1 00:00:00,000 --> 00:00:04,939 the rate of growth, the rise over run was the fastest in history. 2 00:00:05,279 --> 00:00:06,879 And that spooked investors. 3 00:00:07,279 --> 00:00:10,849 So investors took money out of the stock market and started putting in bonds. 4 00:00:11,389 --> 00:00:15,709 And at the same time, when the monies became difficult to get, because 5 00:00:15,719 --> 00:00:19,789 interest rates were high, things started to become cooler, right? 6 00:00:53,554 --> 00:00:54,454 Hi there guys. 7 00:00:54,494 --> 00:00:58,744 This is Vinny Chopra back with my great friend Amit Chandan. 8 00:00:58,784 --> 00:01:02,884 If you have not seen our episodes from before, like two, three 9 00:01:02,884 --> 00:01:06,624 months back, we just published it again on the Desi Money Show. 10 00:01:06,634 --> 00:01:12,254 Please go back and see what a tremendous knowledge Guru Amit is 11 00:01:12,334 --> 00:01:17,394 on stock market and volatility and what's happening in the economy and 12 00:01:17,404 --> 00:01:19,604 how it's going to really shape up 2024 13 00:01:21,744 --> 00:01:24,684 by December with the election year is right here in USA. 14 00:01:24,684 --> 00:01:27,824 So Amitji, welcome to the show. 15 00:01:27,854 --> 00:01:28,324 Welcome. 16 00:01:28,324 --> 00:01:30,074 It's such a pleasure to have you. 17 00:01:30,404 --> 00:01:31,264 Thank you, Vinayji. 18 00:01:31,264 --> 00:01:31,724 Thank you. 19 00:01:31,724 --> 00:01:35,449 I think, you know what, market has been reacting in an amazing way. 20 00:01:35,689 --> 00:01:38,389 some people who know how to, or the people who know how to take advantage 21 00:01:38,389 --> 00:01:40,919 of this market must be very happy. 22 00:01:40,989 --> 00:01:44,689 But those people who don't know what's going on, I have, a session packed 23 00:01:44,719 --> 00:01:45,949 with knowledge for you all today. 24 00:01:46,119 --> 00:01:46,929 Oh my gosh. 25 00:01:47,249 --> 00:01:47,889 Can't wait. 26 00:01:47,949 --> 00:01:48,509 Can't wait. 27 00:01:48,679 --> 00:01:50,289 It's going to be very exciting guys. 28 00:01:50,289 --> 00:01:55,039 If you're in the car listening to us, please look at the video edition on 29 00:01:55,039 --> 00:01:59,319 the YouTube channel and all over so that you can really get the most of it. 30 00:01:59,449 --> 00:02:01,159 So please share your screen. 31 00:02:02,194 --> 00:02:03,994 And we can dig right into it. 32 00:02:04,084 --> 00:02:04,908 Yes. 33 00:02:05,244 --> 00:02:05,574 Perfect. 34 00:02:05,574 --> 00:02:06,029 Can you see my screen? 35 00:02:06,379 --> 00:02:08,819 Perfect. 36 00:02:09,299 --> 00:02:10,859 So folks, my name is Amit Chandan. 37 00:02:10,859 --> 00:02:12,419 Thank you for bringing me back. 38 00:02:12,669 --> 00:02:17,809 So today is August 13 and I'd like to do a market analysis and show you guys 39 00:02:17,829 --> 00:02:23,399 what's been actually happening behind the hood and what I expect is going 40 00:02:23,399 --> 00:02:24,489 to happen for the rest of the year. 41 00:02:24,964 --> 00:02:29,114 And, if you guys want to watch my market analysis, I regularly 42 00:02:29,114 --> 00:02:30,214 release these every month. 43 00:02:30,844 --> 00:02:33,224 So before we get going, please read this legal disclaimer. 44 00:02:33,474 --> 00:02:35,224 Remember, I'm not selling anything. 45 00:02:35,354 --> 00:02:39,094 And what I'm about to share with you are just my views based on my research. 46 00:02:40,679 --> 00:02:46,259 So since July 17th this year, the market has taken a dip, right? 47 00:02:46,619 --> 00:02:49,429 And the market dip accelerated on August 1. 48 00:02:49,759 --> 00:02:53,019 Now as of 5th of this, this month, which is August 5th, the S& P 49 00:02:53,019 --> 00:02:56,679 500 index had gone down by 9. 50 00:02:56,679 --> 00:02:56,929 7%. 51 00:02:56,929 --> 00:03:01,179 And remember S& P 500 represents a collection of 500 largest 52 00:03:01,189 --> 00:03:04,909 companies listed in the stock exchanges in the United States. 53 00:03:05,374 --> 00:03:09,654 NASDAQ that has more than 3, 000 companies listed in it, 54 00:03:10,054 --> 00:03:13,464 and that are mostly technology companies ended up dipping by 15. 55 00:03:13,544 --> 00:03:15,314 7%. 56 00:03:16,104 --> 00:03:21,354 And Russell 2000, which is a collection of 2000 smallest to 57 00:03:21,354 --> 00:03:24,424 midsize companies went down by 13%. 58 00:03:25,054 --> 00:03:28,694 Now, obviously we can't forget crypto, but as you all know, 59 00:03:28,894 --> 00:03:30,754 crypto is highly volatile. 60 00:03:30,754 --> 00:03:30,974 Kyle. 61 00:03:31,284 --> 00:03:38,614 Since July 29 this year, Bitcoin, which is a major cryptocurrency, went down by 29%. 62 00:03:39,134 --> 00:03:45,724 But as you can see, Bitcoin has had a downward trajectory since March last year. 63 00:03:45,724 --> 00:03:47,534 So if you notice, it's just been going down and down. 64 00:03:47,834 --> 00:03:54,799 And since March to this point, the Bitcoin currency went down by 33%. 65 00:03:55,229 --> 00:03:58,359 those of you who have been hoping for this to grow, go up, and may have 66 00:03:58,359 --> 00:04:02,439 invested in March, April last year, have not seen their wealth grow. 67 00:04:02,439 --> 00:04:03,439 It's actually going down. 68 00:04:04,139 --> 00:04:06,149 And I'll discuss several reasons why this has happened. 69 00:04:06,779 --> 00:04:10,599 Now, another, very popular cryptocurrency is Same thing happened in Ethereum. 70 00:04:10,939 --> 00:04:12,639 Since July 22nd. 71 00:04:13,344 --> 00:04:18,774 Ethereum dropped by a whopping 40 percent until August 2nd, until August 5th. 72 00:04:19,144 --> 00:04:23,914 But since March of last year, till the 5th of August this 73 00:04:23,914 --> 00:04:25,444 year, it had dropped by 48%. 74 00:04:27,144 --> 00:04:31,404 So clearly, Vinayji and everybody else, something has been happening in the 75 00:04:31,404 --> 00:04:33,664 market that has brought us volatility. 76 00:04:34,084 --> 00:04:34,334 Yeah. 77 00:04:34,394 --> 00:04:34,734 Yep. 78 00:04:35,004 --> 00:04:36,354 So what are these reasons? 79 00:04:36,474 --> 00:04:38,184 And I'm going to explore those right now with you all. 80 00:04:39,474 --> 00:04:45,914 So first reason is that last week US job data for July came in and the employment 81 00:04:45,924 --> 00:04:51,814 rate fell below the consensus and the unemployment rate Increased by 0. 82 00:04:51,814 --> 00:04:54,644 2 percent to an amount, which is 4. 83 00:04:54,644 --> 00:04:55,734 3%. 84 00:04:56,084 --> 00:04:59,224 So although overall it's going down, but in the last little 85 00:04:59,224 --> 00:05:00,404 while it's been increasing. 86 00:05:00,404 --> 00:05:03,604 So last month, the unemployment rate was sitting as 4. 87 00:05:03,754 --> 00:05:03,914 3%. 88 00:05:05,564 --> 00:05:10,144 But a recent study by Fitch, which just came out a couple days ago, said that 89 00:05:10,144 --> 00:05:17,574 the jobless rate was largely driven by workers joining and rejoining the labor 90 00:05:17,574 --> 00:05:19,594 force rather than a meaningful job loss. 91 00:05:20,304 --> 00:05:24,674 And permanent job losses are still contained, only making 92 00:05:24,674 --> 00:05:27,544 up less than 20 percent of the increase in unemployment rate. 93 00:05:28,524 --> 00:05:34,044 So these are people going in and out while hiring rates have slowed down 94 00:05:34,054 --> 00:05:41,709 meaningfully Layoffs remain close to a 20 year low, which is a good news And 95 00:05:41,719 --> 00:05:46,279 this triggered a recession indicator called the Sam recession indicator, 96 00:05:46,319 --> 00:05:50,149 which in the past has been accurate predictor of recession by 100%. 97 00:05:51,909 --> 00:05:52,619 Oh, wow. 98 00:05:52,949 --> 00:05:55,679 So when people are like, hey, this thing has been correct 100 percent of the 99 00:05:55,699 --> 00:05:59,079 time and it got triggered again, oh my goodness, there was a panic all over. 100 00:06:00,419 --> 00:06:01,799 So I'll show you that indicator. 101 00:06:01,829 --> 00:06:05,619 And interestingly, this indicator is available in the US government's website. 102 00:06:06,169 --> 00:06:10,729 So this indicator, which is called the Sam recession indicator, it signals 103 00:06:10,729 --> 00:06:15,149 the start of a recession when the three month moving average of the 104 00:06:15,149 --> 00:06:18,409 national unemployment rate rises by 0. 