Right Now, The Stock Market Crash is Your Best Chance to Be a Millionaire (HERE’S WHY)

Guys, as crazy as this sounds, there is very little in this world that makes me happier than a stock market crash. Now, I'm not saying that to be a jerk and to root for people who lose money, but in a few minutes, unless you hate money, you're going to feel the exact same way. Let me explain further. If you're a long-term investor, you don't win by guessing trends. You win by buying great companies at great prices, and the best prices occur when the market crashes. I know that sounds counterintuitive. In the moment, it does. Everyone else is panicking, right? The news is screaming, sell. But the truth that most investors don't understand is that the greatest investing opportunities don't come when things are calm or exciting. They come during chaos. They come during times where we don't know the future. If you don't have a plan for crashes, you're not really investing. You're just riding the wave until it breaks. I also assure you that when a crash does come, because it eventually will, you will panic and do the wrong thing. That's why I'm glad you're watching this video. I'm going to show you exactly why I look forward to market crashes. By the end of this video, you're going to understand why they're the best way to build wealth and ride the next bull market to all-time highs. You are going to want market crashes by the end of this video. Proof of that is, in our community here, we have thousands of investors. When the market goes down even 10%, 15%, 20%, there is so much excitement in that community. A little history. Let's go back to 2000. This was the dot-com internet bubble. Now, here's what's amazing. If you bought QQQ, and that is the NASDAQ ETF, the NASDAQ 100 ETF, at the very, very top in March of 2000, you would have seen it fall over 80%. Most people looking in with recency bias would have said, what a bad investment. Here's what actually happened. If you actually dollar cost average all along the way, investing the same amount, watched your money fall 80% and continued on until today, you'd be looking at over a 14.5% annualized return. Let that sink in. You start at the worst time in 2000, the worst date. It crashed. Everybody else said, you can't make money in stocks, but in the long run, you crushed it. In fact, it would have taken 12 years after March of 2000 to get back to even on the index, but you'd been buying all the way down. Let me show you what I mean. Crash 12 years later, but all along the way, you're buying. When it's back to even and everybody else feels comfortable to buy, you've been buying and your average was here. That's what's amazing. Staying calm and keep buying, especially with a low cost ETF that automatically diversifies for you. Now guys, back in 2000, I chased hype. I remember my sister's boyfriend's father told me to buy Global Crossing. He said, Paul, these guys are laying fiber everywhere around the world. This is the next big thing. I bought Global Crossing and guess what I saw? I saw it go to zero and I take full responsibility for that. After that crash, I remember thinking to myself, this isn't investing. This is gambling. I'm guessing. When I guess, it makes me feel icky inside because I don't know the way in which I'm going to make money or lose money. Now, let's get into some more context here. Most people think that the market always goes up. Why? Because that's basically what it's done for the last 15, 16, 17 years, but you got to remember, it doesn't go up in a straight line. It's going to go up over time like this, but the path is going to be this. Sometimes it's this and then this, and it's going to go up. Why? Because in all likelihood, the US GDP will be much greater 20, 30, 40, 50 years from now than today. As long as you pay a reasonable price today, you're going to do very, very well, but you got to remember, there are real world examples where stocks go nowhere for a long period of time. Even before then, guys, every 16 or 17 years, the market either goes up a lot or sideways. It's called secular markets. Why? Because people get excited, then bad things happen, it dies down, we have some reason, and then all the value gets built up. There's a reason why from 66 to 82, even though the market went flat, from 82 to 2000, the market went up almost 15 times. If you're just buying blindly and hoping, it's going to be painful for you at some point. The worst part is when it's most painful for you, you're going to make the wrong decision. But if you're disciplined and you understand what you're buying and why you're buying it, you crush it. In a crash, stock prices fall faster than company fundamentals. Just like during a euphoric time of a bull market, stock prices rise faster than company fundamentals. During a crash, great businesses will temporarily sell at bargain prices. People who bought them high, they panic and sell. Smart investors buy more. But keep in mind, smart investors aren't going to buy at the bottom. They're going to buy all the way down, and they're going to sit there and say, listen, the stock at this price makes sense. I don't know if it's going to go further, but all they know is if it makes sense at this level, they're going to buy all the way along the way. Peter Lynch once said, Nothing better than seeing a stock price go down when the fundamentals are still getting better. Amazon, Jeff Bezos talks about it. He said, Now guys, keep in mind, I'm not talking about buying garbage companies just because they've fallen. I'm talking about good, reliable, cash-flowing businesses that are temporarily mispriced. And keep in mind, those businesses might see a drop in revenue and profit. The question is, is it permanent or