The Stock Market Finally Fell! Why!?
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Well, what do you know! The stock market is finally falling! back days the stock market was down quite a bit. David Tepper says the stock market is the most overvalued since 1999! big statement from a big guy… The dow 30, S&P 500, and NASDAQ were all down big today. About dang time. The fed has some negative things to say. Warren Buffett doesn’t like where things are at… This stock market constantly going up has made no sense considering the massive recession we are in 2020.
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Well, I just woke up a little over an hour going and I turn on my iPad and I go on the stock tracker app and I say it my Am I still dreaming or is this is this actually happening? Is the stock market really falling back to back days? And I’m going through all these stocks.
I’m like, Yes, there’s red everywhere. Everything’s red. Oh, my goodness, we’re actually getting the market to fall in is finally happening. Oh, my goodness, Dow Jones Industrial Average down 557 points here today, s&p 500 down 2.15% NASDAQ down 2.33%.
Now as I’m recording this video, the stock market is still open. We’ll see where everything trades out for the rest of the day. But oh my gosh, guys, it’s actually happening the markets actually falling yesterday, the market fell as well remember, yesterday.
The market was kind of around breakeven most of the day and then right at the end also started falling big and the Dow ended up dropping about 450 points so that the back to back days where the stock market is actually down which is a miracle because remember, just on Friday.
When I was recording that video, right, basically, which was a video where I was pointing out how ridiculous a market was trading right the NASDAQ at that time was up over 20% on a one year chart. Like it was ridiculous. Like, give me a gimme like a good argument whether NASDAQ deserves to be up over 20% in the past one year. You can’t do it.
What because Amazon sales might be a little bit stronger than they would have been without Ronnie Rona. Meanwhile every other company NASDAQ’s basically hurting in this whole scenario, like like apples not going to sell as many iPhones as they would have without running running.
Like why in the world should the NASDAQ have been up 20% Plus, like Google Ad rates are down like everything bad like for almost every single company is just because one company benefits a little while you know, 100 others fail worse than they could have expected a year ago.
That doesn’t mean the market should be up 20 plus percent. Like that was ridiculous. It’s still ridiculous being up 12.7% in the past one year, let’s be very clear about that. The Nasdaq should be down in the past one year.
There’s no argument that could be made that why the NASDAQ just because Amazon sales might be a little bit better, and they’re not going to be dramatically better. I can tell you that it’s not like Amazon’s revenues also going to be up 50% because they’re not okay. s&p 500 is only down 1.3%.
But hey, that’s better than was right. The s&p 500 was up over 4% when I recorded that video on Friday, which was ridiculous. You can’t make an argument that I mean, almost every single company in the s&p 500 is getting hit very hard right now. their balance sheets are much worse.
There’s no reason why the s&p 500 should have been up as of just a few days ago and there’s no reason why should only be down 1% Let me be very frank on that. There’s no reason for that. Okay, so finally, the stock market is falling and everybody’s asking why and that’s what I’m here to address here today.
Why is it finally going down? Okay, hope you guys enjoy. So smash the thumbs up button. The main reason is the feds printer no longer go burned ink kind of dried up nothing. Just kidding. You know, maybe it didn’t Something happened there.
No. Okay. There’s a few different things that are actually happening here. David Tepper and one of the few hedge fund managers that actually actually respect this guy. Okay. David Tepper says stock market is the most overvalued he’s ever seen, except 1999.
This is a this is an important figure in the stock market. Please yawn like a warren buffett level in terms of like importance to what he says no, but I can tell you, he’s one of probably the 10 or 20 most important people in the stock market that when they speak, people listen.
And so when David Tepper comes out and says something like that this is the most overvalued market he’s seen other than 1999. Investors Listen, and they say whoa, David Tepper just said that okay, David Tepper says the s&p 500 forward price earnings ratio based on estimates for the next 12 months has ballooned to above 20.
A level not seen since 2002. He says the market is pretty high, and the Fed has put a lot of money in here. 10%, there’s been different mis allocation of capital in the markets, the markets is by anybody’s standard, pretty full.
I would completely agree with that the case there’s a lot of big tech stocks are already fully valued. And yeah, I mean, I would say most stocks and I would say 99.9% of stocks in the stock market are either at full value right now, or overvalued.
Like there’s maybe like point 01 percent of stocks that you could say are actually undervalued. It’s it’s probably it’s the toughest market I’ve ever seen for actually finding deals out there.
And so you got to ask yourself who’s buying in this market? who’s buying? Do you know me? I’m not putting big money in the market. I haven’t been for at least a month now. I’m looking at this market.
I’m like, No, it can’t it’s come back way too much. If I’m not buying Okay, who’s buying Warren Buffett? Is he buying? Nope. Warren Buffett’s cap, you know, they have what $140 billion in cash and short term investments.
And he’s not out there buying stocks right now he’s not even buying his own stock Berkshire Hathaway at least as of the latest quarter right. He And Warren Buffett not buying some of that’s always putting money in just like myself.
