Ben deserves so much more recognition, It’s unfortunate to see channels that focus on market daily financial news and stock prices without any added value flourish.. keep it up Ben & thanks again!
I'm going to take awild guess and say that Ben doesn't really care that much about a massive YT following, this isn't his day job and he has a really great podcast too.
@@johnristheanswer I was saying that (and I'm assuming here) that this is his side hussle and it seems that due to him having a successful career apart from YT that he and his firm do this simply to inform rather as a source of income.
There was nothing "common sense" about this video -- my mind kept on blowing. I'll have to re-evaluate my whole understanding of the world now, thanks. (Thanks for great content as usual!)
That is just absolute rubbish. I can cite some real examples that are contrary to what he says. Really? I mean we should not pay attention to the economy in other words? How is that possible. Wall street has gone completely insane, "common sense" tells me that valuations are not corresponding to fundamentals. Where is the common sense in this video? There is none. As a business woman I am looking at asset bargains but they are hard to find. I dont care if the market rages on, I am not gonna invest in blue chip stocks with extremley low yields just because wall street wants to endelessly fuel the market with cheap fiat money. I think I will start a youtube channel and get a greater ROIC than the manipulated market to satiet my unfortunate human greed. There that makes more common sense to me.
@@americaromero7373 he explains the economy does need to grow for long positions but this alone does not mean your specific positions will grow...and to be wary of share dilution
I would agree partly, but I think this CFA is a bit Naive to make a false assumption and false conclusion about today's events, just by taking a couple of random research articles to make the obvios point that the stock market and the economy do not correlate, that is very true obviously no need to take peer-reviewed research articles (not my field of expertise I would say, but being a scientist I came across a lot of bullshit science in peer reviewed journals). I would agree with it, but this is not 2009 first of all so you can't compare it, we are living through something completely different. 2009 was all about liquidity something people can control and people can come to terms with by regonotating or declaring bankrupcies but now in 2020, this is all about economics and permanent job loss becuase of the pandemia. Wall street can't buy the virus, nor can they negotiate with it, the virus doesn't care about money or people (wall street expertise). Politician are clueless on how to handle it (except perhaps the asian countries) . I think the expertise lies beyond a "financial background" field and we should be more attuned to the expertise of the scientists who are studying the virus and what they have to say. I prefer to listen to them and their news than what a "financial analyst" says. We should also add wall street never saw the "Pandemia comming", they are not experts in that, how can I trust then that their valuations are right now? There is to much uncertainty and risk for me here. Apart from that I also prefer to listen to what Charlie Munger says, hear his thoughts (being the fact that they have more information than the government itself!), and well things don't look so bright.
Economics really is clear as mud sometimes. I, like many others, assumed that the economy and the stock markets were more directly in step with one another. I also assumed that growing economies like China would result in tremendous stock returns. Its interesting to see the data back up what actually happens.
Most investors fail to realize that the market is forward looking. The term “priced in” has never been more true after the recent unemployment reports.
Horseshit. That's what they said during the dot com crisis then again with the real estate crisis stateside. Massive losses in the stock market followed by significant gains shortly thereafter, then massive losses followed by significant gains. Repeat this process 5-6x over the course of 2 years is the CRISIS. It was never a one-time 50% loss in the market. It ALWAYS took on avg. 2 years. It's "priced in" is a running meme at this point. There may be disparities in timing, but c'mon, 26M have now filed for unemployment. This is priced in???
That's the thing though. At the moment, the stock market is not priced in. There are a ton of companies out there right now that will show little to no profits for the rest of the year, yet the market seems to think otherwise.
This is channel is just fundamental and mixed in such a splendid way empirical and academical evidenced. Thx Ben, I'm learning so much from your videos and papers 🙏🙏
I found out about your channel a few weeks ago, today I have money in VGRO as well as Wealth Simple's robo. Thank you for making clear, researched, and unbiased videos!
Hello Ben! from south korea. I'm your big fan. I've watched all of your videos. Your logic amazed me again. Thanks to you, I'm considering going to get MBA and CFA after graduating from medical school. Thank you always.
That's a horrible idea! The small number of people who enter medical school need to participate in the medical field. People need doctors, they don't need more MBA's. Why did you go into medical school in the first place???
