Where_will_the_stock_market_go_from_here_
00:00:00.000 | Hello everybody, it's Sam from Financial Samurai, and in this episode I want to talk about the
00:00:04.400 | stock market.
00:00:05.880 | In particular, what I think about the stock market at this level, we're close to $3,000
00:00:10.480 | on the S&P 500.
00:00:12.500 | And why I realized I don't like to talk about the stock market and I don't like to write
00:00:16.200 | about the stock market, because there are so many opinions.
00:00:21.200 | If I talk about why I sold stocks, I'm going to get bashed on the one side from bullish
00:00:27.160 | investors who think that's a ridiculous idea.
00:00:29.720 | And then when I talk about why I'm willing to buy some stocks, I get bashed on the other
00:00:35.520 | side from bearish investors who think it's absurd.
00:00:38.760 | So that is the interesting thing about the stock market.
00:00:41.400 | It is the market.
00:00:43.160 | And a market needs to have a buyer and a seller.
00:00:46.400 | So whatever information I put out there is going to be refuted by probably half the readership
00:00:52.680 | or half the listenership.
00:00:55.000 | And that's fine, everybody has an opinion.
00:00:57.120 | But it's just the shelf life on talking about stocks at a particular moment in time, like
00:01:02.000 | right now, might only be around a week or a month because stocks are, especially in
00:01:07.320 | volatile times, always moving.
00:01:09.920 | Whereas when I talk about real estate, there's some really longer term trends and some fundamentals
00:01:15.040 | that we can discuss that can last for a very long, long time.
00:01:18.600 | Now obviously I can talk about long term trends and fundamentals with the stock market, but
00:01:22.800 | I realized I just don't like to do it.
00:01:24.600 | I spent 13 years of my career in equities, so that's stocks.
00:01:30.520 | And I've seen people do very well and I've seen people who I thought were really smart
00:01:35.260 | just overthink things and significantly underperform or lose money in a decent market.
00:01:42.500 | And so stocks, it's really up to you to decide whether this is the right asset class for
00:01:47.800 | you.
00:01:48.800 | It's always going to be around 20% of my net worth, plus or minus 5%, because that's
00:01:54.760 | just how I like it.
00:01:56.640 | I don't like the volatility of stocks as much as other asset classes.
00:02:01.360 | I do appreciate the 100% passive income from the dividends that I receive.
00:02:07.720 | And I also appreciate that there's no carrying costs for stocks.
00:02:11.120 | But I'd much rather talk about long term trends, such as the post I wrote called Focus on Trends,
00:02:17.040 | Why I'm Investing in the Heartland of America.
00:02:18.960 | I wrote that several years ago, maybe it was 2016 or 2017.
00:02:23.920 | But the thesis was that thanks to technology and the trend of telecommuting and working
00:02:29.160 | from home, more and more people would escape expensive, very densely populated areas and
00:02:36.000 | go to less expensive areas and find a better life with lower cost of living expenses if
00:02:42.080 | they could make a comparable income.
00:02:44.480 | And what we're seeing now, obviously, with the lockdowns, the quarantines, the shelter
00:02:48.440 | in place, the pandemic, and so forth, is that there is an acceleration of that trend going
00:02:53.480 | forward.
00:02:54.600 | So as an investor, it's much better to focus on trends, long term trends, identify those
00:03:00.160 | trends, and invest in those long term trends for the future.
00:03:04.480 | Otherwise, investing, thinking, researching, analyzing stocks, specific stocks, is a very
00:03:10.440 | tiring endeavor.
00:03:12.320 | It actually will create a lower return on effort if you have to always think about the
00:03:16.860 | short term.
00:03:17.860 | So you want to think about the long term.
00:03:18.860 | So obviously, the longest term and the easiest way is to just invest in the S&P 500.
00:03:24.440 | And that's where I have the majority of my equity investments in.
00:03:28.600 | But I do have a significant portion of my equity investments in individual stocks, because
00:03:33.480 | I believe that I have the insights to hopefully identify trend long term.
