sell

5 Rules for When to Sell Stocks

atlanta

florida product hey bow tie nation

thank you for being here for another

beer money sunday i love getting

together with you at

you know 2 p.m eastern 11 11 a.m pacific

time and wherever you're at in the world

uh just talking to some of the some of

the good people in the chat here

where are you from uh you know where

you're tuning in from uh

again thank you for being here love

having these little you know

face-to-face

live conversations with everybody gets

me you know gets me charged and

energized for this next week

great video for you today one that i get

asked about a lot so i wanted to make

that the theme of

today's video really when should you

sell a stock it's one of one of the most

common questions i get

not just for stock traders either but

really a critical question

even for you longer term investors you

know you must have whenever you buy a

stock or an investment

you need to have a sell price in mind

and a reason to sell before you buy

and really what that's going to do is

it's going to take the stress out of

that investment right

it's going to take uh you know no matter

what you see in the news about the stock

or

or where the price goes you're going to

have a plan for it and you're not going

to have to be watching it every day

and you're going to be able to get out

you know frankly in front of

some of the some of the hard stuff that

that might happen to that sock

so really excited to uh to talk to you

about

that about that today and then of course

you know after we covered

cover those five reasons to sell a stock

then we'll have some

question and answer and really get the

conversation going um

so i see a lot of people here in the uh

in the in the chat there thank you for

being here again see a question already

about zynx

in the news a couple of the a couple of

the stocks that i've been following and

and a couple of the the big names of

have taken a hit

just this last week i know xynx did

there was a couple other fastly

has also taken a pretty big hit and

you know we could talk more about this

in the in the question and answer part

but uh you know just a big part of this

penny stock and these growth stock names

is understand that you know not all of

these are going to be

huge winners uh fastly even after the 25

26 percent drop that it took uh i think

friday

you know it's still up something

something like 500 percent

uh since last since recommending it last

november uh so still doing really well

but with a lot of these penny stock

names that we talk about on the channel

and a lot of the other growth stocks

your your intent here isn't to make

every single pick a winner it's just not

going to happen okay you know in my days

as a venture capital analyst

um you know we used to have upwards of

40 to 50 percent

of the picks you know so even four out

of 10 of the companies that we invested

in

go completely broke you know maybe some

of those would uh

would return some of the money after a

liquidation or after a sell

but you know four or five out of ten

aren't going to aren't just aren't going

to do anything for you

what you want though in looking for

these high growth names these penny

stock and high risk

names is you get those three to five

that are then going to go on to be you

know 5 and 10 and even 20 times your

your your investment so what that does

is in a portfolio

it averages you out to 27 30 uh

returns on the portfolio annualized

which is an amazing return

and really you know the how how those uh

you know the venture capital investors

uh really how they make their money is

on that portfolio return

so i'm going to uh going to talk about

that in the q a if there's any other

questions on those

but i want to get started here i see a

lot of a lot of great

people from the bow tie nation here in

the uh

you know in the chat so thank you for

being here again uh real quick

last couple of videos last week i wanted

to point out uh

getting into earnings earnings surprises

or earnings for

the third quarter last week and this

week

last week was a lot of the bank names

this week it'll be a lot of the uh the

tech names and a lot of the bigger

big box retailers things like that so be

watching for that uh earnings third

quarter earnings could be

you know the big turning point of the

year whether higher or lower

because you know beyond the news beyond

the stimulus beyond the vaccines beyond

all the other

all the other things that are affecting

the market it really has to come down to

fundamentals and it has to come down to

those earnings

so uh really what we hear uh from the

you know from the from the companies

about third quarter and looking forward

to fourth quarter and next year it's

really going to be important

so wednesday we did a video on possible

earning surprises five stocks where i

think

could surprise on the upside so uh you

know if you didn't catch that one make

sure you

you check that out next week actually we

are actually starting

our 2021 portfolio tomorrow and got a

couple other really cool videos coming

at you tomorrow

a little early to start thinking about

2021 no because

right now i think there are so many

catalysts in the market that you want to

be

positioned ahead of your 2021 stock

picks of what you think is going to do

well

next year so we're going to start

talking about that going to put together

a portfolio tomorrow

and really cool really excited about

this one because i i've got a way to uh

for you to track the portfolio and

follow it and

and get those updates before i even do a

video so anytime i

i buy or sell a stock in the portfolio

you're going to be able to see

uh what when that happens without you

know before i add it to uh to a video

so i want to get started now again we'll

have a question and answer

after after we do the topic here of when

to sell

so if you've got a question ask it in

the comments there

make sure you add a question mark there

so i know it's a question

but getting to this topic about you know

when to sell a stock you know and it's a

question i get all the time

uh and it is so important and not just

for traders again

you know short term day traders or even

uh shorter term traders

you're going to have your buy points and

your sell points and you know your

charting and

and know pretty much when you want to

get out of a stock how when you want to

take that profit

but it's also important for you longer

term investors okay because

all you have to do is look for some

great companies like

general electric research and motion

companies that really dominated their

field at one point

and sky-high uh stocks that

pretty much fell from uh fell from above

right uh you know i i've actually i'm a

i hold ge shares i have for a couple of

years now

right around a i think right around a

750

maybe a little bit lower uh price per

share i think it'd go much higher and

and i'm bullish on the

stock but anybody that's been in in the

long term uh for the long term over the

five

ten years you know how important it is

to know when to sell a stock okay

because that

those shares of ge have come down you

know out of the stratosphere and uh

you're likely never to get some of that

money back same thing with research in

motion used to dominate

the smartphone uh smartphone space and

you know fell so hard so quickly that

you just can't plan on holding a stock

forever you need to have

have a plan for when to sell if you're

gonna sell

