Now Is NOT The Time To Panic! Why I’m BULLISH Stocks Still

0:00Uncertainty, panic, fear, doubt. Investors are freaking out, asset prices are going down, and everyone's trying to figure out what's going to happen. But relax, take a deep breath. Today I'm going to explain to you exactly what's happening in the market and why you shouldn't be nearly as scared as all of your friends and neighbors. So we've got to remember that the war in Iran is raging on. We're dropping bombs on an almost daily basis, and we've got the entire world trying to figure out when is the Strait of Homo's going to open up? It's important because 20 % of all oil goes right through that strait.

0:30And all of the countries in East Asia, they're freaking out because they can't get the oil that they need in order to power their economies. And so here in the Western world, in North America, all eyes are on oil prices. People are watching as oil prices continue to tick higher and higher and higher. Over$100 is not comfortable for people in that Western world. But that just may be a distraction. And I'm going to get to in a second exactly what the distraction is from. But before that, we've got to remember, what is the United States going to do in Iran? My best guess is that the United States is going to stop bombing Iran.

1:02They're going to claim victory and they're going to leave other nations to fight it out themselves. Just this morning, President Donald Trump tweeted all of those countries that can't get jet fuel because of the Strait of Hormuz, like the United Kingdom, which refused to get involved in the decapitation of Iran. I have a suggestion for you. Number one, buy from the United States. We have plenty. And number two, build up some delayed courage. Go to the strait and just take it. You'll have to start learning how to fight for yourself. The USA won't be there to help you anymore, just like you weren't there for us.

1:33Iran has been essentially decimated. The hard part is done. Go get your own oil. That's the type of big energy that people in America are finally saying, wait a minute. The leader of our country is stepping up and saying, if you don't help us, why should we help you? I don't know how that plays out, but what I do know is that here at home, higher oil prices are having a daily impact on the American consumer. It's interesting timing because the average gallon of gas in the US is now over$4 a gallon. It's the highest it's been since 2022. And so this is where investors have to be very careful. Because we have higher oil prices and higher gas prices, people start getting worried about inflation and stocks are selling off because now everyone hates uncertainty and chaos, which seems to be everywhere at the moment.

2:18and they also have that deep concern about higher levels of inflation thanks to the rising energy costs. But when stocks go down, people get scared and they start selling their assets. My friend Mark Yusko always says that only in investing, when things go on sale, do people run out of the store. Any other time, they rush into the store. But in investing, that's not what happens. But obviously this makes no sense. If you like a stock, you should buy more of it when it goes down rather than sell the asset at lower prices. But let's dig deeper into this current stock market sell-off. Charlie Blello writes that the S &P 500 is now down 9.8 % from its January peak.

2:53That's the biggest correction since the tariff turmoil last April and the longest, 61 days. It is the longest since the 2022 bear market. Phil Rosen points out that the stock market and its valuations are declining, that big almost 10 % drop. But at the same time, earnings expectations and actual earnings results are climbing to record highs. How is that possible? The companies are getting more profitable. Earnings are going up, but the stocks are going down. Something's got to break there. And Bill Ackman, the great famous investor, he says that some of the highest quality businesses in the world are trading at extremely cheap prices.

3:26One of the best times in a long time to buy quality. And he says to ignore the bears. And if that's not good enough, we can also listen to Jamie Dimon. Jamie Dimon is the greatest banker of our generation. The man you would expect to say, hey, everyone calm down. Let's stop the wars. Let's make sure that the stock market goes up. That's not what Jamie Dimon's saying. Instead, Jamie Dimon is saying that it's much more important that we are successful and we complete the mission in Iran. Take a listen to what he said on television recently. I think the market, you know, looks, the markets are unpredictable.

3:57And it's hard for me to tell you exactly what. But I think they're just looking at, is there a chance something can go wrong? Now, we should all hope nothing goes wrong. We should all hope that these bad people are, you know, that we win this thing and clean up the straits and that Iran is no longer a threat to everybody. But, you know, the markets will be concerned until it's over. But I think it's very important. It's much more important that this be successfully completed than what the market does. And that sounds like what the UAE and Saudi Arabia and the Gulf states are saying. Finish this off the right way.

4:27They see the urgency here. Do you? Yes. I mean, I hear some people say, you know, they weren't an imminent threat. Threat means I'm threatening you. I might do something bad. These people have been doing something bad for 47 years. They've been killing people. They've been killing Americans. They funded that terrible Hamas thing. Several Americans were killed on October 7th. And so they've had proxy wars. They've been threatening people. I think people are surprised to find out they had a ballistic missile that could go 3 ,000 miles. These are bad people, and they needed to be stopped. Now, it's pretty crazy to hear the head of the largest bank in the United States talking like that.

