Investing for Beginners: A Guide to Wealth Management for Financial Success
If you’re looking to build and preserve your wealth over time, then wealth management is a critical component of your financial planning. Managing your investments, insurance policies, real estate, and other assets is essential to achieving your long-term financial goals. In this comprehensive guide to wealth management, we’ll explore everything you need to know, including financial planning, retirement planning, investments, risk management, and the role of financial advisors.
Why Wealth Management is Important for Beginner Investors
Wealth management is essential for beginners looking to achieve financial success over the long term. Without a sound wealth management strategy, you risk losing your hard-earned wealth, whether through poor investment decisions, unforeseen events, or other factors outside your control. With effective wealth management, you can retire comfortably, pay for your children’s education, or leave a legacy for your loved ones.
Different Types of Investments for Wealth Management
Investing is a crucial part of wealth management, but there are many different types of investments to consider. Conservative investments, such as bonds and mutual funds, offer lower risk, while riskier investments like stocks and alternative investments offer higher returns. Finding the right balance between risk and return is crucial for achieving your financial goals.
How to Create a Financial Plan for Retirement
Retirement planning is an essential part of wealth management. A well-crafted retirement plan can help you achieve your financial goals and ensure a comfortable retirement. In this section, we’ll explore the steps involved in creating a financial plan for retirement, including setting retirement goals, estimating retirement expenses, determining retirement income sources, and more.
Tips for Managing Investment Risk
Investment risk is an inherent part of wealth management, but it can be managed effectively with the right strategies. In this section, we’ll explore some tips for managing investment risk, including diversification, asset allocation, and assessing your risk tolerance. By managing investment risk effectively, you can reduce the likelihood of losing your wealth and achieve your financial goals more effectively.
The Role of Financial Advisors in Wealth Management
Financial advisors play a crucial role in wealth management. They can help you create a comprehensive financial plan, choose the right investments, manage investment risk, and more. In this section, we’ll explore the role of financial advisors in wealth management and what you need to know to find the right advisor for your needs.
Investing for Retirement: A Guide to Wealth Management for the Future
Investing for retirement is a critical component of wealth management. In this section, we’ll explore the steps involved in investing for retirement, including setting retirement goals, choosing the right investments, managing investment risk, and more. By investing for retirement effectively, you can achieve your financial goals and ensure a comfortable retirement.
Understanding Investment Risk: Tips for Managing Risk in Wealth Management
Investment risk is a critical component of wealth management, but it can be managed effectively with the right strategies. In this section, we’ll explore some tips for managing investment risk, including diversification, asset allocation, and assessing your risk tolerance. By managing investment risk effectively, you can reduce the likelihood of losing your wealth and achieve your financial goals more effectively.
How to Manage Your Wealth: Tips and Strategies for Successful Investing
Managing your wealth effectively is critical to achieving your financial goals. This section will explore some tips and strategies for successful investing, including setting financial goals, choosing the right investments, managing investment risk, and more. By managing your wealth effectively, you can achieve financial security and peace of mind.
According to the Market Update from September 11, 2022, it was projected that if the markets followed a certain path, a test of the 9,900 to 10,500 range would potentially mark a bottom. This projection was based on the assumption that the markets would follow a pattern similar to that seen in 1973-74. If this were to occur, it would present a potentially significant opportunity for tactical investors to enter the market.
It is important to note that this projection was based on speculation and was not a guarantee of future market performance. It is not uncommon for markets to experience fluctuations and volatility, and it is important for investors to carefully research and evaluate any potential investment opportunities.
In November of 2022, the Nasdaq experienced two strong rallies, which may have set the stage for a test of the 12,300 to 12,600 range. If the Nasdaq is able to close at or above 12,600, it may pave the way for the market to reach or surpass its August highs. However, it is important to note that the future performance of the markets is always uncertain and that it is important for investors to carefully consider the risks and potential outcomes of any investment decisions.
In the August 27, 2022 Market Update, it was noted that the Dow had lost a relatively small amount of value, shedding less than 700 points since the previous update. At that time, the Dow was trading around 32,800, and it was suggested that risk-takers might consider opening long positions in the market.
In the August 2, 2022 Market Update, it was stated that the markets were entering a corrective phase and that the SPX had reached short-term targets. It was also noted that former support points had turned into resistance, which could potentially turn into zones of support again on a short-term basis. It was suggested that the market might experience a pullback to the range of 3960 to 4020, with a possibility of overshooting as low as 3870.
In the September 11, 2022 Market Update, it was reported that the markets had traded as low as 3,886, falling below the low end of the suggested range by roughly 70 points. However, it was also noted that the markets were likely to continue rallying as the selling pressure was easing, bearish readings were high, the masses were uncertain, and the dollar was close to reaching a short-term top.
In the same update, it was suggested that risk-takers should continue holding their positions until the Dow tests the range of 33,600 to 34,000 and the Nasdaq trades to 13,500. At that point, it was suggested that all higher-risk positions should be closed, though it was noted that investors could modify this trade to fit their own trading style.
RGLD is a gold stock that has proven to be a good investment opportunity even during market crashes. By simply buying and holding this stock, an investor could have seen significant gains. In fact, the profits from RGLD began to surge after 2011, which was when the Federal Reserve started to print more money. This shows that the recovery period between market booms and busts is now about 5 times faster than it was in 2009.
However, using a more advanced strategy such as analyzing long-term charts (monthly charts) can lead to even greater returns. By using these charts to determine when to buy and sell, an investor could potentially double their returns. For example, an investor could use monthly charts to enter and exit the market while the trend is still positive. Experienced traders could take this strategy a step further by using weekly charts to make more frequent trades within the overall trend determined by the monthly chart. This strategy involves selling when the stock is trading in the overbought range and repurchasing when it moves into the oversold range. It is important to note that this advanced strategy should only be attempted by traders with some knowledge of technical analysis.
Overall, the lesson here is that by remaining calm and not giving in to fear, an investor can achieve outstanding gains over the long term. History has shown that this is possible, even during times of market volatility. It is especially important to be aware of the narratives being created by top players in the market, as they may try to prematurely create the illusion that the bull market is dead forever. These players have significant financial power, and they may continue to manipulate the market in this way with increasing frequency. It is crucial for investors to prepare themselves psychologically for these tactics in order to avoid potential losses.
It is important to note that the information provided in the statement is purely speculative and not based on factual evidence. The statement suggests that some large players in the market intentionally create disasters or crashes in order to profit from the fear and panic of others. It is not clear how these players would be able to consistently create or predict market crashes, and it is not advisable to base investment decisions on speculation or conjecture.
It is never a good idea to blindly follow the strategies of others or to base investment decisions on speculation or conjecture. It is important to carefully research and evaluate any investment decisions and to consider the risks and potential outcomes. It is also important to diversify one’s investment portfolio and to seek professional financial advice before making any major investment decisions.
While it is true that the short-term outlook for the market may not always be favorable, it is important to consider the long-term potential for growth and to look for opportunities to invest in strong, reputable companies. It is possible that 2023 may present some challenges for investors, but it may also offer some fantastic opportunities for those who are astute and tactical in their approach. It is important to carefully consider the risks and potential outcomes of any investment and to make informed decisions based on thorough research and analysis.
