April 28, 2021

So in this video, I'm going to talk about the market crash in 2021 and three reasons why I don't think it will happen.

I was browsing around YouTube and I came across quite a number of videos that is trying to predict the market crash in 2021.

I thought to myself, well, does that really make sense? Is there any truth to it? And should you really be fearful when it comes to the market potentially and crashing?

So in this video, I'm going to go through three reasons why the markets wouldn't crash in 2021.

90% correct transcript

So in this video, I'm going to talk about the market crash in 2021 and three reasons why I don't think it will happen. So I was browsing around YouTube and I came across quite a number of videos that is trying to predict the market crash in 2021. I thought to myself, well, does that really make sense? Is there any truth to it? And should you really be fearful when it comes to the market potentially and crashing? So in this video, I'm going to go through three reasons why the markets wouldn't crash in 2021 and the first one they caught tummy is reopening. Now, when I think about the economy for quite a while, I was actually very concerned that a lot of us businesses or businesses around the world will go bankrupt. And I'm very glad to know that cruises will be reopened June, 2020 first.

That is only a couple months away. So that is one of the most impacted industry by COVID. It is resuming and the bookings are actually quite full. So that is good to know that people are willing to consume and get back on a cruise. The world is getting vaccinated quickly and us millions of people are getting vaccinated each day, same for Canada and in Europe and so on. And flights are going to be received later this year. On top of that, the more travel happens, the more business will occur, and that will actually bring the economy back on track. So when you think about 2021 from a business perspective is really a year of recovery. And if businesses are going to be doing better and better and better, it is very hard for the market to crash. Now, in a second reason, why I think the market would in crash is that the unemployment rate has been going down.

Whether you think this is because people are no longer looking for a job and starting their own businesses, that is like an online Shopify store, or you think people are actually getting jobs because restaurants, bars, or offices are reopening. So then people are going back to work, looking at the us stats here. The unemployment rates used to be 14.8% as of April, 2020, and now is dropping and dropping and dropping to only 6.2%, which means we're only 2% approximately a way from the unemployment rates back in March, 2020. And when an employment rate is down, people are getting jobs, then they won't be able to pay their mortgages and so on. So then they can actually support the economy, get the economy moving. So then the market voting crash fed previously have expressed their position that they will continue to be buying bonds until the economy is recovered because what's important is for people to get back to work.

So then they get an income for yourself. So then they're not dependent on stimulus check quarter after quarter. So when you take a step back and you think about the market and somebody is telling you, Hey, I think the market is going to crash in 2021, but everyone is going back to work, but travel is reopening, but cruises are going to be reopened. Does that really make sense? Someone is going to be wrong there. And a third reason why I think the market is going to crash it's because of all this pent up demand of transactions that didn't happen last year. For example, if you wanted to buy a home last year, you couldn't because it's very hard to go check out a house when there's no open houses, do you need to book an appointment? Well, it's very hard to go buy a place when there's COVID, people are scared.

There's less willingness to sell as well. So people who wanted to buy a house last year is now trying to buy a house this year. And here you can see the news article saying that the Canadian housing market is actually quite hot. What did that is Vancouver, Canada, Toronto, and prices have been increasing in by 10 to 15% in Vancouver. And this is also a combination of factors like the immigration policy by Canada and Solano, but you can see a similar increase in us as well. And the next thing is that the food prices are high, whether you like it or not, whether people are saying there is or is not inflation. My view is that there is inflation and you can already see it in the stock market. You can see it in the housing markets. You can see it's in food prices as well.

So you don't need to go wait for the news reports from CPI, consumer price index, to tell you that there is inflation or not, because you can see it in all the major consumption items that there is inflation, regardless of what CPI tells you. And I think this is really a combination of factors. First, the fed is printing money and we're all aware of that. Second there's more demand. And third, when you're looking into supply chain, I don't think the supply chain of the world can actually respond to the pent up demand from last year to this year. So then I think the supply chain is right now trying to catch up with the demand around the world, whether that is for semiconductors, whether that is for food, but that is for housing. And this will lead to a great boom in the next two to three years.

