Last Time Stocks Did This... Everyday People Became Millionaires

People believe that the last time we saw a setup like this, everyday people became millionaires and it's true, but not for the reason that you and everybody else may think it's not because they were able to find one stock that went crazy from all time highs. No, it's the people who follow the simple plan. They stuck to it. And today the same signals are flashing. And in this video, I'm going to show you what's really happening, why it matters and how you can take advantage to be one of the few people who truly takes advantage of what's going to happen in the market over the next few years. We are in the middle of one of the biggest and best bull runs ever. AI stocks are flying markets, hitting new all time highs. You can feel the excitement. You go online. Every video says some new tech is going to change everything. Life is going to be different. Your friends are talking about how easy it is to make money. Stocks only go up and when they do fall, the market recovers very quick. Remember in COVID we had a one month fall. Yeah, it was 40% but it was right back before the end of the year. But guys, this thing is too familiar. Back in 1999 and 2000, we saw the exact same thing. Everyone. And I mean, everyone was convinced the internet was going to change the world. And guess what? They were absolutely right. But people took that story and forgot the most important investing rule. Price matters. This is what differentiates investors from speculators. Speculators, even though they might say price matters, they're buying everything at any price. Investors say at what price? I feel the same thing is happening today. AI is going to change the world. Absolutely. But price doesn't seem to matter to a lot of people. And that should give you pause. I remember back in 2002, my dad took me to one of his friend's house for barbecue. His friend was a doctor. We were talking about things. And I said to him like, Hey, how was he? He's like talking about the heyday of stocks. They go, well, how's it going now? He goes, Oh, my account's like 50,000. I'm like, well, what were they worth at the peak? He goes about 5 million. And I was like, I was like dumbfounded. First off, I loved how open he was with me about this. Most people who lost 99% of the money would have been like losing their mind and embarrassed. He was just like, ah, it was like 5 million. Now I'm like, what is it at? 50,000. Let that sink in guys. You don't recover from that. But this is what happens in bubbles. Prices go crazy. People get rich and it crashes. When the.com bubble popped, the NASDAQ fell over 80%. And guys, the NASDAQ has companies that are very legitimate companies. These are not the fly-by-night internet companies that we're talking about. These are legitimate businesses with legitimate revenue and cashflow. They went down 80, 90%. Now they were dragged down with all the garbage companies that had a.com in their name that had no revenue went to zero. But that's the point. When the garbage falls, it'll drag down the good stuff with it. Millionaires on paper went to nothing overnight. I actually had a personal friend of mine whose father had declared bankruptcy because of too much of a bet on tech. And here's what I want you to understand. Bubbles never end with a gentle landing. They crash, they crash hard, but not everything dies. Companies with real businesses, actual profits, strong balance sheets, competitive advantages, they fell, but they survived and they came back stronger. Microsoft fell from over $50 a share down to 11 or $12 a share in 2010 or 2011, even though its earnings per share were up two or three times. So here was a stock that was plummeting while profit was going up. That's what you want guys. But guess what? The story I always tell 2012, I was buying Microsoft. I was meeting with a friend of mine who was a big shot tech CEO and I mentioned Microsoft and he said, Oh, that company's dead. I'm like, well, I mean, you'd still buy it though at the right price. Like no, no, no. Our company is absolutely dead. I'm like, well, no you could pay 50 billion for it. And it had no debt and a hundred billion in the bank. You'd buy it. No, Paul, you don't get it. That company is dead. And I was just like, Oh my God, this company is generating revenue growth of seven to 9% a year and profit growth of 10 to 12% a year. And he says, they're dead. This guy's paying too much attention to the story and not reality. But Microsoft, that's why it survived. That's why it came back stronger than ever. And I guarantee that same tech guy, if I were still in touch with them, would say he never said that about Microsoft and Microsoft's one of the best companies out there. There were two type of investors from that area. Investor one was the ETF buyer. So let's say you believed in America and understood that time in the market that beat timing in the market, you were able to be smart enough to buy the QQQ, which is a NASDAQ ETF at the absolute top. So literally March of 2000, you're like, I'm gonna start buying worst timing, imaginable. But if you kept investing month after month, year after year, watched your stock go down over 80% in the next two years, guess what? From then until now, you'd have made over 14 and a half percent return per year, even starting out with an 80% crash. You ignored the stock pit from the tab drivers and all the.com hypesters. You'd be a multimillionaire today if you just invested well. Now, investor two, I won't even call them investor two, speculator, the hype chaser. This is the other group, the ones who changed, chase the hot stocks. Guess what? I was part of them. They heard about the next.com stock. They heard about the next company that was going to change the world. They bought it because their cousins, boyfriends, husbands, former dogs, first owner said, it's going to the moon. A lot of those stocks are gone. They went bankrupt. They