Margin Update & Selling Stocks | My Market Crash Problem.

oh man

this is just the stock market disaster

that keeps going

and going and i say that and quite

frankly it's been about a week and five

days since february 19th

which means we're really only like four

and a half weeks into this crap and

sometimes these can tend to last around

six weeks now

i was hoping a couple weeks ago that we

were over

but it looks more like now instead of a

v-shaped recovery we might be in the

midst of a w

and heading towards a double dip sort of

crash

now i personally do not believe the

right side of the w

aka the right side of the w that we're

in right now will be as bad as the left

side because

peak fear regarding all this madness

about bond yields and the fed and all

this

is not really here anymore but we're

still seeing sell-off so we're

definitely in

that w for now and hopefully it ends up

looking like a w

which basically means we've got a nice

v-shaped recovery ahead of us but

i'm not larry kudlow and instead of

talking about v's like larry does all

day long

let's instead do a portfolio reveal

because well it's not gonna be a full

portfolio reveal it's more of a margin

reveal and portfolio balance reveal

but uh anyway the reason for a portfolio

balance reveal is actually thanks to you

because if i type in portfolio reveal

on youtube we get do a portfolio reveal

we've done this before this is correct

i've done this before so we don't have

to do

this i mean you've seen many i mean

pretty much every week i've been

updating what my trades were

and then of course in the course i

update every single moment i make a

trade but anyway do a portfolio reveal

now i like that question perfect you got

it here we go let's give this a heart

and then we want a portfolio reveal got

it lots of this

then we've got this is a good one look

at this adventures on a honda

everyone always does portfolio reveals

when they're green when they're all

green

do one now edit on his live stream

happening right now he said he has two

percent of his portfolio in shift

then said which is a lot 400k so by my

math his portfolio

is around 20 million dollars okay

well uh what i'm going to do is i'm

going to show you

uh the balances in my accounts right now

and i am going to remove because i

personally have not looked at this

number yet and i don't even want to add

it up for today

because i this is part of this part of

what i teach like

people are like okay kevin yes stocks

and psychology and money well when you

actually go through the course that i

have on stocks and psychology money

efforts you're like

oh damn that that did change my mindset

a little bit or maybe even a lot a lot

of people say a lot but but anyway i

love you all i hope you all

uh at least give it a shot but anyway in

this

i say i don't like looking at my

portfolio value i don't want to know how

much it's fluctuated per day

i don't know what it was yesterday so i

can't even try to self-compute so

i kind of blindly scribbled to reveal

any kind of things that would indicate

how much the portfolio has gone down

and it's mostly because my goal is just

to show you the portfolio for

oh my gosh portfolio value you could

sort of impute how much it may have gone

down but i don't encourage you to do

that i don't encourage you to do that

when it's going up either it's really

bad for your psychology

so anyway uh this is my robin hood

we've got uh 2.2 million dollars in

market value and a robin hood

with about 459 in margin and i'll go

ahead and add up what what all these

accounts add up to

i've got a new spreadsheet and it's my

margin update because it's always good

to know what your margin is like

so anyway we got a 2.2 minus about that

459k

of leverage uh and again i'll add these

up for us

then we've got this is the net account

value over at weibull which remember you

can sign up and get

two free stocks with weeble if you go to

medkevin.com weeble but anyway

a market value of 4.8 with a margin of

about 1.3 million dollars so that gets

you that net account value of about 3.5

million dollars then uh over here

we've got uh m1 finance which shows you

there's uh two

uh to about two million dollars now uh

there's no margin on this

and that's because i took well all of

the margin that i have at m1 finance is

actually that cash balance you see at

the bottom

i just leave that there as kind of like

a little emergency tool

but that is literally how much margin i

owe so 706

the 706 cash like just ignore that

number is even there

so two mil over here with zero in margin

and this is my chase

this is just what i when i log in what i

see on chase and so

uh the investment account is at 11.9

million dollars

we do have margin on this and we do have

a cash balance of roughly two million

dollars

a little 18k in credit cards uh and uh

6.6

in a credit line that is drawn at chase

so when you add all of this together you

get to i'm going to pull put this on

screen here

so it makes the math easy for you so

that way you don't have to do it

oh there we go and perfect on screen now

so here you go we've got robinhood these

are all the same numbers that you saw

and if you add it together you get to a

total portfolio value right now of 20.5

mil

this this was a lot higher at one point

but i don't even actually remember

how much it was because i wasn't

actively updating my margin too terribly

much

i try not to look at my portfolio uh

value i think it's toxic i think it

it motivates you to get too stressed out

and then you start

selling or when things are green you get