105 00:06:18,409 --> 00:06:23,199 5 percent points or more relative to the minimum of the three month 106 00:06:23,219 --> 00:06:25,499 averages from the past 12 months. 107 00:06:26,599 --> 00:06:27,469 But this time. 108 00:06:27,714 --> 00:06:31,534 This indicator was triggered by an increased labor supply rather 109 00:06:31,534 --> 00:06:34,684 than the unemployment rate, making this a false positive. 110 00:06:35,154 --> 00:06:38,524 And this indicator is actually made by this lady named Claudia. 111 00:06:39,224 --> 00:06:42,164 So when people asked, okay, Claudia, Sam, what do you think? 112 00:06:42,344 --> 00:06:43,134 This is what she said. 113 00:06:43,194 --> 00:06:48,574 She says, our understanding of what is happening right now is so very challenged. 114 00:06:48,874 --> 00:06:53,704 And what that means is, and I will be the first to say as someone 115 00:06:53,874 --> 00:06:58,634 who has this rule attached to her name, don't just rely on one tool. 116 00:06:58,849 --> 00:07:00,389 She says, don't just rely on one tool. 117 00:07:00,599 --> 00:07:04,579 She also says, we are not in recession now, contrary to the historical 118 00:07:04,589 --> 00:07:09,469 signal from the Sam rule, but the momentum is in that direction. 119 00:07:09,729 --> 00:07:13,619 A recession is not inevitable, and there is a substantial 120 00:07:13,619 --> 00:07:15,979 scope to reduce interest rates. 121 00:07:15,979 --> 00:07:18,739 So what she's basically saying is, don't just rely on this 122 00:07:18,749 --> 00:07:20,209 one indicator that I have. 123 00:07:20,869 --> 00:07:22,409 You got to look at other things. 124 00:07:22,749 --> 00:07:25,899 And she's saying recession is not inevitable. 125 00:07:26,949 --> 00:07:29,419 There's no, a recession may not happen. 126 00:07:29,419 --> 00:07:31,459 And she's saying there are certain things you can do. 127 00:07:32,459 --> 00:07:37,479 Now, remember in order for recession to take place, right? 128 00:07:37,479 --> 00:07:39,399 Certain things have to happen in the economy. 129 00:07:40,929 --> 00:07:41,669 What has to happen? 130 00:07:41,669 --> 00:07:44,099 The GDP has to continue for continuously fall. 131 00:07:44,709 --> 00:07:46,909 But here is the GDP of the United States. 132 00:07:47,169 --> 00:07:48,279 This is a Q2. 133 00:07:48,339 --> 00:07:54,299 But if you notice the three quarters before the GDP was going down, right? 134 00:07:54,499 --> 00:07:59,789 It was going down, but in from Q1 to Q2, GDP started to raise. 135 00:08:00,144 --> 00:08:04,384 So if GDP is rising, that doesn't show there's recession coming, right? 136 00:08:04,384 --> 00:08:07,404 And the GDP in the second quarter reached 2. 137 00:08:07,444 --> 00:08:08,824 8 percent growth in the U. 138 00:08:08,824 --> 00:08:09,104 S. 139 00:08:09,654 --> 00:08:10,094 Yes. 140 00:08:10,794 --> 00:08:13,284 Even though it was shrinking before, but then it ended up raising. 141 00:08:15,364 --> 00:08:19,244 Now I'm going to show you these charts that I have of what 142 00:08:19,254 --> 00:08:23,774 happened with inflation in 2021 and continued till 2022, right? 143 00:08:23,824 --> 00:08:26,494 In 2021, inflation started increasing right here. 144 00:08:26,844 --> 00:08:30,714 So inflation started increasing, leading to a rise in the 145 00:08:30,714 --> 00:08:32,014 price of goods and services. 146 00:08:32,064 --> 00:08:35,154 And to curb inflation, the federal reserve came in and said 147 00:08:35,154 --> 00:08:36,874 we need to do something, right? 148 00:08:36,944 --> 00:08:39,344 What had happened before was there was too much free money. 149 00:08:39,624 --> 00:08:40,924 Why was there was too much free money? 150 00:08:40,924 --> 00:08:43,004 Because the interest rate was almost zero. 151 00:08:44,314 --> 00:08:46,264 So when the interest rates were almost zero, that means people 152 00:08:46,264 --> 00:08:48,714 were taking money and investing in all kinds of things, right? 153 00:08:48,714 --> 00:08:50,714 They could be going on vacation, they could be investing 154 00:08:50,714 --> 00:08:52,354 in consumer goods, right? 155 00:08:53,044 --> 00:08:57,484 So when money kept flowing in the market, that means the demands of 156 00:08:57,484 --> 00:08:59,134 general goods and services increased. 157 00:08:59,264 --> 00:09:02,444 And when the demands of goods and services increases, then the businessmen 158 00:09:02,444 --> 00:09:05,164 come and say let's raise the price because we're going to make more money. 159 00:09:05,424 --> 00:09:08,274 And when they make more money, things just, things become more 160 00:09:08,274 --> 00:09:09,634 and more expensive for consumers. 161 00:09:09,824 --> 00:09:11,284 So that's exactly what started happening. 162 00:09:11,514 --> 00:09:14,854 Inflation started to go because things just kept getting more and more expensive. 163 00:09:15,334 --> 00:09:17,464 So Fed said, we need to cut this. 164 00:09:17,774 --> 00:09:18,744 We need to stop. 165 00:09:18,754 --> 00:09:22,484 We need to halt this sudden increase in prices or continuous increase in prices. 166 00:09:22,774 --> 00:09:25,284 So they have a few tools in their toolkit. 167 00:09:25,514 --> 00:09:27,404 And one of the tools is interest rate. 168 00:09:28,064 --> 00:09:30,424 So they said, we're going to start increasing the interest rate. 169 00:09:30,504 --> 00:09:33,674 So from practically zero, they started raising interest rates. 170 00:09:34,084 --> 00:09:37,034 Now interest rates had been this high in the past, but what happened, 171 00:09:37,244 --> 00:09:41,194 which was unique this time was the rate of growth, the rise over 172 00:09:41,194 --> 00:09:43,464 run was the fastest in history. 173 00:09:43,804 --> 00:09:45,404 And that spooked investors. 174 00:09:45,804 --> 00:09:49,374 So investors took money out of the stock market and started putting in bonds. 175 00:09:49,914 --> 00:09:54,234 And at the same time, when the monies became difficult to get, because 176 00:09:54,244 --> 00:09:58,314 interest rates were high, things started to become cooler, right? 177 00:09:58,344 --> 00:09:59,744 And inflation started to go down. 178 00:09:59,834 --> 00:10:03,204 Because the money supply goes down, small to medium sized businesses 179 00:10:03,204 --> 00:10:06,634 that depend heavily on debt can no longer afford the debt. 180 00:10:07,094 --> 00:10:10,044 So when they can't afford the debt, they stop taking debt, and then suddenly 181 00:10:10,044 --> 00:10:13,564 the projects and programs that they would have otherwise spent money 182 00:10:13,564 --> 00:10:15,334 on, they stop spending that money. 183 00:10:15,964 --> 00:10:18,884 And then unemployment rates start to go high, And when that 184 00:10:18,884 --> 00:10:22,074 happens, people become nervous and they say, let's not spend money. 185 00:10:22,304 --> 00:10:27,844 And when they stopped spending money, then the demand for things goes down and the 186 00:10:27,844 --> 00:10:29,594 supply increases and the price goes down. 187 00:10:29,634 --> 00:10:30,704 And that's exactly what happened. 188 00:10:31,499 --> 00:10:34,879 So the United States inflation rate started to go down and the 189 00:10:34,889 --> 00:10:39,679 United States goal was to bring the inflation rate to two percent. 190 00:10:39,759 --> 00:10:40,409 Two percent. 191 00:10:40,409 --> 00:10:40,659 Yeah. 192 00:10:40,699 --> 00:10:45,029 So they came, as of last month, came very close to that, which 193 00:10:45,159 --> 00:10:50,089 means what they're hoping to achieve was actually working, right? 194 00:10:51,359 --> 00:10:53,239 So here I have a chart. 195 00:10:53,579 --> 00:10:56,289 that shows the consumer price index. 196 00:10:56,579 --> 00:11:01,489 So last month, the consumer price index for the first time ever hit 197 00:11:01,539 --> 00:11:05,959 negative territory, exactly what the feds were hoping to achieve. 198 00:11:06,459 --> 00:11:08,459 March, it came to a certain height. 199 00:11:08,879 --> 00:11:10,689 April, it remained the same. 200 00:11:10,919 --> 00:11:12,579 May, it went down. 201 00:11:12,619 --> 00:11:13,699 June, it was zero. 202 00:11:13,729 --> 00:11:17,589 And then in July, it went to negative territory, which was fantastic. 203 00:11:18,039 --> 00:11:19,849 And CPI is monthly. 