Costa Rica is one of the most famous spots in the world for surfing – waves can get massive.
Surfers paddling into them endure an exhausting process just to get out to the lineup.
No matter how many duck dives, another white-foam-tipped, blue swell is always waiting on the surface.
By the time you get past all the pummeling of the ocean, your arms can feel like Jello.
It’s a lot like what we’re seeing in today’s market outlook…
Like a Costa Rican surfer, markets are getting a little tired and a bit “Jello-ish.”
Of course, this was bound to happen after years of the exhausting processes yielding artificially smooth market conditions.
All thanks to the geniuses at the Fed distorting free price-discovery via suppressed interest rates, reckless money printing, and deficits without tears…
Now a “Jello-armed” Fed continues in vain to control the growing swell – as a massively destructive and dangerous wave looms large in the distance.
Ignoring the Elephant in the Room: Debt
The Wall Street “experts” are ignoring the elephant in the room.
Unlike the tabloid-ridden main stream media, which thrives on fear, bad news, and drama, the bubble-head financial media thrives on hope, bullish memes, and temporary spin-cycles.
After all, the financial industrial complex lives on fees, and fees are higher when markets-and hence portfolios and clients-are higher. This means the experts want to make you feel “high” even when the facts say otherwise.
Ever since the Fed stepped past Main Street and artificially saved the top 10% of America via an artificial stock-market recovery in 2008, such hope-selling was easy.
Indeed, we’ve had over a decade where markets only went up and hence the sales-pitch noise was easy to absorb.
A lot of these financial reporters and “experts” kind of remind me of some guy sitting at the wheel of a fancy car.
He’s bragging about the leather seats, his Blaupunkt stereo, the sweet set of woofers he had installed and the fancy Porsche logo on the steering wheel.
He loves the surface shine and the cool sounds.
But what he’s not seeing is the four flat tires, the broken brake pads, a clogged fuel injector, and the muffler dragging on the road…
How to Invest in a Bad Market with Problems Ahead
When you combine that debt elephant with a tightening Fed (i.e. no longer buying U.S. debt) and a government issuing more debt (i.e. U.S. Treasuries), you have a problem.
As rates trend up in the backdrop of a debt-driven (and completely fake) “recovery,” the debt party that we’ve gotten drunk on since 2008 ends with more pain than the pleasure we hitherto enjoyed.
The obvious question for many of you is this: If the party is about to end, and if markets have far more risk to offer than reward, just what the heck are you supposed to invest in?
In other words, do you paddle in or paddle out?
The first (and most important) part of the answer boils down to common sense, a quality so otherwise ignored among the fluff of market supermen in suits spewing out Wall Street jargon on CNBC or Bloomberg TV…
Would anyone in their right mind buy a $50.00 pair of shoes marked up to $150? Or would you rather wait for those sneakers to go on sale for $20.00?
Although the answer seems obvious, 90% of market homo sapiens do the very opposite.
They buy at tops (herd delusion) and sell at bottoms (herd panic).
Do you want to be a part of that herd?
If you have a portfolio that is facing a massively overvalued market in the backdrop of history’s greatest national and global debt bubble, it should be fairly obvious that the risk far outweighs the reward.
It should be fairly obvious that the best thing to invest in is anything but the stock and bond markets…
Then Go to Cash
Perhaps you say NO! Perhaps you are afraid of missing out.
But missing out on what?
There’s so little upside ahead, and so much downside to come, the best thing is to get off this Titanic market before it hits the iceberg.
Whether you’re a Texas billionaire or a millennial with a 401K at a cannabis start-up, the smart move today is to recognize the most important rule in getting stock-market rich.
Fortunes are made by not losing money.
Get out at these tops and get back in when the markets bottom.
It’s that simple.
Of course, some will argue that it’s impossible to know where the “top” is.
Folks, there’s no crystal ball of perfect market timing, but compared to prior bubbles, does this look like something close to a top?
In the interim, be careful out there.
April 17 2019