over the last 14 trading days the S&P

500 has dropped over 10% putting it into

correction territory and we've got

individual stocks that are down 20 30

even 40% so a lot of people have been

asking me Adam how much lower can the

market go so in this video let me share

my

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thoughts now for those of you who are

totally new to the markets and you have

not started investing you may be very

excited right now because at last stocks

look cheap again I've got a chance to

start building my portfolio and for

those of you who are already in the

market you may also be excited at lower

prices but you may also be a bit nervous

like you know what's happening why are

the prices keep going down now whatever

the case remember that in the long run

the market always goes up and high

quality companies that generate higher

Revenue profits and cash flow year after

year they always go up but again the

market doesn't go up in a straight line

it goes up and down through wave

patterns so if you take a look again at

the last just the last 10 years you can

see that the S&P 500 gained

246 .8% that's an annualized return of

13.24% a year with dividends reinvested

so in other words if you stay invested

in the last 10 years your money is

growing at at least 13% compounded if

you invest in individual companies like

Nvidia palena you get again double

triple those returns but again take a

look the market did not and never has

gone up in one straight line the market

goes through all these up and down wave

patterns so take a look right you got

you know wave up wave down wave up wave

down wave up wave down wave up wave down

wave up wave down so the market will

always go through all these wave pattern

So currently the market is going through

another wave down what's the big deal

it's a CL classic textbook Garden

variety wave down and right now the S&P

500 is only down 10% and some people are

freaking all my go going to die no

you're not going to die right it's it's

part of the entire process so if you

take a look at the last 10 years you can

see that on average the market goes

through a correction at least on average

once a year and for example back in 2015

we had a correction and it was because

of the slowing Global growth that

freaked the markets out then in 2016

again we had another correction because

of the Chinese economy slowing down and

they were afraid how it affect the US

markets and then in 2018 we had trade

War 1.0 when Trump was first in power

that was a 12%

correction and then what happened in

late 2018 early 2019 was a 20% drop now

this was actually not defined as a bare

Market bare market is when the market

drops more than 20% closes below 20%

uh that's bare market so this kind of

like touched 20% and it went up so this

was a a bigger

correction and this was the due to what

we call the FED uh taper tantrum where

the Fed was they stopped quantitative

easing and they raised interest rates

and the market freaked out so the market

went down 20% and of course in 2020 we

had a full-blown recession there was a

full-blown uh bare Market caused by

covid-19 where Global economies shut

down Market dropped 35%

and then in 2022 we had the FED hiking

interest rates at a fastest rate in 40

years we had the highest inflation in 40

years that triggered another bare Market

uh Market went on 27% so you can see

that for Bare markets yeah the market

can go down more than 20% it can go down

27% 35% but in normal Corrections of

which we're in right now they usually

drop roughly about 10 to 14% thereabouts

right right so you can see we had

another correction back in late 2023

that was a 10.8% correction triggered by

weakening economic data and then in 2024

another correction because of bad

disappointing earnings by technology

companies the market dropped

99.7% and now the trigger is trade War

2.0 where the market is down again 10%

now I've been increasingly reading on

social media some people freaking out

and talking about oh my God Trump's

going to create a recession with this uh

trade war and I'm going to liquidate my

entire 401K I'm going to sell everything

I'm just going to run into a cave and

high and is that a good idea well

historically statistically no it's never

been a good idea to panic sell because

of geopolitical economic reasons uh and

because the Market's down so if you take

a look at this chart over here for

example you can see that during this

10-year period from 2009 to 2019 the S&P

went up 400

195% sounds great but I can tell you

that the majority of investors were not

in the market to enjoy that close to

500% return why because there's always

something to be worried about there's

always something to scare people out of

the markets and people scare very easily

all right and I mean take a look again

during that 10e period the price didn't

go up in one straight line it went

through a lot of ups and downs and there

were many scary headlines and that's why

I keep telling my students don't read

news headlines okay if you want to read

it read it for entertainment but never

let it affect your investment decisions

never let it affect your emotions I mean

take a look at all this news during that

time we had Chrysler GM filing for

bankruptcy we've got

66 3,000 jobs lost in March we had the

BP oil spill the flash crash the most

powerful earthquake to hit the S&P

downgrades the US debt we have got the

fiscal cliff we have got taper tantrum

which I talked about ear on the US

government shutting down Ebola virus

contagion fears where Global stock sell

off we have got brexit we had um

election Futures collapsing we have the