00:03:40.160 | And that one trend that I identified in stocks over the past 15 years has been investing
00:03:45.480 | in technology stocks.
00:03:47.240 | I'm here in San Francisco.
00:03:48.240 | I hear about technology all day long.
00:03:51.040 | Technology and the internet is the future.
00:03:52.720 | I even left the finance industry to focus on Financial Samurai, which is an online media
00:03:57.840 | company that is also dependent on technology and the rise of internet penetration rates
00:04:02.680 | and usage.
00:04:03.840 | So I'm all in on this trend.
00:04:06.580 | I'm living, breathing this trend.
00:04:08.040 | And I'm investing in this trend.
00:04:09.580 | And I think the technology trend is going to continue.
00:04:12.760 | So really spend some time focusing on trends.
00:04:15.760 | In this podcast, I just want to share what I'm doing with my money with regards to stocks.
00:04:22.520 | First of all, I want to say that I have many, many different public investment portfolios.
00:04:29.040 | Because I don't have a job anymore, I rolled over my 401k to a rollover IRA.
00:04:35.440 | Because I have Financial Samurai, I created a SEP IRA.
00:04:39.760 | Because I did freelance work as a 1099, I created a solo 401k.
00:04:45.260 | And because I have children, I created 529 plans.
00:04:49.360 | So whenever you hear me talk about stocks, and you hear someone else talk about stocks,
00:04:54.440 | you can't just automatically think the person only has one stock portfolio.
00:05:00.660 | I think most people have multiple stock portfolios.
00:05:03.500 | Maybe not as many as I do.
00:05:05.340 | But I think most people have a taxable investment account, a 401k, those two portfolios.
00:05:13.540 | And if he or she does not, then they're probably a single person with a very simple life.
00:05:19.060 | And that's cool.
00:05:20.060 | That's not a problem.
00:05:21.060 | But when you listen to stock investment advice, or you listen to people talking about the
00:05:26.000 | stock market and investing, you've got to really understand where he or she is coming
00:05:30.660 | from.
00:05:31.940 | And where I'm coming from is that I haven't had a job, I haven't had a day job since 2012.
00:05:38.160 | And I rely on my taxable investment portfolio to help fund my retirement lifestyle or my
00:05:45.600 | existing lifestyle right now.
00:05:47.880 | I really don't want to go to work.
00:05:49.720 | Therefore, my taxable investment portfolio, which is my main portfolio, there's two portfolios,
00:05:55.640 | is more important.
00:05:57.640 | It's more conservative, and it's much larger than my tax advantageous investment portfolio,
00:06:03.520 | such as my 401k, 529 plan, solo 401k, SEP IRA, and so forth.
00:06:08.320 | I cannot afford to lose a lot of money in my taxable investment portfolio.
00:06:14.000 | That's why it's conservative.
00:06:15.280 | That's why I'm shooting for single digit returns.
00:06:19.160 | I don't have a withdrawal rate for my investment income, because thankfully, I'm able to live
00:06:25.200 | below the return rate and below the dividend yield rate.
00:06:29.520 | And that's really financial independence 101, having a large enough investment portfolio
00:06:34.360 | spit off a large enough amount of income, so it can cover your desired lifestyle expenses.
00:06:40.280 | Now, as for my tax advantageous portfolios, those are long, long term investments.
00:06:46.720 | And I don't have as much fear about them because they're being invested for the next 15 to
00:06:51.960 | 18 to 20 plus years.
00:06:54.000 | And so in that kind of time horizon, okay, obviously losing 30% of the value of these
00:06:59.760 | portfolios is really going to hurt.
00:07:01.560 | And it stinks.
00:07:02.560 | It sucks.
00:07:03.560 | I hate it.
00:07:04.560 | I actually want to sell everything and just kind of be really conservative.
00:07:07.060 | But I know over the long term, stocks are provided roughly around a 10% compound annual
00:07:12.760 | return since 1926.
