 is the genes in a bull market. What I mean by that speculation takes over. Nobody cares about fundamentals in a bull market. So this episode, we're going to talk about how fundamentals are lost in a bull market, how the noise comes out on the bull market, and how everybody gets quiet when we start to go into a bear market. So what I first, what I further do, I don't have a lot of time, I definitely you guys and girls don't have a lot of time. So we're going to jump straight into it. So this is your first time checking in. This is Prince Dax, coming all the way live from a beautiful city and state of Honolulu, Hawaii via Denver, Colorado. So that's what you can see right here in my background, but we're broadcasting live in Honolulu, Hawaii. So the first thing we want to talk about is speculating versus investing. Speculating versus investing. Now the first thing is we got to break down what is speculating. Speculating is forming a theory without evidence, point blank and simple. You form a theory that something is going to happen with no evidence, just up your pure belief, which is now saying, I'm not saying that it's a bad thing or that it's a wrong thing. You just have to understand what side of the coin you own. On the other side of the coin, we have investing, right? As a financial professional, if I'm managing someone's portfolio and someone comes to me and says, Prince, I'm looking to invest or whatever the case may be, I have to know the difference between when I'm speculating and when I'm making an investment. I think so many people in this bull market become so confused about the difference between speculating and investing. Right now, we have the stock market that is all the time high, cryptocurrency, bitcoin that is all the time high, and we have high unemployment. How does this happen? What makes people jump into crypto? So many people hit me up all the time and say, Prince, look at crypto, more important, look at GameStop. Who remembers the bond with GameStop that we had a week or two ago? I could not get away from GameStop. Everywhere I turned around, there was somebody talking about GameStop. GameStop, are you in on GameStop? What do you think about GameStop? My neighbor brought GameStop. I'm selling it. I brought it. I can't sell it. What's going on? What are your thoughts and things like that? Now, these are people who knew nothing about GameStop as a company. They knew nothing about it as an investment. Everybody was speculating. If you've been living up on the rocking, you're not familiar with what's going on with the GameStop and AMC, things like that. Those things started out of a social media site. People framing it as Reddit, right? They're saying a bunch of people got together on Reddit, decided to take this one GameStop and shoot it up into calls of short squeeze, getting back at the people at Wall Street and also making a bunch of money for themselves. That's stock manipulation 101. I'm not saying it's wrong. It's right. Who did it or whatever, but we all know, hey, that is openly, publicly stock manipulation. And you know, the SEC governs this, and you know, they're going to slam down the people that came from Reddit, the people that started this or whatever, right? So when you do this, you've got to know the SEC is going to step in and cause a situation. As an investor, as an investment, why would I go to something that I know that is manipulated? I wasn't, I wasn't a person that manipulated it. Why would I go running to something and say, hey, I want to get into this manipulated investment? Wouldn't be a smart investment. But if I was to speculate, build a theory based off of no evidence, if, hey, everybody else is doing it, let me jump in on it and guess what? Now GameStop has shot down about 400% down 400% in the last week or two and everybody's quiet. That's what you got to remember about investing right now today. In the bull market, everybody's a genius and it's so much noise, it's so loud. Everybody knows everything when the market is going up. Everybody's a genius. And people say, why do I care about the fundamentals when I'm making money? I'm making money. Why do I care about the PE ratio? Why do I care about the debt to income ratio, the return on assets to EBITDA? All of these fundamentals and finances, why do I care? For instance, I brought this last week. I made 10% last night. I'm making 20% today and it's continuing to go up. I just want to ride this way while it's going up, right? Nobody looks into the fundamentals or why is this going up? Can it potentially go down? What's going on? Nobody cares about fundamentals in a bull market. But here's the crazy part. There is a time when everybody cares about fundamentals. It's when the bear comes. When the bear market starts to take fear, when the fear starts to set in and that bear comes out of the blue and everybody's looking around to see what's going on and the market is tanking and you see that cryptocurrency going down. You see the stock market going down. Everything flopping left and right. Remember March of 2020 when we had the pandemic hit and all of everything started to collapse and everything started to go down? That's when people start to look at, oh, okay, what is the cash flow? What is the income? Is Apple selling that many iPhones? Is this company doing XYZ? Everybody is worried now, right? Why is the care level so high when the companies are going down? Nobody cares when it's going up. So this is the first thing, right? Right now, accessibility has been created in the market at a massive level in 2021. 