I'm Buying Millions in Stocks... As Soon As The Market Does This 1 Thing
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"The investors who bought Microsoft, Amazon, and Apple in O2 and 03 at the depths of fear made extraordinary money."
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Full Transcript
There is one specific market condition where I start buying as aggressively as I possibly can. I've been there before and it was exciting. So today I'm going to tell you exactly what that condition is, show you the historical moments when it's appeared and explain why everything in your brain will try to stop you from acting on it. So let me take you through history because I think the most powerful thing I can show you is not theory. It's what actually happened during the moments that looked the most hopeless. Start with the Great Depression. The 1929 stock market crash wiped out over 80% of the stock market's value over the following three years. 80%. Guys, sadly, people lost everything. Banks failed. Unemployment hit 25%. The headlines were catastrophic. Nobody wanted to buy stocks. But the investors who did, the ones who had the cash and the courage to buy a collection of great businesses, literally pennies on the dollar during the 1930s, would have generated 11 12% annually over close to a century. That is incredible, guys. Move forward to the early 1970s. The OPEC oil embargo caused an energy crisis. Inflation was running wild. The stock market fell nearly 50% between 1973 and 1974. The headlines at the time were relentlessly negative while it was happening. But keep in mind before then we had the Nifty50. It was everything is great. Just buy these companies. You'll do great. News follows the stock price as it always does and always will. Business Week ran a famous cover story in 1979 during stagflation titled, and this is the real headlines, guys, the death of equities. The article argued that stocks were finished as an investment, that businesses were worthless, that inflation had made owning businesses worthless, that the era of stock market investing was over. Guys, even Warren Buffett wrote an article, an OpEd, where he talked about how bad inflation was, and it was probably going to continue to be bad. Anyone who read that article and sold their stocks in 1979 missed one of the greatest bull markets in history. The 1980s and 1990s delivered beyond extraordinary returns to investors who stayed the course. For reference, the S&P 500 has delivered over 12% annually since 1974 during the panic. And guys, keep in mind when that article was written, there were three more years left before the big bull market occurred. So somebody who listened to that would have felt like see told you three years of course death of equity something would have happened by now. The same thing can happen on the plus side, on the euphoric side. So, fast forward 2002 and 2003 after the.com bubble burst. The NASDAQ fell over 80% from its peak. Stocks that were assumed to be worth hundreds of dollars per share were actually worth pennies and they fell to there and went to zero. Investors who' piled in technology stocks during the excitement of the late 90s were devastated. The narrative in O2 was that the internet boom was a fraud, that technology stocks were worthless, and the market would take decades to recover. The investors who bought Microsoft, Amazon, and Apple in O2 and 03 at the depths of fear made extraordinary money. On top of that, from 2002 until now, the market has delivered just under 12% per year. And of course, 0809, that was the one that I had the most experience with in terms of the excitement of buying. This was the great financial crisis and a lot of people watching will remember this even if they were young because your parents probably experienced it and you probably felt it at home when I was buying stocks back then. I have absolute proof of this. Bank of America Maril Lynch would call me and say, "You're the only good phone call we get." I was trying to do trust back then and the trust involved setting up pricing for when I was buying in the market. And every single day I'm like, "Well, the market keeps going lower. I'm going to wait until this hap until I see an update and then we will do this. I mean it was absolutely incredible. I was loving it. I was buying everything in sight. Guys, not only that was only stocks on the real estate side, everyone considered real estate toxic. It was actually called a toxic asset. What was I doing? I was buying everything sight unseen. Literally, I would send somebody to the property and say, "Is the basement caving in?" "No, we'll buy the property." There were properties I was buying for five, six, $7,000 in areas of Cleveland, not city of, of suburbs of Cleveland where, yes, I had to put 20 or 30 grand into them, but I was getting $1,000 a month in rent. Those same properties today that I put I was into for 30 or 40 grand are worth $15 to $200,000 each. But guys, people literally felt sorry for me. And I was like, what's there to feel sorry about? I'm buying real estate, guys. The market back then in '08 was full of absolute fear. Lehman Brothers collapsed, Bear Sterns collapsed, banks were failing, the US government was bailing out car companies, unemployment was heading past 10%. People were generally scared that the entire financial system would not survive. Warren Buffett wrote an op-ed piece in the New York Times in October of08 with this title, by American, I am. Now, most people thought he was out of his mind. The S&P 500 bottomed in March