So can you survive and even thrive in a bad Market in a bad economy? Yes, you can. And in this video I'm going to show you exactly how now last week I made a video showing you five signs of an upcoming recession and an upcoming stock market crash. and I'm glad that a lot of you have asked me to make this video because you got scared good because that served as a wake-up call. and I'm going to explain exactly what I mean Now what you're going to hear in this video may not be what you want, but it's definitely what you need now.

Why am I talking about wake-up calls? Because look, investing and managing your investment strategy is like being in shape. The only way to lose weight is to change your lifestyle completely and make better choices. The same thing with investing. we're talking about preparing for bad times.

We're talking about preparing for decisions. We're talking about preparing for a stock market crash. But at the end of the day, these tips and tricks and strategies, whatever you want to call them. This behavioral aspect of managing your portfolio, managing your personal finance is always true.

No matter how good or bad the market is, you just have to be more aggressive or less aggressive depending on the macroeconomic environment you're operating in. I'll give you an example if we talk about personal finance right? If you know, like right now, the bad times are coming at you like your freight train. Not good time to start picking up Pennies from the tracks. Not a good time to spend a lot of money on discretionary spending on things you don't need, but things you may want.

Not the best time. This is the time to limit your discretionary spending. You don't want to be absolutely spending every little extra pin you have on that coffee or that vacation, whatever it may be. If you know bad times are coming, that's a really good time to actually drop your discretion.

You're spending close to zero and put everything actually you have into your 12 month emergency fund. Now even if you go at six month emerging fund, I'm still going to be okay with that. But obviously, look, you can't do nothing with your utilities with your food with your rent. I Mean that's pretty much stagnant.

It's really hard to change an apartment. It's really hard you know to change the amount of food you consume. People have you know certain needs and allergies and health stuff. So I'm not getting into that.

But the one thing you can control is discretionary spending and credit card. So description is spending. We just talked about. drop it down to as close to zero as you can and now you have left with one thing that's pulling you down faster than Grandpa after a Christmas party.

That is the credit card debt. A credit card debt has never been cheap. It's never been good for you. but novel times it's absolutely horrific.

You have to think about ways to get rid of credit card debt as much as you can. This is not a good time right now to be in debt. definitely not. So reducing expensive debt is your top priority in case you are not understanding what I'm talking about here.

Basically, do Not pay for things you cannot afford with credit cards that you should not be having and not paying you for your balance and paying interest every single month. It's a bad idea anytime. Especially now now that is pretty much on the personal finance side. Let's get more into the investing time.

fine. and before we continue to the next few things I want to talk about and trust me I have a lot of interesting stuff to cover I Do want to thank Tendy's for sponsoring this video I Love Tandy's their free platform. There's no upsell, there's no premiums, everything's 100 free, and they have an options flow for free which I'm not familiar with any platform giving that for free and an options calculator. Now, if you love options and I know a lot of people in my community use options as a long-term investing tool, and if you want to learn more about it, ask me below.

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Now moving on to the next item I Want to talk about? There isn't going to be a lot of Hope line excitement and b-roll and like exciting stuff in this video because it's not an exciting thing you know, cleaning up your house, going to the gym, taking care of stuff. It's boring, but it's important. Without it, your real life is going to fall apart. the same thing with investing.

So the first thing I want you to understand is look. the average Bear Market so called right on the S P 500 from 1960 all the way to now is about 15 months maximum that we ever had it two years plus. So we've never had a Bear Market for longer than two consecutive years. Two plus and for the most part it's just under a year and a half.

So the one thing you should remember is this tool shall pass. It ain't something that's going to be forever in your life. I Know it feels like forever when you're in it. it feels like hell and it sucks but you have to remember that they can clock is 15 months on average pops two years so at some point it is going to be over and the one thing you have to remember is that high.

Ming the market versus time in the market is always a losing battle Because here's what happened with the people who have stayed in: the bad: Market No matter, no matter how good or bad it is, when the recovery starts, they catch a lot more of it than the people who wait for the sky to clear and jump back on the wagon when it's actually going back up. By doing that, you will enjoy some of it, but for a lot of them, don't miss the bulk of the recovery because of that. Now the one thing that the history proves us is that no matter how you spin it, the good times. The bull markets.

They last a lot longer than the Bear Markets and the way they go up is a lot more aggressive than the way that Bear Markets take it down. The average bull market in the US is like seven years and the average return is way higher than the minus 40 that we have per Bear Market right now since the 1960s. So all you have to remember is Long-term investing. Long-term S p Whatever it is you're using to index your funds on investments, he's always a winner no matter how good or bad things are going on.

now. does that mean you can absolutely ignore your portfolio and just sit back and you know, drink your Mai Tai and forget about things. No, you actually have to do some work. Sorry.

so what's the work we have to do here? So Look Easy Mode is over. It's finished. It's gone for a while. Money's expensive.

Again, things are actually getting harder again. So imagine that investing is a video game and you're playing online against other players. So whenever you get killed, somebody else gets a plus. Point Whenever you kill somebody on the video game not really right, you get a plus point and they die and they have to respawn.

