Transcription
Hello investors, I hope you are doing well, and I'm back with you for an episode that wasn't planned, but since the markets are really dropping today, I told myself, "Let's make a classic video on fundamental reminders that I hope can help." We have the S&P 500 here, which is down -1.5 to -2%, depending on when you look, and the Nasdaq, which is down between -2 and -3%, again, depending on when you are watching. The drop is globally linked to the employment figures that came out in the United States, and we also have the inflation figures that came out not long ago. So we'll talk about it again, and it's about fears regarding interest rates, also high oil prices, and the situation with the conflict that is still not resolved. So there you go, and consequently, we'll review how I'm approaching the situation. I'll give you some reminders, and so on. Uh, knowing that this is a video more focused on strategy with quite a few fundamentals, basically the classics that I bring up regularly, and I hope it can help, especially newcomers, since we are always more and more numerous. I thank you for joining the channel, and we have all been through different moments. So we'll talk a bit more about the history. For your information, for those in the community, I posted this morning on the same subject, about my purchases all week, and so on. And for those who want to join, to have access to a community that is even more powerful in my opinion, especially during drops, because it allows us to talk among investors, to see that we are not alone in the boat, and so on. And it's also a place where I post my portfolio, my insights, my videos that I make several times a week, daily posts, and so on. Don't hesitate, it's without commitment. So it allows you to discover the work beyond YouTube without too much friction, and after a month, if you want to go back to YouTube, that's perfectly possible. And if you also want training, uh, the new updated training is available, uh, with the annual subscription. Let's get started with the video, and obviously, this is not investment advice. So, fears about interest rates and inflation. You have quite a few charts on the screen, I'll go through them all with you. First of all, oil, which, uh, well, consequently, I'm on the S&P 500, the S&P 500 is down -1.8% at the time I'm making the video. Yes, it's starting to make a nice bearish candle. We are up +17% since the lows of last April, March. So we've had a good rise, and it's normal for it to breathe sometimes. I wanted to show you oil. So I'll take UK oil, Brent. And you see that we are still above $90. That doesn't help with inflation. Inflation figures that came out are rising, whether we include energy and food or not. By the way, here you have core inflation, so we remove food and energy, and we are still rising to 2.8%, soon 2.9%. Yes, that's it. You have it here. General inflation is at 3.8%. So clearly, we see the impact here of the oil price. In the United States, each time the figures I show you here, and the CPI, which is the favorite indicator of the American central bank for inflation, it's at 3.7%. So we clearly see inflation starting to pick up again. And on the other hand, you have employment that is not doing as well as it was in 2022-2023. You see that we are at 4.3% and 4.3% for two months in a row, even three months in a row, so it's holding up. But we are still at levels that we could consider high, levels we hadn't seen since 2017, unless we look at the pandemic, of course, but that was an exceptional case. So employment is okay, but not perfect, and on the other hand, inflation is picking up again, which means that the markets are anticipating, globally, no interest rate cuts anytime soon. And well, that makes the 10-year yield rise, which has a strong impact since the US will have to refinance. We know we have deficits, that also strongly impacts real estate. You have the 30-year yield rising too, I was looking at it earlier, and generally, real estate is real rates plus a risk premium. So consequently, you have a lot of doubts about where rates are going and where the central bank will set them. You see, you have here the 30-year yield which is very high, for 5 years. You see, we are practically at the highs. So, naturally, that brings volatility to the stock market. And speaking of stock market volatility, I will answer the question I asked at the beginning of the video. Are we going to see a return of the decline? Well, strictly speaking, I have no idea. I only know the long-term trend historically. Obviously, the classic phrase, past performance is not a guarantee of future performance, but it remains a very good indicator of what's happening. And with experience and by studying history, I'm starting to accept volatility. But when you're new, it can be strange. That's why I'm taking the liberty of talking about it again and showing you these classics each time. So, of course, I want to say that I adapt, we'll talk about it later regarding my cash levels. When I buy more or less, obviously, I adapt my strategy a little, but what I'm trying to say in this first slide is that, broadly speaking, especially, especially, especially, I remain invested because otherwise, what do I do with all this money, and what do I do in the face of inflation that is eroding my money and the taxes I would have to pay on capital gains? And generally speaking too, you take, well, for example, the drop that I was measuring earlier, I'll bring you back to the S&P 500, the SPY. Here, what do I do if I had sold at the bottom? And at that moment, we were in extreme fear. It was very tempting to sell, but it was out of the question for me to do so. I don't want to pay taxes, I don't want to get out of the market, to miss the best days in the stock market. So I remain invested. But it's hard to stomach. And that's why I'm giving you these reminders. Don't forget that experiencing intra-year drops of 5 to 10% several times a year is just [clears throat] normal. And experiencing big drops is also normal. Every two, three, four years, we get a big one, or even more often. It can happen historically. You find phases. You see here, wait, this is the wrong chart, excuse me. You see, for example, there around 2008, 2009, 2010, we got hit after hit for 2 years in a row. Same