History doesn't repeat, but it rhymes. The longer the bull market goes for,
the worse the crash is. If you're not totally leveraged and
you've got multiple income streams, you're prepared for the worst. Worst thing you can do
is panic to the point where you sell at the bottom. I'm Lloyd James Ross, seven-figure
investor and entrepreneur, and I've helped thousands of business owners and
professionals turn financial stress into success. If
you're stuck in old money habits, overwhelmed by investing, or unsure where
to start, This is for you. I'll give you the mindset and
strategies to take control, grow your wealth, and achieve financial
freedom. It's time to make your money work for you. Stock
markets are crashing! Again, headlines are screaming, panic's rising!
Or is it? What you may not realize is we didn't go through a stock market crash
in the last few weeks of March 2025. We've actually just
gone through a correction. Either which way, most people are making the
same mistake they always do. They react emotionally. But
here's the truth, this isn't new. So in this episode, I'm
gonna show you what most people are missing and why history might
just be repeating itself in the worst or best way
possible. So let's get into it. This is all about stock
market crashes. And so what people don't realize is
that it does happen quite a bit. But before we
jump into the episode, I want to explain a couple of things to you. There are three types
of market collapses that happen. The very first one is called
a correction. And that's when the market falls by about 10%. The next
one where the market falls by 20% is called a bear market. Why
do they call it a bear market? Because the bear swipes his hand downwards as
he attacks. And that's why they call it a bear market. The reason they call it a
bull market when the market goes up by 20% is because as the
bull attacks, its horns go upwards. That's why there's a bull on
Wall Street. So that's where you get bear market and bull market from.
So it's got to move 20% to be a bear market down, 20% up to
be a bull market. But then of course, there is a crash. And
a crash is when the market falls by 30% or
more. And believe it or not, that has happened quite a bit. So in
this episode, I'm going to go through a market history and
show you and explain to you when the market has collapsed by
30% or more and the reasons behind it so that you
can see it coming maybe in the future. But most importantly, you
can actually leverage it and use
it to your advantage. Let's go back to the most
recent one. Before we dive into the big, big, big ones, let's go back
to the most recent. In fact, let's go right back in
time to 1987. In 1987, there
was a flash crash and they called it Black Monday. And
it's where the stock market collapsed by, geez, I think the
Dow fell by about 20% in a single day. And it's where all the stockbrokers
were actually jumping off buildings, because there was a lot of leverage in the market, and
there was a flash crash. Now, it wasn't a long, drawn-out crash,
but the market fell by a lot in 1987, and
more than it had before. And it really came after a big, long
bull market. And so it took everyone by surprise. And so
that was a fairly famous crash in the stock market,
but it was nothing compared to what was going to happen in the year 2000 because
after the crash of 1987 The world entered one
of the greatest bull markets in history, and
it was the roaring 90s. And in this period of time, the
likes of the Wolf of Wall Street was in full flight, okay? So
this is where everyone was making money, hand over fist, and
yeah, greatest bull market run ever. In fact, I don't think they had a stock market correction
or any backwards movement for a year for like almost 10 straight
years. So it was like, make money, make money, make money.
And the longer the bull market goes for, the worse the
crash is. So in the year 2000, 1999, 2000, one
of the greatest crashes ever happened. And it's been coined
the dot-com bubble. And here's how it happened. So
on the back of the 90s bull run, a lot of tech companies were
starting to come into fruition. And tech companies were developed
because this new incredible technology was invented called
the internet. And so it took the world by storm, right? flipping
the way that we communicate is a little bit like what AI is doing right now. It's
completely transforming the world. It's like it moved us from the industrial age
into the information age. And so all these new companies were popping up.
Like, where are the internet? Where are the toy store on the internet? Where are
pets.com on the internet? Like, all these businesses were moving to
the internet. And of course, some wonderful companies were created back
then, like Amazon and some other awesome online businesses at
the time. that were legitimate businesses. But the reality
is a lot of them were illegitimate businesses, meaning they were businesses
that weren't actually earning any money. So back then,
what you could do is you could get a URL, you could call yourself this business, you
say you're a tech company, and boom, you have all this backing, all this capital would
go to you, you could go and list on the stock exchange, and all of a sudden, everyone will
pour their money into your business. But unfortunately, It wasn't making any money.
So eventually after this hype, right, zero
fundamentals, zero reasons to own these businesses, but they were doing
it because they didn't want to miss out. And he was even pulling in some of the pros, right? So
almost no one escaped this except for the likes of my hero Warren
Buffett that told everyone at a Sun Valley event that this
was very much like cars back in the year 1920. It's
new technology, like the railroads, like Chula Bolt, like he'd
seen this before. This wasn't new. So he said to everyone, we're
sitting out of this one. And of course, everyone thought he'd lost his mind because if
you don't get in, you miss out, you don't know what you're doing. And all the headlines would say, Warren Buffett's
lost the plot. And so then eventually what happened was
this, people discovered that they weren't earning any money. And
eventually, everyone started to sell. And they sold them.