I've tried to explain this about a dozen times in the past few weeks. At this point I'm thinking of handing out business cards with links to your videos on them instead of talking.
That is true, but teh whole concept of investing is to buy undervalued assets is it not teh case? Have low expectations, not high? I don't quite understant the argument. Let us say that the stock market goes down, and the economy is going up you will obvious justify that you will buy, but in this case the economy is uncertain and down, asset prices are inflated basically by the fed and high expectations of wall street, I prefer to sit aside this one. Wall street with their greed can take the risk and go one playing the money game, I'll invest in something else that gives a me a better return, maybe make a youtube channel like Ben Felix and become an influencer.
A very perceptive insight. Recently announced economic news affects the stock market only to the extent it changes already formed investor perceptions of anticipated stock market returns.
Again, Ben, you are the most interesting and informative investing/finances RUclipsr. Your videos are packed with relevant information backed up by reason and academic research. Keep up with the outstanding work!
8:50 very nice explanation of stocks value that do not grow when GDP grows because of new companies/shares entering the market. Stocks value grows when the stocks that are already in the market grow.
So much useful information clearly explained. Investors who get confused and angered with stocks rising with the recent historically high unemployment should watch this. Thanks Ben!
Practical and insightful. No one can predict where the market will go, so it's better to just DCA instead of trying to be a wizard. Thank you! Your video today made me remember that point again.
Oh! That's the stressful and most hardest phase of trading. I got burned severally as a beginner.. You sure have been able to make ample earnings yeah?
Finally non biased,conflict of interest free investment Advice. Great Job Ben. You deserve All the success coming your way. You are Changing the industry, giving retail investors sound advice. As you know a huge infrastructure has been built around ripping off retail investors, by peddling a false high frequency trading narrative. Liked and subscribed for sure! Keep up the good work mate.
In the words of Michael Scott, you are a gentleman and a scholar. Thank you for this, it was very informative. Keep up the great work, this is by far the greatest channel on investing.
Hi Ben! While I salute your effort to explain the difference between stock market and the economy, here's a couple of remarks and questions that I thing would be interesting for you to answer/thing about. 1) First of all, I think in order to do an analysis on the relationship between stock market and the economy, you should define what actually is the economy, or what do you think it is. The only detail regarding that question you mention is that the economic news are backward looking. I agree with that, but any kind of news except the weather will be backward looking. Economy as a theoretical field of study is as much forward looking than backward looking. 2) The main thesis of your video is : why the economy should not inform investing decisions. I totally agree with you that the economy is not the stock market and vice-versa, therefore they should not be analyzed the same way. However, phrased the way you said it, your thesis implies that one should ignore economic data while making investment decisions, a position you reiterate at the conclusion of the video. In my opinion, this is too much of a stretch. Economic trends and data will always have somewhat of an impact on the overall stock market over the long term, because if you define the purchase of a stock as being a right to participate in the future profits of a company, these profits are highly correlated (albeit not caused) with economic trends. It is very likely that these profits will much higher in growth periods and lower in recessions. Therefore, economic data should be taken in consideration when making investment decisions (while of course not being the only data to consider). Another argument regarding the importance of economic data would be to reverse your position regarding the occurrence of bad economic news and high stock returns like in march 2020 in Canada. It is of course possible to have bad economic news and good stock returns : this is what's happening right now. However, the opposite relation is usually more likely : an economy in a state of slow and steady long term growth is more likely to yield good return for stocks, again suggesting that economic data is in fact very important while making investment decisions. 3) Finally, and this is just a theory, I think another reason, to complement the two you cited, why rapid growing economy like South Korea or China don't have great stock returns is that a big portion of the total sum of dollar invested in the most prominent stock market come from western investors, mostly Europe, Australia, South-Africa, New-Zealand, Canada and the USA, since these countries have rich (relative to other countries) middle class and upper class that have a lot of investment potential. Since these countries all share western ideologies and are somewhat culturally linked, I think they are more likely to invest in western stocks because they are perceived as being safer and are usually known to the public (for instance, most americans are aware that mercedes is a German car manufacturer, whereas I doubt most americans know that Geely is a Chineese car manufacturer that seels more car annually than mistubishi). All that to say that I feel there's a certain geographic and cultural bias regarding to stock investment that's favoring western stocks.
