It is strange that Warren Buffet claimed, "you should never hold cash, never get out of the market, and nobody can predict the market". Here he is doing the opposite of what he suggested.
His problem is he is very size limited. He has so much money that he literally would move the market in a lot of the individual securities that he's traditionally known for buying. Why he doesn't index more in the s&p 500? Now that's a question I haven't seen anyone ask him that does make a lot of sense
man ....his "cash" delivers 1bn for BH every month lol. Most of the cash is parked in Treasury bills.... He never holds just cash except a percentage to pay unexpected bills...He is a wise person
1968 - made $0.90/hr (1st job) -1970 $3./hr - 1974 $5/hr - bought 1st house ($40,000 at 9%) - 1980 $10/hr - 1990 $15/hr - 2000 $25/hr - raising wages but prices went UP - INFLATION KILLS EVERYTHING AS PRICES WILL NEVER GO DOWN (you need MORE AND MORE $$$ just to get by) ?? :-(
Investing in gold and real estate did better than most stocks. Without additional investments the working man and middle class will get crushed by inflation.
The problem with the argument presented in this video is in comparing 1965 to 1981 to the current time doesn't factor in the fact that there are billions upon billions of dollars pouring in from 401(k)s and pension plans that were not there during that original time period. When this money comes in to money managers, they are required to invest that money in the market. So there's a built-in tendency for the market to go up that didn't automatically exist, originally. In addition, the current returns don't seem to reflect previous investment schemes in anyway. No one has a crystal ball. And the way this video attempts to analyze the market is as faulty as any other way. This is the best something to keep in the back of your mind as you plot your way forward. The stock market is overvalued. A serious correction is overdue. So what you should get from this video is the comment about Warren Buffett having a lot of cash on hand. An argument could be made to wait to invest after that correction occurs. The problem of course is timing. Nobody knows when that's coming and nobody knows how much money they're gonna lose by selling too soon. But definitely don't watch a video and think that that should determine your investment plan or get either overly optimistic or overly pessimistic based on it.
I feel it's not that appropriate to link returns to US GDP any more, companies are so much more global than they used to be. If the US stagnates and Asia pacific booms, global companies can still grow above US GDP
Warren Buffett is 94 years old. He is everything a good billionaire should be. A true philanthropist. A man who is willing to pay the taxes that are due. Auntie also recognizes that if our political system wasn’t so corrupt he would and should be paying more, it is amazing to me that no one realizes that he has not lost faith in equities. He is simply preparing for the end of his own life. His lifelong business partner recently passed away. In one or at most two years, he will likely pass away also. As an intelligent person, he is taking less and less interest in the worldly cycles of economy. He is a good man, and I feel confident that he is simply preparing his estate in a good way. I wish him well on his journey. If only the crass and selfish billionaires of today, had his character in spirit. When he is gone, we will have lost one of the greatest men in history.
He is a great and humble man. Do you know his credit card of choice is an American Express green card? The same one he's had forever. No Centurion card for him. No Rollex. I hope he is working on his memoirs and it goes on sale before tariffs hit and everything goes to hell after which I won't have the luxury of buying books. I'll just have to wait till hit hits the library. I just love listening to his videos. There are lessons there that you can take way past the stock market, they extend to life and I get the impression during most of his talks he likes to address everyday people.
I am skeptical of valuations. But the same things were being said last year. And if you took your money out of the S&P 500 you missed a 23% return this year. Hold of variety of assets, massage them if you well. But don’t make drastic moves. That is market timing.
False. If you got out of the market, you lost the OPPORTUNITY to gain 23%, you did not lose 23% because it was never yours. The way we speak about this is very greedy. If you stayed in the market and it crashed 80%, that is money you actually lost. Your retirement gets delayed or cancelled, people lose their homes, so on… that is a real fear. The fear of missing out on a potential crazy gain on top of the craziest bull market is not fear, it is greed.
almost always the average investor will mis-time the market. most people, most of the time, are better off using a boggle head style investing: buy indexes, and periodically rebalance.
Watching this Video is really an eye opener. And am so happy ,The only little problem I have is, not knowing where to start from, I really want to invest in my future, but just don't know where to start from, I really wish someone can put me through
My concern is whether I can continue to sustain my standard of living with $550k and avoid outliving my savings. Every withdrawal makes me a bit unsettled
@@EbrahamAljalil I started investing later than most, so relying on compound interest from Etf's or bonds alone wasn’t enough for me. Despite that, I’ve managed to do well and am on track to retire with around $2 million
@@MichaelGabreil It’s worth noting that luck often plays the significant role in some cases, sometimes even more than the resources involved. Without it, its challenging
@@EbrahamAljalil I usually avoid making specific recommendations because everyone's situation is unique. However, my experience with Julie Ann Lerch has been quite positive. You might find it worthwhile to see if her approach fits your needs
@@MichaelGabreil I looked for the name online and found her page.I will get in touch with her,Thanks for the help I emailed and made inquiries. Thanks for the help
Good job explaining Buffett's rationale and methodical thinking. As I talk to people who invest it becomes apparent to me that even when people know that it is a long term game and that they need to hold on through the ups and downs...they can't do it. They don't have the stomach or temperament to sit back and watch the show. And even fewer people have the temerity to buy more as the markets and market news headlines become center stage. People think it is easy to buy when the markets are crashing . It isn't!!!
