I think we are in a financial properties bubble! As all financial obligations come due, when this bubble deflates and things return to reality, it will be awful and therefore I want to talk about the possible depth of the next stock exchange crash.
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so 20y the average pe was around 22. Wouldnt it be better to do some type of pe to intrest ratio to determine the expected pe ratio. We are comparing pe ratios of the 60-80s where intrest rates went as high as double digits
Ok for the analysis, but exactly what do you suggest to protect your wealth? In such a scenario I think nothing suits as an insurance to avoid a deep impact. Liquidity will be eroded by hyperinflation, stocks will face productivity and fundamentals detachment, Bonds will be no performing debt. Correct?
Buy businesses that will do well over the long term for reasonable prices. Investing in good times is the same as investing in bad times. That no matter what you’ll be okay.
Gold
@@augustus331 well don’t you think is a bit simple? Stock picking can be risky too. In this scenario is quite unclear what can perform over time. In early 2000 can you imagine a world without Nokia, for instance?
@@marcellomazzoni If you invest in a range of ‘diversified’ business models which are non growth stocks, consumer discretionary, utilities or healthcare, for example, many of which also pay dividends, there’s a strong likelihood they’ll still be around down the line. These are also the businesses that will continue to pay dividends as we sit in the trough, and the same businesses which may end up buying out high debt entrants to those sectors (expanding their hold on market share. It all comes back around to the ‘think long term’ approach (which is a lot easier when you are more than 15 years from retirement) where you can continue to benefit even if we have a plateaued state in the stock market for 3-5 years post crash. Other option is go safe and buy into indices and you’re just investing in the expectation that eg the global economy will continue to grow long-term – if that ends up not being the case, that implies we are in a situation where portfolio performance really won’t matter anyway, ha.
Nope, that’s a non-producing asset. Ask Buffett.
the bubble in my opinion is because over the last few years 99% of the wealth is concentrated in hedge funds and billionaires who buy stocks, speculate on real estate and banks
They have trillions of basically gambling money on the markets . All the “debt” is money that subsidized these people
We need a correction of money back to the everyday person
There ist no real S&P 500 or everything bubble if you divide it by the money supply M2. Nominal nearly all assets are roughly constant, except Bitcoin… Don’t worry, bei happy.
Great Channel , maybe share a video with Simoin Hunt to motivate a crash ?
This is kind of fearmongering. It just means returns could be lower than 10% for a while. Nobody can predict when there will be a crash and nearly nobody would buy the bottom of that crash. The s&p is mostly non cyclical high growth tech companies at this moment. It is unlikely that it will trade like no growth cyclical industrials for a long period in the future. This crash you are talking about could happen in 15 years and by that time it would crash from a much higher level. You have been saying valuations for 7 years but in the meantime the market went from 2500 to 5500. The people who were on the sidelines basically had there money halved if they stayed in cash. In 2022 there was european land war between food producing countries causing massive inflation, interest rate rises and the crash was in the 20s in terms of percentage. The last 50% crash was 16 years ago and it took a complete meltdown of the financial system to happen. This crash you are talking about could happen in 15 years and by that time it would crash from a much higher level.
And at the same time, Alibaba was a buy in the 200s, JD was a buy in the 60s, Walgreens was a pretty simple stable company with nothing to fear in the 40s…
But hey, he did a 5x in the 2000s with no experience buying 2 random Croatian companies, another 5x buying some camping resort under development that somehow payed a near 10% dividend, some miner here and there…
You can spend all day speculating how bad things would look if the S&P500’s P/E dropped to 6.
In the 1980s, when the S&P500 last tested those levels, interest rates were 12-15%. Why would anybody buy a stock if you can compound at 12-15% risk-free? Valuacions were cheap for a reason.
The Hang Seng index also traded around 5x earnings in 2022 and it isn’t far from that today: you have a real estate debacle brewing and a dictatorial government that seems fixated on sinking its own market: again. cheap valuations for a very good reason.
Is the US overvalued? Sure. But it also has the best companies in the planet, the most friendly regulation possible and a population accostumed to dollar-cost averaging, so there is absolutely no reason to expect single digit multiples, not even long term average multiples.
The market is also a bit different from 2011, i swear this time is different because TINA due to low interest rates and mucho inflazione
*If you are not in the financial market space right now, you are making a huge mistake. I understand that it could be due to ignorance, but if you want to make your money work for you…prevent inflation*
Interesting, This is superb! Information, as a noob it gets quite difficult to handle all of this and staying informed is a major cause, how do you go about this are you a pro Investor?
