The Next 96 Hours In The Stock Market Will Make Millionaires

Summary

The video script emphasizes the unpredictability of the stock market and the futility of market timing. The speaker reflects on a recent market downturn and subsequent recovery, highlighting the importance of long-term investment strategies over short-term reactions. They share their own portfolio strategy, advocating for dollar-cost averaging and maintaining conviction in fundamentally strong companies, regardless of market volatility.

Takeaways

• 📉 The speaker emphasizes the importance of not timing the market, as it's a game that often leads to missing out on significant gains.
• 📈 The S&P 500 and NASDAQ had a strong rebound after a significant drop, demonstrating the volatility and unpredictability of the market.
• 📚 The script serves as a lesson in market behavior, illustrating how quickly market narratives can shift from negative to positive.
• 🤷‍♂️ The speaker highlights the futility of trying to predict market movements, stating that even experts often get it wrong.
• 🚫 The speaker advises against making investment decisions based on fear or panic, as this can lead to poor outcomes.
• 💡 The concept of 'dollar-cost averaging' is promoted as a strategy for investing consistently over time, regardless of market conditions.
• 📊 The speaker shares their own portfolio strategy, which includes a mix of individual stocks and the S&P 500 index, to demonstrate their investment philosophy.
• 📉 The speaker points out that missing the top 10 days of the year can significantly reduce long-term investment returns.
• 📈 Companies like Nvidia, Tesla, and Palantir experienced substantial gains, showing that market downturns can be followed by sharp upturns.
• 🤔 The speaker encourages investors to reassess their positions and consider whether fundamentals have changed before making any adjustments.
• 🧐 The importance of having a long-term perspective and a game plan for various market scenarios is stressed.

Q & A

What was the main message the speaker wanted to convey to investors?

The main message was that timing the market is a futile and risky endeavor, and investors should instead focus on long-term investment strategies, such as dollar-cost averaging, and not be swayed by short-term market fluctuations.

What happened on August 5th that the speaker referred to as a 'blood bath'?

The term 'blood bath' was used to describe a significant market downturn on August 5th, which was characterized by negative sentiment and fears of a recession, war, and poor economic indicators.

How did the S&P 500 perform after the August 5th downturn?

Surprisingly, the S&P 500 had its best week of 2024 following the downturn, with a 7% increase, demonstrating the unpredictability of market movements.

What does the speaker suggest about the accuracy of the 'Sam rule' after recent events?

The speaker implies that the 'Sam rule', which has never been wrong before, might not be accurate this year due to the presence of skew data, as indicated by Claudia Sam.

What is the 'dollar-cost averaging' strategy mentioned by the speaker?

Dollar-cost averaging is an investment strategy where an investor consistently buys a fixed dollar amount of a particular investment, regardless of its share price, to reduce the impact of volatility on the overall purchase.

What was the speaker's portfolio composition, and how has it performed year to date?

The speaker's portfolio is composed of 40% S&P 500, 40% Palantir, and 20% Tesla. Year to date, the portfolio has increased by 41%, outperforming the S&P 500 but underperforming Palantir's 93% increase.

What is the speaker's approach to managing his investments in the face of market volatility?

The speaker's approach is to evaluate the fundamental business aspects of the companies he invests in and to continue dollar-cost averaging into them, regardless of short-term market movements.

How does the speaker plan to adjust his investment strategy if the market corrects after a strong week?

If a correction occurs, the speaker plans to double down on his investments, particularly in stocks that are 20% below their 52-week high, using dollar-cost averaging to buy more than usual.

What is the speaker's view on the predictability of market movements?

The speaker believes that market movements are highly unpredictable and that even experts in mainstream media, who often claim to predict market movements, are often wrong.

What advice does the speaker give to investors regarding their reaction to market fluctuations?

The speaker advises investors to avoid panic selling during market drops and to refrain from trying to time the market, emphasizing the importance of a long-term investment strategy.

What is the speaker's opinion on the role of fundamentals in the stock market compared to short-term price action?

The speaker believes that fundamentals always beat short-term price action psychology in the long run, and that time is the best friend of a great business in the stock market.

Outlines

00:00

📉 Market Volatility and the Folly of Timing

The speaker emphasizes the unpredictability of market movements, using the recent market dive and subsequent recovery as a case study. They highlight the importance of not reacting impulsively to market fluctuations and warn against the common mistake of trying to time the market. The speaker shares the narrative shift from negative to positive within a week, illustrating how quickly market sentiment can change. They stress the significance of long-term investment strategies, such as dollar-cost averaging, and the importance of staying invested through market ups and downs. The speaker also discusses their own portfolio, which consists of two stocks and the S&P 500, and how they have maintained a consistent investment strategy despite market volatility, resulting in a 41% return year to date.