And no one wanted to hold the hot potato. So everyone was like, I don't want to, I don't want to. And the whole
market in the year 2000 absolutely collapsed, falling
more than 30% very quickly. It was one of the sharpest,
worst declines in stock market history. In fact, it was so bad
that a lot of those, the stock market and the NASDAQ, where all those
tech companies live on the stock exchange, the NASDAQ, It
didn't recover its peak dot-com
bubble hype for like 14 years. So
if you had a board at the peak of the market, you had to wait 14 years to get back
to where you were. So it was very bad. It
was a massive crash. A lot of people lost a lot of money. In fact, in those
days, you could buy Amazon for $6 a share. So some of
the best businesses got thrown out with the baby got thrown out with the bathwater. But
without a doubt, it taught us so many financial lessons, like just because there's a
new technology in town, doesn't mean that those things are
worth anything. And it's very similar to what's happening in crypto. It's
very similar to what's happening in AI. Just because the technology is
cool, does not make the thing that you're buying cool or
effective. So there's a word of warning. And this has happened before. All
right. So again, happened with railroads, happened with cars, happened
with Internet, happening with crypto, happening with AI,
it's gonna happen forever, right? So just be careful of that. Now, what
is the crash that came after the dot-com bubble and after the 1987 crash?
Well, if we look forward, what happened from that point on was the market
corrected and things were going fairly well again. So in the early 2000s,
the dot-com bubble had collapsed. A lot of the tech companies got hammered, but
a lot of other businesses like banks and traditional businesses kept doing
well. But what happened was this. everyone
thought that the property market could never
go backwards. And so a simple idea is
that land over time appreciates and property grows steadily
over time. And that was a wonderful, simple concept that didn't
get taken for granted, didn't get pushed to the didn't
push the envelope on it. It was just the steady flow of things. But
then what happened was someone realized, oh, probably doesn't go
backwards. Why don't we just leverage up and start buying more
properties than we could possibly afford because we're going to get loans from
the banks and they're going to lend us the money to buy all these properties.
Now, here's the thing. At the same time, The
banks were actually lending money to
these people to buy property because they also thought the property didn't go backwards
or down. And they were lending them to people with no jobs and
no income. They called them ninja loans. And if you ever watched the
movie The Big Short, they talk about these things called the ninja loans. And
so these brokers from the banks, in fact, the Wolf of Wall Street was also doing it at
the same time. He was selling mortgages then as well. They
were selling these mortgages to people that really couldn't afford it. And if
you watch the movie, they were actually selling like five properties to strippers
who actually didn't have the cash flow to fund any of those property
investments if interest rates went back up. So there was a couple of things
happening at once. One, people thought property never went backwards. Two, banks
were lending to people that shouldn't have been borrowing money. And three, they
were borrowing the money on these things called teaser rates, like low interest rates.
And at a certain time, the teaser rates would go up and interest rates would go up.
Because they had no jobs, no income, they were going to default on all these mortgages. But
to make matters worse is where it got really bad. The
banks took those mortgages, bundled them together into what's
called a mortgage bond. And
they then packaged the crappy mortgages with the good mortgages. Then
the ratings agencies like Moody's and S&P they
rated these crappy mortgage bonds with like good ones and crappy
ones in it, right? They've rated them triple-a. So
everyone in the financial industry thought that these things were actually
good Right, and so they basically as the old
saying goes they polish deterred and then they saw then what happened was they
actually took these mortgage bonds that everyone thought were great and And
they then sold them in big portions to countries
like Iceland. So these countries are buying these massive mortgage
bonds and are leveraging up to buy more of them because they
knew that property wouldn't go backwards and mortgages are the safest things ever. And these were rated as
AAA. And of course, eventually, the world found
out that there was a massive fraud going on. The banks were lending to the wrong
people. The rating agencies were rating them wrong. And people were buying
on leverage at the same time, these crappy mortgages. And of course, when
that was found out, The whole world pretty much collapsed. The
banks created the greatest financial catastrophe since the
1929 stock market collapse and the Great Depression. We were, in fact, on the
verge of a Great Depression. It was so bad that large banks
like Lehman Brothers were going bankrupt. Bear Stearns almost went
bankrupt. JPMorgan bought Bear Stearns, Lim
Brothers was gone, collapsed, bankrupt. Can you imagine this? The United
States banks were going broke. So the bank run started to
happen. People started to freak out and panic. So they should have, because this
is really bad. And there was all this leverage in the market. And
until Hank Paulson stepped in and changed that,
he was the head of the US Federal Reserve at the
time, and he had to come in and say, hey, we need to loosen up the money and
provide credit to the marketplace. And if he hadn't done that, we
would literally have gone through a Great Depression. The world doesn't even understand how bad it
was. But it was really bad. It was actually one of the greatest crashes ever.
