WHY I CAN’T SELL ALL MY STOCKS IN 2020! (or Buy Put Options)
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Today we chat about why I won’t sell all my stocks in the stock market despite getting much more bearish recently. the stock market continues to go up without weighing the risks of the economy and stock earnings. I think this is a real problem and maybe even a bull trap. I have stopped putting new money in the stock market the past week or 2.
I have no plans to buy more stocks at the moment. With that being said I will not sell my stocks. I will explain that. I also am not interested in buying put options at the moment. I want to explain that as well. Hope you enjoy this video!
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Well Holy smoke is is a no joke is if you’ve been watching my two YouTube channels for the last two or three days, you know that I am not too bullish at the moment I’m watching a stock market that continues to go up. I’m watching an economy that continues to fall and I’m very worried about kind of where we’re headed.
It has been told us and I’ve talked about that very, very into depth if you’ve been watching my YouTube channels for years, you know that right literally right now? I’m the least bullish I’ve been ever Okay, let’s be quite frank about that. Okay.
But with that being said, and without, you know, me kind of explaining my my, you know, my thesis out there and why think there’s a possibility the stock market could fall stocks in general could fall, why I think we’re getting overvalued in the market, especially considering a lot of the risks out there.
With all that being said, a lot of folks are now asking me, why not go ahead and sell all your stocks, why not go ahead and just get rid of them just just sell out of the market and go 100% to cash? Okay, and I want to answer that question here today. And the other question I’m getting a lot is why not go ahead and buy a bunch of put options I have no put option contracts in the market right now. Zero, okay.
People are saying why not go ahead and buy some put options so those are two questions I want to answer for you guys here today and explain my thought process on this I think it’s can be very valuable especially considering I’ve been this market for quite a while and we’re in a pretty extraordinary situation.
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A lot of fun Okay, so let’s start getting to those guys. Okay, here we are, we’re looking at the public count cuz this count by the way is available for free in the private group see every single move ever make in this account every single buy order sell order across the board okay?
So if we’re looking at this and we’re thinking about Okay, when I go ahead and sell all the stocks in the public in the public account when I sell all the stocks in all my private accounts as well which I think I have six or seven accounts in total at this account I have an options account I have a dividends only account which is also available for everybody in the private group to see every single move I’m making that account.
I have an account where I could do margin if I wanted to margin I have a 401k account like an individual retirement account I think I have a SEP IRA account why not just sell out of all the all everything just sell everything go 100% cash. Okay, well, what am I supposed to do?
Am I supposed to sell CCL down 70% I mean, the risk reward on CCL now is probably a little more attractive just hold the dang stock Okay, I mean, you know, yeah, could go to zero okay, that’s possibility It could also go to 2535 45 over the next few years if the company bounces back and you know, everything gets back on the right track Okay, I’m not going to sell CCL down 70 plus percent that’s just not going to happen okay.
The FB you know I love the FB regardless what happens in the economy the FB will grow a lot over the next three to five years there’s just no question about that no question about it doesn’t matter what happens okay, the FP will still grow a lot in the stock you know, we heard the up on that stock in my personal opinion I know it looks like a big gain $9,600.
I don’t think that’s even a big game the big gains are coming in future years this will be a three or $400 stock in the future I’m very confident that and you know what we heard the up on that stock I would feel comfortable you know the very few stocks in the market I’m looking at and I’m like I think it’s a deal the FB I think even if I’m buying at this price.
It’s still a deal and a half if we got any type of like three to five year outlook on this particular stock, I’m not selling FB of 16.8% That’s a joke. Okay, fizzy get dizzy is up 25% we’re about 10 grand on that stock in the in the public home, not selling out fizzy get dizzy.
They still got to report their numbers over the next few quarters, which I think are going to be amazing. And I think they’re going to shock a lot of these analysts on Wall Street and they’re gonna go Whoa, fizzes growing way more than they can we thought they were gonna grow.
I’m not going to self is up 25% there’s just no way. Okay? Tesla has suck. You know, that’s the one everybody’s like, Well, what about Tesla? I mean, goodness gracious. We’re like 70 watts, almost $79,000 just in the public count on Tesla shares up 231% on the stock and investment we’ve had in this account for less than two years.
