My Final Warning to all Investors‼️

The stock market is currently in a tense period, with investors anticipating significant movements. We are about to enter an intense earnings season, with the next 48 hours expected to be particularly volatile. This video will cover two main subjects: a crucial warning for investors about a common trap and predictions for which companies are likely to exceed or miss earnings expectations. A major issue observed over the past three years, which is worsening, is how investors are positioning themselves in the market. Many are falling into one of two problematic categories. The first group, referred to as the "cash squad," consists of individuals heavily invested in cash and treasuries, believing a market crash is imminent. They refuse to buy individual stocks or even broader market indices like the S&P 500, convinced a significant downturn is overdue. This belief stems from the memory of the Great Financial Crisis and the absence of a similar 50% crash since then. However, this approach has proven detrimental. Over the past three years, there has been a substantial increase in money market funds, with roughly $3 trillion added, or about $1 trillion per year. This capital could have been far better invested in the market. While some in this group earn 4% on treasuries, inflation, even at a lower rate of 2-3%, erodes their purchasing power, leaving them with minimal real returns. Meanwhile, the S&P 500 and Nasdaq have seen significant growth. For example, over the last three years, Palantir stock increased 1746%, Nvidia 680%, AMD 274%, and even a relatively safe stock like Walmart was up 153%. Sitting in cash during this period means missing out on substantial gains and experiencing a continuous devaluation of money. To justify this strategy, one would need an 80% market crash. The amount of money in money market funds, currently over $8 trillion and potentially reaching $10 trillion, is a significant factor. This capital tends to build until a major market downturn or until the Federal Reserve substantially lowers interest rates, as seen after the Great Financial Crisis when rates were cut to near zero. If the Fed lowers rates in the next year or two without a severe recession, this money will likely flow into the market, creating significant buying pressure and driving stock prices higher. Even if a downturn occurs, the sheer volume of cash waiting on the sidelines could lead to much faster V-shaped recoveries, as seen recently. Many wealthy individuals are waiting for a crash, but even a 10% dip often triggers buying, making substantial market declines increasingly difficult. It's also important to remember that the 2020s have already seen significant market volatility. Since 2020, the Nasdaq, which is considered the most relevant index due to its concentration of major tech companies, has experienced two crashes of over 30% (in 2020 and 2022), a major correction of 20-25% in 2025, and a mid-correction of over 13% recently. This demonstrates that corrections and crashes are not absent but have been frequent, providing opportunities for investors to buy. The second problematic group of investors is overly aggressive, engaging in excessive margin trading, options, and leveraged ETFs. While margin rates have slightly decreased, they remain very high, with Fidelity, for instance, charging close to 12% for portfolios under $25,000 and even 7.5% for million-dollar portfolios. This level of leverage, coupled with short-term, speculative options strategies, often leads to significant losses when the market turns. Such aggressive strategies set investors up for failure, risking substantial portions of their portfolios in bear markets. A balanced approach is crucial: avoid being overly cautious or excessively aggressive. The recommendation is to build a portfolio of "GVD" stocks—growth, value, and dividend stocks. Focus on the long term, keep investing simple, and avoid leverage and short-term speculative bets. Historically, the stock market has always been "high" relative to previous periods, and today's numbers will appear small decades from now. Long-term investment in strong companies has consistently generated substantial wealth. Regarding the upcoming earnings season: - **UPS and Coca-Cola:** Concerns exist about their guidance, particularly regarding margins and earnings per share, due to energy prices. Their valuations are considered fair for their respective industries. - **Spotify:** No strong opinion. - **Robinhood:** Last quarter's numbers might be shaky due to a tough crypto and stock market environment. Future guidance, however, could be positive. - **Visa:** Consistently beats numbers but is not a big mover on earnings, typically fluctuating 3-6%. American Express is favored over Visa due to a discount and a perceived more premium business model. - **Enphase Energy (ENPH):** Continues to be a challenging stock. - **SoFi:** Expected to deliver phenomenal numbers and positive guidance. If strong, the stock could reach $22-$25 post-earnings, with a potential return to the $30s over time. A substantial drop to $15-$16 would present a buying opportunity for long-term investors. - **Microsoft:** Usually beats numbers, and its valuation has become attractive recently. While the speaker has other heavy tech investments, Microsoft is considered a buy for long-term investors, who might even hope for a dip on earnings. - **Amazon, Meta, Google:** These are also strong companies. Meta's valuation is attractive, but analysts expect over 30% revenue growth, which is a tough target for a company of its size. Additionally, uncertainty surrounds Meta's future CapEx spending for 2027-2028, which could impact future EPS growth. Amazon and Google have more modest growth expectations. - **Chipotle:** Has become more attractive from a valuation perspective (forward P/E of 29) after losing its previous hype. - **Cheesecake Factory:** Expected to beat across the board, with an attractive valuation (forward P/E of 15) and numerous growth concepts (North Italia, Flower Child, Culinary Dropout, Blanco, etc.) for the next decade. - **Mastercard:** Similar to Visa. - **Apple:** Sets up interestingly for earnings, especially as it's reportedly Tim Cook's last quarter as CEO. It's anticipated he would want to report strong numbers before stepping down. The forward P/E is high at 31. - **Rivian:** Vehicles are good, but the stock performance has been poor. - **Estee Lauder (EL):** Expected to beat earnings for the foreseeable future, despite a seemingly high forward P/E of 28. - **Chevron, ExxonMobil:** Positioned well due to current oil prices. In summary, during this intense earnings season, investors should prioritize a long-term perspective over short-term fluctuations. Minor beats or misses in revenue or EPS do not significantly alter the long-term trajectory of major companies. Focusing on building a robust portfolio of great stocks and avoiding excessive leverage will lead to sustainable success over decades.