Transcription
The best investing advice that I have ever come across is: buy when there is blood in the streets. And that's exactly what's happening right now. The global world order is getting reshaped, and we will set the rules for decades to come. And that's why the stock market is crashing. Economies are predicting massive recession that will take years to come out, and investors are massively selling off their stocks. This is a once-in-a-lifetime opportunity.
In fact, this is just the beginning. Because if the US keeps escalating the crisis and China keeps responding with a trade war, that could take the entire stock market to the bottom that we haven't seen in years. It could even be much worse than 2020. In fact, this is just the beginning. The stock market could keep crashing until one of the countries emerges victorious out of this trade war.
People want to invest when everything is growing, when there is so much free money into the economy, and no matter what stock you buy, you are going to win because the entire market is growing. But that's not when the real money is made. The real money is made when there is a crisis, and everybody is very scared to invest. That's when you actually buy the right stocks at the bottom. And when the crisis is over, you can easily turn $10,000 into at least a few hundred thousand. Now imagine if you're investing much more than that—you can easily make millions of dollars. And that's why, at the end of every crisis, there are people who made so much money that you cannot possibly comprehend.
So here in this video, let's try to figure out why now is the best time to start investing and how you can actually profit massively out of this crash. If you're ready, give this video a thumbs up, and let's get right into it.
One of the signs that this crisis is unlike any other crisis that we have seen is that bond yields have actually increased recently. And that is a major warning to all investors because it basically means that there is a massive selloff of US government bonds in the market. And that is one of the most dangerous things that could possibly happen.
Over the last 8 years, the safest investments have been the bond market, especially when we talk about US government bonds. So whenever there is any kind of crisis, and those investors with very deep pockets to invest—not just billions of dollars, in some cases trillions of dollars—they immediately take all of that money and start buying US government bonds because they're afraid to lose their money. If you lose your $10,000, it's not literally that big of a deal. But when those investors lose hundreds of billions, if not trillions of dollars, that is a major blow to those investors. But when everybody is massively buying US government bonds, bond prices start to rise. On the other side, their yields start to go down. Because if everybody suddenly wants to buy US government bonds, now you have to understand that when you are buying US government bonds, you're literally loaning your money to the US government. But when there is so much demand for US government bonds, the US government can offer a lower interest rate, and yet people still going to buy them. And that's why, when there is so much uncertainty, just by looking at the yields of the bonds, you can simply understand how much investors are afraid of what's happening. So when the yields go down, you know that investors are massively buying US government bonds. But what we see over here is that yields have grown from less than 4% to 4.3%. They can even increase, and that means that Donald Trump has broken the entire system—the system that we used to rely on over the last eight years. And that's because investors no longer view US government bonds as the safest option in the market to buy and keep their money while there is a storm.
What made the US such a great economy is that it's very predictable, and it can grow predictably. When you set up your business, you want to know the rules, and you want to know the things that are not going to change over the next 5, 10, 20, and preferably over the 50 years. And based on those rules, you can build up your system and your business, and you can make a lot of money. But if the rules keep changing consistently, then there is no way for you to actually build that business. And the United States have been that place where things have been very consistent, and rules have been followed for years. And that's why the US became such a powerful economy. And the fact that yields are going down for US government bonds simply means that investors are losing faith in the US government because of so much unpredictability is coming from the White House in recent months.
But if everything is crushing, and investors are losing their faith in the US government, how is that an opportunity for investors to make money? A lot of people talk about the tariffs that the White House have imposed, but very few people talk about the final goals of these tariffs—what exactly they want to achieve. Now, if you have been listening very carefully to what Trump has been saying, he made it clear: he wants free trade between the United States and China. And free trade means that the government should not intervene in helping and subsidizing their companies.