I agree with you that economy and stock market dont go in the same direction but economy does affect the stock market to a much greater extent than we can imagine
This is called real analysis of market.. The knowledge and thoughts presented in each video is like a book.. Very good work Ben.. And thanks for being different from other channel.. Like why i am buying Tesla, Cruise stock os good to buy and airline stock related..
11:37 is a bombshell, and that single piece of advice would have probably kept a lot of investors from being completely wiped out by this last downturn. I rode it all the way down, added to lots of positions, and then made a lot of it back in the last few weeks while many internet gurus were still telling people to sell at the bottom. I think I'm about even as of today, and I'm even better positioned for the long term.
Superb video! I found Ben's channel few weeks ago after finally deciding to invest in the stock market during this crisis. Every video is excellently put together, love the objectivity and facts behind all explanations. Looking forward to more. Thank you!
Looking at the current and forward numbers is important. Financials are important, of course. But also know what your company is working on. Where are they expanding? Are they working on something new that would get the value of the cash flow up in the future? Was there any negative news about them during Covid? Does this company have the cash reserves/borrowing capacity to make it through the current crisis? Is the company in a business that will recover even if the economy enters a prolonged recession? How has management responded to changed conditions? Has coronavirus changed consumer behavior in a way that may become a long-term change? Basically, you want to gauge a company's fiscal health and look at why its share price has declined or risen. You also want to consider how quickly business will return to normal once the current social distancing efforts stop and life returns to normal.
I spoke with 4 portfolio managers yesterday who didn’t agree on much. They did agree that almost all asset classes would be lower right now if central bank intervention hadn’t taken place. I would love to hear your insight on how central banks and money printing affects markets in the long run. Thanks!
Listen to episode 94 of the podcast, talks about theories that stimulus packages aren't stimulating anything because there's slack in the economy. The view of the person they received a seminar from was that inflation only becomes an issue when productivity/efficiency is high.
I’m still a bear. “Priced in” is bull optimism, thinking these effects won’t be long term. We had a full year of declining prices before bottom in 2009 and about 3 after 1929. We’re only 2 months in right now.
Priced in is growth in tech etc. Priced in is retail and cyclicals are dying completely with valuations at historic lows. Priced in is a full shift of the economy, people staying home, watching netflix, surfing on internet, ordering all from amazon and only driving Teslas. Priced in is that healthcare will matter the most? Traditional carmakers (peugeot for example) at lowest PEs and price to book since the lows of great depression. Traditional Retail (especially in Europe) even with very strong balance sheets priced as if all going bust, as if their real estate had 10pct its pre market value/ implying 15pct yields in a zero interest rates environment where 10 years of negative growth. Reality: Similar story happened in last 3 crisis (stuff like Macy's, Peugeot, Renault, GM, Banks (a bit of a different story there as some banks never came back / but they were half banks half hedge funds back then), Air France and Lufthansa, etc. hit lows higher than today actually and came back (anywhere between 200 and 500pct higher few years later). Other reality: Overcrowded growth stocks worked well only one decade...
Very insightful again Ben. Thanks for sharing this and your other videos and podcasts, makes me understand what i’m doing with my long term investments 😉😅
Thank you for this insightful video. I had always thought that the stock market in the long run is the economy in the long run. Does owning a diversified equity index fund overcome the problem of slippage as new, successful companies will automatically be included in the portfolio at some point?
Great video, although I find it hard to wrap my head around. Stock markets derive their prices from the expectations on the economy. But where do these expectations come from, if not from "news" (quoted because it includes reports and stats published by central banks and so on)? Also, GDP growth and stock market returns are negatively correlated. This means that stock market returns tend to go up when GDP growth goes down. What if you created an index that would invest in the stock markets of the 10 countries with the highest decline in GDP growth? Practical issues aside (probably hard to invest in the Venezuela stock market right now), it would be interesting to see what results you'd get. From the negative correlation, you would expect the returns of the index to be good, right? You'd invest after the fact (you only know the decline once it's happened) but I can imagine GDP growth rates of entire countries don't change overnight. So a declining GDP country would tend to keep declining. What are your theoretical objections to such a strategy?
Ben, I'm sharing your videos constantly on Bogleheads.org and other forums. You deserve 10 million followers and I hope you'll get there in the next couple of years. You're filling the hole which John Bogle left after he died.
