[Music]

let's start with a quick

review of the year that just passed

2020 and i'm sure you guys agree that

last year was the craziest year

we have ever experienced and hopefully

it's going to be the craziest and not

another

crazy year in the future ahead

and you know there have been good things

they've been bad things and some good

things

uh for one last year i spent more time

with my wife and my kids

than i spent with them for the last 20

years so

that's one thing that was good about

last year my wife loved it in fact i'm

convinced that my wife probably started

kobit 19.

i'm just kidding all right but let's see

what what happened last year so

we started last year with the economy

really strong

economy was growing really strongly

companies were expected to grow their

profits their earnings

we had low interest rates we had

no inflation and the stock market was on

a very strong

uptrend right from january all the way

to february

and it seemed that nothing much could go

wrong the only things that

concerned people at the time was the

budget deficit they say hey you know

what

the budget the national debt is

ballooning uh

possible u.s elections that could be

um some issues with the elections uh

the other issue was the trade war could

the trade war

fly up again so everyone was focused on

those possible

risks but it never happened right

instead we were all blindsided

by a killer virus that created the first

pandemic in a hundred

years okay covet 19. imagine

we were hit by a pandemic for the first

time in a hundred years

and we've got over 86 million people

infected

almost 2 million deaths in the world

devastating

so that triggered the biggest

uh recession since the great depression

in the 1930s now how big was the

recession

to put into perspective during the

global financial crisis in 2008

uh global gdp fell 1.7

during the financial crisis 10 years ago

this recession saw gdp falling

six percent globally so this recession

was three times worse

than the great financial crisis all

right u.s gdp fell

eight percent unprecedented in history

the eurozone minus eight point seven

percent

china was the only country that actually

uh avoided a recession it grew 0.5

percent last year

one reason is because they were able to

control the virus very quickly because

of the strict measures the chinese

government really straight

you put on your mask you don't go out if

not you go to jail we shoot you

okay and then you know they

contained it and so they avoided

recession

now it was the biggest recession in

history

and also the fastest recession in

history

most recessions last six months to a

year

this recession lasted only two months

and one reason is because it was not a

natural recession

see the natural recession what happens

there's

more supply than demand

because of over capacity right there's a

bubble

so it takes many many years to work off

the excess capacity for supply to go

down to meet demand again but this was

an

artificial recession why because demand

was very strong

but because of the lockdown stay at home

you can't spend money you can't go out

you can travel

oh okay suddenly demand goes to zero

right and so that's why we had that

artificially induced recession

so i knew at the time that if it's

artificially induced it can be

artificially changed so a quick recovery

was something that was very very

possible but what also triggered that

quick recovery was the federal reserve

the fact

the fed unleashed unprecedented stimulus

during the financial crisis as you guys

know the quantitative easing

right they printed money like no

tomorrow that was nothing compared to

this this time they printed kind of like

three or four times more money into the

economy

giving people money directly so

and they cut interest rates back to near

zero so that triggered

right the fastest bear market in history

so the market fell

36 percent most bear markets last for

again

six months a year and a half this bear

market

lasted four weeks and following that we

are the fastest recovery in history

so last year was an unprecedented year

now from march which was the market

border to november

not all stocks recovered it was only the

tech stocks the pandemic proof stocks

your amazon your google your facebook

your microsoft right

then in november we had game changing

news

right uh it was announced that the covet

nice knights

the kovit 19 vaccine with 90

efficacy is now available and

the markets started rallying even more

strongly from november

all the way to where we are today now

two other market doesn't care about

elections right even though there was

kind of like a mini civil war

markets still went up markets don't care

all right and of course

brexit was finally completed on the 24th

of december

in the united kingdom so that's what

happened in 2020 right

so at the end of the day or the end of

the year

the u.s markets ended with a gain uh

s p point 500 gained percent

if you count dividends was up like

sixteen point five percent

the nasdaq gained forty six percent

wait i'm seeing some people saying that

i've got a frozen image let me just

check

okay let me just check uh where did it

freeze

it's okay now okay now it's okay all

right froze for a few seconds

all right technical issue

all right okay so you guys good to go

you guys can hear me now all right thank

you

great so at the end of the at the end of

the year

uh the u.s markets ended with a gain

uh s p 500 up 15.78

uh the nasdaq up 46 percent

the dow jones up close to seven percent

china up 13.87

now shanghai went up 13 hong kong

was down 3.4 slightly because of the

political situation

uh because of u.s sanctions but that was

temporary

uh singapore as usual sucked i'm from

singapore so i can say it sucks

singapore's down 11.76

and the uk was down 14.55 percent

so looking at the charts you can see

that

the u.s market this the s p 500

uh started really strongly and then in

