⛔️ WARNING! 🔥 WARREN BUFFETT INDICATOR AND SAHM RULE SHOWING MAJOR STOCK MARKET CRASH SIGNALS! 🚀

Summary

In this video, the speaker discusses Warren Buffett's investment indicators, warning of an overbought market and potential economic downturn. Despite current market highs and personal investment successes, they express concern about the market's trajectory, referencing Buffett's significant cash reserves and historical market crashes. They also mention the S Rule and the Fed's recession probability, suggesting caution while still remaining bullish for now.

Takeaways

• 📈 The Warren Buffett Indicator, using the Wilshire 5000, is at an all-time high, signaling potential overvaluation in the market.
• 🚨 The speaker suggests that ignoring warning signs like the Buffett Indicator could be risky, akin to 'playing with fire'.
• 🤔 The speaker has been successful with investments, particularly with 'Blue Collar options', which are options plays kept under $1,000 each.
• 💰 Despite market warnings, the speaker is currently bullish and has been making significant profits with various stock plays.
• 🔗 The speaker promotes a Discord community where they share investment strategies and have access to AI tools and alerts.
• 🧐 Warren Buffett's company is holding over $200 billion in cash and cash-like securities, which could indicate a cautious stance on the market.
• 📊 The speaker references the 'S Rule' from the Federal Reserve Bank, which suggests a high likelihood of a recession if the unemployment rate increases significantly.
• 📉 The New York Fed's tool indicates a 55.8% chance of a recession within the next 12 months, which is a significant warning sign.
• 📊 The speaker discusses the potential for a market pullback in Q1 of 2025 due to factors such as student loan repayments and unemployment rates.
• 📈 The S&P 500 has seen a significant rally, with the speaker noting a prediction of reaching 5600, which has been surpassed.
• 💡 The speaker emphasizes the importance of being prepared for market corrections and not just focusing on the upward trend.

Q & A

What is the Buffett Indicator and why is it significant in the current market context?

The Buffett Indicator is a valuation metric that compares the total market capitalization of all publicly traded companies to the Gross Domestic Product (GDP) of a country. It is significant in the current market context because it is at an all-time high, suggesting that the market may be overvalued and potentially due for a correction or pullback.

What does the speaker suggest about Warren Buffett's current financial strategy?

The speaker suggests that Warren Buffett is currently holding a large amount of cash and cash-like securities, which is unusual and could indicate that he is preparing for a market downturn or a buying opportunity in the future.

What historical event is referenced to illustrate the potential consequences of ignoring market warning signs?

The speaker references the Great Depression and the story of Joseph P. Kennedy selling his stocks before the crash, illustrating the potential consequences of ignoring warning signs of an overvalued market.

What is the speaker's current stance on the market despite the warning signs?

Despite the warning signs, the speaker is currently bullish on the market and is actively making investments, but is also preparing to be more cautious and is setting up to potentially profit from a market downturn.

What is the 'S Rule' and how does it relate to recession predictions?

The 'S Rule' is an economic indicator that tracks changes in the unemployment rate over a certain period. When the rule exceeds 0.5, it has historically indicated a high probability of a recession occurring.

What does the speaker suggest about the current unemployment rate and its potential impact on the economy?

The speaker suggests that the current unemployment rate is starting to rise and if it increases by 0.1% over the next two months, it could signal a recession according to the 'S Rule'.

What is the 'Breadbot' and how does it function within the speaker's investment community?

The 'Breadbot' is a feature within the speaker's investment community that provides alerts and notifications about investment opportunities. It is designed to help members stay informed about market movements and make timely investment decisions.

How does the speaker describe the current performance of his 'Blue Collar options' strategy?

The speaker describes the 'Blue Collar options' strategy as highly successful, with most of the options plays being profitable. He emphasizes the strategy's affordability and the potential for significant returns.

What is the significance of the RSI (Relative Strength Index) mentioned in the script?