No thank you! You are helping my family and friends understand investing because you explain it in a much better way than i could, you really are making a difference in our lives! Cheers
I'm sure the accolades grow tiresome, but I've been a subscriber for a couple years and I still walk away from every episode further enlightened. In the youtube world of fluff and hyperbolic conceit, its profound to find such great content; always with supporting citations. This is what the internetz could be.
Solid analysis as usual! As you described, someone who wants to place bets based on the economy (which is probably a bad idea) needs to have an opinion of the future that differs from the consensus. Once the consensus is somewhat aligned with your opinion, it’s too late to place the bet. If you place the bet anyways you will get little to no reward for it even if you are right. I admit that i have placed economic bets, forgive me for i have sinned :p
Could you please discuss on your next video the affects of liquidity shrinkage in US market and the enormous US debt, in relation to equity market. Your forecast for next year? . Love your videos , Thanks.
Ben deserves so much more recognition,
It’s unfortunate to see channels that focus on market daily financial news and stock prices without any added value flourish.. keep it up Ben & thanks again!
I'm going to take awild guess and say that Ben doesn't really care that much about a massive YT following, this isn't his day job and he has a really great podcast too.
What do you mean ? He's got 100k+ subs. That's alot in the financial advice field.
@@johnristheanswer I was saying that (and I'm assuming here) that this is his side hussle and it seems that due to him having a successful career apart from YT that he and his firm do this simply to inform rather as a source of income.
Isn’t this the wisdom Warren Buffet advocates? Just buy the best businesses, not the stock prices!
There was nothing "common sense" about this video -- my mind kept on blowing. I'll have to re-evaluate my whole understanding of the world now, thanks. (Thanks for great content as usual!)
That is just absolute rubbish. I can cite some real examples that are contrary to what he says. Really? I mean we should not pay attention to the economy in other words? How is that possible. Wall street has gone completely insane, "common sense" tells me that valuations are not corresponding to fundamentals. Where is the common sense in this video? There is none. As a business woman I am looking at asset bargains but they are hard to find. I dont care if the market rages on, I am not gonna invest in blue chip stocks with extremley low yields just because wall street wants to endelessly fuel the market with cheap fiat money. I think I will start a youtube channel and get a greater ROIC than the manipulated market to satiet my unfortunate human greed. There that makes more common sense to me.
@@americaromero7373 Can you cite those examples or articles? I'd be interested in reading them. Thanks in advance!
@@americaromero7373 he explains the economy does need to grow for long positions but this alone does not mean your specific positions will grow...and to be wary of share dilution
Economic data is backward looking and markets are forward looking, important lesson that every investor needs to understand. Great video Ben!
This right here.
Steve Keen has entered the chat..
How about index futures? Does economic data impact current ES price?
Im convinced Ben is secretly Schofield from Prison Break, and he has all those tattoos hiding behind his shirt...
Just have a little faith
Ben is 6 foot 11 though lol
@@ricardogonzalez6428 I wonder what he is most proud of. His tattoos or those basketball stats?
The tattoos are the secret formula to 25% alpha p.a. consistently over time through bull and bear markets
"the economy should not inform your investment decisions"...cool set of data and great analysis. I'm convinced. Thank-you for all of your hard work.
One of Ben's spicier takes, makes total sense tho!
Yea, great video by big Ben. =) Really share similar values.
@@lettalkaboutfinance hoping it was sarcasm
I would agree partly, but I think this CFA is a bit Naive to make a false assumption and false conclusion about today's events, just by taking a couple of random research articles to make the obvios point that the stock market and the economy do not correlate, that is very true obviously no need to take peer-reviewed research articles (not my field of expertise I would say, but being a scientist I came across a lot of bullshit science in peer reviewed journals). I would agree with it, but this is not 2009 first of all so you can't compare it, we are living through something completely different. 2009 was all about liquidity something people can control and people can come to terms with by regonotating or declaring bankrupcies but now in 2020, this is all about economics and permanent job loss becuase of the pandemia. Wall street can't buy the virus, nor can they negotiate with it, the virus doesn't care about money or people (wall street expertise). Politician are clueless on how to handle it (except perhaps the asian countries) . I think the expertise lies beyond a "financial background" field and we should be more attuned to the expertise of the scientists who are studying the virus and what they have to say. I prefer to listen to them and their news than what a "financial analyst" says. We should also add wall street never saw the "Pandemia comming", they are not experts in that, how can I trust then that their valuations are right now? There is to much uncertainty and risk for me here. Apart from that I also prefer to listen to what Charlie Munger says, hear his thoughts (being the fact that they have more information than the government itself!), and well things don't look so bright.