Somebody always you know wants to put a lot of money in the market people like that aren’t putting money in the market. Hmm. David Tepper? Is he buying now highly touted when he says the stock market is the most overvalued?
He’s seen since 1999. I highly doubt David Tepper is buying, right? You even haven’t CEOs of some of these companies come out and say their stocks too high. Right? You must as Tesla stock is too high back on May 1, that’s when it was around.
It was around like 800 a share then right? He says the stock price is too high. Who is buying in this market right now? Okay, that’s the biggest question this market, you just gotta chill.
If you buy, you can’t buy heavy, if you buy you buy small and this type of market and you really just got to chill, you got to lay back because you’re seeing the person after person that are usually very, very bullish people that usually have a ton of money they’re putting into the market, deciding to not do that right now.
Not out of necessity, but out of choice. And when you see something like that, it should kind of you know, ring some bells like, Huh, that’s kind of something you know, you might want to pay attention to a little bit.
Okay, so type of market, you do three things, your research stocks, you find the next great one, use your time, instead of buying stocks and trying to buy, buy, buy, you use your time to research companies and with your current stock show you the whole The more you sell on okay, if you believe in the company a lot long term, it’s hard to sell.
So you might as well just hold and if you feel like a company got way overvalued and you want to raise cash, then you go ahead and you take some profits, okay, look at something like a Shopify stock, right? Shopify stock has gone from $400 to 700.
Plus, in literally a matter of a month, Shopify business did not increase 10s of billions of dollars in the past one month, I can guarantee you that. Okay, I can guarantee you that, but yet their market capitalization has added 10s of billions of dollars in the past one month.
There’s no way that makes sense. And then in the discord chat a couple days ago, I actually brought to everybody’s attention a stock that I’ve been wanting to buy for a while and I feel like this particular stock.
I said to them, I feel like this is like the poster child of this current stock market we’re in that’s just been up trending up trending where it just doesn’t make sense. And you just, you just can’t even make sense of this. Right.
It’s Texas Roadhouse stock very under the radar stock, but this just kind of proves how ridiculous things are right now. I feel like this is like the poster child. As of just a few days ago, this stock is trading 48 $49 a share.
Okay, Texas Roadhouse is a restaurant where the majority of the high high majority of their business is dying in business. Their restaurants are usually extremely packed. There’s people on people is just, you know, most of these locations, you can have an hour wait two hour wait in the waiting room.
It’s like It’s like being in a club. It’s insane. Okay, that’s Texas Roadhouse. This is a stock that last year is trading at, you know, 50 $55 a share most of the year. That’s where it’s trading. And it hardly and fallen.
I mean, literally, just as a few days ago was 48 $49 a share? How does that make any sense? This this business model was absolutely devastated right now. I mean, absolutely devastated. And it will continue to be devastated for some time.
So why should this business traded anywhere remotely close to where was trading at before it just flat out? Doesn’t make sense. Okay. And this is a type of stock market, we have been in reboot, you know, recently that it just doesn’t make sense.
And as somebody that’s usually a buyer of stocks, like myself, I’ve had to go on the sidelines, say, you know, what, I’m not putting a bunch of money into these stocks, because that’s ridiculous.
I’m not buying Texas Roadhouse, you know, for just a few dollars cheaper than it was when when they’ve missed out on tons of business. And they will continue to miss out on tons of business, what when they open when they can actually open their dining room, it’s half full.
Okay, so what their business is going to be half of what it was, and what about the fact that many people still don’t feel comfortable going out and aren’t going to feel comfortable going out for some time because of many different reasons.
Right? You know, that’s just ridiculous. It’s flat out ridiculous. Okay. Why else? Could the stock market finally be falling? Well, what else do we know? Okay, employers, so many of these employers all around the United States and worldwide are suspending 401 k matching contributions.
And even some state and local governments that that have government employees, and usually have pension plans in a 401 Ks and usually put money in toward that. A lot of them are completely cutting that for at least the next 12 months. Okay. So what does this mean for the stock market?
That essentially means it’s gonna be way less money going into the stock market, like there usually is, right? Because you think about all these big companies that match 401k you think about all the employees that have 401 K’s and they’re always you know, putting money in and maybe it’s just 50 bucks.
100 bucks a week. Maybe some of these people is 200 300 bucks a week might not seem a lot until you add up the numbers and it’s millions and millions and millions of people and then all sudden you take those numbers away and also you have a significant less buyer in work. That’s right.
And think about the unemployment rate, the unemployment rate, you know, the unemployment rate is at least 14.7%. But I can guarantee you the real unemployment rate is actually much higher than 14.7%.
And if you were if you’re an employee, you’re not putting money in a 401k. Right now, you’re just not do you’re not doing that because you can’t do that. So there’s no mass money going in the 401k, either from the employer side, or from the employee side, which takes a massive, massive buyer out of the stock market.
Okay, if you lose your job, you’re not so worried about buying stocks, you’re thinking about how do I sell any stocks? I have, how do I cash out my 401k? Because I need that money to survive, right? That’s the type of scenario you’re in right?
