all right so it's the first of may the

start of a new month and time for

monthly market analysis but before that

a quick disclaimer

[Music]

so let's start off with the s p 500 it

continues to be in this downtrend

consolidation pattern we had that break

above the resistance in middle of march

when it made that first low and i

thought hey okay that's it that's the

low for the year we're now going back up

and it did go back up but then

it hit resistance couldn't break through

and came back down again

so we can't predict the the market

exactly as you guys know so we're down

again and now we have gone below

that previous support but still above

that swing low in middle of march

so i won't be surprised that the next

few days we will go lower and re-test

those slows and possibly exceed those

lows

usually a bottom forms when you've got a

double bottom

and the second bottom exceeds the low of

the first bottom so in other words it

goes below that low and then reverses

back up that could be a possibility

another possibility could be it could

test all the way down

to 17 which i did mention earlier this

year because i said that usually in a

u.s midterm election cycle the market

has been known to correct downs to 17 on

the s p 500 so

we'll see how that goes but the s p

well technically it's not in a bear

market yet although it looks like almost

every stock that we owns in a bear

market the nasdaq's in a bear market but

the snp is kind of like holding up

pretty well

uh because of energy and staples and

utilities

so in a way i agree what some of you are

saying that

this actually feels like a bear market

it's kind of like a stealth bear market

where again a lot of the companies we

own are down 20 30 40

but the snp doesn't show it's a bear

market because it's being held up by

certain parts of the market like i said

the energy the utilities the consumer

staples but

even though it's not a bear market it

might as well be a bear market because

most of our stocks are down more than 20

which are going to depth in the

portfolio review so

year to date the s p is down

13

all right and the nasdaq is in a bear

market so bear market means the market

closes 20

below the high

and if you look at the nasdaq yeah

we are down

uh back down below

the march lows so again it this could be

a sign of a double bottom you never know

right it could double bottom if it forms

a strong bullish candle we could reverse

back up next week

we'll see how that goes but

bad news is that it's below the 20 peak

so nasdaq is in a bear market

so nasdaq is down 23 smp is down 13 now

my portfolio is down 27 year to date

this is a bigger drawdown than what i

had in march 2020 during the kobe crash

during that crash my portfolio was down

26 now it's down 27 this is huge now

a lot of investors would feel upset or

feel scared oh my god what's happening

my portfolio's down like 27

uh by the way in terms of dollars i'm

down like 1.3 million from the top okay

now i'm not upset i'm not

worried i'm not fearful in fact i'm

still pretty optimistic pretty excited

it's not because i'm crazy it's because

i've been in the markets for 30 years

i've gone through so many bear markets

i've been through so many corrections i

went through 2000 2008 i went through

2018

i went through the march 2020 crash

and after every bear market after every

crash i always got richer eventually

every time my portfolio dropped by you

know 20 you'll go up 50

or 100 in fact in march 2020 when my

portfolio dropped 26 during the mid

of march sorry march yeah march 2020

it ended the year

up kind of like about 48

and then the following year 2021 my

portfolio was up another

46

and then so overall after dropping 27

percent my portfolio went up 100

right so

this will be no different yeah my

portfolio may be down 27 right now but

by the end of this year or maybe next

year or the year after that it's going

to be up like 50 100 i know that for

certain because i'm invested in great

companies

that are undervalued and you will always

go up they always go up eventually uh

maybe not now maybe not next week maybe

not next month but they will go up

eventually so

my confidence comes in understanding the

the businesses that i own

now as usual i'll go through all my

stocks in detail in the portfolio review

videos now some critics would say but

adam if you're so smart why are you down

if you're so smart you could have seen

the crash coming you should have sold

everything at the top

and shorted the market at the top and

bought commodities and now you wouldn't

not be down at all you'll be like up

every year every day every month

well it's because i don't have a crystal

ball dumbass and no one is a crystal

ball so the reason why a lot of people

fail in the markets is because they come

in with unrealistic expectations

thinking that

as a great investor you can see the

future you know exactly where's the top

exactly where's the bottom and that's

why most people fail because they come

in with these naive expectations

hey even the greatest investor in the

world warren buffett who's been

investing for the last 80 years

his portfolio doesn't go up in a

straight line it goes down as well in

fact he has seen his portfolio drop like

up to 50

more than four to five times in his

career

and there's only one guy on wall street

whose investment portfolio never goes

down it goes up like every single year

without fail has never dropped at all

and his name is

bernie madoff

who was found to be the greatest scammer

and fraud on wall street because all his

investments were all fake it was a huge

policy scheme and

uh you were sent to jail for 100 years

and he died in jail right so the point

