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Oct. 30, 2018 - Health Ranger - Mike Adams
12:02
Young investors about to get ROLLED!
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Okay, this one is hilarious.
I saw a story about an econ professor, I believe it was, talking to one of his graduate students.
Now remember, these are millennials, and they're so young that they don't remember the dot-com crash, right?
So they think that markets only go up.
And the grad student explained to the teacher that he had figured out, he had decoded the secret to how to make money in the stock market.
And he said that he studies the P.E. ratios, that's price to earnings ratios, of all the companies in the market.
And he looks for the ones that have very high price to earnings.
And the econ professor said something like, yeah, yeah, those are the ones that are overvalued, right?
Very high price to earnings ratio.
And the grad students said, no, no, no, those are the ones you buy.
And the ones you sell are the low price to earnings companies.
They're not doing very well.
They're not going anywhere.
The ones you buy...
Are the high valuation companies because those are the ones that are taken off.
You want to jump on board those.
And the professor was like, you have this backwards, but you don't know that yet because so far your theory has worked for the last few years as long as you've been a young adult.
And the point of this story is that there are many, many millennials who Who are going to lose 50-80% of their money because they think they're geniuses.
This is true of every new generation.
They always think they're geniuses compared to the older generation.
Ah, old people are stupid, they say, right?
And us young people, we're the only ones who know what's going on, and we've figured it out.
We have a whole new way To earn money off the stock market, you buy high-valuation companies and you sell the low-valuation companies.
And that's how you make money.
And they actually think that that works.
So they're in for a very rude awakening, or what you might call a day of reckoning.
You might also call a very expensive extracurricular education.
For when that day comes when you lose half your money because you're not as smart as you think you are, that's a wake-up call.
Especially for young people who are making $15 an hour or whatever they make these days.
It takes a lot of hours to make up for losing 50% of your $20,000 investment or whatever they have to invest.
Really, a lot of these young people think that they will never really have to work They might be working now, but they think it's temporary.
They think all they have to do is just buy the right stocks and they're all going to be multi-multi-millionaires or even billionaires.
They believe this.
They think it always goes up.
This is why they were all big into cryptocurrency and Bitcoin.
Until the crash happened, as I publicly predicted.
Bitcoin was skyrocketing about a year ago, and it continued to really skyrocket all the way up until the end of 2017.
And since then, the crash of 2018 brought cryptocurrency down by 75%, roughly, maybe, across the board, you could say 75%.
Bitcoin itself is not down, well, let's see, it went from almost $20,000 to about $6,000, so yeah, that's about 70%.
And it stayed right in that range, roughly speaking, you know, bouncing around.
But anyway, a lot of young people thought that all they had to do was buy Bitcoin, and that that was their job.
That was their career, buying Bitcoins.
And they thought they were going to be billionaires!
And then reality struck.
Reality is a tough thing for a lot of people to face when they've been telling themselves that they've been in a delusional, fictional, fairytale land for so long, they think it's real.
And it's hard for people to look in the mirror and say they're not that smart, not that bright.
No, you haven't beat the system.
You haven't figured out a workaround to the stock market.
Trust me, you haven't.
The workaround, the only workaround is actually work.
That is, hard work, effort, dedication.
Putting in good ideas and taking some calculated risks in order to have rewards.
That's real work.
That's the workaround.
If there is one, it's not even a workaround.
That's just how you add value to the world and get compensated for that value.
There are no shortcuts.
Except for a few, I guess a few people who are scammers like Elon Musk.
Who can convince millions of people to give him their money so he can pursue these pipe dreams based on other people's money, OPM. There are a few people like that who can just live off of other people's money, but that's not going to work for most people.
Most people aren't going to make it into the NFL or the NBA or be a professional sports person.
You can dream!
When you're in high school, you can dream, I'm going to be a football star one day, right?
Probably not.
Because there's probably somebody bigger and faster than you who is willing to put it all on the line.
So you're probably not going to be a football star, you're probably not going to be a movie star, and you're probably not going to get paid to hype a bunch of pipe dreams like Elon Musk.
Most people are going to have to earn whatever they generate.
And investing in the stock market when the valuations are obviously crazy high right now, it's a financial suicide mission.
That's why I've been out of the market for years and have recommended others do so.
And sometimes, you know, I've been through this before.
I was warning people back in 1998 and 99 and 2000 about the coming dot-com crash.
And I heard the same thing then that I hear from people now.