00:07:15.080 | And that's including dividends reinvested.
00:07:17.200 | All right, so hopefully you understand where I'm coming from.
00:07:20.560 | I've got a larger taxable investment portfolio.
00:07:24.200 | And I've got multiple smaller tax advantageous portfolios when you combine them, they're
00:07:29.160 | still much smaller than my taxable investment portfolio.
00:07:32.280 | So you might be wondering, where do I think the stock market will go?
00:07:35.920 | What is my crystal ball say with the S&P 500 at close to 3000?
00:07:40.560 | Well, I talked about predicting a stock market bottom in March, where it was going to bound
00:07:46.840 | them around 2300 to 2400 and I would be buying the S&P 500 below 2400.
00:07:53.040 | The S&P 500 did indeed bottom at around 2250, somewhere around there.
00:07:59.160 | And it's just shot up by about 33% at the time of this episode.
00:08:05.480 | So what now?
00:08:06.480 | Well, I have sold all the stock that I bought in March.
00:08:12.280 | And I put a lot, I put a lot into the market, I put about $500,000.
00:08:16.780 | So am I up 30% or $150,000 on the $500,000?
00:08:20.520 | Nope, not at all, because I was buying on the way down, and I was selling on the way
00:08:25.920 | up.
00:08:26.920 | So overall, I probably made about about a 15% return on the $500,000.
00:08:33.040 | And that's about a 70 $75,000 return.
00:08:35.520 | Does that sound good?
00:08:36.960 | It's okay.
00:08:38.040 | What's more important for me is the rebound in my overall portfolio, because that is much
00:08:43.360 | greater than the $500,000.
00:08:45.820 | And so I've sold all those stocks that I bought.
00:08:48.440 | And I've sold a little bit more from the tech stocks that have had a huge rebound, like
00:08:52.560 | Tesla.
00:08:53.560 | I mean, Tesla went to like 900, and then it went down to 400.
00:08:56.320 | And then it went up to 850.
00:08:57.320 | And I'm like, okay, you know what, that volatility is just a little too crazy.
00:09:01.640 | I'm going to pare down about 50% of my holdings and just de-risk, de-risk, de-risk.
00:09:07.160 | And the reason why I've decided to de-risk is very simple.
00:09:10.240 | We've come so far so quickly, and valuations are at around 22 times forward earnings.
00:09:16.540 | So if you look at the history of the stock market, 22 times forward earnings is about
00:09:21.860 | as high as we were back in the early 2000s.
00:09:24.980 | That was during the dot-com bubble.
00:09:27.780 | And I don't think, I don't think that analysts have been cutting their estimates fast enough
00:09:31.820 | and aggressive enough.
00:09:33.220 | Overall, the S&P 500 earnings are being cut by about 15% to 17%.
00:09:40.280 | They're getting cut more and more as time goes on, as we realize the lockdowns are lasting
00:09:45.760 | longer than expected.
00:09:47.880 | And I think as we realize that a lot of these jobs are just not coming back.
00:09:52.440 | But if you think about it, if you cut earnings, this is consensus earnings on the S&P 500
00:09:57.200 | by only 15% to 17% for the year, does that reflect the proper devastation of the economy?
00:10:05.980 | I don't think so.
00:10:07.500 | 15% to 17%.
00:10:09.220 | Okay, yes, there are definitely sectors that are doing well.
00:10:12.780 | A little over 20% of the S&P 500 is made up of the gorillas that are doing really well,
00:10:17.860 | the Googles, the Amazons, the Microsofts.
00:10:20.980 | So fine, their earnings might be up.
00:10:24.180 | Let's just take a look at them one by one.
00:10:25.780 | No, let's not do that because that's just a little too complicated.
00:10:28.820 | But again, think about it.
00:10:30.160 | Is a 15% to 17% earnings per share cut for the S&P 500 in 2020 enough?
00:10:37.540 | I don't think so.