The reason that China caught up with the United States in such a short period of time is because the Chinese Communist Party, or the Chinese government, started subsidizing their companies and helped them to grow faster than they could possibly can. So if there is a very good talented company out there, the Chinese government is going to provide them with an unlimited amount of money and will help them to grow significantly faster so that they can compete with the United States in the international stage. That's how a lot of Chinese companies became so powerful and so big and so huge, and they dominated not just the Chinese market but they started to expand globally all across the globe. So the new deal that the United States wants to sign with China is that you should stop manipulating and subsidizing your companies so that they compete in the free market with the United States.
Think of smartphone manufacturers in the United States. The largest one is, of course, Apple. Does the US government help Apple to become a powerful company? Well, absolutely not. Maybe in some ways there have been some kind of support, but the fact that Apple is such a huge successful company is simply because there have been entrepreneurs who built Apple and made it the most successful business in history. And you can say the exact same thing with every other US company. Tesla is a privately owned company. Yes, there has been some tax breaks by the government in order to encourage people to buy electrical cars. Other than that, if it wasn't for Elon Musk, Tesla wouldn't be as successful as it's today. And that's the case pretty much with most of the companies in the United States. But that's not the case in other countries, especially if you take the entire Asia. If you go to Japan, the reason that there are so many successful Japanese companies is because the government intervened. They found that there is a talented company out there, and they started subsidizing them. So those companies that are being subsidized by the government do not have to turn a profit. But Tesla has to turn a profit in order for investors not to panic and keep investing in Tesla. Apple has to turn a profit and make sure that their business model is successful. But a Chinese or a Japanese or an Indian company do not have to do that because they have unlimited money coming from the government. So is that a free trade market? Well, absolutely not. That's not a free market; that's not free trade. One company is being subsidized by the government, and another company is a privately owned company. So if there is any kind of competition, the subsidized company by the government is going to win anyways.
Apple, for example, has 15% of the Chinese market, but it has been dominated by other Chinese manufacturers such as Honor, Oppo, Huawei, Vivo, and other companies. How do you think these companies caught up with Apple? Is it because they've been so innovative? Well, on one side, yes, that is true. But most of these smartphone manufacturers in China do not have to turn a profit. None of them makes as much money as Apple. They don't have to be so effective; they don't have to be so efficient; they don't have to make so much money as Apple does. Why? Because they have a lifeline of money that is coming in from the Chinese government. And that's how they can actually sell their phones at a discount or lower their prices compared to Apple. And over time, they will take over the entire industry. So if they come, for example, to the United States, they can even win over Apple in the United States because their companies, their smartphones, are being subsidized by the Chinese Communist Party.
The exact same thing goes with steel, for example. The reason that US steel companies cannot compete with China is because every steel company in China is being subsidized by the Chinese Communist Party, and that's not the case with the United States. So if the new deal that is being signed with China is going to be that China stop subsidizing their companies, what do you think is going to happen to Apple? Apple will be open to a completely new market, and they will have a fair competition with the Chinese manufacturers. And in any fair competition, Apple is going to win all of that competition because Apple is a much more efficient company than Honor, Huawei, or any other Chinese smartphone manufacturers.
Amazon versus Alibaba. Amazon delivers everything you ever want in the United States, and they have been one of the most successful and the efficient businesses that has ever been, probably in history. Now you have the exact same alternative in China, which is called Alibaba. Now the reason Alibaba is so successful is because in the early days the Chinese Communist Party realized that this is a potential opportunity, so they started giving them an unlimited amount of money so that Alibaba becomes such a giant company that it's today. And they didn't have to worry about profits; they didn't have to worry about money; they simply had a lot of money coming in from the Chinese Communist Party, and they built such a huge company. So without the support of the government of China, that company cannot possibly compete with Amazon. And if there is going to be fair competition, Amazon can literally come to China and dominate the entire market. Well, maybe Alibaba is still going to present a serious competition to Amazon, but Amazon is not being supported by the US government at all. Without—I mean, without US government—Amazon is going to be very successful. And in the US, any company can come in and can beat Amazon if they have—but that's not the case with China unless you have the support of the Chinese government.