And what happened was it affected property prices. And this is why even today, people
are like, property only goes up. Yeah, right. Go back. You weren't even born.
If you were like 35 and younger, you have no idea what you're talking about
unless you've read financial history. You just don't. I was
23 when the 2008 financial collapse happened. I actually watched the TV as
all these banks collapsed before our very eyes. And my dad said to me, we'll be lucky
to keep our house. And he was right. Everyone's houses went back by
50%. They were buying off-the-plan mortgages here, our homes
here, fell by 50%. I saw people walk away from their deposits. I
saw builders, developers in business for 40 years go
broke here, let alone all around the world. So
property doesn't always go up, just so you know. Banks
got greedy back then. It was bad. But thankfully, there
was enough credit supply by the US government to
maintain a level of order in the banking and financial industry. So
sadly, the taxpayer bowed out the banks. That sucks. There's a
lot of regulation. But at the end of the day, it was a massive crash. It
collapsed by up to 40%. But what was really cool about
that is that there was incredible deals at the time. Like Warren Buffett
took $5 billion of Berkshire Hathaway's money
and he actually lent it to Bank of America to give them liquidity and
he got a 9% return on that and then he turned it into, they're called convertible notes,
he turned it into shares in the bank and he 7X'd
it. He 7X'd 5 billion. There
was so many cool deals. You could have picked up like cents
on the dollar back then and the only thing
that I hate was I had no money because I was just starting my career. And
I made this promise to myself, I'm like, Oh my God, I wish I had like
a million bucks, I could have seven x that million like it was crazy. The
deals around were just mental. Like I remember one person, a
real estate agent called me up and said, Lloyd, do you want to buy this apartment in service paradise
for $49,000? I was like, nah. And
looking back, I'm like, idiot. But because I've
seen that happen, and I know that this happens, like, A
correction of 10%, just so you know what we've experienced lately, it
happens like once or twice a year. Once
every year, once every 18 months, okay, let's say. A
20% correction or crash or a bear market, it'll actually happen
every three to four years. And then an absolute collapse,
like a stock market crash by 30% or more like the GFC, it'll
happen every say 12 to 15 years. So
I'm not even like, Guessing it's gonna happen again
It will you have to understand it will so the people at the moment that
are like clamoring up and getting all this Borrowings to buy property at the moment and
people that are like leveraged up and they think it's all gonna be roses like
it is I've got some news for you. It ain't like one day this
will happen again. So how do you prepare for it? Well, the first thing
is to educate yourself so you can dominate and and leverage it when it happens But
the other thing is don't overgear Like property can't, a
good idea becomes a bad idea when it's done to the nth degree. So
just be very careful if you're getting five, six, seven, eight, 10 properties and you
owe a lot of money. Interest rates can spike very quickly because in 1974, there
was a oil embargo and actually spiked oil massively and
interest rates went to 17%. Now, if all of you got interest rates of
17% because of an oil embargo, you're all cooked, promise you. So that's
gonna cause a massive collapse in real estate. Now that's a possibility. So
it doesn't mean be scared, it means be ready. And so that's why it's
nice to have a bit of cash always on the side. So when deals like this pop up, you
can leverage it, you can jump in and take advantage of
it. But also means if you're not totally leveraged, and you've
got multiple income streams, you're prepared for the worst because without a
doubt, this will happen again. In fact, we might be seeing the beginnings of it now
with AI, because AI is the new internet. So
you're going to see a lot of this hype happen like the dot com bubble, and all this investment
may pay back, you may see a bigger crash than what we just saw in the
last year. Just quickly, if you're ready to take control of your finances, but
feel stuck on where to start, I have a solution. My
book Money Buys Happiness simplifies investing and
wealth building with practical steps to help you achieve financial peace.
Get your copy via the link in the show notes and let's get your money working for
you. Now back to the episode. So that is the GFC. And
the latest one that has happened, the latest panic was of course
COVID. And this happened not very long ago. It was like five years ago. Can
you believe it's five years? Five years ago. And of course, what happened was this.
The whole world thought that this common cold, I don't know
if you know this, but the common cold is a coronavirus, just so you know.
