 Ladies and gentlemen, we are back here live coming all the way from a beautiful state of Denver, Colorado via the beautiful state of Honolulu, Hawaii. Guys, this is the Prince of Investing, and I got a lot to talk about. As we know, we always talk about investing in the market, and the hot thing on the market right now, the bull has came out of the cage with the coronavirus. So I don't have a lot of time, and I definitely know you guys and girls don't have a lot of time, so we're going to jump straight into it. The coronavirus has hit the market, the bear is out of the cage, the bear is coming out here with the flu. This is something I think this probably since this show has been on, this is probably the largest drop that we've seen from an all-time high. We have crossed over correction status, meaning that we've had a 10% drop from the all-time high. When you get a 10% drop, that's considered a contraction. The next step is a recession. Can we, and can we hear a recession with the coronavirus? That's the question of the day. The first thing we've got to ask is, first, I'm going to tell you what we're going to talk about today. So we're going to talk about fear, we're going to talk about greed, fundamentals, technical, can this happen, and how is this happening, how is this affecting everybody, and what you should be doing, and what can you be doing with your portfolio? Now, the first thing is, the coronavirus, what does that have to do with the sky market? The first step is, we know supply and demand, right? China is a company that manufactures everything. The US is in a trade deficit, meaning that we buy more than we sell, meaning that we import more than we put out, right? So with that being said, we were allowed other people to give us stuff to be able to sell. China, when people got sick, what started to happen was, when people got sick, they started to shut down manufacturing, slow down the manufacturing there, the factory stopped, people stopped manufacturing, and when people stopped manufacturing, that means that US companies don't have as much to sell. So when that happens, that can affect future profits. Now, the stock market is based off of what they're expecting to happen in the future, not what is happening today. When people are watching the stock market, they're thinking about what's going to happen in the future, not what's happening today. So now, for a prime example, Apple, take a company like Apple, a trillion dollar company that makes the iPhone, the iPhone, the iMac, MacBook, you guys all, guys and girls have all heard of Apple. Even these Beats by Dre headphones, they make a lot of things, right? They're the number one technology company that we have in the world, right? So China makes a lot of their products. What happens is, Apple comes out and says that, hey, China's slowing down factories is hurting our ability to make money, and this is going to affect our future earnings. Because a company like Apple has already predicted how much money they expect to make for the next year. They've already said, we're going to make this much money in the first quarter, this much money in the second quarter, this much money in the third. And what makes the stock goes up or down, or what makes the market goes up or down is Wall Street's expectations of what Apple is doing and their ability to meet or beat those expectations. So for a prime example, let's say, let's take your household, for example. You know, if you, if you live on a salary, you know how much money you make, how much money you predict to make. Now what happens is, let's say if you was to lose your job, if you was to lose your job, or you was to take a reduction in pay, or you used to have a layout or experience anything that can affect your pay is automatically going to slow down everything that you do in your house. Meaning, I eat, you're not going to go to the movies. You're not going to buy that cup of ice cream, so I need to stop doing it. But you're not going to go eat out as much. You're not going to that gardener that you were paying or the whatever service, this if you had a limo service, whatever service you was paying, you're going to slow that down because you're predicting a loss or to make less in the future. So what did I just say earlier, the market is based upon what is going to happen in the future and the coronavirus can affect what happens in the future because a leading indicator, maybe when I said there's a leading indicator where the economy is going is manufacturing. Manufacturing tells you where the economy is going. Prince, how does that make sense? For a prime example, let's take this marker for example. For this marker to end up in my house on my desk, this has to start from somewhere. Someone had to make it. Someone in the factory somewhere probably made this marker. They simply shipped it to their vendor, the person who was buying it before it set on a shelf at a warehouse before it was sold. Meaning that somewhere in the factory it had to be made. So if the factory workers stopped working or slowed down working, that's the leading indicator of where the economy is headed. So this is why people always pay attention to manufacturing hours. Remember the previous episode, what I made on something called leading and lagging indicators. So remember when I said this, I said a manufacturer, we pay attention to manufacturing hours, manufacturing productivity. Why does manufacturing hours mean a lot? Because the manufacturer workers are working a lot of hours. That means they're making a lot of product. And if they're making a lot of product, that means somebody out there is buying that product. And if somebody is buying that product, they are expecting to buy that product to sell it for a profit. And if they're selling it for a profit, that means that the economy is doing well and that the company would make more money in the future. When you see manufacturing hours slow or cut or manufacturers or factories, factories just shut down, that's the first indicator