204 00:11:19,849 --> 00:11:21,749 So as of July 11, this is what it was showing. 205 00:11:21,769 --> 00:11:26,589 And when you analyze that, the analyze inflation rate came to 3%. 206 00:11:27,179 --> 00:11:27,779 Wow. 207 00:11:27,779 --> 00:11:28,999 Which was absolutely fantastic. 208 00:11:29,399 --> 00:11:34,249 So the figures, when you look at the economy is actually showing good signs. 209 00:11:34,539 --> 00:11:41,419 But now what's going on in the market is the investors and people in the 210 00:11:41,419 --> 00:11:46,779 market are saying maybe feds took too long, maybe feds should have lowered 211 00:11:46,779 --> 00:11:48,689 the interest rates some time ago. 212 00:11:49,229 --> 00:11:54,259 And you know what, if the figures that we got in August of unemployment rate in 213 00:11:54,259 --> 00:11:55,759 July because they come one month later. 214 00:11:56,014 --> 00:12:00,354 So if those had come a month prior, maybe the feds would have lowered 215 00:12:00,354 --> 00:12:04,124 the interest rates already, but they just got the unemployment figures. 216 00:12:04,134 --> 00:12:05,494 So now they're acting. 217 00:12:05,534 --> 00:12:09,324 And then the predictions of the rate cuts have now changed drastically, 218 00:12:09,324 --> 00:12:10,054 which I'm going to show you. 219 00:12:10,119 --> 00:12:10,459 Yes. 220 00:12:10,639 --> 00:12:11,149 Yes. 221 00:12:11,279 --> 00:12:15,379 Now, interestingly, countries like Canada already have, were already foreseeing 222 00:12:15,409 --> 00:12:18,599 this and they had started to cut their interest rates starting June this year. 223 00:12:18,609 --> 00:12:21,439 So in Canada, I'm in Canada, our interest rates had already been 224 00:12:21,439 --> 00:12:24,529 cut and there are projections of these being cut in the future. 225 00:12:24,559 --> 00:12:26,949 Now same thing is going to replicate in the United States. 226 00:12:33,009 --> 00:12:37,609 Did you know that Japan, which is one of the major economies in the world, 227 00:12:38,109 --> 00:12:39,889 has a very strong banking system, right? 228 00:12:39,889 --> 00:12:40,419 We all know that. 229 00:12:40,729 --> 00:12:43,839 But did you know that the interest rates of Japanese yen, 230 00:12:44,429 --> 00:12:45,929 which is in the yellow line, 231 00:12:46,179 --> 00:12:51,049 Had been practically zero since the year 2008. 232 00:12:51,609 --> 00:12:52,189 Free money. 233 00:12:52,839 --> 00:12:54,139 Until just now. 234 00:12:54,579 --> 00:12:55,739 Until two weeks ago. 235 00:12:56,179 --> 00:12:57,137 I did not know that. 236 00:12:57,137 --> 00:13:00,099 So what many people were doing, many traders are like, oh great, 237 00:13:00,109 --> 00:13:01,579 here's an arbitrage opportunity. 238 00:13:01,709 --> 00:13:04,559 What they would do is they'd take a loan from Japan, And they would 239 00:13:04,559 --> 00:13:06,309 invest in the United States economy. 240 00:13:06,509 --> 00:13:09,429 So in the stock market, in the bond market, et cetera, et 241 00:13:09,429 --> 00:13:10,469 cetera, in the crypto markets. 242 00:13:11,629 --> 00:13:14,089 'cause they get free money from there and they're like, okay, we'll put money here. 243 00:13:14,229 --> 00:13:17,649 and the American, I guess equity and debt market had been very strong. 244 00:13:17,654 --> 00:13:18,554 So they were making money? 245 00:13:18,614 --> 00:13:18,834 Yes. 246 00:13:19,494 --> 00:13:23,424 so something happened that removed this arbitrage opportunity because 247 00:13:23,424 --> 00:13:27,454 money was so freely available in Japan and people would borrow this. 248 00:13:27,804 --> 00:13:30,594 Japanese inflation kept growing. 249 00:13:31,314 --> 00:13:32,814 They were like, we need to curb this. 250 00:13:32,814 --> 00:13:33,804 So here's a CPI. 251 00:13:33,804 --> 00:13:37,134 it was growing and then although it went down, but it started to grow again. 252 00:13:37,389 --> 00:13:39,979 So the bank of Japan says, that's it. 253 00:13:40,029 --> 00:13:43,829 No more are, we're not leaving this money, for almost 0 percent interest. 254 00:13:44,089 --> 00:13:48,149 So they said on 31st of July that we're going to raise interest rates. 255 00:13:48,599 --> 00:13:49,199 Yes. 256 00:13:49,249 --> 00:13:50,849 So no longer is it going to be 0%. 257 00:13:51,089 --> 00:13:52,819 And guess what happened on the 1st of August? 258 00:13:54,289 --> 00:13:57,059 People who had taken money out from Japan, they're like, Oh my 259 00:13:57,059 --> 00:13:58,259 goodness, now I have to pay money. 260 00:13:58,259 --> 00:14:00,309 This arbitrage opportunities is going away. 261 00:14:00,549 --> 00:14:04,709 So they started taking money out of the US stock exchanges and the bond market and 262 00:14:04,709 --> 00:14:06,919 the crypto market and put back in Japan. 263 00:14:07,299 --> 00:14:09,859 Consequently, the Japanese yen grew in price. 264 00:14:11,409 --> 00:14:14,569 And as because most of the, a lot of our big portion of the 265 00:14:14,569 --> 00:14:15,579 training happens through Amazon. 266 00:14:16,494 --> 00:14:17,074 Algorithmic trading. 267 00:14:17,074 --> 00:14:21,154 So these bots, when they saw suddenly money being plucked and sales are 268 00:14:21,154 --> 00:14:25,824 happening in the equity market debt market and the crypto market, these bonds started 269 00:14:25,864 --> 00:14:27,994 to sell and a ripple effect occurred. 270 00:14:28,804 --> 00:14:31,624 And when the ripple effect occurred, the market took a dip. 271 00:14:31,914 --> 00:14:36,624 And that's why I showed you that since August one market took a sudden dip. 272 00:14:37,024 --> 00:14:39,134 And it happened heavily in crypto market as well. 273 00:14:39,134 --> 00:14:42,354 But remember, cryptos are heavily volatile, but it happened in Nasdaq. 274 00:14:42,354 --> 00:14:45,584 It happened in S and P 500 and S and P 500, because it has 275 00:14:45,984 --> 00:14:47,344 500 of the largest companies. 276 00:14:47,344 --> 00:14:51,694 It had the lowest dip Nasdaq had larger and crypto markets just had crazy dips. 277 00:14:53,004 --> 00:14:54,044 So this was the other reason 278 00:14:56,804 --> 00:15:02,544 in 2022, as I mentioned, the feds raised interest rates at its fastest To defeat 279 00:15:02,544 --> 00:15:06,584 inflation, but now that the inflation is on a downtrend, the central banks 280 00:15:06,674 --> 00:15:11,584 can remove those brakes and press on the accelerator to increase the economy. 281 00:15:11,594 --> 00:15:12,444 And how do they do that? 282 00:15:12,454 --> 00:15:14,004 By lowering the interest rates. 283 00:15:14,584 --> 00:15:17,024 So feds are now looking to cut interest rates. 284 00:15:17,284 --> 00:15:21,574 I had mentioned last month that I view three cuts happening this year. 285 00:15:21,574 --> 00:15:28,654 And now as the time comes closer, those are starting to become more evident. 286 00:15:29,034 --> 00:15:32,734 and I think there's a possibility that if the unemployment rates keep 287 00:15:32,754 --> 00:15:38,184 coming out stronger, which means employment gets weaker this next 288 00:15:38,184 --> 00:15:41,484 month for the month of August, then I think they're going to deteriorate. 289 00:15:42,064 --> 00:15:45,264 They're going to probably do a cut of 50 basis points, and the 50 290 00:15:45,264 --> 00:15:47,244 basis point may continue occurring. 291 00:15:47,624 --> 00:15:51,304 If the economy continues to remain weak, but if the economic science 292 00:15:51,304 --> 00:15:54,634 shows signs of strength, then it's going to be 25 basis point. 293 00:15:54,814 --> 00:15:55,634 And that may continue. 294 00:15:55,664 --> 00:15:59,024 we have to see how it happens and to what numbers that happens, but 295 00:15:59,024 --> 00:16:00,364 it's invariably going to happen. 296 00:16:00,904 --> 00:16:04,844 But the forecast now for the longer duration is the following. 297 00:16:05,224 --> 00:16:07,164 So the rate cuts will continue happening. 298 00:16:07,799 --> 00:16:09,929 I think I'm projecting about three this year. 299 00:16:09,929 --> 00:16:14,979 So one, two, three, and then thereafter, they're going to continue happening. 