The Stock Market Bubble - Why Economists Predict Dismal Returns 

What do you think, should my next investment be a charizard pokemon card ? 🎉 Patreon: www.patreon.com/josephcarlson​ 📈 Growth Portfolio: m1finance.8bxp97.net/ORRVBW​ 💵 Dividend Portfolio: m1finance.8bxp97.net/MXmRgJ

I don't know who needs to hear this but. You've got to stop spending, invest some part of it, If you want to have financial freedom

Those Dividends will still pour in so I'll continue to dollar cost average because long term I'll be glad I did that 😁

What's next to be inflated? RU-vid likes? Smash that like button and click the notification bell for our boi

I'm shocked there wasn't a mention of NFTs, lol.

2020 was all about survival with many achievements not met but you have to be ready for 2021 and it begins right now by making a move to achieve your goals…If you have been saving and it’s not really getting you to were you want to be, then invest that money today for a better life tomorrow. If you can’t fly, run, if you can’t run walk, if you can’t walk crawl but just try and move to achieving your goals..

Just like my friends in tiktok I buy stonks when they are down here low and then but then right before they go way up. That's how you do it.

Great video... The covid-19 global pandemic shut many financial institutions from functioning thereby rendering most people jobless & investors lost more than they ever thought of losing.

Stocks are good but I swapped and invested in Forex and Bitcoin trading I've been making good profit

Crypto is the future

I love how Peter Lynch speeches always kind of end up like a stand up comedy show, AND they are full of useful information.

Oh man I love anything that Peter Lynch says. Awesome video!

Two of my biggest buys still are bmy and mrk, both still trading at low pe ratios and have average cagr div growth over 6%

People get scared to buy when things crash, then complain it's too high when prices go up.

Stay the course, tune out the days headline and keep to the plan.

This guy is genius. Passive income from RU-vid. (2 channels) Passive income from the patreon, passive income from his dividends. All creating massive wealth. Thank you Joseph. I am almost at 100k passive investment portfolio and am the same age as you. You have made me so much money in STOR, JPM, AAPL amd more, just following this channel. You’ve changed my life.

This is Dogo from the future, they were wrong.

A friend asked about about investment options, I told him to track some stocks, he replied saying ''not in stocks, stock market is 100% manipulative" I was shocked to hear that. how can we change that narrative amongst general people? any suggestion?

But Joseph. I thought you could just buy anything at any price and it only goes up??

Awesome video and I definitely agree with your conclusions. I finished college and started investing in 2001 and then the markets were flat for the first decade I was investing. Then I was rewarded with sticking with it by seeing all the gains of the last ten years, so even if these dismal predictions end up coming to pass, they won't last forever.

Money printer go BRRRR

It's the other way around, the dollar is losing it's value because of the crazy money-printing. That's why it appears that houses and stocks++ are more expensive measured against the dollar.

I remember you posted a similar video right before the pandemic talking about the next crash and how expensive everything was. And here we are again, after what Ackman predicted to be Hell. This made me realize that there is nothing new under sun, even after all that happened in 2020.

It's been a long time since you've gone over ETFs, you have a few videos from a long time ago going over ETF alternatives to your portfolio choices, would be cool to do something along those lines again! SPHD, SCHD, VNQ, VHT, VYM

The everything bubble. This was called since the recovery from the GFC. Japan 1989 (38,000) - Japan 2021 (18,000) market is lower. Yes most of the time markets rise when there is economic growth and inflation however at some point when markets are expensive enough, growth low enough and inflation low enough stock markets can fall over time. Buy good companies at reasonable valuation is the gold standard. As markets become more expensive those reasonable valuations will be harder to find. Said so yourself in the introduction.

Dumpy homes in my city (Toronto) list for 1M and always sell for 100k-300k over list price. We have a huge housing market bubble in this city.

“It’s gonna rip your face clean off”🤣😂🙌🏻

I am so glad you made a video on this. I have been looking for months and I am really struggling to find any companies undervalued. Japan has some great prices at the moment though.

Your argument makes sense for the stock market. Stocks can split and people can buy fractional shares. But what about the housing market? We can't split them or buy a fraction of a house and live in it.