temporary? If you're disciplined, a crash is like a Black Friday sale for your portfolio. Now, I've done an analysis in the past where I talked about dollar cost averaging, and if you have the stomach to do it, increasing how much you invest when stocks are below their intrinsic value, their historical value, guys, you absolutely crush it. If you dollar cost average, then you will do very well in the markets. You won't have to guess what's up and when things are down. You will match the market. And all this strategy says is when things are undervalued, you put more in. So let me go show you what it means when stocks are undervalued versus overvalued. So guys, this is my stock market to GDP ratio going back as far back as I can go. I think upwards of like 1900. I do acknowledge the world's a very different place today than it was back in 1900, but it makes logical sense. As the US GDP grows and grows, the companies within it should grow along the way. But you go back here and you look at history. Look back at 2000. We had 50%, close to 50% overvaluation. This is the 10-year return. The next 10-year returns not including dividend, negative. Okay, great. Now let's go to times when we were undervalued just a few years later. And guess what? It goes to a positive five and a half percent. Now let's go back to 1982, like the lowest part of the market. 1982, we were 65% undervalued. The next 10 years, 14% returns not including dividends. The more you pay, the lower your returns. The less you pay, the higher returns. This is not rocket science. If you go back through history, going all the way back in my data, it goes the same way. In fact, when I ran a correlation, there was a negative 0.82 correlation. What that means is negative one is the strongest inverse correlation. The higher valuations were the lower returns, negative 0.82. Just trust me that that is a very, very strong negative correlation. So guys, I went and back-tested this in the next sheet. And I sat there and said, not including dividends, what would happen? Guys, from 1928 until now, you would have 9.5 million versus 6.3 million if you followed this strategy, 50% more money. 1985 to now, 1.3 million versus 695, almost 100% more money. 2000 to now, 328,000 versus 204,000. This is what's incredible. Every single time we did this over a long period of time, 25 years, it worked. And guys, it makes sense. You're turning off the thinking. You're not chasing headlines. You're buying real businesses in the stock market at good prices based on valuation. And when the valuations are in your favor, you up the ante there. Even just tilting more of your investments during undervalued periods, they massively improve your long-term returns. And guess what? When do those undervalued periods happen? Usually during a crash. But most investors think the crashes are the end of the opportunity. But for value investors, the beginning. But let me show you, even if you don't consider yourself a value investor right now, let me show you right now, SPY, the S&P 500 ETF. Here's the max. I always love showing this to people. Guys, if I could tell you, you can only buy four or five times in this entire history, when would you have bought? Here, here, here, here, here, here, and here. Were those during good times or bad times? Well, the perceived time was it was bad, but in actuality, they were just sales. If you believe in the US economy, if you believe it's going to keep growing, then I say to you, then you keep buying. If you don't believe it's going to keep growing, I have a question for you. Why are you watching this video? Why are you even investing? If you're in the US, go elsewhere to invest. But I believe in the US economy long-term. Are there issues? Absolutely. But during market drops, like those times I mentioned here, everyone screams, recession, crisis, sell everything. The news is awful. Why? Because news follows the stock price, not the other way around. The same neighbor that was buying everything when stocks were booming is now selling everything. You panic and you sell as well. But I feel comfortable buying again. The recovery is halfway over and you missed on a lot of gains. Now, let me make this very, very clear. You will never feel like buying in a crash. I shouldn't say never, but it takes a certain kind of acumen on your own. If you're part of our community, everybody here loves that. The emotions will scream, this time is different. This time is worse. Wait for it to settle. Guys, it's no different than when times are good, saying this time is different. Things are never going to end. Things are going to go up forever. But here's a rule that a lot of value investors love looking at. The scarier it feels, the better the opportunity could be. So what should you do before the next crash? Well, first off, don't change anything in terms of dollar cost averaging to low cost ETFs. I'm a real big believer in your ETFs should help you reach your retirement goals. And people in our community always go to a retirement calculator to figure out those goals. But the extra money, if you want to dip into stocks, what I recommend you doing is build a watch list. Have a list of great companies that you want to own and price them. Price them at a price that you want to own them at. Use the stock analyzer tool. This is such an important tool to understand the future and to sit there and put the numbers and the story together. If you're able to use this tool effectively, you're basically just cheating everybody else. Because all you're doing is saying, I'm ready to wait for the price I want to wait to. Charlie Munger said that he knew a person who had a watch list of 300 stocks. And the guy said, all I do is wait for a stock to hit my price