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  • A 100 years ago, investing was accessible to the elite, to people who had fortunes and

  • connections.

  • Wealth wasn't something you could create or build but rather inherit.

  • If you would come from a wealthy family, you had the opportunity to trade, buy land and

  • expand your business but if you didn't, your chances to get out of poverty were slim, to

  • say the least.

  • In fact, the only source of passive income was the interest where you could lend your

  • money to the nobility who would use it to wage wars, conquer more land and then force

  • these people to pay taxes in order to pay you back.

  • That's how the Rothschild family built their fortune.

  • The king will pay as much interest as you want because his kingdom and reputation are

  • at risk, so interests on these loans were beyond your imagination, but the king did

  • not care because the peasants will pay astronomical taxes at the end of the day to pay off that

  • debt.

  • However, that changed with the introduction of the stock market.

  • Businesses could break down the company into little pieces and sell it to the general public,

  • and as the company grew and expanded, the businesses shared its profit with its shareholders.

  • Not a single industry created more millionaires or billionaires than the stock market.

  • Some people have mastered the stock market so deeply that they have created a fortune

  • of 100 billion dollars (Warren Buffett).

  • In fact, every company that wants to grow and compete with a multinational corporation

  • has to list itself on the stock market through an IPO.

  • Of Course, the stock market carries its risks as well.

  • If you bet your money on the wrong stock, you might lose your hard-earned capital.

  • Take a look at what happened to GameStop.

  • People lost a fortune investing in GameStop.

  • But that's just one example.

  • Those who invested in the stock market prior to the dot com crash lost almost all of their

  • money.

  • Amazons stock price, for example, fell from 107 dollars to as little as 7 dollars, and

  • if it hadn't secured funding right before the crash, it could have gone bankrupt, and

  • all those people who invested hundreds of millions of dollars into it would have lost

  • their fortunes and Bezos wouldn't have flown to space in 2021.

  • The same happened in 2008 when the housing crash collapsed, so it's not only important

  • to invest in the right company but also invest at the right time.

  • If you have invested in February 2020, you would have lost at least 30 percent of your

  • money by Mach, but if you had invested in march 2020, by now, you would have doubled

  • your money.

  • So let's find out why wall street believes that the economy has peaked?

  • How is that going to impact the stock market?

  • And why millennials should stop buying stocks?

  • We will answer all of these questions and many more but before we do that, give this

  • video a thumbs up, and here is a little disclaimer.

  • This is not financial advice, and everything that's said in this video is for educational

  • and entertainment purposes.

  • This Bloomberg article claims that the economy has reached its full potential, and it's getting

  • ready to decline.

  • There is something called an economic cycle.

  • The economy starts by expansion.

  • It grows pretty fast, businesses hire more people, wages rise, and people spending goes

  • up, but that doesn't continue forever.

  • At some point, the economy reaches full employment, wages stop rising, and additional spending

  • causes higher inflation.

  • That's when you know that the economy is not growing anymore.

  • The Fed raises interest rates and limits the inflow of cash into the economy in order to

  • keep inflation under control.

  • Businesses and people start spending less and less, and the economy prepares for a crisis.

  • After the 2008 crash, the Fed lowered interest rates to stimulate growth, but in 2017, once

  • the economy reached its peak, the Fed started raising rates.

  • By 2019, interest rates reached an all-time high of 2.5 percent.

  • The US started a trade war, and the pandemic was the final punch that drove the economy

  • down into a recession.

  • Ideally, we should have followed the exact same path.

  • The Fed lowers rates, injects trillions into the economy, the economy takes a few years

  • to recover, stabilizes for another few years, and another crisis should not happen in the

  • next 5 to 10 years at least.

  • But things didn't go as planned.

  • The nature of the last crisis was quite different from previous crises, so the only way the

  • Fed saw its way out of the crisis is by injecting more money into the economy than it ever had.

  • Surprise!

  • Surprise, it worked!

  • In fact, it grew the economy so fast that the SP500 grew by a larger percentage from

  • march 2020 to July 2021 than it did from 2014 to March 2020, which is what led many wall

  • street investors to believe that we might have reached the peak.

  • But that's not all.

  • The Fed perfectly knew that if it's going to increase the money supply by 25 percent

  • in a single year, it will have to get that money out of the economy once we are out of

  • the crises in order to prevent high inflation.