Given the uncertain economic conditions and heightened global tensions, I'm considering investing over $400k in stocks. However, I'm uncertain about how to minimize potential risks.
Consider hiring financial advisors, estate planners or tax experts. They can provide specialized knowledge and help you navigate complex financial decisions.
Good video Hamish, thankyou. The question is, perhaps, what happens to individual shares during the 'flat' periods? At the moment the growth in the S&P is essentially gathered in a handful of companies. So without them, the market would be a lot flatter. Question 2: what happened to dividends over the 'flat' period?
It was engineered by creating value. With the massive rise of GDP, you cannot state that "the rich took it from others". The others never had anything to take in the first place.
Note that I am not saying that the pie is divided fairly. To do so one would have to define what "fair" means in this context and I don't want to get into that. But the pie was baked by those who are rich, not taken from those who are poor.
Nobody invested in stocks in the 60’s and 70’s. People started investing in the mid 80’s. Even more people are investing now than ever as companies no longer use a pension.
@HAMISHHODDER thank you for the video, could you confirm to a beginner over here that you are saying do not invest in snp 500 but invest in individual stocks instead? thanks
Well comparing year 68 to 81, but during this time(70s) US dollar was taken off from gold reserves, so i guess that has some effect on product prices.. So im not sure are these years relevant to compare?
Real estate prices generally follow the market, which generally follows economic conditions, because all these things relate to how much money people have to spend, and thus how much capital people will have to invest and or buy real estate. The US isn't a very real estate centric economy until recent years. Its historically (and still remains), a consumerist economy. Real estate only effects less than 20% of the GDP (but its recently been growing thanks to high real estate prices).
@@rebeltheharem7028 It began growing due to TCJA an tax incentives for rent-seeking behavior. But that's not what this is about. I think the minus real estate would show the real economy as I don't think the exchange of existing property is something that should be presented in GDP data.
"If inflation stays around 2%." The debt is over 35 trillion and is increasing by 1T every quarter. The fed's "balance sheet" is over 9T. Gold is over $2700 an oz.
Which means it can move 2 ways. That spending make speople poor due to distortions. Unaffordability crisis affecte the real economy and stocks and gold crash like in 2000... or well any other of these scenarios. Or weget hyperinflation. Pick the one you think is more likely, I for one pick the first, as the US is not indebted in foreign currency.
I can predict with 100% certainty, that nobody ever predicted and will predict the time of a recession. But if you scream the sky is falling nonstop for 20 years, you may get it right eventually one day. Like a broken watch.
I only watched the first three minutes and I’m confused. If the economy grew by fourfold (or whatever) and inflation grew by ??, how much did the real economy grow? Was the change in the stock market the real growth discounting inflation? If the 1959-1981 period is misunderstood, what effect should that have on a future analysis?
401ks people are forced to finance the stock market from the time that they benter the work force , till the time they turn 59 and a half and then they cash in more people today are working , but you cant ignore the fact , that the american worker is forced to fiance the stock market
The Bank of England has been around 1694. With the exception of extreme periods (ZIRP - late 1960s - 1980s) interest rates have been in the range of 3 - 5%. It's very unlikely that they will go below 3%.
Recently it was near zero. I'm old enough to remember the inflation of the '70's. What you learn living as long as I have is that surprising things happen.
Investing for gain in the stock market is very simple: buy low, sell high. Predicting the market is equally simple: in the long term, it will go up; in the short term, it will go down. You can only do this by actively managing your portfolio and taking advantage of the natural ups and downs of the market. Just because it's a long game that's not the same as sitting on shares and watching them going up and down while doing nothing. By actively managing your portfolio, you can benefit both from dividends and capital gains, a process that outperforms either alone. The longer a bull run or a relatively stable market extends, the more likely the inevitable correction or crash, both of which seem more frequent than before. In either circumstance, gradually increasing the proportion of your portfolio as cash, to about 25% as a hedge against capital loss on your remaining investment and the opportunity to reinvest at a discount when the inevitable occurs. Apparently, this IS what Warren Buffett is doing. I've never followed the investment gurus, I've figured this out for myself.
Yeah, I really call the idea into question the idea that US treasuries are ultra safe given just how unsustainable the US debt load is, and just how rapidly it's been adding more and more debt. Either it eventually won't be able to pay off that debt when interest exceeds tax revenue, or your money will be worth next to nothing when they turn on the money printer to make the payments. And I'm saying this as a US citizen.
Does anyone know which bank houses his cash? Or if his cash is in TBills, or some foreign bonds? Does anyone know. how to find this information? Thanks.
So assuming the PE ratio of the market is on the high side and contracts over the next x years, what does a person entering into retirement do? Many retirement planning assumes a return of 7-10% and a 2-3% inflation rate.
Keynesian economics works well only in expansions because it does everything we like to see- create new money, stimulate demand for goods and services, bolster the jobs market, generate rising tax bases, foster creativity, etc. In reverse it ushers in the opposite of all those wonderful things, delivering reality to us in the forms of”credit crunches” in multiple manifestations: recessions, depressions, inflation, stagflation, bankruptcy, debt restructure- you name it. Any way you cut it major “adjustments” lie directly ahead.
