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Well folks uh i’m not flipping your flapjacks i’m a little scared right now and i want to explain exactly why i’m scared what i’m scared of in the market right now okay and i want to go into depth on this and show you exactly what i’m looking at and exactly what i’m scared of uh for investors out there right now okay uh being you know who i am and kind of leading
Some big youtube channels i think my perspective is uh something that is uh valued out there and i think a lot of folks kind of look to me in in different sorts of markets and right now we have a a quite a vicious market for small caps right it’s been vicious for months it’s just continued to be vicious and um there’s something i’m very scared of right now that
I want to explain and first things first okay what about my hair like this i some you know i had my hair like this for a video this morning somebody said i look like an altar boy like you know i don’t know man like like is that a dis like what’s going on there make sure to subscribe this channel if you’re not hit that subscribe button if you want to be notified
Every time i drop a new video hit the notification bell and you’ll be notified every time i drop a video okay alrighty guys so let’s get into this where do i start i want to go back in time for a moment let’s get in our little time machine let’s go back to basically mid december of 2020 okay this one that was a market when the masses it was all about oh kathy
Wood it was all about arc invest right it was all about tesla stock it was all about call options it was all about the highest risk possible right it was all about story stocks and if you go back to that time period this was a time period that things that started to get so frothy in the stock market and i started being so disgusted by kind of what was going on
The stock market in december and into january look at the stocks i started putting tons of money in jp morgan at that time uh walgreens boots alliance those were like my two big stock buys at that time right because i was looking at a market that was in a very unhealthy place where it was all about the maximum risk possible right and then you fast forward into
About march and right around february march is kind of when we talked in the market and when the amc gamestop stuff was going on that was kind of that was like literally the the top pretty much right in terms of the retail activity in terms of the the vibes of the market and what was going on there right why did this happen like like why how did we get into this
This market back then that we got so frothy that it was all about if you got a 50 return that wasn’t enough you need to get 100 return if you got 100 return people are like you should be getting 200 if you got 200 people like why don’t you getting 400 hey my friend over here he’s got a thousand percent on this option right how did we get into this market well uh
Yeah look what happened in the market the russell doubled it 2x in like nine months when you get a hundred when you get a an index to go up a hundred percent in like two months a 2x right you essentially you put yourself where these stocks have gone insane right where countless stocks had gone up 100 200 300 400 500 from the bottoms tons of people are making money
Anybody that was buying and it seemed like everyday stocks went up right every day you open up your account you’re up another five thousand ten thousand fifty thousand hundred thousand dollars right and it’s like oh i’m up again up up again it was it was easy easy money right easy money and so we got in that market and i even spoke about this i remember i put out
A pretty in-depth video and it covered uh you know all the activity i was seeing in the market at that given moment okay and i i spoke about this and how i was very very worried about the state of the stock market and what was going to happen to investors because no one was paying attention evaluation everybody was just like whatever the best story is whatever the
Riskiest play is that’s where it’s going to make you the most money because that’s what was outperforming and when you kind of get this cycle where that’s what’s working people just get attracted to that they’re like if it works like why is it going to stop working right and like i said we topped out in right around february and into march when when everything
Was you know like literally the amc gamestop stuff that was the last that was the last hurrah of this whole like movement that happened during that time of just insanity right and so that that’s kind of taken us back to time and that was a there was a different fear i had in the market at that time right now we fast forward to today and what is everybody saying
Today and what’s everybody doing today right it’s not about arc anymore it’s about sarc right everybody’s been short and kathy wood pylon on short and kathy wood right i mean obviously her her fun you know arc has just done horrible right and the other ones have probably done even worse to be quite honest right it’s been all about shorting stocks buying put options
On the riskier stocks right or what is seen as riskier stocks uh folks have been fleeing anything small cap related and they’ve been buying big tech stocks right i mean look at what happened to small caps and just countless of these stocks they just continue to sell off to sell off and remember we’re still not even to the end of december we still got a couple weeks
Left here in december there could be still more last minute selling of these stocks right because keep in mind this is very very important to keep in mind like like tack sauce harvesting most people i think have already done it but there could be more coming the next couple weeks and so there’s a there’s a pretty decent probability that the small caps could fall
Even more and i know for a lot of you guys you’re looking at these valuations of something small capture like this makes no sense like the stock is already down 60 70 80 it’s already significantly undervalued like insanely undervalued it doesn’t mean much when at the end of the day somebody looks at their their portfolio and they’ve got a bunch of gains and they
