The one clear thread that ran through the near entirety of your many questions that I answered in my last issue was not surprisingly this: What does one do next to preserve and make money?
Stocks? Growth or value? Small cap or large? Gold? Silver? Mining? Tech? Cash? Cannabis names?
The majority of you are understandably wondering how to get a leg-up, and humbly (i.e. Christian) asked if one can even compete with all the hedge-fund fancy lads out there?
Others, nearing or past retirement worried how to make enough in a short period to feel safe, especially after having been beaten down in the last crisis of 2008.
Some of you (like Bill T) are going nearly all to cash in anticipation of a melt-down.
For cash, I recommend simple money market accounts or similar in ETFs.
Others (like Joseph) want to make money just to help others.
Some of you are history buffs and seasoned investors, others are admitted novices thirsty for more blunt-speak and experience.
What Will Happen Next? When? And What Should I Invest In?
Many of you are asking how much time? And what stocks to buy? Or what sectors are safest?
You are asking for specific names, allocations and sectors.
Currently, I am preparing a four-part series to answer these very questions.
Specifically, the series addresses the case for a near-term melt-up in the stock market based upon a list of factors which you can easily track.
The second part of this series will give equal attention to a list of factors that show how such a melt-up will most likely be followed by a much more serious melt-down in the markets.
In the third and fourth part of this series, I will then list specific examples of the best vehicles, stocks and strategies to invest in during this gyrating, experimental and upward and downward “melting” market.
I will also answer many of your questions (i.e. Larry) about options strategies, inverse ETFs, and other ways to trade a falling market as well as rising market.
Thus, rather than re-eat all that data here, I ask that you carefully consider this four-part series. It will be in your inbox shortly.
What You Are Seeking
For those of you seeking to be financially stable, we’ll show conservative pathways to this, and help you invest as markets turn more volatile, warning and guiding you before the rain starts, not after like everyone else.
For those of you considering using options strategies, we provide precise signals on precise names, using calls and puts depending on the market direction.
For those of you seeking to boost your 401K, we’ll give you portfolio recommendations and allocations that make sense in the current backdrop of higher risk for less reward.
This might mean far greater allocations to cash rather than “instant wealth,” but our view on this is simple: fortunes are made at market bottoms rather than market tops.
If you’re looking to double your 401K as markets are topping in a stock/bond pie chart portfolio, we don’t feel that this a reasonable strategy right now.
The only way to achieve such quick wealth is via exceptional levels of risk, which most folks should not be assuming, even as markets temporarily melt-up with Fed “support.”
As for non-market related questions, such as those of you (i.e. Ron) inquiring about investing in multi-family units etc., I can give some quick thoughts here, based largely upon my long-term view of an inevitable recession to come.
If you’ve read, for example, my free report on The Unemployment Lie, or read my observations about the dying middle-class in America, then you already know that Wall Street has skyrocketed under the Fed, while Main Street has been forgotten.
This sickening but real truth means less folks will be owning homes or able to afford one as our economy slowly rots from the bottom up.
Rental properties will be in increasing demand.
If you can find good value in rental units, such an investment will pay out well in the long run.
But again, this is general rather than specific advice, as much will hinge about the specifics of each deal.
Gold & Silver
Others (i.e. Tony) have been asking about gold and silver investments-or just about precious metals in general.
I’ve touched upon these themes in other reports, but will broadly repeat here that the amount of damage the central banks of the world have done to their local currencies makes precious metals an obvious and rational long-term investment as a common-sense currency hedge.
In Europe, the Swiss lead by example allocating anywhere from 10-15% of their portfolios into gold and silver.
Today, silver offers more bang for the buck in terms of value, as the price ratio of silver to gold is at record lows.
Gold, of course, is fine as well, and historically the best hedge against dying currencies.
Both gold and silver are long-term investments, and thus even if their price falls in the near-term, (even dramatically), that is not to be feared.
Instead, you should think of such investments as flood insurance for a house on a river: someday you’ll need it, and won’t care how much you paid for it.
Tickers like GLD and PHYS are good places to buy gold.
As for gold and silver miners, there are many, and they are highly risky, but can show astronomical gains much higher than their underlying metal when and if you find the right miner at the right time and price.
One key is to find miners whose production costs are lower than the underlying spot price of the metal they are extracting.
Such investments are highly volatile and only for those patient investors who can afford the risk and stomach-churning volatility.
We plan to offer a list of certain mining opportunities, but our real strength at Critical Signals Report is in equities, bonds, options, and the vehicles that trade them.
We will, however, rotate into sectors that deal exclusively in commodities, including miners, in our services to come.
Some of you (i.e. Alan) had also asked about CBD and other Cannabis investments.
There’s no doubt that so-called “sin stocks” make for good investing.
Traditionally, stocks based upon tobacco or spirits have stood the test of time as being solid performers in all market cycles, for the simple reason that in good times and bad times folks universally like to feel a little “buzz.”
After years of being criticized and outlawed by D.C. politicians as a “gateway drug” to even more dangerous forms of narcotics, cannabis was uniformly attacked as a way to get votes for being “tough on drugs.”
This was equally true of alcohol during the infamous Prohibition days of the 1920s and 1930s.
But as the U.S. got deeper into debt, the opportunities, and profits (projected to be a $23 billion industry by 2022) which cannabis could provide to state and federal tax and regulatory receipts was just too tempting.
Today, we are witnessing a public and political “change of heart.”
Money tends to change hearts in D.C., like anywhere else…
Now the cannabis industry is part of a massive “growth story” and about to become a significant profit source.
But like any emerging industry, there will be heroes and there will be goats, and most importantly there will be a period of consolidation in which the winners will slowly eat up the losers.
We’ve seen this historical consolidation reality in every major sector, whether in railroads, cars, dot.com names, cryptos, tobacco, or now: “weed.” In the early stages, many names will spike and then disappear.
Others will gain market share and become the “Microsoft” and “GM” of the weed-industry.
We are not cannabis experts, and do not dedicate ourselves exclusively to this sector.
But like any growth industry, we are tracking the winners and losers carefully before making any specific name recommendations.
As our service expands in the coming weeks, of course, we will be making specific, well-researched recommendations in this particular growth space.
What I’m Reading
Some of you (i.e. Christian) had also asked who I read or where I go to get the best, un-alloyed and “un-biased” data.
As you can imagine, I don’t rely much on the main stream media, of which I frequently enjoy mocking.
I pull a great deal of data from direct Bloomberg links and other trusted sources, morphing the same into massive, live, and interactive tools that track a great deal of technical and other fundamental data, including our own proprietary mix of leading indicators that relate to the oncoming next recession, through tools and streams otherwise unavailable to the general public.
We do all this because it matters to us, and what matters to us matters to you.
I also get the chance to read lots of investor letters from some of the top hedge-fund portfolio managers, as they frequently provide letters directly to their investors. I speak to many directly.
Such insights from professional traders and investors are more valuable than what the prompt-readers and sell-side journalists in the general media provide.
Someone (Mike) had also asked about David Stockman or Jim Rickards. I have tremendous respect for both. I also enjoy the plain-speak writing of John Mauldin.
In fact, Stockman and I come from the same home town in Michigan and I grew up playing football on the field his family donated to the local high school. David and I both come from the farm belt, and both of us have a terrible mid-western habit of speaking plainly.
And that folks, is what Critical Signals Report delivers: plain-speak, not spin.
Again, I thank you for your comments and questions and look forward to sharing signals with you as we journey together through this great Fed-experiment.
In the interim, get informed, stay safe, and be profitable out there.
4 responses to “More Answers So You Know What to Do Now”
May 05 2019