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Friends, it's a wonderful, simply wonderful day at the market. If this is your first time on our channel, you're probably thinking, "What is this guy talking about? "All around is solid red." That's right. All I want are big red days. If you are a long-term investor, this should not scare you at all.
If this scares you, you've found the right channel. I was on the phone last night. I saw the futures. I even wrote to our Everything Money group chat and asked, “Am I seeing this correctly? "NASDAQ futures are already down 1.7%?" Everyone replied, "Yes, I see that too ." And I thought: "Maybe there's some mistake here." Yes, a lot of reports came out yesterday .
Amazon reported that they fell sharply. Intel fell by about 30%. Um, Reddit fell 30% after the report. So I thought, "What?" Then at night the situation became worse and worse. And this morning it all started, guys, NASDAQ is down 3.36% right now. For all you idiots who love Bitcoin and consider it an investment: your Bitcoin is now worth $77,000.
Why? Because the NASDAQ has been falling for the last two weeks . So Bitcoin is falling. Guys, I can bet a lot. If NASDAQ falls 50%, Bitcoin will fall 80-90%. This is a speculative leveraged play on the NASDAQ 100. Anyone who claims otherwise has no idea what they are talking about. The best argument against Bitcoin: if you don't understand Bitcoin, it's because you don't know enough about it.
But when it comes to investing, you just don't get it . Everything rests solely on history. This is absolutely absurd. And nothing makes me happier than seeing Bitcoin suffer. You can sit there and say, "It only fell 1%." No, he fell much harder. Last week, literally last week, the high was 84,300. The low was 76,418.
For those who think this should be our currency: who would want their currency to fluctuate like that—by 10% in a week? 10% per week. This is not a sign of stability. In any case, we have a lot to discuss today. I want to discuss something else for those who follow our main channel and compare the results of my " Big Seven" with the real one: look at what's happening today.
The real " Big Seven" fell by 2.36%. My " Big Seven" fell by 0.83%. Yesterday I was down 0.04%. This is considering that Sprouts Farmers Market shares fell 20%, and they were in my portfolio. Friends, I've always said: when the bear market finally comes, my Big Seven will perform much better . This is noticeable on any day when the NASDAQ drops 1% or more.
My portfolio is holding up much better. I'm not at all worried about my "Big Seven". And I agree with that. Look at it from another angle. When we did the quarterly review, the G7 had grown to about 91,000, and mine was at 57,000. Now look. I have 60,225 now. The real "Big Seven" is at 86,866. Yes, I understand.
It's exciting, but in the long run it will suffer. Okay, let's take a look at Intel today, guys. Intel got it pretty good. Today, shares fell 30.7 %. The minimum was 63.71. The current price is 63.80. This is a huge drop. I have a lot of news, but Intel is the main topic , guys. Intel is still in the process of transformation.
They are still in the recovery phase. And the personal computer market has become weaker due to the rise in chip prices. Therefore, demand fell. It seems like someone, like Dell, announced a 20 percent decline in personal computer sales or something like that. Okay, let's open a few articles. And now let's get back to this.
Intel shares are rolling towards their worst day in a decade with a loss of $140 billion in market capitalization. Friends, you should remember that 18-19 months ago Intel was worth $17, and then there was a sharp jump. I was an Intel shareholder. And I still remain so. I lost a lot of shares at $8 a share because of a covered call option, but I didn't care because I thought they were overvalued.
Intel shares fell 29% in morning trading after the company issued a weak revenue forecast, citing a slowdown in the PC market. The CFO said rising memory chip prices and tight corporate IT budgets are putting pressure on demand for PCs. It seems like a short-term problem. So just remember that the explosion at Intel's plant in Israel cut the company's fourth-quarter revenue forecast by $300 million.
Okay, this happens. This is not good. Let's look at something different. By the way , take a look at AMD. AMD fell 12% today. 12%. Okay, Reddit shares are down 30%. Roblox fell 20% after its third-quarter report. Let's open this . Let's find out what happened. Reddit reported lower-than-expected daily active users in the third quarter and gave a revenue forecast for the current quarter that missed Wall Street expectations.
Oho. Wall Street also criticized the platform's plans to allow access to forums only to registered users. OK. Reddit shares are down 43% year to date, which doesn't bother me. In July, shares fell by more than 21%. So let's quickly open Reddit to look at the big picture and draw conclusions. And guys, if this is your first time on the channel: we will be the voice of reason when the bad "bear" market eventually comes .
There will definitely be a bad "bear" market . The market is too overheated . The estimates are way too high everywhere. I don't care who says what. The situation right now is just crazy. We have a long 10 or 12 years ahead of us. It will probably be a little uncomfortable. That's when real investors are formed.