Stock Market Psychology for Dummies: If you have common sense then Mass Psychology is easy to grasp
If you understand how the mass mindset operates it provides you with an edge when it comes to investing in the stock market. The odds are stacked against the individual investor so that any trading advantage one can obtain, should be embraced. The idea behind the psychology for dummies article was to create a visual representation of the mass mindset in investing known as market psychology, and the chart below captures the thoughts that go through the mind of the average Joe. The herd mentality or Pack mentality should never be embraced; one you are part of the pack you virtually guaranteed to lose.
The masses never seem to learn from history, and sadly are doomed to relive these events again and again. It is reminiscent of the movie “Ground hog’s day”, where the main character is condemned to relive in each day again and again for eternity. However, fortunately, he manages to find the cure to his problem. Sadly this option is not available to the masses as they do not even recognise the problem. Over 80% of the solution to any problem is identifying the problem.
Market Psychology for Dummies; Graphic representation of the Mass Mindset in Action
The stock is going nowhere; its pure junk, let me look at something else.
Lucky break, it’s going to crash definitely.
What, it’s still going up! Earnings are not so good, people are getting carried away, it’s going to pull back and crash.
Ahh, see I knew it was going to crash, thank God I did not buy. (Mistake the mass mindset misses the main point here. Yes, it pulled back but look where the pull back ended–miles away from its first breakout. A losers mind can only see the picture for what it is not, by replacing it with a picture from his or her imagination. Since they live in a losing sphere, they focus on the negative aspects but not on the positive aspects.
What happened here; this stock was supposed to crash, how the hell did it get here? Perhaps I should have bought; I could have made a lot of money; this looks like a sure thing. (So only halfway through stage 5 will the mass mindset decide it’s safe to venture out.
Now, this person finally musters the courage to buy.) Wow, it went up, great, I’m making money.
This stock is going to go to the moon; let me tell all my friends about it; it looks like a sure thing.
What happened? It pulled back. Ahh, I am not going to fall for this like I fell for it last time (look at number 4). Time to buy more, buy on the dip, that’s it.
I knew it, it’s going up, and I made more money, wish I had bought more. Next time I will invest more on the pull back. (Notice the loser’s mindset does not bother to take the time to see that the stock did not put in a new high. All that matters is that it went up.)
It’s going down again, time to load up; I don’t want to lose this opportunity. Earnings are great, so it must be a good time to buy some more.
The first dose of bad news and the stock takes a big hit; okay, this is just temporary; it’s going to go back up. (Blind faith huge mistake, one of the main ingredients of a losing mindset). Let me buy more and average down.
Maybe I should sell now as the outlook does not look that great, but maybe things will improve. Let me just hold for a bit longer. Yeah, things have to change. Look how fast this stock went up; additionally, it has pulled back so much. The worst is over; it has to go up.
This stock is dead; I have to get out. Secondly, it looks like it’s not going anywhere (this is when the stocks start to bottom. The secret programmed desire to lose syndrome has completed its mission. Trader is in a state of extreme distress and shell-shocked). I am never going to look at this or any stock like this again. Moreover, comparatively speaking I knew it was garbage. Why did I ever buy it in the first place? The stock starts to put in slow base formations and the possible start of a new uptrend. Moreover, the worst part is that this trader is no longer in the market. Lastly, he let panic get the better of him and bailed out just when he should have been buying.
Stock Market Psychology for Dummies final thoughts
Take a close look at the above picture, for it clearly illustrates the mass mindset in action. The masses never learn, they will always be used as cannon fodder as that is the role they secretly wish for. Remember the saying “misery loves company, but stupidity simply adores it” The masses always dump when they should be buying and buy when they should be selling.
Nothing in this world comes easy for if it did, it was not worth it in the first place. A little work and patience are all that are needed to overcome the fear necessary to break away from the masses. In this world, it’s not what you know that can hurt you, it’s what you think you know but don’t that hurts you the most. We hope you find this psychology for dummies article useful.
Published courtesy of the Tactical Investor
The Art of Cutting Your Losses
One of the most enduring sayings on Wall Street is “Cut your losses short and let your winners run.” Sage advice, but many investors still appear to do the opposite, selling stocks after a small gain only to watch them head higher, or holding a stock with a small loss, only to see it lose even more.
No one will deliberately buy a stock that they believe will go down in price and be worth less than what they paid for it. However, buying stocks that drop in value is inherent to investing. The objective, therefore, is not to avoid losses but to minimize losses. Realizing a capital loss before it gets out of hand separates successful investors from the rest. In this article, we’ll help you stand out from the crowd and show you how to identify when you should make your move.
Holding Stocks With Large Losses
In spite of the logic for cutting losses short, many small investors are still left holding the proverbial bag. They inevitably end up with a number of stock positions with large unrealized capital losses. At best, it’s “dead” money; at worst, it drops further in value and never recovers. Typically, investors believe the reason they have so many large, unrealized losses is that they bought the stock at the wrong time. They may also believe that it was a matter of bad luck, but seldom do they believe it is because of their own behavioral biases. Read more
Why People Lose Money in the Market?
Many new investors have found that, soon after buying their first stock, its value dropped by half. It makes for a disappointing introduction to the world of investing, but it can also prove to be a valuable wake-up call, inspiring you to learn everything you can about investing in the markets. While investing in financial markets over the long-term is an excellent path to wealth, it’s not unusual to experience occasional losses as investment values go up and down
Here’s what you need to know about why people lose money in the market—and how you can bounce back from a loss in your portfolio
Not Understanding Market Cycles
People often lose money in the markets because they don’t understand economic and investment market cycles. Business and economic cycles expand and decline. The boom cycles are fostered by a growing economy, expanding employment, and various other economic factors. As inflation creeps up, prices rise, and GDP growth slows, so too does the stock market decline in value.
Investment markets also rise and fall due to global events. After 9/11 the stock market fell 7.1 percent, the biggest one-day loss in the exchange. By Friday, September 15, 2001, the New York Stock Exchange had dropped 14 percent while the Dow Jones and the S&P 500 fell 11.6 percent. Read more
How to invest in stocks: The playing field is not level
We covered this topic several years ago, but we used a chart of the now defunct company, CMGI. Hence, decided to come out with this new update. In this example, we will use the NASDAQ. The chart below is a graphic representation of the thought process that the average investors experience when trying to get into any investment. The same concept applies to any stock, index or any market. Hence GOOG, AAPL, WMT, IBM, NTES, SOHU, MSFT, etc. are all bound by the same rules.
Most investors jump into the markets without taking the time to do any legwork. They assume by reading a few books, listening to the talking heads on CNBC and following a few so-called experts, they are ready to take on the stock market. The market is a mighty beast that has a win ratio more than 90%. Only 10% of investors can consistently claim to make walk away with gains.
Get a grip of your emotions before you invest in the markets
The ordinary individual regardless of their background is almost always on the receiving end of the stick when it comes to investing. The reason for this predicament is predicated upon the fact that the typical person leaps before he thinks. In other words, the decision-making process is driven by their emotional state. Emotions and investing are like oil and water, no matter how hard you try they will never mix. Emotional traders are bankrupt traders. Throw emotions out of the window; kill them on sight.
The solution to winning in the markets
The solution to this dilemma is dangerously simple. In fact, it is so simple that its simplicity is what makes it so hard for the multitude to implement. As we stated emotions should be shot on sight; the acronym shoot and ask questions later is highly applicable in this instance. Emotions should never be allowed to have a seat at the discussion table. To be a successful investor one needs to do the opposite of their useless emotions are dictating. There is simply no place for any extreme deviation from the norm when it comes to investing, and euphoria and panic are extreme deviations from the norm.