trade War 1. Zer over here yield curve

inversion US Government shutting down

again S&P enters a bare Market

Charlottesville emergency fed injection

you got all these scary stuff and in the

words of Peter Lyn one of the greatest

fund managers that ever lived he said

your ultimate success or failure as an

investor depends on your ability to

ignore the worries of the world long

enough to allow your Investments to

succeed so the same thing is happening

now after the market goes on a wave up

it's got to go on a wave down now if

you're an investor and you're seeing

that your portfolio the value is

dropping it's totally normal don't freak

out okay there's nothing wrong with you

it's part of the process so remember

that when your portfolio goes through

draw Downs how you feel about it and how

you react to it is what will affect your

long-term profitability all right so

here are a few tips I can give you the

tip number one is this no matter how

good you are as an investor no matter

how skillful you are you can't avoid

draw Downs completely your portfolio

can't grow every day every week every

month every year it can't go up in a

straight line unless you are a total

fraud that that that fix your accounts

right so that was madof who you know

never had a down day or down Year all

right so if you're a legitimate investor

your portfolio will go through ups and

downs so think about it even the

greatest investors in the world Warr

buffer Charlie manga Peter Lynch where

they beat the S&P 500 many many F they

can't avoid draw Downs look at Peter

Lynch he got a 64% return on his mellin

fund over his 13 years as a fund manager

beating the S&P 500

Trex right his annual return was

29% now if you ask people how many of

you would like to be able to get get a

29% return on your portfolio most people

say yeah me right but are you willing to

go through the Journey the turbulence to

reach the destination most people are

not willing to go through that but going

through that draw down is the price you

pay for getting huge returns in your

portfolio so take a look you can see

that during that process his fund went

down 56% 27% 42% 32% it is part of the

process so same thing for me I think I'm

not too bad an investor I've beaten the

market consistently but again my

portfolio doesn't go up every single day

week month or every single year I do

have down years as well so again I've

showed this many many times this this is

my personal portfolio over the last 6

years and my portfolio uh grew

228 over the last uh 6 years

outperforming the S&P 500 that gained

146% my compounded annual return is

21% which is way above the S&P 500 but

you can see in the process same thing my

portfolio dropped

25% during the covid

pandemic uh my portfolio dropped 30%

during the 2022 bare Market So currently

my portfolio is going to a draw down as

well so in full transparency Let Me Show

You So currently the market is down a

10% from the high the S&P is down over

5% year to date and my portfolio is down

as well let me just loog into my account

and show

you so there we are you can see that

year-to date right so my portfolio is

down

2.57% which is less than the market

that's because I don't just hold

technology companies I hold um consumer

defensive stocks I hold healthc care

stocks I've got some China stocks I've

got some European stocks so that kind of

like buffers the volatility of my

portfolio so if you accept the fact that

temporary Market declines and

Corrections and temporary portfolio draw

Downs are part of the investment Journey

and you have no control over when it's

going to happen how long it's going to

happen then you stay relaxed you stay

calm you don't get upset about it

because you've got no control over it so

that's the first point the second point

to remember is that the market price

doesn't always reflect the actual value

of the business that you own remember

when you buy shares you're owning

businesses in the short term the market

is an auction driven Market the price is

driven by demand and supply and 70% of

buying and selling are not done by human

beings they're done by high frequency

elgo robots so in the short term the

market price is driven by news emotions

and

manipulation and often times it has it's

totally different from what the business

is actually worth so if we take a high

quality company like Amazon or meta or

Google or for example Salesforce one of

the companies that I own for example in

the last two weeks the market price Has

Changed by 20% 15 20% but if you think

about it logically the actual business

is it worth 20% less no the business has

the same Revenue the same profit selling

the same products and services in fact

the business the intrinsic value is the

same the same value right it's just that

temporarily the market price gets

disjointed by the value with the value

of the business it becomes

mispriced

so as a successful investor when you nor

the shortterm market price which is like

an illusion is what people buy and sell

and you focus on how the business is

doing you don't feel like you lost

anything because remember if Mr Market

has a panic attack and Mr Market is

willing to sell his shares of Nvidia and

Amazon at 15 20% lower than a week ago

or two weeks ago you haven't lost

anything unless you are as crazy as Mr

market and you press the sell Button as

well if you don't press the sell button

then whatever price you

see is irrelevant right because you own

the same business and as long as you

have the patience to hold on to that

business over time the value of the

business will keep going up and before

you know it in a couple of weeks or

