dropping rapidly and we’re watching stocks move Okay, and I’m talking 4% moves 5% moves 6% moves 8% moves I’ve even seen some stocks today down over 10 percentage points. Okay.
And it is across the board pretty much even the jack Jackson stocks are all falling today. Look at that. Okay, just stock after so I mean, I couldn’t even save those stocks that came out with the video last night 99 stocks to watch now all jack Jackson stocks I couldn’t even save those stocks.
Kay, big tech, look at big tech all down across the board. You know, the FBI is down over 3% Amazon’s down 2.6% Apple’s down 2.7% Google McDougall’s down almost 3% look at Nvidia today in video almost an 8% drop on earnings that people said were flat out unreal, amazing. And what happens as stock goes down 8% man, that’s when you start to feel like maybe you’re at a little tippy top in the market.
When you come out with some, you know, just insane numbers in your stock drops 8% Okay, that’s the type of market we’re starting to get into here. Okay, obviously totally Molly’s down big today. homebuilder, Zillow, it stocks across the board, whatever you look at, I have a tab basically on my stocks tracker app.
And it’s basically a tab called no valuation care. And what do we see we see all those stocks that have on there, Tesla, snowflake, cheap, por la, zoom video, Shopify, Amazon, all those stocks that are on that list all down big today. So also, whoa, people care about valuations. In this video here.
Today, we’re going to talk about how ugly this market crash could get. Okay, we’ll talk about that very in depth. Then we’ll talk about what to do in this market crash and like, like what stocks I’m buying, how I’m going about it, things like that, that I’m doing in the market. So hope you guys enjoy this video. As always, don’t forget to smash even on a down day, you got to make sure you smash okay.
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And now you’re trying to take things to the next level and actually know what you’re doing in the market. Well, we can help you as far as that goes. You want to fill out an application to try to join the private group slash financial fortress, that’s gonna be linked in the description area down there. And we’ll also have that as the pinned comment already.
Guys, first up here, let’s talk about how ugly this could get. Okay, so first off, let’s look at the NASDAQ because I think the NASDAQ so the real index or indices, however you want to look at.
Okay, that’s a real one you want to pay attention to right now. It’s actually not the Dow and it’s actually not the s&p 500. Okay, the NASDAQ all I should be on the NASDAQ right now. And if you look at a five day chart for the NASDAQ, it looks pretty darn sharp.
Okay, NASDAQ was right around 14,000. And, you know, here today, it’s been trading anywhere between like, around like 13,000 113,300. So it’s definitely a big fall a pretty dramatic fall in a matter of a few trading days, and definitely has shaken some people up and like, Hey, hey, okay, the market doesn’t just go up every day, every week every month like it’s been doing recently.
But when you back it out, this is what’s crazy about that, even though that was really sharp when you back it out. It’s nothing on a one year like look at the one year chart for the NASDAQ. Like this is just a little baby fall. I mean, look at that. This is this is literally nothing.
craziest thing to kind of think about here. Okay. And then you pull out a 20 year chart of the NASDAQ And literally, he doesn’t even show up. Okay, that’s the craziest thing.
Look at the 20 year chart of the NASDAQ. My goodness, guys, you gotta be flipping my flapjacks. You can’t even see this little latest side drop here, kids literally that miniscule on the chart, just absolutely. Unbelievable. Okay, now let’s get into some fundamentals.
I want to show you guys some things that are going on, we’re gonna look at Yardeni research that always has some really good reports and kind of seeing valuations where we’re at in the market. And when you kind of look at some of these things, you can kind of figure out how much you could potentially drop in the market. Okay, so what I want to look at first is forward peas.
And if we look at s&p 500 large caps, I mean, we are really rich. No, we’re not really rich. We’re really overvalued. I don’t even know why put really rich on this chart. Okay. It should say really over valued, plain and simple. Okay, plain and simple. Not really rich.
That, you know, in the past, he was like, Oh, yeah, markets a little high. It’s a little bit Nah, no, no, no. Okay, recently, we’re just straight up Over value, okay, remember Ford P is looking at, you know, the next several quarters, the next four quarters for these companies and keep in mind a lot of these companies have really good numbers as it is okay? And when you’re trading that high you’re just straight up overvalued.
