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We Are In The Middle Of A Stock Market Bubble...And Just Don't Know It
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- čas přidán 13. 08. 2020
- 32.9 Percent...That was the contraction of the United States economy during the second quarter of 2020. That announcement combined with an unemployment rate of 11.1%, and the highest bankruptcy rate since the financial crisis, have caused the stock market to crash…or not. In fact, over the last 4 months, the stock market has actually had one of its best 4 month periods in history. You heard that right, during the worst economic crisis of our lifetime, the stock market has seen some of the most rapid gains in history.
Many people have attributed this strange behavior to special circumstances and a new kind of market and economy. Yet some people are saying something different.
In fact, there’s a small percentage of investors that have seen this strange pattern...a few times...before
For example, in the year 1993 a new technology called ‘web browsers’ started gaining popularity around the world. These web browsers, or more specifically the Mosaic web browser, allowed for the average computer user to connect to the internet in a simple and straightforward manor for the first time in human history.
And it was this technology that helped lead to the expansion of the internet and computers into the homes of the average person.
In fact from 1990 to 1997, the computer ownership rate more than doubled, from 15% to 35%, and from 1995 to 1999, the number of internet users grew from just 15 million to over 260 million.
Essentially investors could feel the wave of a new economy coming forward. I mean with upstart companies like Amazon selling books over the internet, and Ebay selling almost anything else, investors became extremely excited at the prospects of a new type of economy.
But also during this time, we saw one of the biggest cuts to interest rates in history. From 1989 to 1993, interest rates fell from 9.8 % to just 2.9%. All this meant was that investors could access capital much easier than they could’ve just 4 years prior.
And the last cherry on top was that there was a significant tax reform in the year 1997, which cut taxes on capital gains.
And it was these 3 factors that lead to one of the craziest periods that the stock market had ever seen.
You see, if you invest in the stock market, you can typically expect a 5 to 10% return per year.
But if you were an average investor and started investing in the stock market in october of 1990. You would have seen on average... a return of about 39% per year for the next 10 years.
But...if you were to have invested heavily in the tech sector with an index like the Nasdaq, you would have on average seen returns of 111.8% per year from 1990, up until the year 2000.
Meaning that if you were to have invested $100,000 into the tech sector in 1990, and simply held your investments for a decade, your portfolio would have been worth 1.1 Million dollars.
But the thing is that, this appreciation in the tech sector, and the stock market as a whole, wasn’t really because their was an influx of new companies that were raking in billions of dollars in profits. IT was mainly because there was an influx of investment capital from the excitement of a new economy, low interest rates, and tax cuts.
And one of the key metrics used to tell you how overvalued the stock market is, the P/E ratio. Essentially all this does is compare the price of a stock, to its earnings per share. Even though the value of a company is a lot more complex than a simple P/E ratio, this metric still is a good general indicator for determining if a stock is overvalued.
So in 1990, the average p/e ratio of the s and p 500 index was about 15, which has been close to the average p/e ratio for the past several decades.
But after the influx of new capital started flooding the stock market in the 1990’s, the average p/e ratio on the s and p 500 jumped up to just over 30.
All this meant was that the average company had doubled its value in relation to it earnings, from 1990 to the year 2000.
And during this time, it was common to hear stories through family and friends, and through the news, of people getting very interested in investing and even day trading to try and take advantage of these insane gains.
End of transcript. Too long
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Podcast:
Hey Everyone! So just a heads up, I am still going through some health issues right now. Most of this was edited when I was not feeling well, so if there is any errors, my apologies.
Im first
Hope you feel better
No apology needed. Get well soon 🤗
The mentioned banks that own the stocks are only ETF fund advisors which manage the money of a lot of people... So the assumption that the banks sell the stocks is wrong... They don't own it (apart from Berkshire Hathaway)
Take care brother, get healthy soon.
I revisit this video occasionally. The recent market conditions hit my portfolio hard, especially my tech and A.I stocks. I lost nearly $100,000-a tough ride.
I believe there are several elements at work. Inflation is growing, and the Fed is considering raising interest rates or cutting rates. That worries investors. My best suggestion is to consider advisory management
When it comes to investing, the stock market offers great opportunities but also risks. My advisōr stressed the need for diversification with a mix of stocks, bonds, and REITS. Consulting a fínancial advisōr to tailor your portfolio to your goals is wise. I currently have $600,000 in a well-diversified portfolio that has seen exponential growth and is still growing.
How can I participate in this? I sincerely aspire to establish a secure fínancial future and i'm eager to participate. Who is the driving force behind your success?
"THERESA DANA PEEK" guides me. She currently partner's with MORGAN STANLEY. But there are a lot of independent advisors you might look into. For me, her strategy works hence my result. She provides entry and exit point for the securities I focus on.
Curiously inputted her full name in my browser and searched online, found her site ranked top, very professional.. thanks for putting this out, it has rekindled the fire to my goal.
I don't lose a penny when the market goes down, or get too excited when a day like today happens... I am not selling, won't touch the money I have invested for another 10+ years, that's investing my friends. I want throw in another $100k just curious on where to diversify
I think you're better off with majority investment in S&P500 and uprising equities cos they always outperform. Alternatively speaking to a certified market strategist can help with pointers on which to acquire
Right, when it comes to situations like this, it's ideal to engage in various options using an advisor, and I can attest to success of the basket approach seeing my portfolio grow from $350k to almost $1m in barely 3 years, by far my best financial milestone.
