Dear Wall Street, Thank u for Selling us Stocks 4 Cheap. Sincerely, Jeremy
How do there folks welcome into today’s video oh man we got some good stuff to talk about here today in this video i got a lot i want to show you in regards to what’s going on with specific stocks out there the markets in general my views on all this but where i want to start it out today hope you guys enjoy this as always by the way thank you for being subscribed
Thank you for joining me for this video i want to start out with this chart somebody in the uh the private discord chat shared this essentially and i just thought this was absolutely magnificent and this shows you the bear markets and the bull markets and uh essentially you know let’s just call it the power of these forces over time okay and this goes all the way
Back to the 1940s all right and you know when you see it laid out like this you really start to realize how absolutely ridiculous and silly it is that we freak out over these um let’s just call it bear markets in these uh markets where the the time periods when the market goes down essentially is so dang silly but we absolutely freak out in these time periods and
It kind of shows you how ah let’s just call it unintelligent the human species how much we really are okay and uh unfortunately it’s a little bit the way our brains are wired unfortunately why we get so screwed up in these situations but when you look at it from this context you realize how just absolutely silly and ridiculous it is that we even worry about these
Bear markets about these crashing markets and we all freak out about it when you realize it’s i’ll give you an analogy okay this is an analogy i have for you guys okay it’s picture you got a big t-rex coming at you and you also have a chihuahua coming after you okay and it’s the equivalent of being like oh no the chihuahua’s gonna bite me oh boy okay not worrying
About the t-rex coming after you or let’s say it’s a massive alligator coming after you and like the chihuahuas biting your ankle and you’re like ow it hurts so bad and meanwhile as an alligators coming behind you to eat your whole head off okay that’s equivalent of this and we freak out over the chihuahua which the chihuahua is always the bear market and we forget
About the uh massive alligator of the t-rex that is essentially the bull markets that we go through over time and i think a chart like this just really puts it in context of how absolutely silly it is that we freak out over the red markets and uh we never forget what it is the power of the other side okay the other side is the ocean and the red part that is a surfer
In the ocean okay let’s just call it that all right alrighty so that’s a good place to start the video no let’s talk about the state of the stock market as of right now so the nasdaq’s down over 27 year-to-date has been absolutely you know awful year for the nasdaq at this pace where i did the calculations we’re on pace to be down around 35 by the end of the year if
This continues which it’s you know anybody’s best guess you know maybe we come back by the end of the year maybe we go down more but at this pace we would finish the nasdaq around 35 down for the year roughly okay now for some context on this on you know if we if that was to happen the trend that is going if this was continue on and we’re down about 35 by the end
Of the year like where does that put us okay so they would put us right about at rona highs okay so we’re not rona highs but right prior to rona happening okay because if you go back to where the nasdaq was february 10th of 2020 the nasdaq was about 9 700 so or so okay 9 700. so basically if we were to go down to you know there uh you know it’s called 35 down for
The year we’d be right about at their own highs there’s a lot of people that do want to see that happen and they want to see us break new lows and they want to see us go back to the the you know previous rona highs i guess you’d say and they would feel more comfortable if that did happen i’ve heard many folks definitely bring that up about you know feeling a level
Of comfort and just kind of erasing everything that happened in rona because if we got back down there we would just have erased everything that when positive in the roman time which is something a lot of people want to do for whatever reason okay and although you know obviously companies revenues and for a lot of companies their net income is not just higher but
Substantially higher than it was in 2019. a lot of people just feel like it’s a level of comfort if we go back to that place just in case companies net incomes and their revenues erode over the next year back down to those sorts of levels prior to rona right no that’s a big question if that was to happen right but that’s the way a lot of folks are kind of looking
At it from this perspective okay now also for some context if we were to be down 35 by the end this year how many times has this happened in nasdaq history and the fact is it’s only happened three times ever in history of the nasdaq that have we gone and been 35 or more down for a year okay one was in 2008 we were down 40 and a half percent in that particular year