and I buy. And he said, that's very difficult to do. The funny part is, it's exactly what I do. I just wait. I dollar cost average in a low cost ETFs, and I wait for the stocks that I want to own to fall the price that I want to buy them at. Guys, I even made my own list of 33 stocks that I want to own basically forever. Now, keep in mind, no investor will say, except for Charlie Munger, that they want to own a stock forever. At some point, things will change. But the point is, these are 33 companies that I think have lasting power. Now, if you're newer to all of this and you don't want to pick stocks, more power to you. Just stick with dollar cost averaging the great ETFs. But you still have to have the right stomach because I don't want you making those mistakes of selling and exiting when things feel bad. Remember, if you bought the peak on QQQ in 2000 and watched it fall 80%, how would you have felt? Guys, anyone would have felt like, oh my God, I made a huge mistake. But if you just kept on buying, you crushed it over the long haul because process beats panic. Now guys, the people who get crushed the most in market crashes are speculators. But here's a sneaky thing about stock market. Speculation feels like investing, but it's not. I've never met a speculator who said that they're a speculator. They always say, no, I'm investing. Putting money into an investment does not make it investing. When you buy a hot stock, just because it's trending or because your buddy swears it's going to the moon, it feels like you're investing because you put money in something that can go up. Money goes in, you own shares, the ticker is moving. But in reality, that's guessing. That's gambling. Investing is totally different. Investing means you have a process. You sit down, you figure out what is this thing worth? And am I paying less than value today? That's a big part of investing. Now, a lot of people say that about Bitcoin. Well, I'm putting money. What's it worth? Well, it's got the demand that people are saying, what's $13 million a coin, blah, blah, blah. No. For me, investing is if the market for that asset went away tomorrow, what would I be left with? Well, if you have something like gold or Bitcoin, you're left with nothing, but at least gold has a use. We can use it for jewelry. We can use it for a ton of things we make in this world. But with a company, when you buy a company, if the stock market went away tomorrow, you still own a piece of that business. You're now a partner. As the revenue goes up, as the profit goes up, as the cashflow goes up, your value goes up along with it. And then you get distributions from that. Speculation skips all of that. It's buying based on hype, emotion, and hope, not facts. It's the greater fool theory. I hope there's a greater fool out there to pay more money than I did, but it feels so similar to investing because we're deploying money into something. And guess what? Until things go bad, it feels like investing, but then stocks start to tank. Speculators panic. They sell at the worst times and then say investing doesn't work. No, speculation doesn't work. That's why a good process matters. With that one, you're just reacting to whatever the market throws at you. With one, you're anchored. You don't care about the daily noise because you know what you own, why you own it, and what it's worth. With the other, you're left hoping that it just goes up in value. Peter Lynch always says, he's one of the greatest investors ever. Know what you own and why you own it. Simple, but it cuts deep. Most people skip that part. And again, people will say the same thing about gold, Bitcoin, and art. I get it. And that's why I think the definition of investing has more to do with how do you make money if the market for that thing goes away? When you know what you want, you don't need someone else to tell you if it's a good business. You've looked under the hood. You know how it makes money, what the risks are, why it fits in your portfolio. And the things that you don't understand, you account for it in your margin of safety. That knowledge is what gives you confidence when the price swings back and forth. And when a crash comes, you may even want to buy more shares of the stock while everyone else is selling. That's investing. Now guys, picture two investors. One buys a stock because of hype. The other one does the work, studies the financials, understands the products, and has a clear reason for owning it. When the stock drops 30%, what's the first one going to do? Well, guys, they're going to panic and sell. They had no reason for why they're buying it. The second one says, wait a second, I looked at everything. The business hasn't changed. The fundamentals haven't changed. In fact, they've gotten better probably. Only the perception of the mood. This is a discount. Same event, totally different analysis of it. If you can't explain it in plain words what the company does and why you own it, you're probably not doing some sort of investing. You have some sort of speculative story, and it's all fun and games until the stock falls. And guess what, guys? Find me a stock that's never fallen. Even Buffet and Munger say that how many times in Berkshires history has a stock fallen over 50%? And guess what they said? And we didn't feel poor. Now, principles are what keep me from getting sucked into the noise. Guys, I do it on a daily basis. I have to sit there and remind myself what I'm doing. Instead of panicking over every price move, as I said before, I stay focused on the only thing that matters, the difference between price and value. That's my goal there. In everything I buy, it keeps me from falling into the emotional traps that ruin most investors. When prices