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Well, Guys today I am going to tell you guys how exactly I find my 10x stocks. Its something that a lot of people ask me about in discord and Instagram. So today I decided to do a very educational video about what exactly I look for in a stock that makes me believe that is going to 10x in the future.
Now it is very different looking for a 10x stock and a stock that is going to 2x. If you are looking for a stock that is going to 2x, that is way easier. But so many factors go into my decision on buying a stock that I believe will 10x in the future. So far the only stock I own that has 10x has been, Tesla. But I own a handful of other companies that are on the way to 10x.
Hope you enjoy this video! It’s an educational packed video and a very in-depth video on what exactly I’m looking for. Don’t forget to smash! It’s very important to smash. Also leave me your opinion in the comment section. Also let me know if there is a stock to buy now or a stock to watch now.
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Well howdy there, folks and welcome into this video. I feel like this video I’m going to record for you here today is a video that is very much needed in the overall stock market investing space, we are talking about spec stocks, but we’re specifically talking about spec stocks as a whole my personal opinions on spec stocks, what you should be doing before you ever buy a spec stock, how to identify a good opportunity and when these stocks versus a bad opportunity they’ve risk involved like this is a very in depth video.
So I hope you guys really enjoy this. It’s just gonna be a comprehensive look at spec stocks in general. And like I said, I’ve seen definitely a lot of people talk about spec stocks, but like more on an individual basis. Not a lot of folks have talked about it as a whole.
And if you haven’t heard of spec stocks before, well, this is your introduction you probably have, you might just might just not have hit you yet that you’ve actually invest in one of these type of companies, or you’ve thought about investing in it or you watch other people’s videos about these different companies.
Okay, so hope you guys enjoy this. As always, don’t forget to smash if you want to join stock hub, which is the biggest and best free discord chat for talking stocks with a ton of other investors. I’ll have that linked in the description if you want to try to apply from a private stock group, they’ll be linked in the description as well.
Okay, so let’s talk about this. So spec stocks, what is a spec? Okay, it’s a special purpose acquisition company. Now I know I didn’t spell the word acquisition, right. And it’s because I am awful at spelling. And I literally didn’t feel like spell checking. So roast me in the comments.
Okay, I do apologize. I am horrible at spelling, thank goodness, like, you know, money wasn’t dictated by how well you can spell because I would be a very, very poor man. That way cuz I cannot spell for crap. Okay.
But that’s what it is, is a special purpose acquisition company is something that’s taken off. And I mean, taken off in a huge way over the past specifically like the past nine to 12 months. And it’s kind of almost like the new form IPO where Initial Public Offering where a company goes public, and then just regular investors can start buying into these companies, okay, but it’s a new form, it’s a different way of doing it, then the IPO process, which had to go through a lot of different big Wall Street banks, and things like that.
And so it’s an exciting space right now. It’s very exciting. And there’s tons of stocks that are doing this right now. And I can tell you, there’s gonna be a lot more companies coming in over the next, let’s say, 12 to 18 months, that are gonna go this route of going back route rather than staying as a private company, or rather than raising more VC money if they’re a private company, or rather than going full scale IPO.
So it’s interesting. Okay, now, I want to start out today’s video by talking about what happened in 1998 through 2000. Okay, so there was a time period, where IPOs initial public offerings, this is before specs, okay? They were going wild. Okay, so tell them companies were going public during the course those few years.
And stock after stock was going up and up and up. And people, some people made a fortune off of just IPO investing. So a new IPL comes out by it shoots up the first day you sell out at some point you make yourself 20% 30% 40% 100% in a day, okay?
In a day, we’re not talking in a year, we’re talking in a day. And it was a time period when some people took like, I remember there’s a story I heard, okay, is one guy made a fortune off IPOs cake, what he did in from actually a very small amount of money, what he was doing was essentially, almost every IPO was going up like crazy.
So as long as you bought in pretty much like within the first like 30 minutes of trading, you are almost guaranteed to make money over the next several hours, because more and more people buy in stock would just keep going up more and more and more. It was the play, okay. And so what this guy was doing was he he essentially started with actually a really small amount of money. If I recall, he was actually in college.
