Unfortunately, that could not be further from the truth in todays video im going to explain why stocks will fall. Another 50 from here. So lets get into it. The reason for the current downfall in the markets is multi faceted. So let me start with some of the recent news that came out on wednesday and then im going to get into some of the fundamentals of the market and show you guys why the stock market could fall another 50 from here. For starters, we know that inflation is sky high, and this is one of the main reasons why the stock market has been falling. Now. Marchs cpi data was the highest in 40 years and it was well expected that april cpi data was going to come in significantly lower economists were expecting an inflation rate of 8.1 percent in april. Unfortunately, that inflation rate came in at 8.3 percent and core cpi was higher than expected at six point two percent now this is really a bad thing, because it shows that inflation is not dropping as much as people thought it would. People thought that mainly with energy costs going down, we would see inflation go down, but thats just not the case. Yes, we did see the rate of inflation drop from 8.5 to 8.3. However, we were expecting a significantly larger drop than that and weve had times before. About a year ago, where inflation went down for one or two months before continuing higher, so unfortunately, this was not the drop that economists were expecting to see and it points to inflation continuing to be much higher than expected.

This is really spooking the market because, while most people for a long time thought that inflation was transitory, we would peak out of march and for there on out, we would start dropping now its looking less certain it doesnt look like thats necessarily guaranteed, and this is Really a problem because it means the fed is going to have to raise interest rates much higher and much faster than expected in order to combat inflation. If, in fact, it does not come down as fast as people thought, it would and of course, aprils higher than expected inflation report pretty much guarantees that the fed will do a half point rate hike in june and possibly again in july. Now the higher interest rates is another reason why stocks are going down and it has to do with the fact that as borrowing costs get more expensive, a lot of these companies who have financed their tremendous growth over the past few years are going to have to Start paying off that debt theyre not going to be able to finance debt anymore because its going to be too expensive, which means the rate of growth, is going to slow significantly, and that is what we are already seeing in earnings. Disney reported stronger than expected growth in q1. However, they are reporting some issues with their part closures in asia and, more importantly, they did not give good forward guidance because they do expect things to slow down.

Disney stock was down two percent on the day and another three percent after hours, it actually closed in the after hours 101.85. Now whats kind of interesting is a few months ago towards the end of last year. I told people that i thought disney would get back down to a hundred dollars and at the time people thought it was crazy. They thought disney would never get that low again. But i looked at history. I look at what happens when pe ratios go sky high. They always come back to baseline, they always get back to a baseline of 15 or lower, and i saw that happening. I really thought disney was going to get down to 100. If you go back and look at my videos from last year towards the end of last year, i was constantly predicting disney would get down to a hundred dollars, and i kept saying i dont want to buy disney until it gets down to 100 and its. Finally, there it actually happened, so it seems crazy. What was quote unthinkable was actually predictable last year, but its worse. Let me show you a few other stocks. Now rivien is one of the stocks that at one point, was one of the most valuable companies in the world by market cap, despite the fact that they had actually delivered zero vehicles in the quarter prior just a few short months later, rivien is down to more Reasonable levels, having dropped from a high of a hundred and eighty dollars all the way down to twenty dollars in the past seven months now we did get a little bit of a rebound rally after hours of about five percent, but that was after the stock had Already dropped nine percent during the day, and if you take a look at this chart, it is very clear that ravenian does a falling knife and, despite being down almost 90 percent from highs, rivien will continue to fall further and other stocks that retail investors ran up To insane valuations last year are finally coming back down to more normal valuations beyond meat shares tumbled.

