[Music]

so the stock market is looking exciting

again especially if you are a value

investor like me in the last uh 10 days

we have got the S&P 500 falling from its

high in mid-February down uh over 5%

you've got the NASDAQ down over uh 8%

and then individual names we've got

Nvidia Down 2 6% 26% from the highs

Amazon down like 16% so what's happening

why is the market going down well there

are three main reasons number one terce

number two Doge number three seasonality

now the first reason is obviously Trump

going ahead with tariffs on uh Canada

and Mexico he went ahead imposing 25%

tariffs as of today as well as doubling

his tariffs from China and what are

these countries doing yeah they're

fighting back so this is Crea

the trade War 2.0 now the Canada and

Mexico and China version if you recall

1.0 was back in 2018 when the trade war

was just with China alone and what

happened then if you recall yep it

created panic and the S&P 500 fell

20% right it didn't actually trigger a

bare Market because bare Market means

that the market has to close below 20%

but in this case the market just touched

20% and and then the and then it flushed

out and the market went all the way back

now could this happen again could the

market drop 20% it is very very possible

now that you've got Canada and Mexico

together in this trade War so it's very

possible Market could go a lot lower if

Trump really gets aggressive and they

really fight back of course in addition

to the terror the second thing that's

causing what we call a growth scan of

markets the market is now concern that

the economy is not going to grow anymore

is of course Doge and of course I think

the intention of Doge is very good cut

government waste reduce the federal uh

the national debt I think that's

fantastic obviously in the long run but

of course in the short term it's going

to cause some pain because a lot of

people get retrenched from the

government right so in fact latest

numbers show that in in wash Washington

DC the unemployment claims have

quadrupled in the last one month okay so

you've got the tariffs you've got the

Doge and that is all showing up in the

GDP numbers so if you look at the

Atlanta fed which tracks realtime GDP

you can see this uh news headline that

came out a few days ago that now first

quarter GDP for 2025 is negative for the

first time in many many quarters uh in

fact if you take a look at the latest

Atlanta fed GDP now data it's now

projecting GDP for quarter one at minus

2.8% uh it was positive 2.3% just a week

ago so this is a huge reversal and

you've got two negative quarters of GDP

that's a recession so could we see a

recession this year it is very possible

uh again if Trump continues with the

tariffs gets more aggressive and Doge

continues firing a lot of federal

workers this can indeed happen so what

is actually causing the GDP data for

quarter one to turn negative well if you

dig into the numbers you can see that

the main reason uh why GDP has turned uh

first of all 1.5% and now

2.8% the main reason is you can see here

change in net exports so historically

it's been like - 26 - 29 - 27 right but

suddenly it on the 20th of February it's

- 248 and now it's minus

238 so why what has caused this huge

change in net exports well is because

the Imports into the US have jumped from

5 suddenly to 20 29.7

and 26 now remember when you calculate

GDP uh

Imports uh reduce GDP exports increase

GDP so when Imports are more than

exports GDP drops so why thees sudden

search in Imports very simple think

about it if you are an

importer and you think that Trump is

going to impose 25% tariffs uh on the

4th of March what would you do that's

right you will import everything as much

as you can before the tariffs come into

effect right to avoid the tariffs so

you've got this sudden search in Imports

before the tariffs go en force and that

creates this huge number there and then

reduces GDP tracking GDP for quarter one

now is it a guarantee that quarter 1's

GDP will indeed be negative of course it

is not a guarantee this is a tracking

data that is updated regularly right so

of course this could reverse and by by

the time the actual GDP is released uh

it could be positive well hopefully so

now of course it doesn't help that

seasonality shows that usually uh middle

of February the market tends to sell off

so if you take a look at this chart you

can see that this is the S&P 500

seasonality Index that goes back over

the last 20 years and you can see that

based on seasonal patterns uh the S&P

500 indeed tends to Peak uh in

mid-February sell off uh all the way to

uh mid of March all the way negative for

the year before it takes off for the

rest of the year so why is Trump doing

this now I've got three theories and you

tell me in the comment section which

Theory you believe all right so Theory

number one is that Trump is an idiot

okay and he and he thinks that tariffs

are something that the foreign

government pays but if you study

economics you know that when you impose

a tariff it is the Importer that pays

the Tariff that passes it on to the

consumer and that can cause a falling in

demand for imported goods uh that could

cause a Slowdown in the economy it could

cause inflation it could cause a

recession all right so the the first

theory is that Trump doesn't know this

is's an idiot and he's creating a

recession okay now my second theory is

that Trump is actually a genius and the

reason Trump is doing this is because

remember what is what was one of his

intentions he said a few weeks ago

together with his treasury secretary

that his main intention was to bring

down interest rates right he especially

wants to bring down the long-term 10year

treasury bond rate for a few reasons

number one when you bring down a 10-year

bond rate that means the government pays

less interest on their treasury bond so

that reduces the national debt number

one number two mortgage rates and uh

borrowing rates the price of the 10e

treasury yield so when the 10e treasury

yield goes down mortgage rates go down

and the housing market will improve

right as well as companies are able to

borrow money better or or more cheaply

and that improves the

economy so he could be a genius and the