I've only made roughly 8% total, or 2% annually, from investing 50% of my $150k salary over the past four years. i want to build a good investment portfolio and have been looking at videos and doing research to be more educated. Where should i invest this for stable cashflow?
That's why I'm keeping my powder dry for the moment. I can't see buying into the market at all-time highs - I'll wait for the next disaster and buy the dip - it's the only way I can see to get decent returns over time for the next decade.
@@carlyndolphin I am already in stocks in my 401k, and have been. I'm talking about where to put a newly-acquired war chest of cash. Given the options, stocks is NOT the best choice in 2024.
Enjoyed your explanation Hamish. Your analysis fits well with predictions about the likely impact on the overall market if a particular candidate wins the US election. Tariffs on imports will fuel inflation. Inflation will increase bond yields and interest rates overall. That will pull money towards safe/guaranteed returns at a higher yield and drag down the S&P500, if my extrapolation of your historical examples is correct. I understand that this is inductive logic which is subject to failure, but I'd be interested in your take on the likely impact on the market of both outcomes, a T or H win.
Markets are fundamentally a reflection of the activity of people active in that market. If you look at the population curve of that market, you will get a predictor of the activity of that market. All our economic models are viable only in growth mode. The population is aging and the economy will go down.
So if I’m interpreting this right .. There’s basically nowhere for growth to come from. No fuel for the fire. Maybe can cut rates again, but that’s about it.
@@jpcarsmedia Beat me to it. The Question is how fast and to what degree do they implement it. 10 years ago the authors of "People Get Ready" were on C-Span said the German Minister of Industry told them "we could replace 100K high-wage workers (BASF, Siemens, Benz, etc) but we're not going to do it because we don't know what to do with the people". Mercenaries in US now not likely to have such sentiments. Most likely post-election jobs depression followed by some government intervention. Bringing back the WPA would not be bad if it could be managed, trouble is the Democrats turn everything into the Chicago public schools.
Right now for me the best short-term investment is bank deposits with the interest rates of around 7-8% here in Poland. I can dump there very large sums of money, risk-free, instead of buying overvalued assets on the stock market with very high risk, where surely I wouldn't deploy that much capital as well.
7-8% sounds far too good to be true! Be careful…. Remember a bank can freeze your deposits overnight and then collapse. I prefer precious metals in my hand! Buy silver and gold coins on dips. I agree stocks are too risky at the moment. Poland is the safest country in the EU I have read, congratulations on your strong government. We need something similar in the UK.
@@alexandermills382 Thank you for the nice words about my contry. I hope UK bounces back soon. Regarding the bank deposit - right now the average is around 5,5%, a year ago it was around 7-8%, but yesterday I made a deposit with a substantial amount with 7,5% interest rate. There are still some big banks who offer such rates from time to time, and if the timing is right, you can really benefit from it. I think the collapse of such banks is extremely unlikely. There is no 100% safe way to invest, but in the past 2-3 years this has been the best way to invest money for me, given exorbitant prices in the market.
@@BuGlobalToday During the last period of sustained inflation (1970s), gold was up 2,300%. Commodities were up 586%. REITs were up 100%. The S&P 500 was flat. But, defensive sectors held their pricing power. Bonds performed very badly!
Thank you so much for this video but in these uncertain times, it is more important than ever to have a solid understanding of how to manage your finances, invest wisely and navigate economic downturns. But my primary concern is how to grow my reserve of $240k which has been sitting duck since forever with zero to no gains.
Invest in S&P 500 ETF, for as long as possible. Do it as often as you can. Try not to withdraw this money and let compounding do its work. Prioritize patience and a long-term perspective most importantly consider financial advisory for informed buying and selling decisions.
A lot of folks downplay the role of advlsors until being burnt by their own emotions. I remember couple summers back, after my lengthy divorce, I needed a good boost to help my business stay afloat, hence I researched for licensed advisors and came across someone of utmost qualifications. She's helped grow my reserve notwithstanding inflation, from $275k to $850k.
This is definitely considerable! think you could suggest any professional/advisors i can get on the phone with? i'm in dire need of proper portfoIlo allocation
Viviana Marisa Coelho is her name. She is regarded as a genius in her area and works for Empower Financial Services. By looking her up online, you can quickly verify her level of experience. She is well knowledgeable about financial markets.
The short term treasuries went to 21% and the 30 year went to 15%. General obligation bonds went to I think 14% or more. But you had to watch out for the call dates. How long were you going to get a high rate of return.
This is a US centric video, understandably. In the UK shareholder returns have held up in the last 10 years, whilst GDP has flat lined as has GDP per capita. In other words corporate UK has been shielded largely whereas the real economy has been in the deep freeze. This suggests that the UK trajectory may be the opposite to that of the US, seeing increasing growth. This might also mean stocks don't rise in the UK though.
As an investing enthusiast, I often wonder how top-level investors become millionaires through investing. Buying assets may seem straightforward, but choosing the right stock without a tested plan can be challenging. I've been attempting for some time to increase the size of my $210K portfolio, but the largest obstacle is the absence of clear entry and exit plans. Any guidance in this regard would be much valued.
