Last Time This Happened… Everyday People Became Millionaires!

The last time this setup showed up, regular people investing in the stock market walked away very rich. Not by guessing winners, but by following a very simple plan. And today, the same signals are flashing again, and I'm going to show you exactly what I'm talking about. We are in one of the biggest bull runs ever. Markets keep hitting all-time highs. AI stocks are flying. YouTubers are saying quantum computing will change everything. Your buddy brags about how easy it is to make money because stocks go up, and it feels extremely exciting. But it also feels familiar if you are aware of history. Now guys, we have seen this movie before. Back in 99, 2000, everyone was sure that we had found a new way to get rich. The internet was going to change everything. And guess what? It did. So people decided through their actions that price did not matter. I want to repeat, through their actions. Their words weren't that. Well, of course, there's a price too high. But when you keep paying more, price doesn't matter. And right now, it is happening again. And let's not forget the atmosphere back then. In 99 and 2000, there were minting of new millionaires at a record pace. Everyone wanted in. Everyone was bragging about getting rich very quickly. And here's the kicker. The people who sat in the sidelines waiting for that perfect moment missed out on one of the biggest booms in history. Today's market will absolutely create new millionaires, just like it felt like it was going to do in 99 and 2000. Bubbles have that effect. It feels like if you are not involved, you're going to be left in the dust. They launched some companies into the atmosphere. And if you're in the right ones, you will do very well. But here's the catch. Bubbles also destroy fortunes. A little anecdote of mine. I remember back in 2002 or so, I went home back from college and met with my father, had a little lunch with a friend of his who was a doctor. We were talking about the tech bubble. And he said, oh my God, my internet stocks are down to like 50 grand. I go, what was it at its peak? He said, close to 5 million. Guys, that is a 99% drop. Even if he invested in Apple back then at the exact right moment, he might be breakeven today. We all know that that's what happened in 2000. Like all bubbles, the bubble popped. And when it did, the tech heavy Nasdaq fell 80% from its peak. Companies with no revenue, no profits, just a flashy website and a name.com went to zero very quickly. Millionaires on paper one year, bankrupt the next. Now here's the lesson. Bubbles don't pop quietly. They crash hard. And while the hype names get destroyed, the companies with real cash flow, strong balance sheets, and real businesses will survive. And here's where it gets very interesting. Back in 2000, there were two types of investors. The first type bought the S&P 500, the Nasdaq, and some other low cost ETF and just stayed in the market. And guess what? They absolutely crushed it. Even if you had the bad luck of starting to invest in the QQQ, the Nasdaq 100 at the very top on March 10th, 2000, but you kept on buying all the way down. We're talking about riding it 80% lower. And you just kept buying, kept reinvesting. Guys, you'd be getting over a 14% annualized return to today. That's life-changing money. And that's after absorbing an 80% drop. Now, on the other side, there were folks who blindly chased the hype. Guys, if you're like the vast majority of investors out there, you might not even realize that you can look at the financials of a company. You can sit there and determine what's a reasonable price. It sounds hard. It's not as difficult as you may be. And that's why we created this video exactly for you. Because at least you're ahead of everybody out there by trying to learn by watching this video. But most of the hypesters out there back in 2000, they bought whatever dot-com stock their neighbor, barber, or buddy at the bar told them was going to be the next Microsoft. And guys, the vast majority of those companies today, bankrupt, worthless. And by the way, Microsoft from its peak in 2000 took 12 years and an 80% drop to get back to normal time. Amazon lost 95% of its value from 2000 to 2002 to 2003. I don't care who you are. That's hard to stomach, even if you believe in a business. And let's not forget the people who panicked. They bought in the market. They saw the crashed. They assumed that the market was rigged. So they sold at the wrong time, likely on the way or at the bottom. And they didn't get back in until prices had recovered. Why? Because they follow the stock price to see if they're right or wrong, not the fundamentals. So they locked in their losses and guaranteed that they underperformed everyone else by buying near the top and selling near the bottom. Now, here's the crazy part, guys. The dot-com bubble didn't pop because of a pandemic or a world war or some massive external shock. Now you might sit there and say, well, Paul, what about 9-11? Guys, go look at the chart. This is January 1st of 2000. This was the peak right here. This was the end of 2001. So 9-11 was right here. Guys, how big of a drop is that? 120 down to 25 before 9-11 even happened. 