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THE 2023 MARKET:
One study analyzed investor behavior – They found that “low risk-free returns caused SIGNIFICANTLY more risk taking for higher-yielding investments… Those findings begin to normalize when risk-free interest rates are higher, even WHEN the riskier investments still the same amount pay more.”
Basically, the conclusion they found was that, when risky returns earn SUBSTANTIALLY more when compared to a risk-free return…investors are more likely to go for it. But, there’s a diminishing return on safe behavior once risk-free interest rates are above 5%, meaning we could POTENTIALLY include that – the worst is behind us once risk-free rates hit 5%.
Separately, the Market Sentiment Blog pointed out that out research that – within the SP500…the top 20% of stocks account for pretty much 100% of growth. One theorized that you could identify stocks BEFORE they increased in value by looking at two factors:
One: It must be a company in the top half of their field – meaning, greater than average market cap…shares outstanding…cashflow..and sales. He found that, under those conditions – companies gave close to double the return of the SP500, while only adding slightly higher risk.
And Two: You should close attention to the Price-To-Earnings Ratio. He found that all stocks with high PE Ratios perform substantially worse than the market, while low PE ratios tend to do much better.
THE MARKET BOTTOM:
Another study found that you could look at 4 factors to determine when markets are fairly priced:
One option suggests that we look no further than the Yield Curve.
An analysis found that the bottom has NEVER occurred until the yield curve is non-inverted…and, today…we are the most inverted we’ve been in more than 40 years.
Two: The VIX.
Morgan Stanley says that “Generally speaking, we do not see bear markets bottom without panic selling, similar to what was seen in 2001 and 2020…Historically speaking, no bear market has ever bottomed without a VIX reading of 45 or more.”
Three: An Ally Invest article pointed out that – a contrarian way of finding the bottom can be all be pinpointed to: The Put To Call Ratio.
For those unaware, a CALL is bet that a stock is going to move higher…and, a PUT is a a bet that a stock will move lower…and, when the market sees 1.8 puts for every call…that’s a sign of retail capitulation, where the worst is probably already priced in.
https://www.ally.com/stories/invest/weekly-viewpoint-may-13-2022-signs-of-a-market-bottom/
And Four: Look at the 200-day moving average.
Ally also suggests that, when fewer than 20% of equities are trading above this threshold – the market is beginning to bottom.
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42 Comments
Could finding the bottom of the market, or certainly a decent entry point be as simple as this : start buying when the pe ratio reaches the historical average, ie around 14 or 15 p/e, which is 25% lower than here. So the s and p at 3000. I for one will get very aggressive at that point. If you buy when its at the historical p/e then surely you will get the historical returns (10%). Or am I being too simplistic. From a viewer over in the UK
.. This bear market made me watch a little more carefully where it is better to invest usdt. This bear market has taught me a lot …
My guess is that it has taken some time for "stimulus cash" to "exit the market" – holidays/Christmas spending might begin to accelerate consumer spending, leading to more people having less money to spend in Q1 2023 – I'm guessing that Q1 2023 might introduce Warren Buffett's "when people fear", thereby opening the door to start "getting greedy" 😁
Let me guess, dollar cost average again?
The bear market is an opportunity for people who can be founded a good stock and buy as half prices, It is a chance to get profitable from this situation. I agreed 👍
Just kidding you have pants on or just kidding that we will see the market finally see the market begin to recover in 2023
3:04 if u had just said "safe" insted of "risk free" I'd have less nots in my brain ç.ç
Dca
This is exactly what I need to know. Thanks for simplifying it!
Ponzi scheme always works !
My 401k is down 35% YTD
SOXS, SQQQ
I've been subbed for a long time but the click baity titles have out me off watching for a long time. People need to focus less on getting rich and just being financially responsible. I know it's boring but so is reading the same click baity title every week.
I made a mistake and sold off a lot of my spy500 for Tesla. Tesla has done terrible since I’ve made the change and my Roth IRA portfolio is overweight. I am 28 yrs old. I am going to hold the Tesla until I can get back as much as I can and then I will be rebuying spy500. Lesson learned
The SCC… Scammer Chief Officer
Surprised you didn’t say invest in FxT
Whenever Graham asks me to hit the like button, I hit the like button.
This administration is putting so many families into difficult situations A lot of people are financially struggling to live , keep a roof over their heads and put food on the table , Anyone who is not investing now is missing a tremendous opportunity imagine I invested $ 1000 with a lady you recommended some time ago and got profits of $ 4,380
You've changed my whole life, Thanks so much Mrs Katherine Haley
didn'twatch vid but dca in voo
Thanks for introducing me to, and vouching for, Ricky Gutierrez, Meet Kevin, and Kevin David all on this channel.
What happened to your FTX sponsor?
Bad market I buy, good market I buy. I only buy
Great episode! (Also earned you a new Twitter follower 😉)
Putt/Call Ratio lol. Golf on the brain, bro?
B***** clickbait title as usual, but you did a better job than usual on the core content.
stop promoting scams dude.
Any thoughts on FTX Graham?
These bots lately are insane!
Nice post. I get this stuff. Your knowledge and wisdom are remarkable. Lots of technical analytics but you are right about not putting too much into this. My opinion – buy and hold SPY. Never look, just continue to regularly add.
Less than 100k views a day after posting. And less than 1000 comments when accounting for bots. This channel is so dead it's gross to even look at.
I miss the days you talked about real estate and even visited some of your projects. Everything was realistic back then.
Just finished the video…..soooooooo how do I use the 2023 market crash to get rich?????
What’s up Graham it’s guys here 😎
<<<Great Video! But I made my first million through trading stocks and investing as a beginner but assisted by an expert obviously; "Elizabeth Ernst David". We met at a trading conference and I looked her up online thereafter. Bottom line, she agreed to guide me and I've had no cause to regret ever since.
Thank for your sharing that free newsletter!!
I appreciate all the research in this one
Some folks' been averaging 150K every quarter according to Bloomberg this year, is this possible for the average retail investor?
Just sacrifice your life and DCA until you die, pass on to next gen, build legacy 😅
Market will most likely bottom in early March 2023
Title should of been " market update "
Title update “Ftx scammer try’s giving stock advice”
It is more reliable to earn Crypton cryptocurrency by mining it on profitable terms in Utopia p2p ecosystem.