The Stock Market Will Crash Again (Part 2 of 2)

In this video, we'll look at reasons for why the stock market will crash again. We'll understand the bearish investors' perspectives and why they believe the stock market will retest the March lows.

ABOUT LUMOVEST
Lumovest is an online school that teaches finance, accounting, and investing. We teach you how to analyze businesses and securities like how it's done at the world's top investment banks and private equity firms.

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[Lumovest]

We just uploaded both BULL (Part 1) and BEAR (Part 2) videos so you can hear both sides of the story. Which one do you think make more sense?

[losg]

Man these videos are put together so well. this channel deserves many views/subs

[teroux]

I like the idea of you guys doing videos making opposite cases.
It's a good exercise for critical thinking skills.
Nicely done

[MaxTalks]

Basically don't try to time the market, if you take a bull or bear perspective, you're potentially missing out on long term gains. Best piece of investment advice is to have a long term mindset and invest continually over time!

[therighteous]

Bear case makes a lot more sense to me.

[christanggg]

I did not watch the video on the "Bulls argument" - not sure what I am going to say has already been mentioned but regarding the 3 points mentioned in the video, if I may offer some insights:
1. The recent rally is a "bull trap".
- Very subjective, nobody can ever be right or wrong about this but, the current crisis is unlike the financial crisis of 1999/2000 and 2008/2009. In both cases, there were bubbles (dot.com, housing subprime mortgage) that were waiting to pop (and they finally did). Investors were all rushing to hop onto the "next big thing" and senselessly poured in all their money for fear of missing out. The crashes that followed were market corrections that had to happen. Whereas in today's recession, things are slightly different - there is no such bubble. Even if Q2 earnings are bad, it is very unlikely the market will touch a new low UNLESS there are extended lockdowns resulting in a chain of multiple bankruptcies (note - possible but unlikely)
2. Stock market (SP500) is overvalued
- If we look up on the composition of SP500, we see that takes up 20% weightage in the SP500. 20%!!!! From only 5 stocks!!! The high P/E are all coming from them, high growth companies investing in Cloud/Tech/Software which are expected to produce very high margins in the future. Amazon itself has a PE of over 60x!! Then again, if you look at the business models of these companies, we will notice that they revenue streams are relatively sturdy. For example, Microsoft's biggest revenue stream is from the licensing of its operating system on a subscription basis. Do people cancel their subscription during COVID19? Definitely not! If you look at most other stocks (travel/hospitality industry), they are still hovering near the bottom as investors remain cautious. So is the market really overvalued? Your call
3. Economy is really, really bad
- Yes, this is definitely right. The most important thing to consider now is whether the companies you are investing in has a strong balance sheet to survive a prolonged period of inactivity. Right now, in my personal (might be incompetent) opinion, the P/E ratio is not really something to be focused upon (it's definitely going to be bad) but rather, can they survive the current storm and emerge stronger thereafter.

Initially I was in the "Bear" party. I shorted the SP500 on a few occasions and made a few painful losses. Did some further research and gradually found myself in "Bull" party. I thought "the market is stupid, the market is irrational". But in the end, I realised that the market was actually the one mocking me instead.
Above is wholly just my opinion and my own findings, hope I do not offend anyone (especially "Bear" party hahaha). Of course, if any of the above is flawed, I am happy to hear more thoughts! Everybody learns in the process.

[PanteraRossa]

Though I’m fully in agreement with the bear sentiment and see technical weakness beginning to grow especially this past week, we can’t overlook the increase in money supply at historic low rates as having no effect. Literally the only inflation over the past 20-30 years has come from cheap debt artificially inflating asset prices while deflationary pressure permeates throughout society. It’s the reason inequality keeps getting worse and those who own assets and property are the only ones actually “growing” wealth. It’s only going to get worse the more printing they have to do. And if they get to negative rates, it’s tough not to see mass revolts all over the world while the S&P and Nasdaq go to new highs, everyone is rebalancing from bonds to stocks... Stay sharp folks

[TehCoz]

This looks a lot more plausible than the bull case. Thanks for the video.

[LostSoulAscension]

The impartiality and striving to do so is respectable to say the least. Thank you.

[markzajac]

This is great information but I'm also quite impressed with your color sense. Nice graphics!

[MrAlanfalk]

Good thing, we can come back here in 1 year and See who was right 😉

[anthonycollins]

Love the hurricane / house comparison!

[ermiaskidane]

It’s not like ppl don’t know some of the stock are over value. it’s just that seen how much money the Fed are printing out saving losing value so much. So we have to buy assist to preserve its true value.

[yusrilmr]

I love this 2 point of views. Very objective . Keep goin man 👍

[mbsesv]

You've opened my eyes, bro. What's said after 10:43 sounds very legit. And after 2:34 is also well said, so I think this time will happen like that as well. The entire falls usually lasted 18 months, so most likely will be with this one, too. In rebounding is possible to get some money in, ,buy" possition, but the real bottom will come after more that year from now, I think.

[sanjaykapoor]

Just found this channel - cracking content, keep it up

[livegoldxauusdsignal]

S&P index is up 7.93 points or 0.23% at 3382.87. It's high price reached 3384.24 today
Dow industrial average is up 38.36 points or 0.14% at 27731.20. It's high price reached 27741.33 earlier today

[jittersgeyser]

Looking st the dow nasdaq or s&p is incorrect. Those are determined by a very few amount of major corporations. Many of those corporations are overpriced. The stocks outside that are still many at almost 80% down still.

[mukeshpatel]

Yes it’s going to be first time cause interest rate so low and fed printing like there’s no tomorrow

[rishikapoor]

Great video. Very nicely explained with examples and logical explanation.