00:10:38.540 | And because I don't think so, I think the true price to earnings ratio for the S&P 500
00:10:44.540 | is not 22 times, it's probably more like 25 times.
00:10:50.440 | So it's more expensive than what the current estimates are.
00:10:54.700 | Because I think the current estimates are still too high.
00:10:58.300 | So everything is relative, folks.
00:11:00.240 | Everything is about expectations when you're investing.
00:11:02.900 | And I personally believe that with a 32% plus rebound since the March lows, I think investors
00:11:10.040 | are expecting a much faster and much stronger recovery than what's really going to happen.
00:11:16.960 | Let's hope there's no second wave.
00:11:19.000 | Let's hope there's no another one month lockdown during winter.
00:11:22.860 | Let's hope.
00:11:23.860 | But the reality is, there is that chance.
00:11:26.080 | And I want everyone, when they're investing with their active money, to think in bets,
00:11:31.760 | to think in probabilities.
00:11:32.760 | If we're at 3000 on the S&P 500, and the record was something around 3350, what is the probability
00:11:41.060 | that we're going to reach a new record high by rising another 10% to 12%?
00:11:46.600 | Versus what is the probability that we'll probably be range bound maybe between 2600
00:11:52.220 | and 3000 for the remaining year?
00:11:55.220 | And what is the probability that we might go down and retest the lows or break the lows?
00:12:01.460 | Think about it.
00:12:02.460 | Just think about it.
00:12:03.460 | Take your time.
00:12:04.460 | My thoughts are that there's a 30% probability, I think, we reach new record highs, which
00:12:10.420 | sounds kind of crazy given there's 40 million unemployed Americans, probably going to go
00:12:15.800 | to 50 million.
00:12:17.960 | A lot of these businesses are not coming back.
00:12:19.620 | And a lot of these jobs are now coming back.
00:12:22.380 | But the Fed and the government have been all in on supporting the economy and various asset
00:12:27.780 | classes.
00:12:28.780 | So 30% chance that the markets could retest and reach new record highs.
00:12:35.580 | I think there's a maybe 50% chance that we just kind of trade range bound between 25,
00:12:43.020 | 2600 and 3000 on the S&P 500.
00:12:46.980 | And on the downside, I think there's probably a 30% chance that we retest the lows.
00:12:53.860 | So not a great chance to reach new highs, not a great chance to reach new lows.
00:12:58.780 | I think the lows are in when we reach 2250 in mid-March.
00:13:03.680 | So what does that mean?
00:13:04.680 | What does that mean?
00:13:05.680 | That means that we're probably going to be range bound, I think, for the foreseeable
00:13:09.080 | future.
00:13:10.140 | And that means that the easy money, the easy money, the easy rebound money has been made.
00:13:15.820 | So the easy money has been made, then it's likely that your money stuck in the stock
00:13:21.140 | market is going to be dead money for the foreseeable future, or it's going to go down in value.
00:13:27.860 | And given this is what I believe, I've decided to take profits and take money off the table
00:13:32.780 | with my taxable investments, because I have a new mission.
00:13:35.860 | I have a new mission in 2020 and 2021.
00:13:39.740 | And that is to find great deals in the real estate market.
00:13:43.400 | Now admittedly, it is proving to be more difficult than I thought it would be.
00:13:49.260 | But I think that value is out there.
00:13:51.940 | And I cannot risk losing, you know, 20, 30, 40% of my money in the stock market if I'm
00:13:58.820 | looking to buy another property.
00:14:01.540 | My taxable investment money is used to pay for the life that I want to live right now,
00:14:07.460 | whether it's through providing income, through dividend income, or whether it's by providing
00:14:12.760 | capital, enough capital for me to buy a good deal on a property, and then I would just
00:14:17.620 | rent out my existing property going forward.
00:14:20.380 | There's always a right now use for my money.
00:14:23.980 | And that's what I want everybody to practice thinking about.