months the market price will again

readjust when sentiment changes and the

next thing you know it's going to be

back to all-time highs again you go

I should have bought more right so

whenever you got a correction it's

always an opportunity to add more shares

of high quality company that you own or

that you want to own now some of you may

say I got no more money I can buy okay

if you have got no more money and you

have no more funds to buy anymore then

you know what ignore the mar don't even

look at it go watch Netflix go watch

something for entertainment and again in

a couple of weeks or months uh you look

at your portfolio it'll probably be back

to alltime highs and you probably have

forgotten that was even a correction in

the first place third point I want to

make is that I noticed some people will

look back and regret ah I should

have sold two weeks ago at a high why

didn't I sell right never look back and

ask yourself that question never have

that regret you know why because if you

entertain this thought that oh I should

have

sold then in the future every time the

market drops a bit you will sell in

panic every time someone predicts oh

there could be a recession you're going

to sell and if you're so quick to sell

in the future you will never stay

invested long enough to allow your

Investments to compound and grow in

values so never entertain at thought all

right so question is am I buying during

this correction yes I've been buying

right so those of you in my community

you know that I'm buying almost every

day all right now I'm nibbling nibbling

nibbling as as we know during a

correction you can't predict exactly

where's the exact bottom you you don't

know exactly how long it's going to last

so you never go all in at one time so to

me as long as a great company that I

want to buy more of is under Val valued

and retrace with support level I would

slowly add I would slowly add in many

many trenches now will this ongoing

trade War really affect the underlying

businesses could their profits really be

affected the answer is yes certain kind

of businesses so especially businesses

in the industrial and Manufacturing

industry agricultural businesses

Automotive businesses retailers they

could really be affected by these

tariffs because it would increase their

imported goods and if they can't pass it

on to the consumer that would reduce

their profit margins and their share

price could drop because there's an

actual drop in profits those are the

companies yeah so for me personally as

you know I don't like to invest in

companies in those Industries I don't

like industrial manufacturing Automotive

agricultural energy companies I avoid

those compan companies because they tend

to be very cyclical they tend to be in

very competitive industry so personally

I like to buy companies that are less

prone to the effects of a recession or

are in fact pretty Recession Proof and I

like to buy companies in industries that

are not affected by tariffs all right so

what are some examples of companies I've

been adding so I just added more of S&P

Global which I already own in my

portfolio for many many years I've been

holding for many many years and every

time the price drops below the intrinsic

value I'm adding more because the you

know S&P Global is a company that again

uh is Recession Proof well I wouldn't

say it's 100% Recession Proof but it is

less prone to

recession uh it's not affected by

tariffs it's got a very strong economic

mode it's got very consistent and

predictable Revenue profits and free

cash flow right so this is S&P

Global and uh I just added more in fact

uh yesterday or was it the day before

sometimes I forget right but just I just

added more right so you can see the

intrinsic value is

$495 and the moment it drops below the

intrinsic value to my support level you

know I'm adding more now did I go all in

no because again for every stock I've

got at least three to four support

levels because you never know it could

correct to the next support level so

whenever it drops to another support

level that's how I do dollar cost

averaging I will add more and more as it

drops to lower support

levels but will it go to the next

support level again I can predict that's

why I buy one Tren first and another

stock that I just added which again I

think is pretty less prone to recessions

that I think it's got a very strong mode

that I think I think is not affected by

tariffs is crowd strike and uh I already

own 14et and I own Palo Alto which are

the two giants of the cyber security

World CR strike is a smaller company the

mod is not as strong as foret and Palo

Alto but they are growing their mode uh

and it's more of a speculative company

at this stage so I don't buy too much of

it but I found it an opportunity that

now it has

dropped below the intrinsic value of

345 and it hit uh the second support

level at

303 all right this the first support

Second support so I bought it somewhere

in between the first and second support

level so again there are many Bargains

out there but the important thing is you

know select companies that meet your

investment criteria these are the high

quality companies of course needless to

say The Usual Suspects like Nvidia like

meta like Amazon like Google and

Microsoft are looking pretty attractive

as well again to me this is not an

advice or recommendation that you buy

you got to do your own research before

you can see what fits your investment

criterias so let's get back to that

first question which is the market has

dropped 10% from the highs how much

lower can it go well again we can't