february it triggered that bear market

again

the market dropped like 36 percent

in four weeks it bottomed in late march

and in early april the blue market

started and of course you guys who watch

my video on youtube know that that was

the time to actually start

re-entering the market and since then

the market has

rebounded about like 80 percent from the

bottom

i still remember that during that time

in late march

early april if you had read the

mainstream news

you would have been scared shitless

right because on the 30th of march

cnbc said job losses could total 47

million

unemployment rate could hit 32

on the 6th of april janet yellen said

second quarter gdp could decline by 30

percent

on 9th of april the imf said

this pandemic could unleash the worst

recession

since the great depression what do you

think most people do when they read

these headlines

they panic right and they sell they get

out

and if they had done that they would

have sold here

at the bottom and when the markets went

up they go oh my god

right and they would have lost money in

the year when the market went up

so what do professional investors do

instead

that's right we buy when other people

are selling be

greedy when others are fearful

that's how you make money so those of

you who are

on my ultimate investors playbook which

is my subscription service where you get

real-time alerts

when i buy when i sell you know

immediately

you saw exactly when i started buying

stocks right

you can see this was on the 25th of

march

uh this was my buy alert i said okay i'm

buying mastercard at 236

adding sd lauder at 158

26 of march buying ping on insurance at

75

30 of march adding facebook at 159

right somewhere near the bottom

and again since then the market

rebounded really strongly and that's how

uh you can see on my portfolio over here

you can see everything is green except

one is not green yet

because i just bought that pretty

recently so that would turn green pretty

soon that's lockheed martin

i'll talk more about that in a short

while

so you can see that all the indexes

rallied really strongly

and of course from uh early april to

november

the nasdaq led the way because the

nasdaq consists mainly of the technology

companies the pandemic proof companies

the s p 500 went up as well but it was

not as strong and of course the dow

jones lagged behind

because the dow jones has relatively

fewer

technology companies the dow jones has

many industrial companies

and financial companies so that took a

while to catch up

but from november once news that the

vaccine was available

people expected the economy to rebound

you know other parts of the economy you

can see the dow jones has begun catching

up financials

industrials and energy are now being uh

beginning to play catch up

with the rest of the market and

technology is now beginning to

sell off slightly as people take profits

from tech stocks

okay so you can see that among all the

sectors

uh you can see technology obviously was

the biggest gainer

beating the s p 500 followed by consumer

discretionary

communications obviously but

surprisingly materials

i never thought that materials would

have done so well

but materials beat the s p

but as i expected uh financials

underperformed

industrials and consumer staples so

again

these are the sectors that are now

beginning to catch

up with the rest of the market

let's look at china so what happened to

china last year

so china actually began on a downtrend

because of uh the pandemic actually

starting in wuhan right so people have

been upset a bit freaked out

some downtrend but they contained it

really fast so you could see that

uh again by late march early april

we had the change in the trend you can

see from the moving averages

the shift in the trend over here and it

ended up about 13.87

here today

and of course if you guys watched my

videos on china

throughout the year i was saying that

china

is a country that you got to invest in

if you want to grow your portfolio in

the years to come

because it is the majority of global

growth

is now coming and will continue to come

from china

the hang seng index which is the hong

kong index of china

uh again ended slightly down

primarily because of the political

situation the u.s sanctions

and so it's down three point four

percent but this year it's on a tear

this is

up uh really well because you know right

now we're over that so that's great

okay so my report card so what i do

at the beginning beginning of every year

which i've done for 15 years is to share

my report card with my community

all right so last year um the snp went

up

15 so i'm pretty happy to beat the

market that's my goal every single year

so my portfolio is up about 50 on this

one

another portfolio up 56 percent

and i've been getting a lot of emails

and

messages from my students in my

investment community

and they're really happy and they say

adam i had my best year

last year in the stock market and many

of them had

huge returns huge double digit returns

we have

uh tony for example from vietnam up 215

for the year uh we have got prashant

from the u.s

who's up 81 for the year he's an i.t

professional he said i've never beaten

the market before

you know since i took your course i

started beating the market

in 2019 2020

and we have andy who was a very newcomer

um he started a hundred thousand a small

fund

and he's up like a hundred and fifty

percent

for the year as well we've got evelyn

from malaysia up 67

my husband asked me if it's a mistake

why not by the way women make better

investors than men because they tend to

follow the rules a lot better they've

got less

ego right and they tend to be more

conservative which is

what you need to be as an investor and

of course we have got

yy who's also one of our coaches

up 90 for the year now for those of you

who did

really well uh i'm really happy for you

but at the same time understand that

