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In terms of where we currently stand, a Guggenheim analyst suggests that stocks could be poised to decline 45-75% from their peak…much like the collapse of the internet bubble…all because of a delayed reaction from the federal reserve to keep raising rates until it’s clear that inflation has gone away.
This also coincides with a term known as the "Bullwhip Effect" – because, when businesses order inventory…they do so by forecasting demand, shipping costs, and prices. Although, when businesses order more…manufacturers order more…so, suppliers make EVEN more…eventually leading to a point where there’s a MASSIVE SURPLUS in excess of what the markets can handle.
That, in combination of slowing demand, and higher interest rates, is causing the market to fall at a pace that we haven’t seen since 2020 – and NOW – retailers are warning of STAGFLATION CONCERNS, where inflation persists, during a time where growth is low, and unemployment is rising.
According to CNBC, these are the 7 Categories that will need to turn in order for us to see a recovery:
One: Housing.
Redfin says that in April, just 60.7% of home offers written by its agents faced competing offers, compared to 63.4% a month earlier and 67.4% a year ago.”
Second: The Automotive Industry
Used car prices have fallen 6.4% since January…and, as supply chains begin to normalize throughout the next year – values could begin to “reverse” – pun intended.
Third: Labor
Earlier in the year, there was a concern of a “Wage Price Spiral,” where employees would have to earn more, to pay for the products that cost more, leading to employees that earn more…repeating the cycle over again. But, with widespread layoffs and declining wages…a spiral looks less and less likely to happen…
Fourth: International Turmoil.
For the time being, we’ve seen commodity prices like oil and grains skyrocket…leading to brand new record gas prices across several states. That, of course, increases the cost of shipping, travel, transportation, and everything else that makes up inflation readings, leading to a greater likelihood of more rate hikes.
Fifth – Higher Freight Costs, which lead to higher prices getting passed on to consumers. It's said that these costs will NEED to begin slowing down…if we’re to get inflation under control.
Sixth: Airfare fares are also increasing, leading to less travel, less spending, and the fears that this may contribute to an upcoming recession.
And FINALLY…SEVENTH…consumer spending will need to see a comeback, because – throughout 2022 – rising prices are deterring buyers, and leading to low..or, in some cases….NEGATIVE growth.
As far as my own thoughts about this, and how I’m investing…I’ve said it before, and I’ll say it again: the term “Riches Are Made In Recessions” is a perfect motto to live by.
The fact is, the best times to buy tend to be the times where EVERYONE thinks it’s a bad idea to buy, and things can get worse…if the market isn’t preparing for something to go wrong, be worried that MAYBE it’s higher than it should be, so don’t fear drops like this.
For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at GrahamStephanBusiness@gmail.com
*Some of the links and other products that appear on this video are from companies which Graham Stephan will earn an affiliate commission or referral bonus. Graham Stephan is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. This is not investment advice. Public Offer valid for U.S. residents 18+ and subject to account approval. There may be other fees associated with trading. See Public.com/disclosures/
I’ve only been investing for about a year and a half and to be honest from my perspective I just want to see a good stock market if it ever exists 😂😂 😭😭😭
you have funded war expenses, bless your soul
@Pedro Reis I started December worst time to invest 😂
Never invest in the stock market with the way you already see it just get scratchers
@Graham Stephan Great video! I’ve been around since Dow first hit 1,000 and have seen tons of bull runs and corrections since then, as a former stockbroker. If oil keeps going higher, might this change your opinion about buying now? Actually, might oil stocks be the best bet no matter what?
Before January, it was the strongest bull market almost ever…are you investing in doge?
Consumers are tightening their belt. Gas prices all time highs and looming recession. People just don’t have as much expendable income.
yep!
This is the first opportunity I’ve had to “buy the dip” so I’m kind of excited by the stock decline! Also, any updates to the script writer position or are applications still being sorted through? Great content as always Graham!
You can communicate with her on telegam with the user name below.
INVESTWITHFLORA
Quality predictions as always. Really helped trading with Flora Morgan Berthold analysis and info, even with the market in a downward trend. Definetly riding the market wave is a good perspective.
Her professional strategies are mind blowing. never thought I’d be able to make as much profit as I’m making. I started with a thousand dollars I was able to monitor the trade
Access to a good information is what the investor needs to progress financially and in life. Here is a good one and I’m grateful.Bitcoin is bringing a different revolution in the world economy.
Best way to prepare: Set up auto investing and delete your investing apps lol.
All jokes aside, since I’m of a younger demographic, as stocks keep dropping, I am able to pick them up for a discount and have time to let them rise as the years pass. Great video Graham!
Assuming you’re not buying today’s Blockbuster or Kmarts…
Lol dude this is not a discount, this is the result of the greatest bull run ever, prices will Never see ATH again
Buy at the dip!
Why not buy them after a period of time after the drop is complete?
Not a dollar cost averaging approach that Wall Street likes to sucker you into?
@David E. Vogel Not really; wait until the Down turn is completed, then Buy!