a stock so i want to cover five

reasons that you can look for to when to

sell a stock five reasons

that will clue you into maybe something

worse worse at the company something

in the the company's future that you

might want to sell and i'm only going to

cover really kind of the highlights here

of these five reasons i've actually

pinned a comment the first comment uh

below it's going to be to a longer 11

minute video that i did on the subject

gives you uh you know stepping stepping

points um

and really the detail in what to look

for in these five reasons

so i just want to cover the basics here

uh of these five reasons

uh you know link to that to that video

if you want to check that out check that

out and then i want to get to the q

a uh because i i really you know love

talking to

talking to everybody here in the chat uh

it's really why i do these

why i do these beer money sundays and

actually i

started early so you know

grab your favorite beverage of choice

and let's get started here

so one thing you'll notice here in these

five reasons is

they're not necessarily tied to price

okay a lot of people

ask me okay a stock has fallen a certain

percentage from the

from the peak should i sell now well

it's really not the the fact that it's

fallen it's

you know what's behind that fact why has

it fallen uh what is the company doing

to address that

and a lot of times when a stock falls

especially one that falls so quickly 20

30 percent

in a day over bad news or or something

then

people get that knee-jerk reaction and

they rush in to sell well the problem is

okay you know what that information's

already based built into the stock price

okay

you know unless you are a hyper-fast

algorithmic trader

a high frequency trader that's got some

of that ai and some of those other

you know the the quick data you know at

your fingertips and you're

at your computer you know all day during

market hours

you're not going to be get be able to

get out before that information

is in that stock so don't think that

okay some news came out

and you know i'm gonna i'm gonna sell it

before all that news gets baked in

because it's almost instantaneously

what you need to do is analyze how that

news affects the long-term

view of the company and what it does to

your investment thesis

and uh and some of these these other

five reasons so we'll start off with uh

you know if there's

a scandal or a major lawsuit uh in a

company you know obviously this

is something like the wells fargo thing

that happened a few years ago now

with uh kind of you know having having

their

their people their their customer

service people put push people into

loans and filling out

fake loan applications stuff like that

uh and it's not necessarily

the scandal itself but the

accountability afterwards what the

company does with that

afterwards okay if there's no

accountability at the top

so you know they none of the management

gets uh gets fired or none of the

directors

uh get get fired or anything like that

you know if there's no accountability

and the company really doesn't address

the problem of why this happened you

know the compensation and the

the rewards packages of that pushed this

scandal pushed the actions behind the

scandal

scandal then they really didn't fix

anything right and it's just gonna

happen again and uh you know eventually

they're gonna get hit with another

scandal and you're gonna get hit again

um what you'll what you'll see a lot of

times is you know after these these

major news events hits

these scandals and other things that

that'll hit a stock then yeah you get

that huge rush to sell

it'll push the shares down but then you

know i mean the shares

bounce back a little bit whether you

know it's the next day the next week

or just gradually over over a period so

the thing is though you know if there's

no accountability at the top after these

scandals

or after these major lawsuits or

something then it's just something

that's going to reoccur and reoccur

and eventually you know the the the

company's going to be bankrupt right

so while you might bounce back on your

shares a little bit

after the news of that scandal if

nothing happens uh to to fix that

culture within the company

then you'll ultimately never be able to

get back to where you were

and i want to point out this isn't

talking about a lot of the spammy

lawsuits that you see

so anybody that uh especially on yahoo

finance right

if you look at the scroll through the

news feed on the company for

yahoo finance um then it is just rife

almost every company is rife with you

know impending class action lawsuit

and uh you know deadline deadline to

file for this class action law

suit right a lot of these they're just

spammy lawsuits okay there are

there are actual law firms out there

that make their living

on these class action lawsuits right and

if you follow these

you know the stock the news for long

enough you'll see the same law firm

uh come up over and over again in

different lawsuits on different

companies

and uh you know it's not saying that the

company hasn't done anything wrong

but a lot of times you know when a stock

comes down when a share prices come down

and

and of course investors want to blame

somebody so these these

just just piece of [ __ ] law firms okay

excuse me but but that's a lot of what

they are

they they come out of the woodwork

preying on investors

right they try to get enough of

investors to sign these uh this this

class action lawsuit against the company

there's really nothing wrong with the

company did a lot of times you know

maybe it's just a loss of a business

partnership or you know whatever caused

the stock price to go down it wasn't

management negligence

but that law firm knows that it can prey

on those investors

you know their their need to blame

somebody

sign them up you know approach the

company with this lawsuit this class

action lawsuit

and get a settlement basically that's

all this is is a lot of those is just

trying to get a settlement

uh to line the lawyers pockets uh the

investors

actually very usually you know

broadly get nothing almost so we're not

talking about those kinds of spammy

lawsuits

because frankly most of them are never

even settled

okay they never even go to court never

settled because that's the way the game

is you know these law firms they're just

uh they're just spam

you know uh chop shops that that want to

try to sue

everybody and get a settlement and and

the companies are wise to it so

they know that they'll drop the lawsuit

when the company doesn't settle

um so anyway scandal or major lawsuit no

accountability afterwards that's your

first reason there

next is going to be something like a

debt fueled buying

binge right you know over the past 10

years it's been really common because

we've seen this

low growth low revenue growth

environment right with a you know the

economy only growing maybe

two percent a year it's very hard for

companies to grow that top line revenue

that chop line sales

right so what's happened is they've had

gotten they've built into this

acquisition strategy right and they're

trying to acquire growth

and then what they do is is also with

interest rates so low interest rates

next to zero then

it's cheap just load up on a ton of debt

to buy these other companies

and basically they're just buying sales

growth okay

and one it's just an excuse for poor

management okay you know so this is why

i always say

