hi this side of a cool here and welcome

to the second installment of this lesson

on the bull market in stocks is bad

strategy playbook edition we'll be

talking about how I manage my portfolio

in the markets right now now if you have

not watched my first video on the bull

market in stocks is back go watch it

right now

that's right turn this off watch it

first video and come back to this

alright so in my earlier video I talked

about the fact that the current bear

market is dead and we have just given

birth to a new bull market now this is

not a call to mind definition this is

the official definition why a bear

market is defined as a drop of 20% from

the higher of the market so you can see

that was the high beginning of the year

3 3 9 3 and we fell into a bear market

in record time alright so it hit the 20%

mark so officially we went into a bear

market right here the market continued

going all the way down to minus 36% from

the hind which is the average drawdown

of most bear markets in the past hundred

years and then something happened it hit

a low of two one nine one and the market

started reversing on bad news with a

huge bad news there was high

unemployment market kept going up now a

bull market is defined as a 20% rise

from the law of the market now again

this is not my definition it's the

official definition from doubt theory so

this as you can see is the 20% mark from

the lows and we achieved that so since

we keep the lowest the market surpass

the 20% mark and we are right now here

which means by definition the bear

market is dead and the bull market has

begun now this is despite the fact that

the economy is already in the recession

and it will get worse more people will

lose their jobs more businesses will go

pass but the stock market doesn't care

about that because the stock market is

not the economy the stock market is a

leading indicator of the economy where

the stock market price

in the future six to nine months from

now so the stock market knows that this

recession would not last really long

that eventually things are gonna recover

and the stock market moves up in

anticipation of the recovery now the

interesting thing is when I posted at

last video I had like 600 comments and

the majority of the comments were

bearish and you were saying no is what

going on is going down on you crazy

affects our people most yeah some

people were upset like these were some

of the comments right this video is

irresponsible

this guy's clueless your clown you're

crazy the markets going back down some

people really upset you know why so down

they must be from the DC Universe

but jokes aside you know so why some

people so upset no wonder why could it

be there these are the people who

actually saw Leah stocks right at the

bottom just before it recovered and

you're pissed that they missed the

recovery could it be that all these

people are short on the markets and as

markets are going up they're getting

their balls squeezed I don't know right

but the interesting thing is is it's not

just a lot of these comments but when

you listen to CNBC and you watch a lot

of comments by investment experts most

of them are actually indeed bearish

that's right right in fact this was

something that I saw over here that 74

percent of the investment experts are

bearish and they believe that the market

will hit a lower bottom and here's the

irony behind this the irony is that when

I read all this and I find that most

people out there are bearish they expect

the market to go much lower ironically

that makes me more bullish why because

you know I've been in the markets for

the last 26 27 years and one of the

things that I realized is that a market

tends to do the opposite of what the

majority thinks that's right when most

people think is going to go down down

thing goes up when most people think is

gonna go

dad thing goes down and you know all the

things said by Jesse Livermore what the

greatest traders that ever lived was

that the stock market is never obvious

it is designed to fool most of the

people most of the time we live O'Neal

from investors calm right he says that

the market moves to disappoint the

masses Bernard Baruch I think that's how

you spell pronounce his name

a legendary invest in the process is the

main purpose of the stock market is to

make fools of as many men as possible so

why does the market tend to do the

opposite of what most people think well

here's the reasoning behind that now

remember what drives stock prices our

demand and supply right so when there's

more demand for stocks than supply of

stocks prices go up okay when supply of

stocks that means the a lot people

selling shares exceeds demand what

happens price goes down correct makes

sense now when you hear that the

majority of people are bearish majority

of people expect the market to go down

now what do you think they have done

that's right that means most people have

already sold their shares or they have

shot at the market so in other ways they

a lot of short positions out there in

other words a lot people who have sold

your shares there very few people

holding on to shares right now so in

other words is supply or demand higher

right now for shares the answer is

supply is very very low right now

supplies revenues because the ref you

shares available for sale because those

are available for sale have already been

sold does make sense so that's ready to

supply of shares out there so in other

words right now as the big value

investors they begin to see value in the

markets they say you know things are

undervalued right and II believe in the

recovery what we do to buy shares people

arguing right so once you've got a bit

of behind a bit of

man and it was a suit little supply once

the demand exceeds the supply stop

prices rise and that's a reason why the

market was the opposite of what the

majority think so as a professional

investor what's my strategy right now

how do I manage my portfolio what's my

playbook so before I share that let me

make a disclaimer in case people accuse

me of being irresponsible you know

you're gonna tell people do the wrong

thing Hey

yes - Clayman I'm not giving financial

