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Hello everyone! You won't believe it, but it looks like the conditions are right for one of the greatest wealth-building opportunities of our generation. Of course, if we don't ruin everything ourselves. For example, despite new attempts to limit the expansion of data centers, ban artificial intelligence, and destroy your marriage over a secret affair with a Chinese spy, objectively we are standing on the threshold of what could soon be the largest economic boom in history. And if everything goes as I think, the biggest winners will not be IT billionaires or large corporations, but ordinary investors who will understand what is happening and make their move before the
rest of the world realizes the essence of events. That's why we need to discuss what's going on, why the next few years could bring in more money than you could ever imagine, and, most importantly, how you can act to win. Otherwise, you could be paying for someone else's early retirement. But before we begin, I want to remind you: Although the midterm elections are over, there is one more vote that really matters. This is to click the "like" button and subscribe if you haven't already . As a thank you for this, I'll give $100 to a random commenter. Thank you, and a big thank you to SoFi for sponsoring this video, but more on that later. So, here's what's happening, why we may soon see one of the biggest wealth-building opportunities of
our lifetimes, and most importantly, how to capitalize on it. Unfortunately, there are several obstacles, and the first of them is oil. Look, since the beginning of the conflict with Iran, oil has become the main unpredictable change in the economy. And while we may be on the verge of a deal, the reality is that until this issue is resolved, almost everything depends on whether gas prices come down. And if not, it could lead to point number two -further inflation. Believe it or not, consumer prices rose 3.7% compared to last year, while wages only increased by 3%. And now that you can get a reliable risk-free income by investing in government bonds, no one wants to pay so much for stocks anymore. This also creates problem
number three-national debt. I know, I don't need to repeat the whole dilemma of the debt spiral, where we pay so much interest that we are forced to print more money, which leads to even higher interest rates and even more money printing. But most devastatingly, we have a $2 trillion budget deficit every year, keeping the printing press running until something eventually breaks. This is especially true for point four: data centers. Listen, here's the part that no one wants to talk about. Amazon, Alphabet, Meta, Microsoft, and SpaceX plan to spend between $803 billion and $828 billion on capital expenditures this year alone, which raises a very valid question.
What happens if all this spending on AI doesn't pay off? But keep in mind: this quarter, the G7 reported profits that collectively came in 14.7% below expectations. So their costs continue to rise, which brings us to point five: cost estimates. In this case, many look at the Shiller ratio (CAPE), which compares prices to earnings over the past 10 years, adjusted for inflation. This year, it is hovering around 40, the second highest in over 150 years. However, while all of this sounds pretty bad, what's interesting is that historically the highest stock market returns tend to come during times when the headlines look terrible-like right now. And that's why when it comes to earnings, you have to understand the 80-year
streak. Here's what's interesting at this particular moment. Historically, after the end of midterm elections, starting in 1946, the S&P 500 index has grown every year by an average of 14.4%. This means that if history repeats itself, as it has for the past 80 years, the next year could bring incredible opportunities. Of course, to be fair, the stock market usually shows an upward trend regardless of elections, but immediately after elections we see an abnormal spike as investors see less uncertainty and return money to the markets. However, there is one nuance that almost everyone misses, and in my opinion, this is where the main money will be made.
Just because stocks typically rise after a year doesn't mean it will be a straight line upward movement. And this is where the greatest opportunities lie. For example, according to Capital Group, the S&P 500 index falls by 10% or more about once every 18 months and by 20% or more about once every 6 years. In fact, when the S&P 500 falls more than 20%, we typically see an average decline of just over 30%, lasting an average of 338 days. But even then, what's most surprising is that if you keep buying and doubling down during a market downturn, the historical average 12-month return after a sharp decline is a whopping 52%. And as the market continues to grow, it typically lasts for 67 months with an average return of 265%. But despite all
this, I know what some will say. But Graham, the valuations are extremely high right now, it's unsustainable, and eventually the whole thing will collapse. And yes, to some extent these people are actually right. But here's what's interesting. Just because stocks are expensive doesn't mean they will inevitably fall. According to a report on November 6, the S&P 500 is currently trading at just 17.7 of expected earnings, below its 5-year average of 19.8 and 10-year average of 19.1. This is actually the lowest forward profit we have seen in 3 years. And here's the most shocking part. This is not because stock prices have fallen, but because expected corporate earnings have risen so rapidly that valuations have declined relative to earnings. So while
stock prices may seem high, companies actually make so much money that it just balances out in the end. Although I must say that for wealth creation, all this may be just the beginning. And depending on what happens in the next few months, there may be more money at stake than many realize. So in terms of what not to miss and how to prepare, here's why you came. Although before we get to that, this is why it's so important to diversify. For example, I have a mix of US and international stocks , personal real estate, some cash, tax-free municipal bonds, and some cryptocurrency. That way, if something goes wrong, I'll have something to fall back on. However, when it comes to cryptocurrency, I understand that getting started can often seem very
complicated and confusing. There are so many different platforms out there that it can be hard to know where to even start, and that's where our sponsor, SoFi, is here to help. In fact, from now until December 2nd, you can earn up to $1,000 in your chosen cryptocurrency. But more on that soon. For those who don't know, SoFi is the first nationally licensed bank where you can buy, sell, and store cryptocurrency in one convenient app. This means that instead of putting your money somewhere and hoping for the best, SoFi gives you a federally regulated platform with all the guarantees of a bank, which is extremely important.