of09. And from that bottom, the S&P 500s delivered over 16% annualized returns into 2026, 17 years later. The investors who bought in March of 2009, when everything felt the most hopeless, captured the most extraordinary bull market run in modern history. And of course, most recently, 2020, the pandemic. The market fell 34% in just 33 days, the fastest crash in history. Nobody knew how long it would last. Nobody knew how bad it would get. Guys, I was so happy. Go look at my Instagram. Go watch our videos. I was kissing the screen as the market fell. I was excited and posted about how happy I was when the S&P fell 7% in a single day. Guys, mark my words. There will be those YouTube guys out there that suddenly after a really bad bare market will be sitting there and saying, "I saw this coming." I'm gonna tell you right now that I've looked a little foolish as of late, but when it does happen, it is going to be very exciting and I'm going to be prepared. I'm gonna be excited to buy things at a discount and I will not be sitting there and saying I called it and then not having evidence for it. And by the way, I'm not calling anything. I'm just merely saying the markets are massively overvalued. Just like in 1979 where they were undervalued and took three years to actually start to move up, it's taking a long time for things to move down. We have people constantly buying ETFs month in and month out, which is a great strategy, but it's helping keep the market up. Guys, in 2020, ironically, the market bottomed before the world even shut down. We only had 5,000 cases of COVID when the market bottomed. Guys, if you'd bought at the lows of 2020, you'd be compounding at close to 20%. So guys, let me ask you a question. What do all these bad times have in common? They all passed. And what else do they have in common? If you bought, you made a lot of money. There will be bad times again. I absolutely assure you. When? No idea. And the story will be pretty bad. It might even be worse than COVID and the great financial crisis and the tech bust and all these other things and inflation. But guess what? Time will pass and this will pass. and you will have regretted not buying when it felt the worst. Guys, look at our presidential stock market returns chart here. The pattern is always the same. The greatest buying opportunities in history looked exactly like disasters when you were living through them. They did not look like opportunities. They looked like the end of the world. That's the whole point. Fear creates opportunity because fear makes people sell and when people sell, prices fall. But rarely does that mean that actual valuation and actual intrinsic value falls along with it. Now guys, as I say in every video, I have no idea what the title of this video is, and it's probably changed dozens of times since it was released and until you clicked it. We are here to teach a process. Do not take our titles literally. Now, understanding all that history is one thing. Actually buying what's happening is something completely different. If I ask people right now, what would you do if stocks fell in half? The vast majority would say, "Oh, I'd buy." Why? Because they're thinking about today's feeling while talking about an event that seems like an opportunity based on today's feeling. I always give the example of ' 06 when I sat down with two of my friends to talk about retirement and I literally asked him the question, "If stocks fell in half, what would you do?" And the wife said to me, "We'd buy more, right?" I said, "You get it?" And a mere two years later, she frantically wrote me an email saying she's selling everything because she thinks stocks are going to zero. the exact same person, the exact same question happening in real time, seeing the news around it made her change her entire mind. Guys, we're humans. We react to fear. But that's why we created this channel. We created this channel to remind everybody that the world is not going to zero. And if it is going to zero, your money won't matter anyhow, so you might as well be buying stocks. I don't want you to freeze when the moment arrives. And I also want you to remember that when the moment feels like it's there, it's probably not done yet. It'll probably get worse. Guys, knowing something intellectually versus actually doing it when your portfolio is falling is a world of difference. You feel like the world is ending versus today when you answer the question you're like, well, stocks keep going up, so what's a bad market? 10 15%. That's why when I hear people say like, oh, 5 6% drop, this is a buying opportunity. I just chuckle. And Warren Buffett recently was in an interview and he said, five, six% that's not a discount. That's nothing. Human beings are wired to avoid danger. Your brain is not wired to sit here and wait for price to fall and be excited when it happens. That took me time. I used to be the guy who was fearful of stocks falling. When prices fall and fear spreads and the news is terrible, every instinct you have says, "Get out. Protect yourself. Wait until it feels safe." In the stock market, unfortunately, it is one of the most expensive instincts you have. Great investors have to develop themselves to understand that the stock market is not rational. When you understand that, you know that the headlines are noise and nothing more. There's a great book that I want to mention by a channel, a friend of our channel named Guy Spear, and the book is called The Education of a Value Investor. Guy is a fund manager and a student of Warren Buffett. We