Your video's are some of the most comprehensive & insightful on all of RU-vid 👏 thanks as always!

The headline “ more money put in the market in the last 5 months than in the last 12 years” makes the near future look good.

Flood the system with money and it has to go somewhere... brrrrrrr

Can’t believe this is episode 147. I remember when I first discovers you and was overwhelmed because I needed to catch up to the first 20 episode. Here I am 120+ episode later + your second channel + your exclusive videos and I’m still learning every video

People like Cathy Wood always talk about innovation and if her predictions become true then fast acting companies will gain a big advantage. However the cousin of innovation is simply becoming tech enabled and joining the online world. There's so many companies out there that still operate using old, slow systems and barely do anything to improve them. Lots of the small and mid-cap world is run in very old fashioned ways but they are slowly gearing up. I believe this is what increases the overall P/E of the market because companies deemed "tech companies" always trade at a higher P/E and more and more are becoming more techy. Amazon trades like a tech company and in many ways is now but they didn't always at one point in there history there was a consensus change where people adjusted their thinking over the course of a few years from being "Amazon is an online retail company" to "Amazon is a tech company". I believe this transition is happening on a mass scale due to actual tech companies like Palantir offering their services to the rest of the world. An old grid management company that's been doing the same thing for many decades might now start implementing new technologies now they have some solid advice.

Tsla is cheap 😀

Those economists are probably right but that is only for one static pool purchase of equities today. The vast majority if folks invest by DCA in their 401ks. Over a 30 year span they will buy a "few years worth" when market is high and a "few years worth" when it is low and most will be reasonably valued. There has been no static pool I've seen that has returned less than 4% (+ 1.8x% dividend) for the S&P500, even buying during the tech bubble, if you hold long enough. Long term means (20+ year holds) are sticky around 7.00% before dividends. I like your strategy and you will do just fine.

I had the same thought about the stockmarket today (that there is no real bargain) compared to the corona pandemic. But I think the semiconductor industry isn’t truly valued at the moment huge demand great improvements and great with an ongoing pandemic.

Also margin usage is very high right now

This video is spot on. My dad never went into the market and mom made enough from investing to buy a 2-bedroom apartment. My dad is an economist and mom is an accountant lol. My mom just focused on the stocks themselves rather than economic predictions.

"You Are Not a Lottery Ticket." Peter Thiel. Extremely relevant to this video. Indeterminate optimism is unsustainable. Diversification works, but it's far better to understand good companies and buy them.

While I also don't feel like the will be a crash, I'm still worried about the unjustified high at the stock market. The situation is different than the cases that Peter Lynch mentions imho. But again, I don't see a reason for a crash, it's not strippers getting loans for three houses. I think the growth will just slow down rather heavily and "make up" for the recent rapid rise, but not permanently.

I absolutely loved this episode. Everybody is sooo hyped about the 'new era', 'everything is different this time' - stuff. It's not, just (misplaced) optimism. Invest, have patience and don't let yourself let into 'fomo' or 'hubris'

I'm fairly new to your channel and I was curious about something - why do you choose individual stocks vs using ETFs?

Hey Joseph, So if someone is just starting to buy are you saying they shouldn't try to wait until things are cheaper to get in despite the apparent bubble so long as they invest in "good" companies? Also, i was wondering if you believe all the securities in your "story" pie to be worth something not just 3 years from now but 10+

People will be kicking themselves in few weeks if they miss the opportunity to buy and invest in bitcoin

Morning everyone 😊

You can’t say that bitcoin is overpriced as it’s going through the normal price discovery process one should expect with a brand new asset class. In fact, according to most models it’s still significantly underpriced.

Pretty sure the vast majority of economists have been wrong about every major event and general trend for the last few decades. I'm not worried. They base their models on past data without any idea what new innovations will create entire new sections of the economy. Most of them completely failed to predict the rise of personal computers and the internet.