How to invest in stocks: Observation
This stock is going nowhere; it is hardly moving, and the fundamentals are weak. I need to find a high flyer one that can move and not this laggard.
Pure luck, the fools who jumped in, will regret it. This is a false breakout. This stock is going drop to new lows. I am not going to waste my hard-earned money on this junk.
Holy smokes, the stock is still going up. Earnings are terrible, long-term fundamentals are not great, and the technical outlook is far from perfect. I think I will pass, as I am sure, it’s going to crash and burn. I am convinced is the secret code word for knowing nothing. Moreover, it is impossible to use technical indicators actually if you are looking through an emotional lens.
Thank goodness I did not buy; I knew it was going to crash. Instead of focusing on the fact that the stock is letting out some steam and building momentum for the next leg up, the mass mindset sees’s only what it wants to see. Governed by useless emotions, it is unable to recognize the opportunity, as it has an almost unstoppable affinity for embracing the opposite. In this instance, the market did pull back, but a close examination reveals that the pullback is just the market letting out some well-deserved steam. In fact, the market ends up putting in a higher low, which is a very bullish development. The horde has an impeccable record at jumping into an investment when euphoria is the air, and out of them when blood is flowing through the streets.
Wait a minute, what’s going on here? The market was supposed to crash. Maybe I made a mistake in not buying. Well, it’s not too late; the picture looks good, and analysts are upbeat about earnings, so I think it is still not too late to get in. The masses need reassurances that all is well, but reassurances come only towards the end of the game. Finally, this chap musters the courage to jump in. Wow, it went up, great; I’m making money.
I was smart to wait until things improved before getting in; it looks like the markets are going to take off……….. Let me call all my friends and tell them to jump in before it’s too late. Remember when everyone is happy, it is usually time to hit the road.
What is going on; why is the market dropping? It’s only a pullback; I am not going to fall for this game again (look at reason number 4). It’s time to average down and load up.
There you go; I knew it was going to turn around. I should have put more into in the market. Next time, I will load up as this is the way to make money. Now the secret desire to lose syndrome kicks in. This guy is trapped in a euphoric mood and fails to recognise that the market did not trade to new highs. It put in a lower high, which should have construed as a warning signal. The mass mindset as we stated before only detects what it wants to spot. For this guy, the only thing that matter is that he made some extra money.
It’s going down again. Opportunity is knocking, and it’s time to load up. Earnings continue to improve; all the analysts on CNBC are bullish, and therefore, it must be a good time to put even more money into the markets. It’s time to back the truck and load up. I need to call everyone and tell them not to miss this opportunity. When you are sure about something, it’s better to sit out and wait. Overconfidence is a sure sign that you are missing something.
The market is hit with a dose of bad news and pulls back very strongly. Ah, this is just a temporary development. The market will recoup and trend higher. I am going to buy more and average down. Gamblers always think of averaging down and hardly think of averaging upwards. All of a sudden, this chap has become an expert on the timing the markets. Blind faith is one of the main ingredients the masses seem to have an endless amount of. If you trade the markets on faith, there is only one thing waiting for you at the end of the cycle; loss and despair.
Now panic and dread start to set in. He questions himself. Did I do the right thing by buying more? Perhaps, I should have sold when I was in the black and booked those small gains I had. Maybe it is time to bail out and cut my losses. Things don’t look so good now. You know what; let me hold for a bit longer, maybe things could suddenly change. The outlook has to change; things were great, and how could they change so suddenly. The worst is over; it has to go up.
Damn it; the market is dead. I am getting the hell out of the stock market. I should have never jumped in. I will never invest in the stock market. Ironically, around this time is when the markets start to give hints that a bottom is not too far in the marking. This individual is a bailing out when, in fact, he should be holding on. He is selling close to the bottom and allowing fear and anguish to direct his actions, just as he allowed joy to guide him into the markets.
The market is going through a slow bottoming phase. Once this phase ends a new uptrend will begin. This guy bailed out very close to the bottom. At this point, of the game, he should have considered holding onto the positions, as he had taken on an inordinate amount of pain hoping for a recovery. Instead, he opts for even more pain and suffering by selling very close to the bottom.
How to invest in stocks: Conclusion
It is imperative that you understand emotions can and will only push away from the right path. Their sole function is to confuse you and make the already complex job of investing even more complex. In other words, you are almost guaranteed to lose if emotions are the main driving force when it comes to investing in the markets.
“Misery loves company, but stupidity simply demands it.” All emotions are based on perceptions. Perception is based on what one assumes to be real. What you deem to be real or illusory could change dramatically depending on whether you are calm or agitated.
The key ingredient to mastering mass psychology is to have control over your emotions. Trying to identify the exact top or bottom is an exercise in futility best reserved for imbeciles with plenty of time on their hands with an inordinate appetite for pain.
The objective should be to distinguish subtle telltale signs that point out when a market is topping or bottoming. Once this identified the practical move is to open a long or short position depending on what you have discerned, even though you might end up opening position significantly earlier than the masses; feel content when you are not in sync with the masses and apprehensive when you are.
The Best Investing Books
I have yet to read one technical analysis book that I was not inclined to throw into the trash can. Over the years, I looked at many books that covered this topic, and have found nothing of value out there. There are some books, with great pictures but other than that they contain nothing of value. Almost every author seems to want to go out of his or her way to make the subject look complex. Secondly, half of the studies they mention are useless, and I am being conservative. Here are some simple examples, Head and shoulders pattern, rising wedge, bull flag, cup and handle, and a host of other nonsense.
Let’s also not forget about the silly omens these books like to brag about, like the almighty useless death cross or the infamous Hindenburg omen, etc.. You would be much better served if you can master the art of drawing a simple trend line.
Before we put out a list of the best investing books to read, we think the topic of Mass psychology warrants a mention. Understanding the basics of Mass Psychology could go a long way in improving your investment journey. Here is a brief excerpt on the topic:
Mass psychology is the study of group behaviour; the mass mindset draws comfort when it does not go against the views held by the majority. For example, an investor feels comfortable buying biotech stocks because the crowd thinks it’s a good buy. In other words, they are acting like lemmings; they are following the herd mindset. In the markets teamwork does not pay; when the masses are euphoric, it is time to head for the exits and vice versa.
The astute investor purchases when the crowd panics and sells when the mob is jumping up with joy. The phrase to keep in mind is the following ” buy when there is blood in the streets and sell when the masses are ecstatic“. This is the only way you can buy low and sell high with little to no stress. The masses refuse to use history as a guide and in failing to do so they are doomed to repeat it again.
Bitcoin Market Crashing: Is this the end of Bitcoin or a pause before the next Bull Run?
Whenever the masses fully embrace a market, trouble is usually close at hand, and that’s what occurred with bitcoin; the masses were completely enamoured with Bitcoin. The masses were euphoric and were expecting bitcoin to soar to the next galaxy. Wild targets of $100,000 were being issued that sounded more like the ravings of a lunatic than of an expert. In an article published on the 4th of December 2017 we made the following comments:
Bitcoin, on the other hand, is now in the feeding frenzy stage, so this market is ripe for a correction. Tactical Investor
The problem with Bitcoin is that it’s not the only cryptocurrency; every Tom, Dick and Harry can issue a cryptocurrency, and to date, that is is what is occurring as we speak. There are so many cryptocurrencies out there that it in our opinion the better way to score a home run would be to issue your own cryptocurrency.
