Investment Wisdom Of The Day Google
What Carl Icahn Thinks You Should Do In Today’s Market
Soros Fund has a large short position. Just a few weeks ago, Jim Rogers said the following Jim Rogers: Major Correction Ahead…Central Banks To Panic. Now, Carl Icahn is warning people that we are once again at 2000 and 2007 tops.
“What is better…..making 1-2% or losing 30% as people did in 2008? Right now is extremely dangerous.”
Forget about my line of thinking here for a second. Who else do you need to tell you that we are in a massive bubble and that a big correction is coming. Warren Buffett? Actually, WSJ ‘Buffett Indicator’ Flashes Warning for Stocks
Anyway, if you are sick and tired of your typical Wall Street analysis…… “We are in the early stages of a secular bull market and right now is a buying opportunity of a lifetime”, do yourself a favor and watch the video below.
What Carl Icahn Thinks You Should Do In Today’s Market Google
Margin Debt Monstrosity & Fed’s Achilles Heel
8/6/2015 – A negative day with the Dow Jones down 120 points (-0.69%) and the Nasdaq down 83 points (-1.62%).
As of today, the FED is facing the following set up.
- Massive stock market, bond market and other asset bubbles.
- Slowing economy and collapsing macro data. We are a stone throws away from an “official” recession. I can argue we are already in one.
- Zero interest rates and limited options to stimulate the economy further.
As a result, the FED has only two options.
- Raise interest rates NOW in order to reload their recession fighting toolkit before the next recession hits. Again, we are nearly there.
- Cancel rate hikes and eventually introduce QE4 to further “stimulate” the economy. Also known as, maintaining financial market stability. This scenario includes postponing interest rate hikes until we are in a recession.
You don’t have to be a genius to figure out which scenario the stock market is betting on. And while it would be prudent for the FED to reload now, in reality, no one really knows what they will do. I don’t think they know.
At the same time, it is a no win situation for the FED. There is no guarantee that the stock market won’t crater even if the FED introduces another round of QE while cancelling interest rate hikes. And I am not the only person who thinks that way.
While most are focused on the risks around a withdrawal of liquidity, we believe the biggest hit to confidence could be the opposite: if another round of US QE is necessary to prop up the economy. While the market could have a knee-jerk rally on an indication of forthcoming stimulus, we think this would likely be short-lived and could end in the red. QE fatigue is already evident: each subsequent round of QE has seen diminishing risk rallies.
Bingo. That’s how complex today’s macro economic setup is. We are at the end of this massive credit expansion cycle and there is nothing that can save this market now. Not even another round of QE. Well, unless the FED goes into a full monetization drive. But that’s entirely another matter.
Now, to margin debt. A few weeks ago I displayed this chart of skyrocketing margin debt and why it is yet another bearish indicator. That is to say, most investors are extremely bullish at the precise moment when they shouldn’t be.
Not everyone agrees with my assessment above. Traders are borrowing tons of money to bet on stocks … and it’s just not a big deal
“Margin debt does not, by any statistical measure, lead equity prices. They are, essentially by definition, coincident. As stock prices move higher, outstanding margin debt does as well. If and when stock prices move lower, margin debt will follow.”
While I would have to agree with the statement above, they are looking at the wrong metric. It’s not the fact that margin debt moves in tandem with the stock market, it is the fact this metric is now 33% higher than at 2000 and 2007 tops. All while the stock market hasn’t gone anywhere over the last 12 months (NYSE). In other words, the market is storing a tremendous amount of fuel for a correction. And given how much margin debt is out there, any such correction can very quickly turn into a violent sell-off.
Further, I would have to agree with the following sentiment. The stock market is becoming a ‘lose-lose’ situation
Investors are in the grip of “Stockholm syndrome” because there is a trust that central bankers don’t want to hurt markets, which more or less forces investors to maintain a “risk-on” positioning, buying things like stocks and lower-rated bonds.
I couldn’t agree more. I continue to maintain that this is the worst trade out there today. The problem is, everyone is in it. By the time most investors realize the FED is not in control and cannot backstop the market, it will be too late. At least 50% of the down move will be over by that point. Oh well….
This conclusion is further supported by my mathematical and timing work. It clearly shows a severe bear market between 2015-2017. In fact, when it starts it will very quickly retrace most of the gains accrued over the last few years. If you would be interested in learning when the bear market of 2015-2017 will start (to the day) and its internal composition, please CLICK HERE.