because a company cannot have an inventory or build an inventory if they have no manufacturing. This is why manufacturing is so important. The coronavirus affected manufacturing, which affects the supply chain in the short term. So it brings fear. That's what it brings into the market. It brings a fear of what we're projecting to potentially happen in the future. So this is why you see the correction into the marketplace. Much needed correction, by the way. We haven't had a correction. This is the longest running bull market, a bull meet going up. This is the longest running bull market we've had in the last decade. So a correction, I am glad to see. I don't like seeing it because I'm a bull guy in the long run. I'm a long-term bull guy. I'm a long-term bull guy, but I'd like to profit from the bear. When the bear comes out and tiptoes out, you're looking for ways. But while this bear is out running wild, is there something I can profit from? And what do you think is going to happen in the long term? First question is, at any time this rubber band can pop back up, meaning that the coronavirus has sagged down the market. And we could just wake up tomorrow. And our next week in the coronavirus is not as serious as it was. And the manufacturer is going to get back up on his feet. And we're going to be just fine. I believe and I know that will happen in the future. Prince, why do you believe that? I want to share my thought process. The reason why is I used this earlier on a podcast where I say that if you made a million dollars a week and you needed a babysitter, your babysitter calls out with the flu. And in order to make this million dollars a week, you need babysitting. You need childcare. Will you find somebody else? Or would you let that million dollars go by the wayside? No. For the short term, you may have to strangle around and work some things out. But you will find another person. You will find some way to find childcare. Whether that could be another sitter, it could be family, it could be friends, shifting hours. You're going to figure something out because it's too much money to be made that you're losing. That's exactly what's happened to companies like Apple, companies like Nike, companies like Microsoft. Everybody has something coming out of China, right? Even Tesla. Tesla just opened up this shop out there in China. So immediately when workers are not coming to work, when manufacturing hours go down, I already explained how that affects the future economy. So people ask me the question, Prince, can this lead to the next recession? What is the recession? 20% drop in from an all-time high. We're 10% away, meaning that we're about 2,100 points from Dow Jones to hitting the recession. And what is the recession categorized by? Two or more months of a declining GDP. Can the coronavirus affect the GDP? So yes, because we're talking about gross domestic product, the gross domestic products of America, how many goods and services that we produce and sell around the country. If we have two quarters of a slow in GDP or we hit 20% downturn, we're not that far away from being technically on paper in a recession. Fundamentally, we have to have two or more months, two or more quarters of a declining GDP. And technically, we have to fall back off the Dow Jones. But what we have today, another 2,100 points. The Dow Jones has failed 3,000 points in the last couple of days, sitting in the frenzy. So with that being said, the question is, can it affect our GDP, our gross domestic product? Fundamentally, I find that very hard press to see that the coronavirus and those workers and things like that passing off into the market. My personal opinion, I think that this is fear what I see in the market now. You see a lot of fear coming to market because of the coronavirus. You're seeing people sell off stocks, people getting rid of things or whatnot. Me being a long-term bull, I'm sitting by, I'm buying things. I'm looking long-term into the future. Things that I always wanted to buy, I'm now snatching up for free or for a low price. I'm at a yard sale and I knew this would come. Now, if we were slipping to a recession, that's meant to, I don't know, I really can't say if we can slip into a recession, looking at the chart. The momentum we have, yes, we have broken the bear trend that we had. We had an upward trend, now the market is in a downward trend. So all my option traders, all my short-term people, people who want to profit from this bull, these are people that are buying puts. These are people that are buying leverage, bearish ETFs. These are people who are becoming bonding gold, silver investors. This is traditional what always happens when the markets become uncertain. Tomorrow, we don't know what the market is going to do. And if it continues to fall, people will look for safe havens to stop the bleeding. And when they do that, people run to cash, people run to bonds, people run to gold. Those are the same commodities. Now, Prince, what are some things that are recession-proof? Our recession-proof index is something called consumer staples. Consumer staples are the index. It's consisted of companies that are staples in the economy. What do I mean by that? These are staples in the economy, as far as no matter what happens tomorrow or whatnot, people will drink Coca-Cola whether they like it or not. Coca-Cola is a staple in the community. People will drink beverages regardless. Another staple would be Walmart. Walmart is a staple, meaning that regardless of what happens, people are going to go out and eat. Regardless, these are consumer staples. People will brush their teeth. People will use deodorant. At least I hope they do that. I always say that when I say that. But people will brush their teeth. They will shave. They will have beverages. They will smoke cigarettes. Those are things that are recession-proof. Those are considered to be consumer staples in a safe haven where the economy has a lot of uncertainty. Now, also, what is another recession-proof index is