9-11 did not cause the market to fall. It popped for one simple reason. People suddenly stopped buying the story and the hype. When there were no new buyers left to go sit there and push these prices higher, that was it. No catastrophic event, nothing happened. Just reality finally settling in. Guys, we talk about Cisco all the time. Cisco was the Nvidia. It was the Palantir of today. It was the darling of Wall Street. But here's the kicker. Let's go look at Cisco stock price. Guys, the peak was March 27th of 2000. It has yet to hit that all-time high of $82 since then. It's getting pretty close. Right now it's at 67 bucks. 52-week high of $72, but $82 back in March of 2000. And the crazy part is, for those of you who want to sit there and say, well, yeah, but look at the profit. Let's go back and look. In the last one year, Cisco's done $55.6 billion in revenue and $10 billion in profit. Back in 99, they did 12 billion in revenue. 12 billion versus 55 today. And they did 2 billion in profit versus 10 today. Five times more profit today. If I told you back when it was $82 a share, and said, guys, the company's gonna be four and a half times more revenue, five times more profit, where do you think the stock would have gone? And it's not like Cisco's selling for a super cheap amount right now. It's still selling for 21 times free cashflow and 27 times earnings. That's not exactly dirt cheap. The stock just got so overvalued that it's taken 25 years and still has not recovered. That's the danger of chasing hype, chasing a ticker symbol, chasing price movement. Versus understanding fundamentals. So what do we learn from all of this? Lesson number one is always stay invested. That first example about QQQ, dollar cost averaging from the peak, watching it fall 80% and still making over 14% return. It just tells you, no matter what the headlines are screaming, no matter evaluations are high or low, you've got to stay in the market. You've got a dollar cost average into low cost funds like the S&P or QQQ. I talked about QQQ, but even the S&P, if you dollar cost average down at the peak, you were still over a 13% annualized return. Just keep buying month after month through good times and bad. Ignore the noise because here's the truth. Timing in the market is impossible, but time in the market is what builds massive wealth. Buffett and Munger always say, you don't make money buying and selling. You make money by sitting. Lesson number two, don't blindly chase the hype. You're not going to catch the next Nvidia or Palantir just by guessing or following a YouTuber. That's gambling. Look at Palantir. It was at $45 in early 2001. We said we'd be interested at five bucks. It fell to 583. Unfortunately, I didn't buy because it didn't hit my price. And now it's well, it got up to $190 recently. Now, the interesting part is some people out there, some YouTubers out there say, see, I was right. I look at it saying, well, if you're right because the stock is up, then what were you wrong when it went down to five? You look at the fundamentals. That's what matters. What was it worth? I don't think it's worth 190. And guess what? I think it'll fall from here. It's selling for 600 times profit. It's selling for over a hundred times sales. Those fundamentals don't make sense. And if you're new to our channel and that sounds overwhelming, don't worry. You will get much, much more intelligent about this. You'll be able to be the smartest person of all your friends talking about numbers. So yes, today is a time where there could be a lot of massive opportunity, but you need to be smart. As bubbles grow, they make a ton of millionaires, but they can also destroy wealth massively. Real investing, true investing means understanding what you're buying. And here's the good news. You don't need a PhD in finance to do it. In fact, the smarter you are from an academic standpoint, the less you will do in investing. You'll probably do worse. Most people spend hours researching the price of a car before buying it. Yet when it comes to a stock, an actual piece of a business, they just throw money at it because it's going up and their friends are making money. It just absolutely makes no sense to me. It's absolutely backwards. The everyday investor can learn to look at a few simple metric like cashflow, debt, and valuations metrics based on those. And they can figure out what's a fair price to pay for a stock. It's not rocket science. But guys, it's difficult because the stomach is difficult. To be able to look at a stock that's down 70, 80, 90% and say that you see something different in the market, that's difficult to do. And it's not for the faint of heart, but this video