swing wildly, emotions will tell you to chase when it's high and panic when it's low. But principles remind me that the market is just an auction and that the price isn't the same thing as the value. Look at Nvidia, biggest company out there right now. And guess what? Its price has fluctuated almost 100% in the last year or 18 months. By sticking to my process, I'm less likely to have knee-jerk reactions. I don't care if a stock drops tomorrow. In fact, I cheer it because I know the value probably has not changed. That discipline has given me confidence to sit still while others are freaking out. Principles aren't about making you emotionless. They're about giving you a framework so that your decisions are based on logic, not fear or greed. Let everybody else be fearful and greedy. Let you be logical and calm. That's how you stay focused on the only thing that matters, the gap between price and value. Now, there are five tenets that myself and the Everything Money community lives by. One, we're investors, not speculators. Two, every investment is the present value of all the future cash flow it's going to receive. Three, if we don't understand it, we do not invest in it. Four, in the short run, stock market's a voting machine. In the long run, it's a weighing machine. And the fifth one, and probably most important, a great story can become a bad investment if you pay the wrong price. Now, I don't expect you to memorize all these principles right away. This is exactly why I put together a shortcut for you, a simple PDF that lays all five tenets out in plain English, no crazy jargon, just the exact rules I follow to stay disciplined and why I do that. This guide is your cheat sheet. You don't need to be a financial wizard. You just need a framework. And guess what? I think the more financially wizardly you're like, the worse you're going to do in investing because you cloud your judgment and thinking, I am smarter. But guess what? Intelligence doesn't mean emotionally strong. When prices are bouncing around and emotions are high, pull up the PDF, read through the principles, remind yourself why you're doing what you're doing. You need to focus on price versus value, not the daily noise. So grab that PDF, keep it handy, click the link below. It'll be emailed to you within one or two minutes. Use it as an anchor. It's simple, it works, and it'll help you make smarter, calmer investing decisions. So click below, download it, start using it today. So guys, 25 years ago, when I started to realize like, okay, this is gambling that I'm doing. I'm not investing. I started to read about all these value investors and they always talked about cash flows and blah, blah, blah. But as time went on and I started reading about them more, I started to notice something. Successful investing was not about knowing the numbers. That's the easy part. That's why Munger and Buffett always say, everybody has the IQ to be a good investor, but very few people have the stomach. I started to realize it's about the emotional and the mindset part of investing. You've got to be able to sit there and see a stock fall and go, no, my analysis I think is still correct. Or when you see the markets fall and people are, guys, imagine the great financial crisis. The world was looking at a complete financial shutdown. It's hard to sit there and look at the screen, go down and down and say, well, this is an opportunity. But go look at my Instagram account during COVID. The world had not yet shut down, but they were talking about it and I was kissing the screen. Why? Because I knew it would not last forever. There's no way it lasts forever. Because if it does last forever, you might as well buy because the money's going to be worth nothing anyhow. It's all about how you handle the emotions of the market. That's very difficult. But guess what? Everyone's capable of it. Think about it this way. You have a job. You do something probably pretty well. But if you threw me into your job tomorrow, I'd be a little anxious. Why? Because I don't know what I'm doing. I have no experience with it. That's how you might feel about investing in individual stocks. That's okay. You can change that. I used to feel the same thing. When I saw the market crashing in 2000, I was a nervous wreck. But as time went on, I changed the way in which I thought, the emotions of it. This principle-driven investing approach has helped me change the way in which I look at money and investing. That's why I really, really talk about that so much in this channel. Yes, I talk about the numbers and they're very important. That's a big portion of it. But the biggest portion is how do I handle the stomach? How do I handle my emotions when things turn against me? The truth is, guys, crashes are scary for most people, but they're temporary. Value is rare, but it shows up the most during chaos. Wealth is built by properly having the right mindset to take advantage of bad times, what other people perceive to be bad times. If you continue to watch our videos, I assure you that the way in which you view crashes will totally change. You're going to encourage them. You're going to look forward to them. You're going to look at them as times of opportunity because you will have a plan. So the next time the market crashes, has a correction, I want you to smile because now you'll be ready. Now, if you want to see me put these things into action, this mindset into action, I picked my own personal seven stocks, stocks that I own, earlier this year to go head to head with the so-called magnificent seven. So click the video on your screen to see which seven stocks that I picked and how they've stacked up. The results will surprise you like they did me. Thank you for your time.