05:01

🚀 Fundamental Analysis Over Market Timing

In this paragraph, the speaker delves into their personal investment strategy, focusing on fundamental analysis rather than market timing. They mention evaluating their holdings—specifically Tesla and Palantir—and deciding against selling based on the companies' continued growth and potential. The speaker outlines their approach to dollar-cost averaging, buying more of a stock when it's down to reduce their average cost and continuing to invest even when the market is high. They address potential market scenarios, such as a crash or rally, and how their strategy remains consistent regardless of short-term market movements. The speaker also shares an anecdote from their community about not selling during a market panic, which ultimately proved profitable, and emphasizes the long-term benefits of investing in solid businesses.

10:02

🕰️ The Timeless Wisdom of Long-Term Investing

The final paragraph reinforces the message that long-term investing is superior to short-term trading, especially for those not专业从事 trading. The speaker acknowledges the difficulty of predicting market movements and the risks associated with trying to time the market. They advocate for a simple yet effective strategy of dollar-cost averaging and maintaining a steady investment pace, regardless of market conditions. The speaker concludes by reiterating the importance of time in the market over timing the market, and the inevitability of fundamentals prevailing over short-term market psychology.

Keywords

💡Investors

Investors are individuals or entities that allocate capital with the expectation of generating a profit or income. In the video's context, the speaker is addressing investors, emphasizing the importance of being prepared for market fluctuations and not reacting impulsively to short-term events.

💡Market Timing

Market timing refers to the strategy of buying or selling assets based on predictions of market trends. The speaker criticizes this approach, stating that it is a 'stupid game' and that trying to time the market often leads to missing out on significant gains, as exemplified by the unexpected positive performance of the S&P 500 and NASDAQ after a period of negative sentiment.

💡Blood Bath

In the financial context, 'blood bath' is a colloquial term used to describe a significant market downturn where many investors experience losses. The script mentions 'August 5th Monday blood bath' to illustrate a point in time when the market took a sharp dive, causing panic among many investors.

💡Recession Fears

Recession fears are concerns about an impending economic downturn. The video script mentions these fears as part of the negative narrative that influenced investor sentiment prior to the market's unexpected recovery, highlighting the unpredictable nature of market movements.

💡Unemployment Numbers

Unemployment numbers are statistics that indicate the percentage of the labor force that is without work and actively seeking employment. In the script, poor unemployment numbers are cited as one of the factors contributing to negative market sentiment, which later turned out to be less severe than initially thought.

💡Dollar Cost Averaging

Dollar cost averaging (DCA) is an investment strategy where an investor consistently buys a fixed dollar amount of a particular investment regardless of its price. The speaker advocates for this approach, explaining that it allows investors to reduce the impact of market volatility and buy more shares when prices are low, as illustrated by the strategy applied to Tesla and Palantir.

💡S&P 500

The S&P 500 is a stock market index that measures the performance of 500 large companies listed on stock exchanges in the United States. It is often used as a benchmark for the overall U.S. stock market. The video script discusses the S&P 500's significant increase after a period of decline, demonstrating the index's role as a key market indicator.

💡NASDAQ

NASDAQ is an American stock exchange known for listing technology and biotechnology companies. It is another benchmark like the S&P 500. The script mentions NASDAQ's performance to emphasize the broad-based market recovery that occurred, despite earlier negative predictions.

💡Fundamentals

In investing, fundamentals refer to the financial and economic characteristics of a company that determine its intrinsic value. The speaker stresses the importance of focusing on a company's fundamentals rather than short-term market fluctuations, using Palantir and Tesla as examples of companies with strong fundamentals that justify continued investment.

💡Portfolio

A portfolio is a collection of financial assets such as stocks, bonds, and cash equivalents held by an investor. The speaker discusses their own portfolio composition, which includes two stocks and the S&P 500, to demonstrate a diversified investment strategy and to show how sticking to a plan can yield positive results despite market volatility.

💡Pandemonium

Pandemonium refers to a state of extreme chaos or disorder. In the script, 'Monday pandemonium' is used to describe the chaotic market conditions on August 5th, where many investors were selling off assets in a panic, which the speaker and their community chose not to follow, instead opting to hold or even increase their positions.

Highlights

This week is critical for investors, emphasizing the importance of preparation and listening to market insights.

Last week's market downturn provided a lesson on market dynamics, showing how quickly narratives can shift.

The S&P 500 and NASDAQ had a significant rebound, with the S&P 500 up 4% and NASDAQ up 5.3%, highlighting the volatility of the market.

Claudia Sam's rule, which has never been wrong before, might not be accurate this year due to skew data.

The speaker's portfolio consists of two stocks and the S&P 500, demonstrating a diversified yet simple investment strategy.

