Hey guys, it's Sasha this morning Mike Wilson The Chief U.S Equity Strategist for Morgan Stanley said that the stock market is going to collapse in March according to this archetypal. Wall Street suit with the equity Market Showing signs of exhaustion after the last Fed meeting, the S P 500 is at a critical technical support given our view on earnings. March is a high risk month for the Bear Market to resume. So there you have it.

A guy whose job title literally has the word strategist in it relies on made-up support lines drawn by brain dead monkeys to make short-term Market predictions. and this is the same guy who a week ago said that the stock market valuations had risen Into Thin Air Which makes you wonder why the tea leaves that this guy uses to perfectly predict exactly which way the stock market will fall tomorrow didn't also clearly predict a subsurd rally that we've just had with the support line or two a couple of months ago. I Guess every stock market move that goes against a random guess that you make is nonsensical and based on thin air. But if the Market happens to move in the right direction that you called, then that is because you drew lines on a chart.

But no, this time you better believe the doomsayer because according to him U.S stocks are in the death zone and could crash 26 within months. Extremely precise and accurate. but if you thought that wasn't scary enough, here is what the Morgan Stanley Tweedle dumbs then said. This is pure Fomo at its best in our view and we find all the hooplan excitement about the year-to-date rally to be misplaced.

The reality is that the S P 500 is flat over the past 11 weeks and exactly in line with where we took off our tactical bullish call on December 5th. So they took off their tactical bullish call at the very bottom of the market and they're now trying to explain why they were so completely and competent and wrong because the market happened to Rally exactly after they went and did that. The main difference is that stocks are now significantly more expensive with the Erp at 168 basis points versus 216 base points back then, and Erp stands for the equity risk premium and this is basically a calculation of how much the stock market will outperform risk-free debt instruments. So Morgan Stanley is saying that the stock market is definitely going to crash, but wait for it because of Erp being low.

This I'm going to explain to you why this is the dumbest thing that anyone who understands anything can possibly say. Erp is basically the difference between your projection on the future stock market return and the return that you can get from bonds. So if you think that the stock market is going to do badly, then you will have a low Erp. So what Morgan Stanley is basically saying is we think that the stock market is going to crash because we we think the stock market is going to crash Sounds like a perfectly reasonable logical argument that has absolutely no dumbass circular reference whatsoever.

In general, it seemed right now that fear and uncertainty is a commodity that is worth a lot of eyeballs. So it's perhaps not surprising that everyone is playing this game. After the stock market fell 20 in 2022, investors felt the pain in their portfolios. you're looking at Red numbers every day, especially those investors who are tech stocks the fangs earlier stage companies that in many cases fell over 50 regardless of which company it was.

And at the start of this year, the markets have made a partial recovery, which weirdly, none of these charlatan technical analysts predicted. None of the dimwits said this two months ago, despite having all these charts and all these lines and all these tea leaves I Distinctly remember these Dimwits in December Each and every one of these guys saying the stock market is going to go down another 30 imminently they drew all these trend lines, shapes, support lines and patterns. and and remember when Tesla stock was definitely 100 going to crash from 100 to 60. That was just around Christmas But now that the market has recovered, every investor is wanting to know what's going on.

Nobody's particularly sure. Is this a green shoot of things to come or is this a Fool's bear Market rally drawing in the suckers and of course CNBC and the rest of the mainstream media. Go In Cahoots With these Banks To fortune tellers to tell you that there is a 120 percent chance that the stock market is going to self-destruct starting tomorrow or next week or whenever. Yesterday, another Chief Global strategy just delivered another breaking bit of insight.

She said that because her forecast of a long and bad recession did not happen, it's of course not because she made a random guest that didn't play out. it's just because that recession is going to come a little bit later this year. And of course, the bounce back in the S P 500 is because she thinks the market has gone too far. That market just keeps on not doing what every one of these fortune tellers wanted to do.

What a bad: Market Give it a smack on the face and it's interesting that so much of economic analysis is based on brand new paradigms that don't have any long-term base. No database rationale that didn't exist until relatively recently. Take this example of high interest rates being a very bad thing for the stock market because the interest rates are at these ridonculous levels. Of course, that means that the stock market is going to crash and everything is going to collapse.

This is a brand new pile of that has seemingly been adopted by everyone in the world of Finance as some kind of indestructible truth. Every YouTuber is bending over backwards to try and guess exactly when the FED is going to Pivot because you see rates have to go back down to zero in order for the stock market to do well. This is something that nobody is even challenging. and if you look at the historic chart of the FED rates, you can see that the rates were at a historic low of three percent in 1993 after the early 1990s question, and the FED then increased those rates to five and a half to six percent, which by the way is higher than the rates are today, and higher than the latest forecast of where those rates are going to top out.

So the FED increased those rates to a rate that is higher than they are right now and then, just kept them flat for years. And you know what happened. Oh, while the race where these unimaginably impossibly high levels, the stock market, for some peculiar, really weird reason, went on the biggest bull run in stock market history from 1982 to Black Monday of 1987, the S P 500 almost tripled. And this happened while the interest rates were on their way down after Paul Walker's 20 hike just before that to bring down inflation, then from 1953 to 1956, the interest rates were increasing while the stock market went up by over 100 in less than three years.