when you're looking at different stocks

you always need to compare

those stocks against the same companies

or against other companies in that same

industry right

and compare that sales growth you know

why is one company able to grow its

sales

without acquisitions why is it able to

grow it sells at one

one percentage at a certain percent and

another company

can't seem to make any sales growth

right so what a lot of times will happen

is is this company that's got maybe the

weaker management

can't grow that that sales growth uh in

that lower growth environment

uses acquisition strategies as as an

excuse

so again you know one it covers up for

poor management but two they're taking

on

so much debt that eventually that debt

is going to come and

come up to bite them in the ass right

you know they they buy they make an

acquisition that is just too large

or the sum total of all those

acquisitions just kind of builds up

on the on the books they never get the

kind of profits or the kind of

earnings out of it they thought they

would and and the interest expense

builds up until basically they're

they have to file bankruptcy so another

one something to look for

in your companies if they start going on

a debt-fueled buying binge

it might be a time to reassess your

investment in them that doesn't mean

that

that acquisition strategy isn't

something that can grow a company but

you have to make sure that it's not an

excuse for poor management

and that that debt isn't getting out of

hand okay they're actually they're

they're making these acquisitions and

they're actually able to turn that

into uh you know into better

fundamentals uh over the long run as

well

number three here when investors really

lose faith in the management okay and so

this

is kind of tied to that first one with

the uh the the major lawsuit or a

scandal

and you'll see this is kind of a

recurrent theme here a lot of this is

going to be about management right

and how management is uh running that

company you know it's not necessarily

how the stock does from quarter to

quarter it's uh that longer term trend

of how management is helping to grow the

uh grow the business

you know and one of some of the things

you can look for in this part

in this one uh as far as you know

investors losing faith in management

is are they regularly missing

expectations okay

a big job of management and it kind of

sucks it's kind of the argument for

you know doing uh by biannual earnings

releases

like they do in a lot of other countries

or even uh you know even going private a

lot of companies uh

you know will go private because of this

because man is a big part of

management's

a job and a lot of stress on management

is those expectations those quarterly

expectations

they have to manage what the street what

investors think

they're going to earn every quarter and

then they've got to beat it right

because

the vast majority i think it's something

like 73 percent of companies

actually beat earnings expectations uh

each quarter

right and of course if you don't beat

expectations if you don't beat

what the wall street is expecting your

earnings to be then then your stock is

punished

because for summer supposedly you didn't

do anything anything right

and you didn't grow beyond what was

expected of the company

um and it's all kind of a farce right

you know i mean management

massages those expectations ahead of

earnings so they can then beat it later

you know a lot of companies are

very adept at doing this apple is one of

the best uh the apple's management is

one of the best at doing this it just

historically i mean an amazing track

record for beating expectations

and it's because yeah you watch some of

the news flow out of management ahead of

time

you know and as well as the outlook they

provide during their earnings uh

releases and they're they're managing

those expectations you know

and uh so it's kind of a game but uh if

management can't play that game if

they're not able to play that game

then investors are going to lose faith

you know they're going to lose faith

that the management

isn't able to manage those expectations

also you know constantly underperforming

on the operating margin or other ratios

and again you can just compare that

company with other companies in that

same industry

and say okay why is company a the

operating margin

they're able to get you know 30 percent

uh to convert 30 percent of their sales

into operating profits

whereas at this company you know

perennially

they're only able to convert maybe 10 or

15 percent of sales

uh into into operating profits you know

and again

uh quartered quarter isn't that big of a

deal maybe maybe a company specific

stuff

but ongoing you know long term

if a company isn't able to raise raise

its

uh operating margin some of these other

ratios to the uh to the average

in the industry then then it's a problem

you know it's a problem with management

right because they're

they're uh they're both selling

relatively same products you know in

that industry they're

still selling uh uh cloth similar

products

and it's management's job to be able to

take that product and

and really get more out of it out of it

in terms of sales and earnings

so again when investors lose faith in

management that they're able to manage

these earnings expectations beat those

earnings expectations

constantly underperforming on some of

these ratios that we talk about here on

the channel like the operating margin

like gross margin you know things like

that

the fourth reason you might consider

just shares at a fair value

you know whenever you make an investment

you need to uh

you need to kind of put put a fair value

on the shares right

you need and that's that means a short

term and a long-term fair value estimate

okay you can be a long-term investor

and and still have a fair value idea of

the stock

okay and then you know maybe once a year

you update that fair value so it's not

like

you know you're you're trading out of

your stocks anytime they they get any

kind of a big boat

a big bump you're still you're still

doing that analysis on the stock to see

okay maybe

is the fair value maybe a little bit

higher now because they did sign on this

partner that

that led to a big bump in the shares so

you constantly need to be

uh you know reevaluating where you want

to be

on these stocks and what's a good what's

a good value because

you know if you're in if you buy a stock

primarily because it's a value stock

then even if you're a long-term investor

shouldn't it stand to reason that

you know if those shares come back come

up and it's not of not doesn't meet

those criteria for a value stock anymore

then you should sell it right i mean

that just stands to reason

you know but i see a lot of long-term

investors they get into something

primarily because it's a value stock you

know maybe they like the company they

like the brand

marginally but mostly it's because of

that value estimate

the shares come up they don't sell and

you know i mean the show it's just kind

of dead money after that

uh so you definitely need some kind of

an idea of fair value that doesn't mean

you can't

raise your fair value opinion uh

regularly maybe every three months you

look at your stocks

and reassess that fair value or maybe

every year

and and you think about that last here

is just a fundamental change in the

outlook right

you know one of the biggest reasons you

should be investing in a stock