@@kashkat987 wow massive gains! my partner recently hinted on going same direction.. what did you invest in, and who is your investment advisr please, if you don't mind me asking? in dire need of asset allocation
Can't divulge much 'Monica Selena Park' deserves credit for my investing success as one of the finest financial planners out there, you should be able to locate her online if you are internet-savvy.
Thanks for sharing this. I curiously searched for her full name and her website came after scrolling a bit. I looked through her credentials and did my due diligence before contacting her. Once again many thanks
1990’s big catchphrase: “it’s different this time”.
Stock market is future expectations of others people future expectations. Not the economy
Already invited in stock and I can't really get good return from it
Investing in crypto is the only big chance of making money
For real crypto is profitable
Crypto is the new gold
@rafael paul That won't bother you if you trade with a professional like Mr Bruce
-32.9% is the annualized GDP drop. The actual Q2 drop was -9.54%.
Correct. But that's too much for doomsters to comprehend.
Hello, I'm new to forex trade and I have been making huge losses but I recently see a lot of people earning from it. Can someone please tell me what I'm doing wrong
All you need now is a professional broker else you gonna continue blowing of your account
For real it's very profitable
I will recommend expert Mrs Laura trading service for you her strategies is working for me at the moment and making good profit from forex trading
Wow I'm just shocked you mentioned and recommended expert Mrs Laura trading service, I thought people don't know her... She's really awesome
Haha you don't have to be surprised about expert Mrs Laura trading service she's really good and everyone love genuine services, she has helped me recover what I lost trying to trade on my own
Title: "We are in the middle of a stock market bubble"
Narrator: "I'm not saying we're in a stock market bubble right now"
I need everything spell it out for me. I hope you are not like me.
🤣
Everyone has been saying the market will correct back since April. Keep saying it and eventually they will be correct. Just when
Reel them in, then CYA!
This is called click bait
We are in a bubble, everyone just doesn't feel it yet. The pain is still to come.
It won’t come how you think...governments are able to control how the economy reacts by the federal reserve system and interest rates etc...what you’ll see is future generations far poorer than they are today due to the current crisis.
So you are saying that I should short the market? Ok
Nah, after 2008, the fed knows it can just keep printing money to hold up the market. The bubble can't burst when you can just devalue the dollar which the market is priced against.
@@usaball9190 You'll lose a shitload if you try to short (I assume you are doing SPY puts). Everyone thinks they can time it, but the Fed will do everything. EVERY. THING. To keep the market propped up -- I think they can keep this charade going on for another year. I'm not a huge Keynes fan, but one quote of his is very true of people going short: 'markets can stay irrational longer than you can stay solvent' ...
Only the top 20% really have any stocks. So most don't even notice it.
The few that have a 401K don't even look at it, or even know what it means.
They may glance at the balance... but if they become to aware of it, they borrow from it and don't have anything actually in it anyway.
“No one can see a bubble, Mike. That’s what makes it a bubble.”
- The Big Short
Miachel Burry and the rest in the movie did.
Mike responds by saying that’s not true, there are indicators.
@@ufoinsider6932 mmmm
Of course he was wrong when he said this. Good movie, I do recommend the book also.
only when bubbles pop now the Fed, pumps the air back in as quickly as it can and the next bubble gets even larger. Eventually the dollar will collapse that will be the time everyone will wish they had purchased lead instead of gold.
The stock market isn't going up in value, the dollar is just losing value.
Zombies, . . . Zombies, you must KILL them
You think this companies convert our money invested into gold 🤔
A Mdz gold is expensive atm but soon it won’t... Spacex
@@ronaldvasquez6488 you talking about space mining?
@@amdz4696 check out who OWNs the companies holding your gold ?
sorry but the gold is backed by leveraged securities, you will
(in a crash ) never ever see your gold ever . . . . . .LOL
The stock market is no longer the economy. They do not react the same.
There are two economies: Main Street and Wall Street
True
That’s absolutely true. The correlation of these is less each year.
P.E. ratio's of today simply are not comparable to those of any previous period for two major fundamental reasons:
1) There are fewer stocks to invest in. Today, there are less than half the number of publicly traded stocks than there were in 1998, for example. Globalization has caused wave after wave of consolidation while increased regulations & low interest rates have caused many corporations to stay private as they avoid the scrutiny & hassles of going public while maintaining access to huge amounts of capital via private equity, which has always been the biggest reason for going public in the first place.
2) Technological advancements now allow virtually any person/fund/firm to invest in any market from anywhere in the world at any time. As little as 10 years ago it was much more difficult for an investor to buy equities or treasuries in foreign markets. This has consolidated money from around the World into fewer & fewer markets over time.
This combination of an unprecedented influx of investment capital from around the globe into the most successful, liquid & stable markets combined with halving the number of public corporations in those markets has necessarily pushed up P.E. Ratios dramatically. This has caused a "black hole effect" as the more capital that is sucked up by the most successful markets, the more capital is attracted to those markets, pushing P.E.'s higher & higher regardless of the underlying fundamentals and further disconnecting them from historical values. As long as the leading markets stay the leading markets this trend will almost certainly continue, skewing P.E's even further over time and making historical comparisons less & less relevant.