and this channel is not just about picking individual stocks. It's about staying into the market no matter what it does through the highs and the lows. That's the difference between speculation and investing. Now guys, when I buy a stock, what do I look for? There are three main questions I ask. One, do I think this company is going to be around for the foreseeable future? When I say that, I don't mean two or three years. I mean 20, 30 years plus. Because remember, money is made in the waiting. If the answer to that is yes, the next question is, okay, like Cisco in 2000, do I think the company will have more revenue and profit 20, 30, 40 years from now than it does today? If the answer to that is yes, my third question is, can I pay a reasonable price for the company based on its future that'll give me an adequate return on my capital? That's where I would have stopped on Cisco in 2000. Because I would have said, you know what? It's selling for a couple hundred times profit. That's just too high a price, even if they crush it, which they ended up doing by growing their revenue by four and a half times and their profit by five times over the next 25 years. And guys, this is exactly why I teach on YouTube. It's really important to me to be able to tell people, guys, there is a price that's too high. As an everyday average person, you can absolutely crush it in the market. That the people who have those PhDs and those MBAs do not have an advantage on you. The guys running those funds are actually worse off than you because if they deviate too much from the market, they lose their jobs. They have career risk. You do not. They've got to match the market to get really close to it in order to keep their jobs. You do not. You can crush it by doing basic everyday things. So that's exactly why we created this channel. And the channel has grown tremendously. I'm trying to keep things as simple as possible because I'm not here to impress the MIT guys, the Harvard guys. In fact, I'm here to criticize them because they are doing a disservice to people out there by trying to make it seem like this is what beats the market. It's not the brain, it's the stomach. So guys, it's easy to look in hindsight and say, well, Cisco was overpriced because we see what happened. But during the time, just like right now, when I sit there and look at some of these high-flying stocks, I go, they just seem overpriced. And it especially seems weird because the last five years, pretty much everything has gone up astronomically. But just remember what we talked about when we talked about the EV bubble. We talked about cannabis. We talked about all these things in the last few years that people ignore that we sat there and said, this is dangerous territory. And a lot of those companies went to zero. So the question is, what do I look at that makes me realize something's overpriced? Well, guys, in and of itself, in and of itself is not enough information, one or two metrics to say this is a good buy or a bad buy. But let's look at Palantir here. First thing I do is I pull up eight pillars. Eight pillars are what I use as a screening process. It's not buy it, it's about telling me a story. So I look at this and the first thing I do is go, holy cow, they don't make any money. The cash flow is good, it's there, but is it a reasonable price? This metric right here, the five-year price of free cash flow tells me in the last five years, if you take the average free cash flow of that time period, the stock is currently at 650 times higher than that. When the market, when I really want it to be under 22, that's 30 times higher. Now, your first comment would be like, oh my God, that's massively overpriced. Maybe, let me ask you a question. What if their cash flow of 1.7 billion last year, what if it were to double, if God came down and said, Paul, Palantir is going to double their cash flow every year for the next 10 years. Well, what would it do? 1.7, 3.4, 6.8, 13.6, 27.2, 54.4. How many is that? One, two, three, four, five, 108.8, 217.6. So one, two, three, four, five, six, seven, call it 400 billion, 800 billion, 1.6 trillion. If it were to do this, and they were to generate 1.6 trillion, and you apply 20 times multiple of that, that makes the company a $32 trillion company. It's currently a $400 billion company. That's 80X over the next 10 years. Guys, if I told you right now, you could 80 times your money in the next 10 years, is that a good investment? That's an insane investment. That would make Palantir a screaming buy today. But that's the point. The question I always ask myself is, what has to happen for this company to be a screaming buy right now? We look at other metrics. Price to sales ratio, 118. The typical software business is 8 to 12. Okay, I look at that saying, again, it's screaming that it's overpriced. But if the company is really small, then maybe it's okay. But here's the deal, guys. It's a $400 billion company. It's one of the top 20 or 30 companies in the entire stock market. Is that really the small company that can grow that much? So these are kind of the metrics I look at. I look at things like shares outstanding. Well, this company is doing great. But along the way, they've increased the number of shares in the last five years by 35%. So they sat there and they said, our stock's really expensive. Let's issue more of it out there for all the people out there who want it. And we'll just give them more partners. So now there's a ton more partners. 