is because the company has a competitive

advantage

or some kind of a best-of-breed status

over its peers

okay and and you know competitive

advantage can come from

just its brand right so i mean coca-cola

has spent

billions hundreds of billions i i

probably uh over over the decades

to create this brand and uh you know and

that means something that

that uh that carries a lot of weight you

know people pick uh

uh pick up a coca-cola just because of

that brand and what it makes them what

it makes them feel

so it can come from a brand it can come

from

uh you know other advantages uh you know

like leading edge technology

in a company it can come from first

movers advantage you know if a company

is the first out with

a way to do something you know like a

lot of the

a lot of the stocks we've been looking

at this year uh some of those first

mover tech companies like fastly

that's moving uh you know using a lot of

their tech advantage

in that in that streaming service that

they have uh the z scaler is a big one

where it's

providing that uh cloud security uh

platform that is taking a lot of the

comp the business away from

some of the legacy providers that are

still dependent on you know hardware

security

um so you know when companies have that

first movers advantage that's a

competitive advantage because

they can bring customers in on that

first movers advantage

and then you know keep them there uh and

uh and really turn that into a long-term

you know business uh business

profitability uh so you've got those

competitive advantages

uh best of breed strat status in a

company whether it's from just economies

of scale or

you know a company's dominance in the

market but if something changes

then then you really need to reassess

why you're

investing in that stock right so if z

scaler you know with their first movers

advantage

if uh if another company comes out with

uh

you know a bigger and better way to

provide uh

corporate security i you know digital

security

comes out with the next tech and then

z-scaler doesn't have anything to

uh you know to answer to that right uh

it's gonna lose that competitive

advantage and you

really have to reassess uh is is that is

the scalar still a good

good long-term company right so those

are really the five reasons that i look

for

when i'm when i'm thinking about whether

i'm holding my stocks for the longer

term

or whether i need to reassess why i'm

investing in that company

and again notice that falling stock

price was not it was

not in that list you know um if nothing

else so we were thinking about selling

out of company with the

when they reached that fair value when

the stock price goes up you know that's

when that's when i

start thinking about whether i should uh

whether i should

uh still invest in a company you know so

so falling stock price a lot of times

the news that whatever news caused that

stock price to come down

it's already priced it you know and it's

not to say that you should just ignore

these

falling stock prices in a stock but your

job now is to take

all of that in decide if that stock is

still worth investing in

right now with this new information how

does that change

your fundamental outlook in the company

you know it's competitive advantage

how management is is able is running the

company

whether there's going to be any

accountability uh for whatever this news

was

whether it's a scandal a lawsuit or or

just some kind of a

general business uh business problem

okay so again you know five real quick

reasons right there uh just kind of the

the overview on each

if you want the detail in each of those

look for uh in the comments section

below

i i linked the uh the video with the

detail a little bit longer video

the detail on each of those five reasons

um when exactly when to when to sell out

of the stock

now i want to um to uh to get to the

question and answer here

again i'm going to try picking out some

of the questions that were already asked

if you

if you got a question just go ahead and

ask it again in the comments below

as we get closer to the election i see

more and more

political commentary in the uh

you know in the chat and that's one not

what we're here for okay so let's

let's keep it let's keep it uh

you know let's keep it investing uh what

else

att should i buy the dip you know i i

mean

i've been i i've been bearish on att for

a while like for a little bit there

you know it was it was a nice stock

trade and i was i got in it

uh and i still think i mean it can be a

an okay company but they're just they

they just don't strike me as

a leader in anything they do right uh

you know i mean if you're looking for a

pure play telecom company

and i like telecom right now because of

5g and a lot of that other stuff

i i mean i think you can go with some of

the other ones maybe verizon

or or uh some of the other pure play

companies there

at t it's just in so many so many

business lines

i think streaming it's really not doing

as well streaming versus competitors

like like disney

and netflix so it's kind of falling

behind there it's it's

spending a lot of money on content with

dish i think they actually taught were

talking about

spinning off or selling their dish uh

their dish

business finally because it just hasn't

worked over the years since they've

acquired it

and i think with at t you run into a lot

of that that acquisition strategy you

know they just

they just started acquiring as much as

they could and put on so much debt

that it's really started now to become a

problem so uh

i think there's better stocks out there

better companies out there than you can

buy

versus at d it's got a nice yield and

they're they've been good about

growing the uh you know growing the

dividend payment to keep that yield

higher

uh so it's not you know it's not a a

quick sell

it's not something you have to rush out

and sell and you know if you see

something in the

in the management and in the company

then uh you know hold on to it for

by all means but uh but i'm i'm probably

not uh not investing more in

in att right now uh

what else

trying to find what is the best

commodities etf out there

uh august portfolio what is the best

commodities etf out there you know

i mean i i really couldn't tell you

right off the top of my head um

i mean i don't know if i would invest in

a

whole commodities uh in a whole

commodities

etf i would rather do the individual

metals

in ets so so you've got like the the the

i share a silver

uh which is slv you've got the spyder

gold

etf which is uh gld which are just going

to give you direct

access into or direct exposure to those

prices you might also try the

the copper etf and um

that one uh the name the the name

escapes me for the the copper etf let me

see if i can find it here real quick

oops

um okay uh so yeah i mean i i would go

with

uh with the the pure play ones instead

of

a a instead of an all-around

commodities etf you know uh i know uh

the

the u.s copper index fund is is popular

uh and that ticker

is the the

uh cper uh it's a little bit more

expensive than some of the other

pure play commodities etfs so uh

so so look for that if you're you know

trying to position

in copper for growth now copper is

obviously much more of an industrial

metal

versus gold or silver so you would have

to have a

big uh a good

outlook for industrial growth world

global

global economic growth uh you might try

also some of the the