300 00:16:14,979 --> 00:16:18,649 So all the way till the middle or end of 2026, I think the feds are going 301 00:16:18,649 --> 00:16:23,559 to continue cutting rates and come below 2%, which is good news for real 302 00:16:23,559 --> 00:16:27,804 estate because as the mortgage rates go down, real estate prices go up. 303 00:16:28,224 --> 00:16:33,404 And at the same rate, as a money becomes more available, businesses can take loans 304 00:16:33,434 --> 00:16:37,214 and start injecting in their businesses and that increase, that pushes money 305 00:16:37,214 --> 00:16:39,924 in the markets, demand goes up and the stock market also goes up, which 306 00:16:39,924 --> 00:16:41,584 means good times are about to come. 307 00:16:41,934 --> 00:16:44,254 But you got to know how to play this game otherwise people 308 00:16:44,254 --> 00:16:45,194 will continue losing money. 309 00:16:46,654 --> 00:16:49,554 So here's what the Fed watch tool is now saying. 310 00:16:49,904 --> 00:16:55,544 Currently, the interest rates as of now, as of today are between 525 basis points. 311 00:16:56,074 --> 00:16:59,574 525 to 550 basis points, right? 312 00:16:59,974 --> 00:17:00,184 Yep. 313 00:17:00,214 --> 00:17:04,044 Now, as of today, and I took the screenshot this morning, as of today 314 00:17:04,224 --> 00:17:09,764 on September 18th, when the next FOMC meeting occurs, there is a likelihood 315 00:17:09,804 --> 00:17:16,454 of the feds cutting interest rates by 25 basis point to 500 to 525. 316 00:17:16,614 --> 00:17:18,134 And the probability is 50. 317 00:17:18,394 --> 00:17:18,944 5%. 318 00:17:20,234 --> 00:17:23,164 But remember earlier, I was saying that if the economic indicators 319 00:17:23,164 --> 00:17:27,044 keep coming out weak, then they may cut out 50 basis points. 320 00:17:28,064 --> 00:17:28,714 Guess what? 321 00:17:30,124 --> 00:17:33,724 While 25 basis point cut is 50%. 322 00:17:34,374 --> 00:17:38,664 The chances of cut by another 25 point is also 50%. 323 00:17:39,069 --> 00:17:39,479 Which is 49. 324 00:17:39,699 --> 00:17:40,409 5%. 325 00:17:41,389 --> 00:17:46,339 So there's a probability it may cut to 475 to 500 basis points, bringing 326 00:17:46,339 --> 00:17:49,529 this reduction potentially to 0. 327 00:17:49,529 --> 00:17:51,539 5%. 328 00:17:51,869 --> 00:17:53,109 And that's looking in September. 329 00:17:53,279 --> 00:17:57,009 Now let's fast forward two more months to November. 330 00:17:57,864 --> 00:18:02,464 and in November, there is a potential of a rate cut by 39 331 00:18:02,464 --> 00:18:05,184 percent to 475 to 500 basis points. 332 00:18:05,184 --> 00:18:07,664 So if it doesn't happen here, it's going to happen here. 333 00:18:08,054 --> 00:18:13,374 But at that time, there is a higher probability of a rate cut by 49. 334 00:18:13,374 --> 00:18:15,694 7 percent to 550 to 4. 335 00:18:16,024 --> 00:18:17,794 475 basis points. 336 00:18:17,884 --> 00:18:23,934 So that's going to be a reduction from today, a potential of a reduction of 0. 337 00:18:23,935 --> 00:18:24,514 75%. 338 00:18:25,064 --> 00:18:25,314 Okay. 339 00:18:25,564 --> 00:18:27,174 Now let's fast forward. 340 00:18:27,494 --> 00:18:29,564 Remember, I was saying there's potential for three rate cuts. 341 00:18:29,844 --> 00:18:34,824 So in December 2024, there is a 46. 342 00:18:34,864 --> 00:18:40,734 8 percent probability of rates coming down to 425 to 450 basis point, which 343 00:18:40,744 --> 00:18:43,294 from today brings it to minus 1%. 344 00:18:44,049 --> 00:18:44,289 Yes. 345 00:18:44,309 --> 00:18:47,639 Like I said in the two slides ago, these rates are expected to 346 00:18:47,639 --> 00:18:50,919 continue going down because now Feds have a very important job. 347 00:18:50,929 --> 00:18:54,559 Their job is to make sure the economy stays not too hot, not too cool. 348 00:18:54,779 --> 00:18:56,309 It stays in the Goldilocks zone. 349 00:18:57,009 --> 00:19:00,729 So because inflation increased so much post COVID, they had to put 350 00:19:00,729 --> 00:19:02,409 breaks by increasing interest rates. 351 00:19:02,410 --> 00:19:04,249 Now they've got to press on the accelerator. 352 00:19:04,814 --> 00:19:05,244 Yes. 353 00:19:05,264 --> 00:19:05,824 So true. 354 00:19:06,104 --> 00:19:10,774 This is so in alignment with, I've been reading also, and thank 355 00:19:10,774 --> 00:19:15,104 you so much for really showing so nicely the whole progression. 356 00:19:15,354 --> 00:19:21,094 Hey guys, if you missed any part of it, I would highly recommend that you go back 357 00:19:21,154 --> 00:19:26,944 on the video edition of our podcast and the show so that you could really see 358 00:19:26,954 --> 00:19:30,674 what and Amitji just makes it so simple. 359 00:19:31,024 --> 00:19:36,544 He keeps, he just gives you no fluff whatsoever straight to the point. 360 00:19:36,794 --> 00:19:38,404 And it's so understandable. 361 00:19:38,424 --> 00:19:42,854 See, a lot of times all these economic terms are like Greeks, Greek, 362 00:19:42,874 --> 00:19:44,264 how many people don't understand. 363 00:19:44,474 --> 00:19:50,514 And a lot of people are not analytical in mindset, but this makes it so simple. 364 00:19:50,664 --> 00:19:51,404 I just love it. 365 00:19:51,754 --> 00:19:53,834 And I also read up the promise. 366 00:19:53,884 --> 00:19:57,144 We promise that we'll bring it to you every two months. 367 00:19:57,174 --> 00:19:58,934 Now, not even every three months. 368 00:19:59,204 --> 00:20:00,914 I think it's going to be fantastic. 369 00:20:00,924 --> 00:20:05,064 So that, Amitji can be really sharing with us all the great nuggets that 370 00:20:05,094 --> 00:20:10,324 he has mastered so that we can all really become very financially savvy 371 00:20:10,784 --> 00:20:15,594 in doing the markets, changing of the markets and investing in stocks 372 00:20:15,594 --> 00:20:19,104 and all along with real estate, because real estate is a trick. 373 00:20:19,519 --> 00:20:20,019 Thank you. 374 00:20:20,099 --> 00:20:20,459 Thank you. 375 00:20:20,519 --> 00:20:21,229 You're absolutely right. 376 00:20:21,229 --> 00:20:22,469 And I was in the same boat, right? 377 00:20:22,469 --> 00:20:26,399 Like when I read articles, I read so much fluff on the internet. 378 00:20:27,369 --> 00:20:31,479 Sometimes, unfortunately, even some prominent analysts get it wrong. 379 00:20:32,089 --> 00:20:33,099 Now I do want to say. 380 00:20:33,384 --> 00:20:34,604 There's nobody has a crystal ball. 381 00:20:34,624 --> 00:20:36,684 Everybody's basically making their assumptions based 382 00:20:36,694 --> 00:20:38,124 on their past experiences. 383 00:20:38,174 --> 00:20:39,724 This is how I view the market. 384 00:20:39,734 --> 00:20:42,374 That's why I'm saying, I'm not telling people to go buy anything. 385 00:20:42,904 --> 00:20:44,884 I'm sharing how this is my view. 386 00:20:44,894 --> 00:20:45,794 This is how I see it. 387 00:20:45,834 --> 00:20:47,055 I base it on facts. 388 00:20:47,755 --> 00:20:48,755 The facts are right in front of you. 389 00:20:49,015 --> 00:20:51,045 This information is freely available to you. 390 00:20:52,985 --> 00:20:53,425 Totally. 391 00:20:53,445 --> 00:20:53,645 No. 392 00:20:53,645 --> 00:20:55,475 And I love the clarity. 393 00:20:55,505 --> 00:21:00,695 I like the simplicity and I love that each and every graph you've covered, 394 00:21:01,045 --> 00:21:04,115 it's so succinct thank you so much Yeah. 395 00:21:04,165 --> 00:21:04,625 So now. 396 00:21:05,675 --> 00:21:08,555 everybody's going to say Amit, how is the market going to perform this year? 397 00:21:09,025 --> 00:21:13,535 So I have a chart that shows you the average performance of S& P 500 in 398 00:21:13,615 --> 00:21:16,925 all election years since the year, 1950, and you're going to notice 399 00:21:17,125 --> 00:21:23,535 that the summertime is typically supposed to be a rough patch, right? 400 00:21:24,345 --> 00:21:28,275 And there's supposed to be an increased volatility and volatility remains 401 00:21:28,285 --> 00:21:30,335 all the way till election occurs. 402 00:21:30,335 --> 00:21:32,915 And typically we know election occurs around, first of November. 403 00:21:33,165 --> 00:21:36,605 So till then, there is typically supposed to be volatility. 404 00:21:36,935 --> 00:21:40,695 And after that market grows, which is called the Santa Claus rally. 405 00:21:40,925 --> 00:21:44,835 Now for longterm investment investors, many opportunities are 406 00:21:44,835 --> 00:21:47,585 going to come to pick stocks of great quality companies this year. 407 00:21:47,785 --> 00:21:50,685 But remember, Don't just invest your money in any stock. 