Hey this is tom, and in case you haven't heard palantir just came out and said: hey we're, buying a lot of gold physical gold because we're prepping for a black swan event. That's not something you hear every day, but jokes aside, i've been on record before saying that planeteer are kind of designed to predict black swan events. I wouldn't take that as an indicator over an impending market crash. However, jokes aside, i think we have to have a serious talk about the possibility of a market crash, or at least a major correction by the end of this year and i'll share with you my opinion, including the factors that are pointing to that with a pragmatic, Down-To-Earth approach, no hype, no fear-mongering just analytics.

So as always, don't click, nothing, don't smash, nothing, don't buy nothing! No courses, no sponsorships, just listen! That's all! I ask of you. So, first of all, let's start with the basics. There's two questions i want to answer in this video. Are we headed to a market crash like an all-out war, or are we headed to a market correction, maybe 10, 20, 30, or maybe nothing ain't about to happen which one of these options actually happens now? I can't predict the future, i'm not an oracle.

I wish i was palantir. Apparently you'll probably have the answer. I wish they would have told me now. Jokes aside, i've actually compiled the list of five things.

I'm going to be looking at to determine whether we're headed to a market crash or market correction, so the first thing is inflation rate. The second thing is the delta variant or any other variants out there that may or may not yet exist versus the reopening. The third one is what's going on with the real estate market, because that's an overlooked area that will impact the stock market. A lot remember 2008.

Now china, stocks or the entire chinese government and regulation is another thing. I'm going to be looking at the hyper tantrum. One of the biggest fears right now in the market i'll explain what it is and what i think the probability of it happening, because that might lead to a crazy and also stock market valuations. Are we in the bubble, or is this just the cost of being disruptive like kathy wood, says i'm gon na analyze? All six of these and i'll give you my answer at the end, but if you're here just for the bottom line, i never hold you hostage.

So you don't have to sit through the entire video just to find out what my opinion is. I value your time and you have to do go do them. My opinion is that we are not headed to a market crash. I think we're headed to a market correction which will be significant and should happen anywhere between september and the end of this year.

Now, if you're interested in hearing my analysis and why i think this would happen, so you can talk about me in the comment section. Stay with me, but if you got ta go i respect your time. I love you, no hard feelings. So, let's start with inflation.

The first factor and i'll explain why inflation plays a major role in this movie. Now you would agree with me that most of you understand inflation. You can explain what inflation is right, you're getting the same amount of dollars, but your dollar buys you more effectively in the time of less inflation. In a time of more inflation, your dollar buys you less quite simple, but how does this have to do with the stock market crashing? Well, it does.

Let me explain when inflation goes out of control, that's pretty much a gg game over good game. Once that train leaves the station, you have a very limited amount of time to catch it before it turns into a runaway train and turns into hyperinflation, which is something a lot of people are afraid of now the guy who's supposed to catch that train before it Goes berserk and stop it is the federal reserve they're the ones responsible to pay attention and stop it now, they're, actually playing a very dangerous game right now, they're trying to restart the economy they're trying to push it forward because of the pandemic effects, but they don't Want to push it too hard, so they lose control over that training. That control is basically the tapering issue. Now inflation has to be controlled by the fed, but how would the fed control inflation, the fed controls inflation by raising or reducing the interest rates? Now, if the interest rate goes up, people save more money, they spend less and obviously you have a lot less available income to spend on nonsense.

Nobody needs in the supermarket and in the stores that way you kind of slow down inflation. That's a very basic explanation. Now, obviously, the fed doesn't have a dial which they spend right, more interest, less interest and that's exactly what the fed has been doing for the past few months. They're buying up a lot of bonds to keep money in the stock market to keep feeding the system with cash with liquidity when you're buying bonds and have explained this before the fed creates demand for a bond which lowers the actual yield.

Now the yield lowers and everybody chases the yield elsewhere and elsewhere is the stock market pushing the stock market upwards? Now imagine this situation. Imagine that now the fed lowers the amount of assets they purchase every month right now, they're spending about 120 billion dollars per month. Imagine they slash it by half demand goes significantly down. Yield goes up.

If that happens, people will be chasing more yield in the bond market, essentially driving away demand from the stock market to the bond market, creating less demand for stocks, reducing the price. Now, that's the big fear. Now here's the thing: if you have the situation where the fed eases basically the foot and they don't press on the gas, so much and they're basically trying to slow down the inflation by actually increasing interest rates. What might happen is what a lot of people define as a tapered tantrum.

If the market thinks that the fed will do it, it can create a self-fulfilling prophecy of cluster fuckness. Basically, what will happen that is going to be a panic shift. That has nothing to do with what actually is going on from the stock market to the mall market, with everybody expecting it. Probably people chasing yield before if it happens, causing a chain reaction, that's going to fulfill the prophecy and some by degree of 10, beyond what the fed intended to do and there's no way to control that mother lover.

It's going to be insane that happened before go. Google, it it's not a pretty sight, and that is why we keep hearing the fed actually make statements that create a very soft landing for that concept. They're coming out and saying: well we're thinking about it, we're thinking about it, we're thinking about it by the time they announce it. The soft landing will prevent - hopefully, god willing this whole chain reaction of a taper tantrum, that's what they're trying to achieve.