00:14:26.740 | There's no point saving, working so hard, taking risk, investing money, and never spending
00:14:33.260 | your investment dollars on a better life.
00:14:36.420 | You want to consistently every year, use some of your profits to pay for a better life.
00:14:42.580 | Your life is not guaranteed.
00:14:44.020 | We all know this, especially given what's going on with the world right now.
00:14:48.580 | If you die with mega millions of dollars or way more than you ever need, you lose.
00:14:54.180 | That's just a waste of time, waste of stress, waste of energy.
00:14:59.180 | You've got to figure out how to consumption smooth.
00:15:02.120 | And the way to do that is to just do some modeling, spend some time, go into Excel,
00:15:08.180 | type out what your savings would be over the next 5, 10, 20, 30 years, estimate the potential
00:15:13.260 | returns.
00:15:14.500 | And if you die with too much, no, no, no, you got a course correct.
00:15:17.700 | You got to spend a little bit more money on yourself, on your family, your friends, on
00:15:22.260 | institutions and people who need the money.
00:15:24.800 | Do whatever it takes.
00:15:26.460 | Just don't die with too much money in the bank or in your investment accounts.
00:15:30.780 | Now for all my tax advantageous investment accounts, for the most part, I've pretty much
00:15:36.220 | kept them intact.
00:15:37.940 | I'm not going to be de-risking my 529 plans for my kids because they won't need them for
00:15:43.620 | another 15 to 18 years.
00:15:45.980 | And I don't want to stress about it.
00:15:46.980 | I just don't want to think about that stuff.
00:15:48.580 | Just set it, forget it, and spend my energy and time living the life that I want.
00:15:54.380 | Now as for your investment accounts, you should think about it the same way.
00:15:57.500 | You should identify purposes for every single investment account.
00:16:01.900 | Your 401k and your IRA and your Roth IRA should be there to provide for a comfortable retirement
00:16:07.500 | after the age of 59 and a half.
00:16:09.900 | So if you are decades away from 59 and a half, or even if you're just one decade away from
00:16:15.260 | 59 and a half, you probably don't want to touch your investments.
00:16:19.260 | I mean who would have thought that we would have rebounded by 30% with such devastation
00:16:23.660 | in the economy?
00:16:25.500 | Not me.
00:16:26.500 | I definitely didn't think we rebounded this quickly.
00:16:29.540 | So you just never really know.
00:16:31.820 | And therefore, if you can't time the market, which most of us cannot, including myself,
00:16:37.180 | I can't time it properly, then you should probably just leave these type of investment
00:16:42.980 | accounts alone and continue to dollar a cost average over time.
00:16:46.540 | You know dollar cost averaging as you get older and wealthier is easy.
00:16:50.940 | The 401k maximum contribution, for example, is $19,500 for 2020.
00:16:57.500 | $19,500 shouldn't be a majority of your income.
00:17:00.980 | You know if you make, let's say, $100,000 household income, you're contributing less
00:17:05.040 | than 20% of your gross income in your 401k.
00:17:08.460 | That is not that risky, especially if you spread it out over 12 months.
00:17:13.460 | But in terms of investing a large amount of money, let's say $50,000, $100,000, or $5,000
00:17:20.180 | to $10X, which you normally invest in the market, that is something different.
00:17:24.660 | That is something that I don't think it's wise to invest a larger sum of money after
00:17:28.920 | a massive rebound when value regions are very expensive and expectations are very, very
00:17:33.780 | high.
00:17:34.940 | It was okay to do that when expectations were very, very low when the Dow was at $18,500
00:17:40.260 | and the S&P 500 was at $2250.
00:17:42.940 | But now, I think the risk/reward ratio is not in the investor's favor right now.
00:17:49.540 | As a result, I'm not willing to put new money to work in my taxable investment accounts.
00:17:55.260 | Or my tax advantageous accounts, yeah, dollar cost average, $6,000 in your IRA, okay, no
00:18:02.100 | problem.
00:18:03.100 | $19,500 in your 401k, okay, no problem.