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below. And, as I said, new customers will be able to earn up to $1,000 in cryptocurrency of their choice: Bitcoin, Solana, or Ethereum. All information is available at the link in the description below. Thank you very much, and now let's get back to the video. So, in terms of stocks, something that most people completely lose sight of, and why the next 12 months could be the most important year of the next decade, we need to talk about a bull market. Look, although there are many reasons for pessimism and stocks can fall into the abyss at any moment because techies can't help but have contacts with Chinese spies. The reality is that the market has already factored in a lot of bad news. And if things continue to move in the right direction, we could
see even more record highs. All that is needed for this is, first, peace with Iran. Even though it all seems to change by the hour and depends on the person, I believe that eventually we will reach some kind of solution and oil prices will start to fall. In fact, up until this point, oil prices had been the main driver of higher inflation, higher interest rates, and stock price problems. So once that is resolved, we will quickly see things start to normalize, starting, secondly, with inflation coming down . Here's the part that a lot of people don't understand. This year's inflation problem was really just an energy problem. And if you exclude food and energy, prices rose by only 2.6% in September. So if the price of oil falls, inflation
could eventually fall to a level that would give the Federal Reserve some room to potentially cut rates. Of course, I'm not saying that the era of free money is about to begin, but the bond market is starting to soften: the yield on the 10-year note fell from 5.3% in early October to around 4.8% on Friday, which is good news for corporate earnings. In my opinion, this is exactly what is not given enough attention. According to FactSet, companies in the S&P 500 just reported a 31.4% increase in earnings compared to last year. This is the third consecutive quarter of 25% growth, and analysts expect 33% revenue growth for the full year of 2026. That is, companies don't just look more valuable, they earn
so much that they catch up with their valuations. And all of this is largely driven by a fourth factor- artificial intelligence. Yes, I know there are a lot of strange things going on around AI and there are risks that are definitely worth considering , but the growth potential is also incredible. It's about fewer administrative hours, faster software development, and lower operating costs for almost every company in the country. In addition, there is a big difference between companies that are already using AI today and making money from it, and those that are spending a lot of money, hoping to profit from AI in the future. For example, Micron and Nvidia were on track to be the biggest contributors to earnings growth this quarter. And at the same time,
the other 493 companies on the S&P 500 list showed higher earnings growth rates than the "Big Seven". This shows that the AI boom is no longer limited to large tech giants. This is literally every existing company that uses AI to reduce costs and increase productivity, which is especially important for the fifth factor-the consumer. Here's the good news. Last week, we learned that the economy added 165,000 new jobs last month, nearly three times the number economists had forecast, and the unemployment rate fell to 4.1%. So if inflation goes down and real wages continue to rise, then over time people will have more money, spend more, which is good for
companies, for stock prices, and hopefully for everyone. However, even if everything goes according to plan, there is one mistake that could cost you a fortune. And, unfortunately, this is the most common mistake that happens at the most inopportune moment. And this usually happens during a stock market sell-off. As for the price declines, last week was a perfect example of why this market can be so difficult to predict. Just like the day after the midterm elections, the S&P 500 posted its best performance in 3 months. And just a day later, it showed its worst result since April 2025. So if you panicked and took a loss when the market was falling, you would miss one of the best days that came literally right after.
Look, I've said this before, but every time the markets have a really bad day-I mean, the kind of day where you think, "Oh my God, the bubble has burst." This is the end. He will never recover. Historically, we see some of the strongest rebounds, usually immediately or a few days after. As proof of this, JP Morgan found that missing just the 10 best days over a 20- year period would cut your annual return by almost half. And seven of those 10 best days occurred within two weeks of the 10 worst. Or, to put it in dollars, $10,000 invested in the S&P 500 over 20 years would grow to about $82,300. But if you missed the top 10 days, you would only have about $35,000. Furthermore
, the same applies to politics. After a midterm election results in a divided government, the S&P 500 rose an average of 14.6% over the next year, compared to 14.9% when one party controlled everything. So it doesn't really matter who is in power. It doesn't matter who won: Republicans or Democrats. The stock market really doesn't care, and it tends to go up over time. Sure, Democrats could push for AI, data centers, and corporate taxes, but deadlock usually means fewer surprises, and the stock market takes that positively. That's why, speaking about my own thoughts and how you can use these next
12 months to come out ahead with the most profit possible-that's what you came for. Overall, I would say I am cautiously optimistic. As throughout history, there is always a reason not to invest. I like this graph, but as you can see, we've been through inflation, wars, recessions, bubbles, you name it. But the reality is that the biggest profits usually don't come when everything looks perfect. Instead, they happen when everyone loses their minds and thinks that this is the end and it will never recover. That's why, if corporate profits continue to rise and inflation slows, stocks could become cheaper relative to earnings even
as prices continue to rise. And this is something that, in my opinion, many people overlook. Secondly, I would also pay very close attention to artificial intelligence. Not because I'm buying up every possible AI stock, but because I believe that if you start using it and embracing it, we're at the beginning of one of the biggest productivity leaps in history. For example, if companies can produce more with less effort, we will see the economy growing at record rates without the inflationary pressures that we have seen in the past. In fact, I tend to believe that the biggest winners in the AI era will not be the AI companies themselves, but the businesses that use
these technologies to dramatically reduce costs while simultaneously increasing output. This is why, for the average person, the ability to use AI to improve their own productivity can be much more valuable than investing in the companies themselves. And finally, about what most people get wrong: you don't need to guess what will happen next or look into the future. You just need to be able to keep buying without selling when the market inevitably dips. And listen, if we see a crash that shakes this video age so much that it becomes an indicator of a recession, at least I'll be there and buy that dip, which I think is better than waiting for an opportunity that may never come. So, having said that, thank you very much for watching. As
always, feel free to hit the " like" button and subscribe. And if you want early access to videos like these, as well as bonus episodes that are sometimes too specific to YouTube, join the channel as a sponsor. You will receive additional content every week, as well as priority responses to all your comments. So if that sounds good and you want to watch next week's video today, join us. Thank you very much and see you next time.
