A Once in a Lifetime Financial Event Is Here
Summary
TLDRThe video script discusses a potential bull market, drawing parallels between current economic indicators and the 1995 market boom. It highlights similarities in CPI inflation, GDP growth, and corporate earnings growth, suggesting a new era driven by AI and digital economy advancements. The speaker emphasizes the transformative impact of AI on business, comparing it to the internet revolution, and encourages investors to stay focused despite market volatility, anticipating significant growth ahead.
Takeaways
- 🚀 A massive bull market akin to 1995 is being predicted, with the potential to make many investors wealthy.
- 📈 Historical data from 1995 is being compared to current market conditions, highlighting similar economic indicators such as CPI inflation, FED interest rates, GDP growth, and corporate earnings growth.
- 💡 The speaker suggests that we are at the beginning of a new era driven by AI, similar to how the internet revolutionized business in the mid-90s.
- 🔢 Current economic indicators show a potential for growth, with inflation at 2.9%, FED interest rates at 5.25%, and GDP growth at 2.8%.
- 📊 The tech sector, particularly companies involved with AI, is expected to show strong earnings growth, mirroring the 14.5% growth seen in 1995.
- 🌐 The potential impact of AI on business operations is compared to the early days of the internet, suggesting a transformative effect on productivity and GDP growth.
- 📉 Despite the positive outlook, the speaker acknowledges that there will be market volatility, including crashes and pullbacks, which are normal in a bull market cycle.
- 💸 The script emphasizes the importance of staying invested during market dips, as they can shake out less informed investors and present opportunities for those with conviction.
- 📚 The parallels drawn between 1995 and the present suggest a 'soft landing' for the economy, with the potential for the FED to cut interest rates and stimulate further growth.
- 📉 The speaker mentions that despite the bullish setup, the market has not yet reached 'hyperdrive', indicating that there may still be significant upside potential.
- 🛑 The script concludes with a reminder to investors to stay focused and not be swayed by fear, as the fundamentals suggest a strong market ahead.
Q & A
What is the significance of the 1995 stock market numbers mentioned in the script?
-The 1995 stock market numbers are significant because they mark the beginning of one of the biggest bull runs in the history of the stock market, which led to substantial wealth creation for many investors from 1995 to 1999.
What was the S&P 500's performance during the bull run from 1995 to 1999?
-The S&P 500 performed exceptionally well, growing by 200% during this period, which equates to an average of 50% growth per year.
How did the NASDAQ perform compared to the S&P 500 during the same period?
-The NASDAQ outperformed the S&P 500, with a growth of 440% during the same period, averaging 110% growth per year.
What is the potential impact of AI on the current market, as suggested in the script?
-The script suggests that AI has the potential to revolutionize business operations, similar to how the internet did in the 1990s, and could lead to a new era of significant market growth.
What are the parallels drawn between the current market conditions and those of 1995?
-The parallels include similar inflation rates, Federal interest rates, GDP growth, and corporate earnings growth, suggesting a potential for a similar bull market as seen in 1995.
What was the GDP growth rate in 1995, and how does it compare to the current rate mentioned in the script?
-The GDP growth rate in 1995 was 2.7%, which is almost identical to the current rate of 2.8% mentioned in the script.
How did the script describe the potential impact of AI on business decision-making?
-The script describes AI as a game-changer that can significantly speed up business decision-making processes, doing in milliseconds what used to take weeks.
What is the script's perspective on the current market's reaction to AI and its potential?
-The script suggests that the market has not yet fully realized the potential of AI, and that the current growth is just the beginning of what could be a much larger bull market.
How does the script address concerns about potential market downturns or recessions?
-The script acknowledges these concerns but argues that despite past downturns, the overall market has seen significant growth, and the current setup with AI and other factors could lead to substantial gains.
What advice does the script give to investors regarding market fluctuations and potential drops?
-The script advises investors to stay focused on fundamentals, maintain conviction in their investments, and not be scared off by market drops, as these can shake out less informed investors.