408 00:21:50,735 --> 00:21:54,535 Invest in stocks of great quality companies that have a wide economic moat, 409 00:21:54,555 --> 00:21:58,945 which means they have a huge barrier to entry from competitors, that they 410 00:21:58,945 --> 00:22:03,175 have strong financial statements, and remember, to pre plan your allocations, 411 00:22:03,345 --> 00:22:05,555 so do not over allocate in one stock. 412 00:22:06,135 --> 00:22:06,495 Yes. 413 00:22:07,200 --> 00:22:10,540 And your investment process ultimately is highly important. 414 00:22:10,840 --> 00:22:13,530 If a good investment process, you've thought through, you're 415 00:22:13,530 --> 00:22:14,550 going to keep making money. 416 00:22:14,620 --> 00:22:17,400 I see that in my portfolio regularly, right? 417 00:22:17,400 --> 00:22:19,000 It just continues to grow. 418 00:22:19,030 --> 00:22:22,080 And whenever the market takes a dip, I'm like, Hey, I'm sitting in cash. 419 00:22:22,110 --> 00:22:24,790 Now it's time for me to enter throughout this year. 420 00:22:25,030 --> 00:22:29,100 I had very few opportunities to enter, but last week market just took a great turn. 421 00:22:29,100 --> 00:22:31,430 I was like, Hey, time to go buy. 422 00:22:31,460 --> 00:22:32,890 It's on Christmas sale right now. 423 00:22:33,380 --> 00:22:33,950 I love it. 424 00:22:33,950 --> 00:22:38,915 We went shopping , so carry on with this and any of viewers who want to, 425 00:22:38,965 --> 00:22:44,185 better learn how to invest or follow my views, like I have a free channel. 426 00:22:44,185 --> 00:22:46,555 Just join me on Amid and then Financial Knowledge. 427 00:22:46,585 --> 00:22:49,165 I have on every one of the slides at the top, I've written the Facebook group. 428 00:22:50,125 --> 00:22:50,565 Yes. 429 00:22:50,595 --> 00:22:51,585 I'm so happy. 430 00:22:51,775 --> 00:22:52,485 And you know what? 431 00:22:52,515 --> 00:22:58,175 I would love maybe as a follow up with this one in about even two weeks, we 432 00:22:58,175 --> 00:23:04,785 could talk about what companies should, how to determine, what big companies 433 00:23:04,825 --> 00:23:07,015 one should be looking into analyzing. 434 00:23:07,355 --> 00:23:07,545 Yeah. 435 00:23:07,545 --> 00:23:10,495 I can definitely share the mechanism of analyzing. 436 00:23:10,515 --> 00:23:10,965 Absolutely. 437 00:23:11,365 --> 00:23:13,075 There's a whole science and math to it. 438 00:23:13,075 --> 00:23:15,375 there are some key fundamentals everybody's got to remember. 439 00:23:15,645 --> 00:23:19,695 And if you follow those fundamentals, which are easy to at least start 440 00:23:19,695 --> 00:23:23,145 getting an idea of, and then you can go into deeper study because 441 00:23:23,145 --> 00:23:26,425 this is a vast field and wall street is full of very educated people. 442 00:23:26,605 --> 00:23:28,770 So it takes time, but yes, I'd be very happy. 443 00:23:28,770 --> 00:23:29,795 And this is my passion. 444 00:23:30,350 --> 00:23:31,520 that'll be fantastic. 445 00:23:31,550 --> 00:23:32,490 That'll be great. 446 00:23:32,560 --> 00:23:33,780 No, I can't wait. 447 00:23:34,000 --> 00:23:38,210 I know for last six or maybe a year we've been thinking about, doing 448 00:23:38,500 --> 00:23:43,770 joint, videos cast and everything and putting them into a reservoir. 449 00:23:44,670 --> 00:23:48,370 Where it's a knowledge base, which you are already doing it in the 450 00:23:48,370 --> 00:23:50,600 Facebook and YouTube and everything. 451 00:23:50,600 --> 00:23:54,750 And we could even promote that on both the sites, your channel kind of view. 452 00:23:54,930 --> 00:23:55,600 Yeah. 453 00:23:55,620 --> 00:23:56,300 No, I can do that. 454 00:23:56,710 --> 00:23:57,360 My pleasure. 455 00:23:57,610 --> 00:24:01,940 Cause I've got a lot of following as some in every channel. 456 00:24:01,940 --> 00:24:03,820 So no, I'm very excited about it. 457 00:24:04,195 --> 00:24:06,345 This is, and I'm learning in the process. 458 00:24:06,345 --> 00:24:10,375 I feel I made good money, but there's always room to grow 459 00:24:10,405 --> 00:24:12,855 and understand the semantics. 460 00:24:13,655 --> 00:24:18,055 Another reason The market distress can be attributed to 461 00:24:18,055 --> 00:24:19,685 the uncertainty in how the U. 462 00:24:19,685 --> 00:24:19,825 S. 463 00:24:19,875 --> 00:24:20,985 elections could turn out. 464 00:24:21,485 --> 00:24:26,745 Remember, the stock market does not like uncertainty and uncertainty in the stock 465 00:24:26,745 --> 00:24:28,625 market exists in the short term, right? 466 00:24:28,735 --> 00:24:29,085 Yeah. 467 00:24:29,385 --> 00:24:34,055 Until very recently, it was looking like Donald Trump was going to 468 00:24:34,055 --> 00:24:37,285 be the clear winner of the United States presidential elections. 469 00:24:38,315 --> 00:24:42,175 But ever since Kamala Harris came in the picture, the certainty of Donald 470 00:24:42,195 --> 00:24:44,355 Trump winning the election has eroded. 471 00:24:44,520 --> 00:24:46,600 No, I'm not saying one is going to win or the other is going to sing. 472 00:24:46,600 --> 00:24:50,710 I'm just saying that certainty has eroded and stock market hates uncertainty. 473 00:24:52,150 --> 00:24:53,370 Let's not go into predictions. 474 00:24:53,440 --> 00:24:56,870 Let's look at how the markets have behaved in the past since 475 00:24:56,900 --> 00:25:00,320 1957 all the way until now. 476 00:25:00,320 --> 00:25:06,410 So until from 1957 until 2023 under Democratic and Republican 477 00:25:06,730 --> 00:25:10,100 presidents and what has the returns of the S and P 500 been? 478 00:25:10,420 --> 00:25:16,810 You'll notice that the stock market on average under democratic presidents 479 00:25:17,070 --> 00:25:21,470 Returns an annualized return of 11. 480 00:25:21,470 --> 00:25:32,580 4 Okay, and while the same s& p 500 under a republican president returns Wow. 481 00:25:33,440 --> 00:25:37,710 So while, yes, market doesn't like the uncertainty, it doesn't really 482 00:25:37,710 --> 00:25:40,930 matter who comes, but let's say even if Democrats end up winning. 483 00:25:42,525 --> 00:25:45,015 Nothing to worry, folks, the stock market is going to go up and it 484 00:25:45,015 --> 00:25:46,235 may even perform even better. 485 00:25:46,805 --> 00:25:48,795 And that's what the history has to show. 486 00:25:50,365 --> 00:25:56,815 So in other words, election year, which comes like every four years, we can 487 00:25:56,835 --> 00:25:59,605 really expect the market to take off. 488 00:25:59,765 --> 00:26:00,685 That's what it's saying. 489 00:26:00,760 --> 00:26:07,140 So how the market behaves in the election year is marked by this chart, 490 00:26:07,150 --> 00:26:11,090 which shows me the average of how the election year, how the S& P 500 491 00:26:11,140 --> 00:26:14,320 performs in election years since 1950. 492 00:26:14,350 --> 00:26:18,930 And what that shows is market has typically an upward trajectory. 493 00:26:19,285 --> 00:26:25,305 Until summer, then a sideways trajectory in the summer, and then it picks up And 494 00:26:25,305 --> 00:26:29,295 sometimes even, and towards, September, October even takes a heavy dip. 495 00:26:30,925 --> 00:26:35,475 But after the election, because the market has now understood the certainty knows who 496 00:26:35,475 --> 00:26:40,345 is in power and, so when it knows who's in power, the market basically goes off. 497 00:26:40,635 --> 00:26:43,595 And typically towards the end of the year, this time. 498 00:26:44,200 --> 00:26:45,910 It's called the Santa Claus Rally. 499 00:26:47,340 --> 00:26:48,630 And what is Santa Claus Rally? 500 00:26:48,650 --> 00:26:53,440 Santa Claus Rally is basically a time of the year where people 501 00:26:53,440 --> 00:26:56,700 like you and me and everybody else goes and buys Christmas gifts and 502 00:26:56,700 --> 00:26:58,030 spends a lot of money in the market. 503 00:26:58,500 --> 00:27:01,340 And when we spend money in the market, companies make money. 504 00:27:01,350 --> 00:27:02,630 And when companies make money, we make money. 505 00:27:02,680 --> 00:27:05,180 their returns become better and their stocks go up and that's 506 00:27:05,500 --> 00:27:06,690 basically what happens in the market. 