Okay folks, so as we deal with some of the back and forth movement in the stock market, I want to bring to light some new data that suggests that something big is brewing underneath the surface and accordingly in this video, we're going to be giving you three different things: number one, an update on plays in the market, number two, what Lucid just did and why they're rallying, and then number three, the main entree, which is what exactly is alarming in this data set and how it relates to where the stock market is going to be trading. Before we get into all of this, the only thing that I ask of you in return is that you hit that ravishing like button and also don't forget to subscribe either. Okay, let's go ahead and start with updates. Market Really really tried to stage a comeback today.

one of its traditional post-massive sell-off rebounds and it kind of worked for like a second and then all of a sudden it started taking again and the end result was fairly lukewarm. Okay, moving on here we go with another green day for Cei when these run. boy did they really run. but eventually it will come down and it'll come down hard.

So my thought process is continue to double down on risk management. The higher it goes, the more it requires. tighter risk management folks. No excuses.

You can enjoy an uptrend without intoxicating yourself with one G-r-e-e Former Sprt was back in action again this morning, managed to find some lovely support yesterday, and bounced off the 23s to over 30 this morning. This was largely as analysts over at B. Riley. The Riley of B gave it a price target at 78 dollars, which at the time was more than 200 percent of upside.

They cited high potential hash rate, low probability of equity dilution as compared to the Piers i think they were referring to Marin Riot and stated that one of its sources of competitive strength was the fact that it's not reliant on third-party electricity sources. But at the end of the day, folks, well, it's great to see analysts go in and call in short sellers bluffs here. I'm not making an argument for this as a fundamental play, I'm making it as a short squeeze plan. I don't believe this is going to be the last that we see of G-r-e-e Big news from Lucid.

Not only have they officially begun production, but they are slated to actually start delivering next month. Their earlier estimates this year were that they produced 20 000 Lucid Air sedans in 2022 and that has been confirmed as of late to be on track. They also have heavy pre-orders and I'd expect as they start delivering and showing up on the road, far more people are gonna want them. I don't know if it's just me folks, but I'm sick of looking at the Model S.

and compared to the Model S, the Lucid Air looks a lot more intriguing. I love Tesla and the Model S is an excellent vehicle, but it looks like a stale piece of bread compared to a Lucid Air. It's also true that the Lucid Air has up to 520 miles of range, which is industry-leading and a huge thing that they can advertise. Hey, our model beats all other Evs by over 100 miles, which is a huge selling point and in totality.

I'm very, very pleased here. Lucid has not only gotten their factories up and running, but they're gonna start delivering next month, which is what everybody has been speculating on all year. Are they going to meet expectations? Are they actually going to have technology and specs that they've promised actually matching up to reality? And now that we're getting close to the end here, we're starting to see Yes. Yes, they're performing In terms of clarification on chip shortages, the Ceo says he expects it to be a quote reasonable bet that within a year's time, most of the chip shortages will ease.

He also reminded investors that Ev production is very, very capital intensive business, and before they actually get their Suv, their next model production off the lot project gravity, they are going to need to raise more capital, which based on what he said, seems like it's going to be in 2022.. In terms of Amc, not much new on this front besides the usual oogabooga battle. Citadel Securities has continued to be under huge pressure thanks to the court document leaks that are trending everywhere. Citadel themselves have actually lashed out via Twitter saying there are those who still refuse to believe an American landed on the moon Internet conspiracies and Twitter mobs try to ignore the facts, but Citadel Securities never requested, intimidated, agreed, or otherwise, sought to limit or to restrict the trading of such securities, blah blah blah.

Ceo Ken Griffin himself actually went ahead and weighed in. He said it must frustrate the conspiracy theorists to no end that Vlad and I have never texted, called, or met each other. But I must say kudos to Vlad, my favorite small Bulgarian child, and his team at Robin Hood, for their remarkable success story. Certainly seems a little bit taunting.

Also, I gotta say, the whole Vlad and I never met defenses. Very, very strange considering that's not exactly the premise of retail traders frustrations on a scale from one to oogabooga. Whether Vladden can get beer on the weekends isn't exactly a top priority. That being said, at this point, hey, let's be clear, we're all speculating here and these are all just allegations.

We'll see what the courts decide. Okay now, main entree. So since the market has gone up consistently over all decade after decade, it always creates this perception amongst investors that it's overvalued in the present moment. Which means that for most investors at any time frame, they're always going to say hey, we missed our moment.

we missed the boat. Oh well, The stock market's now done for me. And then, of course, 10 years in the future, they'll be saying the same thing when everything is at much, much higher valuations. But the thing is, they'll be even more convicted of that, Because guess what, it's Much more expensive.

So they're like, okay, well, yeah, 10 years ago, it might have been cheap, but now it's even more expensive because this time it's much, much different. Quite frankly, while the stock market does tend to go up and go up relentlessly over decades, Truth is, there's certainly periods of time where the market can get ahead of itself. Like for example, if a dangerous man props up the market with endless money printing during economic downturns where Gdp is tanking. The fact of the matter is that while any current valuation of the stock market is always going to be based on the emotions of the masses and their projections on what's happening in the future, the truth is that there actually are metrics that allow you to actually make sense of valuations.

So let's go ahead and bring out one of my favorite indicators: the Buffett indicator. The way that this works is it takes the entire market cap of the U.s stock market and compares that to the Gdp of the entire U.s That way you can see how much you're paying in equity for how much the country is producing. Is it a perfect metric? Hell no. But it's pretty damn good.

