⛔️ WARNING! 🔥 WARREN BUFFETT INDICATOR AND SAHM RULE SHOWING MAJOR STOCK MARKET CRASH SIGNALS! 🚀
Summary
TLDRIn 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
📈 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.
🚀 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.
⚠️ 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.
💡 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.
Mindmap
Keywords
💡Warren Buffett
💡Buffett Indicator
💡Wilshire 5000
💡Overbought
💡Blue Collar Options
💡Stop Loss
💡Breadbot
💡Recession
💡S Rule
💡RSI (Relative Strength Index)
💡FOMO (Fear of Missing Out)
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
that I would take full advantage of that
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
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