And he kind of like had a little finesse on the system because brokerages back then you could essentially place a trade in and even put it on a lot of margin before the money actually cleared into your account.
So and then go ahead, you make a bunch of money sell out of that. And you go ahead and take the profit in that goes toward that money that was supposed to clear and he was doing something back then I remember he would like cancel the order for the money inflowing.
But then he was getting to keep the profit, like it was some sort of finance that was like ridiculous. And the guy’s a genius for like figuring out that whole situation. And taking advantage of that. And he made himself a fortune made like an absolute fortune during that time.
But other people were just making a fortune during that time by simply buying the IPO whatever it is, didn’t matter what it was pretty much during that time. You buy the IPO, you make money. It’s just that’s the market we’re in and you know, now we look at it we call the tech bubble stage where valuations were getting insane, even a great company like Amazon.
Well, it wasn’t a great company back then. It was just simply an online bookstore like Amazon’s valuation ended up going to like it was oh my gosh, I can’t remember what it was at its highest. I think it was in the 10s of billions of dollars.
Then Amazon had no place at that time being valued at 10s of billions of dollars. I need to tell you that that was absolutely insane. But it was just a lot of companies were flying high. IPO market was hot. And it pretty much didn’t matter what IPO you’re buying, as long as it had a story behind it, boom, you’re making a bunch of money. Okay.
So it was an interesting time period. Now, I’ll tell you that, because we’re going through somewhat of a similar situation right now with these spec stocks. So there was a big study that was done recently on spec performance. And it was found that almost all these companies that are that are, you know, going through a special acquisition company phase, almost all of them see substantial rises in their stock prices.
Usually, before it even happens, the deal even happens after the deal happens, okay? Specifically, within the next like, day or two, after, you know, people start buying in and it’s official, okay. So the fact is, spec performance is amazing.
And it’s across the board. And it really doesn’t matter what spec it is, almost all of them have been going up and up and up. And so definitely remind you a bit of that IPO time back, you know, 20 plus years ago, where’s essentially, it doesn’t matter, like put your money in, boom, you make a bunch of money, okay? That’s what we’re going through right now in the spec stage right now, okay?
Now, this all works phenomenally when you have max liquidity, when the stock market in general is going up and up and up. And when you’re in a situation where it’s a risk on because right now we’re definitely in a time period in the stock market where folks are looking, and they’re saying they want to they want to take risk right now.
There’s no doubt about it. Okay, this is the stock market we’re in. It’s a risk on stock market. This is not a time period where where people are saying, Hmm, I don’t know, if I want to risk my money, more people are saying, like, what’s going to give me my best return?
Okay, the people are buying stuff, they don’t even have a clue about, okay, they’re just seeing stuff go up. And they’re like, I gotta buy that. gotta buy that. gotta buy that. Because if it keeps going up, and you watch it go up every day, and you’ve been tracking it for a week, and it just keeps going up and up.
What do you want to do? You want to go out and buy it in with these specs, for instance, right? These spec stocks, people are watching these stocks, climb, climb, climb, climb, climb, and they’re saying, Why am I not going to buy the next one, the next one’s probably going to do with that last one did and I’ve been tracking the last four of these, and they all went up?
Why is this one going to be any different. And then obviously, a lot of these specs continue to go up. And so they’re proven right? And they continue to do that, okay. And so in this sort of environment, where you have max liquidity, where you have tons of stimulus money being pumped out there, and tons of money just being, you know, we hear about $1.9 trillion stimulus package coming. You know, what I mean?
Like, we’re in that type of environment right now, where there’s a lot of money sloshing around a lot of cheap money, interest rates right now are about the lowest they’ve ever been, in all this is extremely good. If you’re risk assets, okay, risk assets, meaning assets, that people are taking a big risk. And it’s not like we’re talking about buying Coca Cola stock, or buying Walmart stock, or Google stock or something like that.
Okay, these are very risk on assets, okay, because a lot of them, you know, we don’t know if they’re telling stories and things like that. Now, more and more people are kind of figuring out this finance, right, they’re kind of figuring out, Oh, my gosh, every single spec pretty much goes up, let me just buy every single spec, right, or let me buy every blank check company, let me just put my money here, because they’re all starting to figure this out. Right.