One was the year 2000 we were down a little under 40 percent that particular year 39 okay and the other time was 1974 1970 before we were down 35.11 for the nasdaq three times in the history of the nasdaq has it ever been down 35 or more so it’s just some context of how rare and how rare a situation like this is in the markets it is extremely extremely rare in the
Market okay now along with the nasdaq falling in the markets in general we have something very interesting happening here okay the other risk on assets let’s call it that such as bitcoin also continue to tank bitcoins down another four percent plus here a day it’s an 18 000 range once again and bitcoin year to date is now down over 60 percent at this point if the news
That continues to weaken bitcoin will continue to weaken this baby follows around the nasdaq if the nasdaq starts going up expect bitcoin to go up bitcoin can sometimes act like a 2x or 3x leverage on like the cues essentially it’s the way it kind of works and um you know bitcoin already had its massive fall it doesn’t mean it can’t fall more so it’s just something
To kind of keep in mind you know bitcoin topped it near 70 000 at the peak and we’re at 18 000 range here today okay so it’s already had its massive fall but it doesn’t mean it can’t fall a little bit more and go down like the fifteen thousand range or something like that okay and you know if you look at ethereum very kind of similar play out now simon simultaneously
We have complete devastation still going on with the wall of street bets type stocks okay we know the three most popular stocks on on wsb it’s uh bed bath and beyond and that one just you know had a bad day okay a bad day let’s just call it that 18 down gamestop down over eight percent here today amc down my favorite number maybe i should buy amc that’s my favorite
Number seven seven okay that’s a vegas slot machine winner winner chicken dinner right there okay uh down uh 7.77 here today so these dogs have been absolutely wrecked and they just continue to get wrecked more and more and for a lot of folks out there in the market they want to see these stocks just go to obliteration levels which obliteration levels for for amc at
Least is five dollars a share for gme it’s like you know 15 a share and for bbby that might be out of business or something like that okay that’s what they kind of want to see to feel like we’ve just you know erased everything of the fomo cycle and the excitement cycle we’ve just erased taste it you know i could make an argument that these things have already been
Obliterated so much as like you know they’re already just been done they’ve been finished man like what else do you want from these things like come on man um you know it’s like these are already down and out you know it’s like whoa what do we what do we want here zeros so you know but that’s the way the market’s kind of looking at those right you know a couple
Of stocks somehow eaked out games today the chef somehow eat out a small gain tesla somehow eeked out again on a day like today and then a fubo of the retail stocks that was the one that was a a pretty big winner today at uh about a seven percent move there you know and we look a little deeper right into some other retail stocks now the the bed bath and beyonds
The amc’s the gmes there’s nothing about the fundamentals of companies okay let’s be quite clear we need to differentiate the sofi socks the palantir stocks those type of retail stocks from those you know bed bath and beyonds amc’s the gmes and those sorts of stocks okay there’s a there’s a huge difference in the investor base is in those stocks and who’s actually
Owning those stocks versus those other stocks okay no if the for the stocks like the sofas the palantiers and things like that although those are heavy retail stocks as well they actually have a fundamentals with the business models unlike those other three stocks right they actually have incredible growth they actually have great long-term growth stories over the
Next five ten years okay and you look at something like a sofa this stock just continues to get up alliterated day after day after day you know this is back down to 5.65 cents at this stock now you know we get a couple week week days in the market this week and the next thing you know this will be a new all-time lows which all-time low for sofi was somewhere around
I think it was just under five dollars or low five somewhere in there and this stock has fallen you know almost 64 percent year to date it just can’t get out of its own way essentially palantir same exact situation heavy retail stock we all know that which there’s a lot of institutions buying into palantir over the last you know number of quarters as well so do keep
That in mind but it’s still a heavy palette it’s still a heavy retail stock the stock is now over 60 percent year to date and never mind that you know if you go back to where these stocks were at in 2021 at some point you know it’s more like 70 80 percent drops for these sorts of stocks okay but these these stocks have just been absolutely racked okay as terms of the
Share price but the fundamentals of these companies continue to get at least uh more attractive the revenue continues to go up for these companies they continue to attract more customers and uh they’re likely going to continue to make progress as far as their cash flow situation and their bottom lines as well over the next you know let’s just call several quarters
