David Jaffee of BestStockStrategy.com shared his thoughts on prediction and reaction videos that try to predict stock market crashes, housing bubble crashes, or anything like that.
In David Jaffee’s opinion, it is all BS when YouTube creators are making random predictions, because no one can tell the future and people aren’t going to remember when they were wrong.
Instead, the one time when the creator is right, they’re going to tout that as if they’re suddenly the new Warren Buffett or the new oracle that can predict future price movements.
David Jaffee believes that the reality is that the stock market is much more intelligent, and random, than any of us. While uncertainty makes people uncomfortable, it’s important, when trading, to gain experience so that you’re comfortable with uncertainty.
When you think about a large cap company like Amazon, it has hundreds of billions of dollars traded every day. For you to think that you know more about Amazon’s future price movement than the collective hundreds of billions of dollars is silly.
The only reason why selling options on something like Amazon ends up working is that the expected volatility is almost always less than the actual volatility.
Plus, if you wouldn’t mind owning Amazon at $500 to $600 below its current market price and collecting about $1,000 a contract every time you agree to buy Amazon $500 below its current market price, then it makes perfect sense why selling options on a large cap, strong brand company like Amazon can be extremely profitable.
A lot of YouTube creators, like Graham Stephan for example, make videos where they try to predict a stock market crash.
David Jaffee believes that these creators are trying to appeal to as many people as possible and use fear as a way of getting you to watch their videos.
In reality, these creators don’t know anything more than you do. If both you and Graham Stephan were to make 10 predictions, your predictions would be just as good as his.
David Jaffee does like some of Meet Kevin’s videos because he’s good at crunching data, but the reality is that all that information is already priced in by the market.
When it comes to the stock market, David Jaffee does not think there’s any value that you can glean by watching videos regarding future economic predictions like housing bubble crashes, stock market crashes, stock market bubbles, when the used car vehicle market bubble is going to pop, or when inflation is going to increase or decrease.
David Jaffee thinks that people are just speculating and they’re feeding into the viewers’ fear.
The YouTube creator is stoking the fears of his viewers in order to get more people to watch their videos.
David Jaffee has noticed a few times where Graham Stephan has said the stock market is going to crash and then Graham is completely wrong. Unfortunately, Graham doesn’t take responsibility for it. Instead, he will continue to put out those types of videos because people continue to watch them, and people forget about his incorrect predictions.
David Jaffee respects Graham Stephen’s work ethic, and Graham is able to maintain his business and become a multimillionaire by making a lot of sacrifices.
However, David Jaffee feels that it is disingenuous for YouTube creators to publish a click bait title and stoke the fears of their viewers, making it seem like they have privileged information.
Then, once a prediction is wrong, they do not call themselves on it or put a disclaimer that they do not know anymore than the viewer watching the video. These creators are pretty much guessing.
David Jaffee’s issue with reaction videos is that he does not believe the person making the video has any more information or any higher probability of being right than you do.
Oftentimes, the creator will stoke the fears of their viewers in order to gain more YouTube ad revenue, increase their subscriber count, and increase the number of clicks that they get on their videos.
David Jaffee with BestStockStrategy.com does create videos to get more subscribers, but he is sharing his experiences instead of claiming to know the future.
David Jaffee has taught more than 1,500 students how to win up to 98% of their trades when selling options through his online options trading course.
If you want to learn how to be a profitable options trader without watching prediction or reaction videos, visit BestStockStrategy.com.
You can also receive $400 of free options trading training material today.