It can give you a lot of historical conclusions. During this period of the 1950s, the market was trading at about 50 of Gdp. Which is to say that for every dollar in the market, you had two dollars of Gdp. You'll also notice that the average trend line has trended up steadily since then, to the extent that when you hit peaks in 2000, you were in much worse shape as the market was trading 150 percent of Gdp.

So in 1950, remember, you were paying one dollar for every two dollars of Gdp. By 2000, you were paying three dollars for every two dollars of Gdp. Three times more money for the same level of Gdp. And you don't have to adjust for inflation or any of these things because we're just comparing units of Gdp.

Okay, so moving on, it goes up and down. The Great Recession kills valuations for a few years, which allows it to settle way below the trend line. But then all of a sudden what happens. Well, what happens is that around 2011, it consistently holds above 100, and by September 23rd, 2021, it's at 239 percent of market value to Gdp, which is not just 91 higher than the long term trend line, which has been already steadily accelerating on its own for half a century.

But it's at a level where it makes the 2000 peak look like child's play. If you invest in the stock market, this means that you're paying more dollars per dollar of Gdp than ever before. 239 percent is the equivalent of paying four dollars and 80 cents per two dollars of Gdp, whereas again, in 1950, you're paying one dollar and you got two dollars. Now, there's only two possible bigger picture explanations for this.

Number one, this is trading similar to a high multiple stock where investors are expecting outsized, massive, massive Gdp growth down the road. so they're willing to pay up now because they think it's going to pay off in the upcoming years. Or number two, the market has gotten ahead of itself. maybe propped up by easy money policies, low interest rates that are causing tons of people to take on risk anywhere they possibly can so they can get a little bit more of a return.

In the first case, if Gdp goes up and valuations stagnate, what happens? Well, eventually it catches up. Investors slowly start getting more Gdp per dollar invested, and it goes back down to its fair value on the trend line. But in the second case, what happens while the market has to adjust to fit the trend line? If the Gdp numbers can't bring the market to fair value, the market has to bring itself back down correct in order to get back to fair value. So of course, this begs the question of what the fair value is.

Based on this indicator, well as a percentage of the beautiful trend line, the stock market tends to find itself most fairly valued between negative twenty percent to about plus twenty percent of that long-term trend line, which again, if you look at the bigger picture, has been steadily increasing. So this actually leaves a lot of room for growth regardless of where it is on the trend line. If you use that, what does that mean? It means that the current fair value for the market based on the long-term 70-year trend is about and forty cents for every dollar of Gdp. But instead we have four dollars and eighty cents per dollar of Gdp.

And in order to actually achieve fair value on the trend line, you'd either need to reduce market cap dramatically in the stock market, or you'd have to dramatically increase Gdp numbers. If you actually do the math, the stock market would either have to lose half of its valuation or the Gdp would have to double. But of course this is a misread on what this is trying to tell us. The main limitation here is that while this does accurately tell us the historical value and where this historically trades based on its Gdp to market cap, what the chart forgets is how extreme and unprecedented the easy money policy situation has been with unprecedented low interest rates.

So yes, this outbreak on the chart is unprecedented, but these are unprecedented times. Quite simply, you can't look at this normally because the indicator hasn't had time to adjust. If you look at this chart five years from now, you're going to see a lot better picture of how the easy money policies of today affected the long-term trajectory of market cap to Gdp, and it's probably going to be much higher. The long-term trend line's probably going to be like 150 percent of gdp by then, and if you factor that in, the numbers don't look nearly as scary.

However, they're still alarming, especially if you believe that Gdp is going to start stagnating. In my view, I do think that the Gdp numbers that we're going to see into the fall are going to be lower than even the reduced analyst expectations largely driven by supply chain issues. I think that Kova is still going to be an issue, but I think that the supply chain problems are much, much bigger. I would argue in the short to medium run three four five months, you do see some inconsistent economic growth numbers, but if I was going to make a prediction over the long run, I would argue that we're going to continue seeing this long-term trend that we've seen since the 1950s, which is outsized market growth that continues to trade higher and higher multiples of Gdp.

And I think that you look at a lot of these industries that promise huge, huge Gdp growth and you start thinking hey, wait a second. The stocks attached to them tend to trade very very high multiple, which means continued high multiple to Gdp, but then years down the road when they start actually using that capital to bolster Gdp, you start seeing Gdp catch up rapidly. Rapidly, you start seeing a lot of those high multiple stocks not traded high multiples anymore because the Gdp has caught up. I think that in the short to medium run, you definitely see certain stocks in certain sectors being very, very overvalued because you're heading for.

I don't want to quote the Kathy of Wood, but a lot of that creative destruction from disrupters that is going to plow into a lot of these mainstream stocks that have factored in the moon and only care about the short run and haven't been investing at all in R D. That could actually create high growth rates for the company itself. In the future, they've just been focusing on Wall Street shareholders and what the analysts think. But in the long run, you're going to start seeing Gdp numbers that are insane because of a lot of that creative innovation that you're seeing coming from, for example, the Ai Sector Ev Sustainable Green Energy Cryptocurrency.

There's just a ton of different emerging technologies and a ton of massive massive industries that are dramatically growing and we're just in the early stages of them. You look at this data and you say, okay, this is kind of alarming in the short term. It's somewhat alarming in the medium term, but it's very, very, exciting over the long term. Anyways, folks that caps off the video.

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They have incredibly fast executions, a great platform, and they're pretty easy to use for new traders as well. They'll also give you two free stocks when you sign up and deposit just five dollars using our link below, so go ahead and check them out if you are broke or curious. Anyways, folks that caps off this video and I'll see you in the next one.