The Text That Started It

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1.2 million households just woke up to the same text message from their broker. It didn't say you're down. It said your account has been liquidated, sold automatically while they were asleep, and there was nothing they could do about it. Now, this happened in South Korea. And here's the part almost nobody's telling you. The United States is running the exact same experiment, just bigger. Right now, American investors are holding more borrowed money in the stock market than in any moment in history. Even as a share of the US economy, there is more leverage than ever, more than in the dot-com bump. More than in 2008. So in the next few minutes, I'm going to show you three things. One, exactly how a market like this breaks, the machine underneath it. Two, whether your money is sitting on the trapdoor right now without you even knowing it. And three, the three-step framework I used to make crashes like this. Almost irrelevant to my portfolio. This isn't doom and gloom. This is solution. Now this video is going to be information dense because it's important and to make sure it really lands for you. I'm going to give you a bonus report completely free that you can download at FelixFriends.org slash AI. And Winston, he's the one who wrote it. He should get all the credit for it, shouldn't he? This new microphone is in the way of your face. That is a that is a hound crime, isn't it? And if you're wondering why the heck I should be the one telling you this, my name is Felix. I worked on the insider as an investment banker, which means I've watched how this stuff quietly gets built up and then unwinds all at once. This is Winston, who does all the smart schniffing and research around here. And I'm also the founder of the GOAT Academy, where my retired Wall Street mentors have taught well over 25,000 people. And the important part that I want you to take away from this is I don't take any sponsors. No one's paying me to scare you. No one's paying me to tell you a story. My mom's telling me that I should be selling you a fund. My only job in this video is to help you keep the money you have and grow it safely. Because what happened in Korea isn't foreign news you can sort of scroll past. It is a preview. And once you see the mechanism, I promise you will be better placed to make sure

Korea’s Retail “Ants” And Leverage

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you are protected for your own stock market, wherever that might be. So let's start with who these 1.2 million households are, because it matters. In South Korea, there are about 51 million people, and roughly 40 million of them are everyday retail investors. They even have a nickname for themselves, they call themselves ants. Because one ant is tiny and it doesn't matter, but 14 million ants moving together can move an entire stock market. And here is why they went in so hard. In Korea, there was a strong cultural expectation. By a certain age, you're supposed to have a good job, own a home, start a family, but housing got so expensive that for a whole generation owning a home stopped being realistic. So millions of ordinary people made a very human decision. If I can't build wealth through a house, the stock market is my only shot. One of the country's biggest finance influentials literally called it their last chance to build wealth. So sit with that for a second because this isn't gambling for fun. This is not a bunch of degenerates. This is people betting their future because they feel like they have no other option. But they didn't just buy stocks, they went all in with leverage. Borrowed money, that is. People took out personal loans, borrowed against their salaries, and put it into the market. And a huge number of them didn't even buy normal stocks. They then went and bought leveraged index funds. So let me explain this as simply as I can, because this is the whole ballgame. And yes, what's happening in the US is actually very, very similar. I'm gonna have to keep massaging here because otherwise I get complaints. Say the stock market goes up 1%, you make 1%, right? Now a 2x

How Leveraged Funds Magnify Losses

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leveraged fund stock market goes up 1%, you make 2%. A 3x leveraged fund, stock market goes up 1%, you make 3%. Sounds amazing, doesn't it? On the way up, just amazing. But here's the catch. They don't feel it until it's too late. It works exactly the same way in reverse. So your 3x fund stock drops 10% in a day, you don't lose 10%, you lose 30%. The same tool that made them heroes on the way up is what destroyed them on the way down. So where did all that money go? What stocks are we talking about here? It basically went to two companies, Samsung and SK Heinex. These two stocks made up more than half of Korea's entire stock market. Korea's a very unusual place. When I was a banker in Hong Kong, I looked through all these Korean companies, and if you look at them, there are like a hundred subsidiaries in them. They're these massive companies that just over just about everything in the country, all sort of weirdly cross-connected. So, yes, they have a hundred companies in the index plus, but really it's mainly just two names. So a diversified Korean stock market was really trading one thing. And the machine that