The importance of not timing the market is stressed, as it often leads to missing out on significant gains.

Studies show missing the top 10 days in a 20-year period can cut investment returns by half.

The unpredictability of the market is highlighted, with recent examples of companies like Nvidia, Tesla, and Palantir experiencing significant gains.

The speaker's year-to-date performance is up 41%, illustrating the effectiveness of a consistent investment strategy.

Fundamental analysis of companies is crucial before deciding to hold or sell stocks in response to market fluctuations.

Dollar-cost averaging is recommended as a strategy for investing, regardless of market conditions.

The unpredictability of market movements is acknowledged, with a 50-50 chance of significant ups or downs.

The community's response to the market downturn on August 5th was to hold or increase positions, not sell.

The benefits of dollar-cost averaging are exemplified by the community's experience with Palantir's stock price movement.

The speaker emphasizes that fundamentals always beat short-term price action and psychology in the long run.

The market's irrational behavior can last longer than an individual's financial stability, a warning against relying on market timing.

For long-term investors, the focus should be on time in the market rather than timing the market.

Transcripts

folks this week is going to be critical

for investors I want you to be prepared

listen up don't click nothing don't

smash nothing don't buy nothing just

listen listen to me last week was proof

evidence and a very important lesson for

a lot of new investors about how the

market works we have seen the market

take a nose dive and the peak was that

August 5th Monday blood bath the whole

narrative coming up into the last week

was negative people are talking about

recession fears Iran starting World War

III we're talking about unemployment

numbers being bad the Sam rule has been

triggered it's never been wrong before

and we just came off the best week the

best week of the S&P 500 of 2024 just

happened S&P 500 is up 4% NASDAQ ran

5.3% small caps iwm is up 3% massive

week in fact since the August 5th

bloodbath the S&P fund is up 7% 7%

that's almost the annual return in a

couple of weeks and the whole narrative

is all of a sudden completely shifted

180 degrees Claudia Sam comes out she

says look this might be the year where

it's not going to be accurate because

there's a lot of skew data she cast them

out and all of a sudden we have claims

come out jobs are not as bad as people

thought Iran still hasn't struck Israel

so World War II is on hold we have

retail sales doubl un expected

Japan car trade completely Unwound and

basically faded like a fart in the wind

so the whole setup is all of a sudden

changed and all the so-called experts

are now on TV telling you how great

things are the same people who were

screaming at you to run like a headless

chicken towards the hills and we're all

going to die the same people are now on

mainstream media telling you how great

things are in the span of a week what

have we learned here we have learned an

important lesson folks a lesson I've

been teaching to my community for the

past 4 years since I've started this

Channel and the lesson is it's not going

to work it's never going to work and

timing the market is a stupid game and

when you play stupid games you win

stupid prizes and when you do this sort

of stuff what happens well you miss out

on a huge amount of upside I've showed

you this before if you miss the top 10

days of the year your returns are going

to be heavily diminished in fact there's

this study that shows that missing the

top 10 days in a 20e period basically 10

days 10 days in 20 years your turns are

going to be slashed by half half Eddie

now the past week probably had a couple

of candidates to be one of those top 10

days but nobody saw it coming everybody

thought the setup is negative and all of

a sudden everybody's a genius and now

everybody thinks well the setup is great

you can't time the market it's

impossible you might hit it once or

twice you might hit 40% of the time but

that's gambling it's impossible look

Nvidia this week the past week is up 19%

19% Tesla is up 8% penter is up 6%

Citadel all of a sudden is buying a

paler everybody's excited about paler

again it's not going to work if you're

going to try to jump in and jump out of

this market and the last week is such a

good proof it's such a good lesson if

you lost some upside if you lost some

potential last week it good because it's

a lesson for you not to try this

again not try and time the market

sometimes you think oh my God all the

indicators are pointing to a horrible

weak everything is bad there's no way

there's no way this Market can run off

of this it's impossible and yet this

just happened so since August 5th to now

you have had two weeks of the most

important lesson an investor can have

and you got off cheap this is just a

preview so listen up look at my own

portfolio I practice what I preach my

portfolio consists of two stocks and the

S&P 500 that's it the S&P 500 Tesla and

paler 40% S&P 500 40% paler 20% Tesla

that has always been my portfolio and

I've never changed now this year I'm up

41% year to date it's a lot better than

the 177% that the index gave and it's

not as good as paler with 93% but it's a

lot better than Tesla with negative 133%

so i' basically I'm up huge on paler I'm

up a little on thep and I'm down on

Tesla but because I mix it up I'm up 41%

year to date and I'm happy with it now

the big question is what's next because

after such a huge crazy week there might

be a correction there might be I'm not

saying it's guaranteed I'm not promising

I'm not predicting I don't know what's

going to happen but after such a strong