What caught our attention was that the masses were jumping up in joy and embracing bitcoin, but for over nine years they refused to embrace the equities bull market. Mass psychology states that when the masses are euphoric (not to be confused with bullish); the outlook is going to take a turn for the worse. And more or less that’s what transpired with bitcoin.
Clear Psychological signals that all was not well
Long Island Ice tea; a company that has nothing to with the Bitcoin market decided to change its name to Long Block Chain Corp. Mind you the name change had not taken effect yet, but the effect on the stock price was immediate; it tacked on almost 200%.
The CEO of Long Island Ice tea had this to say about the upcoming name change:
“We view advances in blockchain technology as a once-in-a-generation opportunity, and have made the decision to pivot our business strategy in order to pursue opportunities in this evolving industry,”
What a load of rubbish as no one in the company has a clue as to how blockchain operates. It’s interesting to note that other than the intended name change, this company has no viable block chain product (as of the date of the above announcement). It just thinks it would be a good idea to get into this market. The company makes beverages for crying out loud. Before the name change, its stock was down roughly 40% for the year. It is a tiny company with sales of just $1.6 million, and viola all it had to do was change its name, and its stock surged.
Riot Block Chain was known as Bioptyx, and its price soared after it changed its name. LongFin (LFIN), a financial company saw its price skyrocket after it announced it would be buying a blockchain microlender. And most recently Kodak decided to take a similar route, and its stock price jumped.
At this rate, even companies that specialise in garbage might decide that it’s a good time to add the words blockchain to their names. Hey, why not right? It’s like share buybacks on steroids; here you don’t even need to borrow money to buy back your shares, just change your name and voila, your stock soars in value.
The creator of Litecoin Charlie Lee sold his entire stake before bitcoin crashed; he claims it was due to conflict of interest. Strange he waited till now to sell it. Maybe it took a few hundred million for him to figure out that there was a conflict of interest issue? http://bit.ly/2leWumd
People were taking out mortgages or cash advances on their credit cards to invest in Bitcoin. Taking money you don’t have to buy something you can’t afford in the hopes you score a home run; what could go wrong with such a brilliant plan?
The last Psychological Straw?
When two experts, James Altucher and John MacAfee stated that bitcoin was destined to soar to $1 million, it was almost a given that the outlook would change for the worse. We sent out the following warning to our subscribers:
Bitcoin is now in a full-blown mania stage; people are taking mortgages to speculate on bitcoin. Insane price targets of $1 million are being tossed into the air, and the masses are lapping it. That is how the market works, it gives and gives but then it strikes and takes everything back ten times faster. Market Update Dec 17, 2017
Bitcoin futures; the perfect vehicle to manipulate Bitcoin
Bitcoin futures provides a great venue for the big sharks to swallow up the silly sardines hoping to strike it rich. The big players can now manipulate the bitcoin market via the futures market. They can use Fiat money (worthless paper) to push it up or down, much the same way they did and are still doing with the precious metals markets. Which illustrates the lie behind the “Bitcoin is different nonsense”; Bitcoin is nothing but digital fiat; in some ways, its worse as anyone can issue their own cryptocurrency.
If you look at the above chart, it puts into perspective how fast the situation went from excellent to unpleasant/painful. While the crowd is anxious, they are still not in panic mode. The bloodletting will continue until the trend of lower highs that started after Dec 14, 2017, comes to an end. On the conservative side, we think Bitcoin could drop down to the 8,800-9,200 ranges, but this market is far from your typical market, and there is a good chance that Bitcoin could drop down to the $5000-$5600 ranges before the dust settles. The masses are notorious for selling at or close to the bottom, so while $5000 might appear implausible now, just remember that panic has a way of distorting reality. When a person panics, they forget what they are doing, their objective is to get out of the game as fast as possible regardless of the cost.
Bitcoin will trend upwards again, but the trending upwards does not mean it has to surge to new highs. A bottom will be close at hand when experts stop issuing lofty targets and turn on this market. Compared to the wild bubble like action the bitcoin/blockchain sector has experienced, the equities markets appear almost timid. One could argue that if these markets follow a similar path, then the Dow and SPX could trade a lot higher before experiencing a strong correction. And that lofty targets of Dow 30K might not be that lofty after all. We will discuss this in a follow-up article, which we hope to publish with the next 1-2 day.
For those who want to play the bitcoin market, a somewhat safer alternative would be via Bitcoin Investment Trust (GBTC). Its quite liquid and you can jump in and out with the click of a mouse. Consider waiting until the sentiment turns decidedly negative or bitcoin is trading at least in the $8000 ranges before deploying some of your funds and don’t bet the house on this market.
On a final note, the outlook for Gold right now is far brighter than that for Bitcoin.
Trending Stocks 2020: Before we get into the meat of the article, let’s look at some of the statements we made over the past few weeks. These comments are being extracted from the market update service.
Put your personal feelings aside and understand this simple fact. No bull market has ever ended on a note of fear; it has always ended on a note of extreme joy. Market Update Jan 17, 2020
Since the inception of mass media, the idea has been to stampede the crowd or create a feeling of euphoria and both conditions are deadly when it comes to investing. However, the new ploy is to keep the masses agitated constantly or uncertain. Why would they do this? When someone is uncertain it takes longer for them to cling to a given viewpoint; they keep jumping from one camp to another, and that is one of the reasons why this bull market has lasted so long.
A sharp pullback is still an outcome we view through a very bullish lens. The ideal setup calls for the Dow to trade to the 28,800 to 29,000 ranges, with a possible overshoot to 29,300. After that, a nice sharp pullback would set the bedrock for a surge to and possibly well past 30k. Market Update Dec 29, 2019
The best time to buy is when the masses are in a state of disarray, and this usually occurs when it looks like the markets are crashing. The masses are hardwired to view strong pullbacks as the start of a new crash, but most pullbacks are nothing but resting points; the markets use these stops to build up energy for the next upward leg. Tactical Investors should hope that the market’s pullback strongly, for it provides them with a lovely opportunity to open long positions at a discount.
It is also one of the reasons why in general the small player is still sitting on the sidelines. They still don’t know if they should jump in and buy or if shorting the markets is the right course of action; the longer they remain uncertain, the higher this market will trend. Market update Jan 7, 2020
One can immediately spot that the media takes delight in blowing anything out of proportion as it comes down to eyeballs and dollars. The more bombastic the headline, the more attention it will get, even if this attention is for a few minutes. In the end, we don’t have news today what we have is weaponized gossip.
Stock Trends and The Coronavirus Factor
The Coronavirus issue is going to be blown out of all proportions and it will be made to look like the mother of all pandemics. In fact, we are seeing individuals that are not qualified to make projections on the rate this virus will spread, stating that millions upon millions will be affected.
Now people are being checked with thermometers to see if their temp is above normal and an above-normal temperature has now become the litmus test for the Coronavirus; voodoo science at its best. This is one of the most retarded medical tests of all time, but no one seems to notice; a real-life depiction of “Pluto’s Allegory of the cave”.