But that works. And that helps kind of like, accelerate the gains. But on the flip side, as you get more and more people into it, eventually you get to a max level, right?
And things switch, and then that that whole, like push that was helping this market, kind of like the IPO market, because I mean, you go back to that time period, you know, the people that were we’re starting to figure out that for NASA, and let’s say 1998, when they did really good into 99, and then eventually kind of toward 2000, everybody had already been piling in those trades, things started going the wrong way.
And once things start kind of rolling the wrong way, it gets worse and worse. And then people start having more disbelief, let that next IPO is not going to be the one that flies up, and then it doesn’t fly up, and then the next one is not gonna fly up. And that doesn’t fly up. And then you start to have the buyers dry up more and more over time.
Okay. So yeah, we have a lot of people figuring out this whole system right now. And a lot of folks are making a lot of money from it. Okay, it doesn’t continue forever, something very important to keep in mind. Also, something very important to keep in mind is not all of these SPAC stocks are created equal, just like all the rest of stocks in the stock market are not created equal.
Tesla is not the same as Ford. And Ford is not the same as AAA. And Chipotle is not the same as Amazon and Amazon’s not the same as Apple. Every stock should be taken differently. And not all spec stories are created equal, especially if you’re a long term investor these companies, okay, so something very important you got to figure out is, Are you being sold a story or are you being sold a company essentially, okay.
And there’s a big, big difference, and I call it the 75 to 100 ratio, okay. You know, let’s say if there’s a talk time from a CEO, and you have, let’s say, 100% of the talk time, is 75% of that talk time being used 75% or more of that talk time being used on talking about future stuff or what they Already done.
A very important thing you want to see in a CEO is them talking 75% of the time or more on what they’ve already done, what they’ve already done, know what they’re gonna do in the future. Because if all the CEOs talking about is what they’re gonna do this, I’m gonna do that, and they’re gonna do this and that in the future, that likely means they haven’t proven very much at all.
And that’s a bad thing. When you’re risking your hard earned money in something, you want things that are more proven, right? Anybody could sell anybody anything technically, in this world, right? I could sell you a story on how I have some workers working on trading a phone, this is not true.
Okay, creating a phone that is better than any Apple, Samsung, or any smartphone in the world. Okay, and I could sell the story on Yeah, we’re been working on it. And it’s going to be better than any smartphone ever. Okay, and I could sell you the story. At the end of the day, you kind of got to say, okay, where’s the proof around this?
Like, where’s the proof of concept? What have you made electronics wise in the past? That gives us some confidence that you could make a phone better than Samsung and Apple and all these other companies out there, right? You’d be like, well, Jeremy, you make YouTube videos and invest in stocks. So balsan, you’re gonna create a better phone than everybody else in the world?
Like, these are important questions to ask. And the same exact thing should be said for the spec stocks, if they’re selling you a story. And they’re going to do this and that. Why should you believe them? Just because they’re selling it to you?
And they’re saying they could do this? And that? Where’s the proven technology behind it? Where’s the proven this? And that? What have they done so far? In the real world that makes you say, yes, this one’s a winner. Okay, and how much time are they spending on telling you about stuff they want to do years from now?
And how much are they telling you about what they’re doing now, because I can tell you all the great companies I ever invest in, like 10%, or 20%, maybe of the talk time is spent on future and where they’re going with to try and do 70 80% is on what they’re doing now and what they’ve done in the past, and how that’s going to translate to the future.
And that’s important, because you want proven stuff when you’re going to invest your money out there. Okay? Very, very, very key, if you listen to a Tesla conference call, okay. When you listen to a conference call, it’s not all just about what they’re going to be doing in three years, five years from now, some of the conference call could be talking about what they’re doing three years from now.
And five years from now, it’s a very small segment, most of it’s on what’s going on today with Tesla’s business model, and what have they done in the past? And how’s it gonna translate to the future, not what they’re doing three years or five years from now, that should be a very, very small amount, listen to any great company, I don’t care if Amazon or Shopify or Google or Apple or any of them, okay?
Because truly great companies can tell you what they’re doing now. And what they’ve done over the past year, not just what’s going to happen over the next 246 years or something like that. Okay, that’s otherwise it just gets into territory where you’re selling a story rather than selling a stock. Okay?
