NEXT MARKET CRASH: 10 Signs it's Coming

many people are claiming there's a bubble going on today and there's a lot of people that are getting upset when say marcus is not going to crash this thing's going to go up this is the greatest economy we've ever had you got to keep investing into the market so who is right so today i'm going to be a lawyer i'm not a lawyer but i'm going to be a lawyer and i'm going to give you 10 points on why i am leaning towards a bubble and a crash and you will have to make that decision for yourself and pick apart my argument below comment say i totally disagree you have no clue what you're talking about but i'm going to make my case we'll do some math i'll give you some trends some of it will be technical some of it will be simple but by the end you'll be able to make a decision for yourself whether i'm making a good case or not so let's get right into it so there's this guy named uh warren buffett who's a very wealthy man very successful man who took his berkshire hath away from where it was to where it's at today he's worth around 80 200 billion dollars and when he gives advice about money people listen he has a famous saying that he's been saying for a long time you've heard this before you've read this before be fearful when people are greedy be greedy when people are fearful are people scared today are people greedy today what do you think you answered that one right there for yourself so if you got to be fearful when people are greedy and today everyone's being greedy thinking they're gonna oh gamestop arriving on you know american airlines bitcoin people are so greedy today maybe we ought to pay attention to what he said matter of fact check this out there's a guy named michael jordan okay who has a rookie card this is his best rookie card 1986 flier and psa is the top grading company in the world there's only about 300 of these graded at 10 okay let me first give you the history of what happened with this thing here just march 22nd which is 11 months ago this card sold for 48 000. then it went up to 51 600 this is when the last dance came out it came out a little before that then it went to 96 then it went to 150. just a month and a half ago two months ago this card was selling for 151 000 in the marketplace you know what it just sold for 738 000 for one card in 11 months this card went from 48 000 to 738 now is it a 48 000 car absolutely not is it a 738 000 car today when there's 300 of these out there i don't know about that so why are people spending this kind of money is it because they're greedy is it because they made a lot of money is it because everyone's making money on the stock market and they have extra money to spend i can't answer that but i'll let you answer that one here now let's get a little bit more technical here so many times when you want to price a company's p e ratio price to earnings you take the formula and you divide whatever the stocks price is by their earnings you divide that and you come up with the p e ratio right so p e ratio typically historically you know companies are between 15 to 17 percent domestic is about 17.47 today on p e ratio let me give you a couple examples of companies where their pe ratios right now you ready so tesla right now p e ratio is 1243 meaning it is overpriced meaning people are banking on what this could go in the future but it's not worth 763 billion dollars today which is why so many people are shorting the tesla stock now you may say pat give me a break it's elon musk you talk a lot of good things about elon musk elon musk is a genius no question about it as long as he runs tesla this thing's going to go to a price like that however let's take a look at some other companies what their p ratios are so tesla was what if you want to get a little closer 1243 right let's look at microsoft big company bill gates pe ratio 36.39 you can just stay right here if we go to facebook what's facebook facebook p ratio 26.71 that's a big company ran by zuck he's still running it let's go to another company like apple what is apple's p e ratio 36.27 let's go to another one uh i don't know uh give me another one kai let's do amazon okay amazon's p e ratio is 77.90 high right let me take you back to tesla you mean to tell me 1256 tesla you mean to tell me tesla's a 771 billion auto company based on today not future earnings i don't know about that this is concerning so now if the average historically p e ratio for a company has been 17.47 take a look at this today it is 39.86 look at the history of pe ratios for s p 500. look at the history of it 12 13 26 okay you know 23 okay let's go to o1 911 happens 42 what happens after 9 11 it drops right okay let's go over here p e ratios look how high it is mortgage boom you remember that the bust the bubble boom 39.86 these are three trends that we can look at now let's go take a look at schiller and by the way for the max and amin you need to know that the lowest p e ratio we've ever had was 5.31 which is 1917. the highest we ever had was 09 that's the big market crash 123. right now let's go to schiller p e ratio with schiller the difference between schiller's robert schiller came out with the p e ratio and they called it the schiller p e ratio what he did is typically when the ucp ratio of tesla being you know the number i showed you which is what the uh uh uh what was it 1200 the 12 month p e ratio trailing 12 month of tesla is what 161.61 12 month which is still high not 1200 but still high what schiller did is he went 10 years is what he did so all he did is he took that pe ratio that's the day or maybe 12 months he said let's go 10 years and see what numbers it gives us and look we found that here take a look at this today the schiller p e ratio is 35.65 second highest ever when it was 30 it was black tuesday what happened to black tuesday look at this how the market dropped do you see it what happened in 9 11 boom market drop look where the p e ratio was shiller p ratio 10 years we're at 35.65 that is not a good trend to be looking at so so far we've covered a few different things we've covered p e ratio tesla i give you a few other companies we've covered shiller a p ratio we've covered when people are fearful greedy greedy fearful buffett we've covered the jordan card that i showed you out of nowhere a forty eight thousand dollars oh buy for seven hundred thirty eight thousand dollars how do you have that kind of money now let's go to the next one the next one is interest rates let's look at interest rates okay so when you look at interest rates here's what you see the history of interest rates in america okay this kind of worldwide kind