CDC estimates that the burden of illness during the 2018–2019 season included an estimated 35.5 million people getting sick with influenza, 16.5 million people going to a health care provider for their illness, 490,600 hospitalizations, and 34,200 deaths from influenza (Table 1). The number of influenza-associated illnesses that occurred last season was similar to the estimated number of influenza-associated illnesses during the 2012–2013 influenza season when an estimated 34 million people had symptomatic influenza illness6.http://bit.ly/2UMJjMG
In comparison to the flu virus, the Coronavirus has caused a minimal amount of damage yet it has received 100X more coverage than the flu virus, which resulted in 34.200 deaths (and only US data is being used).
Worldwide, tobacco use causes more than 7 million deaths per year.2 If the pattern of smoking all over the globe doesn’t change, more than 8 million people a year will die from diseases related to tobacco use by 2030. http://bit.ly/2wcEl1s
Many of the masks that individuals are wearing are not that useful against viruses and even the masks that might provide protection need to be worn correctly. http://bit.ly/2HklQKB. Other experts state that masks are useless as the virus is spread through the eyes. http://bit.ly/2SCjfkw
Stock Trends 2020 Conclusion
There is a 75% chance that the markets will experience at least one strong pullback this year, it would be foolhardy to attempt to predict the exact date though it would be ideal if this event took place during the 1st quarter. Market Update Feb 20, 2020
This correction is taking place in the ideal timeline so it when it ends it will lead to a spectacular rally, those waiting for the crosswinds to subside will (as always) be left holding a can with rotting worms.
The masses beg for an opportunity to buy stocks at a lower price when that opportunity arises the masses panic stating that they need to wait for things to get better before jumping in again. And so they wait, and when things finally get better, they notice that the price of everything they wanted to buy is higher than it was before and so starts the next stage of sorrow.
Notice anything odd above in terms of market sentiment. The markets have sold off, so one would expect bearish readings to soar north off 55. Instead, while they have risen, they are only at 41. What’s very interesting is that the number of individuals in the neutral camp is holding steady at 33 and this confirms that the masses are still uncertain, which means that the rebound from this correction will push the market to new highs.
This market has yet to experience the “feeding frenzy stage,” and we expect the action to be twice as powerful as the current downward action gripping the markets. We expect the Dow to experience upward moves ranging from 500 to 1000 points several times before the market even come close to hitting a massive long term top. The needle on the anxiety gauge has swept deep into the hysteria zone extremely rapidly indicating the crowd is one stop from moving into a zone that until now, we did not create “the madness zone”. If the gauge moves into this zone, then we could end up having an event that will come to be known as the “father of all buying events.”
Courtesy of Tactical Investor
7 Hot Stocks for 2020’s Big Trends
With 2019 coming to a close, it’s both a time to reflect and to ponder the future of hot stocks for 2020. If I had to summarize the markets this year in one word, it’d be China. Through much back-and-forth rhetoric, the U.S.-China trade war dominated the investment and political narrative. Unfortunately, based on recent presidential threats, this conflict could be with us for a while.
But if we finally get a substantive trade deal signed, one of the biggest catalysts for hot stocks for 2020 will be technology. Over the years, we’ve seen small upstarts disrupt long established markets. For the next few years, I’m going to go out on a limb and suggest that the old dogs will play new tricks. Specifically, the 5G rollout offers giant, well-resourced organizations a second wind.
Of course, forecasting the most profitable hot stocks for 2020 is a gargantuan task. Still, I think a reliable factor that you can trust is demographics. Although most countries undergo serious social change, arguably few nations are subject to dramatic paradigm shifts like the U.S. Particularly, the aging of two key demographic groups may offer substantial returns for the patient investor.
Lastly, evolving social mores and rising awareness will most likely impart political transitions. And that will invariably impact industries that depend on favorable public sentiment to catalyze growth. So, without further ado, here are my picks for seven hot stocks for 2020 to consider Full Story
20 of the Top Stocks to Buy in 2020
Before we get to the stocks, let’s acknowledge that these lists are tough.
Choosing the best stocks to buy today depends so much on your individual financial situation. To get a good read on where you stand, read our How to Invest Guide. It walks you through topics like establishing an emergency fund, asset allocation, when it makes sense to buy stocks, etc.
Now, onto the 20 stock ideas. Here’s the entire list, followed by the summary buy thesis for each one.
The Vanguard Total Stock Market ETF (NYSEMKT:VTI)
The Vanguard Total International Stock ETF (NASDAQ:VXUS)
Intuitive Surgical (NASDAQ:ISRG)
Axon Enterprises (NASDAQ:AAXN)
Verizon Communications (NYSE:VZ)
Ford Motor Company (NYSE:F)
General Motors Company (NYSE:GM)
TerraForm Power (NASDAQ:TERP)
Brookfield Infrastructure Partners L.P. (NYSE:BIP)
CareTrust REIT (NASDAQ:CTRE)
lululemon athletica (NASDAQ:LULU)
Constellation Brands (NYSE:STZ)
The first two are a bit of a cheat because they’re actually exchange-traded funds (ETFs). ETFs allow you broad exposure to a basket of stocks, and these two are some of the best low-cost index funds around:
US Stocks: The Vanguard Total Stock Market ETF
Foreign Stocks: The Vanguard Total International Stock ETF
The first ETF (VTI) gives you exposure to basically the entire U.S. stock market by investing in over 4,000 stocks. Full Story
Stubbornness does have its helpful features. You always know what you’re going to be thinking tomorrow.
Expert after expert is busy proclaiming that the world is about to come to grinding halt again.
They never seem to let up on pushing this sewage onto the unsuspecting masses. This is a clear example of insanity in action; mouthing the same thing over and over again with the desperate hope that this time the outcome will be different. The outcome will not be different this time, at least not yet. These guys should focus on writing fiction for reality seems to elude them completely. For years we have stated (and rightly so) that until the sentiment changes, this market will continue to soar higher and higher.
Here is a small sample of the flood of articles that were pushed out this month. If one simply glances through them, one would almost be compelled to think that the writers shared the same notes. There is almost no originality in these articles. The theme is the same, just because it’s October the focus is on the disaster aspect of the 1987 crash. Almost no one mentions that it proved to be a monumental buying opportunity. The focus is oh the financial world came to a grinding halt. Only it did not, the only that came to a halt was the rubbish the predecessors of today’s experts were uttering back in 1987. This reinforces the view that most financial writers have chosen the wrong profession One word sums all this nonsense “Rubbish.”
Could the 1987 stock market crash happen again? – Reuters
Black Monday anniversary: How the 2017 stock market compares with 1987 – Market Watch
Black Monday: 30 years after 1987 stock market crash… Wall Street raises fears of REPEAT- express.co.uk
Thursday marks 30th anniversary of the Black Monday stock market crash – courier-journal
Buy Climax at 30th Anniversary of 1987 Stock Market Crash – Money Show
The Crash of ’87, From the Wall Street Players Who Lived It – Bloomberg
Black Monday: Can a 1987-style stock market crash happen again? – USA Today
So are we stating that the stock market will never crash?
No that is not what we are stating. The market will crash, but for the astute investor, “crash” is the wrong word to use. A strong correction is more likely as most astute investors got into this market a long time ago. It is the crowd that will eventually decide to embrace close to the top that will experience this crash that the experts have been hyping about for years.
This market will experience one strong correction before it crashes, but the moment the Dow sheds 1000 points or more these experts will crawl from the rocks they were hiding under and start screaming bloody murder. To which our response is, please scream as loud as you can; for it will push the markets lower creating a better buying opportunity for us. This is exactly what we said in Aug of 2015 before Trump won and countless times before and after that.