Okay? So like there’s no argument that can be made like the s&p 500 large caps are overvalued right now. Okay? But not everything in the stock market is overvalued. Okay? If we look at s&p 600 small caps, what you’re gonna find there is you’re a little rich, but you’re not out of control, you’re not straight up overvalued.
So it’s interesting, the large caps in the s&p are just flat out overvalued, small caps, little rich, but not out of control. Okay, then we go ahead and if we back it out, okay, it’s over 20 years, right? And we look at this, this shows you the s&p 500 large caps over the past 20 plus years, okay. In that chart should show you everything you need to know about the current stock market we’re in right now.
Okay, even if you’re not some type of stock market genius, you should be able to look at that chart and say, Hmm, yeah, maybe we’re just maybe we’re a little overvalued right now. Okay, just flat out. You don’t have to be like in doing this for 1213 years, like I’ve been doing this, like literally, anybody look at that chart and say, Hmm, something’s a little off there.Okay.
But we look at the s&p 600 small caps, once again, and we’re high but we’re not crazy. So there’s a clear divergence between large caps and small caps and large caps, which really run the market in general, have just gotten to some really bad places. Okay. All those companies that are 100 billion dollar plus valuations just gotten to some really, really bad places.
Okay, median forward PE on the s&p 500. Remember, four P is what I like to look at the most trailing 12 month, pe not the most, because you’re going to get some Roni Roni quarters in there.
A lot of one time costs, things like that. I really like to look forward over the next year. Okay. And that’s always the most important in my opinion when judging the market. And if you look at median forward p, once again, we are just flat out overvalued.
I mean, you look at any time period, and it’s been low interest rates for basically as long as I’ve been an adult, okay, just flat out. Okay. And usually, you’re looking at a 13 to 18. normal range for for peas for the s&p 500 for a median. Okay, that’s normal. We’re bit we’ve been like in the 20th range recently, okay, which means we’re just flat out over valued. All right. Look at this here. All right.
If it wasn’t showing you enough that were overvalued, go ahead and look at margin debt margin debts gone. Whoo, you know, through the roof. This shows you all the way back to 1995. And, yeah, I mean, margin debt should go up over time as the market goes up.
But I mean, it’s really gone crazy, very, very recently. Let’s just put it that way. And look at this one here. Okay. This chart shows you over the past 25 plus years, okay, this shows you margin debt over time. And what you’re going to find is every time after it went on a crazy run, and it went in Super peaked out.
Every time it was followed by a huge drop. And every time there’s usually a huge drop in margin debt is usually a very big drop in the market in general. Okay. Look at this rate before the Great Recession. Whoo. Okay. Then obviously, you had into the kind of, you know, a lot of people were talking about a double dip recession scenario, Ooh, okay.
Then you had you know, there was just kind of look like, everything was grand, and then some weakness came out of China. This was in like, 2014, and all sudden, whoo, okay, then obviously, we had 1718 climbed up, and then just a huge drop. And now recently, we just went on this massive run of margin debt.
And it’s, it’s basically priced a lot of stocks for perfection, or just put a lot of stocks in overvalued territory. And so if you look at this, what do you think’s gonna happen over the next few months, okay, either margin debt is going to keep going to the sky, and it’s going to be even a further drop, or we’re actually going to see over the next few months, a big huge, steep decline in margin debt, it’s gonna be one of those K, the truth.
Here’s the truth for you. All right, the s&p 500 could follow another 10%. Easily, like, it doesn’t mean it’s gonna happen, but the s&p 500 could like very easily fall another 10%. And we could still make an extremely strong argument that the market is flat out overvalued. And that’s if the s&p 500 fell 10% that’s what’s crazy about this, okay.
It’s not like a time period when the you know, everything’s kind of looking green and the markets, you know, kind of priced where it would usually be priced at, and it’s like, well, yeah, the market could could fall 10% but then we’re going to be really undervalued. This scenario is not like that at all.
We could fall at 10% we can still be literally overvalued, okay, and keep this in mind. If the s&p 500 Falls 10% that means NASDAQ’s probably gonna fall 15% or more than 15% right on the upside NASDAQ usually outperforms on the downside.
