I’m Not Selling — Bull Markets Don’t End This Early

Added: 2026-05-14

[00:00:02][snorts] >> Mhm. That was good.

[00:00:06]That's what I call brain food.

[00:00:08]Grilled chicken breast.

[00:00:11]Helps keep me sharp, keep my body fit, keep me feeling good. My wife cooks a mean grilled chicken breast. I also like water with gas. You water with gas type of fan?

[00:00:22]I didn't used to be till I moved to South America and water with gas is just soda, soda water. It's pretty big down here.

[00:00:30]>> [clears throat and cough] >> Now I like it.

[00:00:32]So, let's get this cooking. Let's talk about the market right now.

[00:00:38]Because a lot of people just can't figure it out. They see this stock chart. They see the price of the S&P 500.

[00:00:46]It's up 17% over the past 6 weeks. Just an absolute face-ripper of a rally.

[00:00:53]A lot of people look at this and they start to think like, well, this can't go on. The market's overvalued. What goes up must come down. Right?

[00:01:01]No, not right. We can't apply laws of physics to the stock market.

[00:01:07]Doesn't work like that.

[00:01:09]I can't breed with a donut hole and expect to make a baby donut. Human biology doesn't work on donuts just like Earth's physics doesn't work on the stock market.

[00:01:18]Now, there's only one thing that matters when it comes to the stock market. And this is what can keep stocks going higher. We can absolutely keep going higher from here. Just to be totally transparent, I believe we can easily keep going higher from here.

[00:01:33]The only thing that matters is earnings.

[00:01:36]That's all that's ever mattered. That's all that always will matter when it comes to the stock market. Corporate earnings.

[00:01:43]Now, I've been talking about corporate earnings for months.

[00:01:47]I actually put this video out 2 months ago specifically about tech stocks breaking out. I said I had a $330,000 position.

[00:01:56]And whenever we go and look at my uh tech position right now, VGT information technology, there it is, total value $405,000.

[00:02:06]I'm up $75,000 in 2 months.

[00:02:09]So, that 24% move, more or less.

[00:02:12]And it's because I'm not a genius. I I don't know what's going to happen next. But, I did say the market was looking really undervalued because corporate earnings were so high and stock prices kept going so low.

[00:02:28]And I specifically brought up some data that was from Bloomberg and S&P Global.

[00:02:34]This piece of data right here, showing that the stock price index of the S&P 500 always moves with earnings.

[00:02:43]Earnings go up, stock prices go up.

[00:02:46]Earnings go down, stock prices go down.

[00:02:49]I mean, this is 1945 all the way to 2020. This goes in tandem.

[00:02:53]And so, what we were seeing was I got some more data coming from Chart Kid Matt, and this was showing the entire S&P 500 was in decline from a stock price perspective, but from an earnings perspective, they were just going up.

[00:03:09]And so, whenever we looked over on the left-hand side, this is March 2026, I was like, look at how earnings just keep going up.

[00:03:18]This was the forward earnings.

[00:03:20]And I said, but look at the S&P 500 price, it just keeps going down.

[00:03:25]Stocks are getting cheaper from a valuation perspective, companies were becoming more valuable, and the price kept going down. And I was saying, this is creating a huge disparity in what the stock price is actually worth versus what it's trading at. And what happened was was companies have now came out and reported Q1 earnings over the past week, about 70% of the entire S&P 500 has reported earnings.

[00:03:51]And we have seen earnings growth, actual year-over-year earnings growth reported so far in Q1 2026.

[00:03:59]This is all of the all of the sectors that have reported positive earnings growth.

[00:04:04]So, excluding the S&P 500 right here, nine out of 11 sectors have had positive earnings growth. Look at communication services up 53.2% year-over-year, technology up 44.4% year-over-year. People weren't expecting that. I was expecting it. That's what I've been saying all along. These companies are so strong right now.

[00:04:24]But what happened was there was Wall Street and there was Main Street. There was a lot of people that were more focused on oil, on this private credit risk, on everything, I don't know, whatever they could conjure up in their heads, they were saying like this is going to impact the market.

