After a couple days of rallying the market shat itself again and Wall Street stocks suffered their worst day since the 1987 stock market crash.
The sky is falling, there’s blood on the streets and you’re asking yourself is now the time to panic?
In response, I finished the most important video I’ve ever recorded for you. Discover how today’s global financial crisis happened, and what to do about it.
Due to youtube.com limits I had to cut the video into 5 pieces – watch them below:
Post your comments below 🙂
Your business/trading philosopher,
Ps. Please digg, stumble, bookmark or whatever this post.
PPs. A big thanks to Endre Dobozy, a few of the facts referenced in the video were from his research and more importantly he’s a great source of inspiration.
Great set of videos Dave. Nice to see a balanced view on the current economic situation.
Certainly a lot better than all of the “doom and gloom” you hear in the news everyday!
Great vids David. You have a great handle on what’s
going on as usual.
Trader, Author and Coach
Fantastic video series David!
You hit the nail on the head with your comments. I was planning on offering a similar explanation to my clients but I guess you beat me to it.
You just saved me a huge amount of time because I could not have explained the current financial mess better myself.
I will be recommending all my clients take a look at these videos to get a better handle on the situation.
It is important we all know what is happening in the Global markets and how we can move forward with minimum risk in these volatile times. There is always opportunity!
Author Trading Master Plan
I really appreciate your commentary, because it puts things into perspective and forces us to look at the situation with “open eyes” (instead of “half-shut”, as usual).
Great stuff, thanks again.
Great insightful videos. Thanks for using your time to provide such a useful resource for both myself and my clients. Hope you have enjoyed the rollercoaster ride …..
0412 624 312
A very good presentation. I fully agree with what you have said. It’s a pity that the banks didn’t take note of past experience and realize that booms don’t go on for ever, and there is a limit on how much you can mortgage something for, houses or future earnings!
Great set of movies David, and I see it as exactly what is happening right now. Massive opportunity awaits those who have some foresight, while those who focus on the fear and doom and gloom, will just get more of that.
A very clear insight to the global financial crisis in your video,s.
I would like to ask you and other panelists what role do you see gold playing in a come back to the financial system as a value base. Instead of throwing ever decreasing values in the dollar and other paper backed currencies?
There is a nation at present whose currency is so valueless that its people are bartering petrol, sugar and food units instead of using the local currency.
This is absolutely excellent in every way! Thank you so much for the hard work that you have put into this.
(I have been in cash too, but I could not resist 8 days into SMN, SDS, QID, and DOG last week for a really great return. Moved stops almost hourly and had a great time. Finally decided that a coronary wasn’t worth it and I took my money and ran!)
please consider these few lines one of importance.I am from Jamaica W.I. I have listened to your videos and was really amazed,I see these as important information. I am really interested in the stock market, but does not know much about it. Is Jamaica a good place to invest in stocks?,you said in your video that India is a good place to invest.How can I get more information on the stock market?
Thanks a lot!! As always it’s great to hear you and your knowledge.
What will be the most logical thing to do if one end up in this kind of
situation in the midst of stock market slump?
Panic is always there, but decision is hard to choose whether to pick to
average down or keep what you hold.
What should be the direction of the market as one should know this year is
US Election year and the change of new Administration in US Govt?
Do you keep track of the vicious cycle like this year as compared 10 years
Good to know how Wall Street reacts like 1998, 911 and now consider as
Looking forward to your comments and reply. Thks.
It’s good to see just sensible financial advice when almost everyone is so gloomy.
I look forward to more wisdom.
Great video(s) – you’ve really got a professional production going. Sitting in the USA, I must say that your summary of events is spot on. It’s really complacency and marketing fueling our collective desires that have got us into this mess.
Author of Short Term Trading
Fantastic insights Dave. You have a great handle on how the market is faring, and more importantly have given some excellent high level advice on where to look for opportunities.
Thanks for the support guys!
Mark, Dave G, Marty, David C, Malcolm, Scott, Mike, Bill, George, Limor, Chong, JJ, Alan, Clint and Bash.
All your comments are hugely appreciated and a constant reminder why do what I do… if it weren’t for you I’d probably keep all these things to myself.
Looks like I might need to make another video on where the opportunities are in the emerging economies 🙂
Wow, you’ve lifted the veil on the doom and gloom being sold at the moment. Some wise words from someone standing firmly on the ground.
Some good considered advise.
Smart Car Australia
I don’t agree with your thoughts on few things. Will tell about it more in this comment.
Thanks to Dave Gayne for referring to this video. Good work and nice analysis. I found few things which are misleading and gaps in your video. Let me just fill those with the real facts.
1. Mortgage backed securities aren’t listed in stock market. Not always all of them. Banks and morgage lenders pack those morgages and sell as securities to investors like Lehman brothers and FNM. They buy those securities and lend back money. Since many banks had securities sold with bad morgages, they lost and got into debt. Because of their debt with not much deposits in their hand, they posted loss. Many bank which aren’t directly involved also affected because of it..