This market is extremely overbought so a pullback ranging from 1500-3000 points should surprise no one and it certainly should not be construed as a crash but viewed as market releasing a well-deserved dose of steam. To state otherwise, would simply be disingenuous, which seems to be the only real qualification these so-called experts posses
Market Sentiment indicates that the crowd is far from Ecstatic
The Bullish sentiment has risen somewhat, and the crowd is not as anxious as it was at the beginning of this month or last month, but until the readings indicate this crowd is euphoric, a crash is unlikely. Many people state that most people don’t have money to invest in the markets. We beg to differ; look at whats going on in the Bitcoin market, now that is a market showing some signs of Euphoria; the stock market in comparison is at the lukewarm stage.
Buy The Fear & Sell The Noise
The only thing that is going to crash and has been crashing since 2008 is the egos of these “know it all” experts. If any of them had even listened to themselves half of the time; they would have bankrupted themselves several times over. The fact that they are still around chiming the same rubbish is clear proof that they don’t believe a word they are putting to print and therefore neither should you.
Why Not Try Something New For A Change
Make a list of stocks you would love to own at a discount. When the market lets out a nice dose of steam, instead of fleeing for the hills, you can purchase top quality stocks for a discount
The sheer volume of these articles validates our view that the masses are from bullish and a crash is unlikely. Until the sentiment or the trend changes, all strong corrections should be viewed through a bullish lens.
Obstinacy is the result of the will forcing itself into the place of the intellect.
What is mass hysteria? A perfect example of the masses leaping before they look. in this instance, the crowd has not even bothered to examine the data closely. If they did they would have seen that the so-called experts are nothing but jackasses in disguise.
Long before this pandemic hit, we stated that central bankers, especially the Fed, was on a mission to take rates towards zero. Imagine if the Fed had lowered interest rates by 150 bases two weeks ago, how people would have reacted. When the Fed cut rates before the coronavirus attack, experts were quick to label them as being reckless, but now after a 150 basis point cut, they say more has to be done. Notice the ploy here; to do that which the masses abhor, one has to create a situation that distracts their attention. Then offer a solution that is three times as damaging as the previous one and in their desperation to seek safety, they will agree to whatever course of action is laid out.
The system is going to be flooded with so much liquidity that the markets will melt upwards when the media starts to report the data more accurately. Right now, they talk about the mortality rate without breaking the data down and informing the masses that older individuals are the ones that fall into the high-risk category. Even then, most of them appear to have some other complications already.
Updated mortality rate by age group and nothing much has changed
Notice how mild it is for those that are under 50, but let’s assume its 1.3%, no data is provided on whether these individuals had any existing conditions. So far, they are using stats to manipulate the data to suit whatever outcome they want to project onto the masses. A more robust approach (which would be relatively easy) would entail listing down any other conditions the patient might have had before becoming infected.
Furthermore, when you look at the data from countries that have sound health systems in place, the overall death rate is quite low. Take a look at Japan, Germany, Denmark, South Korea, Switzerland, Singapore, Taiwan, etc., the total death rate is well below 1.5 and in many cases below one per cent and that’s accounting for all age groups. For example, Singapore so far as has zero deaths, Taiwan only has one, and so on.
Mass Media Operating from an Alternate reality
The media is pushing theories without all the data, and if you read almost all the stories you will see experts using words, such as may, could, might, but the masses treat these opinions as facts. Try to google the term “is the Coronavirus from the same family as the flu virus: “You won’t find any articles that answer the question directly in the top 10 search results. Instead, you will find a plethora of articles that go on describe how dangerous the new variant of the Coronavirus is. These articles were there before, but now they have been pushed to the bottom pages where no one bothers to look at.
The answer is simple, yes, it’s from the same family, but it’s a more virulent version. After going through six pages of results, I could barely find a straight answer on Google that discussed only the Coronavirus as it relates to influenza. I had to use duckduckgo.com and only then was I able to find something of value on the first page, but after scrolling down the article in question was I able to find the following info:
Human coronavirus is pretty common throughout the world, according to the CDC. There are seven different types that scientists know of, and many of them cause colds, says infectious disease expert Amesh A. Adalja, M.D., senior scholar at the Johns Hopkins Center for Health Security. However, two newer types—MERS-CoV and SARS-CoV—can cause severe illness. http://bit.ly/2UeuVL5
So why can’t the most popular search engine provide an article in the top 10 results that will answer the question directly? The answer is due to high ranking media sites pushing an enormous amount of opinion based articles, that have replaced articles from lower ranking sites that would have answered the question. Most individuals are not going to sift through pages of data looking for the answer; they stop at the first page and usually look at the top results.
Mass Hysteria: Panic never leads to a positive outcome
This hysteria based sell-off is producing one of the most significant buying opportunities in decades, more on that later.
In the short-term technical analysis cannot identify support levels because we are dealing with madness, and that is the reason, we added the new standard in the anxiety index. What exacerbates the situation is that there is very little liquidity, look at the bid and ask price on some options they are unreal, for example, a bid of 1.40 and ask of 5.00. This provides a few big players with the opportunity to move the markets in whatever direction they see fit.
The only thing that can help stabilize the situation immediately will be one of the following
The Fed throws the Kitchen and the Kitchen sink at this market and A huge Stimulus package is unveiled
The press starts to accurately report the news; all they have to go is go to worldmeters.info to get a better take of what is going on
A new rapid detection test is announced
The US comes up with concrete measures to rapidly test a large number of individuals. This would be seen as good news because the average death rate is 1.39% and that’s taking all groups into consideration. This is significantly lower than in China and many other nations.
A vaccine works in clinical trials. The FDA is going to approve the usage of this vaccine extremely fast, however, data has to show that it works even with limited trials.
A treatment that has a 90% cure rate.,
Mass Hysteria in the markets serves as the foundation of the Next bull market.
when you add in stupidity and ineptitude by the elected officials, what should have been a mild situation turned into a nightmare type scenario. We are supposedly the most advanced nation on earth, but after the current debacle, one would be hard-pressed to call the US advanced at least when it comes to the medical arena.
What we know for sure, is that a vaccine and a better treatment will be found; it is just a matter of time. As for the press and politicians acting in a sensible manner that’s a hard call.
This chart from the 1940s clearly illustrates that every so-called crash has proved to be a buying opportunity and in the long run, bears are always killed, but the same cannot be said of bulls. Hence, when the trend is up and it is up right now, every strong correction has to be viewed through a bullish lens.
Mass Hysteria is A Contrarian Investor’s Best Friend
Still, the long term outlook is given, more so as this crash started on a note of uncertainty, unlike every previous market crash.