50 to 60 years ago in my dad's generation, he didn't have enough knowledge nor did he have the access. So back then in his generation in the 60s and the 70s or whatever, you had to have a stock broker. You had to have a certain amount of money. You had to have a stock broker. You had to have a certain amount of money. You had to have access to the market and you had to have knowledge, maybe subscribe to the Wall Street Journal to look at what companies you wanted to invest in and things like that. Accessibility wasn't there. Now we had a thing called Robinhood. Who has heard of Robinhood, right? Robinhood has came in and it has increased not only by itself, but it's the one that millennials of choice. It has increased accessibility to the market, meaning you right now who's watching this live or catching a playback or whatever, you now can download a phone. You can download an app on your phone and within the next day or two deposit money in and hear you off, you off to the races, be your own investor, stock portfolio, portfolio manager, right? This accessibility is great for the everyday person to be able to invest, but now it brings in a slew of people who run into investments who just say, hey, they go to work, they read an ad, they read an article, they hear about something, they buy it, it starts to go up, they care nothing about the fundamentals because why do fundamentals matter? I'm making money. What I want to hear about that, Prince, I'm making money. This person is not making money. Now let's break it down between speculation and investing. Right now, Bitcoin has been on a rampant run up for the last couple weeks, right? Speculatively, cryptocurrency I think will continue to rise. I don't know why, I don't know why they went up this year, I don't know why they went down last year, I don't know why they're going sideways, I don't know. One thing I can look at, I can say, hey, look, the accessibility is increasing. Well, not the accessibility, the, which word am I looking for? It's been more socially and financially accepted. We saw Tesla jump into cryptocurrencies. We saw Elon Musk get in by $1.5 billion worth of cryptocurrency. Then we're seeing PayPal and MasterCard and, you know, all these banks, people are starting to get into cryptocurrencies and people are saying, hey, this is almost a thing. This is becoming a thing. So the value continues to run up. I can kind of understand that. But when it comes down to finances, I have no way of verifying why this information is happening. I don't know what is the controlling value. I know when it goes up, I know when it goes down. I know the simple concept, when it goes up, I mean a bunch of people are buying it. When it goes down, a bunch of people are selling it, you know, and that's just one coin. There are thousands of coins out there. You have coins, you know, you have Dogecoin that comes out of the blue, that you have the Stellar coin, that you've got the Ethereum, that you've got this cryptocurrency and that cryptocurrency and some people say the value is behind the technology. Who knows? From a financial standpoint, I cannot look at this and make an investment, but I can speculate. It's just like when I go to Las Vegas sometimes and I get on a crap table and I put my money on the field. When I put my money on the field for people who are not familiar, that's just a section of the crap table that somebody rolls the dice and if it hits the numbers that I bet on, guess what? I just double my money right then and there and from wrong, I lose all my money, right? It's fun. People like it because I can speculate. Do I know when I roll those dice is going to hit a two or three or four? What makes the dice hit? What makes the dice not hit? I don't know. It's just fun. I'm just speculating. If I double my money, great. If I hit a certain number and I triple my money, awesome. Awesome out of the casino and things walk off or whatever, right? Because Vegas wouldn't be Vegas. Speculating wouldn't be fun if you only made a 5% return or 2% return, 10%. No, people love that double or nothing. People love that quadruple or nothing, triple or nothing. People love that. That's what keeps people, that's what makes speculating worth it and somebody said, hey, put your money down and if you're right, you're going to get 10%. Not as interesting. Vegas will go out of business tomorrow, but people love the idea of speculating. I put in $1,000 and boom, this ran up, right? Don't know why. I don't know why. So some things, it's okay to speculate if you know. I want everybody to just listen to this to write this down. I tell people this all the time. People always say, hey, only invest what you can lose. I don't believe that. Invest what you need to retire. Speculate with what you can afford to