Not really getting that, ‘Everything is going to be OK’ vibe right now. Something else to consider with automotive sales, is that many of those people who recently purchased will be underwater if the prices drop. From what I’ve seen, the borrowing standards aren’t quite as strict as getting a mortgage. A lot of loans with moderate to low credit scores (higher likelyhood for default) were given. Going to have a lot of people who can’t pay off a loan that’s higher than the purchase price of new car.
VT247
I love your videos graham, i hope my channel will be good as yours one day! you have inspired me to invest in ETF’s and be a long term investor, unlike Jeremy’s bad advice and made people broke.
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I think you missed to talk about lay-offs and hiring freezes for companies with unsustainable growths during peak pandemic times . Latest victim being klarna with 10% of the work force getting sacked … There is perhaps an even bigger issue around the corner as all these BNPL businesses are all suffering from an increasing bad debt as consumers are finding it difficult to produce those monthly payments …
Awesome and solid research, as per usual. Keep up the fantastic work and thank you for sharing the knowledge!!!!
What’s funny is my microvision hasn’t dropped hardly my because we were already severely undervalued 🤷🏻♂️ so I’m still hoping that the market crashes more and more so I can but into a few other stocks
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Graham. The outlook you’re giving the auto industry is optimistic. Mercedes just announced consolidating dealers in Europe as of yesterday. No news on YS though. Chips for cars still haven’t resolved, not at least till Q1 2023. The slowdown of other chip purchases might help, but yeah still not the best.
Inventory is stabilizing and increasing, and inflation index is dropping. Market had done a lot for the FED. This may restrain FED from hiking the rate too much. S&P 500 does not not bottom yet, but opportunities may come in the next few months. Right now it may be a good time to short the real estate…
inflation index is dropping.
Year to year CPI numbers are falling? eally?
@David E. Vogel not the CPI but the inflation index
@GROUNDHOG WATCH OK thanks.
this further underscores my advice all these while: never go all in on any trade, no matter how much you know it’s gonna go. it will go, but on it’s time frame not yours. Leave some money for dips and trade other plays in meantime. No matter how small or large you’re working with.
The best strategies and advice comes directly from professors traders so seek the best advice from them now because they are the techie in trading
Kind of strange to me how most media outlets reports Target’s quarterly result as a “decline” in profit making it sound like something terrible – but that’s _still_ profit not actually a loss. Akin to how politicians always say they’ve “reduced the deficit”, but that’s still a deficit, not balance or surplus. 🤔
Hey Matthew, the reporting done on Target is quit accurate. Before the results, the stock price of Target was about 240$ with a P/E ratio of about 20. Meaning that a strong growth was price-in. Now the price is around 155$ with a P/E ratio of around 13. Profit and a small growth is still included in the new stock price. If Target was not doing any money and it was not expected in a near futur, we would no longer be able to used a DCF method to value Target. At this point, the liquidation method could be used. In this catastrophic scenario that would most likely nener happens the stock price could be arroung 23$ which is the book value of asset minus the liabilities.
@gabo18434 ???
@Bryan Wilkins I’m not sure what you want to know. I just stated that the “outlet” are right about Target and the price seems to reflect accurately the decline in profit.
If you’re in the green, there’s no real reason not to take out a good chunk of your profits – then just up your monthly contributions.
Worked really well for me during Covid – just removed the principal and then bought heavy as it dropped. Then, the eventual net upside was massive, with a very contained loss – in terms of the gains I missed by pulling my money out.
I know this guy is giving important info and I really appreciate it. But I also appreciate the gun show he’s putting on.
This is just an added fallout from the pandemic. Loads of companies stocks went up, especially tech and commerce because everyone was at home. Naturally they will go back down to pre pandemic as everything goes back to normal. Add the war in Ukraine and supply shortages and we wil go down further.
He’s right. I bought a house during May 2020. The peak of the recession. I got the home for 120k and it is now work 270k. Yeah I’m about to invest 1k in the market tomorrow.
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My husband and I are retired, but I tend to buy during significant corrections and have adequate cash always available. We have adequate income and real estate investments.
The Market have been suffering over the past month, with all my stocks recording losses in recent weeks. My portfoliio of $750k is down to $592k. Any recommendations to scale up my returns before retirement will be highly appreciated.
True, initially I wasn’t quite impressed with my gains, opposed to my previous performances, I was doing so badly, figured I needed to diversify into better assets, I touched base with a portfolio-advisor and that same year, I pulled a net gain of $550k…that’s like 7times more than I average on my own.
@Petrona Pina Núñez that’s impressive!, I could really use the expertise of this advisors , my portfolio has been down bad….who’s the person guiding you.
@Erickson Milton Having a coach is key to portfolio diversification, My advisor is Mary Freed Lorenz. You can search her. she has years of financial market experience.
Yes. Invest in baby food and peas
@Petrona Pina Núñez scam. Lol Jesus that’s pathetic
Hi Stephan, I’m very impressed by your videos and attention to detail. Inspiring and to the point. Who or what was your inspiration to start creating video content?