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you definitely know the fomo days are back when gme and amc are both halted you're going to want to get into real estate investing in thos after you watch this video everyone meet kevin here we've got to talk about the reality of a recession when it comes to the stock market and real estate because historically we've always been told th this is like clear as day history now consider the fact that when the federal reserve u-turned in 1987 during the crazy stock market pain we had towards the end of the year what happened as soon as the fed u-turned and set the precedent of bailing out markets markets went up this is when the federal reserve actually first initiated the idea that hey if things go bad in markets don't worry the fed will be here to rescue you and that's exactly what they did in the first quarter of 20 uh 2003 that is 20 003 doesn't sound as good as like 2020 but anyway 2003 when the federal reserve also u-turned marking the end and bottom of the dot-com bubble and when the federal reserve u-turned in february of 2009 marking the bottom of the great recession for stocks at least though very important note about real estate that we're going to talk about in just a moment which is actually really really interesting uh as well in terms of when real estate actually bottomed and then of course when the federal reserve u-turned at the end of 2018 and on march 23rd 2020 all of these marked bottoms for the stock market and i this information has become so crystal clear to markets that markets are now trying to pre-read any potential sign that the federal reserve's job has been achieved and it is now time for them to indeed u-turn now we don't actually expect a u-turn in the federal reserve's trajectory of raising interest rates really until like the summer of 2023 which is next year but we also know that the stock market tends to be forward-looking and the stock market is looking at risks and data and suggesting that wait a minute ordinarily at least historically a recession which we're now technically in should mean that we should have even more pain to go in the stock market we right now sit approximately here which means we still potentially in the event of actually being in a recession should see markets decline even more that's because this black line represents the decline in the stock market after declines begin during drawdowns dating all the way back to the great depression and this is an average of all drawdowns but dating all the way back to then and when we have a recession we tend to see more pain for longer and the gray line represents market trajectory when we're not in a recession now i know we could argue about the definition of recession which just makes this chart a whole lot more complicated but what's really interesting about why maybe this time could be different even though the four most dangerous words in investing are this time is different why this time could be slightly different at least is that wait a minute our stock market this time around fell three times as fast as the dot-com bubble that is something that should really sink in see after all when we look at this chart that says wait a minute the market should go down more for technically in a recession it shows us this based on days before and after uh bear market uh peaks and uh or i should say bear market troughs and bull market peaks right before that right so if we had three times the decline and this is how this time could be different right if we had a decline three times as fast in this bear market that is this seven month disaster rather than like a 21-month disaster or 24-month disaster like what we saw during the dot-com disaster and recession then maybe this time could be different that is the stock market has crashed substantially faster but not only that markets are now potentially predicting that aha the bottom is when the fed u-turns and that's being priced in to happen next summer so let's start buying the dip now now some say kevin there's a reason why the most dangerous words in investing are this time is different and so even though i believe it's right to be bullish on the market and even though i'm 95 in this market there's a substantial danger and that has to do with the chart that is right here this particular chart tells us that payrolls lag a recession we've known this before we've talked about this on the channel many times before but payrolls go down after a recession in fact take a look at this this is the average monthly changes in or average monthly change the blue box here in payrolls and what you'll see here is there's this dotted line right here in the middle which i just made red that dotted line in the middle there represents when a recession is determined and what's fascinating is look at all these positive payroll gains before a recession then you have the red line then you have another period of positive payrolls here after the recession is announced and you don't actually get negative payrolls until usually one to three months into a recession and this is when you get negative payrolls but what's also substantially interesting about this because we think that this could lead the market lower is the following that the biggest negative revisions to payrolls are actually seen around recessions now this is important because see the government comes out and tells us oh don't worry we had 500 plus thousand jobs last month we're fine but the government is really bad at being accurate around times of recession and actually tells us one month oh no things are great and then the next month revises them down and the spread between how much they're off is really really negative around times of recessions those are these red circles on this chart uh well the recessions are around the gray bars of the chart and you could see these peak revisions to the negative almost always align with those gray bars around recession times so that actually gives us cause for caution so we've got reason to be bullish here okay the stock market declined faster and maybe this time is different because we're pre-pricing in the fed's moves a year early that's good right that's a reason to be bullish but reasons to be bearish or well a the fact that maybe this time won't be different because those are dangerous words and even though we might think payrolls are fine kevin like we can't like this this can't be that bad oh just wait it actually can be now there's something else that's really really powerful here that we have to talk about and it has to do with real estate in the lag remember that i told you the bottom of the market for stocks was in february of 2009 during the great recession the stock market started booming after the beginning of 2009.