And this is actually a very unpopular opinion because most people think it will crash because S and P 500 is at an all time high. And this really leads to my conclusion per se, is that nobody wants the market crash. I think our lives are already tough enough as it is. And everyone wants to go back to work. Everyone wants to provide more for their family, and everyone wants to economy to get better. Now, whether you think the economy is an abstract concept, or you think economy consists of millions of lives of people, you want the economy to succeed. You want to have a lot of jobs, opportunities. You want to get promoted. You want to make more money. So then you can provide a better life for yourself, your family, your kids, or dog, and perhaps buy a new car or buy a second home.

If you're telling me that, Hey, I'm going to try to bet on the market crash. And I'll be like, okay, do you know what it's a probability of use of seeding in successfully predicting the market crash? And the answer is actually less than 20 to 15%, because most of the time when you're looking at a top in the market, it is actually not the top. And from my rough non-statistical calculation, I think probability of someone correctly, estimating to top basically calling the shock that this is a crash is less than 10%. So that's why when you watch a movie to Vic shorts, but when you're looking at the COVID crash, where Pershing Square's a CEO, it'll Ackman successfully short, the markets is such an amazing story because the probability of that happening is less than 10%. And even if you successfully shorted the market, and if you don't recover your position within the a lot of time and basically five back your quotes or five back your short position, you'll still lose money.

Because when you're looking at a crash, usually it recovers relatively quickly. And a crash is very unlikely to happen in an economy that is in a recovery things. So even though I see a lot of videos that are talking about the housing bubble in China, a housing bubble in us, the housing bubble in Canada, automobile loan bubble in us, or even something like companies going bankrupt or cruises or airlines or whatnot, I think inherently the fundamental concept is that nobody wants a market crash. This really comes down to a belief that I trust that the people in us and Canada and China and Europe want the economy to recover. So then we can live better lives. The pandemic, the lockdown is not really doing anyone, any good. You want the economy to continue to grow. So then everyone's standard of living will improve because if the economy doesn't grow and the fed printed all this money, the worst case scenario is that the market crashes and the food prices, housing prices go up and people don't have jobs and they would default on their mortgages, but then prices will continue to be high.

And that's almost like a dystopian future. When you think about all the prices recovered, but then everyone's lives are not great. Like everyone's lives are still struggling. When I think about that dystopian future and looking at what's happening on the ground, you know, I have friends that are realtors that are getting multiple deals within a week. You can see housing prices going up. You can see people worrying about not getting into the housing markets, because the prices are going up or whatnot. These signs of business activity will inevitably lead to economic growth. When it comes to investing, my target is really to make 30% a year. And if you want to learn more about the strategy, then you can visit and get the four hour free training. And when you think about the market crash and how I invest in the markets, I always focus on buying stocks at a discounted price.

You will learn more about it in detail into, for our free training. The concept behind that is that I have a very strong belief in the American Canadian China economy, because I believe that people are actually hardworking. I believe that people want to succeed, buy for themselves, and that people want to be independent, wanting to make more money. So then they can provide better lives to themselves, their family and their children. And that's why I invest in the markets. And I don't necessarily short the market and you'll learn more about it in the four hour free training, five minute investing.com/three case study. And the entire investing strategy is actually built on that belief. So when you're looking at investing in celebrator this month, I'm looking to help another 20 full-time professionals without a financial background to master investing and to target 30% return a year.

So when you're looking at investing accelerator, here are a couple of new case studies where Tony made 37% from chef. In two months, John made a 62% from American express, 84% from chef and 39% from CAE food also made 38% from CAE and 54% from American express as well. So congratulations to Tony fruit and John. So these are fantastic case studies and success stories. And I look forward to your next one. And in the coming video, I'm going to talk about another unpopular opinion, which is the responsibility of a YouTuber, right? This is kind of weird because it's geared towards you tubers. But if you're trying to earn investing from a YouTuber, and I think this is something you need to be aware of, it's great that someone is giving out free advice when it comes to investing, but you also need to understand how to protect yourself when it comes to listening to other people's advice.

If you don't do your own research, if you don't develop some sort of judgment, if you don't have a critical mind and just blindly following others, whether they are useful super or a fund manager or whatnot, and it's very easy to get burned. And I've talked to a lot of people that they have gotten burned by other YouTubers before. So that's why I want to make this video for YouTube burst and the rest of the public. So then you understand the power of YouTube and what kind of responsibility they should have. Now, obviously you tubers are not regulated. It's just a video to outline what should happen instead of what is happening. So I'll see you in the next one.

About the author 

Eric Seto

Investor, CPA (Canada) based in Hong Kong and Vancouver

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