Please Don't Be Dumb Money...

Summary

Highlights

• Bravos Research is celebrating a milestone of 500,000 subscribers with a special 30% discount on their services. 🎉
• The S&P 500's rapid increase in market cap from 2022 to 2024 mimics historical growth patterns in percentage terms from previous decades. 📉
• The use of a logarithmic chart scale offers a different perspective on recent market declines, aligning current declines with historical data. 📊
• Tariffs are causing economic uncertainties, but a temporary pause might mitigate immediate effects. A recession still looms as a risk. 📉
• The correlation between inflationary trends and real GDP growth future outcomes are critical, emphasizing data cross-checking beyond government stats for real-time analysis. 📉
• Bravos Research advocates a cautious trading approach during volatile times, highlighting successful strategies with profitable outcomes. 💹

Key Takeaways

• Bravos Research hits 500,000 subscribers! To celebrate, there's a 30% discount on their investment services.
• The S&P 500 added $24 trillion in value between 2022 and 2024, a mark that previously took 28 years to achieve.
• Despite a recent $5 trillion drop, current market trends show similar patterns to the 1980s and '90s after adjusting for scale.
• Uncertainty from tariffs could influence real GDP growth, but a 90-day pause offers temporary relief.
• Inflation trends can predict economic performance; current data suggests stability, barring unexpected shocks like extreme tariff policies.
• Bravos Research uses real-time commodity basket data to provide a fresh perspective on inflation.
• Optimism persists that strategic policies might avoid a recession, with an opportunity for a bullish market continuation into 2025.
• The focus remains on high probability trades with limited buy-in until market conditions improve.

Overview

Chapters

• 00:00 - 00:30: Introduction and Subscriber Milestone The chapter celebrates a milestone of reaching 500,000 subscribers on YouTube. The speaker expresses gratitude to the audience for their support, emphasizing that their mission is to provide free high-quality investment research on the platform. To thank the subscribers, they are offering a limited-time 30% discount on their service, which includes trade alerts and analysis that helped clients outperform the S&P 500 in 2024.
• 00:30 - 02:00: S&P 500 Market Trends and Historical Comparison The chapter titled 'S&P 500 Market Trends and Historical Comparison' discusses the significant growth of the S&P 500's total market capitalization between 2022 and 2024. It highlights that the market value rose from $30 trillion to $54 trillion, adding $24 trillion in just two years. In comparison, it took the S&P 500 28 years to achieve a similar increase from 1995 to 2022, marking a remarkable shift in market dynamics.
• 02:00 - 03:00: Economic Conditions and Tariff Impacts The chapter discusses recent fluctuations in the S&P 500 index, highlighting a significant loss of approximately $5 trillion. It suggests that the rapid increase in the index over the past few years might have been unsustainable. This downturn is perceived by some as the beginning of a larger market correction, potentially more severe than the Great Depression. However, the text emphasizes the importance of viewing these changes through a log scale chart to better understand the true scale and perspective of the S&P 500's performance.
• 03:00 - 04:00: Inflation and Consumer Spending Analysis The chapter analyzes the inflation trends and consumer spending by comparing past and present price actions, specifically focusing on the S&P 500's market cap. It highlights the growth of the S&P 500 market cap from $1.5 trillion in 1985 to $2.5 trillion by 1987, which, although smaller in dollar terms than today, represents a 70% growth in percentage terms. This analysis offers context to current economic conditions as compared to the 1980s and '90s.
• 04:00 - 05:00: Real-time Inflation Tracking and Commodity Prices This chapter discusses the recent rally in the US stock market, noting its steepness compared to historical data. The steep rally in 2024 mirrors the market conditions of the 1990s. The chapter explores the possibility that, similar to the 1990s, the market could continue to yield strong returns for several years.
• 05:00 - 09:00: Market Outlook and Trading Strategy The recent strong market performance could potentially continue with the right conditions, but the recent stock market sell-off raises doubts. This sell-off, driven by tariff-related uncertainties, may significantly impact future market rallies.