The RSI is a technical indicator used to measure the speed and change of price movements. In the script, the speaker mentions an RSI of 80 or higher, which typically indicates that an asset is overbought and may be due for a price correction.

What does the speaker predict about the market in Q1 of 2025?

The speaker predicts that Q1 of 2025 could be a challenging period for the stock market, with factors such as student loans coming due and potential increases in unemployment rates contributing to a market downturn.

What is the speaker's advice for investors regarding the current market conditions?

The speaker advises investors to be cautious and prepared for potential market changes. He encourages joining his investment community for insights and strategies, and to consider the actions of successful investors like Warren Buffett.

Outlines

00:00

📈 Warren Buffett Indicator and Market Overvaluation Concerns

The speaker discusses the Warren Buffett Indicator, using the Wilshire 5000 index to compare market capitalization to GDP, signaling potential overvaluation. Despite market highs surpassing those during the Great Recession and the dot-com bust, the speaker highlights their own successful investment strategies and the community's achievements, while warning of the risks of ignoring warning signs. The mention of Warren Buffett's significant cash reserves suggests a cautious approach to the market, hinting at a possible pullback. Historical context is provided with a story about JFK's father, Mr. Kennedy, who sold his stocks before the Great Depression, illustrating the importance of timing in investment decisions.

05:02

🚀 Market Bullishness and Preparations for a Potential Downturn

The speaker continues to express a bullish stance on the market while detailing personal investment strategies and success, particularly with 'Blue Collar options' that aim to keep costs under $1,000 per contract. Despite current gains, the speaker is preparing for a more cautious approach, referencing the Warren Buffett Indicator's historical highs and its implications for market valuation. The discussion includes the potential for a market correction in Q1 of 2025, influenced by factors such as student loan repayments and unemployment rates, and the importance of monitoring billionaire investors' actions as indicators of market sentiment.

10:03

⚠️ Recession Indicators and the Fed's Role in Economic Stability

This paragraph delves into recession indicators, including the S Rule from the Federal Reserve Bank in St. Louis, which historically has shown a recession when the unemployment rate increases by 0.5% or more. The speaker notes the current unemployment rate's proximity to this threshold and the rapidity with which unemployment can escalate. Additionally, the New York Fed's tool indicates a 55.8% chance of a recession within the next 12 months, underscoring the probability of an economic downturn. The speaker also discusses market technicals, such as the RSI, and uses Tesla as an example of a stock that may be nearing a peak.

15:05

💡 Reflections on Market Volatility and Investment Opportunities

The speaker concludes by reflecting on the market's volatility, the S&P 500's recent performance, and personal predictions that have been accurate. There's an emphasis on the potential for significant market corrections, with a reminder of past downturns for context. The speaker encourages joining their Discord community for investment opportunities and mentions a promotion for new users on the Mumu platform, highlighting the importance of taking advantage of current opportunities while being prepared for market changes.

Keywords

💡Warren Buffett

Warren Buffett is a renowned American investor, business tycoon, and philanthropist. He is the chairman and CEO of Berkshire Hathaway and is considered one of the most successful investors in the world. In the video, Buffett's actions and indicators are discussed as warning signs for potential market overvaluation and possible downturns, which is central to the theme of market analysis and investor caution.

💡Buffett Indicator

The Buffett Indicator is a tool used to determine the market's valuation by comparing the total market capitalization of all publicly traded companies to a country's Gross Domestic Product (GDP). In the script, it is mentioned that the indicator is at an all-time high using the Wilshire 5000 index, signaling a potential overbought market and a warning for investors to be cautious.

💡Wilshire 5000

The Wilshire 5000 is a stock market index that represents the performance of all publicly traded companies in the U.S. stock market. The script discusses the Buffett Indicator using the Wilshire 5000 index, which is at a historical high, indicating a possible overvaluation of the market and serving as a key point in the video's analysis of market conditions.