Margin Calls And The Doom Loop

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turned a normal drop into a catastrophe is this. In a normal market, a sell-off ends when the sellers get tired and they stop selling, right? But when a market is built on borrowed money, nobody has to choose to sell. The selling happens automatically. And here's how: when you buy stocks that borrowed money and the price falls to a certain level, your broker sends you a margin call. In plain English, the broker says, add more cash by tomorrow morning, or we sell your stocks for you. So if you don't have the cash, and most people didn't, the broker sells your shares at whatever the price is. They don't wait for a better day. They don't care that you're down 40%, they just sell. And that forced selling pushes the price down even more, which triggers the next person's margin call, which was a small selling, which pushes the price down again. You get a doom loop. That's what Wall Street calls it. Each sale makes the next sale more likely. And the leveraged index funds put gasoline on it because those funds are forced to sell more every single day just to keep their 2x or 3x ratio. So you had regular people getting liquidated and the funds forced selling on top of them. And at the same time, delete that last sentence at the same time. So end by on top of them. So what did that actually look like? Well, the Korean market fell about 25%. 1.2 million accounts got margin called. 360,000 accounts were completely liquidated, forcibly, literally wiped out. And the hardest hit are the younger ones. The 20 to 30 year olds, who could least afford it, who wanted to buy that house for themselves and the, you know, the girl they want to marry. And it got so severe that the president of South Korea called an emergency intervention to try to stabilize the market. Literally a national emergency of a stock market built on borrowed money. And I want you to really feel the human version of this because these are people who thought they were being smart. They were up, they were winning. And then in about three weeks, the machine took it all back and they had no say in it. And the uncomfortable part of this is that I'd like for you to hear this before we go on. Headlines like this are going to keep coming. Career today, something else next year. And you will never reliably predict which headline on which day is the one that pops it. Nobody can. But there is good news. You don't have to predict a crash like this. You can actually build a portfolio that simply doesn't

Why Headlines Don’t Matter Most

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care which headline shows up. One where a day like careers is a nuisance, but definitely not a knockout like it is for those pulse holes. And that's exactly what I want to teach you. And most portfolios that I look at don't look like mine. Mine has a 35% exposure to AI right now. Most people have about 60 to 70% exposure. And that is tremendous risk that Wall Street isn't taking. The hedge funds aren't taking, but you're taking it often unknowingly, literally just by the SP or the NASDAQ, and you are at those kind of levels. So I want to show you what the pros do. A trading system, an investment system that makes market headlines literally irrelevant. The news is literally irrelevant. And I'll teach that to you this Saturday so that you are not at some point going to end up like those poor souls in Korea. So go to bulletproofportfolio.org, grab yourself a free ticket, show up live, bring your questions. It's going to be live, it's going to be free. And no, there is no replay. And I'm going to spend two full hours with you personally. And if this video is making you a little bit nervous about your money, that's what we fixed up. We actually give you the tools, we actually give you the rules so you can prevent this kind of thing ever from happening again. Because some of you are going to be thinking, okay, it's sad for the Koreans, but it's Korea, it's their problem, right? And I understand the instinct, it's always about, you know, me. That's how we are programmed. But it's unfortunately wrong, and here's why. South Korea and the United States are running

America’s Bigger Margin Debt Problem

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the exact same playbook. Concentrated bets on the same AI story, funded with borrowed money. Korea just ran a faster, smaller version of the experiment first, which means Korea is not some foreign, faraway story. It is a preview. Let me show you the one comparison that reframes this thing for you. Everyone's calling Korea reckless, right? So let's compare their recklessness to the Americans. At the peak, all of Korea's stock market margin debt added up to about 1.3% of their entire economy. United States, right now, investor margin debt is sitting at 4.7% of the economy, the highest level ever recorded in American history. So the country whose market just imploded, whose president called an emergency, that country was carrying less leverage, significantly less, than the United States is. The US is sort of three to four times more leverage than our little caution retail of Korea. And in terms of scale, in real money, it's about 50 times. And by the way, the number is probably actually far worse. And it's because US data only calls margin loans, you know what you do in your broker, it does not count leveraged ETFs, it doesn't count options, it doesn't count any of that, or even private credit. So the real number is a lot higher. So we just can't really fully see it. So the 4.7% number is uh is definitely not where it is. It's kind of the floor, it's going to be a lot higher. Okay, to give you some context here at the dot-com peak, 2000, this was about 2% of the economy, right? So margin debt was about 2% leverage. In 2008, it was 2.3%. In 2021, it was about 4%. We're now significantly above every single crash of the past. And you can go back even further, 68, 87, all of that. And every single time we hit these new highs, in terms of leverage, a serious correction followed shortly afterwards. Every single time. And again, you might be thinking, Felix, I don't own leverage, I just own an index fund. I'm safe. Well, let me show you a safe portfolio. You own the SP 500, right? Half of your money is actually an AI bet. The little tool I built into the Winston up last week. So it shows you which sector is most exposed. The red ones are most exposed to AI, the green ones are least exposed, and then it tells you, you know, put in all your tickets, whatever you own, and it'll it'll tell you what your exposure is. And most people, it's way more than 50% of the money. So you can I'll put a link down below for you guys if you want to test that out. There'll be a free trial to the Winston app. And then it'll also do what it does for me. It will um