Timing the market. Of course the market won't go up forever. Of course things will crash or slow down at some point. But if you don't know precisely when, it doesn't make sense to take action.
It's interesting to see how accessible investing has become with online platforms. The video broke down the basics well, from choosing a platform to understanding order types. Definitely makes investing feel less intimidating!"
I don't see PE ratios dropping much under 20 for longer than short spurts from now on as there are just to much money chasing after to few stocks. There are just to many people investing for their retirements.
Ask friends and family this question regardless of where you are: Are you struggling financially? The predominant answer i found is YES. Our financial system depends on consumers consuming to sustain growth. I do not see it happening, and i see 2025 as what i describe as a "make or break year" regardless of Buffets cash position or historical advice. Case in point: Tesla stock jumped by over 45 USD in a day last week...this is exuberance above and beyond the norm. I for one believe that the stock market is overvalued and there is too much cash around trying to justify value.
What about His Market Indicator. The ratio of total US stock market value divided by GDP is @ 200.2% right now. Indicating that the shoe could drop any time soon ( not that it's going to, that it could ).
pfft, so after all that, Buffet says that the market as a whole has very little impact on his investment decisions because he picks individual companies. I might invest a small amount into indexes, but I'll focus on picking individual stocks which makes all of this concern about the overall market almost irrelevant.
link to the article is in the description :)
When did you hit 200k? Congratulations! Well deserved.
you just wasted 10 minutes of my life. good that i had it on 1.5x speed.
😅
So he sold some days before the election....so interesting 🙂
ooh, a Stockopedia discount, cheers Hamish 👍🤜
The man is making the biggest market forecast without saying a word
The emperor needs not to speak. His subjects fear his every gesture.
@@afonsodeportugalproductivty crisis, late stage capitalismby design
Most of the markets are controlled by artificial intelligence not the old human panic
@@13thbiosphere interesting thought...
The emperor has no clothes
It is strange that Warren Buffet claimed, "you should never hold cash, never get out of the market, and nobody can predict the market". Here he is doing the opposite of what he suggested.
His problem is he is very size limited. He has so much money that he literally would move the market in a lot of the individual securities that he's traditionally known for buying. Why he doesn't index more in the s&p 500? Now that's a question I haven't seen anyone ask him that does make a lot of sense
He is liar, he does the opposite what he says, like he says I drink 5 cokes daily?
NICE REMINDER TO STAY INVESTED...THANKS. OLD AGE VISITS US ALL
HE ALSO IS LEAVING HIS FAMILY GREAT WEALTH THAT HE PROMISED HE WOULDNT☆
Did you watch the entire video. This is discussed in it.
man ....his "cash" delivers 1bn for BH every month lol. Most of the cash is parked in Treasury bills.... He never holds just cash except a percentage to pay unexpected bills...He is a wise person
1968 - made $0.90/hr (1st job) -1970 $3./hr - 1974 $5/hr - bought 1st house ($40,000 at 9%) - 1980 $10/hr - 1990 $15/hr - 2000 $25/hr - raising wages but prices went UP - INFLATION KILLS EVERYTHING AS PRICES WILL NEVER GO DOWN (you need MORE AND MORE $$$ just to get by) ?? :-(
....why you saying this as if it's some new discovery.
Investing in gold and real estate did better than most stocks. Without additional investments the working man and middle class will get crushed by inflation.
Prices do go down. Just on average everything goes up.
The problem with the argument presented in this video is in comparing 1965 to 1981 to the current time doesn't factor in the fact that there are billions upon billions of dollars pouring in from 401(k)s and pension plans that were not there during that original time period. When this money comes in to money managers, they are required to invest that money in the market. So there's a built-in tendency for the market to go up that didn't automatically exist, originally.
In addition, the current returns don't seem to reflect previous investment schemes in anyway. No one has a crystal ball. And the way this video attempts to analyze the market is as faulty as any other way. This is the best something to keep in the back of your mind as you plot your way forward.
The stock market is overvalued. A serious correction is overdue. So what you should get from this video is the comment about Warren Buffett having a lot of cash on hand. An argument could be made to wait to invest after that correction occurs. The problem of course is timing. Nobody knows when that's coming and nobody knows how much money they're gonna lose by selling too soon.
But definitely don't watch a video and think that that should determine your investment plan or get either overly optimistic or overly pessimistic based on it.
And you aren't taking into consideration tRump's tariffs.
Besides, I'll listen to Warren Buffet over you any day...
Happy Thanksgiving.
Well said!
Buffett has cash because there’s a huge amount of newly printed cash out there looking for a home ..
@thesleeplessmn Buffet has a lot of cash because he's been selling tons of stock.
Never believe a top investor that has his own priority to manipulate the investors for his own benefit.