After a wider than expected, loss beyond meat was already down almost 14 on the day and they fell another 21 after hours for a total drop of over 35. On the day, keep in mind that beyond me, it was trading at 240 dollars at one point and it just closed at 20.58 beyond me is down 91 from highs, and it is still trading at a premium compared to the historical valuations of companies like this beyond Meets price to sales ratio is still over three and believe it or not a price to sales ratio that is considered a good value stock is one which means beyond me could continue falling all the way down to 6.86 before it gets down to a low valuation. It is still expensive, even though its down 91 from highs now heres. The thing ive heard a lot of youtubers say that stocks are cheap right now, because theyre down 50 70 90 from highs. Well lets test that theory, because it sounds good. I mean if a stock drops 90, it must be cheap right lets, go back and look at the schiller, p e ratio to see if stocks actually are cheap right now or, if theyre still trading at a premium. Now, to give you a little bit of background, the schiller pe index is a measurement of the average pe or priced earnings ratio over time and what it does is. It shows the price to earnings ratio of the general overall market over a certain period of time.

So lets go, take a look at the schiller pe index and see kind of where we are at and whether or not stocks really are cheap right now now the first thing that youll notice is that the shiller pe ratio is at 30.98. As of wednesday may 11th now theres only two other times in history, where it has been higher, one was in 2017 right before the last recession and the other time was during the dot com bubble other than those two times the schiller p e ratio has always Been lower than where it is today, and you will also notice that the median p e ratio or average p e ratio is 15.87, that is half of the p e ratio of where it is at today. So, in order for stocks to get down to the average p e ratio where they normally trade at stocks would have to fall another 50 percent from here now. I know that seems insane, but youve got to understand. Weve got stocks like tesla that are still trading at a p e ratio of 100 and thats after the stock has already fallen by over 40 percent from highs. So, im hopeful that you can see that when you look at the shiller, p e ratio – and you see that its trading at double, where it normally trades, when you look at the fact that p e ratios are twice as high as where they normally are.

You have to understand: the stock market still has to fall. Another 50 percent before we get down to the average p e ratio that the stock market normally trades at now. Normally, when we get a major correction, the stock market, a bear market, a recession like were in right now, normally what the stock market will do is it will actually over correct, which means stocks, even though they would have to evolve 50 to get back down to The average p e ratio they might fall much lower than that, which means the stock market might fall 60 or 70 percent from here in an over correction before we start going back up again. So i know stocks seem really cheap right now, but it just puts things into perspective. How insanely overvalued the stock market has been for the past three or four years. If you have been coming into the stock market, youve only been investing for less than four years. You might have thought that the p e ratios that weve seen over the past four years were completely and totally normal. But if you go back and you look at history, what i hope you can see in the charts ive just shown – you is that historically, the stock market was extremely overbought. It was extremely expensive compared to where it historically trades at and its going to take a lot of pain and a lot of time for us to get back down to normal valuations.

Now. Keep in mind that if you think its just impossible for the stock market to go down that much, i want you to go back and look at the only other time. In history, where p e ratios were insanely high, it was during the dot com bubble and during the dot com bubble, the nasdaq fell by 80 percent thats right, the stock market fell by 80 percent. Now, keep this in mind. The nasdaq, as of today, is only down about 25 percent. The s p is only down 18 percent. So if we fall 80 percent from highs, we have a lot further to go. So no stocks are not cheap. As ive just shown, you theyre still twice as high as they normally. Trade stocks are still very expensive and they have a lot further to fall before we bottom out. So what am i doing right now? How am i playing this? First of all, most of my money is tied up in cash. There are a few stocks here and there ive traded, but by and large the vast majority of my investment money is in cash and in addition to that, i have been doing some very short term trading to take advantage of the volatility in the markets. Now i dont get it right all the time. I make a lot of mistakes. I get it wrong a lot and thats. Okay, remember you only have to be right. 60 percent of the time to make money in the stock market.

Last wednesday, when the fed had their meeting and the dream house spoke, we bought some call options. We made a lot of money on those call: options sold some of them on wednesday for significant profits, and you might have seen this celebratory video. I did well the very next day the stock market did a complete 180 and the nasdaq had its worst day or third worst day in the history of the nasdaq and of course i lost a lot of money that day, i did not get it right, so I got it right out wednesday got it wrong on thursday sold the stuff on thursday. I wasnt really sure what to do friday. I opened a put option expecting the markets to go down. On monday, we made a 72 profit on that sold. That monday bought a call option monday night sold that tuesday morning for a 56 profit. Now those are the major plays. I did so. If you go back a week now – and you look at wednesday of last week to tuesday of this week so a five day trading period or seven day, total week period, we did four trades. I got three right, one wrong and thats all. It takes guys thats. All you have to do to be profitable. You just have to get most your trades right, so i dont get it right all the time, but i get it right most of the time and thats.