Please Don't Be Dumb Money... Transcription

• 00:00 - 00:30 we just hit 500,000 subscribers and I want to say thank you to each and every one of you supporting our work here on YouTube we wouldn't be here if it wasn't for you our mission is to provide high quality investment research completely for free right here on YouTube and as long as you guys are here we will be too in order to thank you we're doing a 30% discount on our service we rarely do these kinds of discounts and it's not going to last very long so if you want to have access to the same trade alerts and analysis that made our clients outperform the S&P 500 throughout 2024
• 00:30 - 01:00 on stocks crypto commodities now's your chance again thank you for being here between 2022 and 2024 the S&P 500's total market capitalization rose from $30 trillion to $54 trillion adding $24 trillion in value to the US stock market in just 2 years as a reference point it took 28 years for the S&P 500 to add $24 trillion in value between 1995 and 2022 now within the space of just a few weeks
• 01:00 - 01:30 we've seen the S&P 500 give back approximately $5 trillion many believe that this incredible meltup we saw over the last couple of years was completely unsustainable and that this recent correction is just the beginning of a major unwind something that would make the Great Depression look like child's play but before we buy into all of this doom and gloom we have to transform this linear chart of the S&P 500 into what's called a log scale chart putting the S&P 500 index on a log scale helps us
• 01:30 - 02:00 compare today's price action to what was going on in the 1980s and '90s when the S&P 500's market cap was much smaller for instance in 1985 the S&P 500's market cap was $ 1.5 trillion by 1987 it was $2.5 trillion now although in dollar terms that's a much smaller increase relative to what we've seen today but in percentage terms both of these moves up was about a 70% rise in the S&P 500's market cap so on this chart the S&P
• 02:00 - 02:30 500's most recent move looks a lot more reasonable relative to what we've seen before in US stock market history it's definitely been a very steep rally but it's nothing that we haven't seen before in fact if we copy and paste the price action from the 1990s onto today we see that the steepness of the rally in 2024 is actually incredibly similar to what it was back then the only difference is actually that in the 1990s the stock market continued posting the same kind of strong returns for multiple years after so yes we've certainly been in a
• 02:30 - 03:00 very strong market over the last couple of years but nothing says that we couldn't actually continue to see the S&P 500 provide the same kind of strong returns over the next few years provided that we have the right kind of conditions for this type of market meltup to happen but the most recent sell-off in the stock market does put that scenario into question primarily having been driven by uncertainty around tariffs many believe that this will have very real economic implications that makes that kind of stock market rally
• 03:00 - 03:30 very unlikely and potentially even puts the S&P 500 at risk of major downside indeed in order for the stock market to sustain a similar kind of uptrend to what we've been experiencing since 2022 we would need the same kind of conditions that we had in the mid1 1980s and in the mid1 1990s each of these incredibly strong periods of stock market performance had very specific conditions in place when we overlay real economic growth on top of the stock market we see that all of these big market meltups occurred when real
• 03:30 - 04:00 economic growth was extremely resilient in the 1980s and '90s real GDP growth stayed between 3 and 5% on quite a consistent basis since 2022 we've seen real economic growth average at about 2.5 to 3% which has been enough to sustain a very rapid advance in the stock market so for this rally to continue we need to see real GDP growth stay extremely resilient the more complicated question however is whether Donald Trump's tariff policies is about to put a dent in the steady economic
• 04:00 - 04:30 growth that we've seen over the last couple of years the most direct negative impact of tariffs is that they mechanically reduce corporate profit margins lower corporate profit margins can lead to cost cutting measures which can often include layoffs leading to rising unemployment which is a typical characteristic of a recession where you see a steep decline in economic growth this is why all the big banks have been lowering their forecast for economic growth and raising their expected probability of a recession over the last couple of months and indeed tariffs have
• 04:30 - 05:00 significantly increased the odds of economic growth slowing down considerably which is why stocks have already moved down by 20% but Donald Trump has also just announced a 90-day pause on these tariffs meaning that tariffs are not being implemented just yet which means that corporate profit margins won't get damaged straight away which can mean that layoffs won't necessarily start immediately some argue that the 90-day pause does absolutely nothing to reduce recession risks as the economy will grind to a halt in these
• 05:00 - 05:30 uncertain economic conditions others are saying that the pause on tariffs does reduce the risk of a recession as the market will quickly gain clarity onto the situation while avoiding immediate negative impact and possibly lead to better trade conditions on the other side of all of this we happen to be optimists if the Trump administration is able to bring clarity over this period of pause and that negotiations lead to favorable trade conditions for the United States that we could see the economy narrowly avoid a recession we also happen to believe that tariffs are