I feel it's not that appropriate to link returns to US GDP any more, companies are so much more global than they used to be. If the US stagnates and Asia pacific booms, global companies can still grow above US GDP
good point
Really good point
great point
Trump’sprotectionist policies and the resulting trade war will change that
Warren Buffett is 94 years old. He is everything a good billionaire should be. A true philanthropist. A man who is willing to pay the taxes that are due. Auntie also recognizes that if our political system wasn’t so corrupt he would and should be paying more, it is amazing to me that no one realizes that he has not lost faith in equities. He is simply preparing for the end of his own life. His lifelong business partner recently passed away. In one or at most two years, he will likely pass away also. As an intelligent person, he is taking less and less interest in the worldly cycles of economy. He is a good man, and I feel confident that he is simply preparing his estate in a good way. I wish him well on his journey. If only the crass and selfish billionaires of today, had his character in spirit. When he is gone, we will have lost one of the greatest men in history.
He is a great and humble man. Do you know his credit card of choice is an American Express green card? The same one he's had forever. No Centurion card for him. No Rollex. I hope he is working on his memoirs and it goes on sale before tariffs hit and everything goes to hell after which I won't have the luxury of buying books. I'll just have to wait till hit hits the library. I just love listening to his videos. There are lessons there that you can take way past the stock market, they extend to life and I get the impression during most of his talks he likes to address everyday people.
10:40 A 6.3% increase in the S&P 500 over 17 years relative to inflation is still waaaay better that you would do if you held plain cash
I am skeptical of valuations. But the same things were being said last year. And if you took your money out of the S&P 500 you missed a 23% return this year. Hold of variety of assets, massage them if you well. But don’t make drastic moves. That is market timing.
It’s up almost 39% in the last 365 days.
@ This all feels very 1999-2000 to me.
False. If you got out of the market, you lost the OPPORTUNITY to gain 23%, you did not lose 23% because it was never yours. The way we speak about this is very greedy. If you stayed in the market and it crashed 80%, that is money you actually lost. Your retirement gets delayed or cancelled, people lose their homes, so on… that is a real fear. The fear of missing out on a potential crazy gain on top of the craziest bull market is not fear, it is greed.
almost always the average investor will mis-time the market. most people, most of the time, are better off using a boggle head style investing: buy indexes, and periodically rebalance.
Watching this Video is really an eye opener. And am so happy ,The only little problem I have is, not knowing where to start from, I really want to invest in my future, but just don't know where to start from, I really wish someone can put me through
My concern is whether I can continue to sustain my standard of living with $550k and avoid outliving my savings. Every withdrawal makes me a bit unsettled
@@EbrahamAljalil I started investing later than most, so relying on compound interest from Etf's or bonds alone wasn’t enough for me. Despite that, I’ve managed to do well and am on track to retire with around $2 million
@@MichaelGabreil It’s worth noting that luck often plays the significant role in some cases, sometimes even more than the resources involved. Without it, its challenging
@@EbrahamAljalil I usually avoid making specific recommendations because everyone's situation is unique. However, my experience with Julie Ann Lerch has been quite positive. You might find it worthwhile to see if her approach fits your needs
@@MichaelGabreil I looked for the name online and found her page.I will get in touch with her,Thanks for the help
I emailed and made inquiries. Thanks for the help
So what your sayin is we should have lots of cash reserve so if there is a market crash we can capitalize on the low prices?
Yes, or gold.
Y
No.
Yes
Watch the entire video.
Good job explaining Buffett's rationale and methodical thinking. As I talk to people who invest it becomes apparent to me that even when people know that it is a long term game and that they need to hold on through the ups and downs...they can't do it. They don't have the stomach or temperament to sit back and watch the show. And even fewer people have the temerity to buy more as the markets and market news headlines become center stage. People think it is easy to buy when the markets are crashing . It isn't!!!
Always good information Hamish. Thanks bud
It would be awesome to see some content on Milei and argentina. Anyhow your videos are really interesting keep up the good work
Milei is awesome. Wish we had someone like him in the US!
And how he's utterly destroyed the economy there ?? Sad af
@@freesk8😂😂😂
@@snakey973 Afuero! Afuero! Afuero!
Nice research.. thanks
Given the uncertain economic conditions and heightened global tensions, I'm considering investing over $400k in stocks. However, I'm uncertain about how to minimize potential risks.
Consider hiring financial advisors, estate planners or tax experts. They can provide specialized knowledge and help you navigate complex financial decisions.
Great insights and research
Do you have a link to that article?
It's now in the description :)
dude, Warren hasn't said anything since 1998?
We've had a few crashes since then...
Good video Hamish, thankyou.
The question is, perhaps, what happens to individual shares during the 'flat' periods? At the moment the growth in the S&P is essentially gathered in a handful of companies. So without them, the market would be a lot flatter.
Question 2: what happened to dividends over the 'flat' period?
Old wealth wasn't always earned; it was often engineered by taking from others.
There is a reason why envy is a sin.
It was engineered by creating value. With the massive rise of GDP, you cannot state that "the rich took it from others". The others never had anything to take in the first place.
Note that I am not saying that the pie is divided fairly. To do so one would have to define what "fair" means in this context and I don't want to get into that. But the pie was baked by those who are rich, not taken from those who are poor.
the debt is growing at an alarming pace. Near impossible to lower interest rate given the volume of bond the American gov needs to raise.
Run! Panic! Buy Gold!
Let me make a prediction: Berkshire will have more money in cash in 2025. And 2026. And 2027. And 2028. But not 2029!
"Buy when there's blood in the streets." J.P Morgan (I believe)
Th founding rothschild
Nobody invested in stocks in the 60’s and 70’s. People started investing in the mid 80’s. Even more people are investing now than ever as companies no longer use a pension.
