The Stock Market is Now Doing This! Get Ready!
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Today we talk about the state of the stock market and I will show you a ton of data around the stock market and where valuations are at the moment. Many stocks are up huge lately, however, something, in particular, is going on… As an investor in the stock market, you need to mentally prepare for this now so you don’t get disappointed the next couple of quarters.
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Hey guys, today we talk about what in the heck is going on with this stock market? Look at it here today. Okay. I mean, we went from a market that had the fastest crash ever right? To then this extreme bull market and look at it. I mean, now we’re just on days like this Dow Jones down point two 3%.
The s&p 500 the NASDAQ up point two 8%. Okay, what in the heck is going on with this stock market, I want to talk about this, and you guys have to get ready for something, something’s going to take a lot of you guys by surprise, you’re gonna have no clue what’s coming, you likely haven’t been through a scenario like this.
And you’re going to wind up very, very confused on what the heck is going on. Okay, so I want to explain what is going about to happen and when so you can be prepared out there, you don’t get disappointed by something, okay.
And something I always try to do in regards to my YouTube channels. If we’re talking about the stock market as a whole, which this video here today is dedicated toward talking about the stock market as a whole. I tried to never hype the stock market in general in terms of being like oh, NASDAQ’s going to 20,000, get ready guys get in, then invest all your money.
I try to never do anything like that. And I try to never like to have like a depressing tone. Like all the stock market’s going to go down 50% or something like that. There you definitely YouTube channels out there that consistently hype and it’s, you know, the stock market to the moon, there’s definitely channels out there that consistently.
Everything is bad news, and they just always have a depressing tone, I just try to give you guys a good in my perspective, I will always lean a little more toward the positive side than the negative side. Obviously, the stock market goes up most years.
I’m a stock market investor, obviously believe in the markets, I’m always going to lean a little bit toward the positive side. But I try never to go too far where I’m just like a hype machine on the stock market.
Although I do love the hype, a lot of stocks out there that I’m super excited about. So I hope you guys enjoyed today’s video, as always, and I hope you really enjoy the Balanced View, I’m going to really give you on the stock market and give you a ton of insight.
So make sure you smash the thumbs up for me down there. And just so you guys know I have an exclusive link down there. So the first link down there, if you’re somebody that has five figures in the stock market, you’re looking to scale to six figures over the next couple years.
Or you have six figures in the stock market right now and you’re looking to scale to seven figures. Go ahead and check out the first link down there. We have a new revamped financial fortress product that is pretty amazing.
And if you’re qualified, you can actually get on a call with somebody high up from my team. So you want to go ahead and check that out first link in the description. Okay, let’s look at the NASDAQ composite starting out here.
Okay, so NASDAQ here today. 10,500, as we spoke about a point two 8%. It’s at, you know, right around all time highs, if you’re looking at a one year chart, right, it was like, dang, it’s right up there. Right. But if you notice over the past week or two, there’s been kind of a leveling off of the NASDAQ.
If you look, the NASDAQ really hasn’t done much in the past week or two Dow Jones Industrial Average, you’re gonna see this even to a greater extent, right. Dow Jones Industrial Average, obviously, you know, it got really ugly and reached into the eight teams came back like crazy reached all the way above 27.
And here we are, it’s, you know, over a month now, the Dow basically hasn’t gone anywhere. I mean, the Dow was at 26, six, literally over a month ago, and it hasn’t done anything as of recent, which means the markets are starting to level off here.
Okay. Now, this makes sense, in my opinion, okay. because on one hand, remember, we looked at the balance skill earlier, one hand you have the you know, the crowd that’s saying well is better days ahead. economic data is getting better, right?
Unemployment, GDP, earnings, everything has already troughed. Everything has already bought in. And so there’s just better days ahead, you have that side of skill. But then you have the other side of scale, which is like, Hey, why don’t we look at valuations a little bit.
Let’s look at how rich this market really is. And because you have those two sides, the markets kind of in no man’s land right now. The NASDAQ’s not really doing much. The Dow is not really doing much the past month or so, all of a sudden, we’re starting to get even scales, okay.
And here’s the thing, a lot of people are like, why, why? because things are getting better, man. All the company earnings out, they’re getting better. And that’s the perspective and I understand that all these s&p 500 companies are almost all them are seeing their their companies improve versus where they were at in March and April in May. Okay.
Business is a lot better for almost all these companies in July than it was a few months ago. And that’s good, right. But we got to talk about valuations. We got to talk about where this market actually is here today, not where the market was two months ago, or three months ago, or five months ago or a year ago was a market at here today versus the past.