“the time to buy is when there’s blood in the streets.”Baron Rothschild
Losing your head in a crisis is a good way to become the crisis. – C.J. Redwine
Sooner or later comes a crisis in our affairs, and how we meet it determines our future happiness and success. Since the beginning of time, every form of life has been called upon to meet such crisis. – Robert Collier
Successful people recognise crisis as a time for change – from lesser to greater, smaller to bigger. – Edwin Louis Cole
It’s not always easy to do what’s not popular, but that’s where you make your money. Buy stocks that look bad to less careful investors and hang on until their real value is recognized. I’ve never bought a stock unless, in my view, it was on sale. Buy on the cannons and sell on the trumpetsJohn Neff
In order to win as a contrarian, you need the right timing and you have to put on a position in the appropriate size. If you do it too small, it’s not meaningful. If you do it too big, you can get wiped out if your timing is slightly off. The process requires courage, commitment and an understanding of your own psychologyMichael Steinhardt
I will tell you how to become rich…Be fearful when others are greedy. Be greedy when others are fearful.Warren Buffett
To succeed as a contrarian, you must recognize what the crowd believes, have concrete justification for why the majority is wrong, and have the patience and conviction to stick with what is, by definition, an unpopular bet.Whitney Tilson
Humans are prone to herd because it is always warmer and safer in the middle of the herd. Indeed, our brains are wired to make us social animals. We feel the pain of social exclusion in the same parts of the brain where we feel real physical pain. So being a contrarian is a little bit like having your arm broken on a regular basis. James Montier
There are many who give advice, but few that offer guidance. Anonymous
Our all-time favourite
To buy when others are despondently selling and to sell when others are euphorically buying takes the greatest courage, but provides the greatest profit. Bull markets are born in pessimism, grow on scepticism, mature on optimism and die on euphoria. The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell. If you want to have a better performance than the crowd, you must do things differently from the crowd. Sir John Templeton
Stock Market Outlook Going Forward
We have moved deeper into the madness zone, and neutral sentiment has dropped to levels not seen for years. It is trading at 13, but bullish sentiment while below its historical average is still quite high, it would be ideal for it to drop below 24. Bearish sentiment continues to trend higher, and that’s a good sign. As things stand right now, we are close to another “mother of all buy signals” that would match that of 1987 and 2008. Our indicators just need to dip slightly lower into the oversold range.
The trend as per our trend indicator is positive which suggest that every pullback ranging from mild to wild should be embraced.
Courtesy of Tactical Investor
Mass hysteria: An epidemic of the mind?
An outbreak of fatal dancing fits among members of the same community, men suddenly gripped by the sickening fear of losing their genital organs, and teenagers having mysterious symptoms after watching an episode of their favorite TV series — these are all instances of what we often refer to as “mass hysteria.”
“They danced together, ceaselessly, for hours or days, and in wild delirium, the dancers collapsed and fell to the ground exhausted, groaning and sighing as if in the agonies of death. When recuperated, they […] resumed their convulsive movements.”
This is a description of the epidemic of “dancing plague” or “dancing mania” as given by Benjamin Lee Gordon in Medieval and Renaissance Medicine.
These events were spontaneous outbursts of uncontrollable dancing motions that gripped people in communities across Europe in the Middle Ages.
Those affected would often reportedly be unable to stop dancing until they were so worn out and exhausted that they died. These events are typically cited as some of the first known instances of what would come to be referred to as “mass hysteria.”
Mass hysteria is a phrase that is used so often and so imprecisely to refer to anything from giving in to fashion fads to participating in riots and raves that it has become something of a fluid concept, synonymous with anything with a negative connotation that involves the participation of a large group of people. Full Story
The Mystery of Mass Hysteria
WEDNESDAY, Jan. 18, 2012 — A few months ago, six teenagers at LeRoy Junior-Senior High School in upstate New York began exhibiting tics and verbal outbursts that resembled some of the classic symptoms of Tourette syndrome. The students — all girls, of whom there are now a dozen — were shaking and jerking uncontrollably, sometimes to the point of not being able to speak.
Parents and school officials were understandably alarmed and launched a full-scale investigation to determine whether environmental substances in any of the buildings could have triggered the problem. Thus far, however, all reports have come back clean.
Now a doctor who is treating some of the girls has come forward with a surprising explanation: mass hysteria.
“It’s happened before, all around the world,” said Laszlo Mechtler, MD, the neurologist who diagnosed the teens. “It’s a rare phenomena.”
Mass Hysteria Throughout History
Not that rare, as it turns out. Mass hysteria — in which various people in a common group (such as students within a school) spontaneously exhibit an outbreak of physical symptoms caused by psychological stress — has been documented frequently over the ages, dating all the way back to the 14th century. In fact, according to a report from the Johns Hopkins University School of Hygiene and Public Health, there were at least 70 distinct outbreaks between 1973 and 1993 alone, 34 of which occurred in the United States. Schools, workplaces, and small communities were the most common settings of these events Full Story
We are entering a new paradigm; get used to forever QE, though it will be given other names along the journey to make it appear more palatable. The US and by default worldwide debt is set to soar to preposterous levels; if a national debt of almost $22 trillion is shocking to some; imagine how they will feel when the debt soars to $100 trillion. Market Update Feb 28, 2019
If you shook your head vigorously when you read the above statement, print it and put it somewhere, you can easily access and then review it a few years from today. You will be unpleasantly surprised to see how much the situation has changed; the masses are not paying any attention to the national debt.
Central bankers have become very adept at deflating a nation’s currency while maintaining the illusion all is well. This is achieved by subsidising key industries, using a basket of goods that (and the sectors these goods originate from are usually the one’s receiving massive subsidies) paint a false picture regarding inflation and most importantly, they control the media. Let’s briefly look at some of these subjects today.
The press and the crowd effect
Any student of history can spot a pattern that goes back to ancient times; the powers that be knew that the key to controlling the masses was to control the news outlets. In the old days that meant having control of the gossipers, as time passed on, the name gossiper was replaced with the term reporter. Today’s reporters are only concerned with the number of eyeballs they can attract to a given story; it does not help that the people that hire them also encourage this behaviour. The press is the most potent weapon available; it can destroy a person even if he is 100% innocent. Mass media’s sole function is to manipulate the masses; think about it mass media is not for the observer or for the critical thinker; it’s for cows who are begging to be led to the slaughterhouse, hence the term mass media. If you want to have a good idea of what is really going on; you will read several sources that are not widely referenced by the masses and then use that (collective) data to paint a picture.
Elias Canetti’s view on crowd behaviour is spot on:
It is only in a crowd that man can become free of this fear of being touched. That is the only situation in which the fear changes into its opposite. The crowd he needs is the dense crowd, in which body is pressed to body; a crowd, too, whose psychical constitution is also dense, or compact, so that he no longer notices who it is that presses against him. As soon as a man has surrendered himself to the crowd, he ceases to fear its touch.
That is the mass mindset for you, individuals feel great when they all share a common theme and a so-called common goal, but nature clearly states that everyone cannot win and that there has to be a loser or losers for every winner as it depends on how much the winner takes home. 10 losers might be needed to fund one big winner. Teamwork never pays off except for the person that is pushing the concept of teamwork. Misery loves company; how rare it is to find a group that is happily sharing positive stories; bragging does not constitute a positive development, in fact, it is usually a sign of mental instability.
The idea here is to keep critical products at prices that appear to be reasonable. If essential items become too expensive to purchase, the crowd will scream. However, if they have access to reasonably priced education via public schools and colleges, access to affordable food and other basic necessities, then one can create the illusion that inflation is not an issue. So when we state that inflation is a non-event, we are using the Fed’s distorted figures to make this point. In reality, inflation is a massive problem. Just look at the cost of housing, which includes buying or renting, one can easily see that inflation is an enormous problem. Another area is medicine; anyone with a brain can see that inflation in the medical sector is alive and thriving.