@HAMISHHODDER
thank you for the video, could you confirm to a beginner over here that you are saying do not invest in snp 500 but invest in individual stocks instead? thanks
Well comparing year 68 to 81, but during this time(70s) US dollar was taken off from gold reserves, so i guess that has some effect on product prices.. So im not sure are these years relevant to compare?
Thanks Hamish.
Passive inflows into 401Ks and ETFs would likely mitigate this valuation issue to a large extent ?
It would be very valuable to see the GDP number minus real estate.
Real estate transactions have been so disjointed, and massively imoact GDP
Real estate prices generally follow the market, which generally follows economic conditions, because all these things relate to how much money people have to spend, and thus how much capital people will have to invest and or buy real estate.
The US isn't a very real estate centric economy until recent years. Its historically (and still remains), a consumerist economy. Real estate only effects less than 20% of the GDP (but its recently been growing thanks to high real estate prices).
@@rebeltheharem7028 It began growing due to TCJA an tax incentives for rent-seeking behavior. But that's not what this is about.
I think the minus real estate would show the real economy as I don't think the exchange of existing property is something that should be presented in GDP data.
"If inflation stays around 2%." The debt is over 35 trillion and is increasing by 1T every quarter. The fed's "balance sheet" is over 9T. Gold is over $2700 an oz.
Which means it can move 2 ways. That spending make speople poor due to distortions. Unaffordability crisis affecte the real economy and stocks and gold crash like in 2000... or well any other of these scenarios. Or weget hyperinflation. Pick the one you think is more likely, I for one pick the first, as the US is not indebted in foreign currency.
This is an article from 1999, how could you expect this to apply to today's world that changed a lot !
I can predict with 100% certainty, that nobody ever predicted and will predict the time of a recession. But if you scream the sky is falling nonstop for 20 years, you may get it right eventually one day. Like a broken watch.
I only watched the first three minutes and I’m confused. If the economy grew by fourfold (or whatever) and inflation grew by ??, how much did the real economy grow? Was the change in the stock market the real growth discounting inflation?
If the 1959-1981 period is misunderstood, what effect should that have on a future analysis?
401ks people are forced to finance the stock market from the time that they benter the work force , till the time they turn 59 and a half and then they cash in more people today are working , but you cant ignore the fact , that the american worker is forced to fiance the stock market
you're not forced to invest in a 401k
No one is making anyone invest in a 401k. Even in companies with automatic enrollment you can opt out. So stop lying
You have to compared to years past when there were pensions. There's no other option, so yes they are forced.
it's the only game in town ... and thanks to reagan that now includes the entire federal work force ..
@@direwolf6234 Keep in mind it's been the republicans long term wet dream to turn social security into the same scheme.
The Bank of England has been around 1694. With the exception of extreme periods (ZIRP - late 1960s - 1980s) interest rates have been in the range of 3 - 5%. It's very unlikely that they will go below 3%.
That is what Buffet said and the rates went to zero.
Recently it was near zero. I'm old enough to remember the inflation of the '70's. What you learn living as long as I have is that surprising things happen.
Investing for gain in the stock market is very simple: buy low, sell high. Predicting the market is equally simple: in the long term, it will go up; in the short term, it will go down.
You can only do this by actively managing your portfolio and taking advantage of the natural ups and downs of the market. Just because it's a long game that's not the same as sitting on shares and watching them going up and down while doing nothing.
By actively managing your portfolio, you can benefit both from dividends and capital gains, a process that outperforms either alone. The longer a bull run or a relatively stable market extends, the more likely the inevitable correction or crash, both of which seem more frequent than before. In either circumstance, gradually increasing the proportion of your portfolio as cash, to about 25% as a hedge against capital loss on your remaining investment and the opportunity to reinvest at a discount when the inevitable occurs.
Apparently, this IS what Warren Buffett is doing. I've never followed the investment gurus, I've figured this out for myself.
I am coder but very vey interested in financial world and investing, i need to learn more and more. Your videos help me a lot.
When you show eg the 66% return over 17 years are you reinvesting the dividends or is this simply comparing the share price index?
Would like to see a us debt factored into the analysis. Printing all that currency has to go somewhere.
It´s called hyper inflation and will come before the year 2030.
Yeah, I really call the idea into question the idea that US treasuries are ultra safe given just how unsustainable the US debt load is, and just how rapidly it's been adding more and more debt. Either it eventually won't be able to pay off that debt when interest exceeds tax revenue, or your money will be worth next to nothing when they turn on the money printer to make the payments. And I'm saying this as a US citizen.
@@Logge0815hyperinflation will not happen in the US.
Great video. The best you’ve posted in a while, Hamish. Well done.
Very informative. Subscribed. thanks for posting! :D
I am new to finance RUclips but I am enjoying it so far.
Great video! You deserve much,much more than 200K subscribers.
love these videos, keep em coming
Thank you for being a long-time subscriber of the channel!
A bottomless pit far worse than the '29 crash.
Does anyone know which bank houses his cash? Or if his cash is in TBills, or some foreign bonds? Does anyone know. how to find this information? Thanks.