2. Next thing, its not just property value drop which made people to default. It is the faltary lending practices and greed which took over the bank to create ARM’s. As the ARM rates starts to expire, in your words Honeymoon interest rates expire. The payment jumped and people can’t afford payments and they endup defaulting. They also thought the property will is going to go up and we can just sell off the home and leave with profit but it just inverted. Property value didn’t go up and they can’t get out so they defaulted..
3. It is not only leverage, it also bankings not lending each other because of bad securities and dervivatives and they got trapped and couldn’t fund their investment.
4. Finaly point, you missed other things done by US governent like interest rate reduction, money auctions for banks and so much more to give low interest money to banks. It didn’t work and then they went to 700 b bailout. Now with 250 b capital injection.
I know its not all waste. It happened before and its a cycle and government is overreacting. Dust has to settle itself, if you keep brushing it , it is going to keep coming back up. Thats what Donald trump is saying too..
Anyways, I hope I didn’t mean sound picky. You did a good job in summing it all up but should have done little bit more to make it bit perfect.
Investors are looking for bottom of current market. To say it bluntly it is much easier to call the top than bottom. I would advise those who want to cash on Bull run to wait until there is a clear indication of market recovery which is very long way away. I`m talking months not days or even weeks.
The top was so obvious that even blind financier should notice it. Many did see it coming but chose to ignore it which is inexcusable. On the January 20, of this year I have sent an email to one of the “Futures Gurus” to se his comments. His reaction was based on short term trading only. That surprised me since he ranks himself as tutor.
Here what I said in my e-mail:
I can see you having good perpetual holiday, good on ya, mate!
Concerning the Dow, I am sending you screenshot where I see that DJ is having a fearsome free fall which will last for several weeks with some daily reversals. As you can see the market was ready to fall and all indicators were positively showing reversal to come in October 10 top, which was confirmed on October 22 using weekly charts. It can be seen clearly on daily and weekly MACD as both were falling and in Divergence to market. As you can see both MACD today are in beginning of downturn run so it can be easily predicted that recovery is too far away. If we calculate the dept of the top…etc
Let`s see what is coming upon us. Whatever it is it looks quite bad.
….let`s see what is coming upon us.
• Hi it only looks bad if you are holding heaps of shares. If you are “trading what is happening” last two weeks have been the best two weeks for a long time.
At this stage I got angry, my reply:
I am talking about USA economy which is dragging down world economy as a consequence. I do not buy shares I trade indices and Forex, doing very well in this market conditions.
I do not know whether M. chose to ignore my warning or he was ignorant of the imminent crush. In his position having thousands of e-mail addresses of his client traders it was irresponsible of him not to warn them. As I see his attitude represents that of many financial “gurus” In USA and around the world.
Personally I have done very well I the Forex. What I have done is simple, I have financed my Forex accounts with several 100K $USA when Aussie was above 90 Cents and today you can see my delight. I have pulled out some money last week, which will pay my wages for the next eight months or so.
My advice to prospective investors is: wait, bottom is still far away. According to my calculation the drop will be between 50% to 70% from the last year’s top. Not joking!
Ps: I have applied lot of primniples you teach in your course.
Your explanation of what is going on now is one of the most accurate and explanation I’ve seen on the media. Like you I began to realise that this is not a steep intermediate thing with a high probability for a hard fast recovery. I’m beginning to accept that it may be some time before we recover. This last 8+ years have been IMO a dark time in the history of my coutry. I wonder if history will show us as practicing the worst fiscal policy, as a nation and a populous, since Henry VIII. I Also wonder if we haven’t “Taken the Bait” reguarding the war on terror. Our intelegence record there is less than sterling. Time will tell but most modern wars are fought in ways far beyond what rests in the cross hairs. The power of the economists pen still over powers the sword.
But that said. We have been here before. People thought it would be eons for us to recover the post vietnam economy. Well, we did it sooner than expected. Don’t count us out just yet. I think it will take new technologies to reinvigorate the market place and create our next market boom, bouble and bust. That IS the cycle and has been the cycle since the 1800’s. The bottom is where all the whiners come out. Fortunately there are some great pressing needs that are going to cause some great new industries and technologies to move into the market place. Global warming, the biggest among them, Moore’s law another major problem.
Possible and probably new technologies that are big enough to fuel a major boom? Nanotechnology, biotechnology, medical … stuff (baby boomers are getting older also), alternative energies. Fuel cells ETC.