No, most investors don’t understand the level of risk, they’re taking in a lot of these specs, they aren’t regulated to the same extent, or the same levels that like, let’s say an IPO would be it’s more wild wild west stage.
Now, it’s not Wild Wild West stage in terms of like to level of like maybe like Icos and and some of those other things that are going on out there. But it’s certainly not regulated to levels that some, some folks might understand.
Okay, and so I don’t really think some investors or a lot of investors really understand the level of risk they’re really taking when they’re investing in lollies spec stocks, especially the ones where they’re telling you a story.
You know, that’s the really, really key thing. are they telling you a story? Or are they giving you an investment thesis on what they’ve done, where they’re at today, and where they’re going over time? Okay, that’s really, really important.
Now, in terms of the spec stocks in this craziness about, you know, almost all them just going up and up and up, things like that, that could last like 2022 2023. Like, we don’t know, when that’s going to slow down as far as this whole, you know, almost every single one goes up and up and up, and everybody wants to get in the next pack and the next spec stock, they can last a while. Remember the IPO phase?
Like you know that that super hot phase, it lasted for several years. Eventually it cools off and it and you know, comes back to reality. But it can last a while. So you know, it just because maybe last another year or two does not mean that’s going to last forever.
I can promise you that. We’re just all these spec stocks are flying up. Okay. But it could definitely last for another year or two. There’s no doubt about that. Okay. Now my question is what happens when liquidity slows in chills a bit. liquidity just says sloshing of money out there is another 1.9 trillion blah, blah, blah, okay. What happens when rates rise?
Remember, with all these assets going up and up and up in price, especially as unemployment numbers come down, rates are going to rise in rates could potentially rise substantially? Really, really quickly? Okay. I would not be surprised.
The fact is real estate prices have been rising quite rapidly in many markets around the United States. homes have been moving very quickly. The stock market’s almost hits a new all time high. Almost every single day, and assets in general are just getting more expensive kryptos, I don’t care really what you’re talking about, okay.
And there’s obviously mass inflation, I was just talking to a friend of mine recently. And he said, you know, some of the different steel price and aluminum prices, they have to pay for different products for his company. He says they are ridiculously high, like, by far and away, the highest he’s ever seen.
And it just keeps getting worse and worse and worse. And it’s eating into a lot of their profits. And now they’re having to charge customers like surcharges and all these sorts of things. And you’re seeing this in mass inflation happening right now.
Well, when that mass inflation goes on like that, you can only allow it for so long, you don’t want you know, the dollar to go to pretty much nothing, right? So then you start having things like you start pulling back the money, you start having rates rise, and these sorts of things.
And you start kind of slowing things down a bit. So your dollar doesn’t end up becoming like a Zimbabwe dollar back in the day where it becomes worthless, or something like that. Okay. And so that’s all gonna play out, and it could all play out within the next year.
That’s what I don’t think a lot of people understand unemployment rate, as things kind of transpire into the spring and summer, the economy gets back more normal, more of these businesses open back up, unemployment is gonna likely drop really fast, really rapidly, okay.
And when this happens, in top of that assets continue to go up, and everything’s getting more and more expensive, rates are going to rise. And so I think a lot of people have figured, well, rates aren’t going to rise till maybe, maybe 2023 2024 2025.
Think, again, it’s all I’m gonna say about that thing. Again, just just wait, watch, watch what happens with the Fed over the next six to 12 months, high probability, they start raising rates way faster, and way more quickly than a lot of people had figured, okay, especially as that unemployment rate drops, this is going to be very, very key.
So when that happens, what happens to the market in the short term, when all sudden rates are going up and up and up? What happens to risk on assets?
If you notice a lot of the stocks I’ve been buying very recently, are a little more toward value and in companies that will thrive regardless of if there’s a great economy and Okay, economy, a bad economy, a great stock market, okay, stock market, you see me kind of going a little more towards some of these value plays and things like that, in in companies that are more needs based, right, I did a video.
I think it was yesterday on financial education, three, about five different stocks that I think are phenomenal stocks for the next three years, regardless of what happens in the economy in the stock market.