@@reyrom3713 6 months later turns out the real virus is big brother.
Economics really is clear as mud sometimes. I, like many others, assumed that the economy and the stock markets were more directly in step with one another. I also assumed that growing economies like China would result in tremendous stock returns. Its interesting to see the data back up what actually happens.
Most investors fail to realize that the market is forward looking. The term “priced in” has never been more true after the recent unemployment reports.
he mentions that exact thing on his podcast episode with the same name as this video
yes and no, the market would have plummeted if it was not for trump and the fed nationalizing it
Yea, just made a video on this. Would love to know what ya'll think of my $1M portfolio allocation on my channel.
Horseshit. That's what they said during the dot com crisis then again with the real estate crisis stateside. Massive losses in the stock market followed by significant gains shortly thereafter, then massive losses followed by significant gains. Repeat this process 5-6x over the course of 2 years is the CRISIS. It was never a one-time 50% loss in the market. It ALWAYS took on avg. 2 years. It's "priced in" is a running meme at this point. There may be disparities in timing, but c'mon, 26M have now filed for unemployment. This is priced in???
That's the thing though. At the moment, the stock market is not priced in. There are a ton of companies out there right now that will show little to no profits for the rest of the year, yet the market seems to think otherwise.
This has to be the best channel on youtube, all categories. great job, every video ridiculously high quality! Thanks
BEST PART OF YOU IS --- YOU PRESENT DATA AND NUMBER TO SUPPORT WHAT YOU SAY. THANKING YOU.
This is channel is just fundamental and mixed in such a splendid way empirical and academical evidenced. Thx Ben, I'm learning so much from your videos and papers 🙏🙏
One of the most underrated channel on RUclips right now..!!
"Intuition does not mix well with investing." No kidding. As a young investor, this is one of the most important videos I have seen, so thank you!
FINALLY BEN TALKS ABOUT EM! I CAN DIE HAPPY NOW
This is golden content. I couldn't thank you enough for sharing this information with all of us noobs.
i am unable to put into words how much value i have received from this video.
I found out about your channel a few weeks ago, today I have money in VGRO as well as Wealth Simple's robo. Thank you for making clear, researched, and unbiased videos!
Is there a specific video that prompted this decision? Just his overall approach to diversification?
Ben once again with the red pill for us.
Really interesting!
Ben's channel probably can put the whole financial book publishing business out of business.
Another great video Ben!
Thank you Fabio!!
Hello Ben! from south korea. I'm your big fan. I've watched all of your videos. Your logic amazed me again.
Thanks to you, I'm considering going to get MBA and CFA after graduating from medical school. Thank you always.
Exactly my thoughts even thought I am a software engineer. Probably I shouldn't though.
That's a horrible idea! The small number of people who enter medical school need to participate in the medical field. People need doctors, they don't need more MBA's. Why did you go into medical school in the first place???
I've always wanted to go to medical school. The grass is always greener I suppose.
I've tried to explain this about a dozen times in the past few weeks. At this point I'm thinking of handing out business cards with links to your videos on them instead of talking.
Thanks so much for dispelling my misunderstandings about the economy and market being positively correlated!
This is one of the most important concepts you have explained, Ben. My clients always want to talk about the economy in relation to their portfolio.
That is true, but teh whole concept of investing is to buy undervalued assets is it not teh case? Have low expectations, not high? I don't quite understant the argument. Let us say that the stock market goes down, and the economy is going up you will obvious justify that you will buy, but in this case the economy is uncertain and down, asset prices are inflated basically by the fed and high expectations of wall street, I prefer to sit aside this one. Wall street with their greed can take the risk and go one playing the money game, I'll invest in something else that gives a me a better return, maybe make a youtube channel like Ben Felix and become an influencer.
This video is fantastic. One of the best explanations of why you can't time the market
A very perceptive insight. Recently announced economic news affects the stock market only to the extent it changes already formed investor perceptions of anticipated stock market returns.
That's video is a real diamond. It contains so much new to me information! I think I have to rethink many my assumptions. Thank you very much, Ben!