Outlines
🚀 Potential for a New Bull Market in Tech
The speaker introduces a comparison between the current market conditions and the booming bull market of 1995, which was driven by the internet revolution. They highlight similar economic indicators such as CPI inflation, FED interest rates, GDP growth, and corporate earnings growth on the S&P 500. The speaker suggests that we are on the brink of a massive bull run, driven by AI and tech advancements, similar to how the internet transformed businesses in the '90s. They emphasize the potential for significant wealth creation but caution about the volatility and market corrections that will likely occur, using the recent market drop on August 5th as an example of such events.
📈 Drawing Parallels Between 1995 and Current Market Dynamics
This paragraph delves deeper into the economic parallels between 1995 and the present, focusing on GDP growth, corporate earnings, and the impact of technological revolutions. The speaker points out that the GDP growth rates are nearly identical, and corporate earnings in the tech sector are showing strong growth, mirroring the patterns of the '90s. They discuss the transformative effect of AI on business operations, comparing it to the early days of the internet, and argue that this new digital economy and AI revolution are poised to drive significant GDP growth. Despite market skepticism and concerns about recessions or geopolitical issues, the speaker remains optimistic about the long-term growth potential of the market, especially with the Federal Reserve's interest rate cuts expected to stimulate further growth.
💡 Staying Convicted Amidst Market Volatility
The final paragraph addresses the psychological aspect of investing, encouraging investors to maintain conviction in their positions even during market pullbacks or drops. The speaker uses the example of a previous investment in 'paler' that dropped significantly but later recovered to illustrate the importance of staying the course. They acknowledge that the market may experience more 'scary events' ahead but emphasize the need to keep a level head and not be swayed by fear. The speaker concludes by reiterating the potential for significant market growth, especially with the backdrop of a new technological revolution and favorable economic conditions.
Mindmap
Keywords
💡Inflation
💡FED Interest Rate
💡GDP Growth
💡Corporate Earnings
💡Bull Run
💡NASDAQ
💡AI Revolution
💡R&D Investment Cycles
💡Fourth Industrial Revolution
💡Rate Cut Cycle
💡Fear and Greed Index
Highlights
A once-in-a-lifetime investment opportunity is starting, with the potential to create many millionaires in the next few months.
Historical data from 1995 is being compared to the present, highlighting similarities in economic indicators such as CPI inflation, FED interest rate, GDP growth, and corporate earnings growth.
1995 marked the beginning of one of the biggest bull runs in stock market history, with the S&P 500 growing by 200% and the NASDAQ by 440%.
The speaker predicts a massive bull run for the next few years, with the caveat that it will not be a straight upward trajectory due to expected market volatility.
The summer low is most commonly in August, with the first week of August being the most common week for it, suggesting that the worst of the market downturn may be over.
Massive CAPEX and R&D investment cycles in 1995, with companies like Microsoft, Intel, and Netscape leading the charge, are being mirrored today with AI and tech companies.
The potential of AI, similar to the early internet, to revolutionize access to information and business operations is highlighted.
The speaker emphasizes that we are in the early stages of a bull market driven by AI and tech advancements, akin to the internet boom of the mid-90s.
Current economic conditions are compared to 1995, noting the potential for a soft landing of the economy with proactive Federal Reserve actions.
GDP growth rates are similar to those of 1995, suggesting a parallel in economic expansion driven by technological advancements.
AI's impact on business efficiency and decision-making is presented as a game-changing event, with the potential to significantly boost GDP growth.
Despite market skepticism and fears of recession, the speaker argues that the fundamentals of the market remain strong, drawing parallels to the S&P 500's performance over the past 15 years.
Earnings growth in the tech sector of the S&P 500 is noted, with expectations for continued growth in 2024, mirroring the earnings growth of 1995.
The market's current performance is analyzed, showing a significant rally but not yet reaching the hyperdrive seen in 1995, indicating potential for further growth.
The introduction of CH GPT in 2022 is compared to the invention of the internet in 1994, suggesting a new era of technological advancement and market growth.
Recent economic data points such as CPI, retail sales, and job claims are presented as positive indicators, countering market fear.
The Fear and Greed index is mentioned to illustrate market sentiment, suggesting that the true upside potential is yet to be realized when sentiment shifts from fear to greed.
The speaker concludes by encouraging investors to stay focused and not be scared off by potential market drops, emphasizing the long-term potential of the current setup.