[00:04:38]And everything is a narrative until it isn't. We have to materially see earnings, corporate earnings go down if we want to see stock prices go down and stay down.

[00:04:50]Narratives can move the market for a little bit, but if they don't come to materialize and actually impact overall earnings, the the the stock prices are always going to go back up cuz that's the only thing that matters at the end of the day is corporate earnings. That is it.

[00:05:05]Everything every nothing else matters.

[00:05:08]Hey, I don't know a lot, but I know that. I just I stick to what I know and I know that earnings are what drives the market higher.

[00:05:17]So, here we are. We're looking at the S&P 500. It looks like it's standing on the face of a cliff and people are like, "Can this bull market go any higher? Can it go higher?"

[00:05:29]And that's what we're going to talk about today. I'm going to show you using some earnings data, using past previous bull market data, that we can absolutely keep going higher from here. The worst thing that anyone can do is just get out of stocks right now because we went up.

[00:05:45]Like if you look at the market and say, "Because we just went up, we now must go down, and that's why you get out." That is a really bad investment strategy. You can't invest based on feelings.

[00:05:56]That's just not how you do it. You got to invest based on earnings. Earnings and historical data. That's all I use.

[00:06:03]So, we're going to go through that, and before we do, just want to say thanks for being here. I'm Jacob, 29 years old, got $860,000 in a stock portfolio. I'm 100% debt-free, and I love all this stuff.

[00:06:14]Investments, stock portfolios, wealth management, wealth building. You name it, I like it.

[00:06:20]So, if you're into this, hit that sub button, hit that like button, and let's kick it off. So, first off, I keep getting these comments like this one right here. It's like, "We were We just had the greatest bull run of all time. Expect to lose money."

[00:06:37]And it's like, you know, maybe I'm a little harsh with my response, you know, "Brush up on your market history. No, we didn't."

[00:06:45]And, like I said, if this is why you're getting out of the market, you might be missing out on a ton of money.

[00:06:53]So, I want to pull up some data here.

[00:06:54]This is coming from one of my favorite data sources, Exhibit A, and they're using data from FactSet and S&P Global.

[00:07:03]And this says a manual for bull markets, and it shows the S&P 500 returns of bull markets going back to 1949. So, the red bars are all the previous bull markets, and then this gray bar is the bull market that our most recent bull market that started in October of 2022 with the release of ChatGPT.

[00:07:26]Right there.

[00:07:27]Our bull market in the S&P 500 just got to 100%.

[00:07:32]If we look at all the previous bull markets going back to 1949, that bull market going from '49 to '56, up 267%.

[00:07:41]We are not even close to having the greatest bull run of all time. Not even close. In fact, the average bull market runs up to 192%.

[00:07:50]We could be, just from an average speaking standpoint, 92% away before we even top out in this bull market.

[00:08:00]Some of these are just insane. 1987 to 2000, 582% bull market. That's the danger of getting out of a bull market too early.

[00:08:11]If you got out at 100% because it's up 100% and then it runs up to 582% you're going to miss out on 482% worth of gains.

[00:08:20]And I went on ahead and I actually put this chart together myself using the same data.

[00:08:25]And it says, same thing, manual for bull markets. It's all the same data.

[00:08:29]But if we rank this in order of where we're at today compared to all the other bull markets, that 100%er from 2022 to now, we're only in the eighth best bull market going back to 1949.

[00:08:43]Just because we're up 100% over the past 3 and 1/2 years. Just because we're up 17% over the past 6 weeks does not mean we have to now go lower.

[00:08:55]That we have there's no proof of that.

[00:08:57]So, I wouldn't get out of this market just because it's up. And one last thing here, whenever we look at years, look how long that bull market from '87 to 2000 ran. 12.8 years. Look at where we are right now, 3.6 months. The average bull market is 192% 5 and 1/2 years. We still got, on average speaking, not saying it'll get there for sure, but like just on average, 92% away plus another 2 years.

[00:09:29]This this could keep running.