35% more people are sharing in the free cash flow of this company. So investors are being diluted. These are kind of the things you have to look at to say, what's going on here? Now, what's scary is, even at 65 times price to free cash flow, that's still expensive. And the stock's at 650. There's no guaranteed way of saying something's overpriced or not. But what there is, is saying on a blanket of companies, if I had 100 companies I invested in and these were the averages, oh, there is a company, there is a fund that does that. It's called ARK. Cathie Wood buys massively expensive companies that are diluting shareholders. That's why ARK's performance has been crappy and will continue to be crappy. She's buying a bunch of overpriced crap. It's like, if you went back to .com era and bought a bunch of .com companies, that's not diversification. That's buying a bunch of dog ---- and saying it's not dog ----. If there was one thing to look at, it doesn't exist. It's about looking at the whole story. And the eight pillars helped me do this. The eight pillars let me say, okay, what this has told me is, this company is doing a great job of increasing their cash flow, increasing their income, increasing their revenue, and having very little to no debt. This company is going to be around for a long time. That's why I say, apart from Alex Karp being a shady piece of ----, as long as they're being honest about their numbers, this company is going to do very well fundamentally. The question is, will the stock price do just as well as the company starting from today? Guys, there are 22 metrics that I look at. They're very much attached to this page right here. If you want a free PDF that'll explain all these metrics to you and what I think of them, click the link below, put in your email, it'll be sent to you absolutely free within one minute. And the great part is, it'll allow you to watch future videos. It'll allow you to follow along. And you can wow all your friends with all the knowledge that you've learned. When you say, what's the price of free cashflow here? What's that? And you can explain it to them. And you'll be the most brilliant person out of all your friends. Guys, principle-driven investing is so important to me. I sit there and talk about it because it's a way of thinking about the world and thinking about money and thinking about investing. I have these five tenants that created. First one, we're investors, not speculators. Second one, every investment is the present value of all future cash flows. What that means is, whatever you pay for an investment today, your return will be determined based on taking all the future money it earns and bringing it to today at a discount rate. Sounds complicated. Basically, it means the less you pay today and the more cashflow you have in the future, the higher return you make. Third tenant, if we don't understand it, we don't invest in it. That doesn't mean I have to understand how AMD or Nvidia makes their chips. I have to sit there and say, can I determine what this company will do within a reasonable range in the future? That's where we have our stock analyzer tool here. We make these assumptions on the future, low, middle, and high assumptions on revenue growth and profit and things like that. Fourth one, in the short run, stocks are a voting machine. In the long run, they're a weighing machine. In the short run, the voting machine said this. In the long run, the fundamentals said this. Take out all of this. If I just showed you this chart for Cisco, what would you have thought? Wow, what a great company. It sat here, it grew at revenue and profit, boom. But we have this along the way. And the fifth and final and probably most important tenant, a great story can become a bad investment if you pay the wrong price. That's what I'm worried about with a lot of the Mag 7 companies today. Now guys, I've applied this principle-driven investing approach, and it's part of every stock I buy. There are seven stocks that I personally picked. They're my own version of the Magnificent 7. I picked them because I believe their future is a lot easier to understand and the valuation metrics are much better than the other Magnificent 7. So I put my Magnificent 7 head-to-head against the actual one to see who's really doing better. Now it's only been seven months, eight months, but click on the video to watch it because I think the results will surprise you.