That’s absolutely incredible, right? I can’t sell Tesla. I love Tesla. Okay, when I look at Tesla stock, I see a stock that has a possibility over the next 510 years to be a multi $1,000 stock. So yeah, it’s up a lot. And we’re doing very well in that stock and it’s a heck of a lot more expensive than it was you know, a year ago when it was trading at you know, you go back a year ago stocks trading like in the two hundreds, right and yeah.
It’s gone up a lot since then. But when I look at the multi year outlook, this stuff In the chance that this company has a chance to be the most dominant auto manufacturer in the world and be possibly the biggest player in autonomous driving autonomous taxi networks.
How am I gonna sell Tesla stock? Like it’s just I just can’t, like, yeah, it could be a 300% and I’m looking at it. I’m like, I can’t sell it can be up 350% like, at the end of the day when it comes to stock? I just I can’t do it, man. I just can’t do it.
I just can’t do it. Okay, what am I supposed to sell Uber a break even? Come on. It’s Uber. Okay, Uber has huge growth potential. As soon as the economy gets back up and running, people will need Rides Again, like like an Uber Eats, it’s benefiting in a massive way. We’re getting a huge change to the whole restaurant landscape right now with food delivery, absolutely taken off for Ubers business model plus.
Uber freight like Uber is a disruptive company, they’ll continue to disrupt industries, and they’re going to do their dang thing over the next few years. Believe me on that. Okay, winning resorts were down 15% on when? I mean, how am I going to sell when at 78? Like that’s, that’s a that’s a tough decision.
So when I just start going through all these stocks, it’s like, how am I going to sell these skyworks solutions? Yeah, we’re up 26% what $12,800 but how am I gonna sell skyworks Solutions when they have massive growth in front of them over the next few years because of 5g and their 5g chips where they’re gonna get a lot more content in 5g smartphones. How the heck am I going to sell skyworks solutions?
It just doesn’t make sense. Okay. revolv has a chance to be one of the biggest like fashion companies in online retail How can I sell revolv stock when we haven’t even made money on that? It’s just I can’t Okay, I can’t and when you factor in the fact that I’m keeping lots of money I’m probably more cash heavy than I’ve ever been before and I don’t mean like literally like direct cash.
I just mean like money and checking accounts, savings accounts or other accounts where I’m keeping money or more heavy toward that than ever before so I’m ready that let’s say all these stocks go down let’s say all these stocks get hammered and my you know, hold me I think I put out a video yesterday talking about you know a possibility of a stock market crash coming right?
Okay, let’s see what happens okay, I’m gonna be ready to buy I’m gonna be ready to buy if CCL goes down more all I don’t know. I already put a lot CCR. I’ll put more than that one. But if cruisey doozy and elfen, FB and fizzy get dizzy and footlocker and I robot and revolve and skyworks solutions and testing my sn OBD buba and winning resorts if all those stocks follow a bunch, Hey.
I got cash on the sidelines, I’m ready to buy, okay, if all those stocks fall 20 3040 50% I’m ready to buy I am in a cash heavy position. Because I’m ready to buy Okay, I’m ready to buy. But I need the stocks a lot lower considering the risks out there in order for me to put more money in them. That is a thing putting more money in them that we have a lot of risks that need to be set out there.
I’m putting myself in what’s called a win win position, okay, which is very important in the stock market because I’m hedging my bets essentially Okay, if the market goes down, great, okay, if the market goes down, great, I got a lot of cash I’m ready to spend in the market.
If all these stocks go down a bunch, I’m ready to spend I’m ready to buy these stocks. That’s a win win. If stocks go up great, I got a lot of money invested I’m gonna make a ridiculous amount of money it don’t matter what happens it’s all gravy to me in the end where the stocks go down a bunch boom.
I pick up a bunch of great companies for cheap prices and all add even more new stocks to the portfolio and things will be looking real real pretty in three to five years Okay, and if they go up great you know I’m gonna make a bunch of money so don’t matter what I’m putting myself in a wind wind position.
I basically am kind of hedging myself okay, now so that answers why I’m not selling I don’t want to sell because it just miss out on you know a ton of gains like obviously we’re getting a ton of gains and the risk is just too large for me to look at this and say you know selling out of Wynn resorts and some of these other stocks like that’s just I just can’t do that I just can’t do that as too much risk there at the end of the day okay.
But why not put options Okay, remember I put out that video was that I think yesterday about you know possibility of a stock market crash Part Two coming why not go ahead and load up on some put options Well I can tell you why not and by the way put options if you don’t know put options are essentially a bet that a stock price or stocks in general go down to a certain price by a certain date Okay.