The world of Investing suffers in a big way from the Dunning Kruger effect. There seems to be an army of people who, with very limited understanding of Finance or economics or anything much, we decide that there is this one metric or one date that defines everything. Maybe it's the date on which Jerome Powell starts lowering rates, or the days in which inflation is exactly equal to two percent. Or maybe it's a specific line on a specific chart at the moment.

The really popular one is the yield curve where 10-year treasuries have lower yields than the two-year equivalents because often the reason that this happens is negative short-term Market expectations. But of course, like many things in economics, there is more than one reason why yield curves can invert. Not all of them have to follow the same pattern. A period of high inflation is one of the other reasons You can see that the yield curve was dancing around more than a teenager on Tick Tock in the late 70s and 80s, driven by the highest rate of inflation in modern U.S History: Because yield curve expectations happen to have many different causal factors, not just short-term expectations on the stock market.

Now here is the most important point that you need to understand: Fairmont And selling Panic is a proven strategy to sell headlines. So of course, if the financial situation is uncertain like it is right now, every media Outlet is going to be chasing the clickbait to make money. They won't tell you that it could go either way. That's just not very sexy.

It's not very interesting. And then you have the fund managers, the chief strategist, fortune tellers from investment funds who parrot the same because they know that investors are uncertain. They're scared the stock market has already fallen. Investors are concerned that it could fall more, so they want to play right into that fear to align with a negative sentiment because that drives money into their wealth management arms.

That drives new clients who want to protect their Investments Fund manager's sole objective is to get more customers that they can milk for fees. I'm going to say it again: investment managers do not care if the market goes up and down as long as they get more customers who pay them more fees. So next time you hear one of them spout whatever the latest brand of panic is. Just keep that in mind for context and don't take this the wrong way.

I Am not some kind of Oracle I Am not here pretending that I know better I Am not telling you that exactly the opposite will happen because I am a random guy on YouTube I'm just here trying to show you that the world is more complicated than one point on one chart. I Have no idea which way the market is going to go just like these fake analysts. Also have no idea. I Just don't sit here being full of pretending that I know predicting a market crash is a pretty easy business.

If a model is because the market does happen to crash pretty regularly and especially if the market hasn't crashed for a few years, then it's an easy narrative to keep playing. You can sit there like Robert Kiyosaki Michael Barry whoever on YouTube and Just repeat the same every week until the market does crash because whenever it does crash, you will be proven categorically right. You will declare Victory saying that you of course knew it all along and all the time that the market does not crash. It just means that the money Market is irrational.

The market is dumb. All the people buying into the rally are dumb. You were just early, and as an investor, you can sit there while the market is down 16 from its peak like it is right now and try to time it to Perfection What if you can go and wait until it's at the very bottom? No, Perfectly exactly when that's going to be and then you're going to make a killing. Or you can do something that actually works which is invest in the stock market while it's low and keep on doing it while it stays low.

Warren Buffett Once made an interesting observation in the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts. the depression, a dozen or so recessions and financial panics, oil shocks are flu epidemic, and the resignation of a disgraced president. yet the Dow Rose from 66 to 11 497. The fact is, whatever is happening right now seems like an unprecedented catastrophe.

one of the worst things ever is happening right now. Now that has never happened before. We don't know how good it was back then, because right now it is so bad. But here is a negative thought for you.

There is always some kind of going down, and it's usually going down. especially during a Bear. Market Because no, that's what happens, which just happens to be historically by far the best time for investing money. If you don't invest money during Bear markets, you will lose money.

Rather than making money from investing, you can go on. Twitter You can debate whether the market is bottomed already, if it's going to fall more later this year, you can sit there listening to the Doom and Gloom all day. There is an endless supply of it out there, sending yourself into a completely unnecessary Panic spiral. But just like the stock market went up, Against All Odds at the start of this year, it could just as easily continue giving zero about what the randoms on CNBC think and all the while you're sitting there thinking, where is the real bottom I've got to wait until were really bottoms.

First, it's a sucker's rally in the Bear market. Then it's a recession that's going to wipe you out. and it's a war that's about to happen. Then it's something else and before you know it, the market is up 20 and you missed it standing there holding your private parts in your hands.

But hey, I guess I'd probably do far better on YouTube doing those constipated thumbnails telling you the economy is going to crash, your house price is going to crash. Your stocks are going to crash every day. Because talking about actual investing Actual long-term investing based on company fundamentals based on understanding valuations based on long-term ownership while giving precisely zero shits about all of this noise is not sexy. And when I point this out, I get an increasing number of idiots on YouTube throwing a hissy fit, giving me a barrage of abuse because while they know deep down what I'm saying is right, it goes against the fear-mongering rulebook.

The good news is I don't care. so I'll keep sharing my insight I'll keep challenging you to think for yourself instead of listening into what these idiots have to say. I'll keep encouraging boring as investing strategies like investing continuously through a downturn which is a good thing by the way, instead of advocating the general gambling in trying to time untimable Market swings. If you found this video useful, please don't forget to smash the like button for the YouTube algorithm.

Thank you so much for watching I Really appreciate it as always I'll see you guys later. Thank you.