euphoric and it's like oh my gosh things

are going up or whatever i gotta buy i

gotta buy buy buy

it's very dangerous so anyway then you

add up the margin over here and the way

you figure out what your margin

percentage is is you divide

uh the debt by your total portfolio

of in this case 20 mil so that actually

puts me at 40.8

uh percent in margin right now but

that's not my actual margin balance

because i've got cash

and i've got cash that's transferring to

my jpmorgan from

a different account right now so i have

1.9 in cash a plus 1.25 coming from a

different account

this means when i add up these figures

here i've got about 3.2

that i'm going to be using to plummet

down this margin right away

and when i do my margin will actually go

to just 25

outstanding but on top of that if i

needed to i have about 350 available in

credit lines from real estate

which that's one of the beautiful things

about having real estate is i get access

to certain credit lines from having real

estate

and the 350k will be coming from real

estate if i needed it

so if i needed to well if i don't do

anything other than use the cash from

about 25

margin and this is why it's always good

to have backup strategies and you should

run these strategies as well like okay

what cash do i have

and what could i liquidate if i need it

to in a margin situation

well first thing i would do again use

the cash to pay down then

we can draw on credit lines that would

be the 350k from real estate i could

draw from

i could also try to rebalance some of

the money from m1 finance

if i needed to in the event i had i got

closer to margin somewhere else

first right so i have a little bit of

play there

then the next thing that i could do is i

assumed a 25

drop so a quarter percent drop on my

entire m1

finance portfolio which is a lot because

it's the stocks are

you know pretty tech centric but if i

just shut down my m1 finance with the 25

loss i would have another 1.5 available

oops

uh there we go i have another 1.5

available to use towards payoff

that would bring me to about 16.2 margin

and it would allow me to protect my

really concentrated positions

because most of the positions in my m1

finance are diversified in my pies

and i want to protect my really

concentrated positions

then the next thing that i could do if i

needed to continue to sort of bail out

of margin

is uh i would actually probably do this

first

i'd probably close my bitcoin holdings

and so i'm going to assume about a 50

decline in value and so let's go ahead

and put 500k

in here one two three there we go so

uh with with just bitcoin not closing

out m1 finance i'd be about negative

or be about a margin of 21 if i close

out the m1 finance

assuming these declines i'd be about

negative 13

uh if i then still need it to pay off

margin

my first ones that would be going would

be unfortunately

my lovely apples googles and amazons and

that's because i consider them to be a

little bit more cash parky

and i'm gonna assume declines here as

well so i'm going to go with 1250 and

this would assume like another 20 to 30

decline of these values one two three

equals

uh and so that would bring me down to

about 7.6

margin so not totally eradicated but

there's a very clear path for me if i

needed to

to basically protect myself

from a margin call and the biggest thing

is obviously cash

and so one of the things that i

generally recommend

and where some of this cash came from is

sell

when you're green now it's too late for

a lot of us to sell when it's green

because we're not green right

but i sold march 9th and march 16th and

i told all my course members like hey

folks

i'm getting too high on margin i've got

to follow my rules i need to get under

20

margin so i sold off my holdings until i

got to about 19

margin now there was unfortunately this

little private deal that came up and i

ended up taking some

money back out on margin and then we

kind of walked into this

uh but that's that's an unrelated thing

because that's going to be very

profitable i'm excited about that

anywho and we'll talk about that in the

future video anywho the point is

when it's green that's the time to try

to reduce margin ideally under 20

and if you want to be really really

comfortable get to zero and then just

put

all of the rest of your money in the

market when you're at zero you don't

even have to worry about doing these

sorts of numbers right

then having a credit line or equity in

real estate because even though the real

estate market can crash at the same time

as stocks

when you have credit lines as long as

they don't get frozen you could draw on

those

and you saw how on m1 finance i drew

that cache to have it sitting available

yeah that's because when i have it

sitting available it's harder for them

to

not let me take it out anymore you could

do the same thing with real estate lines

of credit if you needed to

of course having equity in real estate

is also a really good idea because then

if you needed to

you could always refinance or sell your

real estate so this is one of the

reasons

i hate refinancing real estate when the

market's skyrocketing

and i prefer to let that grow as meat on

the bone and that way if the market ever

crashes i could refinance at that point

have equity and use that cash to go

shopping at the bottom of the market

in the event there's ever a real estate

crash or another stock crash

so generally as the market's booming you

really want to be thinking about get out

of debt get out of debt get out of debt

especially margin debt right then i'm

