The Stock Market Just Did a 1987! DO THIS ASAP!

by birtanpublished on August 20, 2020

Who goes the stock market just did something it hasn't done since in 1987 before I was born guys this is absolutely extraordinary today in this video here I'm gonna tell you exactly what is going on what just happened to stock market that hasn't happened since

87 okay we're gonna talk about what is the current state of the stock market I'm gonna take you through a ton of very insightful graphs and charts to show you exactly where we're at with the stock market or overvalued in the stock market

Are we undervalued are with fairly value I'm gonna show you a lot of data that I haven't really even really covered in videos in the past in this video so I hope you enjoy that and then we're gonna talk about what should you be doing with

Your money now should you be buying certain stocks out there should you be selling certain stocks should you just be holding I'll give you my perspective on that in this video as well so this is gonna be a video hooked with the value

So hope you guys enjoyed as always 1987 we're talking about 1987 here today okay so let's try to hit 1987 thumbs up in the first three hours of this video that's a number we've never hit before let's go for it okay so hope you guys

Enjoy this get into the Dow rallies more than 200 points to close out at the best quarter since 1987 best quarter since 1987 that's extraordinary okay the thirty stock Dow ended the second quarter with a 17 point eight

Percent gain that's the averages biggest quarterly rally since the first quarter of 1987 when it popped 21.6% now that last sentence is very key we're gonna come back to this okay remember first quarter 87 popped 21.6% remember those

Numbers okay we're gonna come back to that the SMP 500 had his biggest one quarter surge since the fourth quarter of 1998 soaring nearly 20 percent meanwhile the Nasdaq Composite jumped 30 point 6 percent for the quarter

Imagine that 30 percent gain in a quarter its best quarterly performance since all I don't like – I don't like whenever the Nasdaq is put with this year which is 1999 I never want to hear anything in relation to Nasdaq 1999

That just scares me okay that's just flat-out scares me look at the charts okay look at this I mean it literally just throughout the quarter it's just up up up in a way for the Nasdaq sp500 and Dow Jones Industrial Average absolutely

Amazing just crazy just crazy when you think about how much bad news really came out during the quarter let's just be honest there was a lot more bad news in this most recent quarter than there was good news okay the the bad news out

There significantly outweighed the good news but yet the markets went up you know a lot of people are blaming on different things we're not gonna get into that in this video some are saying it's the Fed some are saying well people

Are getting to optimists about the stock market some people are saying well they're not getting any returns on same as the council people are just moving that money in the stock market many different theories out there but the

Fact is we have a lot more bad news and good news and the market head literally the best quarter since 87 extraordinary okay so now let's talk about what is the current state of the stock market and what do you do now with your money okay

Remember I told you guys let's come back to that sentence okay that's a averages biggest quarterly rally since the first quarter of 1987 when the stock market went up twenty one point six percent okay so you must be thinking okay if in

The first quarter of 87 it went up the market went up 21 percent plus the yearly return for 87 must have been extraordinary if in the first quarter alone a pop twenty one percent right wrong okay in 1987 look at this the

Percent return was only 5.2 percent in 87 which means for the remainder of the year it was actually a really bad year in the stock market eighty-seven this kind of tells us well if you just expect like the rest of year to be amazing in

The stock market that is not gonna always correspond like look at this like a 21 percent gain in the first quarter and in the market went negative for the rest of year and only finished up five percent that's extraordinary what else

Happened in 1987 nice indeed this year 1987 like there's something else famous that happened in the stock market it's just there's something out there kay what was it well if you type into Google the worst day in stock market history

What pops up Oh a Monday in 1987 the worst day in stock market history look at that and not just the worst day market history by far and away the worst day in stock market history also happened later on in 1987 okay when on

October 19th 1987 the stock market went down twenty two point six one percent in one day can you imagine that imagine waking up one day and you go to check your Robin Hood account or fidelity or TD Ameritrade and the stock market is