actually had that incredible interview with Guy, one of my personal favorites. And he also has one of my favorite stories about bare markets, showing who the real disciplined investors in the room are. Guy talks about in his book, and he's when we were in the interview, we talked about this. He writes in his book that he was managing money in before the great financial crisis and all his value investing friends said, "Yeah, we love things at a discount." And all of a sudden markets started to fall and they all bailed. And he looked at them and said, "I thought this is what we said we wanted and they didn't do that." Guys, it's hard to invest. It's hard to invest in markets that are plummeting and it's hard to stay disciplined in markets that are going up a lot. Trust me, I've been there. But the reason why most investors never capture the best returns in history is not because they did not know about the potential opportunities. It's because they could not bring themselves to act when everything around them said not to. The news was too bad. Just like now it's hard not to invest when everything around you tells you invest. New highs every single day. The fear was too real back then. The gains are too real today. So people waited back then and they kept waiting. And by the time it felt safe to buy again, the market had already recovered a lot of those gains, if not all of them. So, let me describe what this buying condition actually looks like when it arrives. Not theoretically, in practice. The news is bad. Not a little bad, genuinely scary. People you respect are saying the market might never recover. Financial media is running negative headlines every day. Your portfolio is down, probably a ton. Your friends and family are talking about selling their investments or moving everything to cash. The conversation around you is not opportunity. But guys, businesses, the great ones, the ones that you've been studying, the ones with real earnings and real competitive advantages, their stock prices have fallen dramatically. The earnings are still there. The customers are still there. The competitive position is still intact. The price just got disconnected from reality of what these businesses are worth. That disconnect between a panicked price and a steady underlying value is the condition. And when it arrives, every piece of discipline you've built over years of investing gets tested all at once. Here's what I actually think you need to do in order to be ready. First, you have to know what you want to buy before the crash happens. Of course, I tell people, do what I do. I dollar cost average into lowcost ETFs, and I pick specific stocks as I want them. Charlie Mer always repeated, "Opportunity comes only to the prepared mind." You cannot figure it out in the middle of the panic. Trust me, that is not how it works. Steph Curry didn't start to learn about shooting three of three-pointers when he went to the NBA. He had to prepare himself ahead of time so he could make it to the NBA and succeed in the NBA. You need a list specific businesses, what they do, what they're worth, what price would make them generally attractive. That work has to be done in advance when the markets is calm and you can think clearly because when the crash comes, it'll be very hard to think clearly. Guys, it's even hard for me to think clearly and not have my bias when stocks are lower to make lower assumptions. That's why many of our community members love to determine the prices they want to own, determine the right price, add it to their watch list, and patiently wait. Second, you have to have cash available. Opportunity without capital is just frustration. The investors who benefit the most from market crashes are the ones who are patient enough to hold cash when the market was expensive and brave enough to deploy it when the market got cheap. Now, I want to keep in mind, don't take away from your plan of dollar cost averaging. That habit and and sticking to that so you can hit your long-term financial goals is really important. But if you have extra cash that you want to deploy and you're already hitting your other goals, sit on that cash and only buy stocks when they're the right opportunity. And it can happen at any time. There are opportunities in this market that will do well even in a bare market. But holding cash when the market is going up feels like you're missing out. Spending cash when the market is crashing feels terrifying. But what's interesting is I feel best when things are not very good. You know why? Because I know they'll eventually change. And what's funny is they'll probably change faster than most people think. Remember, and I want to remind you, Buffett, Greg Ael, and Birkshshire Hathway have a cash pile of $397 billion as we speak. Now, I'm not telling you to invest like them, but they have a lot of dry powder that they're ready to deploy. And I assure you that if stocks fell 60% today, they'd be buying a lot of really big companies at really great prices. Third, and this is the hardest one, you have to have a stomach. Buffett says that IQ only gets you so far investing. He said, "If you have a 150 IQ, you'll not necessarily outperform the 130 IQ." Controlling emotions is over 90% of what makes an investor successful. That's one of the things I'm most proud of for myself. Market fall. And I don't not only do I not feel fear, I get excited. I get excited about the opportunity to buy companies at better prices. Prices that allow me to achieve over 15% returns long term. That is the return requirement I