Getting the mass to believe old newspapers (your paper money) is real money
In this area, they have been incredibly successful; very few of today’s young generation even understands the concept of hard cash or what constitutes real money. They assume fiat is real and they are now embracing digital forms of fiat such as Bitcoin. This means that the central bankers are now in a position to inflate the money supply beyond the wildest dreams of their predecessors. There will be a day of reckoning but those waiting for that day will probably see their day of reckoning first. Until the masses start to doubt Fiat money, nothing will change; the masses are showing no signs of resisting Fiat. So no matter what the hard money expert’s spout, their knowledge is useless for nothing will happen until the masses reject Fiat. Just like the stock market is unlikely to crash until the Masses embrace this bull market.
Emotions govern everything, and if you can identify the emotion driving the masses, you can profit from almost any situation.
Central bankers have suddenly changed their chant
What is remarkable is the speed at which central bankers changed their tune and how equally fast and without question, the masses accepted this change.
Nobody is objecting to QE, 10 years ago, they made a big noise, but now the populace at large believes it is a necessity. Let’s start off with the quote we posted by Clarida in the last update, for it clearly tells us that the Fed is not going to stop supporting the stock market, but in fact, it will take even more drastic measures to help the markets in the future. Let the contents slowly sink in, and you will understand why Central bankers will not stop deflating the currency until the masses scream bloody murder and by then it will be too late.
Clarida acknowledged no doubts. He said that radical monetary policy has worked, that it will continue to work, and that it may well become more radical. He contended that low-interest rates are here to stay and that new policy “tools” must be sharpened and kept at the ready.
U.S. inflation forecasts decline, supporting rate-hike holiday
The survey of consumer expectations, published on Monday, is one of the Fed’s price gauges as it weighs the need for rate rises. It showed one- and three-year ahead inflation expectations were down 0.2 percentage points to 2.8 percent last month, with sharp declines in expected medical care expenses. Both the one- and three-year gauges had been roughly unchanged since April 2018.
Stable and low inflation is one of the main reasons that the U.S. central bank, having raised interest rates four times last year, is now taking a wait-and-see approach to any more tightening in 2019.
The New York Fed’s survey found that consumers expected tame inflation despite also forecasting their own wages would rise. Average one-year earnings growth expectations increased to 2.5 percent last month, from 2.4 percent the month before. Consumers also forecast a lower likelihood that unemployment will rise. Economists are debating whether rising wages and low unemployment figures still translate into higher inflation as orthodox economic theory assumes. Full Story
ECB holds interest rates steady to curb Eurozone slowdown
Policymakers at the European Central Bank on Thursday announced a new round of cheap loans to banks and said record low-interest rates would remain unchanged “at least through the end of 2019.”
Previously, the bank had indicated that the earliest rate hike would come in the fall. The measures aim to allay fears of a eurozone slowdown spurred by uncertainty over Brexit, a US-China trade war, and threats by Washington to impose tariffs on European auto imports.
“We’re coming out of, and maybe we still are in a period of, continued weakness and pervasive uncertainty,” ECB chief Mario Draghi told reporters in Frankfurt.
“Our decisions certainly increase the resilience of the eurozone economy,” he added. “But can they address the factors that are weighing on the economy in the rest of the word? They cannot.”
Carsten Brzeski, the chief economist at the bank ING Germany, said the measures came surprisingly early.
“It is clearly an attempt to stay ahead of the curve,” he said. “Any next step from here to tackle a severe downswing of the economy would now require unprecedented measure. Full Story
Global economy: Why central bankers blinked
The wariness descending over leading central banks is a jarring contrast to the buoyant mood this time last year. At the gathering of business and political leaders in Davos, Switzerland in January 2018, optimism was simmering, with one survey of bosses putting confidence at its highest for six years. The IMF hailed the broadest synchronised global upsurge since the start of the decade, with 120 economies enjoying a pick-up in growth.
An update from the IMF last month bemoaned the “backdrop of weakening financial market sentiment, trade policy uncertainty, and concerns about China’s outlook”. Growth in advanced economies will slow from an estimated 2.3 per cent in 2018 to 2 per cent in 2019 and 1.7 per cent in 2020, it said. Global manufacturing activity is at a two-and-a-half year low.
“You are getting a much more sober assessment of global growth,” says Mohamed El-Erian, chief economic adviser at Allianz.
What has gone wrong? The sea change reflects, in part, a realisation that policymakers became overly bullish last year, says Mr El-Erian. The Fed, in particular, over-reached by signalling four increases in interest rates for 2018 when the global economy was still fragile, he says. Its new-found caution is providing “air cover” for other central banks to mark down their own rate expectations. Full Story
What do these headlines indicate?
These stories confirm that we were on the right track when we stated that the Fed had no intention of pushing rates too high for the past 24 months. We pointed to the reaction from the bond markets, Baltic dry index, the world economy, etc.; these indicators showed that this rate hike scheme was nothing but a game of smoke and mirrors. This manipulation of the money supply is going to affect the stock markets dramatically; every single expert that refuses to adapt will be flung under the bus; there will be no exceptions.
The markets will experience many corrections ranging from wild to mild, but almost all of them will prove to be buying opportunities unless the trend changes. If one takes a look at the megatrend (megatrends are ultra-long term trends) then every back-breaking correction has to be embraced; however, by employing human emotion as a timing indicator, we can determine the optimum time to jump in and out of the markets.
Easy Money altering Market Dynamics
Such vast amounts of money sloshing around can alter the picture dramatically; what should happen in most cases does not. Under normal circumstances, precious metals should have soared to the moon, inflation should have been rampant, commodities (in general), should have risen in value. The housing sector should have tanked as rates would have risen in an inflationary environment, hundreds of business should have filed for bankruptcy, the stock market should have experienced another back-breaking correction, and the list of woes goes on. But almost none of the above has occurred, which clearly indicates that the old tools economists and financial experts are relying on are practically useless.
Random Quotes About Fiat Currency
“Growth for the sake of growth,” says Edward Abbey, “is the ideology of the cancer cell.”
“Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist.” economist Kenneth, Boulding
“If corporations are indeed ‘persons,’,” David Niose writes in Psychology Today, “their mental condition can accurately be described as pathologic
Be prepared for the unprepared and remember everything can change but human emotions never do; 90% of humans are wired to do the exactly the same thing at precisely the wrong moment, ensuring that the maximum amount of damage will be inflicted by their ill-planned actions. If you can identify the emotion driving the masses, it is not too hard to find a way to stay out of harm’s way.
However, every problem ranging from declining moral standards, corrupt politicians, surge in wars, political polarisation, and a host of other terrible factors, can in some way be attributed to FIAT Money. As the money supply increases, the situation will continue to deteriorate. Freedom levels have to be curtailed the more a nation debases its currency and nowhere will this been seen more clearly in the US. Think about how much freedom we have lost since 911 and how the national debt soared after it.
Taking things are a step further
This 2-hour movie is an excellent starting point as to why the Top Players go out of their way to control the masses. The idea has always been to target the next generation at the earliest age possible, and with the passage of time, these guys are getting better and better at this game. This video covers a lot more than this concept, hence the length, it definitely makes for an interesting watch.
Final Parting Thoughts on Fiat Currency
Never wear your emotions on your sleeves; observe and use the data to formulate a plan. If one is part of the emotional chaos, one cannot see or hear anything other than the picture they are being directed to examine. Only a calm mind can see what is going on. You have a millisecond to question the emotion that is about to take over; will you examine it and in doing so open a new door, or will you allow it to take over and lead you astray. Insanity is doing the same thing over and over again and hoping for a new outcome. New outcomes come from new actions, not hope; change the angle of perception and in doing so change the outcome.