So it’s important to just keep in mind what’s going on with these stock prices of these companies versus what’s going on with the fundamentals of these companies and if you can continue to grow your revenues continue to grow the amount of customers you have right continue to get your cash flow in a better place and continue to get your bottom line your net income
And make it better place there’s a fairly high probability that over time uh that stock price will be reflected right and if the stock price continues to go lower why all the fundamentals are continuing to get better as an investor as a general rule that’s a great buying opportunity because that usually doesn’t work out usually if the fundamentals of the company
Are getting better these stock prices simultaneously going up this is not the situation for a lot of companies in the market over the past let’s call it one to two years essentially where some of these companies fundamentals have gotten better more exciting more revenues more profits more whatever right meanwhile their stocks are gone down down down so it’s just
Kind of something to kind of keep in mind there but it definitely shows you a level of devastation in the market okay this is completely random but i know i did a fubo video recently and a lot of folks were wondering kind of how many shares i own in that one not a lot okay and the reason being is i already own probably too many unprofitable companies and this is
It’s just another one now to be fair a lot of my prof unprofitable companies are going to start to turn to some profitable quarters in 2023 so they’re like on the pace of getting there versus a fubo that’s not going to be there you know fubo best case scenarios maybe they eke out a profitable quarter a cash flow positive quarter in 2024 but it’s probably more 20 20
25. so i can’t own a lot of this one uh 17 777 shares of this one um you know and that’s you know i might buy a little more but you know like i said i already own several different unprofitable companies and it’s like how many do i want to own here okay now we have something very important coming up here very very important okay and i want to explain this why this
Is so important for the not just this particular stock this is important for what’s about to happen to the s p 500 in the nasdaq as well okay basically what is going on tomorrow is apple is going to show off their new products okay now something to keep in mind usually when apple shows off their new products what i’ve seen many times is the stock price actually
Falls after they show off their new products okay and so it is likely that apple is going to show off four new iphones tomorrow potentially a new apple watch and some accessories and things like that okay and so that that’s going to be a lot of attention in not just the technology space tomorrow and then the following day but also in the stock market in general
Because apple is the biggest company in the world you know if they’re going to show off their new products that are the cash flow machines which the iphone is the cash flow flow machine for apple right this is an important thing that’s about to happen in the market okay and we have some issues that are definitely in front of us in going into this big day for apple
Let’s just call it that okay so the first thing we got to understand is if you’re looking at the weight of the s p 500 apple is by far and away the biggest weight of the s p 500 okay i mean we’re talking about in regards to apple it’s 7.24 of the weight for the s p 500. so if apple stock price is going down it’s likely bringing down the entire market that’s just
The way it works okay that’s for s p 500. for the nasdaq 100 apple is a shocking 13 18.6 percent of the weight of the nasdaq 100 okay so basically what this means is if apple stock price is going down it’s bringing down the s p 500 which is the main index and it’s bringing down the cues in the nasdaq in general if apple stock price is to falter it is to fall okay
Now i’m going into this day essentially apple’s in a not the best position let’s just put it that way okay here’s a deal on a valuation basis when we were going into apple showing off their new products in 2017 go back to september 2017. apple was trading at a pe ratio of about 18 versus today apple trades at a p e ratio of about 25 okay apple when those products
Were shown off in 2017 was trading at about a price to sales ratio of 3.7 versus a price to sales ratio right now of 6.4 okay so this basically means that apple is pricing in a lot of good news and this also makes apple a very big risk to the entire stock market when you’re talking about it used to trade at this and now it’s trading way up here oh boy okay oh boy
But that’s 2017 maybe 2017 was a freakish year right maybe that was a one-off year well why don’t we go ahead and we look at what happened in 2018 for apple stock going into them showing off their products in 2018 okay well in september 2018 going into them showing off their products then apple traded at a pe ratio of 20 versus right now it’s a pe ratio 25 okay
It traded at a price of sales ratio 4.2 versus right now it’s 6.4 all right so once again we’re in a very uh let’s call it not ideal situation here where we’re trading way above where we’re trading now when they were going to show off their products in 2018 but maybe 2017 and 2018 were freak years well why don’t we go ahead and look at 2019 all right we can pull