There are also a number of other, slightly less relevant but still important reasons P.E.'s are fundamentally higher as well. For example, the rise of the 401k retirement system that has replaced the pension, the unprecedented waves of stimulus from central banks around the globe, insanely low interest rates that push investors/savers away from treasuries & into equities, low energy costs & supply chain improvements which decrease global shipping & logistics expenses and a low inflation rate which depresses other basic commodity input prices, to name just a few. The cumulative effect and complexity of these massive changes make understanding the exact magnitude & effect on the system as a whole virtually incalculable but one thing that is for certain is these changes have massively changed the meaning of P.E. Ratio's as we have known them.
But this is not to say the trend will never be broken & a reversion to something resembling historical normalcy won't happen eventually. We already see the seeds being planted as waves of nationalism are sweeping the globe but make no mistake, when it does actually happen, you'll know it, as it will likely be accompanied by a violent down swing in prices and a massive shakeup in global economic market fundamentals as markets, economies & supply chains decouple causing the largest corporations to rapidly lose global market share, allowing small-medium sized enterprises to claw it back, returning some normalcy to P.E. ratios in the process. Until then, my advice is to assume the trend will continue and P.E. Ratio's will continue to climb while being less & less relevant as a comparison to history.
But what do I know? I'm just some guy on the internet giving his unsolicited opinion.
Cheers!
Awesome perspective.
Your perspective deserves a Medium Post. Thanks for sharing it.
thank you, unless you have well thought out opinions like this guy (i''m not necessarily saying he's right, I'm relatively clueless), please stop commenting wasting everyones time
Thanks for that.
yeah, but no. try again
All the chart comparisons to previous crashes were within times where trillions of dollars were not injected into the economy. So the main difference between the previous crashes before 2009 is about 6-8 trillion dollars just for starters.
The bubble on housing caused a real down.
I believe no matter the situation of the economy finding a way to profit of it priority . I don’t mind a stock bubble, with the right bet profit is still guaranteed.
Redistributing wealth to the top never ends well
Redistributing wealth to the top never ends.
Can you say French Revolution?! I don’t think people liked the cake the royals were dishing out!
@J Hof But the poor are the majority.
We don't know were in a bubble until it's already too late.
This time it's a National Bubble, not just one industry. It's brought on by the Fed's overspending.
Leech Phillip yes.But people refuse to go to work when called, don’t apply for jobs and create burden for tax players
You can't counterfeit trillions of dollars into the financial system without some very adverse effect
You want to bet?
it aint counterfeit money they pumped into the system. It's real money. which is worse
Well said, Tricky Ricky
None of those four companies are investment banks, they don’t all trade their own money, and they aren’t reliant on capital markets for purchases.
We know what he means though...
Wait, going from 100K to 1.1 million is 27% per year, not 111.8%.
Yeah I also frowned when it appeared
American Maths
I had the same reaction ... 111.8% is more than doubling ... doubling in 10 years would be 2 ^ 10. The 100k would turn into 100 million.
RIP Newton, both for the video and your comment
@@momo777777777777777 yeah. Sure your country is the greatest country on Earth 😂
Can’t wait for this bubble to collapse and purchase all these stocks for discount prices once they arrive at the sale rack. Real estate as well, stay liquid and prepare to capitalize on opportunities friends.
Exactly the confirmation I was waiting for.
Keep it in US dollars or ?
@@astasna will the US still survive or go back to where it was if there is a crash?
@@astasna If you are expecting this, precious metals would make more sense. When the market crashes, precious metals boom. Then you sell off and reinvest into stocks. You win on both the crash and recovery that way.
Land will never lose it’s value.....
Google trends does not "predict" a bubble. But it does correlates with market enthusiasm of certain assets in real time.
Bubble of all bubbles. Hold tight folks.
Won’t all the bubbles just cancel each other out?
The Nasdaq and Trump to the moon!
Lol sounds like you missed in March and now fomo is ha haunting you 🤣
@@TheLukaszpg not sure what you're talking about but hey 👍🏼
Doesn't matter how hard you hold on. It's going to shake violently and it's going to tear you out from wherever you are.
Thank you. I got a couple of useful tips from your presentation. We are in a bubble, and unlike previous bubbles more people are aware of this than ever, even the Fed reserve bank. So they are keeping the bubble inflated, while we go through the health crises and the economic slow down it creates. But once the pandemic in the US starts to reduce, the Fed intervention will slow down and the stock market is likely to have a correction. The puzzle is not whether we are in a bubble but everyone is trying to guess when it will end and time the market. This is where a lot of people will get caught if these big institutional investors sell their stocks.
Great summary. Thank you.
Well said I couldn't agree more have plenty of dry powder to deploy in the next year or two
mhh the title should be "We Are In The Middle Of A Stock Market Bubble...And everybody knows it"
XiO h the whole time I was like “ he dummy we know! 😂😂 like when does it PoP
“and even who knows it is buying”
But you will not sound as smart?
Have you had a conversation with a normie lately? I know a ton of people that think we're at the bottom right now and have nowhere to go but up. Strange I know but most people are idiots. All I've been hearing is "buy the dip"
@XiO h
You're right! It should be asked ...are we...?
Sep of 2017 to Jan 2017 would mean traveling backward in time :)
Your videos along with Economics Explained are awesome. Keep it up! Look forward to each one of your videos!
We are ALWAYS in a stock market bubble. Hence, the repeating series of rallies and crashes over the history of the stock market. Get well soon.