were worthless guys. I bought global crossing because my sister's boyfriend's father said they were changing the world because they're putting fiber lines across oceans. There was a fastest guy, fastest CEO ever to a billion dollars in under 11 months. The stock went to zero, even Amazon, which by the way, I said was overpriced back then dropped 95% between 2000 and 2002. If you put 10,000 in Amazon, you were down to $500. You'd have to be a machine to be a robot, not to panic and sell. And the worst part, a lot of people sold the bottom. They said, this is rigged. So it's interesting to me. It's rigged when it falls. It's not rigged when it goes up the difference. One person followed a process of those two. The other person followed hype. Now you might say, well, Paul, wasn't it nine 11 that caused the crash? I've heard this before. No, the bubble started to pop in March of 2000, nine 11 wasn't until September of 2001. By then the NASDAQ had already fallen. I think 60 or 70% at that point, the crash didn't need a trigger. It popped because finally valuations mattered and they mattered with a vengeance. When investors finally stop having some sort of buyer to come in, prices start to collapse. Now company I talk about all the time that I love discussing Cisco, Cisco was the Nvidia of 2000. It was going to be the first trillion dollar company, huge growth, huge expectations. It peaked at $82 a share back on August, March 27th of 2000, pretty much in line with the peak of the 2000 tech bubble today. It's actually lower than that. Now you might be wondering, well, Paul, I mean, let's look at the profit here. Well, let's go look at the profit here. Let's go pull up our trustee income statement. Back in 1999, Cisco did $12.2 billion in revenue and they did $2 billion in profit. Today, they do $56 billion in revenue over four times more and they do 10 billion to profit five times more. So if I told you back here that Cisco 25 years later would have four X revenue and five X profit, would you think the stock would be down? No, of course not. You'd be like, Oh my God, this thing is going even crazier. But the problem was it was so massively overpriced and guys guess what? It's not like it's a screaming deal right now. In fact, in our community, the average rating is a hold and it has a PE of 21, 28 and a price of free cashflow of 21. It's not exactly cheap guys. Think about that again. Five times more profit, four times more revenue, and it's still below the 2000 price and isn't still selling for some super cheap valuation. Why? Because people overpaid. That is the danger of hype. Even great businesses can be terrible investments if you pay the wrong price. Now what's interesting is this, before this hype train started, if you go to right there and today you take out this little part right here, it doesn't look so bad, does it? It doesn't. Guess what? From here to here, the stock is up 10 X. What would you guess? The profit and free cash flow up in the short run stocks are a voting machine. In the long run, they're a weighing machine. If you pay a reasonable price today and profit goes up 10 X, you're probably going to see a 10 X increase in your price. It is that simple. And in hindsight, it's easy to sit there and say, you could do that. But along the way you had to put up with that, which is a lot bigger drop than you think. How much of a drop is that? Let me tell you, the peak here was 30 bucks. The low here was 17, almost a 50% drop. Oh, then you saw a rebound and then a fall even further to $15 per share. So even from here to here was another 50% drop. You'd have been like, Oh my God, this thing won't make any money. But if you understood the fundamentals, if you understood how to understand a company, you'd say, yeah, but here to here revenues up profits up. I'm good. The market will eventually figure it out. That is not easy to do, but the more you watch these videos, the more you repeat these things, they will become ingrained in your brain. Like they did for me. Now, guys, if you saw the title to our video, you probably sit there and think something along the lines of bull markets, bull markets make millionaires. I disagree. That's like telling me that becoming a professional baseball player makes you a millionaire. No, the effing work you did ahead of time, the grueling workouts, the working on your craft to get to the major league, baseball level. That's what made you a millionaire. Same thing here. The stock market going up is the result of you preparing the right way and having the right mindset along the way. That's what you're going to learn from things like this and things like this. But it's harder to learn on the way up. Nothing is worse than being, being right for the wrong reasons. Cause I guarantee the person at this point was bragging cause they bought right here when they overpaid right there. In fact, if you go across right here, they only hit that price one time until the late teens, 20 some years and they would have thought they were right because of this. And I say all the time, go look at Palantir right now. People say it to me all the time. I didn't buy it at $5 at 583. I said my buy price was five. I never bought it. It's at 200 now and people are saying, Oh, he missed out on that. Okay, no sweat. I'm not worried about that cause I feel like Palantir is somewhere along here. I don't know where, but it might be here. And if it's not more power to anybody who bought it for the right reasons and makes the killing. But if you bought it for the wrong reasons and you made a killing, use that as a learning lesson. But it's hard to do that. Guys, this is why I teach on YouTube cause you're not going to hear that from out there. I get messages on Instagram and Twitter all the time. People saying, Paul, you changed the way. And because of you, I'm up blah, blah, blah percent. I write back. It's not because of me. It's too short notice to be able to determine that. I