etfs for commodities you know farm

commodities uh some of those i know

moo ticker m-o-o is a good agricultural

commodity etf and that's one that i

actually do like

i know there's corn which is corn it's

another

agricultural etf i would go with those

if you're looking at agriculture

or the pure play metals ones if you're

looking at metal so the gld the slv

or you know one of the the pure play

copper etfs

rather than you know just just general

copper or general commodities experience

or exposure now i do like commodities

uh over the next few years uh just on

that

on that idea of maybe higher inflation

and higher government spending that kind

of thing

so and what else we have uh you know all

investors not terrorists would use

tech analysis to determine uh so uh

kat l wants to know about tech technical

analysis

uh so you know there there's are some

traders here but mostly yeah

mostly that longer term uh longer term

investors buy and hold investors

that kind of thing uh and so you know

technical analysis

is is mostly chart watching right you're

you're following the charts the price

patterns

and and things like that and i'll do

this occasionally it's mostly

on the on the idea of valuation right

and so

you get that relative strength uh

indicator where i'm trying to find

stocks that have come down

and maybe are short-term cheap you've

got

other ones with the the on-balance

volume the obv

is another really good technical

indicator to follow and basically this

just takes

volume into account as well as those

stock price moves

right so a lot of times when you see a

stock move whether it's higher or lower

if it's on very low volume so not very

many many investors

in that then then it's really not much

of a conviction but what this on balance

volume does it takes that volume

into account and so you're looking for

stocks that

whether uh high bigger moves on the

upside or on the low side

and the commensurate volume spike as

well so a lot of conviction

in that move uh so i'll use that

occasionally as well

but uh you know if you're gonna be a

long-term investor then it's okay

you know i generally i'll look for these

short-term

uh tar uh you know short-term uh

indicators uh

as to whether i should you know get into

this stock now or maybe wait and watch

the fundamentals a little bit longer

but generally you're looking at those

longer term uh ratios and fundamental

factors

so you know you can you can spend a lot

of time doing this

uh if i if i were to drop one thing from

my process

uh you know to to free up a little bit

more time it would be that techn

technical analysis right because you're

really analyzing a stock for the long

term for that long-term investment

and what it's doing you know from

quarter to quarter probably

isn't uh isn't quite as as important if

you're talking about uh

you know long-term investing uh

what else

what are some of the best long-term hold

stocks to look out for

um you know a lot of that's going to

going to depend on

you know what you already have in your

portfolio a lot of times

you know the best investments are just

what fill out the fill out the gaps in

your portfolio

okay now i can preview real quick

what uh you know what some of the some

of the things we're adding to the

adding to the portfolio tomorrow for our

2021 portfolio so kind of a preview here

uh i know we are doing we're we're

putting uh

i'm putting citigroup in there which uh

might kind of surprise a lot of you as

far as

you know kind of long-term uh but buy

and hold uh investments because

you know it's not necessarily a growth

stock right it's a

very extremely old company in a in a

very mature industry mature uh

sector but um you know and what i what i

explained tomorrow

in that video is really the two sectors

that i'm looking at for

amazing excellent entry points into a

long term

a long-term portfolio so uh citigroup

you know i think the financials have

really been hit hard especially over the

last week as those bank earnings came

out

and and i think it's overdone you know i

think uh if you're looking for

one industry that really isn't doing

that badly

uh and and will rebound eventually and

will make for

great long-term returns i think it's the

financial side i think it's a lot of

those bank stocks

and uh so i'm getting in citigroup uh

for that

you know look uh the banks just aren't

making any money right now

and uh you know with those with those

rates where they are

right uh but they're not in fundamental

uh

fundamentally bad shape you know okay

we're not looking at 2008 where

the banks have a lot of distressed loans

a lot of bad loans on their portfolios

yeah the the more commercial commercial

bank uh

banks out there that that are more you

know have more of their business

in commercial loans they're going to

have some loan defaults but they're

putting

tens of billions of dollars into that

you know just the top four banks

has have like 40 billion dollars in loan

loss reserves

waiting for those loan defaults to uh to

come up

so one they've already prepared for it

two

you know if the economy keeps on growing

and we get more stimulus and more

handouts from the government frankly is

what it

what it is then those loan defaults may

never happen and they can move that

money back onto their

income statements and uh and it's going

to be you know a very good year i think

even if even if they don't rebound

immediately in 2021

the financials i think is definitely one

you can start putting your

your money in right now into some of

these best banks these biggest

biggest largest banks and you're going

to be doing

very well over the long term

another one that were that we're

investing in

here fang f-a-n-g

it's uh you know diamondback energy and

this is one we kind of highlighted last

week but um

strong energy company and another sector

where i think you know you can get in

now

it's a great value play and and it will

it will rebound okay

you know you look for you look for these

energy companies these explorers

that uh can survive you know at this

forty dollar

a barrel oil right because oil will come

back up

uh you know it's going to be at least

five to ten years before we really get

that electric vehicle

uh revolution that pushes out the demand

for oil

so i think a lot of these uh these

explorers that

uh you know are down fifty percent plus

uh

from their from their peaks you know

they can be very good

long-term three to five year uh

investments at least

uh what else do we have

somebody asked i know somebody asked if

okay so eric asks if who else is worried

about a stock market crash

now i mean you know i've i've been first

to uh to sound the warning bell you know

sound the alarm on

on the market it is so expensive right

now with the exception of a few of those

sectors like the uh

you know like the the the financials

like energy like

uh healthcare is actually pretty cheap

right now as well but beyond that

the the the market is extremely

expensive i'm not

chasing stocks uh in into in a lot of

those sectors tech stocks

and that because you know i don't need

to i don't need to

try to get that extra three percent to

return uh

if i have to invest in a stock that's

trading at like 40 or 50 times it's it's

uh p e p e ratio um

and you know the economy is not nearly

as great as the

the market makes it out to be i think um

you know you we've still got

900 000 people filing new unemployment

claims every week now that's not