The same thing is with electrical cars. The largest electrical car company in China is BYD, but up until recently it was Tesla. Why do you think BYD suddenly became so much more successful compared to Tesla last year? BYD sold three and a half million cars, but Tesla sold around 500,000 cars. But if you look at their profits, Tesla is much more profitable than BYD because BYD does not have to turn a profit. BYD can keep selling their cars at a huge loss because BYD is being subsidized by the entire Chinese government, while Tesla is not. Yes, Tesla is presented with some tax brackets by the US government because the US government wants the entire United States to shift into renewable energy. Other than that, nothing else. So imagine BYD and Tesla are going to be in a free and fair competition. Tesla is going to literally eliminate BYD because BYD will have to compete with Tesla, and they will have to be as profitable. Last year, BYD presented much more revenue than Tesla, but if you look at their profits, with a much smaller revenue, Tesla presented a higher margin profit rates than BYD. Why is that the case, even though that they sold significantly lesser amount of cars than BYD? BYD can sell their cars for $10,000, but Tesla cannot do that.
So the new deal that will be signed with China after this trade war will most likely include within itself that there is going to be fair competition between US companies and the Chinese companies. And that means that a new market is going to be open for the entire US companies, and that means that they can double or maybe triple their revenue or even their sales or even their profits by entering into the Chinese market. Google, for example, is being banned in China, and that's why they don't make any money in China. But what if suddenly Google is no longer banned in China? Google can enter China, and they can actually take a market share and maybe even double or triple the revenue. And when you double your revenue, what's going to happen to your stock prices? Your stock price is going to double as well. Secondly, investors would expect Apple or Google to make much more money, and because they're expecting much more money for them to make, they will start massively buying their stocks, and that means that their stock prices are going to shoot to the roof. And this is just a few examples that I just gave you. Besides that, the US wants to sign a similar deal with every other country in the world, and that includes Japan, South Korea, India, and the rest of the world. And that will open a whole new market for the US companies to entirely dominate and maybe grow their sales twice, thrice, or maybe even 10x their sales over the next 5 years. And that presents a unique opportunity for investors to make massive amounts of profits.
So how do you profit out of this crisis? First of all, there is a turmoil, and during the storm, a lot of stocks are going down, and there is going to be a period of recovery. So even if that kind of a deal is not going to be signed, whenever there is going to be predictability, whenever we are going to find out what are going to be the new rules of the game, those stocks are going to recover anyways, and you will make money anyways if you invest in the right stocks. Secondly, invest at least in three stocks. If you invest in just one stock, you can be wrong, no matter what a great investor you are. You have to diversify to a certain extent because you can be wrong, no matter what happens. You can be wrong because things can quickly change in the market. So by picking at least three stocks, if one of them is going to succeed, if one of them is going to be in the right time in the right place, it is going to massively profit and grow exponentially. If one of those companies can enter into the Chinese market and double or triple their sales, you have no idea how far that stock can possibly grow. Thirdly, focus on tech stocks because tech stocks have the highest chances of actually growing exponentially. If we talk of companies such as Boeing, yes, they're actually present in China, but they've been limited, and there is a very serious competition from Chinese companies. Again, those Chinese companies are being subsidized by the Chinese Communist Party. If there's fair competition, Boeing is going to capture a much bigger market share, but their stock prices aren't going to rise much. But if Google enters, they can easily and quickly double their sales, which means that their stock prices are significantly going to rise compared to a company such as Boeing. The same thing goes with Amazon, Tesla, Apple, and every other tech company. It's still a bit early to find out who are going to be the real winners of this trade war, but there are certainly going to be winners because we are yet at the beginning of this trade war. And if you want to find out which stocks I'm buying, which stocks I'm selling, and if you want to find out what is the best and the fastest way to make your first $100,000 and take the best advantage out of this crisis, then check out the first link in the description. That's it for today. Thanks, guys, for watching, and I'll see you in the next.