💡Overbought

In technical analysis, 'overbought' refers to a security that is considered to be trading at a price higher than its estimated value, often due to excessive buying activity. The video script uses this term to describe the current state of the market, suggesting that the high Buffett Indicator is a sign of an overbought market, which could lead to a correction or downturn.

💡Blue Collar Options

Blue Collar Options is a term used in the script to describe a strategy of investing in options that are kept under a certain cost per contract, aiming to make these investments more accessible and affordable. The speaker mentions these options as part of their investment approach, emphasizing affordability and the potential for significant returns.

💡Stop Loss

A stop loss is an order placed with a broker to sell a security when it reaches a certain price. It is designed to limit an investor's loss on a position. In the script, the speaker mentions setting a 30% stop loss on their options, illustrating a risk management strategy to protect against significant losses.

💡Breadbot

The Breadbot, as mentioned in the script, is a feature or tool within the speaker's Discord community that provides alerts and notifications for investment opportunities. It is part of the services offered to community members, aiming to help them stay informed and make timely investment decisions.

💡Recession

A recession is a significant decline in economic activity spread across the economy, lasting more than a few months. The script discusses various indicators, such as the S Rule and the probability of a recession according to the Federal Reserve, suggesting that the current economic conditions might be signaling a potential recession.

💡S Rule

The S Rule, as mentioned in the script, is an economic indicator that uses changes in the unemployment rate to predict recessions. If the unemployment rate increases by 0.5% or more over a short period, it is considered a sign of a likely recession. The video uses this rule to analyze the current economic climate and the potential for a downturn.

💡RSI (Relative Strength Index)

The Relative Strength Index (RSI) is a momentum oscillator that measures the speed and change of price movements on a scale of 0 to 100. In the script, the RSI is used to analyze the overbought conditions of certain stocks like Tesla, with high RSI values indicating potential overvaluation and a possible upcoming price correction.

💡FOMO (Fear of Missing Out)

FOMO, or Fear of Missing Out, is a psychological phenomenon where people feel an urge to buy assets for fear of missing out on potential gains. The script mentions 'screaming FOMO' to describe the current market sentiment where investors are aggressively buying stocks, which could be a sign of an unsustainable market bubble.

Highlights

Warren Buffett's indicator, using the Wilshire 5000, is at an all-time high, signaling potential overbought warning signs.

Despite historical market downturns, the speaker has been experiencing a highly profitable year with successful investment strategies.

Introduction of 'Blue Collar options', affordable investment plays under $1000 aiming for high returns.

The speaker's portfolio shows a significant increase, with almost all option plays currently profitable.

Mention of the 'Breadbot', an AI tool for stock and crypto investment alerts and strategies.

Warren Buffett's strategy of holding $200 billion in cash and cash-like securities suggests a cautious market outlook.

Historical anecdote about market overconfidence before the Great Depression and its impact on decision-making.

The speaker's belief in being prepared for a possible market pullback in Q1 of 2025 due to various economic factors.

Discussion of the 'Buffett Indicator' and its method of calculation using the Wilshire 5000 index and GDP.

The current Buffett Indicator value is the highest in history, nearing 200%, indicating extreme overvaluation.

Comparison of the current market situation with past market crashes and the potential for a significant downturn.

The S Rule, tracked by the Federal Reserve, indicates a high probability of a recession when unemployment rate increases by 0.5%.

The New York Fed's tool suggests a 55.8% chance of a recession within the next 12 months.

The speaker's analysis of the current market rally, with stocks like Tesla showing extreme overbought conditions.

Invitation to join the speaker's Discord community for investment strategies and alerts.

Mumu's offer of free stocks and an 88.1% APY for new users as a zero-risk investment opportunity.

The speaker's accurate prediction of the S&P 500 reaching over 5600 and the potential for a market pullback.