Why were profitable thats? Why my portfolio and a lot of the peoples portfolios in the vip discard were actually up on the air were making money even as the stock market is down, 20 percent, our portfolios are up were making money, so i just want to invite you if you are Sick and tired of losing money you want to make money in this crazy market come join us over the vip discord. I if you want to sign up for that, i post all my trade alerts in the vip discord. I explain why im buying the trades – and i let you know before i actually buy them that way. You can decide whether or not you want to jump in or maybe wait a trade out if its too risky for you, because i do let you know if a trade is super risky and i tell you position sizing and all that stuff. So if you want that kind of help, you want to make money in your portfolio then come join us over the vip discord. If you want to sign up for that, you can sign up at stock curry.vip, slash, get vip, thats stock, curry.vip, slash, get vip, and i, if youre curious what im trading right now, what im in right now nothing im completely out of all my options, my trading Portfolio is almost entirely in cash. I do have some gldg and a little bit of amc, but outside of that it is all cash.

I i dont have any options trades right now, because, unfortunately, the market is just so uncertain in the very short term. We are right at support levels on the indices, but the overall market technicals are still extremely bearish and i have no idea if were going to bounce and go up over the next few days or, if were going to break below support and just continue going lower. So, in the very short term, i literally have no idea whats going in the market, because theres no clear direction, im, not trading anything im, just holding cash, long term, though over the next year. I do expect the market to continue to drop and it drops significantly now, if youre wondering about cryptocurrencies yeah its bad, a bitcoin is well below 30 000. uh yesterdays video. I went through some technical analysis on bitcoin and showed you that if bitcoin dropped below a certain level, then it would pretty much guarantee drop down to 19500 and today bitcoin did drop below that very significant support level. It is now down almost at a two year low and if you look at the market, technicals bitcoin is, at this point almost guaranteed to get down to 19 500. about 50 or more of people who are invested in bitcoin at this point are now losing money On their cryptocurrencies and as more people lose money, keep in mind that cryptocurrencies are heavily heavily margined in the stock market. You typically deal with a 2x margin right.

So if you put a thousand dollars in your account, you might be able to trade with two thousand dollars, but in crypto the margins go up to a hundred x. So you could put a hundred dollars in your account and you could trade with a whats that ten thousand dollar i mean its insane. The problem with 100x is if the crypto goes down by one percent. Youve just lost your entire investment, even if youre, only in at 10x and crypto goes down by 10 percent. Youve lost your entire investment and right now, bitcoin is down 50 over 50 from highs. There are a lot of people who are losing a lot of money in cryptocurrencies and thats. Why youre seeing cryptocurrency, because its leveraged so much higher than the stock market is? That is why youre seeing cryptocurrencies fall much faster than the stock market is falling. So keep that in mind. Crypto is absolutely 100 in a crypto winter, and i do expect bitcoin to get down to 19 500, which is the next major support level. I would not be investing in cryptocurrency right now, so just keep that in mind also whats. The best thing to do with your money – all i can do is tell you what im doing and im holding cash. I am waiting for the right time to buy in, and i have not found that opportunity. Yet in my long term portfolios i most likely be holding cash for another year or two until we bottom out in my short term trading portfolio.

I am holding cash at the immediate time being just because i dont really see any clear direction in the markets. All right, i hope that helped you guys out again, i explained all this stuff in the vip discord if you guys want to come, join us over there. Finally, i just want to remind you, please hit the like button and subscribe if you havent already. I hope you guys got a lot out of this video.

https://www.youtube.com/watch?v=6WXM-nEXf8A