NASDAQ likely gets uglier than everything else gets for the most part usually. Okay, so NASDAQ could fall 15% and the NASDAQ in general falls 15%. high growth, super high valuation, more speculative stocks are gonna fall 20 to 40 percentage points, okay. 20 to 40%. because keep in mind, the NASDAQ is like, you know, kind of viewed as a growth engine. Okay.
And then inside the NASDAQ, you have a lot of companies that have just, you know, their valuations are just sky high, like past price to perfection. In those stocks do great when everything’s going up like crazy. Those stocks way outperformed the market.
And next thing you know, they’re up another 20% 40% 60% 80%. I’ve heard the complaints from a lot of people where it’s like, they tried to get a position built in a stock over the past six, nine months, and the stock just goes up so dang fast that they can’t even get their position built. It’s happened to me, and it’s happened to others in the market, because we’ve been in a super hot market where margin debts been going crazy.
And just, you know, valuations have become just kind of the backdrop, right? It was interesting. It was either last week or a couple weeks ago, I was on clubhouse right. And sometimes when I’m like responding to DMS in the private group in the private discord chat, I’ll just like go into clubhouse and it’s kind of like, passively listen. And there was one it was a week ago or a few weeks ago, there was one where they’re talking about Tesla stock.
And so of course, I’m like, oh, let me jump in here. Okay, so jumped in there. And I was playing, I’m just kind of passively listening to this. Next thing, you know, people in there recognize me, they put me on stages like a speaker, okay.
And I’m listening to these gentlemen talk back and forth about Tesla stock. And my gosh, are they like so ridiculously bullish on the stock that I actually, me, the Tesla guy, I actually start sounding like a Tesla bear when I come on and start speaking about this, because I’m like, I gotta interject. And so I start kind of, you know, given a little a piece of my mind, let’s just put it that way.
And I was like, by far and away the least bullish guy out of the bunch. And I’m like, Whoa, okay. We got some crazy stuff going on. Remember, a few years ago, I was the crazy guy, okay for saying Tesla stock was going to go to $3,000 a share. And by the way, Tesla stock did that and a whole lot more. Okay. I don’t know what Tesla is on a pre split basis now. But it’s a whole lot higher than 3000. Okay. And back then, I was the crazy guy for saying that.
And now here we are, again, I’m the crazy guy. Because I think Tesla this year, you know, trading at 800 billion to 1 trillion is just silly. just flat out silly. Five years from now, seven years from now, maybe it makes sense.
But in the short term, they I mean, it’s just like ridiculous that valuations just like anybody that should know anything about valuations that isn’t like blinded, should understand that and be able to view that and be like, yeah, that’s a little ridiculous. Okay.
And so it’s it’s interesting that people used to laugh at me for being literally too bullish on Tesla. And now people laugh at me for not being bullish and often Tesla. And it’s like, you know, you can believe all you want in the business and things like that, as I do.
I’m one of the biggest believers out there. And I’ve been on record like back in the day, man, it was galley and me and it was nobody else like a lot of people have popped out last year to in regards to Tesla after started going up like crazy. Back in the day on YouTube. For anybody that’s been around a while you guys know this.
It was Galileo. And it was me talking about Tesla years ago, when you know, that stock was getting tons of hatred. And as far as YouTube, that was about it. And then on mainstream media, it was Cathy wood back in the day.
And it was also Ron Baron. And they were kind of the two people that were on mainstream media and talking about, okay, and that’s the way it was back then. And it’s totally changed because the stocks gone up so dang much.
And now everybody wants to jump on that train. And just like people are talking crazy, and stocks are healthy. Stocks are healthy when the talk is about risk versus reward. Okay, you when you talk about the the downside risk, what could go wrong, why the stocks valuation doesn’t make sense.
That’s healthy, and then you talk about the reward side. But lately, it hasn’t been that it hasn’t been that at all. All the talk is reward, reward reward, stocks are going to the sky and risk is either hardly talked about or not talked about at all, what a market we’re in right now. Okay?