And you see me moving to some of these assets, because I’m noticing this, and I’m like, it’s not going to be pretty, it’s not going to be pretty what happens to a lot of these risk on assets, when, you know, liquidity starts to dry up a bit and rates start to rise. Okay.
And what happens when the market has a true pullback, we haven’t seen a true pullback in the stock market in since like, about almost a year ago, right? February, March. I mean, now we’re in February 2021. Last time, when we had more than a pullback, it was actually like a full on like stock market crash, right?
Like what happens when the market drops, 15 20% 25%, something like that, that could easily happen in this market where valuations are stretched, and false. And you get a situation where rates start to rise. And everybody’s like, what I thought rates weren’t rising four years from now.
And liquidity starts drying up a little bit old boy, okay, it things can happen much faster. And people assume, just like Donald think there’s no soul on this planet. That if you go back to February, March of 2020, including myself, okay, if you will, back to February, March of 2020.
There’s no soul on this planet. With that would tell you in 12 months, the stock market will be at record highs. No. Okay. I was caught in a lot of content back there was no one during February, March when that market was crashing now who would have went on record and been like, yes, the stock market is going to record highs within 12 months from now?
No, okay, by the way, when we actually went to record highs actually way quicker than 12 months, okay. And who would have ever expected it. Now, we’re in a situation where everybody’s expected the unemployment numbers to get to come down and the economy to get better. People aren’t really expecting there to be a big pullback in the market.
And let’s say the summertime into the full time of this upcoming year, especially if rates start to rise as this mass inflation continues to get worse and worse and worse. Okay. Very important. What happens to the spec stocks and the risk on stocks, especially the ones that maybe you’re just selling the story a little bit and don’t have that much proven?
My gosh, okay, those stocks, they sell really well when everybody’s trying to take max level of risk. But those stocks are the last ones, the last ones people buy, when the market starts downtrending and people start getting scared. And you just see the market go down and down, down. Okay. Very important.
All right. There’s been there’s been a lot of people that made a lot of money in the stock market that don’t know truly what the heck they’re doing. In the stock market, there’s been so many people that have gotten involved.
And I’m talking on the retail side, specifically, the retail side over the past year that have made a lot of money in different stocks, the market crashed or like, oh, shoot, man, I gotta buy stocks. And as they’ve done phenomenal, and they made some great gains, but a lot of them don’t even really know how to judge companies in these sorts of things.
What is gonna happen to those individuals, when the market starts going down day after day after day after day, and we have a true pullback in the market. And fear really starts going. Those folks haven’t really been through that yet. Because they start a lot of these folks have gotten in the market after the stock market crashed in February, March.
And they sell the market down huge. And they remembered watching those videos of myself and Graham and all those different people on YouTube. And out there in general say, hey, next time the stock market crashes, buy stocks, buy the dip, and all those people remember that and they’re like, that was my time.
Oh, weeble, Robin Hood, Where are you guys? I’m gonna start an account. Those people don’t know what they’re doing to the market. And they don’t have the right mindset. What’s going to happen to them, okay, and especially if they’re in a lot of risky, risky assets.
All right. Now, another thing I think is gonna happen with the spec stocks is they’re going to get greedy, or they’re gonna push up valuations. I can already tell you some of these companies that were spec play six months ago, seven months ago, eight months ago are we looking at and like, man, I should have waited to do my spec till now.
Because now is even a better time to do one of these moves, because you can raise even more money. So in my opinion, the spec plays will keep greedier, they’re gonna push up their valuations more and more, it’s gonna happen. It happens in the IPO market.
When IPO markets really hot. When the IPO markets really hot. You have all these companies trying to get bigger and bigger valuations are like, Oh, I need this valuation that valuation you saw it happened in the private markets, right?
The private private valuations went insane for basically 2010 through about 2016 or so. Okay. And then something happened. And all these startups, valuations started collapsing pretty fast. Remember, Uber was like, oh, they’re going public, they’re gonna go public at blah, blah, blah, price, then they ended up having to weigh less than that.
And the stock still dropped way less than that. And that was like stock after stock after stock during that period. And right now, a lot of these specs are gonna get greedy, they’re gunning, push up their valuations more and more, because they’re like, the demands just there. If every one of these spec stocks is flying up, why not get even more money for us back?