I wonder if my fellow neighbours in Argentina, a short time ago, thought the rises in price were a market bubble like Americans are thinking right now, instead of realizing It was just their currency going to shit 😂😂😂

I'm looking to China for value and growth. Alibaba and JD.com are my bets. Alibaba for diversified revenue and good margins, and JD for copying Amazon to a T in a market that is 4 times larger. They have space to grow and are both currently about 20-30% undervalued due to delisting fears. Cheers :)

One of the problems is all the people chasing short-term returns jumping on every hot stock they see, while if you only pick 1 good stock a year for the rest of your life, you will do just great! You don't have to catch them all!

The pe ratio is high because analysts and businesses projected lower earnings than before. This is temporary. This has to be adjusted to future pe. Estimates will go up soon

How come that you've forgotten to mention gold and silver - not everything is in a bubble?

you talk about "good companies that are undervalued" name one company that is exceptionally good which is undervalued right now. The problem with a hot market is that a rising tide raises all ships. FAANGs are stretched to all hell. I'm not trying to be negative. I'm going to be holding for the rest of my life all of my holdings (mostly ETFs for FANG, Nasdaq etc.) but I'm unwilling to purchase more at these prices. I am holding Asian tech companies but these are also prone to the same market and rate risk as every other stock. Maybe suggest a way or make a video to actually find a decently undervalued company right now? Everyone knows the trick is to find "good companies that are undervalued". Any company that will provide "good" returns if you were to buy at today's prices, would probably be pure speculation (for e.g Amazon or Apple pre-2000). Literally the same as saying "find an undervalued property in a housing boom!". That advice is universal and applies to any time period but it's unhelpful without knowing what to actually do to find these "undervalued" companies

"This shows how good people are at predicting the future" LOL

there is one sector that is still undervalued, and that is precious metals. they went up fast at the beginning just after the covid crash, but since then they have been stuck at pretty low prices while everything else, including other metals, went up by a lot

8:58 add in higher taxes to support older people who didn't save enough for retirement, or weren't able to due to wage stagnation

Sir i love you video. But as you know, the bubble also BLOWS up just before it burst, so what if the crash is coming after another 50% run? which is very possible :)

Hi Joseph, thanks for the pep talk, you encourage me to go into investing. I am still very new to the world of investing and I have a question to ask is that how do you invest your money? Is it better to invest(monthly or quarterly) or in lump sum? Love to hear your thoughts about it, Thanks!!

I have a 40 year time line. I’m sure 20 to 40 years ago people thought things were high and expensive I’ll DCA into what I like for the next 20 years I think.

Of all the videos you've had, this one is the most benign and tautologic. If everything is overvalued as you've accurately stated in the beginning then how are you going to keep investing in undervalued companies as you've stated at the end? If you've already listed all the overvalued alternative investments why do you reference them at the end as alternatives to look at instead of evaluating unmentioned and under or fairly priced alternatives?

THIS is why I follow this channel.

We could have a rally that stagnates relative to inflation. Both are true

LOL... I love Tom Lee... leave him alone.... keep up the great content...

Hey Joseph, Thanks for all the content. Finally found someone with like minded goals in this realm. To many crazy's capitalizing on quick hits 100x BS. I've been watching your videos for a while and would love to see an update to your Roth. I know it's small and not as interesting but would love to see how it's progressing and any changes you made to the portfolio.

SoOo in other words... just keep investing as you normally would for the longterm... copy 👍🏻

Do you hold or sell if a holding in your portfolio becomes really overvalued?

Peter Lynch has a great message. Even if there are tons of reasons to worry and fret, what is that going to do? Nothing. Invest in what you know and understand, and realize that the noise is just that: noise.

the PE ratios are higher because of globalization.

well the key point is reasonable valuation most of stocks are not on reasonable valuation any more.

But then what about those great companies that you already are invested in. Should just wait for an adjustment to invest in those, and mean while look after smaller undervalued stocks? Great content!

Can you make a video about how to identify when companies are undervalued in your opinion? I’m sure it’s a beast of a subject but any insight would help! Thanks

One thing is clear, the market is overvaluated and needs to correct there are a lot of new players too which may affect the value as you mention but in my opinion, the corrections won't happen until the interest rates flip because at this moment, it is more expensive being in liquid out of the market rather than being all-in in stocks. Bonds are screwed up and huge fortunes are moving to this new tendency too. We will see if this euphoria mixed with macro tendencies swap or not, i'm not a seer but once common sense stablishes, the bull run will, at least, mild the returns.

