A Recession is Coming | Two reasons why I'm still buying stocks

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Published 2022-07-04
There are two things that you need to understand about the stock market.
1) A ≠ B

The stock market is one of - if not the - most complex system we know. The number of variables that influence stock prices is near-infinite. And any patterns we observe, or opportunities we see to predict what might happen, are short-lived and eroded by the activities of other investors.

If a new event "A" occurred, and it looked like it was going to cause "B", the market would move within minutes to bake this into stock prices. This brings me nicely to reason number 2:

2) It's forward-looking

The stock market is constantly weighing the odds and potential outcomes of what might happen in the future. So all the risks you read in the newspaper will already be baked into stock prices. Does the market get it right all the time, no, does it get it right more than you? Yes.

You can either buy into that collective intelligence, and trust the market, or you can pit your wits against it.

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0:00 A recession is coming
1:22 Reason 1
5:54 Reason 2
9:06 In the context of today's environment
11:40 Take aways

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