It’s gonna happen, okay. Now, even after the spec craziness that we’re going through right now and could continue to go through for the next year or two, chills, long term specs are going to be around, I really don’t see these going away, I think it’s going to be something that is a long term player in the market and ultimately could compete with IPOs. Long term, I really don’t see it going away.
I just see there being a chilling in the market at some point in time, kind of like we had a chilling of the market when it came to the IPO market after 2000. I think something similar will happen in the stock market. But I think honestly, these are going to be around long term. I really do. I think there’s just they’re just at a level right now.
Similarly, you know, you watch what happened with Bitcoin in 2017. Right? And when the price just went crazy, and I don’t know went from like 1000 or a few $100 to like 20,000. Ultimately, Bitcoin was still going to be around long term, it just needed a big correction. And that market corrected and Bitcoin fell from I don’t know, 20,000.
I don’t know, I think it was 3000, or something like that right at its lows. And that was a very quick amount of time. And so what I feel is going to happen with spec stocks is I feel like at some point, there’s going to be a very negative attitude towards spec plays, a lot of those stocks will start dropping a lot of the new ones won’t work out, investors will lose money, people get mad at it, forget about it called spec stocks a scam, and it will cool off for a while, but it won’t go away.
That’s the thing. It was the you know, spec spec stocks, in my opinion will not go away. And ultimately, some of these spec stocks are good companies that have really good futures. There are some of those out there, and those ones will thrive. And those ones will do well, similar to that what happened IPO phase right?
Some of those companies were just garbage and you know, ultimately went to zero overtime or pretty dang close to zero or had it be bought out for really bad prizes, things like that. Right. And some of those companies were beautiful business models that ended up arriving and becoming beast companies over time.
Same exact things happening in spec market right now. Remember, all specs are not created equal. Very important to remember for all long term investors. So if you’re thinking about putting your money in one of these spec stocks, okay, you got to ask yourself some questions. What is proven around the business model? What does it actually proven? This is so key Okay.
What has the company actually done? In the real world? What products and services can you go into the real world and see today? Not what is promised years in the future? Not they’re going to do this and that what is going on today? What can you see today? Is your level of understanding around this spec stock at a high enough level that everything can make sense and you can put all the pieces together.
This is very keep I’m watching you know it’s been You know, cuz back stocks have been so, so hot, I get a ton of discord, DMS, I go through like, essentially in my private stock group, we have a discord chat in there and I try to respond to the DMS I get in there every day or every other day.
Okay, a lot of those questions have been in, like regards to spec stocks, and I tried to push back on the members in there, it was my job to try to make those people as good of investors as possible, I try to push back on them a bit, and I say, well, what’s your real bull thesis around this, and when they start giving me that bull thesis back, a lot of times.
I can just tell they’re being sold a story, rather than being sold a company is just not an ideal situation. And they just don’t have a high enough level of understanding to really understand that industry well enough. And they’re just giving back the same exact talking points that those CEOs of those spec stocks give, which a lot of it is just a big story, rather than what the company has done in the past, in why what they’ve done in the past translates to future profits.
That’s what matters. And so ask yourself what’s proven What can you see in the real world for products and services today, okay, that is so big and key, and then you can kind of start making judgments around valuation. And if the stock makes sense on a valuation basis to buy it, you can start running numbers and you can go from there.
But unless you understand the company on a very high level, and unless you can see its products, services, whatever in the real world can talk with their clients and customers about why that product or service is special, you can’t do that you can’t really buy the stock and then because it’s just you’re more like gambling money, you know, in that whole situation.
So anyways, hope you guys enjoyed this. As always, this is a big spec video if you want to share this with family and friends go ahead and do so this will definitely be a good video to kind of enlighten folks on kind of what’s happening in this market, kind of my opinion on those sorts of things.
I hope you enjoyed Don’t forget to smash if you haven’t already go and join stock ups absolutely free to do so I might have that as like the pinned comment down there.
If you want to apply for the private stock group that’s going to be linked in the description as well might also add that as a second pinned comment that goes in all my strategies, what to look for in stocks, very in depth, how to run portfolios, we even have one on one coaching with you know, seven figure students in there and things like that. So pretty cool stuff.
Thank you for watching and have a great day.