We're definitely living more in the time before the great depression, more than any other time in history. You want to talk about parallels, do some research on the time before then. (not the narrator, you do amazing work, just talking generally) I do agree, we are very much in a bubble and a time of massive exuberance
A whole lot of short term thinking without any long term planning, people have set aside less than $400 for an emergency yet they’re steeped in debt for consumer goods.
@@kelleycrockett3387 this is why the rich get richer, they're not the consumers, they're the sellers and the owners
@Intelligently Stoopid it certainly will be interesting
@Intelligently Stoopid very dark. Haha
Love how the "this time is different" thinking even in this clip.
"This time it's in more established companies."
Is it really? FAANG would be like the 90's Microsoft even Yahoo and Apple then and it went bust for a period of time in the mid 2000's until it came up with the iPhone.
And 3M, John Deere, Cat., GE, GM, Ford, various utilities are still hammered.
But you have a rise in speculative disasters some that were just nearly avoided like WeWork.
But Uber which has never really scored a profit since its existence and is being blocked by unions and other cabbies, same with Lyft and Arbnb and Nikola that doesn't even have a selling product available yet has suddenly billions in market capitalization.
No. It's not. And there's no difference in people saying it's different... that is itself the same.
It's a bubble. And for the same reason... "Fed Reserve that time crashed it." Well, they also caused the 90's bubble by lowering interest rates ever more so through the 90's as it grappled with low growth outsource til supply chains are all foreign and very few domestic... any shock to such a system, suddenly toilet paper even becomes scarce.... a bicycles become double and quadruple in price or just simply unavailable.
Wages and salaries continue to decline.
And the real wealth turns more feudalistic in buying up existing real-estate, no real conviction to really build more unless its to their fellow feudal lords for rents and flipping Mc-Palaces; rents rising in the face of a great depression even when their very tenants and any new tenant is unable to even pay their original rent prices.
We're at the end period of a low wage race to the bottom global cluster mug.
Difficult to say how it ends: hyperinflation or deflation... both likely in what order its difficult to say. And owning metals or stocks or comic books won't save you from the ill effects that have and still devastate nations worldwide all the time. Difference is that a global collapse happens to more than just a handful of countries, but most if not all nations all at once.
China will benefit from this in that they won't have to subsidize the U.S with free stuff anymore. Invest there
This market isn’t going to Fall! We are witnessing a hyperinflation blow off like the Venezuelan stock market did.
yeah people like to panic but money printing is creating hyperinflation big time so you better off being invested in assets like stocks. This pandemic proved that Innovation stocks that will change our future will continue to do well even through pandemics.
We won’t get hyper inflation. Highest the Fed will let it get is 2%. You have to remember that lower commerce (lower money velocity) is deflationary.
@@SirSmithThe1st 😂🤣😂🤣😂🤣😂
You are right,i was thinking about it today.Germans were in similar situation after WWI.China rules the World and it will have to be adjusted,will military involvment be necessary?Who knows🤷♂️
Hybrid war is ignored,people are lazy and greedy so they stay home when you give them stimulus money and order to do so(they do not even call for their constitutional rights,why would they if they can still shop online) but not affraid of "victims" that war killed by "convid" .It is sad,very sad.
@@michalnowak3558 Stop; smoking; crack.
Very true Jack. I suspected this outcome earlier this year. Had to diversify my portfolio, now I'm making insane profits investing in the forex market 😊
I'm interested in knowing how you do this
Insane profits? I'm interested lol
How do you invest in the forex market? I initially thought you can only trade it just like the stock market.
That's what I do too. Forex is highly profitable with the help of an account manager trading on your behalf.
@@keithsunderland9314 Does this work consistently for you?
We are not in a bubble because:
1. Fed's unlimited QE has provided sufficient liquidity into the economy. Don't fight the Fed.
2. The economy is still running but in a digital manner.
3. 1% of Americans own 50% of the stock market. 10% of Americans own 84% of Us shares. I know this is harsh but it is a game of the rich now. Sadly, the average income of the bottom 40% of Americans is US$32k a year. They are not market participants and have no impact on the market. And Treasury Department's 2.2 trillion packages have sustained the buying ability at least for now. Congress is expected to pass new bill for supporting the economy. It is coming.
4. Over 160 vaccines are under development now with 3 under Phase 3 and more to come. FDA is expected to Fast Track approved one by end of this year.
5. Jamie Diamond has it - in a typical recession, savings are dropping, home prices are dropping but, this time, savings are increasing to a record level and new home sales/pricing are rising. Not a typical recession but more like an economic stoppage and that is expected to be temporary. And Wall Street is ahead of what will happen at least 12 months.
6. S&P 500 is not the US economy. 40% of S&P revenues are from overseas market and 2/3 of S&P companies are manufacturing-driven vs. 2/3 of the US economy is consumption-driven. S&P is market capitalization-based and the US economy is output based. There are fundamental differences.
7. Last but not teh least, while Fed is substantially increasing its Balance Sheet but there is no inflation of economic goods. Why? Because as long as the money did not flow into economic goods, there is no inflation. But where did the money go? If you draw two lines on Fed's Balance Sheet and S&P 500, you will see positive correlation. This means that we are living in an era of inflation of financial assets. That is why market P/E today is higher than market P/E 10 years ago. It only tells that stocks are more expensive and money is less valuable. Stocks are new safe heaven not just for value appreciation but also for safeguarding value depreciation. This is the new normal.