Okay, we’re looking at forward piece here of s&p 500 large cap stocks. They’re on a 22.2 right now, this shows you all the way back to 2006. And looking we’re we’re so far elevated than any time in recent history.
Right. And especially if you think about any time since I’ve been a stock market, I go on the stock market 2008 2009 right. I mean, just look at any time I’ve been in the stock market. We’re paying the highest prices for large cap s&p 500 stocks that we’ve ever paid in recent history. Okay, let’s look at s&p 400. Mid caps, also very high, not as high.
Okay, a 20.7 for the mid caps, it’s still high, it’s still literally higher than any time in recent history anytime within the past, you know, 1415 years, but it’s not as crazy, as we saw with the large cap. Very interesting there.
Okay, s&p 600, small caps. Once again, the numbers have come down recently over the past week or two. But they’re still really, really high. By the way, all this information I’m showing you as far as these charts out of this company named Yardeni research, okay, actually put out some phenomenal data around four peas and those sorts of things.
But like, look at that says 23.9, it’s still far away higher than any time in recent history. This chart here shows you s&p 600, small caps at a 23.1. Okay, this goes all the way back to the tech bubble days.
And we’re above even the tech bubble days. Okay. You know, that’s pretty crazy. Because if you ever look at valuation Titan data around either s&p 500, especially NASDAQ back then you’re gonna usually find the highest p E’s 40s.
Anything across the board happened in that 99 to 2000 range. That was a tech bubble. And you know, evaluations pretty much haven’t, you know, reached those type of levels since then, thank goodness, because I can tell you, you know, valuations were so out of whack, and it’s why we still talk about it.
Here we are 20 years removed from the tech bubble. And I’m still bringing up as reference 20 years later, that’s how important that time period was. And that’s how out of whack things got valuation wise.
And this is why when when it comes to stock market, it’s not just about you know, all stocks grow to the sky. It’s about valuations and being you know, somewhat realistic with these companies. Here, we look at median forward p ease for the s&p 500.
So this is a median, forward p Okay, we look at it since I got in the market 2008 2009 were the highest, okay, we’re the highest we’ve been now it is down over the last few weeks. And that’s good news.
But we are still we have to be honest, we’re still the highest of any time in recent history is something very important. That’s median for p for the s&p 500. If we look at these charts here, okay, this shows you the s&p 500 for PE that’s in blue.
Okay, that’s a 21.9. Right now, if you also look at the s&p 500, median, forward p read 18.5. that essentially means there’s some stocks that are just trading at insane I mean, absolutely insane. P e ratios in the s&p 500 for the the forward and the mid to be that disconnected.
Okay. Usually they’re somewhat connected. Right now we’re in a time period where things are very, very disconnected. This essentially means that growth stocks are just trading really, really richly, let’s just put it that way.
But literally, you look at since I got in the market, 2008 2009 It’s the highest, it’s the highest for both of those, okay, it’s the highest free medium forward P and it’s the highest for just four peas in general.
Okay, something very, very important there. Let’s look at this one. This shows you s&p 500 peg ratio. Okay, this is a price to earnings growth ratio. If we look once again, since I’ve been in the market 2008 2009 We’re the highest we’ve ever been in by a large margin.
By a large margin. I mean, look at how far up that chart goes. It’s at a 2.1 You know, there’s been no time in recent history, we’ve been at a 2.1 it’s extremely high. It’s it’s down from its peak level, you know, a few weeks ago, or a month ago or so.
But dosh I mean, it’s still really, really tremendously high. Okay, if that’s not enough, let’s look at the four p growth versus value. And look at how disconnected these have begun to get. Okay, the growth for s&p 500, Citi group growth versus value is at 27.6. Now, that’s the blue one.
Look at how disconnected it is from value, you could always expect usually growth to trade much more richly than value, but we haven’t seen this type of disconnect since 99. In 2000. Okay, now, is it at those levels?
Absolutely not, it is not at those levels, but we haven’t seen it this big since then. Which gives you a little time to think about wow, you know, yeah, things are getting better in the economy and things like that. But Gosh, these valuations are pretty dang high.
When you just look at the facts, you look at the data behind this, okay? And you might be looking at all those charts in your like, we just went over what 10 different charts there or whatever. And you might be in bed right now.
Like I was when I was prepping this video and like what the heck does that mean Jeremy like what does all this mean? Okay. It means two things and these two things are very important. Okay. The first is the market is expensive right now, there’s no debating that.
