UM, Pete, Ryan Cohen discussed on Prosper
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. The other ravage that we hold. Very sacred is But the crowd when that extremes Is always wrong. So a Z great Warren Buffett said. Be greedy when others are fearful and be fearful and others greedy. And you 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 down there literally off the charts. How did he tell investor sentiments? Especially sentiment. There's um There's a couple of 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 their members. Where do you think the market's going to be a few months into the future? The bullets, Paris or or neutral and right now, um, bullishness is very high bearishness is low. 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 are 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 that euphoric, historically high levels bullishness was off the charts. You would have stocks that would go up 345 10 fold within days. Um, it 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. 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 tack crash, so giving What your methods are at that time. If you would have seen extreme euphoria you would have been in cash is shorting the market. Is that fair to say it's fair to say that when you see euphoria, it's best to be in cash until, um, until the market begins to enter a state of the client. Because a lot of times 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. A purchase that person the stock at $27 I so that a few days later at I believe 76 $78 something like that. So I doubled or tripled my money. Ah, few days after that, that it was trading at over $800 when you have a stock going for being a 25 26 $27 going up to $850. That's a mania. Anybody, uh, that would of began to have shorted that when they hit 100 or 203 100. So you have to be patient before shorting because it could last a lot longer than most people think that I can. And if you begin to short too early, you're going to get really hurt. So you mentioned game Stop it. I am seeing some other companies for Gamestop is a brick and mortar. Video games cellar, right breaking mortars kind of out right now, although there was a huge supply for video games this year during covert that during the lockdown, Um but then, uh, a man named Ryan Cohen, who started chewy 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 evolved. We're going to switch the e commerce and the stock went from the third. It was actually around five in August. Too, You know, 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? Um, because of the euphoria you're not investing long right now, just just so everyone knows we offer an 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 2019 It's up 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 or as 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 didn't have to endure that big roller coaster now, if anyone is interested in learning about Pete Strategies, or, in fact, I know Pete offers a knee email to 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 texts Where 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 that has 33 strong up upturned cycles to two corrective waves. And, But the fifth way, which is the one that we've identified they were currently in is the most euphoric wave. And it is the wave where things get still being ridiculous, which they are now, just as you mentioned about game stopped, you know, Think about what you just said. Back one from $5. 2 300 or two over $350 in a very short period of time, Okay? And what I'm talking about a company that has found the cure for cancer but talking about a brick and mortar company That's gonna that's going to be transitioning supposedly To E comments so How much competition this game stop. Have lots. Ah, lots and lots. So this is that way? Five euphoria. It is very dangerous..