It is time limited it’s not like you buy into you know Apple stock and you can hold it for years and years no, that’s not how put options work. It’s like you place a bet that on stocks going down to a certain price by a certain thing. Okay, so premium the premium is so dang expensive and when when I say premium for those you guys who do not know options, essentially what you have to pay to kind of open up that contract, okay?
The premiums are extremely expensive on put options right now, why is this? Well, the VIX has gone crazy for the past couple months and I mean absolutely crazy crazy. Like the craziest. It’s really been in years. When it comes to VIX. I mean, a lot of years.
Okay, you have to pretty much go back to the great financial crisis to find the VIX being as crazy as it has been recently. So when the VIX goes up, so much like that, and you get so much volatility in the market, guess what ends up happening.
Premiums for options end up skyrocketing, because whoever’s writing the options out there, they realize that oh my gosh, this market could go up a bunch, it could go down a bunch, I can get destroyed on this option contract, okay? So they ended up taking that into account and they say, you know what.
I need more premium, I need more premium for, you know, go ahead and write this contract or sell this contract to you just flat out, okay, you look at the Dow Jones Industrial Average, it went from 29, five to 18, five in a month, in a month. Okay. That’s, that’s a, that’s absolutely incredible.
And over the past month, it actually a little less than the past month, it’s gone from 18, five to 24. Two, that’s extraordinary. I mean, absolutely extraordinary volatility in the market. And so if you’re writing in selling, you know, put options, you’re gonna want a lot of flippin premium, because you know that this market could easily switch the other way.
Things could get really bad really fast, and you could get absolutely destroyed on this. It’s just way too much volatility. When you think about selling put options out there. Okay. Look at the Russell 2000. Even more volatility, it goes from about 1700 to under 1000 in a month.
That’s ridiculous, okay, and now it’s gone from under 1000 to over 1200 in a matter of you know, less than a month. So when you look at these type of moves, the volatility is is immense. Okay, and you want to give me I’ll give I’ll go ahead and give you a real world example out there. Okay. Let’s go through a real world example. And I’ll show you exactly what I mean.
And exactly why put options aren’t interesting to me, although I am you know, somewhat negative on this market. Okay. Las Vegas Sands Corporation ticker symbol Lv, so if you know lbs, they operate resorts in Macau and Vegas, and they also have a beautiful property in Singapore. And I think they even have one in Pennsylvania if I recall.
Okay, so let’s say I was looking at lbs, it’s a $47 stock here today. And I’m saying, You know what, I think things are gonna be really weak in Macau, the company gets a ton there, the revenues and profits from Macau, I think Macau is gonna be super weak and keep mine Macau is super weak.
I mean, like, factually, the numbers are awful. They’re talking about, you know, gross gaming revenues down something like 80 to 95%. At the moment, it’s it’s rough, rough, okay. And it will probably be rough for quite a while. So let’s say you like lbs is way too high right now Macau is gonna be weak, then we know lbs has some big properties here in Vegas, my city, right.
And so let’s say you’re also saying, you know what Lv Vegas is going to be weak for years. Let’s say you believe that, you know, room capacity is going to be low for the next couple years, you believe room rates will be low for the next couple years. And you’re just negative on Las Vegas in general, right?
And so you think that markets going to be weak? So if you think that then you’re probably obviously think Singapore will be weak as well. So then you’re like, Okay, I got I got, you know, Las Vegas Sands, it’s going to go down. Okay. So let’s say you go ahead, and you’re like, I’m going to place a bet that Las Vegas Sands is going stock is gonna go down over the next few quarters.
I think the number is gonna be horrible. I think there’s gonna be a lot of negativity in the market. In general, I think Las Vegas Sands is going to go down a bunch. So you go ahead, like, let’s go ahead and place a bet September 18 2020, that’s when the options would expire. And you’re basically want to place a, you know, put options bet that the stock will go down to a certain price by a certain date.
So let’s say you’re picking something around where the stocks trading at right now the closest price to that would be $45 strike price. Okay. So for $45, strike price net expires on September 18 of 2020, you have to pay a premium of $6.25. For that, okay, $6.25 of premium.
That means, essentially, you need the stock price by September 18th of 2022. To go down to $38.75. Just to break even, just to break even on that move, okay? And keep in mind, if you’re taking this type of risk, where if you’re, you know, obviously, with put options, if the stock price is above 45, you just lost 100% of your capital, you’re not getting in this position to breakeve.