have set for myself. But because I have real estate, I have businesses, and I have more than I already need. So, I'm going to be picky. I don't recommend 15% for you, but at the end of the day, picking a return above the overall stock market return is very important. And fourth, you have to understand what you will that you will not catch the bottom. Nobody does. The investors who bought in '09 did not know March was the bottom. In fact, when I was having those phone calls with Bank of America, Meil Lynch, and my lawyer and accountants, that was in December of08. We still had more to go. Guys, the key is you don't need to be right about the exact moment. You just need to be positioned when the recovery comes. And the recovery always comes. If you don't believe it'll come again, what are you doing? Just put all your money in gold, put it underneath your bed, and be ready for Armageddon. Go buy land. Go buy guns. Hope is not a plan. I used to buy stocks hoping that they would go up. But hope doesn't protect you when the market turns. Hope doesn't help you sleep better at night. Hope it doesn't decrease your fear. I had to learn how to build a real strategy, one that makes sure that I personally never go to zero. Now, every investment I make is based on numbers, not hype. This is why I built everything money. It was built for me. I wanted the tools that gave me clarity, took the fear out of investing, and helped me make better decisions that helped me sleep better. People saw me using them on YouTube and said, "Paul, can you give us that software?" And I said, "Well, I can't cuz it's mine right now, but I can create it." And so, I did, and a real community was born. Real people sharing ideas, live chats, live streams, and tools that help beat 99% of investors. I still use these tools like the stock analyzer every single day. Stop guessing, start learning. Click the link below, try our trial, $7 for 7 days, and see how confidence will replace your fear. So, I want to bring this back to the present moment because I think it's important to be honest with you about where we are today. The market pulled back to start the year and then it quickly rebounded to all new highs. Some individual stocks are still down significantly from their highs, 20, 30, 40, 50, and even more percent down. And that's created some genuine pockets of value that I find interesting. There are specific businesses where the price has come down enough that the math is starting to make a ton of sense. We talk about those on our channel regularly. If you haven't watched our recent videos, we've covered at least 20 different companies in recent weeks. But the broad condition I described where great businesses across the market are selling at obviously discounted prices. We're nowhere near that. Even when the NASDAQ was in correction territory for a short time, I didn't feel we were near there. The market overall is still expensive by historical standards and getting more expensive. If the Iran situation escalates further, if rates stay higher longer than expected, if the economy slows meaningfully, we could get there, the setup for a real opportunity could be building as we speak. This is our stock market to GDP ratio. We are currently 137% overvalued. Here's why it's scary. Back in 2000, based on today's history, the worst we got was 47% overvalued. Almost triple overvalued than we were back then. Now, there is one metric we're still under. The 10-year PE ratio. The 10-year PE ratio currently is 42.05. In 2000, it got as high as 44, I believe. And I'm scrolling down to get to it. 43.5 44.19. Which one's right? I don't think it matters which one's right. The bottom line is it was still bad. The returns for the next 10 years were still negative in both in both areas. and it's still projecting to be negative. Does that mean sell everything? No. Keep dollar cost averaging because you don't know when it's going to bottom. And the other thing is when the NASDAQ fell from the peak of March of 2000 to the bottom, if you started at the peak of 2000 and dollar cost average to today, you'd have made over 15% return on your money. Even if the market falls in half, it's still 12 12 or 13% of your money. So, don't stop dollar cost averaging. But get yourself emotionally ready for some bumpy times for the next 8 to 15 years. Now, it won't be bumpy the entire time. We will probably get back into a good bull market at some point, but we'll still be below today's levels in all likelihood at some point 8 to 15 years from now. If that sounds unreasonable, go look at history. It's not the only time it's happened, and it only happens during major market valuation highs like today. Now is the time to prepare. Build the list of businesses you want to own. Know what they're worth. Know what price that would make them generally attractive to you. Keep your powder dry as long as you're already also hitting your goals on dollar cost averaging for retirement. And when the moment comes, and it always does, you'll be ready to do what almost nobody else is willing to do. This is how generational wealth is built. It's not through timing. It's through preparation, patience, and the courage to act when everyone around you and everything around you says not to. So, if you want to see specific moves that I'm making in my portfolio right now, the exact stocks I'm buying, and the prices I'm targeting, click right here to watch that video. I walk through every move, every assumption, and exactly how I'm thinking about finding value in this insane market. Thank you for your time.