[00:09:32]No, >> [clears throat and cough] >> we're not going to go higher in the market simply because past bull markets have gone higher. That's not how markets work. It doesn't say like, well, you know, let's the average, so we must get there. No, no, no. Same thing, earnings drive the market higher. The stock price has to be supported by earnings growth.

[00:09:54]If not, that's whenever you start to get a bubble, the bubble burst, that's whenever you get something that looks like the dot-com GFC.

[00:10:02]And this is where a lot of people were offsides because they thought that oil, they thought that the private credit risk just 2 months ago was going to have a material impact on the market, and it still could. It could have been a delayed impact.

[00:10:18]But what we got was quarter one earnings came in, and there has been no material impact, plus we got companies like Visa, JP Morgan, American Express saying from their data, they don't think oil's going to have an impact on the consumer. They think the consumer is still too strong.

[00:10:33]So now that's still an upcoming bet on what could happen, but from a factual standpoint, like I said, a narrative is only a narrative until it actually isn't. It has to make a material impact, and we just haven't seen a material impact yet.

[00:10:47]So whenever we got Q1 earnings coming in, here are these actual reported earnings, this is coming from the compound, and they're using data from Bloomberg. This says actual year-over-year quarter one earnings.

[00:10:59]We have the S&P 500 year-over-year has grown its earnings by 24%. These have been historic earnings, historically good earnings. Communication services up 53.2%. That's insane. Think of companies like Meta in there. Think of companies like Google in there. 53.2%.

[00:11:19]Technology sector, just overall, Microsoft, Apple, Nvidia, all the semiconductors grew earnings by 44.4%.

[00:11:27]People weren't expecting this good of earnings, and this is what surprised the market and has driven this rally and not just technology, but the overall S&P 500.

[00:11:37]There's only two sectors down here, energy and healthcare, that earnings have gone negative, 2.5%, 5.8%.

[00:11:46]And that's actually really interesting because we think about all the people who have piled into Exxon Mobil and Chevron and Devon Energy, just all those oil companies, they're expecting earnings to go higher.

[00:11:59]They haven't gone higher yet. So, that's an interesting one because before it was like people were expecting earnings to go lower and they were getting off sides.

[00:12:08]They were getting out of technology just 2 months ago cuz they thought earnings would be lower.

[00:12:12]But then earnings surprised on technology, they were much higher. And it's funny cuz then they rotated into energy and now energy earnings haven't surprised, they haven't came in yet to what people were expecting.

[00:12:25]So, just be it'll be really interesting to see how this one plays out.

[00:12:29]But now a lot of people are thinking that the market is overvalued.

[00:12:36]Is it overvalued? Like I showed you earlier, earnings and stock prices go together. If earnings get decoupled from a stock price, like if stocks go up 50% earnings growth is only 25%, then yeah, that that is getting to be overvalued territory.

[00:12:54]So, I wanted to pull up some data showing earnings growth versus 1-year stock price return. I just used the same data from the earnings growth and then I put together from the last chart and then I put together my 1-year stock return price, which I pulled from Bloomberg and TradingView.

[00:13:10]And so, we have the actual year-over-year Q1 2026 earnings growth, same blue bars we just saw.

[00:13:18]Then we also have the 1-year stock price return.

[00:13:22]And this was as of today, May 11th, and the earnings were as last week, May 1st.

[00:13:30]So, this is where it starts to get interesting in terms of are stocks overvalued? Is the market overvalued?

[00:13:37]And I like to break this down by the sectors.

[00:13:41]So, whenever we look first, let's just look right here at the S&P 500.

[00:13:46]We have year-over-year earnings growth in the S&P 500 at 24%.

[00:13:52]Whenever we look at the one-year stock price return of the S&P 500, it's up 30%. So, there is right here, we have this return versus earnings gap.

[00:14:02]There is a 6% gap.

[00:14:05]Kind of a premium. People are overpaying right now for the S&P 500 by about 6%.