They're like, no, you're missing out, man.
This is the best time to buy.
Everything's going to go up forever, they say.
It's going to keep going up.
You're missing out.
And when you start hearing people say that they think they're never going to have to work an honest job in their lives, all they have to do is just watch the computer monitor and just keep buying and buying and buying.
And they can turn on CNBC, and guess what?
There they can also be told to keep buying and buying and buying.
Jim Cramer and all that.
Just keep buying!
And they think they're going to get rich.
Well, the problem is...
Of course, when the market crash comes, they will still be in the market because they never sell at the top, do they?
You see, people who gain wealth by playing in markets, they sell high and they buy low, right?
They sell at the top and they buy when it's low and the market's low.
People are panicking.
Everybody's selling.
That's when the real investor is buying.
But the average person, and especially these millennials, what do they do?
Well, they buy high, but they're going to panic sell when it's low.
So if you buy high and sell low, what does that do for your finances?
Well, it destroys them.
You buy high and sell low, you're going to run out of money very quickly because you're selling when there's a panic.
I mean, you're buying when there's just like a mob movement, like everybody's buying.
It must be awesome.
It's going up forever.
So you're buying, but you don't realize, well, this is the peak of the market.
You're buying high, and then when it crashes, you'll sell low.
Because you won't sell right away.
You'll think, ah, it's just a small correction.
I'm going to hold on to it.
It'll correct 20%.
You're like, nah, I'm going to hold on to it, because it's going to double, I'm sure.
It's going to recover and go even higher, because that's what all my friends said.
So you're not going to sell it.
And then it's going to drop 40% or 50%.
You're going to say, well, man, that's a great price.
I should buy more.
So you buy more.
And then it crashes 70%.
You're like, Well, it's not worth selling now.
Might as well hold on to it and it crashes 90%.
And people still say, well, it's just a paper loss.
Oh, really?
So you're just playing the paper game.
I see.
Because I thought when it was really high, you talked about it like it was real money.
Now that it's worth nothing, you say it's just paper.
Oh, that's interesting.
How you just change your definition.
All of a sudden, depending on whether you're rich or broke.
That's funny.
But wealthy people, of course, will be buying when there's blood in the streets, right?
I mean, metaphorically speaking.
When people are panicked and people are leaping off of tall buildings, and that's not a metaphor.
That's actually what people do when they lose their life savings sometimes.
When people are falling out of the sky and there's panic in the streets, that's when wealthy people are buying stocks.
And when do they sell them?
Well, times like right now.
They sell them when there's a long line of buyers who are willing to pay anything, driving the price higher and higher, because those buyers are convinced that the markets will go up forever.
Man, that's the time to sell to those suckers, because you know the market top is fast approaching.
So think about it.
And also, to buy low and sell high, you have to be a contrarian, because you're buying when everybody else is selling.
That's why the price is low.
And you're selling when everybody else is buying.
That's why the price is high.
So if you find yourself actually investing with the crowd, then by definition, you're going to lose money.
Because the only way to make money is to buy and sell on the opposite side of the crowd.
That's the only way to make money in the market.
You have to be a contrarian.
Unless you want to get paid on dividends, you know, just long-term collecting dividends, which is a wise thing to do for conservative investments, but not very many people follow that.
They are speculators.
Most people are speculators.
They want to buy and sell the stock price, not really own a piece of a company that pays annual dividends based on profits, you see.
So most people are speculators, but they don't call themselves speculators.
They call themselves investors.
Well, I guess if you go to Vegas and you play roulette, you can also call yourself an investor, but you're really not.
You're a gambler.
You're a speculator.
That's what most people are doing in the market.
In any case, I say all this because I want you, obviously, to be safe.
If you are still in the stock market right now, you may want to take a whole fresh look at that situation because, remember, it's not real money until you sell.
Only after you sell does it become money.
Until you sell, you're just holding shares that aren't really, they're not transformed into actual money yet.
And if you don't have a plan of when to sell, under what conditions you're going to sell, then you probably won't sell when the crash accelerates.
And you'll just hold on to it, and you'll hold on to it until it drops to very low levels.
And then you'll panic sell, and you'll fall right into the trap of buying high and selling low.
And that's a way to lose money quickly.
So don't let that happen to you.
Read my website, risk.news.
If you want to stay up to date on some of this, we've also got collapse.news for talking about greater market collapses.
This is Mike Adams.
Thanks for listening.
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