That up okay going into showing off their products in 2019 we go back to september 2019. the company was trained at 18.6 p ratio and now it trades out of 25. it was trading at a 3.8 price of sales ratio and now it’s trading at 6.4 okay so this goes to show you how big of a risk apple is going into this day in which they’re about to show off their products they’re
Weird trading evaluations that this company just doesn’t usually trade at other than the kind of rona the freak time okay usually going into these product launches where a p ratio of 18 and 20. and we’re way above that and not only that i think there’s a real risk that apple’s revenues are going negative next year we’ll see what happens i hope it doesn’t happen
But there’s a real risk i think it’s a legit risk and i own several semiconductor companies that do significant business with apple i own qualcomm i own skyworks solutions and i don’t think i own crazy doozy anymore but anyways those two companies get significant amounts of their revenue especially skywork solutions from apple so if this guy that should root for
Apple it would obviously be me right but i do not have a good feeling unless apple shocks the world tomorrow which probably isn’t happening that apple’s revenues could go potentially negative for that company in in uh you know 2023 let’s just call it that and now it’s a bad setup for the market if we’re talking about these products or you know let’s call it a little
Disappointing tomorrow right they’re gonna have to do something that almost like shock people to get any excitement around this you can’t just come out with your your phone’s going to work a little faster and the camera is going to be a little better and the screen might be a little more clear than it was before because that’s the same stuff they do every year and
Um you know when it’s okay if your stock’s trading at let’s call it lower valuations but when you’re trading at kind of sky high prices that’s when people start saying oh boy okay and then also folks are worrying about the state of the consumer with everything that’s going on with inflation and uh it’s not the best setup for apple it’s a bad setup actually going
Into this whole situation okay very bad setup now to to track it back to where we started this video if we’re going to talk about this potential of a 35 down year for the nasdaq how do we get there apple is exactly how we get there if that was to play out if that’s to play out it will have been apple that took us there essentially okay and took us down to those
Prices now do keep in mind if apple was to take us there and the market was to drop most all stocks are going to fall more in that sort of scenario some will fall harder than others because some stocks have already been devastated so much that it’s hard to get any more selling pressure in some of those stocks and that’s why we see a lot of the smaller cap stocks
Right a lot of those stocks that have already been obliterated they’re not hitting new lows and it’s like why are a lot of those stocks not hitting new lows and new lows like they were let’s say prior right and the reason being is they’ve just been so obliterated they you know they’ve ran out of sellers in some of those stocks and that’s why even on some of these
Down days you see some of these stocks actually go up and it’s like how is this stock going up on a day that’s a down day for the market and where a ton of other stocks are getting obliterated right it’s because there’s you know basically there’s just they’ve run out of sellers at that point in time for some of these stocks and you’re starting to get just a few
People that are starting to position and it’s i mean we’re literally in like the pre-game warm-up of this we’re not even in the first inning we’re in the pre-game warm-up of people starting to position for the next bull market okay we’ll probably be in the first inning in about a month or two from now and it’ll be in the a second inning at the beginning of 2023
And that’s what i call the positioning for the bull market so we’re in the pre-game stage right now and that’s why some of those stocks are having trouble hitting new 52-week lows and why they’re you know just staying up decent let’s just call it that okay but that really comes down to the companies that have the exciting business models over the next five ten
Years if they’re going to look at it from the the speculative trader stocks and some of that wsb stuff they’re not going to be attracted to those sort of stocks because they don’t have the long-term excite exciting story let’s just call it that okay so apple is if we’re going to do this thing it’s going to be led by apple let’s do keep that in mind hope you guys
Enjoyed this video as always i appreciate everybody joining me if you ever want to say hi to me and send me a message that you enjoy the videos or whatever or just say anything feel free to send me a dm on the gram and uh might get back to you and say hello as well so much love as always and have a great day
Transcribed from video
Dear Wall Street, Thank u for Selling us Stocks 4 Cheap. Sincerely, Jeremy By Financial Education