this will not happen every year okay

last year was exceptional on average

the the u.s market gains about 10

a year on average for the last 100 years

okay so last year the market went up 15

which is 50 more than the average

so if you found yourself making huge

gains

understand that it will not happen every

year the market doesn't go up that much

every single year

there are years the market will go down

historically

the u.s market makes an annual gain 75

percent of the time

write this down remember that so 75

of the time the market will end up with

a gain on any given year but

25 of the time the market

may end down for the year so it's those

years when you can

get a positive return that's the

challenge

okay so do understand that this year you

may not

see as high returns but you will see

positive returns

if you follow the rules at the same time

i've got some students who have been

writing in to me and they say adam i'm

not happy

i said why not they said i only got a 25

return you got 50 percent

some students got 150 i'm not happy

my message to you is this

put things in perspective right you guys

know that

only 10 historically only 10

of professional fund managers are able

to

beat the index every single year only 10

percent

so if you can beat the index if you get

better than 15

you are better than 90 of professional

fund managers in the world okay so be

happy with that

in fact the world's biggest hedge fund

run by ray dalio who's a billionaire

fund manager

they were down 18 last year 18

okay so if you made money be proud

of that okay and i can tell you that

last year the majority of people lost

money

majority lost money so if you made money

you are the minority now how do i know

if you look at stock brokers they keep a

record

or record depending american right you

they keep a record of how many people

were

long the market that means they bought

stocks

versus how many people were short in the

market in other words they saw or they

sold short

and this is from the ig client sentiment

report

last year you can see the one in red

are the number of traders who are

shorting the market net

short and the one in blue

were the number of traders who were net

long

so question were there more people who

are long or short

yeah you can see that trump the the year

there were more people short in red than

long

so more people were actually selling

last year than buying

in fact retail trader data shows

that the ratio of traders short too long

was 1.6 is to one so for every one

person who was

buying like us along the market

there were 1.6 people who were short the

market and they lost a lot of money last

year

okay so again the lesson is to make

money you don't

follow the crowd because the crowd

always loses money

to make money you got to go against the

crowd you got to do

opposite of what most people do

you're gonna act contrary to

most people's emotions again you're

gonna be greedy when people are

fearful confident when people are

uncertain

and when everyone's greedy then be

cautious all right

okay so let's review what are the

lessons

to take away in 2020 now those of you

who are my students you would already

know these lessons

theoretically but last year was a

baptism of fire

where you saw in real time why it's so

important to

follow these lessons i've been teaching

you okay so what's lesson number one

lesson number one remember

you can never you can never

predict why

or when a market crash will happen

you know people always ask me every adam

is is the market gonna crash this year

is it gonna crash next year what's gonna

cause a crash that's the most stupid

question you can ever ask

why because no one knows you see

the biggest economic and investing risk

every year

is the one that no one is talking about

you know why because if everyone is

talking about a risk

it no longer becomes a risk because

everyone knows about it

and it's already priced into the markets

it's like what's a lot of people talking

about this year they say oh the market

could crash because the democrats

are now in charge of the government they

could raise taxes

you know the federal debt is

unsustainable

um you know the trade war could happen

so when people

focus on these risks it is not a risk

because everyone knows about it and it's

priced into the markets

right what normally triggers a crash

is oftentimes something that no one

would ever think about

like let me ask you a question in 2019

if i

told you that in 2020

there'll be a killer virus that will

stop

us all from traveling we're going to

work at home with the wear mask

everywhere what would you say to me

you say i'm nuts it won't happen but it

happened

okay so what i'm telling you this the

next crash will happen

because of something that no one thinks

about what could it be

example alien invasion right you never

think aliens would come

but they may come right they could come

and the market will crash again and

that's the time we could buy

companies really cheap again so you

never know so that's the first lesson

okay lesson number two

again remember be greedy

when others are fearful easy to say

hard to implement that's why we have got

our community of students where i

i work on their psychology every day i

say come on bye now

or sell now all right and you gotta keep

reminding people

okay so buy aggressively when there's

blood in the streets even if the blood

is yours

now take a look at this chart now

what gave me the confidence to buy

in late march when the market bottom

one of the things i've learned in my

experiences is the market bottoms

when there's capitulation what does it

mean capitulation is when

the retail investors have soaked in

panic

when everyone sells in panic and people

have given up

that's when the market bottoms so i

always like to joke the best time to buy

is when people start jumping off the

buildings that's when you buy

and how do i know i was watching this