So , if you say you're a long-term investor, but days like these scare you, I have to disappoint you—you're not a long-term investor. The good news is that I was in your shoes, but I changed because I realized: no, there has to be a better way. So , Reddit fell 30% today. It currently sells for 17 times free cash flow and 21 times earnings .
Not bad considering the all-time high was 283 and the stock is currently trading at 90. That's a 67% drop. And these 283 were back in January. Guys, you understand that when the stock was three times more expensive, the P /E ratio was 50 or 60. Now the stock is cheaper. P /E is 18. Price to free cash flow—18.
This is an opportunity for real investors. Excellent return on capital. By the way, there are almost no debts. Market capitalization of $18 billion versus $15.7 billion enterprise value. This means they have a net $2.4 billion in cash. Oho. So you're actually paying 15. Guys , this is actually really interesting.
This is indeed a very interesting company to study. So what I mean is: let's say you have a mortgage on your house for 500,000. You have a car loan for 50,000. All your debts are 600,000 in total. And you have a million dollars in your personal account. That's what's happening here. This company has more cash than all their debts.
This is just incredibly cool. Wow, why have their profit margins been so high lately? Let's take a look. Let's check their income statement . Net income just jumped significantly. Almost a billion dollars in the last year. Revenue skyrocketed. Look at this revenue, guys. In 2020, there were 230 million, then 485, 666 , 804, 1.3, 2.2, 3.09.
That's right. Now you can sit there and say, "Well, Paul, why do n't you buy it?" I need to do more research. I need to do more research. It seems like a pretty good deal, but if I don't understand the company and the stock starts to fall, I won't understand why I should hold it. And another thing—what is the life expectancy?
What is the long-term value of Reddit? If Reddit didn't exist in 10 years, would I be surprised? I don't know. I don't think so. So I look at it and think: is this really a company I personally want to own? Because I try to buy companies that I think will be around for a very, very long time. But, guys, let's look at these eight pillars.
For example, the absence of debt. That's the problem. The number of shares outstanding is huge. They now have 36% more shares outstanding. I mean , look at this. Look at this jump. But now it is starting to decrease a little . So that's good. That's not bad. So, the latest trend is slightly decreasing.
And guys, if Reddit continues to get cheaper, I would advise Reddit to spend its billion dollars of free cash flow on share buybacks. I ignore the 5- year P/E and 5-year price-to-free cash flow ratios because they are much lower than the current ones. The question is, will their current net income and free cash flow continue to grow, or was this a one-time big spike?
That's the question I'm asking. Because let me tell you, it looks pretty interesting. Now let's check out the other articles. Look at this. The best stock market forecasting tool says returns over the next 10 years will be terrible. Personally, I believe that the 10-year PE ratio with a very high correlation and the market cap to GDP ratio with a correlation of about 87% are the best indicators.
But this graph shows that the share of stocks in the portfolios of average US households is at an all-time high. And according to the best forecasting indicator, this does not bode well. So let's take a look at this graph. It reflects the situation in reverse order. Household equity holdings compared to S&P total return over the next decade.
Friends, over time, more and more people are investing in stocks. But look at this. Quite interesting, isn't it? Although the figures don't match up perfectly, the picture is quite bleak. The profitability in the next decade does not look optimistic. When more and more people own stocks, it means everyone loves them, and therefore, prices become very high.
When you pay more for an investment, what happens to your future returns? She falls. This phone costs $1,000. If you buy it for $200, you make $800 in profit. If you pay $900, you only earn a hundred. The more you pay, the less return you get. Same here. We must remind everyone that when you buy a stock , you are buying a share of the business.
I go into detail about this in our valuation workshop. Of course? So, let's take a look. Anyway, guys, this isn't...listen. So, assuming inflation over the next 10 years is 2.7%. The share of equities in households assumes a nominal annual return of minus 8.7% over the next 10 years. Oho. Minus 8.7% per annum, and this does not include dividends.
So including dividends , it will probably be 7%, maybe 6.5%. This is bad, friends. This is really, really bad. This does not mean that you should stop investing. We try to teach you how to invest using cost averaging in low-cost ETFs, no matter what happens. But I want you to enjoy the "red" days at the market.
If you tell me, “Paul, I’m retiring soon,” then don’t hold so much in stocks. You must be aware of this. It may be worth reducing your stock holdings if a 50% market drop would affect your ability to retire . You should think about it. So, if you are young, and by young I mean under 50 years of age, you will have many opportunities over the next 10-15 years to invest money at very low valuations.
Yes, it will hurt because your current money will probably depreciate, but you can't look at it that way. You should look at this as an opportunity, because you will probably retire during a new long-term bull market, which could bring you a huge fortune, and that would be great. This is simply incredible.
