Here are the major warning signs that show up before every single market crash.

@whymattrs

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Why it worked

The video effectively uses historical examples and clear, concise explanations to illustrate recurring patterns in market crashes. The visual aids and the relatable "history rhymes" narrative make complex financial concepts accessible and engaging, encouraging viewers to reflect on current market conditions.

Summary

The video outlines four historical signs that precede market crashes: pure speculation (like Tulip Mania), high margin debt (like the 1929 crash), complex and misunderstood financial products (like portfolio insurance in 1987), and excessive debt stacked on debt (leading to the 2008 crisis). It suggests that these patterns often repeat and that those who invest through fear can emerge wealthier.

Structure

1Introduction to market crash warning signs
2Tulip Mania: Pure speculation
31929 Crash: High margin debt
41987 Crash: Complex financial products
52008 Crash: Debt stacked on debt
6Conclusion: Investing through fear

Call to action

So take a look today and see for yourself, how many of these signs are flashing again. And when the next crash does come, because it always does, every single crash on this list has eventually become a sale. And the people who kept investing through the fear are the ones who came out wealthier on the other side. And if you like this video, follow for more content like this.

Original caption

this happens before every crash

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On-screen text

1. Pure speculation Starting in Holland in the 1630s, people stopped caring what tulips were worth and started buying them just to flip it onto the next guy. And at the peak of this, a single bulb traded for more than 10 times what a skilled worker was earning in a single year. And then one morning, a flower. buyers didn't show up and the whole thing collapsed almost overnight. Tulip Mania: The First Evidence of Economic Bubbles Prices reached astronomical levels, with bulbs being traded for high-end houses. In 1637, a Dutch trader lost confidence and walked out mid-trade. 2. High Margin Debt Regulators sat back and let regular people buy stocks, putting down 10% and borrowing the other 90%. And when that cracked, the Dow fell 89% and it took 25 years to fully recover. 3. Products Nobody Fully Understood Then in 1987, there was a shiny new tool called Investors set a price floor Mathematical model (like Black-Scholes) adjusts futures positions Portfolio value is high -> Few futures sold Portfolio value falls- More futures sold to limit Portfolio insurance losses Portfolio insurance Was supposed to limit losses but instead it triggered a chain reaction of selling that dropped the Dow 22%. Black Monday crash of 1987 Dow Jones (1987-06-19 through 1988-01-19) Strike Until this day is still the worst day in stock market history. 4. Debt Stacked on Debt And then there was 2008, where there was too much debt stacked on debt, cheap loans got bundled into securities almost nobody could price. The Lehman Brothers filed for the big bankruptcy in US history. The S P 500 fell 57%.

Transcript

Here are the major warning signs that show up before every single market crash. And because history doesn't repeat, but it does often rhyme. So here's exactly what to look out for. Starting in Holland in the 1630s, people stopped caring what tulips were worth and started buying them just to flip it onto the next guy. And at the peak of this, a single bulb traded for more than 10 times what a skilled worker was earning in a single year. And then one morning, a flower. buyers didn't show up and the whole thing collapsed almost overnight. Fast forward to 1929. Regulators sat back and let regular people buy stocks, putting down 10% and borrowing the other 90%. And when that cracked, the Dow fell 89% and it took 25 years to fully recover. Then in 1987, there was a shiny new tool called portfolio insurance. Was supposed to limit losses, but instead it triggered a chain reaction of selling that dropped the Dow 22%. Until this day is still the worst day in stock market history. And then there was 2008, where there was too much debt stacked on debt, cheap loans got bundled into securities almost nobody could price. The Lehman Brothers filed for the big bankruptcy in US history. The S P 500 fell 57%. So take a look today and see for yourself, how many of these signs are flashing again. And when the next crash does come, because it always does, every single crash on this list has eventually become a sale. And the people who kept investing through the fear are the ones who came out wealthier on the other side. And if you like this video, follow for more content like this.