This videos are always fascinating and give me a new perspective on whatever Ben is talking about. Great stuff as always!
Again, Ben, you are the most interesting and informative investing/finances RUclipsr. Your videos are packed with relevant information backed up by reason and academic research. Keep up with the outstanding work!
Thanks Pedro!
8:50 very nice explanation of stocks value that do not grow when GDP grows because of new companies/shares entering the market. Stocks value grows when the stocks that are already in the market grow.
So much useful information clearly explained. Investors who get confused and angered with stocks rising with the recent historically high unemployment should watch this. Thanks Ben!
110k subscribers now, congrats and well deserved
Why doesn’t this channel have at least a million subs? Priceless info, thanks Ben.
One of your best video's yet Ben, every beginning investor should see this one.
More great Common Sense Investing, with a side of sociology and a dash of psychology! Always great information to help keep us informed and focused!
Practical and insightful. No one can predict where the market will go, so it's better to just DCA instead of trying to be a wizard. Thank you! Your video today made me remember that point again.
I have to say Ben u r simply awesome. Thanks for sharing such a greatly useful knowledge videos.
Love from India 🇮🇳
Are you actively involved in the stock markets?
@@ashleyraetrisler284 Not really..just a beginner
Oh! That's the stressful and most hardest phase of trading. I got burned severally as a beginner..
You sure have been able to make ample earnings yeah?
In the long-run, everything is the short-run.
Ben thank you so much for the time and effort that you put into all your videos .
This is possibly your best video yet Ben.
Finally non biased,conflict of interest free investment Advice. Great Job Ben. You deserve All the success coming your way. You are Changing the industry, giving retail investors sound advice. As you know a huge infrastructure has been built around ripping off retail investors, by peddling a false high frequency trading narrative. Liked and subscribed for sure! Keep up the good work mate.
Thanks Ben for this highlights on weak correlation between economic news and stock market prices.
You are the best finance channel on yt. Great job and thank you.
Ben, why is all your stuff so next level?!
"intuition does not mix well with investing" 🙃
In the words of Michael Scott, you are a gentleman and a scholar. Thank you for this, it was very informative. Keep up the great work, this is by far the greatest channel on investing.
Hi Ben! While I salute your effort to explain the difference between stock market and the economy, here's a couple of remarks and questions that I thing would be interesting for you to answer/thing about.
1) First of all, I think in order to do an analysis on the relationship between stock market and the economy, you should define what actually is the economy, or what do you think it is. The only detail regarding that question you mention is that the economic news are backward looking. I agree with that, but any kind of news except the weather will be backward looking. Economy as a theoretical field of study is as much forward looking than backward looking.
2) The main thesis of your video is : why the economy should not inform investing decisions. I totally agree with you that the economy is not the stock market and vice-versa, therefore they should not be analyzed the same way. However, phrased the way you said it, your thesis implies that one should ignore economic data while making investment decisions, a position you reiterate at the conclusion of the video. In my opinion, this is too much of a stretch. Economic trends and data will always have somewhat of an impact on the overall stock market over the long term, because if you define the purchase of a stock as being a right to participate in the future profits of a company, these profits are highly correlated (albeit not caused) with economic trends. It is very likely that these profits will much higher in growth periods and lower in recessions. Therefore, economic data should be taken in consideration when making investment decisions (while of course not being the only data to consider). Another argument regarding the importance of economic data would be to reverse your position regarding the occurrence of bad economic news and high stock returns like in march 2020 in Canada. It is of course possible to have bad economic news and good stock returns : this is what's happening right now. However, the opposite relation is usually more likely : an economy in a state of slow and steady long term growth is more likely to yield good return for stocks, again suggesting that economic data is in fact very important while making investment decisions.
3) Finally, and this is just a theory, I think another reason, to complement the two you cited, why rapid growing economy like South Korea or China don't have great stock returns is that a big portion of the total sum of dollar invested in the most prominent stock market come from western investors, mostly Europe, Australia, South-Africa, New-Zealand, Canada and the USA, since these countries have rich (relative to other countries) middle class and upper class that have a lot of investment potential. Since these countries all share western ideologies and are somewhat culturally linked, I think they are more likely to invest in western stocks because they are perceived as being safer and are usually known to the public (for instance, most americans are aware that mercedes is a German car manufacturer, whereas I doubt most americans know that Geely is a Chineese car manufacturer that seels more car annually than mistubishi). All that to say that I feel there's a certain geographic and cultural bias regarding to stock investment that's favoring western stocks.