(***Please Note: A bear market might have started already, I am simply not disclosing this information. Due to my obligations to my Subscribers I am unable to provide you with more exact forecasts. In fact, I am being “Wishy Washy” at best with my FREE daily updates here. If you would be interested in exact forecasts, dates, times and precise daily coverage, please Click Here). Daily Stock Market Update. August 6th, 2015 InvestWithAlex.com
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Investment Wisdom Of The Day
Is It Possible To Predict The Stock Market?
Most investors automatically assume that the answer is NO. For instance, Past stock-market performance tells you nothing about future results — literally nothing
My response, if they “find no relationship between historical five-year returns and subsequent 12-month returns”, they are not working hard enough. It is a lot easier to just say the S&P is going to 2,200 by the end of they year, than it is to actually run calculations. Here is how the stock market really works…..
The markets being, at minimum, a 3-Dimensional phenomena, exactly like a large molecule rotating in space, in and out of the Z plane, with DNA coding sequences governing the entire process. Without understanding that the market is 3-D, twisting like a plant governed by the phyllotactic laws of dual number series and harmonic composition and decomposition, all measurements taken on a 2-D chart become misleading.
Point being, the stock market is not some randomly generated metric that chaos theory tries to explain. It is a mathematically exact entity that baffles the mind. And if you are willing to do the hard work, sooner or later, you will figure out exactly how it works. The explanation above gets you there half way.
Breaking News: Find Out Why We Are In A Massive Financial Bubble – TODAY!!!
8/5/2015 – A mixed day with the Dow Jones down 10 points (-0.06%) and the Nasdaq up 34 points (+0.67%)
A pair of interesting bubble articles for you today.
First, John Hussman: Stocks Show 4 Signs of Major Decline Ahead
He cited the metric among the indicators that foreshadowed declines after peaks in 1972, 2000 and 2007:
- Less than 27 percent of investment advisers polled by Investors Intelligence who say they are bearish.
- Valuations measured by the Shiller price-to-earnings ratio are greater than 18 times.
- Less than 60 percent of S&P 500 stocks above their 200-day moving averages.
- Record high on a weekly closing basis.
I would have to agree with the points above. They give more credence to my own bearish case. A case where I suggest that we are on a verge of a massive multi-year bear market sell-off. The decline that will represent the final leg down in 2000-2017 secular bear market. That’s right folks, we are still in a bear market. The 2009 bottom was a mid cycle bottom similar to 1907, 1937 and 1974.
Today’s stock-market bubble is bigger than the dot-com boom
Today risk is everywhere! Valuations will never be as high in such a period. So those who are saying this bull market still has some juice because valuations haven’t reached tech-bubble levels are kidding themselves! Those valuations were an anomaly!
My research shows that valuations during calm geopolitical periods tend to be twice as high. But the valuations on this bad boy are already higher than every bubble or major bull market peak over the past century. The only real exception is the year 2000. And we’re not far off 1929. And that’s with the poor geopolitical period we’re in!
That includes the major bull market peaks of 1937, 1965, and 2007.
So don’t believe the “this is not a bubble” arguments. This is denial plain and simple — which has happened in every single bubble in history, especially near the top.
An outstanding article worth a few minutes of your time. It is nothing that we haven’t discussed on this blog before. One look at Shiller’s S&P P/E ratio should be sufficient enough to realize the same. For god’s sake, only 1929 and 2000 tops were higher. And not by much. What else do you need to know to realize that we are in a freaking giant FED induced financial bubble. And if you still don’t see it, I can’t help you. No one can.
If it looks like a bubble. Walks like a bubble. And quacks like a bubble. It’s a damn bubble.
This conclusion is further supported by my mathematical and timing work. It clearly shows a severe bear market between 2015-2017. In fact, when it starts it will very quickly retrace most of the gains accrued over the last few years. If you would be interested in learning when the bear market of 2015-2017 will start (to the day) and its internal composition, please CLICK HERE.
(***Please Note: A bear market might have started already, I am simply not disclosing this information. Due to my obligations to my Subscribers I am unable to provide you with more exact forecasts. In fact, I am being “Wishy Washy” at best with my FREE daily updates here. If you would be interested in exact forecasts, dates, times and precise daily coverage, please Click Here). Daily Stock Market Update. August 4th, 2015 InvestWithAlex.com
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Breaking News: Find Out Why We Are In A Massive Financial Bubble TODAY!!! Google
Your Guide To Shorting Social Media – Investment Grin Of The Day
Shocking: The Real Story Behind Apple’s (AAPL) Decline
Most investors, market pundits and money managers are dumbfounded by Apple’s (AAPL) recent decline. After all, it was not supposed to happen. Apple is the best performing company in the world (which is technically true) with like a zillion dollars in cash on their balance sheet.