predict for certain but we can make some

educated guesses so my guess is that I

think the market will drop at the very

most another 2 to

3% that's it okay now why so again if

you take a look at history if it is not

a bare Market remember bare market

usually coincides with recession so if

it's not a recession if it is not a bare

Market a you usual correction would

normally be between 10% drop to 14% drop

so since we down

10% then like I said I'm only looking at

another 2 to 3% and I'll show you the

charts in a short while now some of you

may say but how do you know it's not

going to be a recession now of course it

could be I can't predict for certain but

at this stage I don't think uh a

recession is on the cards uh at least

not for now now and there are a few

reasons why I don't think it's going to

be a bare market so first of all let's

take a look at the uh fret economic data

and you can see what's the probability

of a recession well it has gone up uh

from it has gone up from 5% probability

to currently is gone up to

27

28% probability sorry yeah sorry 26%

chance of a recession it's still a low

probability from now now for some people

who are saying but the GDP growth

estimate by the Atlanta fed is showing a

contraction of 2.4% GDP for quarter 1

isn't that concerning well the Atlanta

fed they just clarify the reason for

this negative figure for quarter 1 GDP

estimate is because of a big decrease in

net exports now remember that when the

US exports it is positive GDP when they

import it is negative GDP so there was

the search in

Imports now all the big search in

Imports came from non-monetary goal as

you can see there was an increase in

non-monetary gold imports from 13.2

billion in December last year to 32.6

billion in January so because of this

search in Imports in non-monetary Gold

Imports that caused the net

exports here change N Net exports to

decline from a usual -

29 to -

256 so this caus the negative uh GDP

reading now if you actually take away

that Distortion because of the gold

Imports then GDP is actually not

negative it's not as bad as what people

make it out to be now the other

interesting thing is that if this market

decline is caused by the trade War then

the trade War Partners should also see a

drop in the stock market but they're not

you can see that China which is one of

the US trading partners the China stock

market is up 21% year to date and Mexico

that is also in this trade War the stock

market is up 3.5% year to date the only

one that's down is Canada right Canada

is down 2.61% but again it's only down

2% so this tells you that a lot of the

selloff May actually be an

excuse to push the market down it's a

lot of manipulation and not actually

because of the trade war or or the

recession so that's something to think

about the other thing is this if the

market truly believes that there's a

recession coming what do you think is

going to happen a lot of investors will

dump stocks and buy treasury bonds

because treasury bonds are a safe haven

when their recession fears and that will

cause the tltf to fly up and the 10e

treasury yield to collapse but it hasn't

if you look at a 10year treasury yield

it has come down from

4.8% down to

4.1% but in the last week the 10e yield

has not kept going down it's actually

been going up so this tells you that the

bond market doesn't believe that there

is a coming recession at least not for

now once again if there's no recession

it's not a bare Market it's a usual

correction then highly likely uh we will

drop to at the very most

5358 on the S&P 500 so this is uh where

I think is the lowest the market will go

so currently the market is here again

the market is down 10% from the high and

I think at the very most we dropped

another 3 to 4% to this level where the

total decline from the high would be at

the most uh 13 about

133% so again that's just my guess now

some of you may ask how did I draw all

these support levels well if you take a

look at the long-term trend of the S&P

500 let me just zoom out these are the

monthly candles on the long long very

long-term

Trend um you can see first of all during

a bare market crash the SNP finds

support at the 50 moving average on the

monthly candle so this is during a big

crash big crash big crash usually a bare

market right so that's why

4637 at the blue line that is where it

will go to if it's a recession bare

Market which I don't think it is okay so

we're not looking at this number over

here so if it's a usual correction you

can see that the market tends to drop to

this red line

all right drop to this red line during a

usual correction uh this red line is the

20 EMA on the monthly candles and that's

why uh I I added this line here

5358 and another support at 4876 that

coincides with the 40 EMA this blue line

over

there so we're looking at this level

over here so if I zoom back to the

weekly

candles uh you can see where we are

right now now if you put in a Fibonacci

retracement Tool uh you can see if you

take that as the A to B

wve uh this

5358 coincides with the

38.2% Fibonacci level as well all right

so again this is just my guess uh

there's no way to predict for certain

but again my guess is that we are going

to bottom anywhere from now to this

level over there okay okay so in the

meantime as we going through the

correction I will be slowly continuing

to add shares of my favorite companies I

hope this has been useful thank you for

listening and as always May the markets

be with you stay safe and stay

profitable if you want to catch my

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online this is Adam coup and may the

markets be with you