Transcripts
folks a once in A- lifetime opportunity
starts today and sadly most individual
investors are going to miss out on it
the next few months are going to make a
lot of millionaires but a lot of people
going to miss out now look I'm going to
read you some data and I want you to pay
attention we have CPI inflation at
2.8% the FED interest rate at
5.7% the GDP growth at
2.7% and corporate ear ings on the S&P
500 growing by 14 A5 per. the data I
just read to you the data is in 2024
this is
1995 numbers now why am I talking about
1995 numbers listen up 1995 marked one
of the biggest bull runs in the history
of the stock market it met a lot of
people Rich it me a lot of people
lifechanging money from 1995 to 1999 the
S&P 500 did 200% that's 50% a year now
the NASDAQ went even crazier the NASDAQ
did 440 per. that's
110% per year for four straight years
imagine if you own a company with a
three beta that's 1200% 1300% this is
insane this is lifechanging money this
is big now I want to show you some data
and then we'll talk about the current
setup of the market but I think I think
we're looking down the barrel of a
massive Bull Run for the next few years
of course of course it's not going to be
straight up now people think that when I
say these things I mean that from this
point on for the next four years we're
going to shoot up on the 45 degree angle
no there's going to be a lot of bumps
there's going to be a lot of crashes a
lot of pullbacks a lot of scare events
that are designed to shake out the
weekends and one of them was just a
preview the August 5th Monday was just a
preview for the bigger crashes the
biggest drops that are still in the
barrel and they're going to scare a lot
of people since 1928 the most common for
the summer low is August and the most
common week is the first week of August
so I think maybe the worst is behind us
but it doesn't mean we're straight up
from here we had massive massive CAPIC
investment Cycles massive R&D investment
Cycles in 1995 companies like Microsoft
like Intel like Netscape you know
Netscape in 1994 basically was
considered to this day kind of the
invention of broad use retail internet
imagine a world where every word ever
written every picture ever painted and
every film ever shot could be viewed
instantly in your home VI an information
Super Highway and in fact that's already
happening on something called the
internet that anyone in the world with a
computer and a modem connected to a
telephone line can subscribe to all of
this craziness that happened basically
is repeating itself today with the same
CICS investing cycles and R&D investing
Cycles with AI with Nvidia with
Microsoft and similar companies but you
know the times have changed but the
concept is pretty much the same just
like we had the internet pop in 1994 and
the massive Bull Run came for the next
five years the AI cycle is just in its
diapers it's just starting out we are
just in the early stages of a bull
market and if you look at what we've
seen from AI Revolution just from
broader Tech it's been strong from an
earnings perspective and the growth
scare that we saw it's just a bump in
the road to what I believe is really
this fourth Industrial Revolution
playing out and that's how we've
handheld investors through this this is
the time to own Tech and I believe it's
really just to start still 9900 p.m. in
an AI party that we believe goes to 4:00
a.m. in
1995 the inflation numbers were
2.8% the Fed was at
5.75% interest rate right now we're
literally at 2.9% inflation and
5.25 interest rate so it is almost an
identical setup now what happened in the
next few years is that the FED took the
interest rates from 5.75 to
4.75 for the next three years until 1998
and inflation dropped to
1.6% so we had a three-year cutting
cycle of 1% and inflation dropping from
2.8 to 1.6 what exactly are the
parallels between now and Circa 1995 the
main parallels are that we have
inflation that is lowering uh and an
economy that is not collapsing um you've
got the the labor market that's slowing
consumers hanging in there inflation
peaked two years ago and is now under 3%
uh so the FED is in a good position here
if they can be proactive enough with the
economy still showing some resilience
and inflation way past its peak you've
still got a good chance to soft land
this economy that means slowing growth
enough that you the FED cuts and then
you begin to see credit prompt or
promote more growth so that's that's a
good sign a very strongr connection
between now and the summer of 95 the
crazy part about this that it doesn't
end there the GDP the gross domestic
product growth in 1995 was
2.7% right now right now it's a 2.8%
it's almost identical in 1996 we went up
to 3.8% then in 1998 to 4.5% and in 1999
we hit 4.8% GDP growth that cycle was
fueled by globalization by the internet
the the Baby Boomers were peing the
globalization was taking over and the
internet was basically creating a lot of