reason he's doing this is because he

knows that when you create a growth

scare in the markets people scare that

the the economy is slowing they will buy

treasury bonds as a safe haven which is

what they're doing right so people are

buying treasury bonds that's why you see

the TLT ETF going up and the treasury

bond yield as bond price goes up yield

goes down so this is actually working so

the 10e treasury yield has fallen from

4.55% at a high this year to

4.17% so this could actually uh be part

of Trump's plan and of course if this

growth scale continues then the Federal

Reserve may be forced to cut the

shortterm FED funds rate faster than the

intended which is what Trump wants to do

anyway and so by bringing rates down

that would

improve the economy at the same time

bring down inflation so in other words

Trump could be doing this because he

wants to create short-term pain to get

long-term gains all right but of course

it's a danger that if he carries it too

far then it could trigger a really nasty

recession so it's a fine balance so my

that's my second theory he's a genius

right the third theory is that he's an

opportunistic bastard Okay the reason

he's doing this is to to crash the stock

market so that his friends and family

can buy cheap and then he reverses his

policy reverses the tariffs Market goes

up they make a killing right so which

Theory do you believe you leave your

comments in the section is he an idiot

is he a genius is he an opportunistic

bastard yeah so what do I think honestly

I don't care I don't care which Theory

works because whatever reason I benefit

okay so why do I benefit because as you

guys know as a value investor I love it

when markets drop in the short term

because it allows me to buy more shares

of high quality companies now when the

stock of a company drops there are two

main reasons first it drops because of

company specific reasons something's

wrong with the company right and often

times you have to find out okay what's

wrong with the company is it a

short-term issue is it a long-term issue

yeah if it's a short-term issue it's a

great chance to buy shares when they

undervalued if it's a longer term

structural issue then of course you want

to avoid buying the stock but when the

stock of a great company drops for

reasons that are not company specific

that means there are macroeconomic

geopolitical reasons like

this I love it I love it right so as you

guys know I already own a lot of Nvidia

I own a lot of Microsoft I own a lot of

meta I own a lot of Nvidia did I say

Nvidia already getting old Amazon

whatever right

but every year I want to buy more

because I want to keep owning more and

more of these great companies but I

haven't been able to buy a lot more

because prices have not been very cheap

some of them are already undervalued but

only slightly so I want prices to go

down a lot more to be a lot more

undervalued so I can deploy more of my

Capital so I always look at these

short-term sell-offs short-term drops as

gifts for Value investors because in a

long run you know that these companies

are going to keep growing in value so

any short-term drop is a gift to add

more shares now again they must be high

quality companies companies that have a

historical track record of consistently

growing Revenue net income and cash flow

from operations despite recessions

despite short-term trade Wars they must

keep growing revenue and profits very

important they must have a a durable

competitive Advantage a strong economic

mode that protects them from competition

they should have low debt they should

have high return on Capital return on

Equity return on invested Capital these

are the only companies I buy CU these

companies whenever they drop short-term

they are opportunities to add before

they go higher yeah but companies that

have inconsistent profits companies that

have got weak economic modes companies

that have got low return on Capital

companies that are over leverage I

wouldn't touch them no matter how cheap

they get because you know they can drop

and never never come back so just be

that in mind again whatever it is during

these sell-offs during these drops as an

investor the last thing to do is Don't

Panic remember it is all part of the

game it's all part of the way markets

work and I always like to remind people

that remember that market downturns

happen frequently but they don't last

forever and on average the S&P 500 will

drop 5% or more at least three times a

year on average so so far the S&P 500 is

down just over 5% and again this is only

once it's going to happen three times

this year on average so be prepared for

it and take advantage of it and if you

say hey Adam I've got no more money to

buy stocks then just ignore it just hold

what you have close your eyes watch

Netflix because soon enough the the sell

off is going to be over and it's going

to back to New highs again right and out

of the the the three drops a year on

average once a year the market will drop

10% or more so could this be the 10% or

more maybe I don't know we can never

predict right and once every 3 years the

market will drop 15% or more and once

every 6 years on average the market will

drop more than 20% and if it closes more

than 20% that's called a bare market now

I doubt we're going to go into a bare

Market this year unless trumpy boy

raises tariffs even more they retell it

even more of course everything is

possible we could get a recession we

could get a bare Market it is possible

Right but if I believe that trumpy

doesn't want a bare Market he doesn't

want a recession he's just creating some

short-term pain to bring down the

long-term interest rates that at the end

of the day he wants the economy to do

well which I believe he does then I

don't think he will allow that recession

or bare Market to happen that this could

simply be just a pullback or a deep

correction and again and again recall

that during trade War 1.0 back in 2018

the Market did drop

20% and so far the Market's only down 5%

so as an investor you got to be

psychologically

prepared that we could drop a lot more

and that's why as an investor whenever

the market drops even though uh prices

are undervalued I don't go all in I