All common colds are coronaviruses, without going into too much detail. They called that because
they got little coronas on them. I don't know, that's how they got a
pre-med degree. They're just cold. And I
got it, and I was like, that sucks, but it's fine, I didn't die. And what happened
was the whole world through social media thought everyone was gonna collapse and die. So
the whole world and the mainstream media put everyone in a little panic. And of course they closed
the world. No way they're going to close the world down. No way they're
going to close airports. No way. No one is this stupid. No
people are this stupid. I just spat on the mic there. No one is this stupid. I
was just cleaning it off. No one is this stupid that they're going to
close the world down. But
what I learned was never underestimate the stupidity of
governments and the public. I
mean, recently we had a cyclone and all the same stupid people went
in to buy toilet paper. What the hell are you going to do with toilet paper coming out of your wazoo? What
the heck are you doing? The same thing happened. I'm like, surely people are going
there. Surely the government's not that dumb. Yes, they are. So I'm like,
oh my God, I underestimated the stupidity of what happens in panics, okay? So
there's another lesson learned there that when the world gets to a panic, you
start to see massive stupidity, all right? So I'm like, oh my God, this
is actually happening. Now, thankfully I had saved up some money then because
I'd learned from the GFC. And when that happened, I
knew that it was a common cold. I knew that the survival rates
were very high. And I knew that in a
year or two, we'd come out of this very quickly when they discovered it. So
I knew that the market would correct very fast. So I thought that this drop
is a once in a lifetime opportunity. So where do we look to put
our money? We deployed it into travel companies. And we were buying travel
companies when they'd sunk by like 90%. And we were buying
stocks, you know, like across the market. And
so that we were able to grow a lot of wealth in that period of time quite quickly
because we knew it was going to correct again. Every storm
runs out of rain, like every big market collapse has
recovered. every single one so of course it'll recover again
just the worst thing you can do is panic to the point where you sell at the bottom all
right that's what you'd want to absolutely avoid that so that's
the latest one it was covid it was caused by panic the late the
the the correction lately has been a 10 one will we see a
big one in the future it's highly likely when No one
knows. So you just have to be prepared for it. So even
massive crashes, whilst they seem really bad, can create massive opportunities
for you. And of course, history doesn't repeat, but it rhymes. So
there will be this sort of pattern that happens where there's a boom, then
there's massive greed, then there's a massive bust, and then there's fear. And
that whole cycle will start again. But it does create opportunity. You
have to be ready to take advantage of those opportunities. But also, make
sure you understand that the media's job is to create panic and noise and
fear in you. Like it's his job, okay? So don't just jump
on the news and watch and think, oh my God, the world's crashing, we're all gonna die. No,
go and do your own research and look for the noise. and look
for then the signal beyond the noise, all right? Emotional investors lose,
disciplined, intelligent, educated investors win. So you've
got to choose, which one will you be? The panic-stricken, emotional one,
or the disciplined, educated one? Because it does make a
difference, all right? So here's what you want to do when it happens. The first thing
to do is just zoom out. step back and understand that the S&P 500, which
is the market, has grown massively in the last 100 years. It's
incredible. In fact, if you put $10,000 in 1942 before the war ended, you would now have $54 million. So it's bumpy, but
the world's going to progress. So don't bet on the end of the world, because even if
you're right, you don't make any money. So stop trying to time the
market. Time in the market is better than time in the
market. Use the downturns to accumulate more assets faster,
stocks, ETFs, and property, and automate your investing, which
means start to dollar cost average, which means buy the
same thing that you're wanting to invest in long term, but buy
it periodically at the same time. So every month, every quarter, same
amount, same time, same amount, same time, same amount, same
time. Because if you were to do that with your shopping, you
buy the same food, same time each week, sometimes there's gonna be some deals, sometimes
there's not. But over time, you're gonna average out your buying and you're gonna get it for better
prices, okay? So don't follow the hype, study history.
And here's a final thought for you. The market doesn't repeat perfectly.
But as I said earlier, it does rhyme. So if you understand the
patterns like I've explained in this episode, you'll see what it
is all about. And you'll kind of understand, well, it's going to come again. Will I be ready
or not? And it's going to run out of rain. The storm will actually disappear too.
So having this understanding is one of the great wealth building opportunities of
your life. Because if you're young enough, you haven't experienced it before. But I
promise you, at some point, it's coming. All right. So make
sure you take this information and absolutely apply it. All right. Because history shows
us those who stay calm, invested and smart come
out on top. All right. It's not the end of the world. It's just another chapter in
a very familiar story. So zoom out. Stay
the course. If you play it right, this could be the moment that changes your
financial future forever. So thanks for listening and go check
out the next episode and the next video on YouTube. Thanks for listening to
Money Grows on Trees. If you enjoyed the episode, leave a five-star review
on Apple Podcasts and Spotify and subscribe to
us on YouTube so you never miss an episode. And if you're serious about building
wealth, make sure to check out the links in the show notes and follow me on
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