Your Hidden AI Concentration Check

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write essentially your personal Wall Street Journal for you, just for your stocks, for your portfolio, and what really matters. It's like the the only bit of news out there that isn't noise to you because it actually matters because you actually own these stocks. So it writes that for you every time uh you you log into it. So you might be thinking, hang on, Felix, I think it's fine. Don't worry about it. Don't be such a doomer. Well, let me show you what's holding this whole thing up. It's a loop. A handful of giant companies, Microsoft, Google, Amazon, Meta, are spending about three-quarters of a trillion this year building AI. And that spending doesn't just vanish because one company's one company's spending, we call them the hyperscalers because it's it's it's hyperscaling. That $750 billion becomes the revenue for the chipmakers. You know, you are NVIDIA's, it becomes the revenue for your memory makers, the whole AI trade. And their booming revenue justifies their booming stock prices. And those stock prices are being bought in part with record borrowed money. So you get record stock prices and then leverage buys up. So as long as the spending keeps going, the specter kind of spins around and round and around because also the hyperscalers can borrow on the back of their very high stock valuations. So watch just one number. As I'm recording this, we had a pretty good day yesterday in the market. But there was one sector that didn't do very well. It was the hyperscalers, the Microsoft's, the Amazons, and so on. So watch this one number. This one number is holding up the entire global stock market, four companies, and their expenditure on AI. So Korea didn't even crash because memory demand actually fell. It crashed because investors got nervous, it might. Just the fear was enough. Now imagine one of these four giants gets it on an earnings call and says, we're cutting our spending plans. But I can tell you the guys on Waltzia will pick it up and they're gonna act on it. Because that spending is someone else's revenue. So the chipmakers would collapse. Not the Microsofts, right? And we saw this before. Literally in 2000, if any of you remember 2000, put 2000s in the comments, Coca-Cola needed to buy about 10,000 routers or routers, as you Americans call them. And the next year they cut their order from 10,000 down to just 2,000. Now, Cisco was the NVIDIA of 2000, right? It

Hyperscaler Spending Holds The Market Up

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was just a customer trimming an order. Cisco's earnings collapsed and the Nasdaq fell 78% because of Coca-Cola, the bastards. One spending cut. That's what it does to the suppliers underneath. And today the suppliers underneath are basically the market. Okay, I spent a lot of time in this video scaring the bejesus out of you, but which is not fair unless um I hand you the fix, right? So here is the exact three-step framework that I use so that a day like career is not something that I worry about, something I read about briefly, but it doesn't happen to me. And this is going to work whether you have, you know, $10,000 or $10 million in your account, and none of it requires predicting the future. Crystal bolts are not required to cancel your order on Amazon. So the first step is a self-ordered. Because unless you actually know what you own, you can't fix it. So literally pause the video and actually do this. Ask yourself three questions. One, do I own any leveraged index funds? These are funds with names like 2x or 3x in the title. So if you own one of these, that's what could turn career into a wipeout. So I'm not a financial advisor, I'll tell you what to do, but you want to seriously, seriously think about whether owning those is a good idea. Secondly, am I using borrowed money in any form? Margin in my brokerage account, options, portfolio margin, buy now, pay later on investments, anything where a loss can be bigger than the cash that I put into it. And what I would do with it, I don't have any debt in my life. None at all. And I know for Americans, you have tax reasons to have debt on certain things. I get that, uh, but I don't like it, I don't need it, I don't have any. Now, numerous test is is my portfolio secretly just one debt. And the tool you can use, and I'll put it down below, is literally this. So you can put in, you know, here, you can click on edit my name, so edit my edition, and you can type in your favorite stocks, you know, PLTR, there she is. Maybe you own a bit of NVIDIA, uh, maybe you own a bit of SoFi still, maybe you still own some Pain Pell or whatever it is that you own, maybe you own a bit of gold, right? Safe changes, and actually not too bad, right? But if you added a bit of QQQ to this, for example, took out the SP just to give you a bit of an idea, 51%, put it in there, see what you own, see what happens to it, and then it'll tell you literally which tickers are exposed into what industry. And you might want to think about being a little bit more in the green bit than in the red bit. If you want to figure out how to do that, also come and join me on Saturday, because that's when we're gonna really do a proper teaching session on this for two hours, right? Most people are not diversified. Having half your money in one trade is not diversification, right? So most people fail that particular test down here. And then you want to make sure that no single event can end you and your financial freedom. So there are two ideas here. First, it's position sizing. No one should be have a no one should have