lose. Again, invest what you need to retire. Right now, you can sit down and say, hey, I want to retire by the age of 45, 55, or 65. This, how much money I need in order for me to get to that type of money, I need to earn a 7% return on investment for the next 20 or 30 years. I need to invest $800 a month for the next 25 years in order to be retired, right? Well, you know that amount. Invest that to get to your goal. Now, when it comes down to speculating, speculate with what you can afford to lose. When I go out and buy some stellar corn or whatever, or stellar, or Ripple, or all these other cryptocurrencies, I heard that one was bad, this one was good, Bitcoin, Ethereum, Litecoin, all the different types of crypto currencies out there. I buy a bunch of it, and you know, I may have a hundred bucks. I throw a hundred bucks over there and say, hey, you know what, I'm going to see what it does. I'm going to buy $10 a month, $10 every time I get paid, I'm going to just buy some cryptocurrency, see what it does. If it becomes something great, if it doesn't, oh well. That's speculating. I'm just speculating. I'm hoping it goes up. It's the same concept I would take if I went to the local gas station and brought a lottery ticket. I'm speculating that it will go up. I have nothing to do, I have no investment knowledge. Now what we're going to do on this episode, sorry, not my microphone over there for a second, but what we're going to do on this episode, we're going to go into the fundamentals of investing. When you make an investment, what are some of the things you're going to look at? What are some things you should look at? So we're going to look exactly how the fundamentals of investing work. So we're going to go away from speculating. We're going to go into investing. We're going to look at the fundamentals and how people can make a judgment off of investment versus speculating. Because right now, what's driving the market? What drove GameStop? What drives a lot of things that happen? The fear of missing out. The deal is people start to look around and they say, hey, you know what? Ah, the fear of missing out. My buddy told me he brought Dogecoin. My cousin said he brought a bunch of GameStop. My friend told me they made a bunch of money off of AMC stop. And they said he brought it for 10 bucks. And now it's at 20 bucks and it's going to 30. I read an article said it's going to be at 100 by the end of the month. I don't want to miss out. I don't want to be an idiot that misses out on this. So I want to jump in. I want to get inside of this. I don't want to miss the boat. The fear of missing out. That's what drives a bull market. Not that you have this bull market going on. Nobody's looking at the fundamentals. Nobody wants to hear about. We just had earnings this season. How many people listen to Uber earnings? Apple earnings? Amazon earnings? Netflix earnings? Facebook earnings? Who listened to those? Who watched the 10K report? Who not watched? Who read a 10K report? Read a 10Q report? Read a cash flow statement? Nobody. Who cares? I'm making money. I'm a genius. Everybody gets on social media and telling me how smart they are. But that's okay. We're going to take you from an ins speculator and to investing. So we're going to take a quick break. You don't move a muscle. You stay right. You stay tuned and right here to Prince Dax. I'll see you after the break. Bull is loud. But the bear is always quiet. Prince, what do you mean? Welcome back to the Prince of Investing, ladies and gentlemen. My name is Prince Dax, coming to you guys and girls live all the way from a beautiful city and state of Denver, Colorado via Haluah, Hawaii. I wanted to bring this up to say to the concept of the bull is loud. But the bear is always quiet. When people are making money and everything is going well, everybody's on Facebook, Instagram, Twitter, coworkers. Oh, I'm so rich. Everything is just going so fine. You should get in. He should get in. We all should get in. I brought this. It went up and we lose the illusion that the market just continues to go up. And we get into that illusion that the market is going up. Nobody pays attention to that bear that it's right around that corner. Everybody's in that bull market is going up, up, up, up. Crypto is at an all-time high. Stocks at a all-time high. We are just so fun and funny. Danny, I don't care nothing about the fundamentals of company. You get a stock. You get a stock. This is a bull market. This goes up. This goes up. This goes up. And we fall upon an illusion that all companies continue to go up. Now here it is, right? Everybody is a genius. We talked about everybody being a genius in the bull market. Now we're going to take you away from being a speculator into an investor. Now we spoke about a speculator before the break. We talked about a speculator as a person by a dictionary term, forming a theory with no evidence. So for prime example, building a portfolio and making an investment, purely offer what someone said, what you heard, what you feel, what you believe. Not saying anything's wrong with that, but that's computer speculation. How is that different from investing? Investing. Now we're