507 00:27:07,020 --> 00:27:10,700 Now you cannot essentially time it by the exact week because 508 00:27:10,700 --> 00:27:12,010 it's never going to be identical. 509 00:27:12,020 --> 00:27:14,590 This dotted chart that I have is an average. 510 00:27:14,790 --> 00:27:19,760 So sometimes a certain, growth may happen a month after a month before, and same 511 00:27:19,760 --> 00:27:23,780 thing with dips like this year, instead of a growth in August, there was a dip. 512 00:27:24,080 --> 00:27:26,800 So maybe it was this dip that happened earlier, or maybe 513 00:27:26,800 --> 00:27:29,080 this dip that was supposed to happen previously happened now. 514 00:27:29,630 --> 00:27:33,450 Nobody really knows that, but we got to understand is volatility occurs. 515 00:27:33,590 --> 00:27:35,100 to embrace volatility. 516 00:27:35,430 --> 00:27:39,200 And yes, as long as you know how to select company stocks of great quality 517 00:27:39,200 --> 00:27:43,790 companies and be able to mathematically calculate what the fair market value is. 518 00:27:44,545 --> 00:27:46,745 you will know what to buy and when to buy. 519 00:27:47,605 --> 00:27:49,505 from all the people that I run into. 520 00:27:50,400 --> 00:27:53,620 98 to 99 percent have no clue how to calculate the 521 00:27:53,620 --> 00:27:54,870 fair market value of a stock. 522 00:27:54,910 --> 00:27:57,340 They have no idea what net present value is. 523 00:27:57,340 --> 00:27:59,200 They have no idea what discounted cash flow is. 524 00:27:59,560 --> 00:28:01,610 They have no idea how to value banks. 525 00:28:01,660 --> 00:28:03,260 You got to understand these things. 526 00:28:03,290 --> 00:28:07,330 people ignore finance, but everybody wants to make money and have their wealth grow. 527 00:28:07,690 --> 00:28:08,780 how can your wealth grow? 528 00:28:08,820 --> 00:28:14,170 If you don't know finance, you've got to understand this stuff, or at least 529 00:28:14,180 --> 00:28:15,760 some basics you got to understand. 530 00:28:16,360 --> 00:28:19,290 Now, going back to the next chart where you asked me a question, 531 00:28:19,780 --> 00:28:25,920 this chart doesn't represent the performance of S& P in election years. 532 00:28:26,010 --> 00:28:29,900 It represents how the market does every year under 533 00:28:29,900 --> 00:28:31,555 presidents of different parties. 534 00:28:32,095 --> 00:28:37,955 if we have a president of the democratic party on average, SMP returns 11. 535 00:28:37,955 --> 00:28:38,625 4%. 536 00:28:38,625 --> 00:28:42,125 these are the averages that have been there since the year 1957. 537 00:28:42,465 --> 00:28:43,375 I haven't made this chart. 538 00:28:43,375 --> 00:28:44,775 I just got it from Motley Fool. 539 00:28:45,335 --> 00:28:46,075 Surely. 540 00:28:46,165 --> 00:28:46,625 Yes. 541 00:28:46,635 --> 00:28:49,535 The Republican, a president under Republican party. 542 00:28:49,565 --> 00:28:54,005 If that person comes into power, then the SMP 500 returns 543 00:28:54,055 --> 00:28:56,295 on average 7 percent a year. 544 00:28:56,645 --> 00:28:57,105 Got it. 545 00:28:57,255 --> 00:28:58,385 That's what this chart shows. 546 00:28:58,870 --> 00:28:59,260 Yes. 547 00:28:59,390 --> 00:28:59,790 Yes. 548 00:29:00,140 --> 00:29:00,330 Perfect. 549 00:29:00,350 --> 00:29:03,940 Now remember, I was telling you that the stock market is highly emotional 550 00:29:03,980 --> 00:29:09,370 and irrational in the short term, and it ends up getting spooked by many number 551 00:29:09,370 --> 00:29:11,470 of reasons or any number of reasons. 552 00:29:11,920 --> 00:29:15,540 But in the long term, the stock market grows to reach its fair market value. 553 00:29:16,640 --> 00:29:20,710 And the fair market values are calculated on the basis of companies earnings. 554 00:29:21,170 --> 00:29:24,980 So I have a chart here that shows you the earning that shows the earning 555 00:29:25,000 --> 00:29:28,100 insights of the S& P 500 companies. 556 00:29:28,395 --> 00:29:29,725 In the second quarter just ended. 557 00:29:29,775 --> 00:29:36,635 The green here represents all those companies and the percentage 558 00:29:36,635 --> 00:29:41,015 of those companies in the sectors that have beaten analyst estimates. 559 00:29:41,595 --> 00:29:46,105 Ah, the yellow represents when, it was in line with ES analyst estimates, 560 00:29:46,105 --> 00:29:51,925 and the red shows that these companies did not meet the analyst expectations. 561 00:29:51,925 --> 00:29:55,855 And right here is s and p 500, and you'll notice in s and p 562 00:29:55,855 --> 00:30:01,045 500 that 78% of the companies. 563 00:30:02,525 --> 00:30:08,715 Beat analyst expectations, 78 percent and inline were 6%. 564 00:30:08,715 --> 00:30:10,955 So 78 plus 6 is 84. 565 00:30:11,185 --> 00:30:17,065 That means 84 percent of the companies either beat analyst expectations or 566 00:30:17,065 --> 00:30:20,715 met analyst expectations, leaving only 16 percent of the companies 567 00:30:20,715 --> 00:30:21,895 below analyst expectations. 568 00:30:21,965 --> 00:30:28,410 So if the companies continue to produce good earnings, Their fair 569 00:30:28,410 --> 00:30:30,020 market values are going to grow. 570 00:30:30,740 --> 00:30:34,660 And if their fair market values continue to grow, then invariably in 571 00:30:34,690 --> 00:30:38,670 time, the stocks of those companies are going to get there shortly. 572 00:30:39,790 --> 00:30:43,790 And if you, for those of you who want to pause and review this carefully, 573 00:30:44,090 --> 00:30:48,410 you'll notice that this, each of these lines is represented by sectors. 574 00:30:48,410 --> 00:30:49,320 So first the health. 575 00:30:49,610 --> 00:30:50,780 Healthcare sector. 576 00:30:51,040 --> 00:30:55,530 Then the real estate sector, industrials, financials, utilities, 577 00:30:55,770 --> 00:30:57,290 then S and P 500 as an average. 578 00:30:57,290 --> 00:31:03,120 generic materials, information, technology, energy, staples, consumer 579 00:31:03,120 --> 00:31:05,560 discretionary, and communication services. 580 00:31:06,230 --> 00:31:06,690 Yes. 581 00:31:06,940 --> 00:31:08,040 That's what this chart shows. 582 00:31:08,140 --> 00:31:12,150 It's freely available on the earning insight that you can go and get. 583 00:31:13,280 --> 00:31:18,710 Now, lastly, we have to remember how the market typically behaves. 584 00:31:18,760 --> 00:31:20,450 The market never goes up in the straight line. 585 00:31:20,450 --> 00:31:22,190 You'll never see the stock market do this. 586 00:31:22,470 --> 00:31:25,390 It always goes up and down and up and down and up and down. 587 00:31:25,510 --> 00:31:28,180 When it goes up, you got to know that it's not going to go down. 588 00:31:28,390 --> 00:31:29,390 So wait for the dips. 589 00:31:29,530 --> 00:31:32,500 What a lot of people do is they buy stocks at when it's high because 590 00:31:32,500 --> 00:31:33,850 there is euphoria in the market. 591 00:31:38,170 --> 00:31:42,650 so if I consider this line in the middle to be the intrinsic 592 00:31:42,650 --> 00:31:44,330 value, what happens is the stock. 593 00:31:45,355 --> 00:31:47,195 reach that and then they go above. 594 00:31:47,245 --> 00:31:48,945 When they go above, it's called overvalued. 595 00:31:48,965 --> 00:31:50,525 When it goes below, it's called undervalued. 596 00:31:50,815 --> 00:31:52,835 So stocks always go up and down and up and down. 597 00:31:53,275 --> 00:31:57,045 And there are patterns that are predefined, or basically I should 598 00:31:57,045 --> 00:31:59,285 say there's statistical analysis that has already been done. 599 00:32:00,195 --> 00:32:01,425 And what is that? 600 00:32:01,575 --> 00:32:07,755 the, these things exist, or what the analysis says is average 601 00:32:07,765 --> 00:32:09,435 frequency of these kinds of dips. 602 00:32:09,975 --> 00:32:15,025 So a dip that is 5 percent or more or 5 percent and less than 10 percent 603 00:32:15,405 --> 00:32:19,905 happens about three times a year and their average length is 43 days. 604 00:32:20,345 --> 00:32:22,605 And a dip of five. 605 00:32:23,080 --> 00:32:27,000 Percent or more, but less than 10 percent occurs three times a year. 606 00:32:27,630 --> 00:32:30,630 This time, the S and P 500 went down by 9. 607 00:32:30,630 --> 00:32:31,265 7%. 608 00:32:31,265 --> 00:32:32,480 So it fits right here. 609 00:32:32,500 --> 00:32:33,540 It's not even a correction. 