new business that created massive growth
to the economy right now we have a whole
new digital economy starting out and on
top of it we have the whole AI
Revolution basically changing the way
everybody does business we've seen
people at these penter events talk about
how this new system the AIP essentially
takes a thing that used to take weeks to
get done and it does it in seconds we're
on a model
we score our database we execute we wait
6 months to see what happens and then we
collate a lot of information we argue
amongst ourselves we used to have six
weeks to make those decisions now we've
got to make those decisions in
milliseconds so Foundry and AIP have
been terrific for us we actually
launched the first prototype within 45
days and that was just amazing from my
perspective this is a game-changing
event that we're seeing in front of us
right now with AI basically
revolutionizing how business is done and
that is going to translate into more GDP
growth now people are skeptic and I get
it people will always say oh recession
is coming up a crash is coming up
geopolitics is a mess you know over the
past 15 years you had a lot of reasons
to sell a lot of reasons to sell but at
the end of the day the S&P 500 went up
by 700% 15% per year despite all the
crashes and the collapses and all this
crap now look even if you look at
earnings
S&P 500 earnings in 1995 grew by
14.5% if you look right now at the tech
sector in the s&p500 which is Microsoft
Nvidia Google and all these companies
the tech sector essentially grew by 15%
in 2023 and is expected to do 12% in
2024 we have a cooling down inflation
GDP growth on the move up and corporate
earnings that are improving and are
staying strong because of this new cycle
then it was the internet and now it's
the AI boom and yet despite all these
similarities and despite all this great
setup the stock market hasn't really
gone to hyperdrive yet like it did in
1995 yes we've seen a 40% rally on the
S&P 500 but if you go back all the way
to December of 2021 from December of
2021 to now the S&P 500 did 16% that's
like five and a half percent per year
NASDAQ did 5.8% per year giving us
17.4% the iwm the Russ of 2000 the small
caps actually lost 12% and the market
gave us nothing nothing for the past
three years we've seen a bounce back but
not really that hyper Drive we've seen
in 1995 now look at the AI boom right
the invention of CH GPT in November of
2022 you know let's call it the
equivalent of the invention of the
internet in 1994 right well since the
introduction of Netscape in 1994 for the
first 700 days the market the NASDAQ was
up
120% since the invention of chat GPT we
have gone through about 630 days so
almost 700 days the NASDAQ is up 65% S&P
is up 44% we're still half way to where
we were in 1994 and CH GPT is actually a
lot bigger than the invention of
internet as far as the impact it's going
to have on businesses we've seen just
the beginning of it right now what we
have is a setup that's very interesting
the CPI is a 2.9% retail sales have just
doubled from 04 to 1% doubl than
expected
we have Walmart coming out saying hey
earnings are great people are buying
like crazy job claims actually better
than expected after the initial scare
we've seen from the unemployment stuff
we have Warren Buffett buying consumer
discretionary Ulta we have Bill Amman
buying up Nike GDP is at almost 3% and
everybody's still fearful if you look at
the fear and GD index it's on fear so if
it is on fear it means that the upside
isn't here yet because the upside will
be here when everybody's going to be at
Max greed not when everybody's at fear
so this setup is beautiful especially
with the FED starting a cutting cycle we
know one thing once the FED is going to
be done with the cutting cycle the S&P
500 on average gives you 26% in the
following year and that's just the S&P
500 with the rate cut cycle when you add
in good macroeconomic data good
corporate earnings and the invention
that reduction of AI into the business
world that just starting out you're
talking about massive cataclysmic impact
that hasn't been seen yet and when
people talk to me about a pullback or
drop yeah it may come sure but here's
the thing what happens if the market
drops is it shakes out a lot of people
who don't understand fundamentals who
don't have conviction the same thing
would happen with paler when paler
dropped from $35 to $7 a lot of people
got spooked because it's scary it's
scary I get it but the people who had
convictions like me basically stayed in
and we're back to $32 right now nothing
happened the same thing with this Market
me saying saying hey this is 1995 we're
going to go to 1999 it's not going to be
in the straight line there might be more
scary events ahead so make sure you keep
your head in the game stay focused and
make sure you don't get scared I'll see
you the next one
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