5:02But this then brings us to, okay, well, if he thinks that Iran is more important than the stock market, why is the stock market going down? Carson Group's Ryan Dietrich shows that hedge fund, they are now selling so much stock that it is in line with a 100-year pandemic and a 10 % two-day crash after Liberation Day. This time, he says the S &P 500 is down about 9 % in two months. And what is dragging all of the stock market down? Well, Barry Ritzholtz shows that the hateful eight, it's 85 % of the total S &P 500 decline. It's just eight stocks. Everyone take a deep breath. But taking a deep breath ain't gonna solve volatility.

5:39Go back to Charlie Blello. Look, he shows that the VIX closed above 30 in each of the last two trading days. Why is that important? Well, historically, this level of fear in the volatility index, it's been associated with above average future stock market returns, plus 21 % over the next year on average. But the biggest gains have come with the VIX over 40. And so are we going to get a VIX over 40? I don't know. But if we're already over 30 and everyone's panicking, it's getting pretty interesting. You know, people start rolling up their sleeves and say, maybe I should be pouring capital into the market.

6:08But of course, the big bad Federal Reserve, that's what everyone wants to know. Are they going to cut rates? What should they do? Well, let's just take again a look and be honest with ourselves here. How much of the current situation is being driven by short-term oil prices rather than the structural deflationary forces that are swallowing the U.S. economy? And this is very important. I can't, literally, I cannot describe this enough, is right now, all the conversations, go look at every single headline, CNBC, Bloomberg, Wall Street Journal, Financial Times, Reuters, any of them. Oil prices, energy, gas at the pump, the war, the Strait of Hormuz.

6:45That's all they're talking about. But the short term oil prices are short term. If all of a sudden we claim victory six months from now, what do you think is going to happen to oil prices? Do you think they're going to be back down? Probably. And so the more important thing for an investor who's not a day trader, somebody who is trying to invest their hard earned economic value for their family, for their children over time. You got to look at what structurally is happening. And right now there are structural deflationary forces that are swallowing the US economy. Tariffs, deportations, AI and robotics, all of those are deflationary.

7:20And you don't have to believe me. Let's look in the housing market. Home prices, according to the government data, are now falling in more than half of the major MSAs. More than half of all major MSAs have home prices going down. That's not supposed to happen. But again, I continue to explain that we are seeing structural deflationary forces. Those are going to lead to lower prices. There are other two examples. Recently, there was an entire article about Sharpie. Why is Sharpie important? Because Sharpie figured out that they could reshore their manufacturing. They used a bunch of robotics and they now are producing their product for less.

8:00So coming back to America actually made it cheaper for them to do this rather than staying where they were. On top of that, there's another example recently of a peanut farm. And guess what happens in that situation? They implement a bunch of robotics. And now not only are their workers getting paid more money, they're working less hours. That is the beauty of deflation for workers and consumers. Prices come down and people can make more money and work less because you have that deflation. Now, are there downsides to deflation? 100%. But I think that people should not worry about that. Why? Warren Buffett, the goat of investing, the greatest to ever do it, according to many people.

8:42He recently was on CNBC with Becky Quick. You know what he said? He believes that the Federal Reserve should have a 0 % inflation target, not 2%, 0%. Buffett sounded like a Bitcoiner now. Take a listen. I wish they had a zero inflation target. But I mean, once you start saying you're going to tolerate 2%, that compounds pretty dramatically over time. And you're saying to people that you're getting less than 2 % on your money, you're going backwards. And actually, if you pay tax, you may pay tax on the 2%. I don't like that particular goal. So there you have it, folks. The greatest to ever do it is telling you we shouldn't have a 2 % inflation target.

9:31We should have a zero. Why? Because he doesn't believe that inflation is good for people. He doesn't believe that it is good for the US economy. I agree with him. The Bitcoiners agree with him. And ultimately, I think that the United States is going to experience the structural deflationary forces. and all of the noise when it comes to oil prices, energy, gas, war, etc. is going to be a complete distraction. When we go and we fast forward six or 12 months from now, everything's going to be fine. Relax, stop getting so deep in the rabbit hole of what the headlines are saying and realize that your portfolio is going to continue to do exactly what it was doing because all of the short-term things will eventually pass.

10:15and at the end of the day, the United States economy is going to be stronger than ever and we are going to see prices come down and we are going to see people be much better off. If you don't believe me, the best thing you can do is get out your popcorn and just watch. That's it for today's show. Thank you guys so much for watching. Please remember to subscribe on YouTube. Every single one of you that subscribes, you're helping us out and I appreciate it. I'll see you guys live tomorrow from the desk of Anthony Pompliano.