is this the point is if anyone tells you

that they can see the future they can

sell at the top they can buy the bottom

it always goes up it's a freaking fraud

okay it just doesn't exist so if you

think that we grow up okay don't be so

naive all right

so

so like i said i'm not i'm not uh

fearful i'm excited because i know that

it's part of their journey

and

it's kind of like marriage right you

can't have a great marriage without

arguing once in a while and after every

argument that should strengthen your

marriage it's unrealistic to think that

you know i'm gonna have a marriage for

like 50 years never argue happy every

single day yeah try try that go ahead

best of luck

it's the same thing with a business in

business

you can't always have sales you've got

to have sales and cost of goods sold and

that gives you profit so i look at my

portfolio the same way my portfolio goes

up it's like sales sales sales but i can

have sales all the time i got to have

some course once in a while

before the next sale and remember that

the market is kind of like a breathing

pattern right breathe out

breathe in breathe out breathe in no

matter how strong you are you can't

breathe out forever it's impossible you

can't

right you've got to breathe in

once in a while before it can breathe

out even further so the market is

designed in a way that

you have to take one step back

to take three steps forward and

sometimes you take three steps back like

now or four steps back to take eight

steps forward so once you understand

that that's how the market works you

don't get upset you don't get concerned

during these drawdowns you expect it you

anticipate it and you

go with the process you enjoy the

process and

and why not you know i always say enjoy

the journey it's not just a destination

it is the journey

and i tell people that if you

buy a portfolio of great companies

underlying good businesses and you buy

them at reasonably good prices you don't

have to buy at the bottom as long as you

buy them when you're undervalued

collectively it is impossible to lose

money

it is impossible to lose money because

eventually

they will go up again to new all-time

highs right the only way you can lose

money is

if you sell halfway

at bottom prices because of fear because

you panic halfway you know and as long

as you invest with money you don't need

urgently you don't invest with board

money there's no one forcing you to sell

you just

just hold it through those

ups and downs so as i always like to say

the stock market is like a roller

coaster

and the only people who get hurt on the

roller coaster are those that jump off

the right halfway if you stay in the

ride and you know enjoy the roller

coaster you will reach the destination

uh eventually

so let's take a closer look at what is

under the hood of the s p 500 again the

index is down 13

not that much but my portfolio is down

27

and i would guess that for many of you a

lot of the companies that you hold

are down more than 20 so you may say why

why am i underperforming the market now

the reason i am underperforming the

market so far this year so far this year

i've mentioned before is because my

portfolio is concentrated into

technology companies

consumer discretionary

communications company which so happens

that now these are the ones that are

down the most these are the sectors that

are down the most if you take a look at

year to date you can see ooh

communication services

like facebook for example disney is down

24 percent right technology like your

microsoft and your

uh viva and your sales force is down 23

and consumer cyclical which are consumer

discretionary stocks like nike and so

and so forth that i own is down 22 so

my portfolio

is concentrated in the three sectors

that are getting bashed the most so far

this year and of course i've got a bit

of healthcare

i've got a bit of real estate and a bit

of industrials which are also down 11

so in my portfolio i don't have any

exposure to energy

i don't have any basic materials

consumer defensive i have

a few and i've got no utilities so

notice that these are the ones that are

propping up the market and that's why

i'm underperformed because i don't have

these sectors and i mentioned

uh why i don't have these sectors

because

in the long run

uh

technology communication services and

consumer cyclical

and healthcare and financials in the

long run these sectors outperform the

market because these are the sectors

with the highest growth with the highest

profit margins

and with companies with the strongest

economic modes

by the short term they're not doing well

because the market sentiment is kind of

like

you know

going away to away from growth away from

innovation and towards all these safe

safe

uh kind of

sectors right

so

should i sell my stocks

and buy these ones that are going up

that's what some people are doing right

they sell the out of favor and buy the

ones in favor and like they want to

catch that trend so i don't want to do

that because right now these sectors are

pulling up the market but they are

overpriced and

in the long run they don't perform so

i'm gonna stick with the sectors i have

and use this opportunity of a big

drawdown to slowly keep buying shares

into the company because i always say

that this is a crisis

and never let a crisis go to waste use

it as an opportunity so that when it

turns around and markets normalized you

would really really outperform the

market again and make a lot of money so

i've got no doubt of that and i'm

sticking to the investment plan that's

he always stick to investment plan and

don't change it halfway and go chase

what looks nice and abandon what you

have right