advice I'm not telling you what to do

for goodness sakes I'm not a licensed

financial adviser I'm a professional

investor investing my own money I've got

my own skin in the game I can share with

you what I do all right should you

follow me absolutely not

follow your whole strategy never follow

someone else's strategy this is one of

my portfolios of multiple portfolios

that I have and you can see that I put

my money where my mouth is right so I

shares almost every single day I've got

multiple accounts one of my accounts

which is about eight hundred forty-one

thousand dollars it was for nine hundred

grand and the beginning of the years was

slightly down because you get down the

highs but eventually it's gonna be

neither okay a million two million three

million a lot higher really confident

that and this is one of my other small

accounts she about four hundred grand

and again you can see that most of my

positions are not above water because I

was buying adding shares right at the

bottom of the market last week okay so

what's my playbook what am I gonna do

now

moving forward so let's go back and take

a look at the charts all right there we

are okay so like I said right officially

the bear market is dead and officially

the bull market in stocks has begun now

people have been asking me this question

and how long do you think this bull

market is gonna last one day one week

one month one year I don't know right I

can't predict the future now is it

possible that this bull market lasts for

a few days

dies and the bear market comes back sure

everything is

well heaven you watch those horror

movies when you kill that monster that

bad whatever it is and the guy

resurrects and comes back parks second

round of course it's possible and that's

why it's professional investors you

always gotta have a plan a a plan B in a

plan C so you know exactly what to do in

every single scenario so that in every

scenario you win you make money it's not

whether you're right or wrong is how

much you make when you're right and also

how much you make when you're wrong I'm

gonna show you how I do that right now

so let's get a chance so again this is

the S&P 500 and so let's look at the

various scenarios and the first scenario

is that the bull market continues all

the way to the previous all-time high

and continues to a new all-time high

that's the first scenario so in this

same scenario would I add chance right

now no I would all right I've already

added shares somewhere there if you

looked at my previous video I've also

been adding shares almost every day over

here now would I add more chairs right

now no I won't by the way if you wanna

know exactly when I add shares you can

subscribe to the ultimate investors

playbook and in the private telegram

chat group right you get to see me

invest live every single day right

anyway so like I said I won't add shares

right here wine remember that nothing

goes on a straight line okay this would

not go in a straight line what goes up

must come down

before going higher you gotta see a wave

pattern so we've got wave back

wave down weave up wave down and so and

so forth so right now over here we have

a with a pattern and we've got a wave

down so this is a weave up never button

we've up wait for the wave down so gonna

wait for weave down first now how much

would it drop okay now no one can

predict for sure but one way is to use a

Fibonacci ratios okay so we call this

the start of the impulsive with a and if

we get a reversal pattern over here on

Monday that would be the end of the

impulsive wave so it would

trés now you can use Fibonacci to kind

of like guess the retracement so click

on a drag to be so it should retrace to

the 50% or the 61.8% level so we are

expecting a wave down to here and what

we want to see is we want to see make a

low higher than the previous low so if

we start to see higher highs and higher

lows that would be very bullish and then

we could add more shares here to catch

the next wave up and of course you can

wave down add more shares with any

continues again bear in mind when I say

add shares well you could as an investor

just buy the SMP 500 ETF Nori's but you

buy individual stocks you gotta be

careful not all stocks will recover some

stocks will drop and never come back

okay you could be really careful right

so you know I highly suggest learn how

to pick fundamentally good companies

stocks that's what I teach my value

momentum investing cause the real

investor for example so for me I will

never buy Airlines right oh I dunno why

on earth Warren Buffett bought Airlines

to me it's too competitive and industry

I'll never buy those cruise stocks

I would buy oil and gas stocks right

because these companies their balance

sheets are very weak they are losing

money every day they could go bankrupt

they could they may never recover right

so I want to only own shares where their

sales and profits are hardly affected

affected by the lockdown in fact your

sales and profits may be boosted by the

lockdown for example and people at home

they have to order things from Amazon

Alibaba they still go on Google they go

on YouTube click on Netflix we call this

the recession-proof stock so these are

these are the stops that I buy because

these stops their sales and profits

continue to rise

in the recession and they've got very

little debt very strong cash so you know

that even if it goes down temporarily

because of some panic in the markets it

would go higher eventually and these are

the only stocks that I want to have in

my portfolio this make sense right so

like I said when I say excess you could

add the right chance and the wrong share

is gonna go down and never ever come

back okay

so again that is scenario number one

right the boom market continues we go

back to all-time highs probably in July

August and we make new highs and

hallelujah now that's a first scenario

second scenario again everything is

possible remember that as an investor

okay you can always have a plan B right

no matter how much you believe in plan a

it's kind of like no matter how much you

exercise and eat right you're gonna buy

health insurance because can happen