Excellent video, thank you 😊
Great video Hamish!
Thanks!
You just warned the stock market could go down over the long term then said people should buy the index for the long term.
thank you for doing such thorough research ,love it
My AI Buffett used in the intro needs some work... 😆
The voice is scarily good - which AI tool do you use for this?
I thought buffet actually said this 😂😂😂
Had me fooled
Buffett really is the goat, I wonder if he’ll be going into commodities now
That was a fantastic video. I always enjoy looking for your new videos, but this one was the best!
So assuming the PE ratio of the market is on the high side and contracts over the next x years, what does a person entering into retirement do? Many retirement planning assumes a return of 7-10% and a 2-3% inflation rate.
Keynesian economics works well only in expansions because it does everything we like to see- create new money, stimulate demand for goods and services, bolster the jobs market, generate rising tax bases, foster creativity, etc. In reverse it ushers in the opposite of all those wonderful things, delivering reality to us in the forms of”credit crunches” in multiple manifestations: recessions, depressions, inflation, stagflation, bankruptcy, debt restructure- you name it. Any way you cut it major “adjustments” lie directly ahead.
Excellent presentation. Thanks.
Another freat video. I am sharing this with several close friends. Thank you.
Outstanding analysis
I've only made roughly 8% total, or 2% annually, from investing 50% of my $150k salary over the past four years. i want to build a good investment portfolio and have been looking at videos and doing research to be more educated. Where should i invest this for stable cashflow?
Econ 101: In a recession, cash is king. But we're not in a recession ast this time.
yet.
what should you have invested in from 65 to 85?
That's why I'm keeping my powder dry for the moment. I can't see buying into the market at all-time highs - I'll wait for the next disaster and buy the dip - it's the only way I can see to get decent returns over time for the next decade.
The next few years will certainly be interesting, thanks for watching!
1000% Believe the same thing.. This is the biggest bubble in the history of this over 100 to 110 year old Fiat currency.
The last 2 years you have lost out on 60% gains! Good luck on timing the market though.
@@carlyndolphin I am already in stocks in my 401k, and have been. I'm talking about where to put a newly-acquired war chest of cash. Given the options, stocks is NOT the best choice in 2024.
@@JohnPamplin invest in your own business. That's the biggest return you can get in the next 17 years
Enjoyed your explanation Hamish. Your analysis fits well with predictions about the likely impact on the overall market if a particular candidate wins the US election. Tariffs on imports will fuel inflation. Inflation will increase bond yields and interest rates overall. That will pull money towards safe/guaranteed returns at a higher yield and drag down the S&P500, if my extrapolation of your historical examples is correct. I understand that this is inductive logic which is subject to failure, but I'd be interested in your take on the likely impact on the market of both outcomes, a T or H win.
If this holds up, stockpicking will become more important in the next years.
According to the Buffet indicator, S&P is over valued by 63-65% now, so expect that pull back and then you can say that you bought at real valuation.
The 'Buffett Indicator' is 'Correct'!!! And, maybe, even "More than it says". Think like "Minus 68 percent to 72 percent. 😐😐😐😐😐
Markets are fundamentally a reflection of the activity of people active in that market. If you look at the population curve of that market, you will get a predictor of the activity of that market. All our economic models are viable only in growth mode. The population is aging and the economy will go down.
I think a lot more people bought bonds instead of stocks during the 70s
Time to buy then.
So if I’m interpreting this right .. There’s basically nowhere for growth to come from. No fuel for the fire. Maybe can cut rates again, but that’s about it.
Growth is from AI and layoffs
Jpc is correct without AI consumers are broke and done for.
@@jpcarsmedia Beat me to it. The Question is how fast and to what degree do they implement it. 10 years ago the authors of "People Get Ready" were on C-Span said the German Minister of Industry told them "we could replace 100K high-wage workers (BASF, Siemens, Benz, etc) but we're not going to do it because we don't know what to do with the people". Mercenaries in US now not likely to have such sentiments. Most likely post-election jobs depression followed by some government intervention. Bringing back the WPA would not be bad if it could be managed, trouble is the Democrats turn everything into the Chicago public schools.
Right now for me the best short-term investment is bank deposits with the interest rates of around 7-8% here in Poland. I can dump there very large sums of money, risk-free, instead of buying overvalued assets on the stock market with very high risk, where surely I wouldn't deploy that much capital as well.
7-8% is pretty damn good! thanks for watching :))
@@HamishHodder Isnt it! Cheers, thank you for great conent
7-8% sounds far too good to be true! Be careful…. Remember a bank can freeze your deposits overnight and then collapse. I prefer precious metals in my hand! Buy silver and gold coins on dips. I agree stocks are too risky at the moment. Poland is the safest country in the EU I have read, congratulations on your strong government. We need something similar in the UK.
@@alexandermills382 Thank you for the nice words about my contry. I hope UK bounces back soon. Regarding the bank deposit - right now the average is around 5,5%, a year ago it was around 7-8%, but yesterday I made a deposit with a substantial amount with 7,5% interest rate. There are still some big banks who offer such rates from time to time, and if the timing is right, you can really benefit from it. I think the collapse of such banks is extremely unlikely. There is no 100% safe way to invest, but in the past 2-3 years this has been the best way to invest money for me, given exorbitant prices in the market.