that's not people that were laid off you

know in march or april when uh when we

had that complete lockdown these are new

unemployment claims

companies that are you know laying off

people right now because of the economy

um we've still got you know what is like

8.4 percent a 7.9

unemployment rate the real unemployment

rate when you uh include this

discouraged workers and a lot of this

other workforce

is much higher so yeah i don't think the

economy is doing uh well at all

right now and does not justify these

prices now why i am a long net long

investor

though why i'm more bullish on the the

stock market over the short term though

is because you know right now it's

really not about the economy

uh the market is singularly focused on a

vaccine

right a vaccine approval uh stimulus

and you know in some part to the

election

you know and and the market's only

looking at the only looking at the

election

in terms of stimulus right the market

right now is

is pricing in you know whether you like

it or not whether you believe the polls

or not

the market is pricing in a democratic

sweep

in november right that would be

presidency senate

and they already control the house right

and like it or not you know

republican or not whatever the the

democrats typically spend more money

there for more government spending

they've been pushing for higher

higher stimulus you know the democrats

rolled out in

may their 3. 3.4 trillion dollar plan

they brought it down just last month

into like a 2.2 trillion

dollar plan to be closer to the

republican plan for that for that

negotiation

uh but if we get a a clean sweep in

november then

you know we might get another two

trillion uh in stimulus

and you know whether it's actually going

to help people or

you revive the economy you can argue all

you want about that

but it undeniably pushes asset prices up

right

so the the market is looking for that uh

you know looking

looking for that extra stimulus pricing

that into stocks right now

and that's holding it up uh i know

pfizer

pfizer said last week that it was going

to be seeking emergency authorization

for its coronavirus vaccine around late

november

right and you know there are so many

companies in this vaccine race

that we will get a vaccine approved uh

probably on emergency authorization in

november you know late aft it'll be

after the election

but it'll be either november december

and that'll be a big boost to sentiment

okay so the market is looking at those

two and it's saying okay you know what

yeah the economy sucks right now yes

stocks are extremely expensive right now

but we've got these two huge sentiment

boosts we've got this this money

flowing into the economy the fed is

keeping rates

extremely low never going to never going

to raise rates basically is what the

fed's saying

and that's going to you know that's

going to keep a floor under stocks right

so i do believe you know through um

through november december uh maybe even

into january or so then you're going to

have that floor of support

under stocks that is going to keep

stocks from coming down too much you

know

could we get a five or a ten percent

correction yeah of course of course we

could because stocks are so expensive

right now

but uh but there's going to be that

floor of support

so i would be a net long at least over

the next uh you know

three months three to four months uh

longer out

from that though i am looking at

probably february you know

i mean and obviously it's hard to say

you know month to month

any specific month when it could happen

but there will be a point

where the market's going to look and say

okay we've got our stimulus

we've got a vaccine but the economy

still sucks right

you know we're still fairly high

unemployment

unemployment hasn't yet

you know trickle down into retail sales

and consumer spending

and that's really the big shoe to drop

right you know and but you can't have

you know uh retail sales for for last

month came out this week and they were

way above expectations uh you know it

was a big market mover

and uh big surprise but you're not going

to have that going forward

you know okay if we get more stimulus

then yeah it prolongs it a little bit

but you cannot have seven eight percent

unemployment uh you three unemployment

or or even you know 10

plus unemployment on some of those other

measures the u6 and such

uh you can't have that and still have

high consumer spending it's just not

going to happen

right so there's going to come a point

where we've got all these big

uh you know these are these big uh

catalysts these

the vaccine the stimulus you've already

got those in the market they're already

done

uh and the market's looking for

something else and all they're seeing is

the economy that

isn't in the best of shape and doesn't

justify these record high prices

uh and that's when you know before that

so you know i'm thinking i'm i'm

thinking february

you know late january february march is

when this market actually starts pricing

some of that

pessimism uh into into prices

so again you know i would probably

probably be net long bullish uh through

the next few months

i think the stock market can do well

with that floor of support

uh but then you know i definitely want

to reassess

where i think the market is uh you know

in january of next year

and be positioned for that be ready for

that

what else do we have bosom gold and

silver

uh yeah you know i i mean like i said i

think i do like the

uh the the commodities here just if

nothing else for that

for that real assets and that inflation

trade over the next few years

like i said that the fed has committed

to

not raising rates for several years uh

the economy

is is uh you know it's basically

i think last income report uh they said

something like a third

of household incomes was being supported

by that stimulus

uh so yeah you know i i mean the

the the stimulus is is holding it up and

pushing

pushing prices out there um

jean fritz john st paul wants to know

about cvs low operating margin but

other points are solid in in his

position wants to know what i what i

think of

cbs i love cbs you know i mean those of

you in the nation probably get

get tired of hearing me talk about cvs

and some of the videos

and in fact tomorrow's video on our 2021

portfolio is going to include cvs

so a little bit of a spoiler alert there

but yeah you know cvs

they they haven't done well over the

last couple of years

so it's it's been it's been a tough call

i just started i just started my

position probably about

four or five months ago that i started

going long into the stock so

you know hoping uh hoping it gets gets

into a turnaround story and i think

there's a lot of reasons to be in it

for the short term but but especially

for the long term okay you know health

care

is uh is a major factor of all of our

lives

and only getting more important as more

people age into that

demographically important part of

healthcare spending

but more so cbs i mean they've been

building this this

just giant healthcare distribution

network for about 10 years you know

they've got

aetna for the insurance they've got uh

scripps i think it is right uh or or uh

caremark i think is is the other is the

the uh the pharmacy benefits uh company

that they acquired a few years ago

they've obviously got

you know more than 10 000 stores so a

huge retail network

uh for pharmacy and and all that um

so you know just a an all-encompassing