there's a very old saying

in hockey ice hockey uh by wayne gretzky

this hockey great he said don't skate to

where the park is right now you know

those parts which they hit with that

stick right don't skate to where the

park is right now skate to where you

think the park will go to uh in the next

couple of seconds right so that's what

we do in investing now if you take a

look at the s p 500 look at the

component companies you can see that

again the majority of the

the great companies the one if growth

the one with uh strong economics they're

the ones that are getting hit the

hardest in this very strange market

right so amazon was 25

right that's a big position i have i've

got google big percent down 20 i've got

facebook down at 50 i've got microsoft

that was 17

um

but the other ones that are green

holding up the market are the energy

stocks right these are all green these

are all going up but i don't own any of

them because in a long run energy

companies uh have low profit margins are

unpredictable and they underperform in

the long run right so i don't touch any

of those and again no regrets not going

in uh in a short term because i'm

sticking to my plan right health care

i've got a bit of health care

should have bought more but i've got a

bit of it so that's kind of like holding

my portfolio up but

that is what's doing well so far this

year and i've got some of these

financials as well

and of course basic materials

commodities also are pulling the market

up so if you're like me and again your

portfolio is

uh underperforming the market and you're

wondering why am i down 20 30 when the

market's only down 13

uh you're not alone right a lot of us

are going through that including me but

don't worry when things turn around it

would flip the opposite and you will way

outperform the market

okay

now

first the bad news and then the good

news well actually there's no such thing

as bad and good news it's like what

master oogway says in kung fu panda

there's no good news there's no bad news

there's just

news

alright so

the bearish news right the bearish news

is this

this year has been pretty historical

because from january to the end of april

uh we have seen the worst

four months

not the worst the third worst four

months

since 1932

okay

so we can see that right now we are down

13

for the first four months of the year

and this is the third

worst decline

in the last

uh

90 years okay so it is a historic moment

so be proud that

you are going through this right and

you'll get out of it

uh stronger okay so

what was worse was 1932 it was down 28

for the first

82 trading days january to april 1939 it

was worse as well so we are the third

worst then it was 1942 down 11 1970

and so and so forth right now

for the two years that

were worse than what we're going through

what happened

from may to the end of the year so what

happened in the next three quarters of

the year

was that the market gained 18

okay so normally when you got a really

bearish

first half

or first quarter you tend to the bullish

second half

that tends to happen most of the time

right so although 32 ended down

but it ended down 14 not as bad as

uh how it started right so 1939

again the second part of the year was

bullish and it kind of like paired a lot

of those early losses but it still ended

down five percent right so this year

um we're we're we're just finishing that

first uh quarter of the year

and the second quarter i'm pretty

optimistic that we will be bullish in

the second

uh part of the year all right and we may

still end down but chances are we won't

end as down as where we started this

year all right and of course there are

times when you end down the first

quarter but you could still

end up

and the the year up by the end of the

year so you never know right of course

you could get the entire year down as

well that's still possible but you can

see more often than not

uh the second part of the year

tends to

uh be up if the first half is down not

all the time but

tendency so

that's the more bullish news

so i do expect we should have that

bounce now

so what must happen for the market to

change sentiment so the main thing

that's pulling the market down right now

is this high inflation right is this

high inflation that's causing the fed

to be forced to raise interest rates

very fast and to tighten their monetary

policy

all right and of course this inflation

is being

exacerbated being made worse because of

the war

and because of supply chain problems

because of china's covet zero policy so

for the sentiment to turn what needs to

happen what needs to happen is we need

to see

inflation start to

peak and come down

so for that to happen

uh what would help if is if there's a

kind of like a resolution to the war

number one number two uh china begins to

loosen its covet zero policy so supply

chains get moving again and supply is

you know

more flexible and that would bring down

inflation number two

the third thing is

inflation will also come down naturally

uh as demand starts to drop

as prices get too high people want to

cut back on their spending as more gauge

rates go up naturally demand will go

down so all these factors combined is

what we need for the market to to turn

around now

this is from larry williams who's a

legendary trader who's probably been

trading the markets longer than i've

been alive in this world he's like i

think like 70 or 80 years old right now

legendary trader and

what larry does is he does a lot of uh

forecasting of cycles

and one of the interesting

uh forecasts that he did was of um

inflation and you can see that inflation

like everything else follows the cycle

right so there's a you know this cycle