• 05:30 - 06:00 not the only thing that can influence economic growth in the United States and I can show you that by adding a simple line on top of the chart of economic growth in the US that actually predicts what real GDP is going to do over the next 8 months this line right here is the inflation rate in the US but it has been flipped around and it's been shifted forward by eight months so that it basically predicts what growth is going to look like over the next 8 months now that may look and sound
• 06:00 - 06:30 complicated but it's really not inflation represents the cost of living but mainly the cost of living for essential things that are required for people to get by things like the price of gas at the pump food medical insurance shelter all of that makes up a very significant portion of the inflation data if the cost of living for these essential things is rising you can probably expect that people are going to reduce their overall spending in other areas of their lives this is what many would characterize as a weakening of the
• 06:30 - 07:00 consumer as we know when the consumer is weak the economy weakens and potentially heads into a recession so rising inflation or rising cost of living is a leading indicator of consumer spending and hence the economy what we found is that it takes about 8 months before a rise in inflation translates into a weaker consumer and that is exactly what this chart shows it predicted every single slowdown in economic growth going back to the 1980s with the exception of CO that was of course induced by the pandemic in each of these examples
• 07:00 - 07:30 inflation rose and then 8 months later real economic growth collapsed over the past 8 months we've seen inflation remain quite steady which to us suggests that we should be expecting economic growth to remain quite steady at least for the next 8 months there is a big caveat to this of course the pandemic was a great example of how an external shock can cause a recession without a spike in the inflation rate an extreme tariff policy today or even high levels of uncertainty in the marketplace could
• 07:30 - 08:00 end up making this chart look something like this and again many people believe today that's what's going to happen we are not PhD economists so we're not taking a big stance on this right now that if we see the economy avoid a tariff recession right now then this chart is telling us that the economy could actually continue to hold up quite well throughout the rest of 2025 now you might be thinking that we are relying too much on government data here and you're right in trading we always have to cross-check our information with other sources plus if we just use the
• 08:00 - 08:30 government's data we only get monthly updates on inflation we much rather have a realtime view of what is happening with inflation so for this we constructed a basket of publicly traded commodities that can tell us what inflation looks like in real time this includes things like the price of cotton wheat corn soybeans but also the price of metals like copper and nickel that are essential in manufacturing when mixed all together these commodities give us a broad sense of what inflation
• 08:30 - 09:00 looks like dayto-day this is what this basket looks like on a chart going back to 2016 and if we plot it against the rate of inflation in the US we see that it does do a very good job at telling us what inflation looks like in real time right now our basket of commodities is telling us that inflation is indeed remaining quite stable just as the government's data is suggesting at least for now again if we were to see a pickup in the price of commodities here over the next few months you'll start to hear some different things from us regarding
• 09:00 - 09:30 the economic outlook provided of course that Donald Trump's tariff shock hasn't already pushed the economy past the point of no return we really are at a makeorb breakak point for the US economy avoiding a recession in the near term could mean seeing stocks continue a very healthy bull market throughout the rest of 2025 but a recession would of course lead to more pain luckily as traders we don't need to make a call on this right now our trading strategy is based on making high probability trades yielding
• 09:30 - 10:00 large returns during favorable market conditions the goal for us in these current conditions should just be not to get ripped apart by volatility this is why we currently still have a very conservative approach in today's market environment until we see an improvement in the technical and internal structure of the stock market at that point we'll start to initiate trades much more aggressively again if you want to follow all of our trades make sure to check out our website on our homepage you'll find all of our closed trades for 2024 you
• 10:00 - 10:30 can scroll through them and you'll find that our trades allow our members to get a great ratio of winning trades versus losing trades with the winners providing significantly higher average return relative to the losses that are much more limited in size now 2025 has been a bit more choppy so far as the stock market has dipped but we have kept our clients exposed to trades on gold and Chinese stocks which have been performing incredibly well in the first quarter of 2025 our mission is to make all of our clients as profitable in markets as possible join us if you're
• 10:30 - 11:00 ready