chart

this shows you the s p 500 futures

number of people long versus short

okay now you can see over here on the

right of the chart

in late march the s

p future saw the biggest net short

position

in five years right in other words so

many people were selling like crazy

they were shorting the market right here

and it was precisely the time

i started buying because that's when the

market bottoms

so remember this lesson lesson number

two lesson number three

turn off your tv smash your tv if you

can

never listen to the opinions

and predictions of analysts economists

and

talking heads on tv they tend to always

get it wrong

okay nothing against jim cramer i think

he's a very nice guy he's really

entertaining but

please listen with a pinch of salt

because in early april

when i started buying jim primer said

nope i'm convinced there's gonna be a

lot more selling so

when you listen to all these people what

happened

it affects your emotions it screws up

your psychology

it causes you to not follow your rules

and that's when you lose money

so always be confident in yourself and

not be affected by market noise

lesson number four remember the stock

market

is not the economy a lot of people they

missed out

because they were watching the economy

they said adam how can it be

how can the stock market go up when the

economy is collapsing when people are

losing their job people are dying how

can it be

it doesn't make sense of course it makes

sense

i've been saying this for the last 15

years the stock market is not the

economy

it's a different animal the stock market

is a leading

indicator of the economy and the stock

market will go up

long before the economy will ever

recover

so watch the market watch the price

action

ignore the economic fundamentals

you can watch it for entertainment but

ultimately it's the market that's the

leading indicator lesson number five

remember this the stock market index

will

always go up eventually write this down

the market will always go up eventually

and if you buy fundamentally good

companies

that are making money they will always

go up eventually

the stock market is like a roller

coaster

the only people who get hurt are those

that

jump off halfway during the ride

but you stay in your seat and you fasten

your seatbelt

no matter how scary that roller coaster

is

you will reach the end of the roller

coaster you will reach the promised land

provided you buy the good businesses if

you buy speculative companies that are

losing money over value then sure it's a

roller coaster that could derail make

sense

one reason why the stock market will

always go up is because of the federal

reserve

the federal reserve has the power to

print

unlimited money that's why the u.s

market can't go down that much

or for that long because the the moment

the market goes down by a certain amount

the federal reserve will print money

like no tomorrow

coming into the economy into the markets

and hallelujah

we're at all-time highs again so never

bet against the federal reserve

it's like the avengers they do whatever

it takes

to save the world okay so people often

ask me adam

is the market manipulated of course it's

my new place that is my new place to

always go up

so take advantage of it and don't

criticize it right

last lesson lesson number six

when you hold shares of fundamentally

great companies

now remember the secret of my success

is not predicting the future i can't

predict the future guys

but the secret of my success is to only

buy

fundamentally very good businesses and

in the entire market i can tell you that

less than one percent less than one

percent of companies

are safe enough to invest in

they are fundamentally strong companies

only one percent

so what's a strong company a strong

company is one

with low debt is one with

consistently increasing sales revenue

net profit and free cash flow

great companies are companies with a

sustainable

competitive advantage with wide economic

modes

that protect them from competition these

are great companies and i only invest in

great companies

why because great companies will always

rise

over time they will always go up over

time

in the short term if the price goes down

is purely irrational

it's purely manipulated giving us a

chance to buy more

at lower prices okay so

buy more shares during

crashes instead of selling in panic

but please avoid companies that are not

fundamentally strong if you buy

companies that are speculative

that are overvalued that are not really

making consistent cash flow

right they may drop and never come back

all right so you gotta

discern which are the good businesses

versus the ones that are just

speculative now if they're speculative

short

you can trade them short-term trade them

using options

but don't hold them for the long run so

i keep mentioning

companies like like square or

tesla or new they are speculative

companies right they are going up like

crazy and you can make money you can

trade them

you can trade them with options but if

you hold them as an investment

they can be pretty risky because you've

got really high debt

they don't have consistent cash flow

they're in very competitive industries

and so and so forth i know some of you

would disagree they say no that's why

you gotta buy tesla

hey i'm not here to argue i'm just

telling you my methodology my philosophy

is up to you whether you wanna listen or

not listen

okay same reason why i i don't buy

bitcoin right say why don't you buy

bitcoin keeps going up yeah but it's

speculative

bitcoin has no utility there's no

intrinsic value

bitcoin is a greater fools game it's a

greater fools game

if you buy you're a fool but it's okay

if you sell it to a bigger fool willing

to pay a higher price

but you better sell it to a bigger fool

and not be the biggest fool that holds

the back of [ __ ]

at the end of the day make sense

okay so with that

you