A Three Step Crash Proof Framework

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a stock holding. Um, struggling to get my words out here, that is big enough that if it collapses, it takes you with it. The Koreans put everything on two stocks. When those two fell, that was it. And that's also why we own our own things that are not so related. Maybe it's a it's a particular real estate fund, or maybe it's an industrial company. I did a video last week on a rail stock. I'm not saying you should run out of buy this. I'm just saying take your mind out of it's tech, tech, tech, tech, tech. The news, the media, clearly gets paid by tech companies somehow. Otherwise, this isn't all they'd be talking about, right? So there are 5,000 companies in the US that you can trade or invest in. They're not all tech businesses. And then three, decide your exit while you're still calm, before the scary day, not during it. I have a plan for every single position I have. There is a sell order on every single one of those at particular levels. And again, I'll walk you through some of that on Saturday. If you come and join me, it's completely free, but you're going to show up live because it won't land for you unless you're there live. And that's something you're going to want to put in the right writing. You might want to automate as well, which is what I do. Because you see, what we can learn from the Koreans is that it's very hard to make your most important financial decisions in the middle of a stampede. So rules you write while you're calm are definitely going to beat the decisions you make while you're terrified. So plan on paper stands between you and the, you know, being a forced seller. And then there is an opportunity for prepared investors. And that's what nobody really talks about because everyone's stuck on the fear. Well, the prepared investor, a crash is not a catastrophe, it's a sale. Like I'm always smiling at first, and then I think of all the poor souls who but just lost their shirt, and then I stop smiling. But of course, for myself, it's always an opportunity. When 360,000 Korean accounts get forced sold, someone was on the other side buying those shares at file sale prices, right? So some people panic, are over-leveraged, the disciplined buyers quietly stepped in and they bought the dip. And I'm not telling you to buy Korean stocks, but that is the difference between two types of investors here. So the goal of everything I've shown you today isn't to make you flee the market, sit on the sidelines. It's always a bad idea, in my humble opinion. It's to put you on the right side of what's happening in the market. So if we recap this three steps, right? Find any hidden leverage you have, right size your positions, decorrelate. So don't be all in one thing, and then really have an exit plan. And that's how any market, good, bad, hideous, is an opportunity and you feel a lot more in control. And I'll just leave you with one image. When the Titanic was already taken on water, literally already sinking, an executive from the company that owned it said, we have absolute confidence in the Titanic. We believe the boat is unsinkable. He said that after it hit the iceberg. That's how these things always sound at the top. Total

Titanic Confidence And Final Warnings

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confidence. Just before this Korean crash, 14 million Korean investors had absolute confidence. Every bubble's last words are, this time it's different. Now, just to be clear, I'm not telling you to runt on the market. I think AI will change our lives completely. And that some of these companies will be worth staggering amounts one day. But right now, investors are paying tomorrow's prices today with borrowed money as if the future has already happened. So just be careful with leverage and debt, especially right now. And if you take one action from this video, make it this way. Learn the trading system that makes market headlines irrelevant. I don't watch the news. I haven't owned a television in 20 years. I go on holidays, I don't lock into my brokerage account for an entire week because it doesn't matter, because it's all set up, it's all automated. This should not take a lot of time. So get your free ticket at bulletproofportfolio.org, show up with your questions, and I'll be there live for you for two hours to walk you through exactly how the pros run their money, how they invest, and how very simple it actually is. And if this has been helpful, if you know some people who need to bulletproof their portfolio, then post that link on your social media. That's really all I ask. And the link is down below in the description. Take care.