I remember when I was first starting my real estate marketing company was 2015 Where was I taking money out of because I needed to live and I needed to support my family and things like that.
I was taking money out of my stock market accounts. It’s the only thing I had I didn’t have an income I was trying to get the business going it was going very slow. So what did I have to do I had to sell stocks and sell stocks because you know, we need somewhere to live.
I need a roof over our head and things like that. And that’s the that’s the type of scenario that a lot of folks in right now where they like they lost their job, or you know, it’s not going the way it was and so they go and they they cash out 401 K’s they sell stocks, they do whatever they have to to survive.
Okay, so the flat out honest truth is the stock market going up recently, over the past one to two months, it’s got to be the strangest thing I’ve ever seen in the stock market. Let me be very, very clear about that is the strangest, weirdest thing I’ve ever seen in the stock market.
It makes no sense whatsoever. So let’s give a rundown here of what’s going on. We have no big investors buying lately. None of these big investors want any one any part of this market right now in terms of putting new money and that is that is a big in itself.
Okay, so so what is pushing up the stock market? If If no big investors are buying and those are the ones that really can push prices up or down? who’s buying this market right now? Okay. 401k contributions are way down, right on the employee side and the employer side, right?
People lose jobs. The Hey, lets us money go into the 401k. Same thing for the company. They don’t have to match. Maybe if they were matching before. Maybe they like, Hey, man, we need to save a bit of money we have right now. We’re not matching.
Perma bulls like me. formable. Right. People that are always bullish, not even putting big money in this market. We’re like, Nah, no. Well, let’s see how things play out. I’m not going to run into this market right now. Let’s see how fast it takes for unemployment to come down.
Why do I need to put money in the market? When the NASDAQ’s up was up? You know, 20 plus percent as of Friday, why do I need to put my money in and be like, Oh, I kind of kind of I just got to put 100k here, 100k there 100k. Here? Why do I need to do that?
The fact is, I’m not getting some massive discount on most of these stocks, I’m paying an overvalued valuation or full price for the stocks, that that’s not the name of the game. I want to buy undervalued assets at the end of the day.
So you have folks like myself that are saying, you know, what, we’ll we’ll stay over here for now let’s, let’s see how things play out. And if the economy gets back on track, we’ll enter the market. But let’s see.
Let’s just let’s just have some patience for a moment. Okay. Okay. Corporate buybacks are all pretty much cut right now. Corporate buybacks. You know, most of these companies had been buying back their stock very heavily.
And you know, a lot of people that always point out, but a lot of bears, oh, this is why the stock market keeps going up. Because you have these buybacks on and the companies are buying their own stocks back.
Most of these companies aren’t even buying back their own stock right now. And that’s facts. That’s not opinion. That’s facts. The majority of the company, the public companies out there are not buying shares back.
So you just put, in some cases, the biggest buyer out of the market, because literally for some of these corporations, the biggest buyer of their stock, you want to know what it was its own Corporation, you don’t have that right now.
And you haven’t had that for the last couple months. And yet the stock market has been going up and it’s just like, this is the strangest most fishy stock market I’ve ever seen in my 12 years of being in this okay.
The thing about it, usually there’s a ton of dividend money being paid out, right? And what have we seen from the majority of companies that usually pay dividends? We’ve seen them either cut the dividend by quite a bit or cut it completely, and that’s the majority of dividend stocks out there.
So imagine you’re an investor and you’re used to getting all this dividend money and now all sudden half your companies that you usually get dividends from cut that money, what do you usually do as a dividend investor with that money usually most folks that are get that dividend money, they don’t go out and spend that money.
They reinvest that money back into more stocks and you can say well, that pushes up stocks more and more, they get that dividend money they buy more stocks with it pushes up stock prices higher and higher.
That’s not even going on right now. Like we said, most of these dividend companies have cut their dividends. So most of the folks that usually you know are investing all this money or the big funds right?
All of a sudden dividends are cut right? Didn’t know these are usually all pretty good dividend payers especially like Wynn resorts Las Vegas Sands you know MGM these guys have all cut their dividends.
So if you own any of those stocks, you know my own when you’re not getting dividends Right now and you probably are for some time can usually if I get that wind dividend What am I doing with that money I don’t go spend it at the club when no.
I take that wind dividend money, go buy some more wind shares with it or buy another stock. That’s not happening right now. So that takes another big buy and segment out of the market right and get the NASDAQ was up 20 plus percent on one year as a Friday.
The s&p 500 was up four plus percent on a one year as a Friday. That doesn’t make sense flat out this market needs to drop and it needs to continue to drop because nothing makes sense right now in the stock market.
I can tell you that it is the fishiest thing. No There are not big investors buying that’s facts. Okay, no there are not 401k contributions going to Sky sky right now. That is fact so down big perma bulls sideline though corporations aren’t buying mass amounts of their stock back those are down massively and I mean.
Like you know, probably down 80% plus right now, dividend money. Nothing makes sense right now the only thing could be Thank you for watching and have a great day.