basically going through my

lowest can after those so like after

cash brings me to 25

uh after if i needed to the credit line

brings me down a little bit further

going back to the chart here i'd be

about 23

margin if i use my credit line and the

cash that i have to pay down margin

which is good that's no selling no

selling and i'm at 23

margin only after that point if i needed

to

not because you know i want paper hand

or whatever but because i got backed

into a corner then i would liquidate

in this order bitcoin sorry bitcoin goes

then m1 finance just simply because i'd

probably start with

uh metkevin.com 1337. the reason for

that is that's a pie of like

59 stocks that i really really like but

there's so

little in each one of those at m1

finance

that it's it's very diversified and to

me i'd rather

sell that and be able to preserve my top

top picks

then i'd probably sell 38 then probably

the biden pie which is also pretty

diversified and i'll try to keep 13.39

which again you could see these just go

to metcalfer.com1337

slash 1338 1339 or slash biden

and you'll see those but i'll sell the

most diversified things first

well actually first bitcoin then the

most diversified things

and then only at that point would i

actually if i really needed to i mean

things would have to be really really

really really really bad

uh would would i just dump apple google

and amazon

uh and obviously i would want to try to

be a little bit predictive here

uh and see i mean i never want to try to

like time the market and try to

determine how much the market's going to

fall

uh but i do that you know even though

that's not the best thing to do it's

what i do

i personally do not think i'm going to

have to sell a single thing here

because again i'm just taking my cash

and just properly allocating in like

wiring dryer transferring

finishing my wires which i've got like

200k wires scheduled every day so it's

going to take like 10 or 15 days or

whatever to get it all done unless i get

on the phone and do it manually but i

want to get on the phone and this is

fine for me too because

there's no rush like it's not that bad

there's no rush

so anyway the point is i've got a plan

and i want to stress to you that if

you're ever in a situation where you're

using margin

you've got to ask yourself what's your

plan what's your back-up plan

what's your income like here's another

rule of thumb i like to use

do not exceed six months of your income

and margin

or twenty percent whichever is lower so

for example if you make

six thousand dollars a month don't

exceed thirty six thousand dollars worth

of margin

which would mean your account value

thirty six represents twenty

would be somewhere around a hundred

eighty thousand 000 in stock so let's

say you got 180 000

in stocks you get paid 60 000 a year

or rather 72 000 a year six thousand

dollars per month

i wouldn't want to exceed 36k uh ever so

even if my account value went up to like

four or 500 i would wanna be able to

make sure i could get that margin down

in six months because that way if the

market starts trending down

first of all you're not past twenty

percent but every week you get paid

you could take a little bit and start

using that

to lower your margin and try to escape

that falling of stock prices now

sometimes stocks fall really fast

and it's really good to have a plan for

okay what's going to go first

so that way in the event there's some

crazy like flash crash or something like

that

and you get that phone call you already

have a plan you're not

panicking and that's the big lesson here

is you never want to be in a situation

where you're like

oh crap i'm panicking sell

everything and then you end up selling

some of your highest conviction stocks

because they've sold off the most and

then when

the rebound happens you get a small

rebound

but not the big rebound on your high

conviction stocks that you usually see

when the rebound

comes so those are some lessons that i'd

be thinking of

right now some thoughts that i'd be

processing so if you've got margin ask

yourself okay what would i do if

if you don't have margin just keep

buying this dip if you're less than 20

margin less than six months outstanding

on margin you know i don't want to tell

you to go into margin because i don't

know your situation so i never advocate

anybody going to margin

but i would just say if you make the

personal decision to go on a margin

stay within those guidelines as much as

you can do whatever you can

to always follow those guidelines very

very very very important

uh and when i get down to which i'll be

at soon if i get rid of the credit line

here i'll be at 25

margin i will see i mean stocks could

continue to fall right

uh but anyway then i'll be at about five

uh

million dollars outstanding uh so i

gotta get that down to twenty percent to

follow the rules right

i gotta follow both rules the income

rule and uh

and the margin rule so we wanna make

sure we get this down so both rules are

followed

the big thing right now is getting under

that 20 figure

sometimes that's a little hard though

when the market's falling because like

every day the market falls it's kind of

like you're literally just taking cash

and throwing it into a fire pit

but remember we still own the shares

right the big thing is preserving as

much of the shares we have as possible

because

pain is temporary it hurts but it's

temporary so stay strong dab and hand

this

check out the programs down below on

building your wealth and folks we'll see

in the next video good luck