going to break down the difference between investing. When you look at investing, for prime example, my belief is when I look at people with cryptocurrency, I tell people, look at the technology behind cryptocurrency. Bitcoin, not Bitcoin, but blockchain. Look at the technology behind something like Bitcoin, which is blockchain. Who are the companies that are providing the infrastructure? For prime example, I took $1. I went on Coinbase or Robinhood and I took my $1 and I brought a fraction of Bitcoin or I brought Dodgecoin or whatever the case may be. Then it went up to $2. I sold it for $2. And then I put the money back into my Bank of America account. And then I went and bought a cheeseburger. What is the technology behind that? Who is the magic invisible hand that is allowing this to happen? So when I look at those companies, I discovered several companies that are behind it. You have companies like Riot, Silvergate, some of the companies just to name a few. You even have a blockchain technology ETF. So to think about it, now when I look into those companies, I can look at their 10K reports. And I can look at their 10Q reports. What is inside of their 10K report or their 10Q report? We have things like their finances. I can look up their cash flow statement. I can look up the income sheet. I can look up the balance sheet. So cash flow, income statement, balance sheet. Why is that so important? With all of these things put together inside their cash flow statement, I can see how much money is coming in and out of the company. With the balance sheet, I can see how much money is in the bank. How many assets do they have? How many liabilities do they have? How much money do they have in the bank? The income statement. I can see how much money is coming in. How much revenue is the revenue growing? Is the revenue decreasing? What is the profit margin? I can look at things like the EBITDA, the interest, the interest earned, earnings before taxes, depreciation, and amateurization. Hopefully I didn't butcher that up with one of the acronyms. But I can look at how much money the company is making. Now, when I look at these, I can look at profitability formulas. I can look at different financial formulas and say, okay, look at the debt to income ratio. Look at the return on assets. Look at the profitability. What is the price to earnings ratio? All these different ratios, I can start to figure out and compare to other companies. So for prime example, I can look at a company and I can say, well, this company has been profitable for the last two years. This is this cash flow. This is the type of businesses in. This is the, these are their competitors. This is how the business is growing. This is how the business is declining. I can look at all that information from 10K reports, 10Q reports that I can see on scc.gov. And I can make an assessment, compare them to their competitors. I can look into the space and say, hey, I want to make an investment into this particular company. That's what you can do when you make an investment. So it's my economy. Let's say I'm wrong. I invested into SI Silvergate. I think the company's at $140, $150 right now. Let's see if that company went to zero tomorrow morning. I can say, well, this is why I made that particular investment. The company has been profitable for 20 years. This is return on assets. This is his income statement. This is how much money it had in the bank. This is how much money was coming from his cash flow. This is the way it was doing business. This is where they're making their money from. This is how they were investing their money. This is how they was financing their money. I can see all those things. And I thought that this company would be XYZ in the next five or 10 years. And if I'm wrong, I made my decision based off of financial documents and assessments. Then I can look at commentary. I can tune into a show like this. Here's what people are saying about this company. How is this company aligning? Every three months, I can hear from the CEO. I can read the CEO's letter. I can read the CEO's annual letter. Then I made an investment. If I was wrong, I can live with that. For prime example, if my Bitcoin went to zero tomorrow, why did it go to zero? I don't really know. I can speculate why it went to zero, but I never really understood why is that 40 something thousand dollars a day? Because people say, hey, well, it's being used. It's accessible because of the technology, things like that. But I have no black and white that I can point to, financial data, not a blog or what somebody said. I don't know who the CEO of Bitcoin is. I know it's decentralized. I don't know how to read any of the data. How many Bitcoins are out there? How many are being purchased? Who's controlling? Who's looking at XYZ? Who's the technology behind it? What if somebody hit the power button, the off button on cryptocurrencies? It's all on the internet, right? What if you're a digital wallet just one way? Who's backing that? Who's looking at? I don't know. But I can't speculate. It is because I'm not foolish to know that, hey, I can speculate and say, hey, it is going up and as it become more