I don’t care if you’re the ultra most bullish bullish, bullish bullish person in the world. And you are just such a massive believer in the markets. Great. Okay, we’re still expensive. I don’t care which way you slice it.
We’re in an expensive The market right now, but specifically expensive around growth stocks, okay. This is where things are really richly priced. Anything growth stock related, is trading unbelievably rich right now, we just went through facts, okay, those aren’t opinions, those charts aren’t opinions.
Those are facts about where these companies expect earnings to be over the next year. Okay. Number two, a strong recovery in 2021 is already priced in this is why the markets are trading the way they’re trading.
The fact is investors funds everybody across the board is basically expecting a very strong recovery in 2021. A lot of folks are expecting many of these companies, businesses to be read back the prior levels as soon as 2021 that’s the facts. Okay.
Investors are expecting a strong recovery. Okay. And what does this mean? Okay, this means two things, expect a stock market correction, if this scenario happens, okay. When I say a stock market correction, that is different than a stock market crash, if we say a stock market crash, we’re talking about the markets going down 2535 45%.
We’re talking about what happened, the financial crisis, we’re talking about what just happened in March, when the stock market dropped, the fastest bit ever has in history have dropped? Like, what was that 30 something percent in 22 trading days, we’ve never ever seen something like that happen before.
But then again, it’s pretty rare to get a once in 100 year event like Ronnie roenick amount of somewhere, but expect the correction if we get a weak recovery in 2021. Okay, if a weak recovery happens in 2021, when it comes to earnings.
GDP growth, everything like that, expect a stock market correction because we’re in a scenario where we priced in a phenomenal 2021 and just a it’s a you know, things are right back to normal. Okay. So if that doesn’t happen, guys in the market drops 510 15%.
Don’t be surprised. And by the way, that’d be healthy, and that would be fine. There’s nothing wrong with that. It’s nothing to really be scared over. Okay. number two thing to expect is stagnation. This is a big one. Okay? expect stagnation.
So many people expect the stock market to go up every day, every week, every month and when it stagnates or particular stock stagnate. They think like what’s going on? Why is the stock not really moving? It’s the same place it was six months ago, or a year ago or two years ago, I’ve seen some stocks.
Tesla, right? That’s stock like was pretty much a stagnation for like five years, right? stagnation, this happens, okay? Why? Because so much is already priced in. Okay. So, we’re gonna go through an example here, I’m gonna show you of what you got to get ready for okay.
So much growth is already priced in this market, especially when it comes to growth stocks in many stocks are priced to perfection now, and when your price to perfection as a stock, it’s usually not a great thing for your stock price in the short term. Because essentially, this means you need to you just come out with the best earnings.
You could ever come out with unbelievable numbers. And if you report anything less than the most unbelievable numbers, your stock price goes down. Okay, get ready, because this is gonna happen with a dramatic amount of stocks likely okay.
And it just happened here today. Netflix stock k, this is a perfect example of exactly what I’m talking about in terms of the stocks being priced to perfection. And even if they report amazing numbers, the stock stills goes down because Netflix last night reported, you know, would be considered amazing earnings record revenues, phenomenal.
Everything in the stock goes down six and a half percent today. That’s how their stock gets treated after those amazing earnings $15 billion in market capitalization gone here today. Okay. And this is what a lot of investors aren’t ready for, especially if they’re newer to the market.
They haven’t gone through something like this or like what, how does the stock go down six and a half percent after those numbers. Let’s look at how good those numbers were. This company just grew from $4.9 billion in revenue last year to this recent quarter.
They do $6.1 billion. Their revenues were up $1.2 billion year over year in the middle of a Roni Rhona really bad situation where most companies are going to likely see what revenues go down and probably go down considerably.
And here you have Netflix, a stock, a company that increases revenues $1.2 billion dollars year over year phenomenal growth. I mean absolutely phenomenal growth this company in a once in 100 year event, and their stock gets treated like this down 6.52% Are you kidding me? Are you flipping my flapjacks?
That’s how the stock gets disrespected after those amazing earnings. Kay, well guess what, when it came to Netflix stock is a stock that’s gone from under $300. Back in March of those lows, right toes trading well over $500 a share.
It is added about $100 billion of market capitalization in that amount of time when it was trading well over 500 based upon where it was at, you know what those March lows to 98 over 100 billion. Look at how richly priced evaluation I got this stock was priced to perfection.