Transcripts

Warren Buffett knows and I'm going to

tell you something if we ignore him we

are playing with fire the Buffett

indicator Now using the Wilshire 5000 is

at an alltime high I want you guys to

think about this we are talking about

the Great Recession the dot bust even

2020 in that absolute just crushing of

the market everything and we are now at

a point that the buffet indicator is SC

screaming overbought warning signs

should we ignore them I don't know we

also have some other things out there

that I'm going to go over in this video

that you need to pay attention to and

I've been running with the bulls for

months we've been absolutely killing it

we're making tons of money it's been one

of the best years in my entire investing

Life cash being made at levels that are

of seene and for those who are watching

you might say what do you mean Mo well

it

we introduced so many plays but we have

over in my stock mode Discord first link

down below do yourself a favor get in

there today hit that link and come on

over but um here you go I love seeing

these we got a lot of moves in here uh

you can see the Apple call this person's

up 200 and something I'm in that Apple

call I got to tell you Rory and Rico I'm

not you're not alone I'm up

38% on this option I rolled this out

just uh we do these options a whole

bunch of options every week and they're

called Blue Collar options because I try

to keep them under $1,000 a piece a

roughly $3 $400 a contract and so or I

should say per play and this one was one

of the plays and we set a 30% stop loss

so if I buy $300 if I lose 90 bucks I'm

out but I'll have plays like this and we

have a handful of losses but right now

in my portfolio I believe every single

one of my option plays puts and calls or

up money for since I got into them I I'm

not sure don't quote me on that it might

be one that might be down a little bit

but this one alone's up a th so when I

have a play like this it makes up for

think about it if I lose $90 I can lose

basically basically what 12 different

plays and I'd still be almost even and

that's not how it's working right now we

were crushing we had CVS uh that was up

100% we have other plays that are doing

well in other words we are loving life

and if you're not over there we have my

normal portfolios where I'm loading up

on a lot of plays and stuff uh and you

get the AI you get the breadbot you get

it all and you might say the breadbot

what's the breadbot and of course the

Bots and alerts you guys can come in

here and we have the chat the alerts of

course you guys can see you can pull up

these charts and they have the bread

recipe so you're allowed to use that

that's for the stocks the crypto as well

and the bread bot alerts which is the

newest feature with once you get in here

you can get notifications sent to you of

the plays that are popping using my

breadbot uh and so if you want a piece

of this for a little over a dollar a day

click that link down below and get over

there you know and it's a great

Community to begin with thousands of

people very positive good place to go

now back to what I'm worried about and I

I saw this article today well written

article and um I should say today it was

written yesterday but I I got

notification of it today and they talk

about the warm Buffet indicator which I

filed the indicator the uh there's a lot

of other ones we're going to go over in

this video this this is something you

should pay attention to one I did a

video this morning on Warren Buffett and

it's $200 billion in in in cash and cash

like Securities why would he put that

much money into basically treasuries is

because if you think about it this

Market is absolutely setting itself up

for a pullback and I think it goes back

to a story I was once told I I don't

know the truth of this story but I'll

share it with you that I believe it was

JF K's dad I forget what his name but

we'll call him Mr Kennedy and Mr Kennedy

was hearing about the The Roaring stock

market back in the great depr right

before the Great Depression The Roaring

20s the Market's going crazy and for

those who don't know I believe the setup

was that you were able to borrow 10

times what you had and buy stocks and so

if I had $1,000 it'd let me buy $10,000

worth of stocks so

everybody was buying stocks and making

money and the market did nothing but go

up and one day he was getting his shoes

shined and the guy looks up to him and

he says U Mr Kennedy I I you'd be happy

I just put all my life savings into the

stock market and I'm making money and he

said that that was the moment that he

realized that this is getting out of

control and he called his his his

financial guy and said I want to sell

all my stocks and he sold all the stocks

and he said you you don't want to sell

your stocks the market are running and

he did he sold the stocks and they kept

running for another month or two or

three I forget how the story goes but it

wasn't long but they kept running and oh

you were wrong you were wrong and then

