Why I’m Waiting For The Next Stock Market Crash

I want to explain why I'm waiting for the next stock market crash, hopefully in 2020!

📊 Sven Carlin (Expert Investor) Portfolio & Free Investing Course: http://bit.ly/SvenCarlinPortfolio

📈 How To Invest Course: http://bit.ly/theinvestingacademy-how-to-invest-in-the-stock-market

__________________________________

My 2nd Investing YouTube Channel: https://www.youtube.com/channel/UC6qBTYqQpXqLutg39ZgXcJQ

Subscribe Here: https://bit.ly/2Y1kNq8

___

I can not tell you how many people ask me, Cooper, what are you doing in the stock market? The answer that I give, no one seems to expect it. I’m waiting for a stock market crash… Now, there’s a couple of key reasons why I’m doing this, which makes me hold off from buying stocks and instead wait for a crash. Let’s dig straight in…

The first thing I need to talk about is sky high prices and market cycles.
For those who don’t know we are currently less than 5% away from all-time market highs. The S & P 500, which gives the best measure for the USA’s stock market is sitting at around 3,200 points, that’s not far at all away from the peak.

Now a lot of people look at this and think aw, that’s such a good thing. The economy is booming, stocks are up, surely investors are happy. And it’s true a lot of investors are absolutely gleaming at how high the stock market is.
But investors like Warren Buffett and myself, we look at things slightly differently. We are less happy when stock prices go up and more happy when stock prices go down. Now for some people this might sound confusing but stick with me.

What Warren Buffett and I truly focus on is the underlying business. Are they generating more income, revenue and assets. How is their business model going and how will it look like in the future? These are the types of things which we hope to go up. But, the stock price, we want that to go down as far as possible. This way we can purchase, great solid underlying businesses for cheap prices.

But you might look at me and say Cooper, yes that makes total sense, but why aren’t you buying stocks now. Why are you holding off and waiting? There is no guarantee of a stock market crash.

That is a very good question, but to answer that I want to back to talking about the underlying business. Right now, in the stock market if you look at a lot of their underlying businesses, you can see they’re struggling.
For example, everyone in the travel industry. Nobody is really travelling these days, because of this shutdown. This results in every business in the travel industry being affected. And losing business losing customers.

I mean we all saw, Warren Buffett, he completely sold all of his stocks in airline companies. They just lost so much business and so many customers and the question became are they worth holding on to, Warren Buffett though not.

But then don’t forget it’s not just airline companies, and it’s not just businesses involved in the travel industry. Small and medium sized businesses across the USA have been deeply impacted. I mean less people have been going for coffees or going out to eat. Less people are going to the movies, or the ice rink.

Business across the USA have lost a lot of customers. Now what is the flow on affect from this? It means businesses bottom line go down. It means the amount of profit that they generally make, get’s eaten into. Investors like myself, who focus on the underlying businesses look at this, and think, if I’m going to invest in stocks like these, well at least I want to be paying a cheap price for them. And at the moment prices are nowhere near close to cheap. As I mentioned before they’re actually close to all time highs.

It puts us investors in this weird situation where the economy is down by 6%, the underlying businesses of stocks are struggling yet the prices for these stocks, are sky rocket high. The value investors like myself and Buffett, are just staying on the sideline because of this.
And a lot of people will be looking at us thinking, what are you doing? Look at the returns you’ve missed out on. But they don’t understand this one simple principle of investing. And that is you make money with investing, not through constant buying and selling, but through waiting.
Charlie Munger he put’s it best. He said this… “you don’t make money when you buy stocks. You don’t make money when you sell stocks. You make money while you wait”.

Most people do not have the patience to wait for a couple of years to buy stocks and that is why so many people fail at investing. A simple lack of being able to wait…

___
DISCLAIMER: It's important to note that I am not a financial adviser and you should do your own research when picking stocks to invest in. These are just some of my viewpoints, by no means would I recommend watching one YouTube video and then immediately buying that stock. This video was made for educational and entertainment purposes only. Consult your financial adviser.