If you’re if you ever open up a call option position, which I have a call option position I talked about a few weeks ago, it’s a call option position in fizzy get dizzy going right now. So I’m doing amazing for us, I think we’re up 66%, I didn’t go into making that call option bet saying I just want to break even know I’m going in that because I want to 2x 3x my money.
And same thing goes on the put option side, if you’re placing a put option that you’re trying to 2x 3x 4x 5x your money because that’s the only thing that makes sense if you’re placing that type of event out there, because if you’re wrong, you lose 100% of your money, and that’s rough.
Okay? So once again, September 18 2020 3875 is your breakeven the stocks at 47 right now, okay, in order to to extra money, you need the stock to go to all the way down to $32.50 to two extra money and that you’re really looking for a 2x plus and once again, if you’re making a bet like this, you’re not just getting in it just to be like, let me just No, no, you’re if you’re taking that type of big risk out there.
You want at least two extra money. So you need the stock to essentially go down almost 15 dollars a share by September 18 2020. And it’s certainly possible that happens if the stock market crashes, and we get a super weak stock market.
If you know, there’s a lot of worries about Macau and Vegas, and they’re taking a lot longer for things to come back then some folks are already pricing in, if that scenario happens, the stock could go down there, the stock could go to 30 to 50.
But it’s a big dang risk you’re taking, this is why I can’t do put options. That’s right now guys, I just can’t the premiums are immense, you have to pay, and you need things to really, really go your way. And this is this is this is countless stocks in the stock market.
This is just one example I’m giving you LDS. But I mean, you could look at a ton of these different stocks, especially these a lot of these Russell 2000 stocks, and you’re gonna find a lot of them. If you want to place a put options bet, get ready to pay through the nose for the premiums.
It’s ridiculous. Okay. So when I look at this market right now, the fact is, in my personal opinion, the market is too risky to have no money invest in this market. And if especially if you’re somebody that owns a lot of great companies, if you if you’re the type of person that you buy individual stocks, and you own some individual stocks that have some amazing opportunities in front themselves over the next five years.
It’s risky to not have any money in this market, because maybe things do turn out great. And maybe the economy gets back on track well, and maybe corporate earnings get back on track well, and to be quite honest, for for some of these stocks is you know, like, let’s say an Amazon stock rate doesn’t really matter.
You know, I mean, if the economy is great, that’s good for them, if the economy is Okay, that’s good for them, even in a bad economy, Amazon’s probably going to do fine, right? There’s certain opportunities in the market with some stocks, that they just do great no matter what, because it’s just that dang good of a company, and they just have that much growth, ensuring a good economy, they’ll probably grow even more.
But they’re just the global men are what, and that’s kind of like a Tesla stock for me, I think they’re going to grow kind of don’t matter what happens out there over the next three to five years, you know, that’s just, that’s just the name of the game. So if you’re going to sell off some great companies, that’s a risk. And if you’re selling out the market completely, that’s a risk.
Because maybe things do continue to get better. The feds, you know, putting money out there like crazy, the feds trying to backstop everything they can. And if the feds, the Fed successfully does that maybe maybe things will be okay, maybe unemployment comes down, that’s a risk to have no money in the market. And the same thing, it’s a huge risk if you got 100% invested, you know, good for you.
But that’s a huge risk. If you got every penny to your name, invest in this market right now. It’s a risk man, I am telling you, it is a risk. We’re looking at unemployment rates that are going up to the highest since the Great Depression. We’re looking at crazy, you know, declines in GDP.
We’re looking at an economy, a global economy that we don’t know if it’s going to take years for this to come back three years, four years, five years, six years, you’re taking some real risk if you got every penny in this market and you think it’s not going to fall anymore, and we’re just up up and away from here.
So I think it’s too risky to have no money in this market. I think it’s way too risky to have 100% let me just put it that way. I think if you got every penny in this market, you know, good for you. I just think it’s too dang risky there with that being said, I hope you guys enjoyed today’s video.
As always, don’t forget to smash that thumbs up button and leave me your opinion on this whole situation down there in that comment section. I would love to hear from you guys. As always, don’t forget the huge sale is going on. That’s a pinned comment down there.
Make sure you guys take advantage of that this weekend. The deal is supposed to go all the way I think through midnight on a Sunday. So if you get in it before it ends, I’ll be the pin comment. Thank you for watching and have a great day.