Want to look right off a loss against it doesn’t mean even if the valuation is ridiculously ridiculously low it might say well shoot my my tax liability is so high on this i’ll go ahead and cash it out buy it back in january right and the hope is the stock just doesn’t happen to shoot up between now and january right and keep in mind a lot of earnings for these
Stocks come out either in late january or early february or even into mid-february so a lot of folks look at that and they’re like i can get back in before the next earnings come right so everybody’s been fleeing that going to big tech going to the large caps which have been performing amazing right or even just like buying index funds now selling any risky stocks
Like it’s obvious like you know some of this some things are debatable in the stock market something that’s not debatable is everybody’s been selling all the riskier or is it what i’ve seen is riskier stocks small caps even a lot of mid caps but especially small caps right it’s not like that’s an opinion of mine that’s factual look at where those stock prices are
Going this selling pressure has been relentless in those stocks it’s just clear folks have just sold it all right in selling any unprofitable companies it’s hard to find any unprofitable business models that are doing great right now regardless of what type of story you have regardless of what your revenue growth is or what your revenue projections are or what
Your story is right it’s literally couldn’t be more of the opposite of where we’re at exactly 12 months ago it is literally the exact opposite okay now why is this going on why are we into this present day well look at it like look at apple stock in the past year apple stock was you know 126 126 at this time last year right it’s 175 today look at google mcdougall
Google mcdougall was 1700 at this time last year it’s nearly 3 000 now look at microsoft microsoft was 2 18. roughly at this time last year microsoft’s 339. people are like these are the easiest stocks in the world to make money with and i could have just put my money in here and made money right versus a lot of folks that got in were getting into small caps or
Whatever stocks that they were excited about the story stocks especially right and they’re down 60 70 80 percent from where these stocks were in december of 2020 right and they’re looking like dude i could have literally just put money in apple stock and made a bunch of money right and then they look at the art fund and arc at this time last year was 127 at its
Peak peaked out at 159 plus this year it’s 94 today so people are like uh okay so i could just literally put money in apple google microsoft make a bunch of money versus i thought i’d be smart put money in ark down huge or buy other stocks down massively right and so that’s how you get this change literally in a matter of 12 months where folks are saying screw
Risk screw anything that’s highly risky or even seen as remotely risky screw any unprofitable business models screw any stock that has huge revenue growth if they’re not making money i don’t care and you get this flood out right and as far as the fed everybody the fed’s going to be the fed like it’s always going to be drama oh they might raise right it might
Lower rates that’s always going to be the same story over and over again okay it’s just going to go back and forth on kind of what happens there right at the end of the day that’s the type of market where and that’s why we’re in this sort of market right meanwhile you look at short interest on a ton of these stocks it’s clear as day the shorts have piled in now
The shorts have gone all in and you look at some of these stocks and some of these stocks you know i don’t know about their long-term futures but some of these stocks have extremely exciting long-term futures lemonade in the insurance industry beyond meat obviously in the plant-based food space tattooed chef just put up a disappointing quarter with 43 revenue
Growth in the last quarter okay yeah you know you’re betting against uh you know let’s just call it a tidal wave that like the tidal wave is not ending plant-based food is going to expand exponentially over the next 10 20 years and you’re you know it’s one of the biggest growth engines in that you’re betting against the tidal wave right corsair gaming like gaming
Hardware streaming hardware stuff so it’s going to continue to grow in the future right and so some of these stocks actually have great business models and have extremely exciting business models in the long term but the shorts have gone all in shorting you know why because it’s worked and what a lot of folks look at and they say well what’s working out there
What’s working out there what’s been working right apple microsoft google any other you know super large caps what’s been working short lemonade short beyond me short tattoo shaft short corsair short teledoc shortening kathy woodstocks right all right so we get a pile on last year into the wrong stocks at the wrong time now we get a pile on this year that is
Essentially putting folks into the wrong positions at the wrong time in my opinion because those just aren’t going to work out if you look at for a moment here if we go back and we just look at this was something that was done in 2019 we look at you know where what a thousand dollars would be worth you know from basically 2009 to 2019 look at netflix a thousand
Dollars investor would have netted you almost fifty thousand dollars right look at amazon 22 000 apple 8400 united health group 8 000 boeing 7200 nike 6200 microsoft 5000 uh you know google mcdougall 5000 plus this is really important because every single one of these stocks had many dips some of these dips lasted for months some of these dips lasted for a year
Or two and all them had to go through right all those stocks and so folks if you had invested in these right you could have said man this isn’t a good stock it’s going down right and you could have sold out and made that decision my gosh would that have been a awful awful decision right the best stock i possibly know about in the past 20 years and i i took part