thing, 2020 a big hit, 2022 another big hit. Then here 2023-2024 it's better, with -8% and -10%. And then boom, 2025, last year we had one too, and 2026 too. I'll show you 2025 again, oops, -20%, and if you go back to March 2020, I was already in the stock market, I didn't have the YouTube channel yet, but I was in the stock market and I lived through that moment. And there, in 3 weeks, you had to live it, and we haven't lived it since 2020, and we will certainly live it again one day. We got hit by -34, -35. Yes. -34 in 3 weeks, globally. So there you go. And yet, if I zoom out completely, well, that's the trend. So this reminder video, as I was telling you, for those who have been on the channel for a long time, these are the classics. I'm repeating myself a bit, but it's so important because not all of us have been in the stock market for, well, there are those who have been here for 3 months, 6 months, 1 year, 2 years, 5 years, 10 years, and it's okay to talk about it among ourselves and to share each person's little level, their experience. And so now, I even have fun writing down the fears. So there you go, today, we have fear, disagreement on the conflict. So oil is still high, the return of inflation is possible, and there will be an interest rate hike. We're starting to hear about that. And by the way, even if you look at the CME Fed Watch Tool, I'll show you the probabilities. A part of the market is putting a probability of interest rate hikes at the end of this year or early next year. And you have here the percentage of what the market thinks each time, knowing that today we are here between 3.5% and 3.75% on the screen. So there you go, it's normal. And don't forget either, here you have the inflows and outflows on the S&P 500 for Mutual Funds, a very well-known study that I often show you. And so the S&P 500, in particular, tends to sell massively at the lows and buy massively at the highs, and the fear and greed index is going up and down. It's normal, we'll be in extreme fear, extreme greed, extreme fear, extreme greed. We were in extreme fear, well, 2 months ago during the big drop, and now we were in euphoria, and it's just going back and forth, it's the swings, it's up to us to manage our emotions. Now, how do I approach the situation? I've been saying it for a month now. I'm calm at the highs, I'm comfortable, I'm invested, I didn't miss the April rebound, I even bought quite a bit on the dip, but I'm not deploying massively. Anyway, with my strategy, I find fewer and fewer stocks to buy. I still find them, I even bought some this week, but I'm going more cautiously, on a case-by-case basis. And it reminds me a bit of December-January when I was telling you too that we were at the highs, I was increasing my cash levels. Cycles repeat themselves, as we saw in the previous chart, intra-year drops, we'll get them. And so there you go, be ready to buy if it were to drop further. Take a step back, above all, remember your strategy and apply it. You have plenty of videos on the channel where I do individual stock analyses. That's not the objective of this video. The objective of this video is to exchange together, to do fundamental reminders, because I am convinced that in the long term, 80-90%, I don't have exact figures, but the majority of stock market success will come from emotional control. In any case, that's my view of things. And then, well, go enjoy the weekend, once you've applied your strategy, you know what you want to buy, at what price, you increase your cash levels a bit when there's less to buy. Well, perfect. You see, for example, I've put my projections on Google randomly. Well, randomly, I know it's a bit expensive, but it's a company I've loved buying for years, and I'm willing to pay $224-$225 for it. Today, it's over $300. I'm not buying Google. And if there's less to buy, then I increase my cash levels. You see Google at $369, I can't go for it. So there you go, know that you are not alone. Remember the charts. Now, I'm making the video a bit early, but I'm making it anyway because, okay, we're not at a 10-15-20% drop in the markets, but let's be clear, a -2.86% is a violent event. It appears on the charts, we all feel it, and even if we're not far from the highs, I'm taking the liberty of making the video anyway because, because the candle hurts, the bearish candle, we feel it in our portfolios. So there you go, you are not alone. It's not for nothing that I'm giving these reminders, we all feel it. It's a battle not to be your own worst enemy. We'll get more drops. For now, it's okay. We'll get worse ones than March 2020 and the 3 weeks I showed you which were of enormous violence. Also be careful about comparing short-term versus long-term, it often goes in one direction. We often tend to compare when we are in the red compared to the week before because the aversion to loss makes us suffer much more when it drops than when it rises. And we also tend to take gains for granted. As long as we haven't sold, well, they are not realized, they are not taken for granted. And take distance, look at where you were 5 years ago, 10 years ago, 15 years ago, depending on your age and your journey. Obviously, the younger you are, the less experience you have. And so that's also why I make these videos because, well, when you start, it feels strange the first few times. Something to ponder, in any case, and that's my mindset. It hasn't changed for years, obviously, even when we experienced big drops, well, I was on the channel, but it happened that we went to be philosophers on the beach or in the forest because, well, sometimes it's better to just close the broker and try to remember the fundamentals as much as possible. But don't worry, I feel it too. Today, it's okay, it's a small drop, but big drops also exist. And whether it picks up again or the drop continues, I have no idea, and well, we'll be here all together, both on YouTube. I'll continue to post. I've never stopped posting during drops. I've even often increased my video output during drops. And obviously, in the community, we exchange together, and clearly, it's a powerful tool, and I have a lot of positive feedback on it. So I want to thank you for that. I wish you all an excellent day. A good start to the weekend, and see you very soon for a new episode.