then you don't expect right no matter

how much you love that plus you get

married always have a back-up plan

alright have a prenuptial agreement so

if goes wrong you can bail out okay

so what's the plan B so is it possible

that this boom market does not last very

long and the bad comes back for a second

round sure it's possible so we have to

watch this level where this bear market

that started right we could have be

going down this fear shot some boom up

here that hits the resistance and it

makes a new law over here so what is

this level again we use Fibonacci to

calculate so we take this as the a start

of the impulsive wave be the end of the

impulsive wave where is the level of

resistance it'd be here right so click

on a drag to be there we go so that's

the 50% retracement 61.8% retracement so

these two levels are very important

levels to watch

you can see right now we are right at a

50% retracement level so many bearish

people if they hey it's hit the 50%

right and he's gonna go all the way down

to make a you know a double bottom of

course everything is possible it could

happen okay so for me what am I watching

I'm watching this level over here

remember like I said this will likely go

down but again if it goes down and makes

a higher law than this then the bull

continues but if this goes down and

closes below this load right if it

closes below this low ooh then it's a

chance that bear resurrects and we make

a new move that is possible now if this

happens what do I do as an investor very

simple if it goes even lower I'm happier

why because I've got fundamentally very

good companies and if it's cheap enough

I buy more shares see when you own very

good companies you don't care it goes

lower because you know that eventually

it's gonna go much much higher in a year

or two because they are fundamentally

good companies not the airlines not the

cruise companies not the oil companies

they may never come but good commies

will always block so I'll buy more

shares so because I'm happy because I'm

also happy I'll buy more shares at the

same time he goes down I also want to

make some short-term profits so that's

when I use options okay so I'm a big

options trader I use put spread options

so that when a market goes down and

genetics shot the profits and I can use

the shuttle profits my put options to

buy more shares at a lower price and

that's why I says a professional

investor you make money in any direction

it goes up you're happy it goes down

you're even more happy who cares where

it goes because in a long run you will

always make money if you hold great

companies and you love to short the

market to make short-term profits if it

goes down all right now let me show you

how I use put options to generate

profits if we close below this low and

we make a double bottom

now again you have not let options yet

you can always take my professional

options trading course they are

available at periodic profits but anyway

let me show you what I would do right

now so what level is this let me draw a

line to determine the level so this

level is about two four four zero okay

so like I said if the market closes

below two four four zero I will go short

using put options and make money as it

goes down to make the new note you know

whatever maybe may go down to two one

eight zero for example it may even go

down to two thousand right that is

possible if we make a fifty percent drop

from the top okay so what I do is I will

then go to my trade that over here and I

could buy a put spread option that lasts

for say 30 days okay say 32 days okay so

I'm looking at put options I'm looking

at 32 days to expiry and I'm looking to

buy the two four four zero put options

and simultaneously sell the two one

eight zero put options because when I

sell these put options I collect the

premium to finance my two four four zero

put options so that lowers the cost of

my short trade so let me show you how

that's done so let me look for two four

four zero

okay there we go right so two four four

zero I'm gonna click by and I'm gonna

buy a vertical spread okay all right so

two four four zero and my target price

let me see where it is again so my

target price could be two one nine zero

two one eight zero let me check that out

so it could be 200 zero

over here

okay so you can see that by taking this

trade how much would it cost to take

this trade the short trade it will cost

$22 right now one contract is a hundred

shares of the S&P 500

so one contract be twenty to forty five

times a hundred it will cost me two

thousand two hundred and forty-five

dollars to buy one contract of these

food options so the worst that can

happen is that that is my cost of

insurance okay now if the market does go

down how much money do I make

let me show that to you so I'm gonna

click send over here and you can see

that my maximum profit from the trade is

twenty three thousand dollars that's

right $23,000 $23,000 and how much does

it cost for the trade my maximum loss is

two thousand dollars to two four five

okay

so that's not bad so that's a risk

return ratio of 1 is to 10 so if the

market goes down and bending one dollar

to make ten dollars so every quarter I

buy I'm gonna make 23,000 dollars now if

I my 10 contracts I'm gonna make a

quarter million dollars so I'm pretty

happy if it goes down I make a quarter

million dollars I take that quarter

million dollar profit I buy more shares

of good companies when it goes up

eventually I make even more money all

right so that's really cool now if two

thousand dollars is too much money for

you and you say you know I kind of

thought 2 grand Nori's you can buy put

options on the S&P 500 ETF which is the

spy which we won't tempt the price so

instead of 2 grand you only have to use

about two hundred dollars per contracts

you can also do that as well so again if

you're interested to learn more about

how we trade options no check

professional options trading cards so I

do hope this video has given you more

insight on how professional investors

make money consistently in any direction

see you soon guys stay safe and Meena

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