Great analysis. Where can we find literature to educate ourselves. Any books or articles that you recommend?
@@imdoc7872 I am actually wrting a book about this. And it is in going to be published at the end of this year.
Curious how this video will age
my guess is it will age very badly.
So far it’s looking like he’s right, all hell is about to break loose
@@adamchill8780 Yea. NASDAQ is falling fast, DOW dropped 500 today, and Gamestop, AMC, and Blackberry have grown more than 100%. I'd say the bubble is soon to burst.
I checked the stock market. After the GME shock, all indexes have dropped 2%. I see it all happening.
You know, when markets go up in a big way, it is but obvious to come out and predict a crash. All average people do that. In-fact they predict a crash almost every week and keep doing it until the crash actually happens some day and they come out and say "You see I was RIGHT !!", and feel like a genius. None of them is a genius. These are average people. A real genius can separate a bull market from a bear market. I am not saying this video is wrong or the people who have commented here are wrong. But I have been hearing this shit since 2013. Its been 8 years and nothing happened except a crash which came due to the coronavirus and didn't last for even 3 weeks. Many people missed out in a really big way.
‘So I am not saying that we are in a bubble right now...’ Meanwhile the title of the video: we are in a stock market bubble
Dude you so smart, you predicted the market correction happening now in the tech stocks one month ago, brilliant. You have one more subscriber now.
i pulled out of the market when it recovered about HALF of what it lost... my funds are just sitting right now...im waiting for it to crash. when it does crash and the market drops 20%, i'm going to jump back in and ride it back up.
I have like a 20 year horizon so i dont need to time it perfectly..just need to get in when its down a considerable amount
Its going to collapse at least 75% if not more so good luck
@@joelhardin1166 that be great if it did... id almost double my money as i ride it back up
@@rjf7023 it will hit bottom at least a year after the collapse.
Do you’re willing to let your money to be devalued ,,ok
@@user-rs4ci3fn2d re-read what i wrote
Despite the economic crisis, this is a Still a good time to invest in Gold and Crypto
The rich spend less and invest more
Investing in these economic crisis will be one of the best thing to do
You're right I think Gold and Crypto are the best to invest right now
Gold's are good but crypto is better
I wanted to trade crypto but got confused by the fluctuation in price
Nine months later and the bubble has gotten bigger.
Ubsubscribed dude. Every video I watch you're throwing out random facts and then contradict yourself.
Watch for 5 seconds starting at 5:50, then read the title of the video. You have some cool visuals but your content is bad and doesn't help anyone. Truth is nobody can predict the future.
Exactly what I thought. Video title says "we are in the middle of a stock market bubble", yet he says "I'm not saying we're in the stock market bubble right now". Huh. Saying alot without saying anything at all. Clickbait, nothing else. Gotta pump the ad revenue in.
Its more like we are in a stock market bubble and most investors most definitely know this but they just want to ride the bubble for as long as possible to gain as much of the large increase in value as possible and pull out only right before a crash
Good luck getting out in time
@@JonathanRootD I haven't started yet. Maybe I'll wait a bit until it crashes and then buy a lot.
I've watched so many economic videos, CZcams owes me hundreds of credits for my CZcams degree.
Lots of actual degrees have worse teachers than some youtubers
the value of stock market is increasing because of panic investment. people/banks/countries don't know what to do not to lose money so they invest wherever they can.
R.I.P all the guys that listened to this and tried shorting the stimulus market
I’m sorry. Who doesn’t know that we are living in a stock market bubble?! They live under a rock?
Good One 😂
After Labor Day...it will go down! Trump 50/50 shot to Win!
Angelos Giotis nope. The TGA has over a trillion laying in wait to fend off collapse prior to the election
*crawls out from under rock*
@@angelosgiotis6258 there is a pretty interesting stastic that the vast majoirty of the time the stock market has increased average of 7-8% even following ANY election
Time to get out of the market. Where to go? There is almost nowhere to go.
Worst GDP report in history, stock market explodes upward lmfao
Your assumption those should be linked are based one what?
With a yearly growth of 110% for 10 years you would not have 1,1million dollars, you would have 166,8 million dollars. Interest on interest over the years makes a VERY big difference.
I knew we were in a bubble when apple, Amazon, and google all became trillion-dollar companies.
This system is going to plummet!
You do know that Apple generates almost $100 billion in free cash flow a year? Not overvalued at all.
What kind of an agreement is that? Please explain
111.8% a year for ten years on 100k is a lot more than 1.1M you do know that right 😂
The moment I stopped watching the video... :D
174 million, only a couple mill off
I had to search a lot to find someone picking this up too... Also stopped watching this video there
In 2000 10 year yields were at 5%, with the NASDAQ PE at 80. Today 10 year yields verge on zero with the NASDAQ PE under 30. When everyone is calling the market a bubble it is not a bubble.
The initial crash this year in March was caused by the virus halting international trade and shortly after most domestic trade. There are lots of new traders with spare cash and less distraction because they're home working or on government support schemes so they've driven up the prices of popular stocks. Plenty of other stocks should never have gone down in the first place because their business is entirely unaffected so they bounced back quickly as expected (utilities companies, most online services and shopping). The industries still struggling have been struggling for a decade anyway and the weakest of the bunch may close permanently as investors re-evaluate their entire portfolios to focus on growth industries 3 years+ down the line (cinema chains, airlines, traditional car manufacturers and anything fossil fuel related are all risky areas). If you buy anything now be prepared to hold through serious volatility and average down your position when possible.
