Hi, I’m Jimmy and this video we’re looking at the continued crash of the stock market and we’re gonna take a quick look at the crash that’s happening in oil right now. First, we’ll get a quick understanding of what’s happening and why it’s happening, and then we’ll look at where there might be some opportunities for our investment portfolio. And hopefully we can use this information to get us closer to our personal goal of achieving financial independence. OK. Before we get to the massive drop in the stock market that’s been happening over the past few weeks. I personally think that it’s important that we keep our cool in situations like this. I truly look at these events as opportunities and this is genuinely no time to panic. This is very much a fear driven selloff, a very legitimate fear driven selloff. But I think it’s important that we recognize what the fear really is purely from an investment standpoint. And I think that most of us can agree that the investing fear is centered around people spending less or not going out as much, or perhaps manufacturing has really taken a hit from many of the different quarantines that are happening, particularly in China. Those are legitimate investing fears and they’re all legitimate concerns. So I don’t want to come off as taking this fear too lightly. I’m just trying to stay unemotional. And if we can do that, well, then, does the stock market crash look like an opportunity? And to me, in many ways, it really does. So let’s recap the big picture concern. So because of the virus, much of China’s manufacturing has slowed down and in many cases, it’s come to a complete standstill. I did a video where I touched on some of this recently, but in that video, we looked at the Baltic Dry Bulk Index and this is what that chart looks like. So basically what this index does is it gives us an idea of the cost of shipping goods via dry bulk chips. And if we’re curious, this is an example of what a dry bulk chip is, just so we could visualize. So as things slow down in China, well, this index really got hit. And then as China got a minor grip on what’s been happening recently, well, the reaction of the index was that it’s slightly recovered. Now, I bring this dry bulk index out again because this is really confirmation of the fear. Manufacturing gets worse. People slow their spending. And together, these two together bring the global economy to a recession. And this is very possible and something that needs to be watched. But let’s ask each of ourselves a question, and we’ve got to try to answer this in a non-emotional way as best we can. So if we owned, let’s say, Microsoft or Disney, you know what? Let’s focus on Disney, because in case you haven’t heard, Disney has understandably shut down a few of their parks. Some of their parks around the world have had to be shut down in different countries. And I did a video on Disney not too long ago, and I got quite a few people saying that their parks are shut down and profits are going to plummet. Since, you know, when the products are closed, they can’t make any money since the park is closed. So I understand the reaction. But if we were to take a bigger look at the stock market crash or as Disney as a whole, as the entire business, what are we really looking at here? And don’t take this as me pushing Disney. There’s lots of examples. Disney is just one example of many companies that are in a very similar position. I’ve just recently done a decent amount of research on Disney. So it’s sort of fresh in my mind. OK, so don’t forget, we want to stay as non emotional and analytical as we possibly can during this. So Shanghai Disney is closed. Tokyo Disneyland is closed. Hong Kong, Disney is also closed. And another a few more. And it’s very possible that this list continues to change. But in reaction to this, Disney stock has been cut by about 25 percent. But what if we found out that Disney’s entire park segment accounted for just 37 percent of twenty nineteen revenue? Does it make a 25 percent pullback in there in their stock price? An overreaction? Maybe. Maybe not. But what if we also learned that the international portion of their park segment only accounts for about 6 percent of total revenue? And then what if we learn that Shanghai, Disney, the Shanghai Disney Resort, which is closed right now? Well, Disney only owns 43 percent of that property. Hong Kong Disneyland own Disney only owns forty seven percent of that property. My point is Disney’s stock and so many other stocks just like them, have seen huge price drops in their stock price for something that perhaps in the long run doesn’t deserve such a huge pullback in their stock. Because in my mind, this interruption in the economy, as serious as it is, is likely at the end of the day to be somewhat temporary. So I think it’s on us to identify opportunities in our research to go to the bullpen of stocks that we might have lined up ready for when the stock hits the right price. I think it makes sense to look at those and say, all right at the end. Hey, how much is this company really affected by what’s happening right now? And this brings us to another crash that’s happening right now. And that’s a crash in oil prices. This is a chart of Brant Oil. And as we could see, oil, the oil prices have really been hurt, not just from the decrease in demand from the virus, but mainly because it seems that Saudi and Saudi Arabia and Russia have gotten into an oil production standoff and that’s driving the price of oil way down. Saudi Arabia has lowered their monthly prices. Russia has come on, said they’re going to continue to produce. So prices have rightfully reacted by got going significantly lower. Now, I think it’s important to point out that generally lower oil prices is a positive thing for the overall economy. When we switch over to the average price per gallon in the United States of a gallon of gasoline, or we can see that it’s been drifting lower over the past year. And this is the most recent data that I could find. It goes up to a few days ago. That’s not going to count accounting for the eight, nine, 10 percent drop that’s currently happening in the oil markets. So this is going to get even better for the average consumer. Oil prices being down generally should lead to lower energy costs. And overall, this tends to be a good thing for the economy. And then we know that interest rates have been lowered recently, which is also supposed to be a good thing for the overall economy. And then on the flip side, well, we have the negative side of this. People are afraid, rightfully so. We can see that in the price of a lot of different things right now. And we don’t know when the virus is going to get under control. But the real question is, the non-emotional question we must answer is, do we think it will get under control at some point? I think it will. And if it does, well, at that point, after a bit of a ramp up period, the economy could go back to its normal growth. And that will be further fueled by lower interest rates, lower energy costs, assuming oil prices stay down, which many people think that it will stay at least somewhat reasonable. Well, if that were to happen, then once again, the stock market could continue to move higher. In fact, lower interest rates alone should have should they should cause stocks to be worth more today than they were before interest rates dropped. So if you want to better understand why interest rates have such a major impact on the fair value of stocks, actually did a video on that. I talk about how falling interest rates affect the overall economy and individual stocks. That could be a good next video for you to watch. And I really want to thank you for sticking with me all the way into the video if you can try to stay calm through this whole thing. And I really appreciate you. Stick with me. Thanks. And I’ll see in the next video.