[00:14:11]That's not a lot. So, whenever I get comments like the market is way overvalued and it is at artard valuations, like these comments right here, I'm like, "Well, what are What are you comparing it to?" Because whenever I compare it to earnings and then stock price, I don't think that this looks overvalued at all. It seems may maybe a little bit. Like maybe there's a little bit of a premium going on. But again, 24% earnings growth, I mean, these are historic earnings. So, if investors globally are thinking, "Where can I put my money?" I I don't know. I mean, like where else in the world are they doing 24% earnings growth? Nowhere. So, like a a 6% earnings premium or a stock price premium, a valuation premium, doesn't seem that crazy to me right now.

[00:14:59]Now, let's go back over to the chart.

[00:15:01]And let's go starting from the left. So, we got that communication services.

[00:15:06]Look at this. Year-over-year earnings, 53.2%, but the stock price on the one-year is only up 18.6% and these are all S&P 500 sectors. So, the communication services sector in the S&P 500 is only up 18.6% that is still a huge margin contraction right there. These stocks are still so cheap in com- in comparison to what they're returning on an earnings perspective. Technology on the other hand, there was earnings contraction, but now we have earnings up 44.4% year-over-year. And look at this though, the stock price up 61.6% a lot of that being tacked on just over the past 6 weeks.

[00:15:51]Just that monster rally from the bottom.

[00:15:54]Same thing I was talking about from 2 months ago.

[00:15:56]Consumer discretionary, look at this. We have a giant gap between earnings coming in at 34.2% year-over-year, >> [snorts] >> but the stock price is only up 17.5%.

[00:16:11]Now some of these are getting a little crazy. Like whenever we go over to industrials, look at this. The one-year stock price return is up 27.8%, but the year-over-year earnings growth is only up 9.4%.

[00:16:26]That means we have a gap of 18.4%.

[00:16:30]People are way paying a lot more for this stock than what they were in the past and the earnings aren't really there. That is whenever you can start to say like this is looking a little overvalued in this sector and I would agree with that.

[00:16:44]Same thing like over in utilities, we see a 4.4% gap on the stock price to the actual earnings.

[00:16:51]Staples looks pretty good. And here, this one right here, like I said, we're going to see how this one plays out energy. Of course, oil did go up by 100% so we can expect earnings to probably start going higher, but so much of that now is already baked into the stock price. That's what I think. I I don't know. I Personally, I wouldn't want to just be jumping into oil right now.

[00:17:16]I feel like the move happened, but I don't know. Like whenever they come and report their earnings, whenever uh the energy companies report their earnings, how shocking can they really be?

[00:17:26]I mean, we already know oil went up 100% and then it's kind of stabilized there and now it kind of fluctuates to the downside just a little bit. I mean, it went up to like 112, 120 barrel of oil.

[00:17:36]Now we're down in the 90s. So, it's like it Can they really shock us with their earnings? I feel like a lot of this has been priced in now. So, I just I wouldn't I don't think I'd be getting into energy now.

[00:17:47]Maybe if you're trying to get the dividend. I don't know.

[00:17:51]But >> [clears throat and cough] >> whenever people see again this stock chart, the market just went up 17% in 6 weeks >> [gasps] >> and they don't think they can go higher, it can 100% go higher because what happens is is in bull markets, money rotates.

[00:18:11]It doesn't For the market to go down, money has to just completely leave the S&P 500. It has to leave all these companies.

[00:18:17]And then the market will go down. But oftentimes what happens is that money will rotate into other sectors that have been lagging. So, let's go back to this chart, the earnings growth versus the one-year stock price return.

[00:18:30]And we see right here, technology has probably gotten out a little bit ahead of itself. A lot of this demand on all the semiconductors and specifically semiconductors, right? They're the ones crushing it. A lot of that demand's probably getting a little bit pulled forward.

[00:18:43]But this is only one component of the entire S&P 500.

[00:18:48]And whenever people investors start looking at well, where can we put our money next, they'll look over here to communication services. Again, we have this contraction of 34.6% between the stock price and the actual year-over-year earnings growth.

[00:19:04]This makes it look like this sector is really cheap compared to the technology sector over here. Same thing with consumer discretionary, Amazon, just the sector as a whole.