That is why i think if people are looking at jackson hall next week, there's not going to be any news out of jackson hall. That's going to help this equation. It's going to be more the same. The fed will be slowing down, basically saying: hey guys, we're thinking about it, we're thinking about it, we're thinking about it.

Making you understand, they total your car. Remember my example: hey hey had a little accident. What happened yeah the car hit a little something. What do you mean something like uh, paul, yeah paul and is the car? Okay? No, it's total by the time.

I realized that the car is totaled. I've already gotten used to the idea for these few questions. So that's exactly what the fed is doing. So.

Jackson, hall will have no actual issues coming out of it. That will have any sort of material news. However, however, where i think we'll do see, the results is in the meeting in september, i think in september they will come out and they say hey we're. Actually, thinking about doing this by the end of this year, with actual operational guidance as to when this is going to happen, i think september is where they have to push the trigger if they want to get it done by the end of this year, because unless You think inflation is completely transitory unless you think that it has nothing to do with reality and just a supply chain management issue that will go away.

You have to do something about it and, despite john paul coming out and saying well, it's transitory transitory. Clearly, that's what what the fed thinks, because everybody in the fed right now talking a whole different language where they need to slow down asset purchases, which means they don't believe that this is a transitory inflation environment. It is what it is. However, there's an ax factor here that you need to understand this whole thing may not even happen because the one thing that may slow down this whole process and throw a monkey range into this reopening case inflation, because inflation is growth, reopening equals inflation.

Pretty much in this equation, if we have the delta variant, go crazy or any other variants. You know. Every week we have new variants if certain variants go crazy and halt reopening bring us backwards into this lockdown situation. If that happens, the fed is going to have way more leeway to buy more bonds more assets because it's going to slow down the whole reopening inflation situation, which will allow a much softer landing so that thing kind of counter intuitively the delta variant or the pandemic.

Coming back or whatever or the lockdowns might actually prevent a stock market crash as crazy as it sounds, because it will allow the fed to keep buying up bonds and actually increasing demand and reducing the yields pumping up the stock market. I know that sounds crazy, but you know we live in the crazy world and, having said all that here's my opinion, i look at other factors as well. Now, for example, i see the bitcoin rate goes up almost at 50 000., that's usually an indicator that people looking at a safe haven to park their money away from the stock market. That's an important indicator.

Also michael berry is betting heavy on inflation, not saying that michael berry is a god or an oracle, but i mean that's another dude, that kind of knows what he's doing talking the same language and, most importantly, i just did a video on microsoft and it came Out that microsoft is now at 300, which is insane, i did a post on our patreon feed six months ago, saying it might hit 220 by the end of the year. It just hit 300 and i maxed out my dcf completely couldn't get anywhere beyond 300. Now this happened with a bunch of companies this month and last month. So for the past few videos, i would say six or seven videos that i did of companies that push through my target price.

It comes out as if there's no more price, to give there's nothing. Even if you max out earnings, you go crazy at certain points, i think i gave certain companies 90 growth for the next five years. It still comes up as the price right now being way. Overvalued or right on point, nothing is cheap anymore.

The stock market is showing me that the overvaluation the stock market is definitely bubblish. Now, i'm not saying we're in the bubble, i'm just saying that the prices right now can't be justified long term, given the price, given the earnings given the growth, this would have to be a crazy five years to justify the current prices and just to be clear, I don't think the stock market is in the bubble at all. I just think it's a little bit or a little bit more overvalued compared to the fundamentals and there's one thing you need to know is over the course of time. It always evens out it's like a three-point shooter.

If you have a 20 shot from three and you had a great night, eventually the more games, you play it evens out towards the 20, and that is why prices are bound to correct backwards, because right now valuations are out of control. Microsoft is just one example. You can go check out. My latest videos nvidia a lot of different companies that are great companies, but right now the valuations are insane that has to change it's going to correct backwards, but i don't think we're going to see a full-on crash.

So how do i deal with this quite simple? I consolidate into value plays and my highest conviction stocks. I want to have stuff that are low, p, high revenues, no capex very simple, as well as tech plays as well as speculative tax, plays that i'm absolutely in love with which i don't care about the price, a palantir, for example, a tesla, for example. There's a lot of other examples. It's completely individual.

This is just my opinion. Again might be inaccurate might be wrong. Maybe the remnants of a madman, you got ta choose your own stuff. Do your own research, allegedly because, as i mentioned before, i'm not a financial advisor and just a guy on the internet.

You find your own opinions and your own high conviction. Stocks stop stealing palantir from me. I'm just kidding. Do whatever you want now, as always a huge shout out to the channel members and the patrons it's five bucks per month? If you want to join, we do have a zoom call tomorrow.

I believe at 2 p.m, eastern time. So if you join before 2 pm tomorrow, you can participate in the zoom call. The details are going to be in the patreon link or in the patreon page, whatever it's called now and before we sign out. I want to give a huge shout out to the channel members and the patrons we just crossed 3 600 patreons, which is unthinkable to me.

Thank you so much, i'm humbled i'll see you tomorrow.