And the market did not view those earnings yesterday as perfect. They were amazing. But amazing, didn’t even cut it because of how much his valuation has gone up. Look at Netflix for a moment. Okay, September 30 2019, the company is trading at a market capitalization of 117 billion.
Most recently, as far as like, yes, as of yesterday, the company’s market cap was trading at 230 million, it added $113 billion in market cap, when you had $113 billion in market cap, you better come out with the most amazing, amazing, amazing.
Amazing numbers, or you’re gonna probably see your stock price get hit okay, the four p on the stock, it usually always trades high for Netflix, but it’s trading incredibly high. Right now you go back to September, you’re getting this company at a four P of 48. You know, it’s a little rich definitely, in general, right, a four, four p a 48.
But it’s a lot lower than an 82, which is where it’s been trading at recently, right? This stock is priced to perfection, look at the price to sales ratio, how much has gone up, it went from 6.86 back in September 2019 to now trading at 11.
This means a company in general is just priced to perfection. Okay, and when your price to perfection, expect a stagnating stock price, or downtrending stock price most of the time unless that company is so amazing that they continue to beat okay.
So don’t be surprised if you want to grow stock out there. Or if you own several growth stocks in your portfolio, especially growth ones I’m talking about, okay, not just stocks in general, but especially in these growth companies that have seen their stock prices.
Double triple quadruple up and they report good or great numbers and the stock goes down or stagnates Do not be surprised you’re not be taken aback and like whoa, what how the stock market’s such a rip off, man.
I mean, how could my great growth? How could zoom stock my amazing growth stock report, you know, 125% revenue and the stock price goes up? Don’t be surprised if that happens. Okay. I’m just gonna put that out there.
And for my fellow Tesla shareholders, okay, you guys, you know, I’m a big believer in this company and investor in his company. Don’t be surprised if Tesla comes out with really strong earnings. Good, you know, good news overall.
And the stock price goes down to 1300 1200, something like that. Don’t be taken back like, Oh my gosh, how could this ever happen? The stock market, they don’t respect Tessa. Tessa is priced to perfection here in the short term that’s just factual around this particular stock amazings on Amazon.
This company’s went from back in September $850 billion market cap to 1.5 trillion now that like $700 billion in market cap in a matter of less than a year. So if when Amazon reports in a month from now or whatever, and they come out with earnings, and the earnings are amazing, and revenue growth is record highs and it’s amazing, amazing. Amazing.
Don’t be surprised if the stock goes down or doesn’t really do much and just stagnates Okay, don’t be taken back like this is so unfair. Why is my company Amazon here report amazing earnings and the stock goes down or or just stagnates? Don’t be surprised, okay?
And don’t be scared in this whole situation. Okay, do not be scared, do not fear this dropping like oh, my gosh, what if my stock doesn’t do anything? What if my stock goes down, and they even just don’t be scared about it, guys, there’s nothing to be scared of.
Okay, there’s still a few deals out there. It’s like finding needles in a haystack in this current market right now. But there’s still actually some deals in the stock market right now that you can find that some that I’ve been able to find recently.
And there’s still some out there, okay. And if we had more deals in this market, it would be great for all of us investors that are looking to buy unless you’re retiring tomorrow or something like that. And it would be healthy, it would be healthy.
If we can get a stock market correction of some kind, or some of these, you know, super high value growth, stocks can come down a bit to more realistic levels, it would be a healthy thing to happen in the stock market.
And something that you should actually look forward to something that you don’t be scared over this be the throat, if this happens, this is good for all of us. Okay, there’s nothing healthy about a market that just goes up and up and up.
And the NASDAQ goes from, you know, 6600 6800 to 10,600 in a matter of few months. Last thing we want to see is the NASDAQ go to 15,000 real quick or something like that, that’s not healthy, okay. Healthy is when you know, stocks can go down a little bit and especially for the short term, and they don’t just go up every day.
Okay, guys, so hope you really enjoyed this video, hope you learned a lot from it between the data and just kind of giving you my perspective as somebody who’s been in this market for over a decade. So make sure you smash that thumbs up button for me down there, please. And don’t forget, if you want to check that out.
And you want to learn how to scale your account through our financial fortress program, you want to get on a call with somebody high up from my team. Go ahead and check that out down there. So the first link in the description.
And that’s really for folks that are you know, you’re at five figures in the market, you’re trying to get to six figures or you’re at six figures and you’re trying to scale to seven figures in the stock market.
That’s something I’ve been able to successfully do over time. That’s what we teach. So if you’re in any of those two categories. Definitely check that out first link in the description. Thank you for watching and have a great day.