you should have invested in 2009 and this was still while we were in big old pain mode and real estate took another two and a half years to bottom out in fact real estate in most markets did actually not bottom until november of 2011 and that sets up some remarkable opportunities because during the great recession real estate only fell at a maximum pace of about 1.9 percent per month real estate is incredibly slow relative to the stock market and real estate is driven oftentimes more by fear rather than this pre-pricing of what the fed is going to do next and so this is where when i tell you hey there's an opportunity for you to really learn a lot and make big dalahalas no guarantees of course but in real estate you want to prepare yourself you want to get into it doesn't have to be mine of course i've got a course on s people bundle these all the time it's our most popular selling product right now of course people are taking advantage of the coupon code that expires on august 19th but folks to yourself right now is kevin i'm watching a stock video why are you talking about real estate because real estate tends to be not get rich quick but it's often get rich for sure and i really believe that every single person watching my content on youtube should be really really really motivated to get their butts into real estate in fact if you need a side hustle get a real estate license the best time to focus on making more money is during a recession the best time to become a real estate agent is in a real estate crash because guess how easy it is to sell real estate in a bull market when i was selling real estate in 2011 it was hard because the market hadn't bottomed yet and i was still living the freaking bottom everybody i told oh i'm a real estate agent like a trader joe's all of a sudden they're the expert on my job they're like oh wow that sucks and i'm like no this is and when everybody is telling you that's a crappy job to be in that's the time to be in that job so yeah we've still got risks for this recession but hey it's up to you depending on what you believe will this time be different will those uh inflationary figures actually come down the way the bond market is predicting as bond yields are or at least the break-even yields are plummeting indicating a huge head and shoulders pattern for inflation but that gets a little bit more complicated and we've actually got to talk about a few more things now before this other important information here's a quick message from our sponsor thanks to mine for sponsoring today's video mine is a smart data assistant that helps you discover where your data is and lets you keep it only where you want it mine finds out which companies hold on to your personal data and allows you to manage their access to it on an ongoing basis the growing number of data breaches out there every day i don't want my personal information to be at unnecessary risk but with mine signing up for this protection is a breeze it 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below and start protecting what's yours today again use the link in the description down below to let them know that i sent you and that you want to get your personal information out of hands the people you don't want to have it now let's get back to the video like cpi okay cpi comes out in two days folks today is the eighth in two days we get cpi and we've got a lot of concerns that this cpi is supposed to come down but could miss dearly look this is what the suits see that is the wall street suits when they look at what the cpi expectations are and look folks the expectation is that the month-over-month change in inflation that again comes out 5 30 a.m i'll be live for it on uh wednesday is going to be 0.2 that is such a low read and these estimates are almost always wrong if i could draw you sort of a quick little bell curve of what oh this ipad change it but anyway imagine that's a bell curve of uh usually there you go now it's a little more bellish of of where the economists think inflation is going to come that would be the midpoint inflation almost always either comes in here or here or like even sometimes way outside of where the predictions are uh that's because this is a consensus read of essentially an average of a bunch of economists who are like oh no we're tracking this it's supposed to come down a lot yeah well what if it doesn't then we could be setting ourselves up for a big miss and that's another reason to be cautious and so what should we potentially do when we have data coming out that that signals whether it's ppi or cpi you know this expectation that headlines yeah ppi is going to come down a lot uh or that month-over-month ppis and cpi's are going to change what should we be doing if we do believe that maybe this time is different but we don't want risk well my opinion the most important thing is staying out of debt we have to be out of debt otherwise we could end up with big big problems because you don't want to get margin called you don't want to get wiped out in a recession because that is guaranteed how you end up getting killed by fomo and really never building wealth now we do have some other good news and bad news of course today we had the energy bill pass the inflation reduction act that provides over 300 billion dollars in tax credits and incentives for energy extending solar tax credits to january 1st 2025 providing 7 500 tax credits for most commercial and passenger ev vehicles as long as much of their battery packs are created in nafta territories like the united states and canada and mexico which i'm sure manufacturers will finagle to make sure that we can get the tax credit that is offered up to forty thousand dollar tax credits for commercial vehicles although that gets a little bit more nuanced kamala harris had to come in to break this tie because republicans and democrats were fighting so much i mean you even had wharton that came out uh which i tweeted about you should follow me on twitter at real meat kevin by the way but i tweeted about this wharton came out and said that well it kind of looks like the inflationary impacts of the inflation reduction act are uh indistinguishable from zero that's literally right what they wrote here is uh not statistically different from zero the inflationary impacts but oh well i mean leave it to the government to say they're going to do something great and really have no impact at all but then again that's the way it works medicare is going to be able to negotiate drug costs for the first time in america which should lead to some kind of savings for our government 80 billion dollars more for the irs one percent excise on stock buybacks which is interesting you've got stocks like enphase going up and tesla going up on uh news of this energy bill passing the inflation reduction act but emphasis is a big fan of doing stock buybacks now they're gonna have to pay those one percent uh excise taxes you know once this actually goes into effect that'll take some time 15 corporate minimum tax and what else do we get this morning we got and this is why you got to be careful playing with earnings because playing with earnings is playing with fire playing with margin is doubling up that fire palantir missed and so did nvidia nvidia blaming a gaming slowdown which probably related to crypto down eight percent palantir down as much as 16 percent uh also big miss on earnings this comes after palantir was always a company where peter thiel told us hey we will not have a sales team and now they're hiring salespeople like crazy and they also bragged about how last week they were planning on expanding their workforce by about 30 percent going into a recession which seemed a little odd leading a lot of folks to believe that pallentier would run but we did miss but there's the belief that the worst might now be behind us for palantir and nvidia e sponsor and the courses linked down below especially those on
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