I agree with you that economy and stock market dont go in the same direction but economy does affect the stock market to a much greater extent than we can imagine
What a surprise, negative correlation between GDP and stock returns... thanks Ben for shedding light on some serious doubts!
This is an outstanding video. Your concepts make perfect sense and I appreciate your evidence and science based approach to investing.
This is called real analysis of market.. The knowledge and thoughts presented in each video is like a book.. Very good work Ben.. And thanks for being different from other channel.. Like why i am buying Tesla, Cruise stock os good to buy and airline stock related..
Wow thank you Ben for helping me understand what has been happening in the stock market recently
Fantastic video, thank you for posting. I've subscribed and will take a look at your other videos. Concise and interesting, the perfect formula.
Great vid as always Ben. I think making a video on David Swensen should definitely be on your list!
Thank you Ben , my mentor in Mexico has not explained to me this . But you did it, thanks
You have an intriguing way of looking at things.
slippage effect point was excellent ,
Everytime I watch a Ben Felix video I get the urge to invest more
Should have been fully invested to begin with ;)
Wow! This is so counter-intuitive, yet so logical.
Awesome video. Much needed video I should say. So many people don't understand that concept.
Really refreshing, very interesting video! I immediately subscribed. Keep it coming !
Great analysis. Thanks for being a channel with substance!
11:37 is a bombshell, and that single piece of advice would have probably kept a lot of investors from being completely wiped out by this last downturn. I rode it all the way down, added to lots of positions, and then made a lot of it back in the last few weeks while many internet gurus were still telling people to sell at the bottom. I think I'm about even as of today, and I'm even better positioned for the long term.
Great insights ben as always, really loved your passion you put in making these videos. These have been investing 101 for me.
Just what I needed to hear as a beginning investor, thanks!
Superb video! I found Ben's channel few weeks ago after finally deciding to invest in the stock market during this crisis. Every video is excellently put together, love the objectivity and facts behind all explanations. Looking forward to more. Thank you!
Thanks Pavel!
Looking at the current and forward numbers is important. Financials are important, of course. But also know what your company is working on.
Where are they expanding?
Are they working on something new that would get the value of the cash flow up in the future?
Was there any negative news about them during Covid?
Does this company have the cash reserves/borrowing capacity to make it through the current crisis?
Is the company in a business that will recover even if the economy enters a prolonged recession?
How has management responded to changed conditions?
Has coronavirus changed consumer behavior in a way that may become a long-term change?
Basically, you want to gauge a company's fiscal health and look at why its share price has declined or risen. You also want to consider how quickly business will return to normal once the current social distancing efforts stop and life returns to normal.
Really enjoy these presentations. Thanks Ben.
Great video as always, Ben. Thanks a lot for sharing this info with us!
Good videos! More people needs to know these intuition in order to build an informed perspective on their own finances
I spoke with 4 portfolio managers yesterday who didn’t agree on much. They did agree that almost all asset classes would be lower right now if central bank intervention hadn’t taken place. I would love to hear your insight on how central banks and money printing affects markets in the long run. Thanks!
Listen to episode 94 of the podcast, talks about theories that stimulus packages aren't stimulating anything because there's slack in the economy. The view of the person they received a seminar from was that inflation only becomes an issue when productivity/efficiency is high.
Stuart Edwards Thanks, I’ll definitely check it out.
Thanks for bringing these lesser known facts to light, Ben!
I want to like this video a thousand times.
I’m still a bear. “Priced in” is bull optimism, thinking these effects won’t be long term. We had a full year of declining prices before bottom in 2009 and about 3 after 1929. We’re only 2 months in right now.
Priced in is growth in tech etc.
Priced in is retail and cyclicals are dying completely with valuations at historic lows.
Priced in is a full shift of the economy, people staying home, watching netflix, surfing on internet, ordering all from amazon and only driving Teslas.
Priced in is that healthcare will matter the most?
Traditional carmakers (peugeot for example) at lowest PEs and price to book since the lows of great depression.