00:18:08.140 | But investing $50,000, $100,000, multi-hundred thousand, millions right now, it just doesn't
00:18:14.940 | seem like a good idea.
00:18:17.140 | Now even though I am skeptical of the stock market after this huge rebound, and I fear
00:18:22.980 | that we're going to be in a trading range or just go lower, I still am not going 100%
00:18:28.780 | cash.
00:18:29.780 | Again, because I have purpose for every single investment account.
00:18:33.780 | And let me just share some reasons why maybe the stock market will continue to hold up
00:18:39.620 | and reach new record highs, right?
00:18:41.220 | I think there's a 30% chance we keep on going higher and we'll be higher by the end of the
00:18:45.660 | year.
00:18:46.700 | So one, there are plenty of people benefiting from this crazy depression pandemic recession.
00:18:53.580 | Not everybody is losing like the media makes it out to believe.
00:18:57.540 | If you want less stress, if you want to feel less freaked out, you got to stay away from
00:19:02.300 | the news folks, you got to stay away from the media.
00:19:04.260 | Maybe listen to Financial Samurai or other people who have more balanced viewpoints,
00:19:08.720 | because the media tends to want to talk about more horror stories to drive more views and
00:19:13.980 | more clicks.
00:19:14.980 | That's the way it is.
00:19:16.940 | Negativity sells better than positivity.
00:19:18.740 | Nobody wants to hear someone doing really well during a pandemic.
00:19:21.580 | Two, the Federal Reserve is definitely on the investor's side.
00:19:25.900 | Fed Chair Powell has implicitly said he's going to do whatever it takes and use whatever
00:19:31.120 | amount of the Fed's balance sheet to support the economy and buy assets.
00:19:36.420 | They can buy everything because they, or we, America, we can print an endless amount of
00:19:42.060 | money and we are a global currency.
00:19:44.940 | Three, the federal government is on our side.
00:19:47.540 | They too can just lend out money, forgive money, create all these infrastructure works
00:19:53.020 | projects to help millions of people get jobs again.
00:19:56.220 | That's what happened with the New Deal when FDR announced it between 1933 and 1939.
00:20:02.300 | There's no doubt this is going to happen again in 2020, 2021.
00:20:05.980 | Four, there could be a vaccine that comes sooner rather than later.
00:20:10.940 | You know, it's a race for billions.
00:20:12.300 | Whoever finds it is going to be a very, very wealthy person.
00:20:16.580 | So you've got companies like Gilead, AstraZeneca, Moderna, all racing to find that vaccine and
00:20:22.980 | they are just going to crush it if they do find it.
00:20:26.500 | Five, you want to hedge against a layoff.
00:20:29.220 | The irony about what we're seeing right now is that the more a company lays off and the
00:20:34.700 | more the economy has shown a rise in unemployment claims, the stronger the stock market has
00:20:40.900 | gotten.
00:20:42.260 | You see this time and time again when a company announces massive layoffs, the stock shoots
00:20:45.700 | up.
00:20:46.820 | Every week in April when there were record high unemployment claims, the S&P 500, the
00:20:51.980 | Dow, the Nasdaq, they all shot up.
00:20:54.940 | And they shoot up because the idea is that there's going to be hopefully more stimulus,
00:20:59.740 | more support from the Fed and the government, and that companies are going to be just as
00:21:04.800 | productive and have higher operating profits with less overhead.
00:21:10.340 | Another reason why to own stocks is because of low bond yields.
00:21:15.060 | Everything is relative in finance.
00:21:16.380 | So stock investors look at bond yields, which is the risk-free rate of return, specifically
00:21:20.340 | U.S. Treasury bond yields, like the 10-year bond yield, and think, "Okay, how much equity
00:21:25.600 | risk premium do I deserve?
00:21:27.500 | Am I willing to demand to take more risk in the stock market?"
00:21:32.620 | Well, if you look at the 10-year bond yield, it's currently around 0.6 to 0.7%.