[00:19:14]They say, "Okay, tech looks overvalued by maybe 17% but discretionary looks undervalued by 16%." Same thing with financials, maybe it looks undervalued by 18%. And what money does, what bull markets do is they spread out. They spread across all the sectors.

[00:19:31]And so, whenever we don't have all of the sectors participating, but the earnings are good, but the stock prices aren't participating, what investors might do is either they'll start pulling some of their money out of technology and rotating it over to these parts of the sectors, or they don't sell any of their technology or uh they don't sell any of their technology positions. Maybe they don't sell any of their industrial positions or any of their energy positions.

[00:19:56]Just whenever they get more money, they start allocating that money into the communication services, into financials, into discretionary. They just start allocating it to everything that looks cheap. And that's how we get more money into the market and how asset prices continue to go even higher.

[00:20:12]So, we can 100% keep going higher from here. The only thing that matters are these earnings. But we have a really good setup in the market right now.

[00:20:20]We have a lot of undervalued companies, a lot of undervalued sectors still. We got some that are getting a little crazy, maybe a little frothy, maybe tech is getting out ahead of itself.

[00:20:31]But there's other ones that aren't.

[00:20:35]The one thing that I'm just watching all the time is how can these companies continue improving? Can they continue increasing earnings? Can they continue increasing their revenue?

[00:20:48]And that's the one thing that any investor that that really knows what they're doing, they're not worried about narratives, they're only worried about what's actually going on. They don't care about a reality that may or may not come to pass, a future that may never exist. They only care about the reality that we're in.

[00:21:06]All we all care about are earnings and what the next quarter is going to look like.

[00:21:12]And so, what is expected of these companies now, the bar has been set so high. The technology sector, for example, the semiconductor companies, their bar has been set so high that now it's like if they can't meet those expectations, that is where we have to really start to worry, okay, the market has a really good chance of starting to roll over.

[00:21:33]Because we have to meet the demand that investors want.

[00:21:37]And so, this is whenever I want to start looking at the expected earnings for next quarter. And whenever these ex- expected earnings start getting out of control, that's whenever I want to be a little cautious.

[00:21:48]So, I'm going to pull up some data coming from exhibit A.

[00:21:51]And this is the consensus expected earnings growth over the next 12 months.

[00:21:56]And this shows the S&P 500 sectors and then what we're expecting for the S&P 500 itself.

[00:22:02]So, starting over from the left, where where we have a consensus expected earnings growth for technology at 35.2%.

[00:22:12]That's really high.

[00:22:14]Analysts are expecting, demanding is a better word, demanding 35% growth in technology over the next 12 months. If technology can't deliver this growth, then yeah, the market's probably going to roll over.

[00:22:29]Same thing with energy. Like I said, all the folks that have already front-loaded this energy trade, they're demanding that energy, the sector, increase its earnings by 27%.

[00:22:42]Now, I'll go back just really quick.

[00:22:44]Last The past 12 months, we've had minus 2.5% growth in energy earnings.

[00:22:50]Expected earnings like, okay, well, the price of a barrel of oil has gone up. It should now be up at least 27.2%. Your earnings should be up there.

[00:22:59]Materials, 26%. That's what they're expecting for this sector. The S&P 500 as a whole is expected to grow 18.6%. We just had 24% year-over-year growth. Can we do 18.6%?

[00:23:16]These are really high numbers. Last quarter was a historic earnings quarter.

[00:23:22]I I think it might have been the greatest ever. You'd have to fact-check me, but I think last quarter as a whole was the greatest earnings season ever.

[00:23:31]So, the bar's set really high right now.

[00:23:34]It's set super high.

[00:23:36]And this is kind of what I'm most I don't know if worried's the word, but I'm definitely most focused on. Like, the higher the bar gets, the harder it's going to be to jump over.

[00:23:49]And eventually, yeah, companies are going to miss these expectations.

[00:23:54]The market will go maybe have a correction, maybe it'll go into a deeper crash.

[00:23:59]I don't know. I don't know what what the future holds, but I do know what matters the most, and it's these earnings. So, this is what I'm watching. If you liked this video, if it helped you out, be sure to hit that like button, hit that sub button. I'll be back with more.