controlling

uh uh you know healthcare distribution

network that they're going to be able to

use

you know to uh to to really grow profits

uh what i've really been looking for and

what i'm frankly kind of surprised they

didn't get a bigger bump

was i think it was either thursday or

friday the news came out that no vaccine

distribution partnerships

that we've heard about uh went to cvs

and walgreens and actually you know if

you look at some of the

some of the videos i've done about cvs

uh over the last

uh over the last couple of months that's

really been a big part of my of my

thesis is

you know they've got this huge

distribution network they can reach

anyone and everyone uh they are primed

to be able to distribute that vaccine

like like no other company

and and i think it's going to be a major

upside a surprise upside evidently from

the

uh you know from the share price

perspective because you know we got the

news come out and i think it was up two

three percent maybe uh which which

wasn't a big isn't it really a big move

for for cvs but i think

i think it should be in high much higher

and i will i do think it's going to be

much higher over the longer term

uh what else

okay uh

one wants to look at doc rf i really

haven't looked at it from the from the

looks of it it's probably maybe a penny

stock

i would say so so very very small cap

stock haven't looked at it i'll have to

look at that

maybe a little bit later uh

so what else uh walgreens boots alliance

so so yeah that's another one

and i think somebody you know said yeah

one way

uh said feeling like they're setting up

to be bought out that would be that

would be tough

uh but i could see it happening you know

amazon is is obviously

trying to corner the market on health

care uh so i i wouldn't be surprised

maybe if amazon does go after a

distribution network

uh like something like that i haven't

looked at walgreens as far as the

the debt load and some of that other

stuff so you know it would have to make

sense as far

as uh you know how much debt they have

on the books how much

how much how much how many much of that

problem that uh that another company

would have to uh would have to pay to

acquire it or the valuation i haven't

looked at that

as well obviously but uh but yeah you

know i mean

with the thing is with with interest

rates as low as they are right now

then uh you know it just makes sense for

uh for companies to to load up on the

debt and not make that acquisition

uh if it think if they think they can

acquire some growth uh

into a sector or the market that they

want to be in so and that's why you're

seeing a lot of acquisitions now

um you know in the in the space

capital gain tax okay uh so mark mark

has a great question here could be a

sizable pull out of the market by the

end of the year

millions million dollar investors if the

democrats win

and looking at that capital gains tax

increase

uh now okay so so uh biden has come out

with

uh his his tax proposals right and it

does include

raising the corporate income tax from 21

to 28 now

understand remember it came down from

like 35 percent so

it's really not a huge uh tax increase

on corporations he has talked about the

capital gains increase

uh but again it's it's probably going to

be at the very high

segment so you know 400 000 uh a year

people

millionaires like like you talk about

now the thing is

uh one is i don't think it's though and

the reason why i don't think it's going

to happen

by year end if he wins uh because

you know nobody's going to be increasing

increasing taxes next year okay just

ain't going to happen i mean

you don't you don't increase you you

don't raise taxes

in uh when when uh unemployment is at

seven or eight percent right

you don't raise taxes at the same time

you're you're pushing stimulus out there

for you know ppp loans and

and other stimulus to try to bolster the

economy uh because they just cancel each

other out

right and plus it would be political

suicide okay um

you know even even the the democrats in

congress would would just

mass exodus out of the camp there uh if

if there was a

a serious push to raise taxes even next

year you know i could see

maybe maybe towards the fourth quarter

of next year starting to talk about it

but but certainly not even in the first

half of the year not even talking about

raising taxes

so i don't think the market's going to

be really worried about that and and i'm

not i'm not worried about

any of those tax increases either even

though i am in that

you know would be probably paying higher

capital gains taxes uh if they do go

through with that

i think it's like a 400 000 and above uh

income range

um but it's just not going to happen you

know not when not when unemployment's

where it's at not when the economy is

where it's at

somebody zuli wants to know about square

for the longer term i do like square

i've highlighted it before

i haven't looked at it in probably a

couple of months though

so you know i i mean it's a payment pro

system and payment systems are big

obviously especially over the last few

months i don't know where the valuation

is right now so i would

hesitate because you know most of these

tech stocks are just extremely expensive

on a valuation

basis i think you can wait uh for maybe

that sell-off

into you know february march april

somewhere around there

and probably get it at a better price

and honestly if we do get

you know more stimulus we get a vaccine

and as i think as we move on to some

some normality next year then you're

going to see that rotation

okay you're going to see the rotation

from growth where it's been where the

market's been this year those growth

stocks tech stocks

a lot of the best performers this year

in the value which you know

or again is why i'm looking at energies

and why i'm looking at healthcare and uh

and financials a lot for next year

because uh

you know you get that you get that

rotation every once in a while in the

market

where uh investors just kind of

naturally shift uh to

one segment of the market right and

growth has been doing very well

but it is so expensive right now and i

think a lot of your value names is where

the money's going to be going to

mostly just for con from consumer

spending standpoint okay you know

people aren't going to need the maybe

some of the some of the work from home

technologies quite as much next year

so a lot of those revenues are going to

come down uh and disappoint the market i

think

so p investors going to be looking for

where else to put their money in they're

going to find it in in growth

so so i would be you know i mean someone

else a

pregler asked about dropbox slack

technology

uh you know i mean i like these

companies for long term plays square

slack and dropbox uh they're great

long-term

ideas as the you know as our world

shifts to more up being more online

but right now a lot of them are

extremely

uh you know extremely expensive and

there you you will get that rotation out

of

out of those names i think next year so

i say put them on your watch list you

know if you really really love them and

if you think

the the valuation is perfect right now

maybe pick up uh

some shares uh may pick up a small

amount just to

make sure that it's there in your

portfolio and you're watching it

but i would say hold off on any big

purchases for

for a while what else we have reits

highly undervalued reits are tough you

know

reits are

[Music]