we know what happens afterwards the

market absolutely got destroyed and

people lost everything they had but the

kennedies did not and we know what

happened afterwards they went on to have

massive wealth and to

absolutely JFK became president so a lot

of things can happen with the decisions

you make and sometimes the the point of

that story was that the timing behind

the decisions might not make sense at

the time they're made but looking down

the road will Buffett look like a genius

remember he started with ,000 doar when

he was young he's now worth tens of

billions of dollars I believe he will

look like that genius now I'm not here

to spread fud I'm here to show you facts

you make up your mind what you're going

to do I am still all bullish for now but

I am getting set up I am really getting

set up to be a little bit more careful

so the Warren Buffet indicator let's

pull this up we'll talk says it hit its

highest point in history and they're not

wrong but it depends how you look at it

because there's different versions of

this this version that they're talking

about just to make sure everyone

understands is using the wilkshire 5000

index I or I say the Wilk Willshire

Willshire uh 5000 index I got a buddy

named Wilshire

so the Willshire 5000 index so we're

going to go with that all right so here

we go and as we go through it how you

find this you take the market cap of all

companies five Willshire 5,000 and you

look you and the GDP all right so once

you get that ratio you can come in here

and of course do what you need to do

which is Buffet indicator using the

willsher 50002 GDP and as you can see at

this one this is what's it look like

well this is June right this is an older

chart uh and it's

177.8cm Friday July 5th 196 and we come

back in here 193 was the high we are now

above that 193 and we're closing in on

the 200 and they are correct in their

article this is the highest it has been

so this has G up up up up up up and

you're seeing it go higher higher higher

almost straight up like this and it's

getting close to the 200% and once we

see that I want you to compare it to

where we have been this was the dotc ERA

this is the crash the NASDAQ dropped 75%

it was ugly right and we got back down

this is your mean 102 score any and

that's your average score right uh the

buffet indicator likes to see it under

100 is value anything over 100 is not

value well the lowest we've been around

49 and 56 were the extreme value you buy

at these points you should expect it to

get Meander back up to 100 uh 100 on the

buffet indicator the means 102 of course

but overall and you notice the average

score is roughly around that 100 so when

you get it up here almost double the

average double the 100 what they expect

that's telling you it's extreme extreme

overbought and something has to change

drastically uh and we're just not sure

you know which which one's it going to

be what's going to change and usually

what you see is you'll see that price

come down now pay attention this is 2010

the original bull market after the Great

Recession right here and it ran ran ran

ran and now you had a little selloff

over uh from 2020 down and all of a

sudden we had that massive pump that

we're having now and now we retested

that will this be a double top where the

market starts to come down I got to tell

you I'm in the camp that I believe the

setup is there for q1 of 2025 to be

absolutely a Bloodshed moment for the

stock market student loans come due

reporting for the people haven't been

paying come due rates for longer

continues to drive unemployment higher

things get worse it snowballs out of

control and that's what I believe could

happen and the longer the FED goes the

longer the more I am feeling that that's

going to be the case and so you see and

you know and I always tell you guys this

go by the actions of these billionaires

and when you look at Warren Buffet and

you see him stashing away almost over

$200 billion dollar over 30% of all the

money they got in their company is in

just treasuries and Treasury and

treasury like cash-like Securities that

is crazy that is absolutely crazy and so

now we come over and you say well Mo

there has to be more there has to be

more and there's always more and we're

going to talk about some of these uh let

me see here right here the S rule have

you guys heard of the S Ru so we add the

Som Ru in with the buffet indicator and

this is a one I personally follow and

this is from the fed this is the Fed

they track they like it so much they

have it on their website and this is

from the Federal Reserve Bank in St

Louis uh so as we go down here anytime

it gets up to 0 five or higher it has

always always shown a recession

recession recession recession recession

recession recession recession recession

recession we had one in there uh M uh I

should say short but it was there and

now as you can see it's starting to move

up it's at

043 if we have a increase let me pull

that up there so everybody can see it if

