Pete, Elliot Wave, Warren Buffett discussed on Prosper with Keith Singer
Uh Our job is to help. This is to try to figure out and to help our clients determine which which way the market is going to go over the short term and the other and the other rat. It's that we hold. Very sacred is The crowd one that extremes. Is always wrong. So a Z great Warren Buffett said. Be greedy when others are fearful and be fearful and others are greedy. And we know when people are being greedy. There's several there. Several waste that greed and fear can be measured. Um One way is to look at the put the call ratio another way is to look at investor sentiment. And both of those are at extremes. Right now. They're literally off the charts. How can you tell what investor sentiment is? Especially sentiment. There's there's a couple service out there. One of them that we use is the American Association of Individual Investors, and they come out with Serbia every Thursday, and they asked there Members. Where do you think the market's gonna be a few months into the future or the bill? It's Paris or or neutral and right now they're bullishness is very high. Bearishness is low. And But more importantly, if you look at the put the cool ratio you have You have that record record low. There are tremendous amount of calls that being purchased and very few puts so it's very interesting. Let's let's elaborate on that a little bit. Let's go back in history. If you look at the tech craze, right? Ultimately, there was a huge crash in the late nineties early two thousands in tech right before that occurred. Would you say investor sentiment was very bullish or bearish? Right before the bubble burst. It was euphoric. Historically high levels bullishness was off the charts. You would have stocks that would go up. 345 10 fold within days. There was just here. A man is going on kind of kind of like what's going on right now, With stocks like James stops. And AMC. BlackBerry stock there. They're going up 2345 fold in a matter of a couple of days, and that's not only not healthy, it's not normal. It's not healthy and it It shows that there is excessive greed in the market and We'll talk about. Let's talk about those stocks in a second, but getting back to the tech crashed. So given what your methods are at that time, If you would have seen extreme euphoria, you would have been in cash. You're shorting the market. Is that fair to say? It's fair to say that when you see euphoria, it's best to being cash until, um, until the market begins to enter a state of decline. Because a lot of times that euphoria can last a lot longer than most people think right? And to give you an example back in 1999 1 of the stocks that I was trading was a stock like Qualcomm. I had purchased that versus the stock at $27. I sold it a few days later at I believe 76 $78 something like that. So double or triple my money. Ah, few days after that, that it was trading at over $800 when you have a stock on for being a 25 26 $2027 going up to $850. That's a mania. Now. Anybody, uh, that would of began to have shorted that when he hit 100 or 203 100? So you have to be patient before shorting because it could last a lot longer. Most people think that I can. And if you begin to short too early, you're going to get really hurt. So you mentioned Gamestop name seeing some other companies for Gamestop is a brick and mortar. Video games cellar Right and drinking water is kind of out right now, although there was a huge supply for video games this year during covert that during the lockdown, But then, uh, a man named Ryan Cohen, who started Shui and a very successful e commerce company, started accumulating shares and now is on the board and he's an activist, and he wants to make the company more e commerce. So There's a group chat on a site called Reddit called Wall Street Bets, and A Lot of those people are saying This could be a really good investment now that Ryan Cohen's involved and they're gonna search the e commerce and the stock went from the third. It was actually around five in August. To yo in the thirties recently and then this month it ran up to, I think 145 $150 and then on Wednesday, the 27th in overnight trading it hit 3 60. Okay. And so the story remains to be seen how that's gonna end. But there's been an enormous short squeeze. So there's other stocks that are acting like that as well. And I guess it's one of the signs of euphoria that you mentioned. Obviously, How does that translate to? What were the work that you're doing right now? Because of the euphoria, you're not investing long right now. It's just just so everyone knows we offer on account of Charles Schwab that Pete gives us the signals and we buy and sell for our clients based on Pete's recommendations, and since we started in September of 19 Some 40% Since that time versus 23 for the S and P 500 in 2020. The strategy was up 19.14 versus 18 for the S and P. But the big difference is this account was never really down or year. Whereas you if you bought the S and P 500, you had to endure huge decline, and then it came back and by the end of the year Had a nice year where with the peat strategy. We were in cash during that decline, and we actually were able to avoid it. And you know, we didn't make his much once the market was rebounding because we were more cautious, but We certainly had a decent year. Not not a great year for repeat standards, but you know, still slightly beating the S and P 500 where you don't have to endure that big roller coaster now, if anyone is interested in learning about Pete Strategies are. In fact, I know Pete offers a knee email his subscribers and some people pay $1000 a month for if anybody wants to receive that email, where Pete will give you his analysis and recommendation for three weeks at no cost. Text the word Spartan 2474747 text the word Spartan 2474747. So, Pete Currently, you know, you are very cautious about the market talk about as of late January. What's making you be very cautious and what's making you potentially be bullish. What's keeping us cautious is there is there is a market time technique that is called the Elliot Wave. And there, Elliot Wave has five cycles as 33 strong up upturned cycles to corrective waves. And, But the fifth wave, which the one that we've identified they were currently in is the most euphoric wave..