reits you know i love real estate it's

where i got my professional start at as

a commercial property analyst

and i've worked as a read analyst for a

while

but again with reits you got to talk

about it in set in sectors uh you know

in property types you can't talk about

the entire reit market

because uh you know within that i mean

you've got the digital reits the the

data centers and that

the tel the the wireless towers right

that are doing very well obviously uh

but then on the other side of the

spectrum you've got

uh other other property types like

uh office like retail uh

those you know uh shopping malls things

like that that are obviously doing very

poorly

and and there's a reason for that you

know so uh

if you're looking now now i assume uh

when you talk about value

in reits you're talking about those that

have that have underperformed the

the shopping malls the retail and the uh

the office

and i i think it's dangerous you know uh

i would say over the next couple of

months especially as that vaccine comes

out

is approved and as we get more stimulus

and you could you could get a bounce

in these especially the retail and the

shopping mall ones you know spg

uh you know some of those i actually

like mesa rich a little bit better than

uh spg just because it's a little bit

better quality malls

that maestrich owns uh so you could get

a big bump

over the next couple of months but

longer term these malls

and the retailers are in trouble okay on

one part

you know you've got that long cyclical

structural change from

traditional traditional shopping to

online okay and it's just an undeniable

unstoppable force

that is driving that up this year

accelerated it because of the virus

but um but it's it's just gonna keep on

going so you know retailers are gonna be

struggling for decades uh with that that

shift to online right

and but but more so also you know

especially with the malls

then uh they're converting a lot of this

space you know as these

big box uh retailers like jcpenney like

sears drop out

they're converting a lot of that space

to uh to warehouse you know i

i think uh spg was talking to amazon

about

leasing a lot of the space for

distribution centers well

you know the the problem is people don't

go to the mall to look at the amazon

distribution center okay

and that's what these big box retailers

i used to be they used to be

magnets traffic magnets for these malls

uh so

you know if you convert too much of your

mall to a warehouse to a distribution

center

then uh then it just becomes an

industrial property right actually i

think it was the journal the wall street

journal last week

uh put out a piece maybe it was

bloomberg about you know the effect

of of changing the the property type in

your malls in these malls

uh to these other you know warehouse and

storage and uh

and and whatnot uh and they said you

know you dropped the value down by

you know minimum like 60 of these just

because you know retail lease rents are

so much higher than

than warehouse uh distribution that kind

of thing

uh so you know what you're going to get

is is a lot of these i think you're

going to get

spg even macerich you know which owns

better quality uh

you know better quality malls but even

macerich they're going to have to write

down a lot of value over the next couple

of years

okay and i think that's really going to

be the next shoe to drop for for the

malls for the mall rates is going to be

you know writing down the value of those

malls when they figure okay

well you know what instead of jc

penney's now we got an amazon

distribution center

in that mall uh so we're not getting the

rents we we used to be getting from a

lot of these other

these other uh retailers we're not

getting certainly not getting it from

amazon

so that mall just isn't as attractive or

as

valuable right now so you know i would

be very wary

of uh of some of these these malls the

retailers

as well as some of the other those those

reits that have been they've been doing

poorly

uh what else what else we have

let's think of buying a little bitcoin

to assimilate for the future

uh another question by mark great great

questions love it um

you know what about buying a little bit

of bitcoin for for the future

and you know i mean i i don't like

bitcoin at this price and i'm not a

bitcoin expert

but i have been in in and out of bitcoin

in the past

uh i like bitcoin more and i think i

talked about this last week uh with uh

with the

um you know with the the way to value

uh bitcoin and i want to look that up

because i couldn't remember what it was

called

uh social social theory

social valuation theory

bitcoin users see if we can find what

that

theory is for

uh metcalf

metcast law okay if you wanna if you're

investing in bitcoin

look at metcast law okay and it's a

little

it's a it's a little heady uh

mathematically but

it's not too difficult but what

metcalf's law is says is

the value of any social network okay and

that applies to facebook twitter a lot

of these social media stocks

but it also applies to bitcoin because

its business

is uh you know this business depends on

that

that um basically that network of users

okay and metcalfe's law says that any

network of users

any company that is based on a network

of users can be

valued off of that okay and and it's

going to give you kind of a

a floor price a support price of fair

value

for bitcoin and what it says right now

it's actually only right around

maybe four thousand four to five

thousand dollars

for a fair value now of course that

doesn't mean that bitcoin can't go

higher up in price on

you know maybe a little bit of a hype or

investor value investor sentiment

but really that's where i like bitcoin

at it's down there

i know it hasn't been there in a while

and that's why i haven't invested in

bitcoin for a while

but generally when it does fall down

between four or five

even you know into the mid five five

thousand dollars per bitcoin

i'll pick up some bitcoin and and then

sell it out when it's you know

nine eight nine ten thousand uh per per

bitcoin

can it go higher in the future sure it

can you know i mean it's

uh the the uh you know the whole idea

behind it uh the distributive network

and everything it's it's a great idea

and i think it is the future of a lot of

different sectors and industries

but um you know but but i i don't know

that uh

it's it's a great it's a great trading

strategy

uh or a great long-term thing if you're

you know if you're in it at 10 or 15 000

it might be a very long time to to uh to

wait for it to have any kind of a return

or a gain

with a lot of these you know with a lot

of these these high risk high return

these long shot moonshot investments

what i say is you know and the penny

stocks that we talk about on channel

what i say

is that you know put maybe okay total

10 percent of all your wealth in these

so maybe maybe

two or three percent uh in any single

single one so you know you've got maybe

two or three percent of your money in

bitcoin

maybe you've got two or three percent of

your money in uh

in a certain penny stock or in a group

of of five penny stocks maybe you have

five percent total

right and the idea here isn't that uh

you know isn't that that you're going to

get rich off of them but you know you're

you're going to get

enough of that that moonshot return on

just a couple of these

that it's going to juice your portfolio

for you know maybe another another five

ten percent uh portfolio return on top

of of your other your other stock picks

so uh you know i wouldn't be obviously

wouldn't be going into it with 20 or 30

percent of my money

but i think it can it can be a small

part of your alternative investment uh

part of your portfolio uh it's been

about an hour i'm going to

close it off from there i got to go i

got to go lyft actually

started just uh just getting to the back

to the gym it's opened up down here

so loving that loving being able to do

that uh thank you again for everybody

that's been here uh today i love having

these conversations with you

again next week sunday at 2 p.m

uh eastern time 11 a.m pacific i'll be

right back here uh

talking about something else so if i

didn't get to your question ask it in

the comments below

the video usually takes about 30 minutes

to process gets up on youtube

and you can ask your questions there in

the comments so thank you again i will

see you

tomorrow for tomorrow's video