social acceptable and as more people buy it, I can see the value going up. But at this point, I can only make a speculation. I can't make an investment based off of what I know. So what I did was I made an investment based off of, I made an investment into companies that are backing cryptocurrencies because I can look at the data. I can look at it. I can formulate an opinion by looking at the evidence of what the company is doing. With the actual currency itself, I'm speculating. I'm just saying, hey, you know what? It's 50 bucks, 100 bucks. This is 20 bucks that I was throwing away every week anyway. I'm going to just throw that to Bitcoin and see how that works. That's speculating. I can't base that off of factual data, factual data that I can put my hands on, that I can touch and I can tell, oh, for prime example, if you ask me Prince, what does Apple do? Apple does this, this, this, this, this. This is how much money made last quarter. This is how much money made last year. This is how much money has in the bank. This is how much debt it has in the bank. This is how much money they're spending on debt. This is how much money they're spending on marketing. All those things I can look and I can say, okay, now let me compare them to Microsoft. Microsoft is doing HYZ. This is how it's going. These are the things that these companies are looking at. That's the difference between speculating and investing. It's nothing wrong with speculating as long as you understand that, hey, I just went to the gas station. I spent $5 on a lottery ticket or a stretch off and I understand, hey, if it works, great, I'll turn it in and get a million dollars or $5, $50 or whatever, or I'll throw it in the trash. But I understood what I stood when I walked into that investment or not investment, but when I walked into that business deal or proposition. So the thing about it is, we got to understand, when these stocks start to run off and people are making money, you hear all type of podcasts, all type of shows, all type of things across the globe, where everybody is just going to say, oh, Prince, I'm making, I made so much money off of this company. You guys need to get in. Look at my Robin Hood stream shot. Look at this. Look at that. Look at that. Everybody's a genius. So you're sitting back at home thinking, okay, well, I don't know. I heard my buddy said they're making money off of this and I was that guy. I used to speculate all the time. So there you go. You get on your phone and you download the app because you heard so much about it. You get into it. You buy it because somebody said it's a good thing or whatever. And you know, you buy something and it starts to make money. So you put more money in, but you make some more money and you care nothing about the finances behind it. Why don't you care about the finances behind it? Because you're making money. So I always tell people, nobody cares about the fundamentals in a bull market. Now in this episode, you have learned what's the difference between speculating and investing. And you also have taken on board what is speculating and we talked about investing. How to make an investment based off of investing. If somebody came to me with a real estate idea or a business idea, you know, yes, the person's probably going to talk with me very fine. I'm very good and say, oh, this is the best thing in the world. Oh, you know, I'm telling you, oh, this is the best opportunity. You know, if you want to make some money, just give it to me and it's all going to be fine. All the good things like that. You're like, oh, okay, cool. Well, this person got a good track record and I want to make some money and you jump into it. And that's how you end up losing, right? With me, I did that in my younger years. So, but now I like to say, hey, you know what? Send them to paperwork. I want to see audited financial statements to say how much money, if I was going to go buy a company today, if I was going to go buy a particular company today, someone was looking to sell me a company, I'm going to look at all their financial status. I want to see how much money is in their bank account. I want to see what contracts they have, what trademarks, what everything they have before I'm making an investment. So that's in between investing and going around and speculating. Just remember, nobody cares about the fundamentals in a bull market, but they will care when the bad market pieces hit around. That's when everybody's going to start to count their coins and look to see what the heck I really put my money into once things start to go down. But take that eye now. Enjoy the bull market, but be very mindful and watch the fundamentals because the fundamentals will rise again. All right. Well, ladies and gentlemen, that's going to conclude today's topic and episode. I hope you took away something from this. As always, my name is Prince Dax. I'm the Prince of Investment. Thank you, guys and girls, for tuning in. And until the next video, podcast, cartoon, whatever it's you're seeing me do around the globe, don't forget to hit that like, subscribe, comment, and share button. Until the next time. Peace. Be safe. I'm out. Thank you.