  • Keep in mind that one of the main reasons why the US dollar is the dominant currency

  • is because its stable.

  • 60 percent of global currency reserves are held in US dollar because t he world believes

  • that its the most stable and transparent currency, its United States's golden treasure and the

  • Fed will do everything to keep it that way.

  • Does that mean you should not invest and wait until everything crashes?

  • Well, it's not as simple as that.

  • First of all, it's really difficult to time the market and impossible to predict the future.

  • We can make as many predictions as we want, but only time will tell what the future is

  • holding for us.

  • If you are a long-term investor, you shouldn't care about what Wall Street is saying, but

  • if you are a trader and need to show huge gains quarter to quarter, that's something

  • to worry about.

  • But the reason why millennials should stop investing is that the combination of stimulus

  • checks, lockdown, and an astronomical rise of the stock market has led to a new form

  • of gambling.

  • Millennials started buying stocks not because behind them stands really great, strong, profitable

  • companies but rather because it's a popular stock since everyone is buying that stock

  • on social media as a way to get rich quickly.

  • In fact, some people actually did make a lot of money out of them.

  • But the vast majority lost.

  • When GameStop stock price for example was trading at 300 or 400 or 450 dollars.

  • Remember, people were paying real money to buy the stock at that price.

  • The demand is what kept the price increasing.

  • But when it fell to 40 dollars, most of these people lost their investments, and even now,

  • the stock is trading at around 180 dollars.

  • You might say that it was because broker apps prevented retail investing from buying the

  • stock, and that's true.

  • But let's take another example, AMC or Dogecoin.

  • Dogecoin is not a stock, but people are investing in it for the exact same reason.

  • Most retail investors bought it, hoping that they will get rich quickly.

  • People love the idea of getting rich quickly.

  • That's why gambling is so popular.

  • Every year, Americans spend 40 billion on gambling, but when casinos were closed down

  • due to the lockdown, people turned to stocks.

  • Of course stocks are not gambling machines because behind every stock there is a company

  • but if you invest without studying that company, analyzing financial statements, or doing your

  • fundamentals, then you're gambling.

  • By the way, if you want to learn all of that, then you can check out my Course on skillshare,

  • which is simple, straightforward, and fully animated.

  • It doesn't matter whether you are beginning or already an investor.

  • You ill find this Course helpful.

  • The first 500 people to click on the link in the description will get 2 weeks of skillshare

  • premium and will be able to watch the Course for free.

  • At the end of the course, there will be an assignment that you will have to complete,

  • which I will personally check and provide you with feedback.

  • The problem is that when the market is booming, everything is growing, including junk stocks

  • or junk assets.

  • So when you throw your money into these unstable assets and make some money, that encourages

  • you to trade more and invest more money, but like everything else, whatever rises will

  • eventually fall especially if it's a risky asset.

  • Let me ask you a question, are you ready to hold these investments for the next 5 to 10

  • years?

  • Probably not because today it's a popular meme stock but tomorrow, something else will

  • be a popular meme stock, so you are eventually basing your strategy on luck, and luck is

  • not a strategy.

  • It's alright to trade and gamble on some of these stocks, but if you are doing that, in

  • fact, you should be prepared to lose all of that money! if a stock or an asset can grow

  • by 100 percent overnight, then it also can go to zero overnight.

  • That's simply a fact whether you like it or not.

  • Don't let your emotions get in the way of your investing decisions.

  • Feeling lucky because you invested in the right stock is an amazing feeling.

  • But it also can destroy you.

  • Investing is a long-term game and behind every company stands a real company that sells real

  • products, real services and the world of business is brutal.

  • Try starting a business, and then you will understand that.

  • Either base your investment decision on facts and proper analysis or don't bet the money

  • you are not ready to lose because that's how gambling works.

  • For every person who makes a million dollars, a few hundred thousand people lose.

  • If you have enjoyed this video, you will most definitely enjoy this custom playlist that

  • I have created specifically for you that has our most popular videos on business, investing,

  • and the stock market that can potentially change your life.

  • And now give this video the thumbs up that it deserves, and make sure to subscribe if

  • you haven't done that yet.

  • Thanks for watching and until next.

A 100 years ago, investing was accessible to the elite, to people who had fortunes and

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Why You Will Regret Buying Stocks in 2021

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    Summer posted on 2021/07/31
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