 Good day, family investors. Welcome to the stock market news with the long-term fundamental, essential investing twist. My name is Sven Karlin, I'm a private investor. I'm an independent stock market researcher and I love sharing my findings here on YouTube. So please click like for the algorithm, subscribe and click that notification bell that you get notified when an important video comes out. Now let's dig into the content. There is a lot going on in the stock market, in the economy, weighing on the bad news and now we have to see how put whatever is going on into an investing perspective should be invest now, should we sell everything we have if you are fully invested. So the situation is tricky because there is a lot of uncertainty. Uncertainty is the key word nobody knows when what will happen, when will this ease, when will things normalize and that's something that each investor, every decade we can come across such a situation and we have to see how to come out in the best way possible, low risk, high reward. I am pretty much invested, I'll keep investing and I'll discuss more about the strategy later even if the bad news, even if the news that we're going to discuss now are not that positive. Let's start with the content. Let's dig into what's going on with the market, what's going on with the economy, what's happening and how that impacts our long-term investing. So from total panic, the market went to fear of missing out that is now again turning into panic because of the huge bad news, especially coming from the United States. It's very interesting how quickly the market changes their perspective, their pricing in but that's what the market is. It's a pricing machine, it's a voting machine and we have to be the real investors that weigh the things in. So we have to be the fundamental analysts and investor to find the best strategy when it comes to the market. So again, volatility is still here definitely and probably for longer. There is a lot of uncertainty which leads into volatility and then the market reacts on a daily basis. We have seen for the last five days, Friday morning I'm filming this before the market opens. So 3% down, 3% up, 4% down, 3% up, et cetera. So a lot of volatility. But what's the market pricing in? A month ago the market was pricing in a full depression, a lot of uncertainty or a recession and then it bottomed two weeks ago. Then it started pricing in a quick rebound based on the stimulus packages that were announced and now we are again in uncertainty with high volatility. Okay, what should the market price in? There are a few economic scenarios. We can discuss the good scenario, the bad scenario, but just a nice chart that I found on the Wall Street Journal. So after each major decline, 12 months after there is a lot of positivity as you can see and each time over the last seven times that happened there was always very positive rebounds later. However, the question is we don't know whether the major decline is over yet or no because we are down what 22%, 22.4% but if we look at the data from the past we can go to 40, 50% like it was the case in 2002 and 2009. If that happens, yes, the rebound might be quick, nice and very, very positive but you have to survive the downturn so the market can go deeper. Now I've read and subscribed to Bloomberg, to Wall Street Journal, to everything and I really sit down and read all the information and try to filter out what is really important for me as an investor. My conclusion is very simple. Nobody knows what will happen because that's the situation we are in. There is uncertainty, we don't know whether there will be a vaccine, whether it will soop during the summer. A lot of uncertainty, the market hates uncertainty and therefore you can only invest and think in scenarios. So you have to invest in a way that you are prepared for various scenarios and those two scenarios, the good one and the bad one which has a little bit more of weight is what we are going to discuss now in the economic scenario because the economic, yes, have a stimulus packages, have everything but it might really get uglier, especially across the globe because it's a big globe and the stimulus will not get everywhere. So if we go to the positive scenario, that was the case actually two weeks ago. Things will calm down. That was the hope a few weeks ago. I was also hoping that not that much for the portfolio but really for the health of the population. Unfortunately, it didn't happen and the situation spread across the globe, especially hitting the United States, unfortunately. This is now the question, when will things return to normal? 2009, even with the crisis, life was mostly as usual. You did the things you used to do. Today we can do the things we used to do despite what the economy is doing. So it's really a lockdown and again, when will things return to normal? We don't know the answer so it is uncertainty and we have to create scenarios of uncertainty. In the bad case scenario, this lasts longer, puts a heavy toll on economies across the globe and we have supply and demand shocks that impact our normal lives. Stimulus, there is a lot of stimulus but we don't know how it will work. The depression, jobless numbers are really from a depression situation. It has never been like this in history. If we look at the United States, similar situation will probably be in other countries also in Europe. So shoppers are staying at home. Retail purchases have really been decimated. Restaurants are closed. So really, zero, zero revenues there that will lead to a big hit to the economy, tourism and everything. There's nothing we can do about it and the question is how much will the stimulus help no economic activity? Also mortgage defaults with all the unemployment could pile up at the pace that was 2008 and Goldman Sachs has adjourned its GDP forecasts and we are now looking at 45% annualized in quarter two due to the lockdown. That's insane numbers and then hopefully in Q3 if the situation normalizes, a big rebound that let's say rebounds and then we see normalization in 2021 and this is what is the market pricing now but then again if it lasts longer into Q3 then the market will price in again a more negative scenario that will have the longer this lasts will have longer bad consequences but there are also not consequences also fundamentals that one has to talk about. If we look at the US debt to GDP ratio, look at the part over the last 10 years. Yes, now due to the stimulus, the debt will go up and the debt to GDP ratio will reach World War II levels but you see that the debt has been growing already since 2009 and the great recession and the financial crisis. So it's not something different that is changing. It's just that there is a lot of free debt, free money, zero interest rates and it seems that nobody cares about the debt now. What will be the repercussions of that of unlimited stimulus of helicopter money that we are seeing as people are getting their money directly into their hands for nothing? What will be the social economic consequences of that will be something that we'll have to discuss in many stock market news over the next year. So please subscribe. Thank you for that. It really means a lot for