Banks deposit insurance?
I love you Hamboy!
You might have to become a value investor and focus on dividend paying options: like VOO @ 45% and FDVV @ 55%.
So it's his past prediction, not his current prediction? If correct, what is value add of this podcast?
Very informative, thanks man!
What are the two variables, I see inly one mentioned which is interest rates
Buying Stocks or Gold are the absolute best hedges against hyperinflation.
Absolutely. Historical patterns show that both beat bonds and cash during the 70s.
Not true
@@BuGlobalToday During the last period of sustained inflation (1970s), gold was up 2,300%. Commodities were up 586%. REITs were up 100%. The S&P 500 was flat. But, defensive sectors held their pricing power. Bonds performed very badly!
No, There is something else that is a big secret here. Clue: Modern Munger and Warren think it is rat poison. Really!
@@borisdodgingbullets very interesting. do you think its working? I like stocks
Thank you so much for this video but in these uncertain times, it is more important than ever to have a solid understanding of how to manage your finances, invest wisely and navigate economic downturns. But my primary concern is how to grow my reserve of $240k which has been sitting duck since forever with zero to no gains.
Invest in S&P 500 ETF, for as long as possible. Do it as often as you can. Try not to withdraw this money and let compounding do its work. Prioritize patience and a long-term perspective most importantly consider financial advisory for informed buying and selling decisions.
A lot of folks downplay the role of advlsors until being burnt by their own emotions. I remember couple summers back, after my lengthy divorce, I needed a good boost to help my business stay afloat, hence I researched for licensed advisors and came across someone of utmost qualifications. She's helped grow my reserve notwithstanding inflation, from $275k to $850k.
This is definitely considerable! think you could suggest any professional/advisors i can get on the phone with? i'm in dire need of proper portfoIlo allocation
Viviana Marisa Coelho is her name. She is regarded as a genius in her area and works for Empower Financial Services. By looking her up online, you can quickly verify her level of experience. She is well knowledgeable about financial markets.
Stop predicting the market. Just look for the gems. There is no best timing to the market. Isnt it what he is saying all the time on the other side ?
Brilliant Hamish - great piece
Did you adjust his cash pile for inflation?
nice video, thanks!
The short term treasuries went to 21% and the 30 year went to 15%. General obligation bonds went to I think 14% or more. But you had to watch out for the call dates. How long were you going to get a high rate of return.
Another great video.
This is a US centric video, understandably. In the UK shareholder returns have held up in the last 10 years, whilst GDP has flat lined as has GDP per capita. In other words corporate UK has been shielded largely whereas the real economy has been in the deep freeze. This suggests that the UK trajectory may be the opposite to that of the US, seeing increasing growth. This might also mean stocks don't rise in the UK though.
As an investing enthusiast, I often wonder how top-level investors become millionaires through investing. Buying assets may seem straightforward, but choosing the right stock without a tested plan can be challenging. I've been attempting for some time to increase the size of my $210K portfolio, but the largest obstacle is the absence of clear entry and exit plans. Any guidance in this regard would be much valued.
He sold banks because they are short silver and will collapse soon
Lol "billions" in losses of the 5 largest banks will lead to their total collapse.
That's such a tiny fraction of their equity.
It's only alarming for people who want to retire in 10 years, for everybody else who's accumulating it's perfect for stocks to be flat.
Unfortunately, I'm retiring in 6 years.
Oh great.
I’m 62.
Timing the market. Of course the market won't go up forever. Of course things will crash or slow down at some point. But if you don't know precisely when, it doesn't make sense to take action.
It's interesting to see how accessible investing has become with online platforms. The video broke down the basics well, from choosing a platform to understanding order types. Definitely makes investing feel less intimidating!"
It's common sense that all that printed money will eventually find its way into the market... why do most people over analyze this fact?
A ridiculous number of scammer comments here.
Flat for two 25/26 …mini bull peaking at 2030… stay invested and go and get a hobby till 2030 do not be tempted until 27
What article was this in which magazine? Fortune 500 or _____ magazine
I don't see PE ratios dropping much under 20 for longer than short spurts from now on as there are just to much money chasing after to few stocks. There are just to many people investing for their retirements.
Ask friends and family this question regardless of where you are: Are you struggling financially? The predominant answer i found is YES. Our financial system depends on consumers consuming to sustain growth. I do not see it happening, and i see 2025 as what i describe as a "make or break year" regardless of Buffets cash position or historical advice. Case in point: Tesla stock jumped by over 45 USD in a day last week...this is exuberance above and beyond the norm. I for one believe that the stock market is overvalued and there is too much cash around trying to justify value.
Your analisis are amazing.
A lot of similarities covered in this video. Debt to GDP wasn’t 130% during that time frame.
Thank-you Hamish.
What about His Market Indicator. The ratio of total US stock market value divided by GDP is @ 200.2% right now. Indicating that the shoe could drop any time soon ( not that it's going to, that it could ).
pfft, so after all that, Buffet says that the market as a whole has very little impact on his investment decisions because he picks individual companies. I might invest a small amount into indexes, but I'll focus on picking individual stocks which makes all of this concern about the overall market almost irrelevant.