Believe it or not, there is a plausible scenario where the stock market sees a retest of the March lows before 2020 ends. It isn’t a far-fetched scenario, either. Though not the base case, another 30% or greater drop in the S&P 500 — and the Nasdaq — could happen before the year is out. If that sounds bizarre, well, that’s because it is. Remember, though, that all of 2020 has been bizarre, and the year isn’t over yet. We
Read nowSomething interesting and exciting — and profoundly bullish for precious metals and Bitcoin — happened on Thursday and Friday of last week. To explain what happened, and why it’s a big bullish deal, we need to walk through the chain of events. On Thursday, Aug. 27, Federal Reserve Chairman Jerome Powell gave a historic speech from Jackson Hole, Wyoming, live-streamed over the web, about changing the Fed’s inflation mandate. To briefly summarize the key point, Powell said the Federal Reserve
Read nowThe 60-40 portfolio has been a cornerstone of retirement strategy for decades. Around the United States and the world, hundreds of millions of retirees have had, or still have currently, some version of a 60-40 portfolio. For American retirees, though, a serious problem looms. The 60-40 portfolio is on its last legs. It is simply going to stop working as intended, for reasons that are impossible to stop. When investors fully realize what has happened — a process that will
Read nowIn TradeSmith Decoder, we nailed the 2020 silver move thus far. And it looks like there is much more to come. We took a super-sized position in a bellwether silver ETF on March 23, two days after the low. Then we added a second leg (again substantially sized) on July 9, noting the upside move could accelerate. In addition to that, TradeSmith Decoder picked up substantial exposure to silver equities, and published a special report titled “The Triple-Bullish Case for
Read nowU.S. capital markets are no longer free. If they were quasi-free markets before, they are more or less state-directed markets now. This assessment comes from Ray Dalio, one of the most connected hedge fund managers in the world. Dalio founded Bridgewater Associates, one of the largest hedge funds in the world, in 1975. His personal net worth is in the $15 billion to $20 billion range. “The capital markets are not free markets allocating resources in traditional ways,” Dalio said
Read nowWe now have a basic understanding of what powered the 2020 rebound rally, which then morphed into a lockdown mania, and which now appears to be over. This is important because, with a sense of what happened — and the various components involved — we can better understand the probability distribution of what is likely to happen next. From the current vantage point, it looks like the rally was powered by “rocket fuel” that is now running low, and may
Read nowOn Jan. 24 of this year, we noted “Three Signs Market Sentiment Has Reached Dangerous Extremes.” Within four weeks of that broadcast, the stock market peaked, and one of the swiftest bear market declines in history followed. Now market sentiment is looking extreme once again. If anything, the new levels of euphoria make the January action look sleepy. We are seeing bizarre market patterns, investor behavior that makes no sense, and even snooty dismissals of Warren Buffett. We can begin
Read nowIt’s rough out there — not just for the United States, but the entire world. The global economy is expected to face its worst recession in 80 years, according to a new Global Economics Prospects report published by the World Bank. This means that, to find a comparably bad recession year for the global economy — all countries across the board — you would have to go back to 1940, the first full year of World War II (which began
Read nowThe stock market was insanely strong last week. And we don’t mean strength within normal boundaries either — as in, “the market had a strong performance” or “the market looks strong.” This was strength well beyond the bounds of normal. It was strength so freakish, the standard explanations cannot account for it. Here is Mark Hulbert, a columnist for MarketWatch, describing the market on May 30: …94% of S&P 500 stocks now trade above their 50-day moving average (according to
Read nowAfter we explained why deflation is coming, some of you wrote in to ask: “What happens to gold if we get deflation?” The short answer is that, in deflationary environments, the value of gold tends to go up, possibly by a lot. We have empirical evidence of this from the 1930s, a decade where gold mining stocks saw stratospheric gains. The price of gold, though fixed by the government, went up in the 1930s too; when President Roosevelt revalued gold
Read nowAs of late February 2020, the major U.S. indexes are down more than 3% — and gold stocks are up more than 3%. On a day when global equities were hit hard by coronavirus (COVID-19) fears, gold and gold stocks surged to brand-new, multi-year highs. That is not a coincidence. Gold miner profit margins are leveraged to the long-term gold price. A key metric is the miner’s all-in cost of production, and how far above that threshold the current gold
Read nowThe zero-cost investing model is taking over Wall Street. Everywhere you look, the cost of participation is being driven towards zero. Fees and commissions are shrinking, to the point they nearly vanish. And when it comes to investing and trading via brokerage firm applications, the “zero” in zero cost is literal. For buying and selling stocks through various brokers and apps, there is often no charge at all these days. The trend was just reinforced by news of another big
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