Down twenty two point six percent in a day imagine how many stocks that day we're down 30% 40% 50% imagine that imagine you have a million dollars in your account you wake up and you know your account only says 800 K or 700 K

600 K like that like that's absolutely extraordinary okay know you're ready for something really creepy okay I'm gonna share something with you real creepy okay guess what in 1987 my dad was thirty years old okay he actually turned

Thirty on that exact day thirty years old guess how old I am right now oh my goodness guys so if the next worst day ever in the history of the stock market comes this year don't be surprised okay just some creepy stuff going on out

There okay so let's go ahead and look at the Nasdaq over the past ten years what we're gonna find is the Nasdaq has had an extraordinary past decade I mean extraordinary we're looking at you know you go back nine ten years ago the

Nasdaq in the 2000s range and it has gone all the way up to you know approaching 10,000 now over the past ten years it's been extraordinary and there's been several small dips in the Nasdaq throughout those years but it

Also included two massive dips right the late 2018 dip which was huge and you know if you were buying like I was in late 2018 you've got some extraordinary buying opportunities and then obviously the most recent one the roni roni a

Massive dip so we've had two massive dips plenty of smaller dips in the Nasdaq over that you know decade essentially where the markets just gone up and up and up specifically looking at the Nasdaq right now at the end of the

Pie look the markets at its just you know an extraordinary level keep in mind here it has been driven by the biggest of the big dogs let's be very clear about that 45 percent 45 percent of the Nasdaq

Waiting is in five stocks literally think about that 5 stocks control almost half the market when it comes to the Nasdaq so if those 5 stocks are doing great then Nasdaq is doing great if those 5

Stocks are doing terrible the Nasdaq is likely doing terrible right Apple Microsoft Amazon Facebook Google they control 45% of the waiting of the Nasdaq 100 that's extraordinary ok absolutely extraordinary this next chart I want to

Look at it shows you the sp500 p/e ratio this is very important this are the latest twelve quarters and what was the EPS for those companies versus the stock prices of those stocks okay and right now we're looking at S&P 500 p/e ratio

That doesn't look that super-high okay I'm we're not looking at a 90 year by the way we're just looking at the last 10 years it doesn't look crazy okay let's be honest I mean it looks a little elevator but it doesn't look anything

That like that crazy when it comes to just looking at sp500 p/e ratio where things get a little crazy is when you go ahead and look at the forward p/e of the S&P 500 and although it's coming down a little bit recently

We are still massively higher valued when it comes to forward Peas for the S&P 500 then we have been any time in recent history I mean any time in recent history look at it look at the I mean I drew that line for you guys there just

To show you how much higher we are valued right now forward P wise and this is looking at the next 12 months of earnings versus stock prices I mean literally there's nowhere anywhere in relation to the last you know 14 years

Let's say that were even close to being on par with where we're at right now for P so when you look at this chart this is this is a most troubling chart I can look at right now as an investor in the stock market this is a most trouble

Literally just because that is that's really dang high the valuations are quite high in the sp500 and across all the markets the Nasdaq the Dow 30 everything across the board this is why you've heard me say it's hard to find

Deals several times right I've been get all over the last few months this is a way it's been it's been fair hard to find deals out there you have to look really hard just to find a decent

Deal this is not one of those times that stock market where you can buy any stock and you're gonna make money over the next year – it's just not very now currently we're in a market where you've got to search hard to find good values

In the market very very hard okay let's look at this this shows you volatility okay in the last ten years and what we'll see in the current state of the stock market we have had an insanely volatile stock market recently a matter

Of fact it's the most volatile stock market we've had in the last ten years their closest you've had to this is 2011 okay and by the way 2011 we got some extraordinary opportunities I bought a lot of stocks in 2011 that ended up

Producing me some unbelievable gains in 2012 2013 and 2014 I capitalized on my volatility and I've also been able to capitalize in this most recent volatility in buying some stocks over the last few months that are