Traditional Retail (especially in Europe) even with very strong balance sheets priced as if all going bust, as if their real estate had 10pct its pre market value/ implying 15pct yields in a zero interest rates environment where 10 years of negative growth.
Reality:
Similar story happened in last 3 crisis (stuff like Macy's, Peugeot, Renault, GM, Banks (a bit of a different story there as some banks never came back / but they were half banks half hedge funds back then), Air France and Lufthansa, etc. hit lows higher than today actually and came back (anywhere between 200 and 500pct higher few years later).
Other reality:
Overcrowded growth stocks worked well only one decade...
Absolutely Fantastic.
Thank you
Hey Ben Really Great Video , Your podcast is amaaaazing I always keep looking forward to them.
Thank you very much for your instructive and valuable information Sir. Regards from Helsinki, Finland.
Just stumbled across your channel. This is really good content. Keep up the good work :)
Very insightful again Ben. Thanks for sharing this and your other videos and podcasts, makes me understand what i’m doing with my long term investments 😉😅
I believe that every time a chart covers Ben it is the time he actually blinks
You are my favorite "efficient market" and "it's all random" RUclipsr. :-)
Phenomenal insights, thank you, Ben!!
Mind blown
Thank you for this insightful video. I had always thought that the stock market in the long run is the economy in the long run. Does owning a diversified equity index fund overcome the problem of slippage as new, successful companies will automatically be included in the portfolio at some point?
Great video, although I find it hard to wrap my head around. Stock markets derive their prices from the expectations on the economy. But where do these expectations come from, if not from "news" (quoted because it includes reports and stats published by central banks and so on)?
Also, GDP growth and stock market returns are negatively correlated. This means that stock market returns tend to go up when GDP growth goes down. What if you created an index that would invest in the stock markets of the 10 countries with the highest decline in GDP growth? Practical issues aside (probably hard to invest in the Venezuela stock market right now), it would be interesting to see what results you'd get. From the negative correlation, you would expect the returns of the index to be good, right? You'd invest after the fact (you only know the decline once it's happened) but I can imagine GDP growth rates of entire countries don't change overnight. So a declining GDP country would tend to keep declining. What are your theoretical objections to such a strategy?
Great question and what i would love to know too: where do the stock markets expectations actually come from?
@@kc-me6wl I would guess a major one would be earnings, since MBAs I know always go on about the P/E ratio
Ben, I'm sharing your videos constantly on Bogleheads.org and other forums. You deserve 10 million followers and I hope you'll get there in the next couple of years. You're filling the hole which John Bogle left after he died.
as always, thank you for your well informed opinion
Great video! Congratulations on the baby!
Thank you!!
No thank you! You are helping my family and friends understand investing because you explain it in a much better way than i could, you really are making a difference in our lives! Cheers
I'm sure the accolades grow tiresome, but I've been a subscriber for a couple years and I still walk away from every episode further enlightened.
In the youtube world of fluff and hyperbolic conceit, its profound to find such great content; always with supporting citations. This is what the internetz could be.
Some really good points in here
I wish you covered American based markets, love the videos man 👍
great video, thanks, I trust your opinion as my bff is also a cfa. does a weak chinese yuan mean a stronger US dollar?
the stock market is a place where you have to find value... if not ? find bonds.... Do you see value? do you see a good rate for bonds ?
Solid analysis as usual!
As you described, someone who wants to place bets based on the economy (which is probably a bad idea) needs to have an opinion of the future that differs from the consensus. Once the consensus is somewhat aligned with your opinion, it’s too late to place the bet. If you place the bet anyways you will get little to no reward for it even if you are right.
I admit that i have placed economic bets, forgive me for i have sinned :p
Could you please discuss on your next video the affects of liquidity shrinkage in US market and the enormous US debt, in relation to equity market. Your forecast for next year? . Love your videos , Thanks.
5:46 Wow he predicted it :O
It wasn't a prediction. The video's made in April 2020 when China had been on the quarantine for a couple of months already.
Hi!
What do you think of the political risk/emerging markets premium?
Is it a real risk premium like the small cal premium?
Is it worth investing in?
Amazing content!
One of the best channels on investing.
Thanks for the great analysis. Could you please make a video on the "Momentum Factor" that MSCI uses, and if it actually comes with a premium?
Quality content. Thanks Ben, much appreciated
Appreciate the research that went into this.