Stock market is the oldest online
market we have done in the past years,we employ it because of the the highest quality of service it's renders and how successful it is, today we now say crypto currency too,I'm just saying that people should develop the habit of investing, really helpful in life.
The US stock market looks real weird right now investing in Bitcoin/ forex will be the wisest thing to do now as the stock might crash
Absolutely right 👌
Bitcoin investment might make you rich if you're a hedge fund with deep pockets or an unusually skilled currency trader but for the average retail trader rather than being an easy road to riches Bitcoin trading can be a rocky highway to enormous losses and potential penury
Bitcoin investment is great unlike the stock market and other financial markets bitcoin has no centralized location since it's operates 24 hours a day in different parts of the world
I have been involved in trading in recent times and ever since I haven't lacked anything I have to spare and anythingI'm living comfortably
Just to be clear. 6 people can’t be first.
People with DID: Hold my personalities
666th
How can the stock market be so detached from the real economy?!
Magellanic SpaceClouds it’s just simple things to understand
I feel things would still get worse in the near future. This is certainly the time to look out for short term strategies. Would be best to get a help preferably a pro IA cuz this market is pretty much complicated right now.
My story with the market has been all about shoot and miss and now I'm even more discouraged by this speculations about recession. Would appreciate any kind of tips or recommendation.
@@Kennedy-my8ez I have my funds across other securities not just on stocks and I'm a bit aggressive. But I don't make these picks myself. I use trade signals from a US regulated broker and investment advisor Monica Sullivan Javorcic. I've made very decent returns from an allocation of $150,000 since Jan 2020 using a professional help.
@@bretmaki2110 Quite impressive. Do you copy the trades manually? I have a full time job. And what does Monica Javorcic
charge for her services?
@@Kennedy-my8ez Auto trading works programmatically so you don't have to sit to copy manually but you have control over your funds and can opt out anytime. It's a subset of algorithmic trading. The lady I just recommended is a renowned broker and knows what the heck she's doing. You can check her out online if you'd need some help. Good luck
@@bretmaki2110 Just found her official website so I'll mail her right away. Thanks
Investing in crypto now is very cool especially with the current rise in the market now
Yes you are right
Thanks for introducing me to Mrs Allen Lisa
People are scared of investing because of the high rate of scam in the business
Making them to remain poor out Of ignorance
There are scammers but there are real brokers waiting for investors out there
Shares don’t match the current state of the economy.
Who said it should? Did you look at how the US markets performed in 1916 during WWI? Go read Reminiscence of a Stock Operator.
We are definitely in a huge stock market bubble.
It’s so clear czcams.com/video/NNpgmCDZ67E/video.html
The problem with bubbles is that you can't predict how much bigger they might get and when they end.
John Kosi but the end result of this one is almost guaranteed - currency depreciation and most likely hyper inflation
Maybe inflations yes not bubbles
Not necessarily. There's inflation out there. And most of these companies will attract investors who don't want to sit on top of worthless cash. Instead they will buy either gold or shares. Many companies will default, but the big ones like MS, Apple, AMD, Amazon and so on will get bigger and bigger. The great transfer of wealth could occur through crypto currency and stock market shares.
My man. The mathematics behind the calculation about the Tech investment in 1990 are so flaud it's incredible
I felt that too, all that talk about information revolution and I was thinking the math would only work if those companies were really making robots to do all the work. Maybe if robotaxis work we now will have that revolution.
@@icaropereira3218 that's not at all what I was referring too. But it doesn't matter all that much, I just think this video is rubbish
There's a lot of misinformation in this video. Firstly, the -32.9% figure is annualised, so the real decline in GDP in the last quarter was around 9%.
Secondly, when the fed prints money, it can only buy assets such as government bonds and shares. Obviously when money is being printed in the trillions and used to buy up shares, the market will rise. This is more to do with the devaluing of the dollar rather than an increase in absolute value of the market.
Finally, the s&p 500 is dominated by the big 4 tech companies. Apple, Amazon, Alphabet and Microsoft have all flourished in the second quarter, as people having to stay home actually makes these companies MORE money than otherwise.
All that said, there is the potential for a bubble here, but given how much money is being printed, it may just keep going higher as the dollar is devalued. Remember that a poor stock market reflects a poor economy, but a poor economy doesn't always reflect a poor stock market.
The only need I've heard from all CZcamsrs,all mainstream media( leftist and conservative) is that it was the biggest quarterly drop ever,so, who are you?🧐
@@c39v26 it is the biggest quarterly drop in GDP ever, but not -32.9% in one quarter. Do you have a problem with the facts?
@@KingOfForest22 I just saw the commerce report and that is the first time I've seen 'annualized',a thousand pardons wise One🙄
@@c39v26 this is exactly my point, all the sources you've seen before as well as this video fail to point out that the - 32.9% figure is annualised. It's either ignorance or blatant misinformation.
Ken Semotiuk you’re*
Trading these markets is pure love :)
Thank you for your videos. I am learning a lot. Keep up the good work. Subscribed!