610 00:32:33,540 --> 00:32:38,390 It's a dip between 10 and 15 percent is called the correction. 611 00:32:39,010 --> 00:32:41,160 And that is 10 to 15%. 612 00:32:41,630 --> 00:32:43,430 It happens once per year. 613 00:32:43,450 --> 00:32:48,820 A severe correction is 15 percent to 20%. 614 00:32:48,830 --> 00:32:50,000 So here's a severe correction. 615 00:32:50,330 --> 00:32:52,750 This happens once every three years. 616 00:32:53,540 --> 00:32:55,590 And a bear market is anything over 20%. 617 00:32:56,070 --> 00:32:59,080 And that happens once every six years. 618 00:32:59,250 --> 00:33:02,870 We just came out of a bear market, and we're seeing our first dip. 619 00:33:03,510 --> 00:33:05,910 There are chances of three more of these in a year if you look at 620 00:33:05,910 --> 00:33:07,750 statistics, probability and statistics. 621 00:33:08,160 --> 00:33:11,790 So that means we'll have more opportunities to pick up stocks 622 00:33:11,820 --> 00:33:15,230 at Christmas sales, which I call Christmas sales because they're dips. 623 00:33:16,040 --> 00:33:16,690 Yes. 624 00:33:16,740 --> 00:33:24,050 But this 42 days, 43 days, 110 days and 251, I'm thinking that's a long time. 625 00:33:24,565 --> 00:33:24,965 That's right. 626 00:33:25,415 --> 00:33:28,025 And I would say, how should investors look at it then? 627 00:33:28,085 --> 00:33:32,438 I think some of the major dips that happened, in 2008, 2002, 628 00:33:32,448 --> 00:33:33,588 those lasted for a long time. 629 00:33:33,588 --> 00:33:37,198 They may be skewing the numbers, but I think recognizing that these dips 630 00:33:37,208 --> 00:33:40,238 happen frequently is very important now to how you deal with them. 631 00:33:40,328 --> 00:33:41,128 I'll tell you how you deal with them. 632 00:33:41,583 --> 00:33:44,053 So let's say the stock market is going like this, right? 633 00:33:44,143 --> 00:33:47,063 And suddenly a dip comes and it goes like this, it goes like this. 634 00:33:47,243 --> 00:33:52,383 what you got to do is called portfolio management and allocation. 635 00:33:52,563 --> 00:33:57,273 So if you have, let's say 20 stocks in your portfolio, that means every stock 636 00:33:57,273 --> 00:33:59,283 is going to have 5 percent allocation. 637 00:34:00,093 --> 00:34:02,783 you never allocate 5 percent in one shot. 638 00:34:02,803 --> 00:34:06,023 You say, I'm going to do maybe three of these purchases a year. 639 00:34:06,743 --> 00:34:08,803 So every quarter. 640 00:34:09,513 --> 00:34:12,643 You can just start putting in one third or one fourth of your money that you 641 00:34:12,643 --> 00:34:14,193 had pre allocated to a certain stock. 642 00:34:14,493 --> 00:34:17,073 Then if a dip occurs, you're just getting a larger volume. 643 00:34:17,143 --> 00:34:19,953 This is a very simple way of what's called dollar cost averaging. 644 00:34:20,593 --> 00:34:21,533 Just keep doing that click click. 645 00:34:22,233 --> 00:34:24,713 If a dip occurs for a longer duration of time, you're just going to get 646 00:34:24,743 --> 00:34:26,433 a higher volume of those stocks. 647 00:34:26,718 --> 00:34:30,408 When you get higher volume at lower cost, your average cost 648 00:34:30,418 --> 00:34:33,558 per cost basis, ACB goes down. 649 00:34:34,088 --> 00:34:38,828 And when the market picks up your cheaper stocks grow and 650 00:34:38,858 --> 00:34:40,728 your total portfolio value grows. 651 00:34:41,218 --> 00:34:42,738 That's basically how you take advantage of it. 652 00:34:43,158 --> 00:34:46,408 you also have to be able to pick up stocks of good quality companies 653 00:34:46,408 --> 00:34:49,218 because to say cheap junk is just junk. 654 00:34:49,548 --> 00:34:51,948 If you say, Oh, this stock is really cheap, I'm going to buy it. 655 00:34:51,948 --> 00:34:53,578 If it's junk stock, it's just junk. 656 00:34:53,958 --> 00:34:55,088 You're accumulating junk. 657 00:34:55,478 --> 00:35:00,108 So learn to figure out which are great quality companies and their mechanism. 658 00:35:00,108 --> 00:35:02,538 There's a whole process to identifying that there's math 659 00:35:02,588 --> 00:35:04,368 behind it and we're going to do it. 660 00:35:04,378 --> 00:35:06,888 we'll set up a time, maybe two weeks from today. 661 00:35:07,078 --> 00:35:12,218 so that you are ready and then we'll do, the another edition. 662 00:35:12,498 --> 00:35:16,898 And you know what, to be truthful, I think this is so good knowledge. 663 00:35:17,158 --> 00:35:21,098 I know I teach and talk and everything about real estate, commercial real 664 00:35:21,098 --> 00:35:25,258 estate, and hotels, and multifamily, now senior assisted living, 665 00:35:25,848 --> 00:35:27,588 residential assisted living, all that. 666 00:35:28,338 --> 00:35:31,998 People's net worth is in the stock market, 39. 667 00:35:32,068 --> 00:35:41,068 9 trillion are in the retirement funds, close to 40 trillion in retirement funds. 668 00:35:41,068 --> 00:35:43,558 And that's what you're talking about right there. 669 00:35:43,958 --> 00:35:47,548 And if somebody goes in, they have their 401ks IRAs, majority of them, 670 00:35:47,728 --> 00:35:48,508 they're going to stock market. 671 00:35:48,508 --> 00:35:51,268 And most of the people have no idea how to take advantage of the stock market. 672 00:35:51,548 --> 00:35:54,858 They depend on, fancy financial advisors and suits and ties. 673 00:35:54,858 --> 00:35:55,918 Yeah. 674 00:35:56,233 --> 00:35:59,823 Whereas if you as an investor are the best person to take care 675 00:35:59,853 --> 00:36:03,823 of your own financials, learn a little and you can do a lot better. 676 00:36:04,133 --> 00:36:07,663 Join my Facebook group, which is Amit Chandan Financial Knowledge. 677 00:36:07,663 --> 00:36:10,863 And I share all kinds of information on a regular basis. 678 00:36:11,203 --> 00:36:12,943 I hope everybody does that. 679 00:36:13,003 --> 00:36:13,893 Maybe I'm already there. 680 00:36:14,023 --> 00:36:15,363 Facebook right there. 681 00:36:15,363 --> 00:36:15,703 Yes. 682 00:36:16,523 --> 00:36:16,543 Yeah. 683 00:36:16,543 --> 00:36:18,103 So that's fantastic. 684 00:36:18,253 --> 00:36:22,473 I will be, so Amit Chandan, financial knowledge guys. 685 00:36:22,713 --> 00:36:27,913 And also Amitji has a YouTube channel also really big and also 686 00:36:27,923 --> 00:36:29,803 on the Facebook and LinkedIn. 687 00:36:29,803 --> 00:36:31,833 Also people can find you there. 688 00:36:32,673 --> 00:36:33,093 Instagram. 689 00:36:33,103 --> 00:36:35,423 But if you just go to my Facebook from there, people can get everywhere. 690 00:36:35,763 --> 00:36:38,213 So I just kept that fabulous. 691 00:36:38,473 --> 00:36:40,263 What else do in store? 692 00:36:40,583 --> 00:36:43,103 So many great nuggets you've given this morning. 693 00:36:43,393 --> 00:36:45,253 I'm really thankful to you. 694 00:36:45,253 --> 00:36:49,353 I know lots of people will be joining your Facebook group and, we'll be 695 00:36:49,373 --> 00:36:53,723 interacting with you and I, and let's make sure that we are able to teach. 696 00:36:53,763 --> 00:36:57,823 And then these are only the views of Amit Chandanji and 697 00:36:57,833 --> 00:36:59,983 myself, myself, very little here. 698 00:36:59,998 --> 00:37:06,268 But remember, risks are always there, and we do not promote 699 00:37:06,338 --> 00:37:10,414 anybody buying stocks or, this is for entertainment purposes only. 700 00:37:10,634 --> 00:37:15,794 I want to qualify that so that no lawsuits come and so forth, I just want to say 701 00:37:15,794 --> 00:37:20,804 that I've learned so much where the market is, where it's been, why it's behaving 702 00:37:20,804 --> 00:37:25,264 like that, where the interest cuts will be coming, which is on everybody's not, 703 00:37:25,324 --> 00:37:29,499 in my seminars, I do a lot of people ask me, so I'm going to send this. 704 00:37:29,589 --> 00:37:34,669 Episode to all of them because they need to be watching this and really 705 00:37:34,689 --> 00:37:39,199 getting into the driver's seat with what's fixing to happen with the lower 706 00:37:39,199 --> 00:37:44,389 interest rates to be a boom for the real estate and for all the people who are 707 00:37:44,389 --> 00:37:47,009 in distress and other things like that. 708 00:37:47,299 --> 00:37:48,429 That's going to help a lot. 709 00:37:48,659 --> 00:37:51,709 And not only that picking with the dollar cost averaging. 