Name: Why Investors ALWAYS Ignore Every Warning Before The Crash
Uploaded: 2025-11-29T17:54:38.000Z
Duration: 15 min 4 s
Description: Thousands of YouTube videos with English-Chinese subtitles! Now you can learn to understand native speakers, expand your vocabulary, and improve your pronunciation...

Why investors ignore every warning before a crash.

Past simple

We've had hundreds, if not thousands of crashes in the past, and

all of them follow the exact same pattern.

So why do investors keep falling for them?

The more the economy grows, the more the markets grows, the more everybody else makes money.

But what if I told you that the system is designed purposely to crash every few years?

And even if investors pay attention at those warnings before a crash, they can't stop a crash.

I know that this sounds like a conspiracy and it's very difficult to comprehend that, but

by the end of this video, you will change your mind, because I am going to give you the facts and will tell you exactly why stock market crashes are inevitable.

So if you're ready, give this video a thumbs up and let's get right into it.

The biggest crash in American history is the 1929 crash, when the S&P 500 fell by 90%.

90% crashes are very rare because it wipes out 90% of the wealth out of the market.

But very few people know that the market crashed again in the middle of the Great depression by about 50%.

Then we had the crash of 1973, the famous.com bubble that crushed the N stack by 80%.

The 2008, the 2017 Bitcoin crash, and so on and so forth.

If I'm going to talk about every single crash that has happened, this video is certainly going to be 50 hours long.

But it's normal that people want to profit out of the market because the nature of the market, that it continues to grow, the more businesses we build, the more technologies emerge, the more the new industries come up, the faster the economy grows.

And if you want to profit out of it, then you start investing.

And it's very normal that we have a new technology, an Internet, smartphones, AI.

You invest your money, the economy grows, and you make money out of it.

And when the market is growing, nobody is actually going back into historical data to figure out whether it's a bubble or not.

Because our brain, our bias, there is something called a recency bias.

We always focus on the most recent information and, and not on the historical data.

So if over the last 12 months the market has been growing, that's when the attention of your brain is onto, and

And then you go into the Internet and you start looking for information that is going to confirm that.

So if you are an investor in Palantir, you're going to look for information that is going to confirm your opinion that Palantir will continue rising.

If you are a bitcoin investor, you will start reading articles, watching the people that will tell you that it is going to continue rising to trillions of dollars.

And it's very difficult to watch how everything is growing while you're not involved, because there is something called the fear of missing out.

When you see your friends making money, when you see people on the Internet making money, you want to jump in and profit as well.

There is even a famous story of Isaac Newton, who was one of the smartest people in history who fell for it as well.

He was an investor in a British company back in the days when the stock rose.

And then he watched how that stock keeps growing faster and faster and faster.

And he was very disappointed that he got out very early.

He thought that he could make a lot more money, especially when he saw the people around him are massively profiting from his stocks.

So he dumps most of his wealth into that stock again.

It turns into a bubble, and then it crashes.

And Isaac Newton loses the vast majority of his wealth with that transaction.

So if the smartest person in the world has fell for it, what do you think is happening to the rest of the people?

But what if I told you that this is not why stock market crashes happen?

The real reason that markets are falling down are because of derivatives.

The total value of derivatives are about $1,000,000,000.

And it's a time, Bob, at the heart of the market, not a trillion dollars, not a billion dollars, not $100 trillion, but

You can literally just Google how many zeros a quadrillion has.

The size of the US economy is $30 trillion.

The size of the derivatives market is a quadrillion dollars.

The size of the global economy is about $136 trillion versus $1,000,000,000 of derivatives market.

Derivatives are literally the place where you.

If you think that people have gambling addiction with cryptos, or when they go to Vegas and throw millions of dollars overnight, then you don't know what a gambling addiction is.

The largest gambling market is the derivatives market, where people or investors or huge financial institutions are betting trillions of dollars every single day.

There are a lot of instruments in the derivatives market.

But we will take a look at the three most important ones.

First, of all options option is a contract that gives me the right to buy or sell a certain stock at a specific price sometime in the future.

So imagine I am investor A and I believe that the stock A, which worth today $100, is going to fall and I'm going to buy put option contracts from investor B.

Now investor B doesn't have the motivation to get into this contract with me.

So I'm going to pay him a premium or an interest throughout this put option contract if the price of this asset rises to $120.

Now, I'm not going to exercise my option because I can simply buy it for $120 and sell it to him for $100 and I'm losing money.

What if the price of this stock goes to $80?

Now, I can exercise my put option contract and this investor has to buy it from me for $100 per stock.

I'm going to buy it for $80 and sell it to him for $100 and I made a $20 profit.

Now this doesn't seem like a big deal, but

then what if this put option contract were worth millions of dollars?

What if they're worth billions of dollars?

So even if there is going to be a small correction in the market, the second investor doesn't have enough cash to fulfill this put option contract.

When you get into such a contract, you don't need as much cash to do that.

So if the market falls now, the second investor is doomed.

Now he has to sell most of his portfolio to ensure that he can back up this put option contract.

Now, a single investment doesn't seem like a big deal.

But when the market falls slightly and hundreds of billions of dollars, if not trillions of dollars of put option contracts must be fulfilled, there is going to be a massive sell off by all these investors in the market, which is going to amplify the crash.

So a crash that could have been just 5% instantly turns into a 20% crash.

The second type of derivatives are futures.

A future contract is a contract to buy or sell a certain asset at a specific price at some time in the future.

So unlike the option contracts where I have the right to either exercise or not this contract, a future contract is a contract that must be exercised.

Let's imagine that this is Palantir and its price is $200.

And stand future contract has about 100 shares.

That means that 50 multiplied by 100, that's how many shares I'm going to buy.

So since the price of the share right now is about $200, the total value of this future is about a million dollars.

But to get this future contract, I only can put a margin of about 10%.

With $100,000, I control a portfolio worth a million dollars.

If the price of Palantir did actually rise by 10%, the value of this contract has increased to $1.1 million.

So I essentially doubled my $100,000 to $200,000, even though the price of Palantir just increased by 10%.

But now the real question is, what if the price of Palantir falls down?

Let's imagine for a moment that it falls to $150.

Watch now what happens to the value of my Future contract?