And while Apple will surely bounce here short-term, it is not looking good long-term. Here is what we said about Apple on May 21st. Just a few trading hours before an important top was set. I still stand by that analysis.
May 21st Update: Alert: Smart Money Is Trying To Distribute Apple (AAPL) To Fools
I firmly believe that the overall market and Apple (AAPL) will crack at the same time. Hence, overwhelmingly bullish coverage of the company and recent analyst upgrades should cause some concern. For instance…..
- CARL ICAHN: Apple is worth $240 per share
- Morgan Stanley says Apple shares could rise 50%
- Here’s the top stock pick from each of 50 biggest hedge funds – Quite a few of these hedge funds have a massive long Apple position.
There is another name for all of the above. Distribution. The smart money is trying to unload their massive positions to unsuspecting retail investors in an illiquid market. A game that is as old as the stock market itself.
Listen, I don’t have anything against Apple. It is one of the best performing companies out there. Yes, it is overvalued, but its valuation is not as bad as some of the junk floating in the market today.
I am merely pointing out that retail investors shouldn’t be sucked into a game that they cannot win. Make no mistake, once Icahn, Morgan Stanley and the rest of the big guys unload their long positions (if they are smart), Apple’s stock will fall like a brick. Just as the market will. That is to say, the opportunity with AAPL might be on the short side of the trade, not the long.
Shocking: The Real Story Behind Apple’s (AAPL) Decline Google
Just How Much Risk Can The Market Bear Before Breaking Down?
8/4/2015 – A down day with the Dow Jones down 48 points (-0.28%) and the Nasdaq down 10 points (-0.20%).
The market continues to trade within a tight trading range. Putting most traders/investors to sleep. With that said, I continue to maintain the view expressed here Is Our Historically Boring Market About To Get Exciting? You Bet. To quickly summarize, most markets continue to accumulate energy for a big move ahead.
AKA, don’t be caught with your pants down or asleep.
In terms of how much risk is out there, consider the following…..
- Shiller’s S&P P/E ratio is at 27. The third highest in the history of the stock market. Only 1929 and 2000 tops where more expensive (not by much). We all know what happened thereafter.
- Today, Americans have 41 percent of their financial assets in stocks, matching the high in 2007 and trailing only the Internet bubble.
- Americans already own a lot more stocks than they usually do. At 57 percent, the current holdings relative to bonds and cash are far from their peak at 66 percent in 2000, but they’re approaching levels that have coincided with market peaks in the past. The low was hit in 1982 at 27 percent.
- America’s 95 million investors are at huge risk. Remember the $10 trillion losses in the crash and recession of 2007-2009? The $8 trillion lost after the dot-com technology crash and recession of 2000-2003? This is the third big recession of the century. Yes, America will lose trillions again.
- With interest rates at zero, the FED will be powerless to backstop the next bear market leg. Even the next round of QE can backfire in a major way. Depending on how the bond market reacts.
I am not sure how most people view this, but for me, the points above represent a tremendous amount of risk in today’s financial system. A risk that is currently not being properly priced in.
This conclusion is further supported by my mathematical and timing work. It clearly shows a severe bear market between 2015-2017. In fact, when it starts it will very quickly retrace most of the gains accrued over the last few years. If you would be interested in learning when the bear market of 2015-2017 will start (to the day) and its internal composition, please CLICK HERE.
(***Please Note: A bear market might have started already, I am simply not disclosing this information. Due to my obligations to my Subscribers I am unable to provide you with more exact forecasts. In fact, I am being “Wishy Washy” at best with my FREE daily updates here. If you would be interested in exact forecasts, dates, times and precise daily coverage, please Click Here). Daily Stock Market Update. August 4th, 2015 InvestWithAlex.com
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Why You Might Want To Rethink The Dow 20K
Bill Fleckenstein is right on the money. I would have to agree with 100% of what he says. Particularly, the FED. Bill shares my view in terms of the fact that the FED has now lost the ability to control or prevent any sort of a decline/collapse. If you participate in financial markets and value your money, the video below is a must watch.