want to wake up 10 years from now and somebody look at me and say, Paul, we had two bad bear markets and I was calm. I went and bought more. That's because of me. That's the thing I want people to take away. That's why I teach on YouTube. I'm not here to hand out stock picks. I'm here to look at companies, make determinations based on what I feel and then tell you, go think that way about other companies. So a couple of lessons I want you guys to learn. First off, if you take nothing else away from this video, this is what I want you to take that NASDAQ 100 dollar cost average example, stay invested dollar cost average in a low cost ETFs. Don't try to time the market. Every time the world feels like it's falling apart, which will happen. I want you to remember that things will always get better and if they don't get better and the world does fall apart and we go to nothing, you might as well dollar cost average cause your money's gonna be worth nothing. Anyhow, you might as well get it invested. Cause if you're wrong and the world does wake up and all of a sudden everything's normal again, you would have missed out on tons of gains by selling SPY VOO. They just follow the S and P you're buying 500 of the biggest companies in the world. Month after month, rain or shy over time. That's how you win. Number two, stop chasing the next big thing. Don't chase Palantir cause it's up. Don't chase Tesla cause it's up. Don't chase Nvidia cause it's up. If you don't understand the business, you don't know how to, it's going to make money. You're not going to know how it's going to lose money. You're not investing. You're guessing. I said about Palantir at 40 to $45 a share, people out there were saying it was going to 500. I said I was interested at five. Paul, you're crazy. Went to 583. I'm not saying I was right for that reason. I'm just saying I knew it was worth a lot less. It just happened to go down 580 to 583 and guess what? It went soaring back to $200 per share. But guess what else? How many of the people who bought at 45 stuck with it down to five? I guarantee it was very few of anybody. And now people are saying, look, we were right. I still have Palantir worth a lot less than it is today. And I've shown the numbers even on aggressive assumptions to say, I don't think it's worth more than 20 or $30 a share on the high side. But if being right just means that in the short run prices went up, then you were also wrong when it went down. And that's what people don't remember. You're not wrong on Palantir is one from 45 to five. You're wrong because the reason you justified 45 was incorrect. That's something very important. Understand that I a hundred percent guarantee you no big channel on YouTube talks about now very important quote that Philip Fisher has about the market. The stock market is made up of individuals who know the price of everything and the value of nothing. Price is what you pay values, what you get. So let's say Palantir trading at 448 times earnings. That's a PE of 448 price to sales ratio of 126. Keep in mind, Microsoft and expensive company is selling for 13 times sales. This is 126 times sales, 10 times more. Is it cheap or is it expensive? Well guys, just on those numbers, I would say if you blocked out as Palantir, I'd say, I don't know. Can they double their profit every year for the next 30 years? That's the question to ask. Now, obviously I know it's Palantir and I've run the numbers on them saying, yeah, it seems pretty expensive, but if you don't know how to answer that question, that's your signal. It's time to learn how valuation works because when you understand value, you drastically decrease the amount of emotional decisions and reactions you make. You greatly decrease guessing guys. The future is unknown. We have to do some sort of speculation about the future, but now you'll have a process and you'll start buying with confidence. So let's pause and talk about the most underrated thing to talk about investing emotions, because this is exactly where most people lose. There have been countless studies showing that people don't match the market because they buy at the wrong time and they sell at the wrong time. Peter Lynch was a fund manager from 1978 to 1990. He made 28% a year or something. And you know what he said? He's like, 90% of my investors didn't make anywhere close to that because they bought after stock. My fund had run up in price. You look at ARK Investments with Cathie Wood and it still boggles my mind how Cathie Wood can be taken seriously. Her ETF is up so much since it started yet the average investor is down significantly been buying. Why? Cause they bought when the time was wrong because when the price was going up like crazy, everybody made fun of us. When we were saying Cathie Wood didn't know what she was doing in early 2021. And then her fund went from $160 a share down to 30. I don't even think it's worth $30 a share to be honest with you. She's always jumping in and out of investments. Worst thing to do. She sold NVIDIA right before the big run up, by the way, I'm not saying that it's a criticism, but I'm saying it as a looking at her going, so the stock fell. So you sold it. Are you kidding? How about understanding the value? But yet she's an expert on Bitcoin. Why? Bitcoiners love her. Cause they, it's this, it's this echo chamber as a circle jerk of, Oh, it's it should be worth $1.5 million a coin based on what? Well, it's limited supply. Oh guys, I can take a dump in a garbage bag, put it in the middle of the street. There's only one of those in the world. Is that worth unlimited? It has to have use in order to have value. That's why gold has value. There is use for gold, but most people have a fear of missing out at the top because it's not about intelligence. It's about a major, it's about emotion. It's about behavior. Study after study shows what I said before the average investor earns less than the market. Even when they're invested in low cost ETFs, they make bad decisions. They pull out when things feel scary. They jump in when things feel safe when it's usually too late. That's why you need principles. That's why you need a process because process protects you from yourself. Now, when I'm buying an individual company, I ask three simple questions. Like I said before, I keep things as simple as possible. One, do I think this company will be around for the foreseeable future? 