How to Invest in a Stock Market Bubble

Alpesh Patel
4 min readJan 23, 2021

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Will the stock market crash? Welcome to this series on ‘Learn to Invest with Alpesh Patel’. A computer model developed at Yale University showed that markets would most likely crash in late summer 2018.

And that’s the problem — it was wrong, and too many times people cry wolf, but the paranoid could be right again.

The algorithm, which was developed by a team of financial engineers led by Professor Robert Shiller, based its prediction on past volatility. So we are talking about smart people.

Be prepared — Learn How to Invest Before a Crash

The average investor knows that a crash is coming but doesn’t know when. If not a crash, then a severe decline.

At worst, the average market correction would erase PAST gains in the stock market.

Simplest-Guide-Ever-to-InvestingDownload

To protect their assets and meet long-term financial goals today, they need to start thinking beyond down moves.

For me, the best way to do this is not to try to guess whether it will be this month or next, whether in small or large stocks or which theme will do better, e.g., tech, healthcare, but to look at companies which will be resilient to falls and spring back fast on recoveries.

Research on a Likely Stock Market Crash

Research shows these are companies with growing cash-flows, regardless of company size or sector. They also have growing profits and increasing sales. Of course, some stocks move up without any of these.

No one can be certain about what will happen to the stock market. Some experts are saying it will probably crash.

And it is making people worried. Investors wonder if they should wait until the market has crashed to buy or have missed their chance and whether they should sell first.

The possibility of a stock market crash keeps investors awake at night.
According to the CIA World Factbook, the US Debt as % of GDP is over 100%.

Interest payments on this debt represent over $300 billion per year, i.e., pay 300 Billion in Interest. That’s more than the entire budget for the Department of Defense.

How to invest- Data from leading gurus

I have aggregated data from leading gurus and their holdings like Gates, Buffet, Ackerman in this field and translated their holdings into action.

It shows they believe not in selling out or speculating or gambling, but holding through falls in cash-rich companies growing in cash, profits, and sales.

The world of finance is a scary place. Trends and predictions have power over our lives.

What if you could have a tool that helps predict what’s to come. Would you use it?

Reliable shares

The best tool is a calm mind in the knowledge that companies in which you hold shares are not fads but with solid foundations to weather storms.

I continue to own Apple, Amazon, Microsoft, TechTarget, PayPal, Mastercard, among others.

My job for my family is to convert every £100k into £1m over ten years or sooner, preferably. I hold 15 stocks and review them every 12 months. The returns are left to compound over time.

Alpesh Patel OBE

See also https://www.tradermind.com/investing-for-retirement-in-the-stock-market/

More free resources on www.alpeshpatel.com

www.trading-champions.com

www.investing-champions.com

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Alpesh Patel
Alpesh Patel

Written by Alpesh Patel

CEO of regulated asset management company specialising in hedge fund and private equity. BBC Newspaper reviewer to 300m audience. Founder www.pippspredator.com