we have an increase of

0.1% 0.1

in the unemployment rate over the next

two months it will officially

eclipse5 and thus it would

qualify as a signal that a recession is

most likely probable most likely

probable doesn't guarantee it you can

see how high these can get and how long

it can take before you get above 0.5

look at this right here 0.5 April and of

course we did have that recession but it

didn't once a recession came you see it

popping why unemployment goes through

the roof unemployment goes through the

roof so once it gets up there you see it

34 five right there what happens

unemployment goes through the roof well

we're moving up there right now in my

opinion the fed's starting to lose

control of unemployment and you can say

well it's just small little hikes yeah

but small hikes can go quickly and

they're all very steep see how steep

they are it's steep like when the

unemployment starts to happen happen it

goes quick everybody starts laying

everybody off and it gets out of control

and then the FED has to step in the

government steps in with with all these

uh these these checks to help people out

stimulus checks to help people out

unemployment benefits get extended all

these things are going to happen once it

gets out of control now you may say well

hold on here well look the probability

of a US recession by the tool from the

New York Fed so I showed you the St

Louis fed this is the New York fed these

are their sites have that we are we have

a

55% chance of a recession based on the

numbers from June 12 months from now

55.8% family that is wild that is wild

end of the day Market too so 55 more and

so when I say it's probable probable

means over a 50% chance in my book The

Fed itself is telling us that we have

over a 50% chance of a recession in the

next 12 months combine that with the Som

rule combine that with the buffet

indicator wow I don't know let's just

take a look at the cu's let's go in here

and look at the cues what's going on

with the

q's wow so you had this massive rally

and we broke out of the channel I was

watching we're moving up the ultimate

Channel's right here we are getting over

bot over bot over bot over bot over bot

over bot everything and you have 80 on

80 80 on the RSI 80 right here wow like

it is screaming fomo people are making

money Handover fist everybody's piling

in retail's piling in give us another

example what's retail's favorite stock

Tesla it's running like a champ and of

course I have this right here this line

that I I've been waiting to watch for

can they breach this line at

265 or is it going to go sideways and

then crashed down we got our first

warning shot today this is the first

warning shot we opened up above came

back down to close below if I see

another warning shot I may be ready to

take a little bit of a chance on that

one because look at the RSI is up there

87 wow this is what I'm talking about

family we plan on making money on the

way up which we have we plan on making

more money on the way down which I will

and so if you'd like to join with that

all you got to do is click that first

link get into the Discord today take

advantage of everything I talked about

we are killing it and if you're a part

over there do you like the blue collar

options do you want to see more of them

I share some of the plays here with you

when I share the the WIS family if you'd

like to see more of them let me know and

I will put more blueco collar option

examples in these videos and let me know

what you think about buffet and the

buffet rule do you think we're heading

for a correction I didn't say a crash

like 50% % down but a correction keep

this in mind though for the buffet rule

to get back to 100 it would need to drop

the market by almost

50% wowers just think and before you

think it can't happen remember the S&P

500 they were talking about the S&P 500

just a little bit ago uh and the S&P 500

is at 5600 being in the 3000s just I

remember a couple months ago well we'll

probably finish in the 3,000 somewhere

we're now in 56 00

5600 it's crazy it we keep moving higher

we're keep crushing it and I told

everybody I remember had stocks with

Josh he put out his price point I said

we're going to go high we're going to

run up we got a lot of bullish in there

and uh we discussed that and the price I

put out I said 5600 or higher we have

cross it at 5633 today so nailed that

prediction will we nailed the prediction

of a pullback in q1 I'm not sure but I

will be ready for it all right uh like I

said come on over join the that and of

course if you haven't gotten your free

stocks from Mumu it is the second link

down below put 100 in get five free

stocks put a th and 10 oh actually get

all 15 plus the 88.1% apy you want to

put 90 days put your money in there and

get an 88.1% apy on that new users get

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zero risk 88.1% apy that's how you do it

all right family that's all I got for

you today I appreciate you stopping by

let's get out there and make some money