Already performing phenomenal I think over the next few years we'll continue to perform phenomenal so volatility in the market is actually the biggest of buying opportunities you can ever get in a stock market if you're somebody that

Is focused on long term investing which if you're watching this channel you probably are and if your focus on building stakes and companies over the next 3 5 7 10 years you've got to almost wish for volatility because volatility

Creates the best buying opportunities you will ever get in the stock market and those end up producing you some phenomenal gains in future years the last time volatility was really like it has been this year you have to go all

The way back to the Great Recession volatility was actually even more insane during that time but needless to say volatility has been crazy recently this is an interesting chart I don't think I've ever should I'd know for sure I

Haven't ever shown this in any video ever this shows you the Nasdaq – Dow Jones ratio is an interactive chart showing you the ratio of the Nasdaq Composite Index to the Dow Jones Industrial Average a high ratio tends to

Mark periods of extreme bullishness as high momentum technology stocks attract for more investor funds than more traditional industrial companies as reflected in the DJIA okay and look yes it's gone through the roof the

Nasdaq – Dow Jones just in the past ten years we haven't seen it this high I mean it's just gone up in almost a straight line especially over the past year – and it probably has something to do with the fact that Amazon Apple

Microsoft Google and Facebook have just seen more and more interest and those companies have grown bigger and bigger and bigger and grown out bigger more massive companies out of them because this is just absolutely extraordinary

And keep in mind a majority of those big tech stocks actually aren't in the Dow Jones Industrial Average believe it or not which is quite interesting okay now if we back it up a bit this does get a bit scary okay if we back this up a bit

To look at like the last 25 to 30 years for instance Nasdaq – Dow we're gonna find we're approaching levels not seen since the tech bubble okay since 1999 that is a little worrisome okay now keep in mind shortly after that the Nasdaq –

Dow actually fell to the lowest level it's ever been basically in its history look at that right around 2001 2002 it was literally the lowest it had ever been and keep in mind when did it also fall to the lowest level it had been in

A long time during the Great Recession 2008-2009 that number also fell substantially but as of right now literally we're looking at the highest Nasdaq – Dow we've seen pretty much ever I mean side of literally the tech bubble

So that is quite interesting here okay know I know I talk a lot about the American markets obviously the majority of folks that watch my youtube channel or interested in the you know American markets let's put it that way the Dow SP

500 and Nasdaq and most people even if you live internationally and you watch my channel a lot of you guys still buy US stocks okay what we're looking at now is China's stock market we're looking at the Shanghai Composite Index and what

We're gonna actually find is what market hasn't really gone anywhere in terms of the Shanghai Composite Index since like 2007 this is extraordinary you think about all the you know the 13 years a lot of growth in China a lot of great

Companies and things like that and look at that literally that the Chinese stock market hasn't gone anywhere in such a long time and this does make me think hmm maybe it might be interesting to

Potentially buy something that like an index fund that is essentially invests in the Shanghai Composite Index I feel like that stock market over the next you know if you really have a 10 20 30 year outlook will probably perform a lot

Better over the next 10 20 30 years then it's performed in the past we know the Chinese historically like to save money just literally save money or buy real estate I think that investors psyche will start to change over the next

Decade two decades and I think more and more money will come in to a lot of those public companies in Shanghai in China in general and I think ultimately that stock market will probably thrive over the next decade or two so just

Looking at that it makes me think hmm might actually be some opportunity there for an international market okay so let's talk about this and then we'll – I'll give you my perspective on what you should be doing with your money right

Now in relation to the stock market this is what we call Jeremy's curtain line chart okay and what we have here is we have a you know basically a scale on one side the left hand side you see that's like insane undervalued okay then we

Have our midpoint and on the right hand side we have insane overvalued market and if I was to price the American markets right now I would put us somewhere kind of in between the midpoint and insane overvalued okay