Now in real life, there's no respawning. It's a zero-sum game. and if you sold at the bottom and you bought at the top, somebody else did the opposite and made a lot of money. When you're looking at your portfolio right now, and use this upcoming recession, stock market crash, whatever you want to call it, use this as some sort of a wake-up call as I mentioned earlier to clean up your let's look at your portfolio right now.

look at every single company of portfolio and check whether it's ready for a bad time, whether it's Recession Proof Whatever you want to call it, right, Let's check right. How good is the liquidity of every single one of the companies in your portfolio? Liquidity means more cash than debt. preferably zero debt. And plenty of cash.

I Can give an example: Alan Tear almost three billion dollars in cash. Zero debt. Tesla Very similar and we can keep going and going and going. You want a company with high liquidity? Liquidity means safety.

Liquidity means Firepower Liquidity means a lot of things with this company. So the last thing you want right now in this environment and in fact, any time is an over leveraged company, Now, an over leverage company is always a bad idea. But in this environment it's even worse. So what I'm saying here is these rules apply anytime.

Right now they apply like Sevenfold or can you say Sevenfold or twofold I Don't know. Oh look what it is. Number one. Number two: You want to see that the company actually generates positive cash flows.

The last thing you need is company that's bleeding cash. Why? Because if the company is beating cash and it has negative cash flow, it means that one of two things has to happen for the company to survive. It just stood me saying that that's just reality. You will either get diluted because they'll need to sell more shares and then to get more money into the company to survive, or or they're gonna have to take out a loan and pay extremely expensive interest.

All that loan now interest is never cheap, but now more than ever it's even more expensive. You see where I'm going with this negative cash flow is not a good thing ever. Right now it's killer. So stay away from negative cash flow companies.

Now the second thing is balance sheet. Health You want to make sure that this company is strong like an ox. I Mean it's always important to have a good balance sheet, but now more than ever, it's super super important. So you want to have at least twice more assets than liabilities to ensure that strength and liquidity.

Now, beyond the fundamentals, we have to look at the business side of it. Don't forget, every stock you hold is a company you own a piece of. And as an owner of a company, you want to take a look at the business now. I Don't own anything that doesn't actually meet this criteria.

Number One Pricing Power I Want to know that my company, no matter how bad things will get, whether it's inflation, whether it's bad time times, and people don't have enough money to spend, this company is selling something that everybody or a lot of people require or a lot of business require. so they can still charge their prices even at bad times and not lose sales. Now Number two: Number two is high margins I Want to make sure that the company I invest in has plenty of margin because don't forget from the one dollar you make by sales. by the time the accountants, the government, the lawyers are finished with you, you're down to bare minimum.

Just do your underwear. So the high margins allow companies to fry survive in in recessionary environment. especially now. High Margins are always good, but when you're hitting an inflationary wall, when you're hitting a recession, a potential stock market crash High Margins mean that you have a bigger cushion of safety before you hit the ground.

Now the other thing I Hate in my portfolio in I mean in every environment, but especially now is capital intensive businesses I Hate that. Why? Because you need to take a lot of debt for Capital intensive business. whether it's high inventory or high raw materials whatever that may be infrastructure right when interest is so high when debt so expensive. Capital Dental Businesses are bad now.

they're always bad in my opinion. Again, made. You know you may argue with me. but this isn't the right time for a capital intensive business.

So nothing with high inventory requirements or high raw materials or Goods costs and stuff. And the other thing is whack. Now whack means weighted average cost of capital. And basically that means how much your company will pay for debt if it actually is to take out loan.

And that has to do beyond the interest rates in the in the market. for company specific things like how good is the company managed, how good is the balance sheet, how good is the cash flow? Basically, the banks are more inclined to give you a better loan if you don't need it. So a company like volunteer that doesn't need it is probably has a better chance to get a loan. A way better conditions than another company that actually needs the money.

Ironic, but it is true. Number two is how safe is this industry right? The industry that you're in like for example, if you're in software or you're in healthcare or you're an infrastructure or an energy, how volatile it is et cetera. For example, if you're a mining company versus your business software producer, all different set of risks, a whole different pricing for the loan. And obviously of course you have geopolitical risk if you're a company from Russia China Ukraine versus the company from the US You see where I'm going with.

this risks will be priced in the loans you eventually have to take. whether it's a simple credit line or a massive loan, but again, something I Like to have companies with minimal risk so that if cash is needed, some point that cash would be cheap to get now. I Hope this video was helpful for you to give you a framework now. I Believe that everything I just said in this video applies to any environment and I still believe that timing the market is a bad idea.

So I'm not going to be trying to time this recession or the stock market crashes 7 million times. The main reason because I just don't know when it's gonna hit. but I will be prepping and making sure that all my ducks are in a row in case. I Forgot all these best practices I Just mentioned this video are kept to the T in my Investment Portfolio in my personal finances.

Now if you found value in this video, make sure you subscribe to the channel. Really means a lot to me. As always, if you want to subscribe to our Patreon we have a five dollar per month subscription and you get to enjoy our private zooms and our newsletters and all. They do stuff but mainly you're gonna be supporting the channel if you're so inclined.

Thank you so much! I'll see you next video.