In this stock and some of its gains unfortunately only some of it i wish i got to take part in this whole thing i wasn’t investing back in back you know 20 years ago but the best talk i can i possibly know of the past 20 years is monster beverage corporation all right and look at how many peaks and troughs monster has had over the past 20 years right look at
How many time periods the stock didn’t really do anything and all along the way you could have sold out this stock you could have cash you could have said this is a bad stock it’s a down trending stock the stock isn’t doing anything a stock hasn’t done anything in the last six months 12 months 18 months and all along if you sold out anywhere along the way all you
Would be is sad today right because you’re like my gosh look where there where look where i sold out of the stock look where it’s at today right and this is essentially what’s happening now to investors this is why i’m so scared because folks are are are at the end of the rope for them right they’re like my gosh i can’t go through this pain anymore i’m selling
I got to sell the stock it’s a bad stock it’s been going down right down 30 40 50 whatever on the stock right um if it’s a bad company like literally they don’t have revenue growth and it’s just a bad business model and their balance sheets horrible and things like that that’s fair right you got into a really bad stock you didn’t know what you’re doing but for
Companies that have insane revenue growth that have insane opportunities and massive tam and realistic tam they’re going to get to to go ahead and cash out of those to sit on the sideline and then watch a lot of these companies become what you thought it was going to become is gonna be painful and that’s the thing i’m most scared of for so many investors out there
Is they’re gonna sell a lot of these stocks at basement prices right selling at basement prices to go into cash or whatever meanwhile they’re going to sit on the sideline and they’re going to watch their companies go up and up and up and a lot of these companies futures come to fruition and their stock prices come to fruition right and then it’s going to 2x and
3x and 4x and 5x and meanwhile these folks are going to be on the sideline like what why did i do this like why did i sell out of this stock it was a it was a you know it was at this price and i sold out i cashed out to go into cash you realize you go into cash although you know i always like to keep some cash around right you do have to realize if you go into
Cash you are being taxed on that money right inflation is destroying your dollar every day so if you want to go ahead and sell out of stocks at basement prices put that money into cash that’s absolutely a decision you can make right but you got to understand that’s a decision that is essentially a a something that’s going to lose you money over time right the
Only way you you can get lucky in this situation is literally if everything crashes the stock market crashes real estate crashes everything crashes then you have some some money and you can buy right but remember if everything crashes what do you think the fed’s gonna do oh start up the money printers like it’s nobody’s business and rates may even go negative in
A situation right like that right where you get paid to borrow money and guess what happens to your dollars in that scenario okay and so this is what i’m so scared of in the stock market right now is the fact that tons of people are going to sell some stocks they love at basement bargain prices and they’re going to look back in two or three years from now and
They’ll be like remember when i sold you know this stock at this price wow look at it today right and that’s going to be no fun in that scenario right because like literally you just think of it right like like if if the economy gets bad if stocks go down and everything crashes the fed is gonna print the money to the sky right it’s the same thing that always
Happens and then all of a sudden your dollar goes boo and so that’s why it literally makes sense to always always be mainly invest it right have the majority of your money invested and i’m just it’s going to be unfortunate because it’s going to happen to a lot of people and there’s going to be so many people that are saying oh yeah i remember when i held dot dot
Stock and i sold it at 2 and now it’s at 22 and they’re like oh yeah why did i do that again and it just causes more frustration and meanwhile then you have the other folks that think they’re smart right piling into these max short positions that are going to get absolutely taken for a ride the next couple years i mean taken for a ride and you got the folks that
Are buying the puts and it’s like you’re late to the game there was the play last year like that’s what you should have been doing in december of 2020 not now and and piling into index funds piling into apple microsoft hey those are great companies they could continue to thrive it also comes a risk with those type of companies because they can be disrupted and
We’ve seen it throughout history every single company gets disrupted right apple was the disrupter google has been the disrupter fb was a disrupter and at some point those companies are getting so big now that there’s going to be companies on the come up that are going to disrupt those companies and that’s that’s a part i think a lot of folks uh don’t quite get
They think these things are forever right when i first started the stock market 2008 2009 you know what was the safest best stocks you could put money in exxon mobil chevron royal dutch shell those are seen as the companies that would forever be beasts that would rule the stock market that was the safest place to put money no one now 13 14 years later whatever
It is no one wants a piece of exxon mobil and chevron in royal dutch shell and all those other oil and gas companies and when i started the stock market those were the big dogs and those were the stocks that everybody looked at and they said these are here forever these are the big beasts these will be the biggest companies who even talks about those stocks today
Okay so that’s some food for thought guys much love as always and don’t forget to smash subscribe and have a great day
Transcribed from video
i'm scared By Financial Education