Some assets are more bubbilicious than others...take TSLA for instance. I know a guy who knows a guy who started with $300k last year...he now has at least $1.8M...but he will be poor again and here's why. TSLA produces 0.02% of all cars, yet their stock valuation is more than the valuation of all other car companies combined. THAT'S INSANE!!!!! TSLA will absolutely collapse in spectacular fashion and only the dummies will hold on. I think that will start a cascade of other stocks doing the same even if they're not as over-valued...for the simple reason that people don't know what they're doing and will panic like never before.
The video starts at 6:05
As an investor, just want to say that next year will be fun!
One thing that is often overlooked is that the .com bubble was actually correct. The internet and new technology was the future, companies just werent quite ready for the insane amount of money flowing in from investors and needed time to grow.
Investing in tech companies at the height of the .com bubble would still have been a super super smart investment at this point.
Sure we will see the stock market dip, or maybe crash but it will come back and investing now will prove very prudent in 10 years. Might see some short term hurt however
Your belief is that market will always comeback and create even bigger bubble. Is it true? History says it not true. It all depends on the size of bubble.
@@Roseart09 no im not saying they will create an even bigger bubble im saying that bubble was actually accurate in accounting for growth of those companies. you can't invest in high growth companies the same way you invest in established blue-chips. So the bubble will pop in the short term as people look the stock price vs earnings, but they will then come back when they realize that the bubble was only accurately accounting for INSANE future growth. Which most of those .com era tech companies experienced. And i think EV companies will experience as well
Yes definitely so the video makes sense and seems legit....
My question is : So then why vanguard, blackrock, BRK and SSGA holding this large number of apple shares ???? When they know that stock market is booming and gdp is sinking, it is pretty clear that it is a bubble and so why dont they start decreasing their stake in overvalued tech companies ?????
thanks god everyone is predicting a new 1929 with their crystal balls, meaning it wont happen. There would be a REAL PROBLEM if everyone started to state quite the contrary, that the stock market would be keep rising and was the best moment to invest, that's when i would sell off everything
One of the few sensible people in this comment section.
Wait wait wait! Who doesn't know we are in a bubble? The economy has been crushed and stocks are up!
Everyone who doesn't know we are in a bubble has got to be a little... touched.
Therein lies an issue -- EVERYONE believes we're in a bubble.
True but there are lots of stocks that will still make money.
dont see how the economy has been crushed
@@chocktalk Look at distressed debt, unemployment rates, retail sales, new loans issued.... Every element of the real economy has been crushed! Outside of financial assets, naturally...
@@chocktalk try opening your eyes
only when bubbles pop now the Fed, pumps the air back in as quickly as it can and the next bubble gets even larger. Eventually the dollar will collapse that will be the time everyone will wish they had purchased lead instead of gold.
We are not in a bubble.
We are in a GIANT everything Hyper bubble!!!
Not everything.. pay ratio for hard work is undervalued around the world
lmao I cant wait for people to keep saying that the market will crash for the next 10 years.
I can't wait for them to say it for the next 50 years. The inequality of wealth will grow forever as more and more people get passively richer and richer and have fewer and fewer heirs. The big waves happen but the trend is positive because of dividends and long term investors the asset bubble grows forever propped up by consistent investors.
Py16777216 the rise of populism, both left and right, indicates otherwise.
Clear and concise, well paced narration. Making it it easy to digest the information. Good job.
knowing how large of a portion of many Massive companies that banks own was a very helpful fact to know, thank you for this information. Ive made a lot of money with my VGT tech stock, but i am quite scared that it could tank within the next few months, I may consider selling off soon
Apple's biggest shareholders are investment companies, not consumer lending banks. If whatever goes wrong, they don't necessarily need to sell. The stock market and the real economy are two VERY different things. 2020 is just a further demonstration of that. I made some bad moves in March, and boy did I get burned!
Yup, just sold stocks I've had since the 80s. Just cashed in yesturday.
Good choice! It might not crash till a few more years but you have 40 years of profits so what’s two years or five!
All though I’d recommend to put a small amount in bitcoin! After the crash I’m sure people will want bitcoin instead of dollar bills
Thanks for liquidating! Younger generation appreciates it.
@@joselyn8518 what? wtf? why?
MHNK77 czcams.com/video/iNlBizfi-jM/video.html
When everybody is yelling that the market bubble is gonna burst, well guess what, it will go up for a while.
Yep
THANK YOU for this fantastic channel
Watched all of your videos and appreciate all the knowledge gained
HUGE factor with the $600/wk in unemployment benefits, plus stimulus checks. That amounted to a lot of people getting a good portion MORE money than what they were earning pre-COVID... It's hard to tell what's going to happen; there's definitely a case for bears and bulls
IRS is waiting for those folks
Are we just gonna ignore he completely miscalculated those returns from 1990-2000
LOL
he just completely forgot about compound interest
also those 111,8% cant be right, that would sum 181.660.103$ lol
Well if the bubble last 10 years like the 90s then great..lol
It will, this forced recession would make it so, plus a stimulus check lol. Anyways, the point is the gap between rich and poor would be more noticeable soon.
As someone who works in finance, I must point out there is a bit factually incorrect about the "ownership of Apple". Vanguard, Blackrock and State Street are NOT "investment banks" - they are companies that sell investment funds (package different investment together). Because these are an efficient way of investing in the stock market, many people chose to buy one of these funds (they're probably in your 401k!). Because of this, Vanguard, Blackrock and State Street just represent YOU (as a collective), who has purchased these funds through the fund structure! Moreover, the selection of which investments go into those funds is meant to just mirror the 500 largest stocks in the market according to their size, so no one there "knows" more about Apple than we do - they just increase or decrease their holdings directly in line with the stock price.