And that’s what really scares me about a market like this, when just everything is about reward. And this stocks go into a trillion and this stocks going to 2 trillion and there’s no bottoms evaluation. And as soon as the stock hits that people are like, Oh, well, now it’s going to the next trillion dollar is like, whoa, whoa, slowly roll. Okay.
You do realize like, maybe in the short term valuation doesn’t matter. But you do realize over the long term valuation matters. Okay. Same thing. It was silly when Tesla a few years ago was priced at 30 or $40 billion dollar market cap when I was buying that stock. It was just silly, in my opinion, okay.
Now, I feel like today, if that stock price at 800 billion to a trillion, I feel like it’s silly as well. Okay. But hey, man, it’s the market.We’re in right now. Everybody’s just talking about reward. Okay? The moral of the story is the market crash could get worse easily, okay? Doesn’t mean it will.
But it could easily get worse and make 100% sense in my opinion. 100% not like, Oh, that’s some crazy thing, not like this market could easily drop a bunch more, and I wouldn’t have a problem with it. And I would say that actually makes sense.
If you asked me, does it make more sense for the market to? Let’s say, let’s say the NASDAQ a, let’s say the NASDAQ is at 13,000. Does it make more sense, in my opinion for the NASDAQ to go from 13,000 to 17,000, over the next year, or from 13,000 9000 13,000 to 9000? makes more sense in this market right now than 13,000 to 17,000? In my personal opinion, okay.
That’s the type of market we’re at. Okay. So next question is now we talked about how they could potentially get and all those different various factors we just showed you here. Okay. Now let’s talk about what to do in buying stocks, things like that.
Okay. First off, thing that’s gonna come to some people’s mind, especially newer investors, the market, sell your stocks, okay? Are you going to sell your stocks? Something like that? Okay. First off, that is usually a very bad idea. Okay.
Trying to time out the market is an extremely poor idea of most of the time, you want to know why. When do you get back in? Okay, when you get back in? Also, if you sell who’s to say it’s going to go down? What if it starts going up and up and up again? Okay.
The problem is, it puts your mindset into a short term trading type mindset, when you’re trying to sell out and all your stocks or a bunch of your stocks, and then trying to jump back in and timeout and things like that. Because let’s, let’s say, hypothetically, you sell it to your stocks, when you buy back in when the markets fallen 3%, or 5%, or 10%, or when the market starts going back up again, even though evaluations are crazy, what if it just gets crazy?
You know what I mean? Like, it’s just, it’s too hard of a game to play. I’ve tried to play that game in the past, I’ve seen others try to play that game. And it’s usually a lost cause. You were usually if you hold truly great companies, you’re usually better off just holding those stocks and build cash during times.
You don’t want to buy Okay, I do that all the time. Like, if there aren’t that many good deals out there in the market, I build cash, I build cash, I build cash, okay. Unless let me be very clear, unless you hold some crap stocks. Okay. Which is definitely possible. Maybe over the past year or two, you bought some crap stocks? And maybe those have done really well, just because the markets been really hot. Okay.
If you see some stocks in your portfolio, and like, Yeah, I don’t believe in that one that much over the next three, five years. perfectly fair game to sell a stock, especially if you made a bunch of money on it. Good for you. Okay, that’s when it can make sense. Okay. What am I doing in the market right now? What am I up to, in regards to the stock market right now?
Well, first thing we got to talk about what I’ve been doing over the last few months in the market. Okay, what have I been doing? Well, I’ve been cashing up right? I’ve been 24% cash 23% cash, somewhere around there, which my midpoint is usually 20%. Right?
We try to keep 10% to 30%. So if I’m getting up to 23 24% cash as I’ve been recently, that obviously means more toward not as attractive of deals out there maybe a little more bearish than bullish right if you see me get all the way down 10% which I have in the past I’ve even got below that I try not to but I’ve even gotten below there in the past.
Those are time periods when I’m extremely bullish on the market. There’s deals everywhere it’s like shooting fish in a barrel and that happens from time to time however recently I’ve been catching up and I’ve been buying some real value stocks and real value propositions that are very attractive on four p basis perfect example is WPA okay
Walgreens, I mean this is a stock I bought heavily I bought you know a lot of money worth this stock and in many of my different accounts right and I’m up $159,000 on that stock so for just in my main private account alone up 159,000 nevermind dividends, that stock will pay me but that’s a stock I looked at and said okay, valuations in the market are getting really rich.