always nibble I always buy a bit first I

always buy in tranches I buy over three

to four tranches why in case we get that

10 15 20% decline I still have bullets

to keep buying all the way down and of

course I can never buy at the bottom I

can't predict the bottom as long as I

can do a dollar cost average and buy you

know somewhere near the bottom is good

enough right I've done my job for the

year and that's how my portfolio grows

every single year by the way not all the

sectors have been equally affected by

this selloff so if you take a look at

this heat map you'll notice that the

majority of the declines have actually

come from the technology sector over

here which is my favorite sector because

over the long run technology companies

they offer the highest growth rates the

highest profit margins the strongest

modes and we are again within the early

stages of an AI Revolution so any kind

of drop in my AI related stocks to me is

a gift it's a gift to add shares right

the other area would be consumer

discretionary stocks uh like Amazon uh

and of course you've got Tesla which as

you know for various reasons I

personally do not buy all right and then

communic ation services like Google and

meta that's down as well so again they

are all related to the AI investment

which in a way is related to to Trum

they call the Trum trade if you will

yeah but the other sectors actually have

not gone down that much in fact some of

them have been positive like consumer

defensives have been um rallying you've

got financials have been rallying and

Healthcare has been rallying and that's

why it is so important to have a well

Diversified portfolio so for those of

you who are my subscribers you see my

portfolio in real time you know exactly

what I'm buying and selling every day I

send you notifications every month I do

a deep dive research in my portfolio and

I've got a lot of healthc care stocks

I've got consumer staple stock I've got

Financial stocks so that goes up while

my technology goes down so it buffers my

portfolio and that creates a lot of uh

resilience in the portfolio so you got

to always diversify so finally let's

take a look at some potential

opportunities now again this is not

recommendation or advice for you to buy

any of these things that's my disclaimer

right these are stocks that I own and

I'm happily buying more every year when

I get them at good prices so first

obviously is

NVIDIA which is uh one of my largest

positions and Nvidia is down

26% uh from the high even though they

posted very good earnings and I think

the demand for NVIDIA is still very very

strong the Nvidia chips um so if you

take a look uh again as you know for me

I always look at at the intrinsic value

as long as the price goes below the

intrinsic value I will want to add

shares if it retrace us to a technical

support level so in the case of Nvidia

my intrinsic value is

$130 and these are the support levels

I've identified based on historical

support patterns uh at 121 that's the

first support level which it broke below

uh as of the last few days it broke

below that first support level then the

next support level would

be at 101 and then $90 and then $75 so

these are my four buy levels if you will

so every year what I do is that I would

allocate I say okay for example I want

to buy 100 shares this year and what

I'll do is I'll buy 25 shares first at

the first support level and then if the

if the price drops even more to the

second support level I buy the next 25

share so I keep adding more as it drops

to these levels so that I average in the

position so essentially that is what I

do uh for my for my stocks right so

that's Nvidia so Nvidia is currently uh

undervalued and just below the first

support

level okay uh Amazon is another one of

my uh biggest positions and I think one

of the strongest highest quality stocks

in the market and you can see recent

price action over

here so it's uh you know wave up wave

down wave up wave down wave up wave down

down wave up wave down so big wave down

it test the 50 moving average wave up

now it's waving down looking to test

that 50 moving average over here as well

so my intrinsic value for Amazon is

221 and the next support level is 195

you can see a pretty strong support at

195 over

there so that would be an interesting

level to add and of course could it

break lower everything is possible if we

get a deep recession then my next

support level will be 166 and then

151 okay uh let me show you couple more

we've got Microsoft for example

Microsoft also down from the highs and

my intrinsic Valu is like

415 and right now it's at this level of

support you can see a pretty strong

support level over there right so in

fact I just added some Microsoft right

at this uh support level and again could

it bounce back from here if Trump

suddenly u-turns on a policy and say

okay I changed my mind sure all right

but if it continues could it break to

the next support level at 364 sure we

have if we go into let's say a recession

could it break all the way to 324 the

last support of course it's possible

right so as an investor always have all

these pre-planned in mind finally I I

think the other very high quality

company that people are not giving

enough credit for especially if they are

way more cars uh leading the autonomous

robot taxi industry as well as the

YouTube doing really really well of

course alphabet Google Google has sold

off quite a bit and Google's intrinsic

value in fact it just increased based on

the increase in free cash flow is $223

that's the valuation and right now it's

very undervalued and you can see all

these are the support levels I've

identified and it's broken the recent

Support over there and I'm looking to

see if it's going to test the third

support this another strong support

where an investor could add at a pretty

good discount right so there we are

that's the state of the market right now

hope this has been useful so as an

investor remember psychology is the most

important thing happy shopping and I'll

see you guys in the next video if you

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investing and trading live online this

is Adam cou and may the markets be with

you