week you might see some correction so

what do you do well let me show you how

I'm handling this look at my own

strategy and you can figure out your own

now right now what I've done is I'm

looking at penter I'm looking at Tesla

I'm saying okay is there any reason for

me to cut ties with any of these

companies is there any reason that I

would like to reduce my exposure to

Tesla or paler fundamentally anything in

the business that makes me less certain

less convinced that these companies are

the future and I say to myself no

fundamentally these companies are doing

a lot better than last year

business-wise and their potential is in

fact bigger than it was a year ago so I

don't want to sell any of them so the

fact that Tesla is down and paler is up

is irrelevant it's completely irrelevant

the only part where it actually matters

is how much do I buy because I buy at

all times I dollar cost average which

means I keep buying at all times paler

Tesla and the index S&P 500 now because

Tesla is below 20% off of the 52e high

so it's below $224

I'm going to buy a little bit more of

Tesla compared to paler and compared to

the S&P 500 because the s&p500 is high

paler is high they're both not in that

range where I want to double down but

Tesla is within that range Tesla is 20%

below the 52 high and actually lower so

I'm doubling down on Tesla and I'm

dollar Coss averaging normally into

paler and SP 500 that's always been my

strategy nothing has changed now a lot

of people are saying well Tom what

happens if the market crashes this week

what do you do what happens if the

market rallies this week what do you do

well it's very very simple because at

the end of the day here's the hard truth

that people in Min media don't want you

to know we have 50% chance that the year

is going to end up 6,000 on the S&P 500

there's also 50% chance that the year is

going to end at 5,000 on the S&P 500 so

it's an equal chance we move up five

point 500 points and we move down 500

points and what they don't want to tell

you and because they feel embarrassed

because they want to produce this shows

where they're like the expert that know

everything is going to happen they can

predict the future they don't want to

admit the fact that they have no idea

now I have no problem saying it I have

no idea whether we go up or down 500

points on the SP by the end of the year

I have no idea I have no idea what's

going to happen this week I have

absolutely no freaking idea but I have a

game plan and my game plan is very

simple if a correction happens the

upcoming week that starts today well

that's great I'm going to see if any of

my stocks remain 20% below low the 52 we

high if that's the case I'm going to

double down all my dollar Coss averaging

I'm going to buy more than usual if the

market rallies continues to go up well I

change nothing I continue to buy slowly

that's it simple as that I don't formal

when the market runs up and I don't

panic sale when the market drops the

same the same thing that happen with

penter look at penter is a prime example

of that strategy and how it work for my

community now in our community I can't

tell you for certain because I don't

have access to every single member

portfolio but in general in my community

the consensus was we're not selling the

Monday pandemonium blood bath right so P

drops from 27 to 24 almost overnight

August 5th and in my community we're

going to write it out we're going to

write it out in fact we might double

down and a lot of members double down a

lot of members just stayed but virtually

I don't think anybody sold I have no

idea but the consensus was we're not

selling I had one member who put in six

figures into penter almost overnight

when this crash happened but that's not

a prudent thing to do and if he's

watching this video you shouldn't have

done that but hey the idea is very

simple if you have this setup where

you're convinced of a company's

fundamentals in business and the

companies all of a sudden drops more

than 10% in a single day overnight what

do you do well you say I'm going to do

Coss aage into it that's an opportunity

to reduce my cost bases so then you wake

up and then you go 2 weeks forward into

your future the stock goes up from 24 to

$32 that's a 33% increase in 2 weeks now

could we have known that's going to

happen did we know could we have

predicted it no we don't know because at

the same the same sentiment I can tell

you that this stock can be $12 tomorrow

it might drop $20 who knows nobody knows

but if you just dollar cost average and

you understand if the stock goes up you

slow down if the stock goes down you

basically increase the pace and long

term if you have picked good companies

if you've pick good businesses solid

businesses

longterm time is your friend time is the

best friend of a great business in the

stock market because always always

always fundamentals are going to beat

short-term price action psychology every

time and the past week is a good proof

of how timing the market is not a smart

strategy a lot of people are talking

about it oh my god I've made $100,000

this week I've made $200,000 this week

but sometimes they lose those 100 and

200 and there's no consistent way of

predicting how the market is going to

behave there's a very famous saying the

market can stay irrational much longer

than you can stay solvent and that's not

just a saying it's very very true so the

best thing to do for a long-term

investor not for a Trader for a

long-term investor is a understand I a

long-term investor I'm not a Trader and

understand that you don't want to be

trading as an investor and number two

time in the market is better than

timeing the market dollar Coss average

slowly keep the pace it's that simple I

promise it's not complicated it's that

simple I'll see you next one have fun