Plus it’s impossible to buy a house in my country

$69 million for a jpg LOL

When everything is expensive it’s a good time to start your own business!

Regarding the market's PE ratio, it's possible that the criteria have changed or that there is a new normal due to how much money has been extracted out of the market, population/market growth, greater globalization, etc. In effect, the assumptions and behaviors that previously underpinned the overall market have changed, or might have, so the new strong PE might be higher than in the past. Or, there could be a crash coming... Like most things, the truth is probably somewhere in between.

You better sell it all... My portifolio is getting nuts...

Investment is still a good decision and I have found myself pumping funds into the Stock market away from all the distractions around.

I can't identify with this at all, I'm still finding a ton of stocks that are cheap with low P/E and even lower forward P/E. For example Alliance-Bearnstein (AB). With a 14 P/E and a forward P/E of 11. Dividend yield is 9.64%

Hey Joseph, great content as always! Just what I needed in these times. One question, the links to dividend and growth portfolios-are they upto date?

6:41 Well that didn't age well...

Does the average P/E include Tesla? That would bump up the average by a few points

Houses in my area are up like 40-50% in 2-3 years

Great video! Always great to remember that these people have their own reasons for causing alarm. Buy and hold, rinse and repeat.

While everything is considered expensive, I'd argue staying in cash is even more expensive. Arguably everything is super expensive not because the company or home value has changed but rather the value of the us dollar has decreased. While assets and equity prices are flying high it's basically hedged against inflation, while holding cash is almost a guaranteed loss.

Off topic question. Is it better to use the capital gains you have in a company to buy for shares in said company or just hold on to the unrealized gains???

Inflation, inflation and inflation... FED money printers go brrrrrrrrrr

Joseph, what are your thoughts on NRZ and it's new purchase today? Thank you.

Great video as always! What do you think of altcoins?

I have the same feeling everything I have is in the green for the exception of energy which is the sector I least want to invest to. Part of me is thinking should I just build cash and wait on a good investment but then its like how much could I potentially missed out on doing that? I had to remind myself I'm dollar cost averaging into everything so block all that noise and just stick to the plan.

Thank you. I look forward to your videos. What do to think about beachbody stock? It is a subscription exercise and lifestyle streaming.

The only thing that is not expensive is Riocan real estate in Canada. Still big hit from the pandemic. Love those dividend.

CVS Health is undervalued company with great dividend. Specially after their latest acquisition of Aetna !!!

I personally agree with both the Economist article and Peter Lynch, and don't think they're necessarily adversarial. The Economist position isn't saying that the future earnings of companies is going to be lower, or that there's some serious headwinds hurting economic growth. It's position is that current earnings multiples mean that you're buying expensive stocks, which inherently lower expected returns from the earnings multiple alone. My agreement with Peter Lynch is that doom-and-gloom predictions shouldn't keep you from investing, and that there are good returns in assets that are underpriced (because of these predictions). His argument does not imply that buying into an overheated market is a good thing. Instead, look where optimism is low, and invest there. Specifically, international stocks. (VXUS for example)

Fast af boi

It doesn't matter what any analysts say, they just have to be bear/bull for clicks. Look at what people who have a lot of stake in the market do - they stay invested.

The face ripper rally prediction and the lower future returns predictions are not in contradiction. The former is for the month of April (indeed it subsequently rallied hard) and the latter is for the following years or decades. I'm glad you're not a journalist.

I think I'll just stick to my strategy of having auto-invest and auto-deposits turned on and set for Monday and manually invest my weekly dividends into the holdings which have the lowest unrealized gain (negative, atm its $YOLO at -3.37% followed by $AZN at -1.84%) to lower my cost basis in those. /shrug.

Best advice ever, buy great companies at fair prices, by good companies at great prices. Think this was Warren Buffet, I might have paraphrased..