of gives you an idea you don't see anything being above what it is today today is as low as it's ever been now if we really kind of break it down so you can see it even deeper this is what you will notice this is the federal funds rate 62-year historical chart okay rates were just a little over you know a decade ago they were what 5.21 okay six point five five so 2001 market tanks we take it down to 0.98 under a bush administration to help the economy come back up but we raise the interest rates again right obama comes into office takes office he keeps it low below one percent for nearly his entire term and then trump comes and says we can't keep it at this the rates go a little bit higher but then eventually covet hit we have to take the rates low to what point zero nine we haven't been this slow for a long time go to the history of america what it looks like okay here what we have what happened in 81 this is carter if you look at carter when he came in rates went to the roof cds were paying 15 16 at one point what happened with carter one term president reagan came up came up with reagan reaganomics and he brought it lower so when you look at this and you say interest rates who cares about low interest rates pat well let me show you 30 year fix and i'll kind of give you an idea why this is so important to look at if you go right now and we type in your zip code this is boca raton uh interest rates today for 30 year fixed is roughly what 2.875 at this bank chase is 2.92 let's just say three hundred three or three percent is the interest rate today for what for 30-year mortgage rate today's what three percent so then let's just go do math what does this have to do with anything pat i don't know where you're going with this can you kind of help us out better on some what you're doing yeah let's just say you're buying a 500 000 house today i'm gonna do the math for you say you're buying a 500 000 house today and you are gonna go with the current rate which is what three percent over 30 years your payment today would be what stay over here your payment would be what 2108 why is that such an important number let me show you something simple on the paper here and hopefully this will make sense here's how rates work when interest rates are low price of homes are what high but when interest rates are high price of homes are what low meaning right now if the rates are three i'm gonna be able to buy five hundred thousand dollar house because i'm solving for this i'm not solving for this i'm not solving for this when people buy a house they say what i can't afford two thousand dollars a month nobody says i can afford a half a million dollar house you go to your banker at chase that baby say i think i can pay two thousand dollars a month for a mortgage let me do the math you qualify for three percent interest rate we can go as high as 500 000 great i get that pre-approval letter then i go to my realtor and i say we can look at houses all the way up to what 500 000 now here's a problem watch this here if i raise this interest rate to six percent which is what it normally was is three thousand dollars same value house but the rate went up to six percent if that interest rate goes to nine percent what happens mortgage goes to four thousand dollars the couple's sitting at the bank saying i can't pay four thousand dollars a month but it's still only five hundred thousand dollar house so come over here i've done some math for you to simplify to take a look at this so if i get a five hundred thousand dollar house at three percent thirty years i'm paying 2108 a month total i'm going to pay over 30 years at 758. if that goes to 6 i'm paying 29.98 1.79 if it's 9 4 000 1 million 448 this is the problem the problem is the following if i am solving for what if i'm coming in and i'm solving for the payment of 2108 and i tell my mortgage guy hey i can only do 2001 2100 payment per month and the rates today are six percent guess what i can only get i can only get a 351 000 house to be at that payment did that make sense which means today i may be able to afford a five hundred thousand dollar house because rates are three but if the rates go to six percent i can only afford a three hundred fifty one thousand dollar house and if the rates go to nine percent i can only afford what 262 thousand dollar house which means today real estate is inflated and uh if they keep the interest rates this low pal keeps saying it's going to stay for another three years interest rates low price is high interest rate goes high prices go down so this is this is one other thing to be thinking about where people are buying houses left and right odds and it's just interest rates are so low if it goes the other way around do not be surprised if these same five hundred thousand dollar houses are selling for four four hundred thousand three fifty and same million dollar homes are selling for seven hundred thousand dollars six hundred thousand dollars if that were to happen so now let's go back to this so is that a sign of a market crash yes because we have kept the rates low for a long time and we can't go low for too long sometimes you would do it to just boost the economy a little bit but to keep it for this long since obama came in we kept the rates low below one percent since 08 for this long this is like a bodybuilder being on steroids growth hormone everything you put for 20 years you know what happens to you eventually you have a heart attack the market's about to have a heart attack if we continue like this this is not something that's sustainable over and over and over and over and over again that's another argument i'm making to you now let's go to a complete different argument we just decide to raise the minimum wage to what 15 bucks an hour it's about to become official because biden's got the senate house and obviously he's the president and you know kamala can vote so it goes to 15 an hour cbo does a case saying hey if we go to 15 bucks an hour you i just want you know we're going to lose 1.4 million job 1.4 million americans are going to lose their job no we have to go to 15 an hour you can't make a case today it's going to 15 bucks an hour no problem um which industry has the most minimum wage employees which industry wall street that funds most of these political campaigns now uh real estate no which industry has the most employees making minimum wage well let's take a look well according to u.s facts here if you go and look at it food preparation and serving related has the most minimum wage employees last 12 months lots of jobs were lost no around 15 million jobs were lost in hospitality hotel restaurants so