10, 20, 30 years from now? If the answer to that is yes, I go to the next question. Will it have more revenue or less revenue and more profit or less profit 20, 30 years from now than today? If the answer to both those is yes, it's higher revenue and higher profit. I go to the third one. And the most important one, can I pay a reasonable price today that gives me an adequate return on the money that I have invested? If the answer to all three is yes, I have to look deeper. If not, I move on. But that third question is the most important one. That's the price versus value question. And here's what I love about investing. You don't need a finance degree to crush it. In fact, the pros often do worse than even you do. Why? They have career risk. They have to match benchmarks at the plate safe. They have, they have to worry about what everybody else is doing. You don't have to do that. You can focus on what matters. That gives you the edge. You're only investing for yourself. And this is exactly why I teach here to show you that everyday investors can win not by being smarter up here, by being smarter in here, being more patient, more principled, more focused. Now back to Palantir for a minute. Let's say Palantir somehow doubles its free cashflow every year for the next 10 years, that would make it worth hundreds of trillions of dollars. But what if the growth slows? What if margins shrink? Suddenly you've overpaid. The investment breaks down. Even if the business does well, that's the lesson. You don't just need a good company. You need the right price. And guess what? Usually when you finally find the right price, it goes down even further. Do you have the ability to say, okay, let me buy some more because my fundamentals probably have not changed. So guys, when the market's flying and everybody's making money, it's easy to get caught up in the hype and have FOMO. But this is where most people make big mistakes. They chase the hot names. They buy what's going up and they don't stop to ask the most important question. Am I paying too much? I have made every possible investing mistake you can imagine. I bought too high. I sold too early. I listened to the wrong people. And that's exactly why I built everything money. It was first built purely for me. I wanted the tools that gave me clarity and decrease the fear of investing. People saw me using these tools on YouTube and said, Paul, can you share those? And at first I said, no, it's a data feed. But then I realized I could make this. So I did. And the real community was born. Real people sharing ideas, live chats, live streams, and tools that help you beat 99% of investors. But most importantly, help you sleep better at night because money can be very scary. I still use these tools every single day, like stock analyzer, real estate calculator. So stop guessing, start learning, start sleeping better. Try it for $7 for seven days. I'll see you in there. Now, if I don't have a great stock at a great price, no problem. I'm still going to keep on dollar cost averaging to my low cost ETFs. These ETFs, the basket of companies like SPY and VOO that has 500 companies in them. It gives me exposure to the biggest, most profitable businesses in the world. And guess what? It gives me exposure to the U S economy and the market drops. I'm buying those same great businesses at cheaper prices. That is how you build wealth. You buy great companies at great prices over time. It's not flashy, but it works. And if I'm picking individual stocks, I'm buying when price is below the intrinsic value. It's simple, buy great businesses at great prices, but it's not easy. Doing that takes this. Doing that takes also understanding how to value the companies. These are the setups that make people wealthy over a 30 or 40 year period. Now here at everything money, we don't chase hype. We don't have FOMO. We don't want you chasing a hot stock, hoping to get rich tomorrow. In the end, probably overpaying. We want you to get rich as **** over the next 20, 30 or 40 years, but we want it because you follow the right principle and you followed a principle driven investing process. We have the principles in the process and we stick to it no matter what the market's doing. And no matter what stock is having a big run, we live by five simple but powerful tenants of principle driven investing. First off, we are investors, not speculators. Second, every investment is the present value of all future cash flows. Third, if we don't understand it, we don't buy it. Fourth, in the short run, stock market is a voting machine. In the long run, it's a weighing machine. The fifth and most important one, a great story can become a bad investment. If you pay the wrong price, those tenants keep us focused. They help us block out all the noise out there that the market's going to make. And the good news for you guys is I don't expect you to memorize these. I created a free PDF that explains all five thoroughly so you can have it readily available. So click the link in the description and download it is a simple shortcut. It'll change how you think about investing forever. This PDF is part of your three foot shots like Steph Curry. Do what I do, read it regularly. So if you want to see how I apply all this to real stocks, check out the video on your screen right now. Early this year, I picked seven stocks to go head to head with Magnificent Seven. The results you'll be surprised. Click it now. I'll see you there. Thank you for your time.