Maybe a little closer to midpoint then insane over value but certainly closer to the overvalued side then the undervalue side how do I know this well the fact is it's really hard to find great deals out there and when markets

Like this where it's really really hard to find good deals that means you're definitely leaning more toward an overvalued market then an undervalued market you can also look at forward P's that gives you some context as well so

In my opinion that is where we are at right now in the stock market okay no what do you do now with your money okay should you be buying the market selling the market holding the market what should you be doing okay so in my

Perspective first one is if you hold some B stocks hold them okay in my opinion like like you think about this okay and when I talk of B stocks this is what I'm talking about I'm talking about companies that will grow

Revenues despite whatever's going on in the economy 10% plus per year okay those type of B's companies that they're just going to continue to throw over the next five to ten years

Regardless what happens if the economy is great if the economy is good the economy is bad okay anything across the board there are certain companies out there that will grow regardless and if you hold those type of stocks you just

Got to continue to hold them regardless of what type of market we're in regardless of roni roni numbers or anything like that the B stocks you just hold them and just put them in the filing cabinet and you

Know they're gonna be volatile and if any major dips happen to them what do you do you buy them and those are the type of stocks you never panic sell those stocks because they're just too dang good ok this thing you cash some

Profits in my opinion on some of these overvalued roni runner plays and we don't have to mention names but there are plenty of those stocks out there that were like the whole like oh they're working from home and so those business

Models have seen their market capitalizations double triple quadruple five acts literally just in the past few months and a lot of those companies already had extremely rich valuations on them they've just gone to parabolic

Ranges of valuations now if you hold some of those stocks in my opinion you gotta at least consider cashing some profits doesn't mean you have to sell all your shares you can always tell half your shares let's say you tripled up

Your money on one of these stocks that was a roni rona play there's nothing wrong with saying you know what I'm gonna sell half my shares or I'm gonna sell two-thirds of my shears cash at put that money into some other stocks then

Maybe haven't seen their stock price go crazy like some of those plays out or just hold cash for now and be prepared for when you find that next great stock there's nothing wrong with that guys there's nothing wrong with cashing out

When some of these stocks are eaten saying the overvalued and keep in mind like I said a lot of those stocks were overvalued going into roni roni they really were they had extremely rich valuations and a lot of them have seen

Their market cap positions 2 X 3 X 4 X 5 X just off of the height of roni roni in how is gonna help those particular business models so I just got a cap some profits and say I'm good on those ok in the mixed thing you got to do you got to

Continue to look for deals out there you gotta find the needles in the haystack stocks let's call them that ok never heard that expression you find a needle in the haystack you gotta be looking for those there are still opportunities in

This market yeah you know regardless I've been the stock market for now like 12 years and regardless of what more i've ever been an undervalued market fairly value market overvalued market there's always been a few stocks out

There to buy and although i'll definitely say we're closer to overvalue than undervalued there are actually a few needle in the haystack stocks that you can find out there and actually go ahead and invest some money in and

You're probably gonna get some phenomenal gains over the coming years I don't want to make any promises but I actually might be recording a three stocks on Pine July edition okay that actually might be coming this week and I

Am being able to do that in a while because there haven't been three stocks all at once that I'm interested in buying but actually as of today at least there's a dividend stock that interests me a value stock that interests me in a

Growth stock that all interests me right now that I'm actually putting money in so they're my potentially potentially keywords potentially here three stocks I'm buying July video and that's the first time in a while but I've had a

Look you know very far into that haystack to find any deals and I think I actually have three stocks in the market right now that I actually like that I'm willing to actually continue to buy so hope you guys enjoyed today's video as

Always let me know down there in that comment section what you are doing in the market are you buying are you holding are you selling any particular names out there you're making moves with I would love to hear from you guys in

That comment section as always also first link in the description I have a new video I put together for you guys how to create a low-risk high-reward stock portfolio from scratch you want to check out that that's the first link in

The description thank you for watching and have a great day

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