This was in December I was putting this money in so a couple months ago, okay, I looked at that and I said valuations getting really rich in the market. If I’m going to put a bunch of money in a stock, it’s got to be a stock that regardless whatever happens in the stock market over the next two, three years, I think this talk is going to make me a lot of money on its share price and its dividend as well.
And that’s the way I look at it WPA I’m like literally doesn’t matter stock Martin can go down a bunch. I think WPA is going to be a big moneymaker for me over the next two, three years.
And it literally doesn’t matter what happens in the NASDAQ NASDAQ can go down 10,000 whatever. Okay, WPA will make me a bunch of money. It was just extremely undervalued, great turnaround play.
They have so many different bullish things going for them. Great dividend payer, like that one’s just going to succeed. And also I’ve also bought three stocks here today okay, but when I bought these three stocks here today, I didn’t go crazy in them I didn’t go all in oh my gosh, let me just plow all my money. That’s not the way I do it. Okay. I like to try to stay disciplined in the market and funneling money as I see deals okay. In a lower stocks go that I really love. I go ahead
I buy more and more in more and more stocks Kate and I just continue to put in money continue to put in money but I don’t go through all my money in one day because the thing is this is like like we’ve already had several drops in the market very recently right over the last few trading days if after the first drop you get rid of all your money that has a market continues to drop you have literally nothing to put in right that’s not a situation anybody wants to be in Okay, so I try to buy in discipline fashions Okay, by the way on financial education three
I might disclose what three stocks so those were I might do a video tonight and disclose what three stocks those were so if you’re not subscribed over on financial education three make sure you actually get subscribed put notification bell on, it’s actually my most active channel. Now.
I post so many videos on the channel is absolutely ridiculous, especially during the trading week. There’s a lot of stuff that can’t go on the main channel and things like that. And, you know, news related content, all different types of content. Okay, so yeah, definitely check that out.
Probably disclose those three stocks over there tonight. And when you see the stock market going down like this, and stocks going down like crazy, buy great companies you love for the long term when they’re falling down, okay, not all at once you don’t just plow your money in one day or something like that.
But as you see great stocks you love for the long term fall, make sure you buy those stocks. Okay, an example of a stock I was looking at today that I don’t own right now. But I’ve thought about buying was Amazon stock a ticker symbol am ZN I don’t know any Amazon but I was looking at Amazon falling today. And I was like Amazon’s gonna be higher three years from now.
It’s just no doubt in my mind that Amazon regardless, whatever happens in the NASDAQ, the markets in general, there’s no doubt in my mind, Amazon has a much higher stock. It basically based upon the valuation it’s at right now looking at their growth rates in future years.
There’s no doubt in my mind that that stocks higher in a few years from now than it is today. Right. And so that was a stock I was looking at.
I didn’t buy it, but I was like, it would make sense to buy it honestly, because I was already buying three stocks today. So it’s a bit much and really want to add a fourth, but I was looking at that stock and I was like that stocks a deal.
It’s a perfect example of a great company that has an amazing future in front of it in so many different fronts and the stock price is likely going to be a lot higher in future years and is today Facebook is another great example of you know, that one’s extremely cheap valuation wise. That’s another stock that I would say it doesn’t matter what happens in the NASDAQ over the next two, three years.
Facebook’s going up literally don’t matter what they’re so you know, certain opportunities in the market. You have out there obviously there was those stocks I was buying that I’ll probably disclose on financial education three later.
But yeah, make sure you take advantage of deals at the market especially if this market continues to get weaker and weaker in valuations start to really line up and keep in mind remember the small caps were already where you know things were the most attractive if the small caps fall more than you love some of those small caps. Don’t forget to take advantage I hope you guys enjoyed this video.
As always, don’t forget to smash if you haven’t already, if you want to try to apply for my private stock group and get in there along with financial fortress, that link is in the description area but also have that as the pinned comment down there. And yeah, that will definitely bring you a ton of value if you’re allowed in there. Thank you for watching. Have a great day.