We are currently in a bubble of epic proportions and everyone knows it, except nobody cares. As long as the FED has our backs the markets will rise forever. The FED will do whatever it takes to prevent the failure of any major bank.
IMHO, the stock market is over pumped because much more and more ppl are online trading right now ......even my grandma so to speak. And we all know that a major price lifter of any given item or situation is when it attracts attention ......and because i have been there and i know how it is to perceive that you re going to have more freedom and power sitting in your living room and playing your cash online. With all those huge numbers of ppl being sent away from their jobs, while internet and IT and ecommerce do increase by leaps and bounds, the perception of online trading is bubbling up exponentially ....... even as i was watching this video i had to go through 3-4 times etoro's ad on youtube. Ppl massively try to go from the 1st, 2nd rich dad poor dad's cash-flow quadrants straight into the 4rth one which is the investor's world. When ppl will start realize that this is not the way to live a life by being stuck on a screen either, then we will be having yet another shift. Until then, happy trading !
The ammount these poor mans brokerage houses work with is insignificant to move the markets. Berkshire, Blackrock, big banks etc are the true market movers.
@@Dr_Salt haven’t you heard the $500 RobinHood accounts are the new market makers
This is the dot.com bubble all over again.
While we are certainly overvalued and in a bubble this is nothing like dot com era. The Nasdaq has 50% of its value in only 6 companies right now. AAPL, Amazon, FB, Microsoft, google. These same companies are 22% of the value of the SP500.. we are VERY top heavy since they are weighted index... All of those companies are actually making real money and have real dominant positions. Nothing like 2000 when all the companies making no money at all ran it up.
imagine not already knowing we're in a stock bubble
the decade is fucked
In 2020 we have the everything bubble, scary thing will be the bond market getting hit hard and wipe out retirement plans. Housing will kill the new home buyers. I personally am sitting on physical precious metal, cash food and ammo. Not sure where the market will be in a few years but Buffet is following my lead and sitting heavy on cash.
It’s well- informed information for me. Thanks , keep it up
Trading with an expert in the field is the best, Have been making a huge return from my investment since I meet Cynthia Donald one of the best in cryptocurrency investment
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has been handling my account for years now
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We for sure are in a debt bubble. We are headed towards MMT system . Printing money will be the norm , but the way we will control it won't be easy. Turbulences will come.
Suel Koka chin is loving this
Doesn’t matter if this is a bubble, as long as Trump is in charge, he will keep on printing more and more money and still will flow back into equity market
People like you is what’s wrong with America
Did you forget about compounding interest at 3:12?
Yeah I thought that too
5.53 "...i'm NOT saying that we are in a stock market bubble but..."
There are so many factors: The future of tech and cloudbased services, apps like Robinhood and the ease for low-income investors to buy fractional shares, and the opportunity to make money without leaving your home. Who knows, man.
US Market is in the TULIP MANIA BUBBLE right now...
At 5:51 in the video, you state, "So, I'm not saying we're in a stock market bubble right now...." Yet, the title declares "We are in the middle of a stock market bubble.. and just don't know it."
Really, editing issues, yet clearly make sincere proclamations?!?! How about take a day off day what you mean and own it, no excuses. He lost all credibility with that statement.
click bait
Would you have watched it if the title accurately reflected reality.
Fed wasnt doing quantitative easing or fiscal stimulus back then. Asset values are increasing because the feds are buying up assets and there are low interest rates, fed wont stop pushing liquidity into the market until inflation goes up. Inflation wont increase because we continue to outsource. The bubble is created by the central bank therefore its not like the dotcom or the real estate bubbles...
Your points are superficial and dont address these structural issues. Would appreciate your thoughts on these points
@@Mistrinho My main point is that the current situation we are in is in no way similar to the 2001 or 2008 bubbles. We are in a state of economic shock after a crisis, we're not building up to a crisis. The best historical analog to whats going on now is the Great Depression, interest rates are at zero so the Fed needs to print money and buy debt. So the only bubble that is occurring is a currency bubble (inflation). But inflation might not happen if we continue to outsource to poor people and keep paying the average american a shit salary
@Ken Semotiuk ya i mean, its impossible to know exactly whats going on and to predict the future. But the whole point of watching videos like this is to form an opinion and refine it through debate and more research.
Armand Amin thanks someone who reflects after their own thoughts.
I haven't seen that 73% drop yet maybe next year
everyone was calling for 4000 spx top ahahahaha
its at 4700 now I say 5900 top and crash in September 2022
You can approximate the total market yield, as 1/pe + div yield(as a fraction). Right now, the S&P pe is 35, and the yield is 1.75% ( 0.0175), so 1/35 + 0.0175 = 4.5%. The 10 year treasury, which has about the same time horizon as the stock market, is 0.8%. That means your risk premium for owning the S&P is 3.7%. I will just say, this is a very low number. The long term average is nearly double that (suggesting a possible 50% market drop in the waiting). I've sold most of my mutual funds and am being very picky right now, as it's hard to find things that are a bargain in this environment. The tiniest uptick in interest rates is going to crash this market.