Okay, let's take a look at Amazon. Now Amazon actually gained some ground today. Let me open this in our program. So , Amazon shares fell by only 2.15%. At one point today they were down almost 5%, but recovered nicely. They released their earnings report. They were terrible. So, Amazon shares are falling even amid a bold new forecast for cloud technology.
Let's see what this means. Let's open this right now. Here. Amazon shares fell nearly 7% in over-the-counter trading after third-quarter revenue and profit fell short of Wall Street expectations. This does not mean that the company suffered losses. She simply did not live up to expectations. Their income grew by about 11% year-on-year.
Amazon Web Services grew 39.3% in the quarter, falling short of the 40 % mark. Imagine your company losing 7% of its value because people expected 40% growth, and you only grew 39.3%. This is what I mean when I talk about people's emotional reactions. Today is a big "red" day in the market. Many factors came together.
But friends, if you remember, those of you who were in the market in 2000 know that there was no specific event that caused the peak in March 2000. It just happened. There were quite a few people at the market, as were we, considering how many households were present there. Something crazy is going on there.
And I love it because the next 10 years are going to be so exciting for those who understand value. We on this channel always try to teach the difference between price and value. Now people are probably saying , "Oh, Paul doesn't understand." No, many people think I understand. But haters, there will come a time when they will say, " Paul says all stocks are cheap." "He doesn't understand anything." Okay, that sounds good.
The same stocks I criticized today, for example, at $100 a share, will be told I don't understand anything when they're at $ 30. This has already happened to almost every stock I own. Look at Nike. Best example: We did a video when Nike was 180 and said we'd look at it when the price dropped below 100.
People said it would never drop below 100. Now when we buy it for 30, 40 or 50, people say, "Dude, you don't understand anything." "Nike is the end." And I just think, "Oh my God, how can Nike be the best company in the world at 180, and at the same time be terrible at 30, 40, or 50?" Yes, their income is falling, but this is complete madness.
These are the same people who love "shchytkoins" . I will simply call all of Bitcoin “ shieldcoin.” I know it's a name for junk coins, but it's just Bitcoin . This is ridiculous. It will be my greatest pleasure to see Bitcoin fall so much. Look at NFTs. By the way, no one gives us credit for NFTs. NFTs have appeared.
We're like, "What is this ?" And I remember saying that I believe in NFTs more than Bitcoin. And they have actually depreciated to zero. NFTs that used to sell for millions of dollars are now worth a hundred or two thousand dollars, or something like that. This is ridiculous. They lost 99.99% of their value.
We do n't even talk about them anymore. I think Bitcoin will be the biggest disappointment. Oh God, I can't wait. I honestly can't wait, guys. I really can't wait. So guys, if this is your first time on this channel, I ask you to do two things. First, subscribe to the channel because when the markets get crazier, we will be the calm in this storm.
If you go to my Instagram, there are photos of me from the COVID crash, kissing the screen on days when the market was down seven or eight percent. This is who you need around you when you're scared. You don't need other people who are also afraid. I would really like that, and I proved it then. I would like to see a 50 or 60% bear market, really bad.
But, guys, I want to remind you: if you don't have the right tools , it's useless. So do yourself a favor— invest in yourself. We have our software. There is no company I would consider without first running it through our stock analysis tool. I don't buy anything without checking it on a stock analyzer several times.
I use all this software to help me make any investment-related decisions. Guys, we have a community of thousands of like-minded people here. Everyone is delighted today. Everyone is full of energy. Everyone loves red days. But someday there will be more than just red days. I don't know when, but eventually there will be red months and red years.
Remember, 2000, 2001, and 2002 were a continuous recession. Three years in a row, this has never happened before. And I believe that this market is significantly overvalued . I'm not scaring you. I'm telling you to do what I did. Become better because of this. Because before, like everyone else, I followed the hype.
And now I say: "No." When I buy a stock, I buy a share of the business, not just a graph that moves up and down. That's why red days don't bother me. That's why red days make me say, "Okay." And then you know what ? On green days I say, "Okay, cool." My stocks are going up. I win in both cases. That's what's amazing.
So if you want that kind of confidence, I ask you to ask yourself: how much is it worth to you ? Because our community and software only cost a dollar a day . Follow the link below to everythingmoney.com and register. $7 for seven days. Check any promotions in our analyzer. By the way, guys, we have a new button that will guide you through each step in the stock analyzer .
Help me make a guess. It will ask you questions over and over again so that you learn to make assumptions in the analyzer. It won't tell you what assumptions to make. She will guide you by asking the right questions. But guys, I assure you, believe the thousands of people who have been with us for years—this is a radical change in the approach to investing.
But more importantly, successful investing is about the right emotions. So I want you to stay with us and watch more videos. This is our plus channel. It grows incredibly fast. Don't forget to subscribe. Thank you very much for your
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