the industries that took the biggest hit those small restaurants that took the biggest said now we're going to raise the minimum wage for the waiter waitresses that work there and the bus boys we're going to now take them so i'm running a restaurant i'm already running on small margins of 3 4 now you're adding that on top of it if restaurant business industries go out of business who gets affected what do you buy at restaurants you just buy burgers no you buy beer alcohol liqueur liquor paper man other industries could be effective yeah you know i spoke to andrew zimmerman who has his own show and he's been around tv for a long time expert when it comes down to a restaurant and he goes deals with the white house when it comes down to restaurants he says nearly 50 million people are affected by this entire decision that was made with the restaurant business you know with the coveted shutdown they're being affected tremendously does that potentially lead to a bubble and an effect maybe because it's delayed pain that's about to come up to small business owners and what are we going to do every single time send one point 1.9 1.9 trillion dollars to people is that really effective well now that we're talking about the 1.9 trillion dollars why don't we take a look at the 1.9 trillion dollars and how much money we've printed in the history of america i don't know let's just take a look you ready here's what it looks like on what we've done history of america when we print money 2 000. look we're at 2 000. nothing crazy okay and then all of a sudden what do you see goes up goes up goes up and what do we do in 2020 with covet look at this from oh wait how much we printed with quantitative easing but then look at that spike we go up that's a scary site some say 40 percent of all the money in the history of america was printed just in 2020 some say it's 18 but it's between 20 to 40 percent almost a fifth of all u.s dollars were created this year fifth which means what 20 percent so do we keep solving problems by printing money we got a printing press let's just keep printing money it's okay we'll solve the problem that way that's the way to go about solving the problem right that's what we should do no that leads to fake success and fake money and what is fake success and fake money do you ever met a fake rich person what happens to them eventually they lose the cards they lose the house they lose everything because they were fake rich they were never rich they were rich on the outside but they were never rich on the inside you ever see these people that's very happy oh my gosh it's so wonderful i'm so blessed as if they have zero problems deep down and said they have a lot of issues there's a lot of fake millionaires today a lot of fake success today a lot of that going on today and by the way we can't blame many of them because we are promoting this this is the greatest time to get rich take advantage of it be greedy this is what you should do and folks don't realize we're not talking about sets of money aside we're not talking about emergency fund we're not talking about get ready that if something bad happens we're not talking about the rainy day all we're talking about is flamboyant this person did this that person did this all this stuff comes together so now let me go to another one excessive valuations i already gave you when we talked about tesla but some of the excessive valuations with robin hood gamestop american airlines you know bed bath and beyond what is that all about that is another sign where the market today can be manipulated because if one person sends a tweet this person goes on gamestop reddit strange things are going on when companies are being overvalued and they're not worth that even the doge coin ceo says we're not a 10 billion dollar company i don't even know what the hell is going on here we're not a 10 billion dollar company the ceo makes a comment like that where the own ceo is concerned about that even musk said i think we're overpriced today in a tweet but people are saying no we're not keep buying keep buying keep buying that's another concern and then last but not least economic expansion went for how long i think economic expansion went for 128 months no one's even talking about it today but economic expansion went for about 128 months okay when you go for 128 months of economic expansion then comes kobe we forgot about it that the market grew for 128 months nearly 11 years and then because of covet we had to shut down a market tank 35 in one month if you remember that and then what happened but take hold it out take covet never happened say covet never happened there is no coronavirus nothing happened and 2020 goes the way it did how does the market go where does it go 35 040 000 that's still a bubble that's been going for 11 years no econ economy expansion goes for 11 years and the debt of the country keeps rising the way it's rising for us and the interest rates that's not sustainable eventually there is a crash that's going to come and it's not going to be pretty and this wasn't a crash in 2020 we did not have a market crash but 2020 was such a bad year to rough no no no people got unemployment benefits people got stimulus checks centered and people got billed people got bailed out in so many different ways where people didn't even want to get a job because they were making more money staying home than getting a job this is not a sign of a market that's growing okay this is a 11 year bubble that's been brewing that's been going up and when it drops it is not going to be pretty so having said that that's my argument i made about 10 or 11 points to you you agree put thumbs up you disagree put thumbs down but give me your argument below and if you want to find out more you say pat this is scary what if this actually does happen how can i prepare myself i got a video i also did titled eight ways to prepare for market crash if you've never watched it click here to go watch it thank you everybody bye you

Channel: Valuetainment

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Keywords: Entrepreneur, Entrepreneurs, Entrepreneurship, Entrepreneur Motivation, Entrepreneur Advice, Startup Entrepreneurs, valuetainment, patrick bet david, market crash, great depression, recession meaning, market prediction, market crash 2019, market crash coming, black swan, 10 Ways to Make Millions in The Next Market Crash, next market crash, stock market crash, housing bubble, real estate crash, tech bubble, reaganomics, NEXT MARKET CRASH: 10 Ways To Make Millions As An Entrepreneur

Id: 2g8PawZIRrk

Length: 19min 12sec (1152 seconds)

Published: Tue Feb 16 2021