goes up and goes down and goes up and

goes down so this blue line represents

the cycle and this black line represents

the actual inflation data and you can

see that going back to

1980

30

plus years ago

it's pretty accurate right you can see

the cycle it goes up right comes down

right goes up i mean it's not perfect

but you can see that cycle

you can see that cycle right here

and right now where are we on inflation

we are right up there at about eight

percent inflation rate

and it looks like we are nearing the top

of this cycle that it should begin to

turn down now based on this cycle

forecast this

should happen somewhere

in june early july

so in other words latest and june early

july when inflation peaks and begins to

come down that's when we may see

sentiment begin to shift

and the market go up really strongly now

it could happen before that maybe it may

but it could be up to even june and july

and again these other slides are from

larry williams i do suggest you watch

his great

video

on youtube you can just type larry

williams and you know uh his credit is

like he's his slides not my slides but i

kind of like i want to share because i

think it's really good and you can see

that whenever inflation

peaked and cut came down that was a

great bottom in the markets right you

can see over here

inflation peaked came down and market

bottom market started rarely rallying

right uh inflation peak came down uh

market bottom rallied after that

inflation peak came down market

uh rallied after that so

you can see that pretty uh consider

consistent pattern here right again

inflation p came down market rarely

market bottom and went up inflation p

came down market bottom and came up and

so and so forth and again where are we

right now if you look at where we are

currently we are here right inflation is

really at a super all-time high the

highest in like

what 40 years right so it's gonna peak

eventually right so once that peaks and

and it comes down right in the next one

or two months then the market would have

a reason to to turn around

so that's something that i'm looking at

i'm also looking at this bottom fishing

indicator this famous indicator which i

pulled out during the march 2020 crash

and you work then

let's see if it works now okay so again

for this to work um

i'm looking at the s p 500 on weekly

candles

and there are two indicators the first

is the williams percentage r

52

we close

and the normalized atr

so these are two indicators

now what makes it pretty powerful

if you look at history every time this

line this willem's r

drop below minus 80.

can you see minus 80 is the oversold

level right so here it dropped below

minus 80.

it dropped below minus 80 here

here here here and here right so every

time it went below minus 80 it tells you

that the market is oversold like a

rubber band

is gonna it's over stretch is gonna snap

back up

but you can't just look at this alone

you have to also look at normalized atr

so the pattern we have found is that

when normalized atr

goes above 80 which is this line over

here whenever this goes above 80

and this goes below minus 80 and they

happen at the same time

they coincide that tends to be a pretty

good bottom

in the markets

right coincide bottom in the markets

coincide bottom in the markets coincide

bottom in the markets coincide bottom in

the market so right now you can see that

this

has dropped below minus 80 and it's not

easy to get below minus 18.

this has happened

one two three four five only five times

in the last 14 years so it's not easy to

get below that so we are below that

right but this normalized atr

went above 80

but is now back below 80. so

this signal is not yet valid right so if

this goes back above 80

and

this stays below 80 that would be a very

powerful bottoming signal so i'm

watching this closely to see uh when

that would take place

all right so again i'm looking at many

things it's not just one thing i'm

looking at inflation i'm looking at this

to see you know where could we see a

bottle but remember as investors

we don't have to predict the exact

bottom we don't have to

buy at the exact bottom as long as we

buy consistently when it's undervalued

you know and we average in opposition as

long as it's somewhere near the bottom

it's fine you know we will make a lot of

money when you rebound eventually we

don't have to catch the exact bottom and

i'm doing this more for

entertainment purposes right it's not

critical to make money we will make

money regardless of whether

we we catch the bottom or not

the other thing is the fear and greed

index

so right now the fear and greed index

is at 27

which is still at the fear stage so if

the market goes down a bit more in the

next few days we could go to extreme

fear

and extreme fear is good because when

the market gets really scared people are

their pants that tends to

coincide with a market bottom right you

can see here oops

whenever we have got again extreme fear

which is

about below 25 right below 25 extreme

fear

uh market tends to find about extreme

fear market tends to find the bottom

extreme fear

market tends to find the bottom extreme

fear market tends to find a bottom so

right now extreme fear not yet

but

akanda tang coming soon to a theater

near you let's see how that goes uh the

other thing that i'm looking at is of

course the fix

the fix is the volatility or the fear

index and you can see every time this

sucker gets above 35

that means there's extreme fear

and again that tends to coincide with

the market bottom

all right so right now you can see or it

went all the way up here to 85 this is

the kobe crash

now as of now a friday it touched

33.