00:21:37.900 | That's ridiculously low.
00:21:39.020 | So nobody investing in bonds is trying to make a lot of money.
00:21:43.360 | People are investing in bonds for safety.
00:21:45.420 | And so when an investor thinks about relative returns, he or she thinks, "Well, 10-year
00:21:50.940 | bond yield, the 30-year bond yield is so low, and if the dividend yield on the S&P 500 is
00:21:55.980 | higher, well then, not only am I getting a higher dividend yield, I have the potential
00:22:00.540 | to make a higher capital return."
00:22:02.620 | And history suggests that back in 2008 and 2009, when the S&P 500 index dividend yield
00:22:10.100 | was higher than 30-year U.S. Treasury bond yield, it was a good time to buy.
00:22:15.500 | But that time is a little bit different from this time because we've already rebounded
00:22:18.980 | by a lot.
00:22:19.980 | If I were to tell you this back in March about the dividend yield of the S&P 500 higher than
00:22:26.940 | 30-year Treasury bond yield, which it was, that would have been a great indicator.
00:22:30.940 | But now, it's really tough.
00:22:34.900 | And then finally, I think it's worth noting, it's worth noting that there's a tremendous
00:22:39.060 | amount of cash on the sidelines.
00:22:42.820 | As the stock market has gone up, the cash hoard on the sidelines has gone up, up, up,
00:22:48.820 | up.
00:22:49.820 | We're talking about something like $4.8 trillion worth of cash, which is more cash by about
00:22:56.620 | a trillion than back in August 2008.
00:23:00.000 | So having a lot of cash on the sidelines is definitely a good indicator for a potential
00:23:06.420 | continuation of the stock market rebound if there's more good news on the coronavirus
00:23:10.900 | fund and on the economic front.
00:23:13.540 | It is a ton of cash, folks.
00:23:15.540 | And I definitely encourage you to click over to the post and check out that cash on the
00:23:19.100 | sidelines chart because it is massive.
00:23:23.120 | Those with experience or who've lived through the dot-com bubble crash, the global financial
00:23:28.520 | crisis in 2008 and 2009, realize that cash is very, very valuable during times of uncertainty.
00:23:36.540 | People who didn't have cash weren't able to survive.
00:23:39.420 | They had to liquidate their homes and their investments at the bottom.
00:23:43.900 | Those who didn't have cash couldn't take advantage of fire sale prices in various types of asset
00:23:48.860 | classes.
00:23:49.940 | So a lot of people have learned from the past and are starting to hoard cash to be better
00:23:55.380 | protected this time around.
00:23:57.460 | Cash is really important.
00:23:59.400 | Please have a higher than normal cash amount because this thing ain't over yet, folks.
00:24:05.160 | And if you think it is over this quickly, well, I got a Dumbarton Bridge to sell you.
00:24:09.840 | Overall, I am optimistic.
00:24:11.440 | I'm optimistic that we're not going to fall into the abyss because the federal government
00:24:16.440 | and the Federal Reserve are going to save us.
00:24:19.440 | They're going to save us.
00:24:21.400 | And up until this global pandemic, the economy was looking great.
00:24:26.720 | Balance sheets were very strong.
00:24:28.240 | Profitability was very strong.
00:24:30.880 | Household balance sheet was very strong.
00:24:33.200 | We've been doing a great job since 2009, 2010.
00:24:36.580 | So long as the government can keep supporting us during the lockdown period and during the
00:24:41.980 | gradual opening up period, I think we're going to be okay.
00:24:46.700 | So keep the faith, folks.
00:24:48.660 | And I hope this is the last I'm going to talk about the stock market for a while because,
00:24:52.200 | man, I really don't enjoy talking about it, even though you might enjoy hearing about
00:24:56.520 | it.
00:24:57.520 | And if you appreciate this episode, I'd appreciate a great review and a share.
00:25:01.720 | Thanks so much, everyone, and I'll see you guys around.