710 00:37:52,059 --> 00:37:54,559 The stocks, which will be going for Christmas sale. 711 00:37:54,779 --> 00:37:55,939 So would you wait? 712 00:37:56,269 --> 00:38:01,039 I've got a question for you today is like August 13th. 713 00:38:01,769 --> 00:38:04,839 So Should we wait a little bit more for it to come down? 714 00:38:05,739 --> 00:38:08,029 It depends on a person's goal, right? 715 00:38:08,399 --> 00:38:09,259 Some people may say. 716 00:38:09,769 --> 00:38:15,499 I want to in for longterm, so I want to somebody maybe 40 right now and say by the 717 00:38:15,499 --> 00:38:17,539 time I'm 60, I'm going to take out money. 718 00:38:18,029 --> 00:38:21,559 As long as you know what to get, and if you know that the fair market value of 719 00:38:21,569 --> 00:38:26,999 that stock is below its current trading price, and you know that you've already 720 00:38:26,999 --> 00:38:30,709 created a list of stocks and you know how many you're going to allocate and how 721 00:38:30,709 --> 00:38:32,269 much you're going to buy this time, right? 722 00:38:32,269 --> 00:38:34,769 There are many cause risk management is number one. 723 00:38:35,099 --> 00:38:35,929 As long as they know that. 724 00:38:36,329 --> 00:38:36,549 Yeah. 725 00:38:36,549 --> 00:38:39,619 I think now could be a great time to acquire today. 726 00:38:39,619 --> 00:38:42,719 The market has jumped a little, so you gotta analyze those stocks 727 00:38:42,719 --> 00:38:45,519 and say, which ones are still, under priced or fairly priced. 728 00:38:46,399 --> 00:38:46,759 Clearly. 729 00:38:46,889 --> 00:38:47,489 So true. 730 00:38:47,489 --> 00:38:47,989 So true. 731 00:38:48,249 --> 00:38:53,789 Can I also talk about in the last three weeks, it's been a downfall. 732 00:38:53,819 --> 00:38:56,269 Almost some portfolios went down 20%. 733 00:38:57,309 --> 00:38:57,719 Yes. 734 00:38:57,779 --> 00:38:59,139 Why did that happen? 735 00:38:59,149 --> 00:39:01,909 That's spooked the market so badly. 736 00:39:01,959 --> 00:39:02,289 Yeah. 737 00:39:02,309 --> 00:39:04,099 So your question is why did that happen? 738 00:39:05,289 --> 00:39:05,729 Yes. 739 00:39:05,749 --> 00:39:10,379 So my understanding right now is it happened because of, the higher 740 00:39:10,379 --> 00:39:12,299 than expected unemployment rate. 741 00:39:12,339 --> 00:39:16,349 So the bad data that came in, it happened because of the Japanese 742 00:39:16,379 --> 00:39:18,659 yen and it's interest rate crisis. 743 00:39:19,349 --> 00:39:19,819 Yes. 744 00:39:19,829 --> 00:39:20,289 Yes. 745 00:39:20,309 --> 00:39:20,519 Yes. 746 00:39:21,929 --> 00:39:24,059 and this, recession indicator that went off. 747 00:39:24,279 --> 00:39:26,259 So these were the key reasons that it happened. 748 00:39:26,329 --> 00:39:29,539 Now the third reason why it was likely to have happened was because 749 00:39:29,539 --> 00:39:30,829 the market was trading too high. 750 00:39:31,449 --> 00:39:32,869 So a dip was inevitable. 751 00:39:32,979 --> 00:39:38,009 A lot of stocks in the S& P 500 were trading above their intrinsic values 752 00:39:38,679 --> 00:39:42,079 and they had to come down because it's like a rubber band, like a rubber band 753 00:39:42,089 --> 00:39:44,409 you Extend and then it collapsed back. 754 00:39:44,459 --> 00:39:46,399 So that's what happened. 755 00:39:46,699 --> 00:39:50,099 I was watching the stocks go up and I had the fair market 756 00:39:50,099 --> 00:39:51,029 values, a lot of companies. 757 00:39:51,029 --> 00:39:53,429 I was like, there's not much of an opportunity right now. 758 00:39:53,839 --> 00:39:59,399 I made some purchases in January this year, and then now I 759 00:39:59,399 --> 00:40:00,589 bought nothing else in between. 760 00:40:01,229 --> 00:40:01,979 Wow. 761 00:40:02,619 --> 00:40:05,669 Because I don't, that's just the nature of my portfolio. 762 00:40:05,729 --> 00:40:07,489 Now other people may have different portfolios. 763 00:40:07,589 --> 00:40:09,999 Some people's portfolios may have dipped by 20, 30%. 764 00:40:10,019 --> 00:40:11,719 That depends on what kind of stocks they had. 765 00:40:11,749 --> 00:40:16,549 If they had highly volatile stocks, such as cryptocurrencies, then yes, 766 00:40:16,799 --> 00:40:20,489 if your stock was an Ethereum, you may have seen a 40 percent dip. 767 00:40:21,389 --> 00:40:26,419 But if stocks in more defensive categories or healthcare, may not have gone down. 768 00:40:26,699 --> 00:40:30,049 Now, to understand which ones you would have invested in, if our viewers go back 769 00:40:30,049 --> 00:40:35,189 to my previous podcast with you, I had shown performance of different sectors. 770 00:40:35,769 --> 00:40:39,829 some sectors that had done really well last year, naturally they may 771 00:40:39,829 --> 00:40:41,069 not have done that well this year. 772 00:40:41,069 --> 00:40:41,959 And that's what happened. 773 00:40:42,214 --> 00:40:43,784 I'm so glad you brought it up. 774 00:40:43,844 --> 00:40:46,894 This is the one guys we were just talking about. 775 00:40:47,534 --> 00:40:49,574 Please go back and look at this whole podcast. 776 00:40:49,584 --> 00:40:51,674 She gave so many great nuggets. 777 00:40:51,714 --> 00:40:52,794 It was mind blowing. 778 00:40:52,964 --> 00:40:54,224 It was just last two months ago. 779 00:40:54,224 --> 00:40:54,264 Yeah. 780 00:40:54,784 --> 00:40:57,364 two months back and it's so much knowledge. 781 00:40:57,574 --> 00:40:59,384 It's just fantastic. 782 00:40:59,384 --> 00:41:05,514 I hope everybody really gets to see Amitji brings fantastic graphs 783 00:41:05,514 --> 00:41:07,534 and everything just like this one. 784 00:41:07,594 --> 00:41:08,314 Let's see here. 785 00:41:08,354 --> 00:41:09,164 It's going to come. 786 00:41:09,784 --> 00:41:11,414 Oh, look at this one here, there. 787 00:41:12,144 --> 00:41:14,304 So there is so much going on. 788 00:41:14,534 --> 00:41:19,594 Amitji is so much knowledge guru that I just totally and in simplificity 789 00:41:20,754 --> 00:41:22,624 is able to explain all these things. 790 00:41:22,624 --> 00:41:25,844 So please go back and look at this episode. 791 00:41:25,844 --> 00:41:29,784 Also, we'll put the link right below so that you can really learn 792 00:41:29,944 --> 00:41:34,304 a lot as we do this, sessions, maybe on every month, maybe we should. 793 00:41:34,539 --> 00:41:36,059 And that'd be fantastic. 794 00:41:36,479 --> 00:41:39,389 So I'm really thankful to Amitji. 795 00:41:39,429 --> 00:41:41,069 Amitji, thank you so much. 796 00:41:41,109 --> 00:41:42,769 I'm going to go back over here. 797 00:41:42,819 --> 00:41:46,259 Oh, and share so that we could, people can see us. 798 00:41:46,309 --> 00:41:50,359 right there Thank you for all your knowledge and It's been 799 00:41:50,379 --> 00:41:52,824 such a pleasure to have you. 800 00:41:53,024 --> 00:41:53,814 Thank you guys. 801 00:41:53,814 --> 00:41:58,704 If you really liked episode, please share, comment and share the knowledge 802 00:41:58,704 --> 00:42:02,954 with other family members, other people in your companies and everything 803 00:42:03,124 --> 00:42:07,364 who can really take care of of their retirement funds and everything in their 804 00:42:07,364 --> 00:42:13,254 investments and savings to get better returns, it's not good to just keep the 805 00:42:13,254 --> 00:42:15,494 money under the pillow or putting it. 806 00:42:15,789 --> 00:42:18,769 Into a bank account with two, three, 4 percent interest. 807 00:42:19,389 --> 00:42:20,669 Great things can happen. 808 00:42:20,669 --> 00:42:22,409 Again, this is educational show. 809 00:42:22,769 --> 00:42:27,459 We are not promoting any, securities or any investments or anything like that. 810 00:42:27,769 --> 00:42:31,289 It's for educational and entertainment purposes only. 811 00:42:32,109 --> 00:42:33,129 Amitji, thank you. 812 00:42:33,129 --> 00:42:36,619 And please say again, how can people reach you in Facebook? 813 00:42:37,069 --> 00:42:38,549 With the Facebook. 814 00:42:38,589 --> 00:42:41,789 My handle is Amit Chandan financial knowledge. 815 00:42:42,299 --> 00:42:45,799 Amit Chandan, financial knowledge, fantastic. 816 00:42:45,849 --> 00:42:46,739 See you in the next