In my opinion we will eventualy see a dispersal of oils market share among several new energy possibilities. This will start moving in earnest when the oil companies can reposition to controll it. (I do not suffer from the delusion that I live in a utopian free market democracy)
There are things that are worth watching in the US markets. I do allot of sector rotation monitoring and relative strength searching. Right NOW EVERYTHING is getting clobbered. But people will come to their senses. In the coming markets I suspect that mean reversion swing trading strategies will be the bread and butter for some time BUT there will alwayse be companies here or there that make amazing momentum runs. That is what I trade .. a mean reversion for bread and butter and a momentum trend following for greater wealth generation. Both are shut down. Actually the reverson for buying is starting to flash green lights.
The sectors that come up as relatively strong? You’ll think I’m nuts. Small Banks in the USA. some of the same indicators that highlighted this decline in MID 2007 (IMO it began late 2006 despite indexes but that another story) are calling for the banks to take off if not recover here. Look at the carts to some of the realestate REITs. Look at them, don’t show up to the pitty party of people crying over them.
Healthcare sector (including biotech) is showing considerable weakness in general the last month.. but again everything is. Prior to that they looked really strong. Consider that all kinds of advances are beign made all the time here and the Baby Boomers are starting to retire in waves. Not all of them are getting creamed. There is another phenominon we are going to see soon. A MAJOR shift of money through inheritances. A friend has a 3/4 million dollar trust that has actually grown during this period.
U.S news focuses on tragedy. Not EVERYONE is loosing their home. Not all investment accounts are skint.
Our slow recovery will be peppered with items that soar and small cap indexes and stocks tha will move despite the indexes. We saw this at and during the top and we’ll see it at the bottom.
Not ALL financials are tangled up in the debacle but all are getting sold. SF is looking strong among others. I like the looks of JPM for large cap plays. Several are out there.
Be paitent, the opportunities that are being created now will be the sort that only come 1-2 times a life time. Be dilligent. You will miss them if you are looking away.
Keep your chin up and be dilligent.
(full time trader, albeit hungry right now)
Not all of us Americans consume beyond our means!
But you are dead-on about the greed of the companies that got themselves into this mess.
You are only partially right. Many major events have already occurred in this ‘new’ century and many more will happen. This is one of the major events which looks like the beginning of the 1929 Great Depression. In the 1929 Great Depression, easy credit caused a huge buying of stocks and shares. Then there is a sudden shrinking of available credit followed by panic selling of shares. This time round, instead of stocks and shares we see the buying of properties. The shrinking of available credit is already evident from the LIBOR values.
The market will revive again just like in 1929, and everyone will think that things have returned to normal. What they don’t know is that this is a window of opportunity created by ‘insiders’ to unload their shares and make huge gains. On the other hand, the man in the street doesn’t know; and he will get caught when the ‘peak’ dips down again. We haven’t seen it yet and it may happen. If it does, World War 3 will occur which is the agenda of the ‘Global Elite’.
As a Christian, all the major events in this new century is pointing to fulfilment of Prophecies in the book of Revelation. I hope there are Christians reading my message. It is time to renew our faith and be ready to face the coming tribulation.
Some thoughts that people haven’t heard, or don’t want to admit: The crisis wasn’t caused by the greedy banks making stupid loans. Banks aren’t stupid. They were forced to grant loans to people who shouldn’t have gotten them and couldn’t afford them in the first place. The Democrats in office as far back as 2003 forced mortgage companies, under threats of discrimination, to give loans to bad risk applicants purely for political purposes. Now the same folks who caused the mess, the politicians, claim to be able to solve it, but they’re not ready to take the blame for their screw ups.
The solution? I don’t know, but it starts with getting the government out of the mix.
Great videos! Thanks!
Regards from a Brazilian trader.
thanx David – interesting stuff, keep me in the loop!
You’re one of the few people I read regularly. This video series is a clear example of why I do. Your comments are logical, clear and concise.
I urge other traders to keep on top of your views. As you know, I train trader on staying mentally and emotionally disciplined in their trading and that disciplined starts with seeing yourself as IN CONTROL.
Your views are empowering. They make sense and traders can know that there is a reason for what is happening… and then follow with executing their trading plan.
Thank you, my friend, for your continued sharing of views.
Looks like my market commentary video was spot on and I’m creating quite a buzz as a result…
3,100+ views on youtube
#12 most viewed for the day – youtube Australia
#55 most viewed for the week – youtube Australia
But enough blowing my own trumpet. Just wanted to say thanks again for your support.
Zac – Thanks.
Vijai – Some fantastic points… and you’re right, there are a few points I could have expanded upon. I think I needed to make an hour long market commentary.
Ferdinand – it’ll be interesting to see how far it does fall.
Tom – Some wise words, especially in your closing comments.
Jeff – Hehehe… I know there there are a few exceptions, and I bet you’re one of them 😉
Paul – It will be interesting to see where the affects of this crisis are felt.
Scott – I know how we could have avoided the situation we’re in but I’m not 100% sure what the solution is now we’re stuck in it.
Paulo & Joe – Thanks
Norman – I’m flattered to read your comments.