something considered utilities. These are things that we use every day, regardless of what the market is doing. We have light bills. We have water bills. These are utilities. Things that we have to buy every single day to keep our house, our business up and running. These are considered recession-proof because regardless of what's happening in recession, people will use these. So the companies, now, the things that will take the massive hit, the things that have taken a massive hit, a technology company, things like our Amazon, Facebook, Microsoft, right? Those are companies, Tesla. Those are companies that are taking major hits, especially if they have connections to China. So I like to look at that area and say, if they're falling down and the index is a NASDAQ, if they're falling down the most, who do you think is going to rebound the most? Just something to think about. If the market goes back to where it was before all of this craziness started to happen, how much would your portfolio be up or down? So people, these are when the pessimists, the people are coming out, people are looking to take advantage of this big bear. I look at it as the bear sits in the cage and he comes out every eight to 10 years, where more sometimes it's mostly between three to eight. Having been out in the last 10 years, he comes out, he has the coronavirus, and he's growling, he's running all over the place. Everybody is scared, everybody is running. Nobody knows what's going to happen. I'm sitting up on that bull, I'm riding this bull, but I'm looking over at that bear saying, since he's out the cage, what are some ways I can take advantage of him? And man, I just wish I knew how long he was going to be out the cage and how far is he going to bring the market down? If I knew that, trillions of dollars I'd be making. But obviously I don't make trillions of dollars, so guess what? So I don't know where the bottom will be. There are people that are paid millions of dollars to pick bottoms and they can't pick bottoms, right? Now is the market in a downward trend? Yes. Can you take advantage of a downward trend? Yes, as I previously stated. But if you are a long-term person, meaning that you are five years or more into the market, you have to ask yourself the question. If I'm looking five years down the line, who do I think is going to win? Do I think this bear is going to win or do I think this bull is going to win? So now the question is, can the coronavirus lead us into the recession? On a technical chart, I believe so. Fundamentally, do I think they can bring down a GDP for two consecutive quarters? I don't think so. Can I see the market dropping to the two points built out of fear? Yes. But for it to be considered a recession, we have to have two quarters of a declining GDP and two quarters of course that's six months. That means we have to have a declining GDP for six months. And do I think the coronavirus by itself could do that? I don't think so. But I can see the market dropping out of fear. So on a technical standpoint, I can see it pulling us into a technical recession. But getting into a fundamental recession, I'm very hard pressed to see that. But what I would tell people out there now, I'm still riding that bull. I'm still long term. If you are five years of war, if you're a young majority of the listeners that listen and tune into this, you're someone who is looking at five to 10 to 20 years down the line. You should not be concerned about what's happening today or tomorrow. And if you are looking at what's happening today or tomorrow, you should be taking advantage of the downturn. Remember, corn by the greatest investment of all time, Mr. Warren Buffett, he said, be fearful when others are greedy. But be greedy when others are fearful. Right now, do you think people are greedy or do you think people are fearful? 3,000 point drop within three days in one week in the Dow Jones. Do you think that's fear or do you think that is greed that is running the market? I will say it's fear. Seeing the Dow Jones drop this fast, this is how it always happened in the history. You've seen me talk about this plenty of times. I studied the market crash of 1929, 1987, 2008, and 2000, of course, with the Black Fridays going all the way back to the worst one that we had, right? And with every market crash, it always comes out of the blue and it always hits fast. The market takes the stairs up and the elevator down. If you're new to investing, come in. Start dollar cost averaging and as the market takes dip, you're buying along with the dips as well. That's the best opinion I can give you of what I think is going on with the market right now. So I hope that cleared up a lot of things. We talked about what is the coronavirus? How is it affecting the market? How fear runs the market? We talked about can the coronavirus lead us into the next recession. What is the recession? Technically, we talked about what is the recession fundamentally and we also talked about ways to benefit from, for the bull, for the people that are long-term. We talked about ways for people to benefit from there and we also talked about the people who are pessimistic. Who believe the markets are going to drop even more that is bearing, is just getting started. We talked about ways you can profit there as well. So I hope that kind of put some tips into your notepad and maybe into your portfolio and help share some knowledge of what's going on out there in the world. If you say in print should I sell, should I move? I will say no at this particular time because guess what? Now that's how they'll attend, you're not smart enough to pick the bottoms and that's not me saying it for my personal opinion. I'm speaking for statistics. Guys and girls, I'm not smart. I'm just smart enough to know what I'm dumb at. But anyway, that's my time. My name is Prince Dykes. This is the Prince of Investing and as always until the next video, cartoon book or one of those crazy C.R.U.R. on the globe. Peace, be safe. I'm out and thank you.