so like i said if it goes above 35

this coming week we got really high vix

that could signal uh a bounce in the

market all right so watching all these

things very carefully

now some people have asked me whether is

it possible that this

snp goes into a bear market

and we've got a really bad recession and

this bear market is as bad as 2008 or

the year 2000 where the bear market

lasted for like

two years and we go down for two years

and we take another three years to go up

is that possible well everything is

possible but i don't i still don't see

that happening i don't see

a protracted recession or bear market

like in 2008 or the year 2000 because

some people are saying hey what if like

you know this is actually the beginning

of this long crash

so why don't i see that because remember

that

in 2008 2009

there was a lot of systemic risk in the

market where the banks almost went

bankrupt they were holding all these

assets that went to zero these

mortgage-backed securities millions of

people lost their jobs all right we

don't have that here we have got

unemployment

at a historic low we have got wages

going up people are employed

it's a bit different banks are well

capitalized

uh consumer balance sheets are strong we

don't have that systemic risk

uh or during the dot-com crash when many

of the tech stocks that time were not

making money but if you look at the

companies that are dropped so much like

amazon and facebook or even tesla or

even

a microsoft they are making money they

are making a lot of money so it's a very

different situation

of course we could have systemic risk if

uh freaking putin goes nuclear right i

mean if there's world war iii and

nuclear i mean sure that could really

create systemic risk but

unless that happens right now there's no

major systemic risk in the markets now

some people say but adam you know

we just had an announcement that gdp

came in negative

and everyone was shocked that gdp was

negative and as you know a recession is

defined as two quarters

of negative gdp growth and we just had

the first quarter where gdp for the

first quarter of this year fell 1.4 so

is is this does this mean that we're

halfway

into a recession

maybe we could have a technical

recession a technical recession is a

recession where

it's very short and sharp right and even

if we do get a bear market you'll be one

that's a pretty fast bear market not

like a protracted 0809 2000 now

if you actually break down this first

quarter gdp decline there's some silver

lining behind it here's the silver

lining normally

um one of the biggest contributions to

gdp growth in the us is consumer

spending that's the most important part

of gdp and the good thing is that

consumer spending was actually up

although lower than expected but

consumer spending still rose 2.7 percent

business spending

also rose 9.2

so the only thing that caused gdp to

drop the first quarter was

a trade

now trade was a negative

negative 191.6 now

this is a technical reason why this

happened right now

understand how they calculate this when

the u.s imports things

it's a negative

it's a negative to trade when the export

is a positive all right so in quarter

one there was more imports

than exports so there's this trade

deficit that causes negative now why did

this happen reason

is because in november and december last

year

there were a lot of imports that were

supposed to come in but the ships were

stuck

along the coast of california you know

they they couldn't dock because of covet

uh restrictions and all those things but

now the ships

can come in and they're unloading these

imports and they record the imports in

quarter one this year that's causing a

search of imports in quarter one hence

causing the trade deficit causing trade

to um

deduct 3.2 percent from gdp right and

the second reason is because of

inventories there's a drop of

inventories of uh 0.84

to gdp reason is because

initially there was a lack of inventory

and then what businesses did last year

was they build up their inventory stock

and now that their stocks are full they

got enough inventory to meet demand

uh they don't need to build inventory

anymore so inventories are kind of like

declining

right and that's why you've got that

negative uh spin to gdp so in other

words the gdp number is not as bad as it

looks if you actually

go below the surface of why that has

happened

now interestingly uh the last two or

three days the you know everything came

down right bonds went down the u.s where

every bloody thing when a crypto went

down something that i don't touch

everything went down the only thing that

went out was china so i'm not surprised

that this year china could actually be

the best performing market in the world

maybe i don't know right

so some good news for those of you

holding chinese uh equities like me i

have got a 12 allocation right now

china now is saying okay

uh they are going to end their

regulatory

crackdown over the technology companies

and they are now telling the big tech

companies okay we're gonna we're not

gonna screw you anymore we're gonna let

you grow and we need your help to grow

the chinese economy because right now

it's in a sluggish position and the

chinese government is now kind of like

doing their best to stimulate the

economy spending on infrastructure

spending and because of that hallelujah

chinese stocks had a huge rally uh in

the last few days so alibaba

tencent mate one went up um you know 12

to 15

so some people are skeptical that can he

sustain

um

i think it could i think it could and i

think that the the laws of the china

markets are in i don't think we're going

lower anymore i think it's a matter of

consolidating and from here there's

going to be a lot of

upside for chinese equities so this has

been our monthly

market review and analysis

and i'll see you guys in the portfolio

review videos where we go through in

detail all the stocks in my portfolio

the revised intrinsic values and the

revised buy points of where we can

continue to build up positions in good

companies i'll see you in the next video