the channel. Now also in Europe, we have Euro bonds. The Dutch are not liking the idea of paying for Italian debt, especially if you look at debt to GDP, just compare Italy 145%, the Netherlands 452% and now they want the bond that everybody is liable for. That's also moral hazard. So the North will pay anyway if you're from Italy. So why would I pay? Why would I increase taxes? Why would I apply austerity rules, et cetera? So this might lead into populism in the South or even in the North and it's a tricky risky situation in the European Union but that leads again to the fundamentals. We have seen in the US the fundamentals of high debt. Of course they are the reserve currency, they can borrow anything but the fundamentals of Europe are a little bit more shaky and therefore it's also interesting how this will evolve. It's a hope that this subdues quickly. If we go to emerging markets, also everything is connected. We are in a globalized world and there is also a big hit to them. This is India, a lot of 130 million workers without their job trying to get home which creates again a risk of spreading, et cetera. So there are a lot of parts in the world and we are always discussing Europe, US because that's always in the news, that is the data and that's what makes the news but even if you look at where I was born in Croatia, they don't have the euro. Access to financing can be very, very tricky. Devaluation can be very, very costly and have long, long-term repercussions especially on high debt that is already there. So we'll see how that affects the long-term health of the global economy. Before the market was pricing in a recession or depression but quick one, then we have had a rebound thanks to the stimulus and now it's already slowing, starting to decline as the bad news come in and wait down, put the pressure on down on the market as the stimulus will work partly but it's a global issue and will not work, might not work as fast or as good as it hoped especially as the situation got worse and worse unfortunately. Now, the longer the recovery, the lower will be the value of the markets and here it comes to market timing. I think there is a 30% chance that we had the bottom in March and I will see volatility but slowly up thanks to more and more stimulus because there have been some voices from Fed that there will be more stimulus, unlimited stimulus which might keep the market up and then if the situation improves we get some breaking news of a vaccine or something then it might really push up the market from the stimulus, not from really a fundamental perspective even if it just comes back to where it was so that's one chance, on the other hand we can have issues in Europe, issues in emerging markets, issues across the globe that simply weigh on the global economy, global markets despite the huge stimulus that coming in which might push the markets lower and lower and lower perhaps slowly, volatility lower which might create even more opportunities to buy real, real bargains because we are value investors, as value investors you're optimistic over the long term and you think that in 10, 20 years the world will be a better place. I think that we are this communicating all across the globe so we want to raise everybody's well-being so I think we will work hard to do that and this video is also one way of doing that. So if we have more bad news, unemployment up 100, 200% to 10% in the US or 15% in Europe that's a very, very big deal and we'll put way as there is less money going to pension funds, more money going out of pension funds more money going out of the stock market for real daily life needs that will put more pressure. SAP 500 probably will shift to losses not just a 20, 30% decline in earnings. Companies Europe, emerging markets will be even worse especially with the oil scenario being very, very bad that covenants might be breached, bankruptcies, crazy financing needs. We have seen Carnival taking debt at 11.5% which is huge, huge interest rates highly risk. So that's something that we have to keep in that the bad news might keep coming. So market it likely it will be more pessimistic from the optimism we have had thanks to the stimulus two weeks ago there is a real cash constraint if the Fed doesn't simply put more money in your hands and even that you can buy stocks. That's also a scenario we'll see what the Fed decides but what about the world is also the question and there is a high chance there will be more bad news. So there is the fear stocks will fall more but when things normalize and those ones will and we already see two trillion infrastructure projects probably the same Europe will do the same they'll print money China the same all the countries which might normalize things and create again a boom economy especially if they feel they can print as much money as they want without repercussions because more money creates more supply, lower prices and they manage to keep inflation stable. So when it comes to investing strategy as I said the probably the best thing is take your purchases in relation to your personal position in relation to what you where you are seeing value what you are happy owning from a long term perspective I still have two small purchases to make we likely do them over the next weeks and if the market goes down more stage more purchases over the year and I'm going to take a loan for that for my main portfolio and do also a lot of private purchases so that's my plan. We will not be buying two pieces of real estate we will buy just one and the other money from a real estate that I always like to diversify as stocks go lower no real estate we are buying more stocks for the personal portfolio so I am in a situation when I was prepared for this I have the cash I have the cash to survive a long time thankfully and now will be time to start deploying that cash more and more also the portfolio I manage I think with a loan where I pay only interest for the next five years will allow me to really increase those portfolio returns from that portfolio perspective so if you are over leveraged over in if you're over leveraged if you're over invested if you have no more money to add there then just think okay there will be some dividends here and there reinvest those and you will be good when things stabilize and normalize so sit tight these two will pass and we just have to see how much opportunities we might catch at the bottom or not you might not buy everything cheaply you might not make the best purchases but in that scene investing is a positive sum game the business is everything will deliver great returns over the long term the reinvested dividend in July of this year might do extremely well for you in the long term so don't be greedy just think this is life it's volatile it's uncertain but if I do the right thing by value when I see it I'll be well off in the long term not to say long haul because aircrafts unfortunately don't see a haul anymore see you in the next video on Sunday about oil I've been researching the sector over this week I have a presentation of 50 slides so it will be very interesting for those that want to see invest opportunities and understand how investing in oil might work thank you, thank you, thank you