I feel Investors should exercise caution with their exposure and.exercise caution when considering new investments, particularly during periods of inflation. It is advisable to seek guidance from a professional or a licensed expert in order to navigate this recession and achieve potential high yields
Prioritizing effective personal finance management holds greater significance than the sheer amount saved, irrespective of income source. Consulting a certified financial advisor can offer tailored strategies to optimize financial results by reducing expenses and enhancing income, regardless of whether it’s earned through employment or investments.
Brian Humphery Services was my hope during the ‘bear summer’ last year. I made so many mistakes but also learned so much from it, and of course from Brian.
He is really a good investment advisor. Was privileged to attend some of his seminars.that’s how I started my own crypto investment
I don’t know. The last time the market crashed (I am referring to the 2009 crash, not covid) I didn’t lose a penny. I just ignored it and kept investing. Many folks got scared out of the market and never got back in. Very sad. If you are young enough, just ignore the crashes. If you are old, invest in quality companies and don’t worry about it. What’s the alternative?
@@Amwatson801 Actually, I was asking for an altenative to “actually invest”. That seems like the sensible approach.
Someone with a timeframe of 15 years would be unhappy with Microsoft from 1999 to 2014. Someone with a timeframe of 25 years would be very happy though. And someone who invested steadily into Microsoft from 1999 to 2014 would be pretty happy — even in 2014 — since most of their money would have tripled.
Just calculated roughly. If you DCAed into MSFT every year on Dec1 from 1999 to 2014 10k, you would have invested a total of 160k and would have about 360k worth of stock — and the stock would have barely moved. And if you held that until today, you would have millions of course.
@@mikekeenanphd If you were fully invested in 2000 in high multiple names like msft, as people are today, the return on that capital was 0%. The return on the new capital used to DCA later on was better obviously. However, unless you were young in 2000 with little wealth to your name, the impact of no return on the core of your wealth for 14 years would have been very detrimental to your overall returns. I am not in for a decade of no returns on my current wealth. A number of Chinese businesses, for instance, offer 5-10% growth and 7-10% dividends at 5-12x earnings. Meta also offered that in 2022. Apple offered that at sub-15x earnings a decade ago. It is hard not to compound by being patient and building stakes when the business returns are there. I see no point in gambling the few high-multiple names that the entire planet is fixated with, however great they are.
@@mikekeenanphd nice work!
@@mikekeenanphd What you write is clear, but if you are fully invested in Msft today, or you were fully invested in msft in the late 1990s, the story is slightly different.
If you were fully invested in 2000 in high multiple names like msft, the return on that capital was 0%.
The return on the new capital used to DCA later on was better obviously: investing in high quality that trades at low multiples is always a good idea.
However, unless you were young in 2000 with little wealth to your name, the impact of having a 0% return on the core of your invested wealth by 2000 for 14 years would have been very detrimental to your overall returns.
Sven, if you actually believe that you are saying, then what specific actions are you taking to profit off your predictions? If you’re not going short, then this is all a lot of hot air.
It seems like China, European telcos and cash.
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You gotta be the biggest perma bear i’ve seen so far.
I use to like the channel, but i guess your polarized your camp too much. I even bought your book 2 years ago, good one btw.
But idk where you look, or what you refuse to look but man there are HUNDREDS of good business at the right price right now, you have to look away from megacaps, but you’s already know that right. Are you just looking at the S&P500? Or obsessed by the Mag7 valuation (Amazon is pretty alright priced tho)?
Idk, but your ultra pessimists position you set yourself since 2021 must have cost you a fortune in cost-opporunity. But you probably know that already, or you do differently than you say.
To me rn, you’re just noise atm. Your channel is set to scream fear all the time, a bit of rationality could have been welcome before i remove it from my feed.
– A broken clock is right 2 times everyday.
You’ll have your day
Seems to me that the best strategy is to learn how to short the market effectively. Given that we have been in a long only market for the past 50 years shorting has been extremely dangerous. The trick is how to figure out when that paradigm has changed. Of course when it happens it will probably do so very quickly.
long term spy puts
And now you have a crystal ball? Where are you going to put your money since the crash will take out 50-75% of worth.
Bets on the lowest CAPE ratio or highest excess CAPE yield reached during next big panic or sell off?
real evaluation. good job
The first sign that the toy has broken will probably be when during a cut by the FED, we see the 30-year T-bond drop in price…. this will be the moment where the real panic will begin.
Everyone says Elf is better stock than Ulta.. can you do analysis?
Companies and economy today are not what they used to be in 1929 or 1980.
I would joyful if the market crashed 50-75% and the valuation of the american market is high for sure but not i don’t think it’s correct to say companies valuations should be what they used to be.