NOTCH ON THE BELT: Stocks Bite The Bullet!

All I’m hearing from investors is that they’re not sure if the recession will hit this year or the next. With regards to surveying investors about a bear market, the answers I get are anywhere from “the data is falsified and tampered with – we’re already in one. Don’t believe the government” to “We’re going to see a full reset. Expect the worst of times.”

Investors are definitely not exhibiting any excitement.

One thing I know is that we live in a low-returns world, in general.

The S&P 500 has, for the past 18 years, returned 65%, not including dividends. Long-term investing is, simply, different than what it used to be in the 1980s and 1990s, when annual returns were so high.

With interest rates this low, post-inflation returns, no matter which asset class you’re looking at, are not high. If any asset can post unusually high yields or healthy price appreciation for an extended period of time, it is because it’s in a bubble. Case in point would be real estate in the U.S. in 2006, rare earth minerals in 2012, cryptocurrencies in 2017, or tech stocks in the Dot.Com era.

Because entire sectors can reach these bubble valuations, other sectors can dive deep into liquidation levels.

Due to these extremities in sentiment, we get conflicting data all the time.

I’ve seen countless “experts” raise the point that we’re heading into severe deflation for years. On the other hand, a similar number of “gurus” have rung the alarm on inflationary nightmare scenarios, due to the mountains of debt all over the place.

So many of these outlooks and forecasts have come and gone, unrealized, that investors have rightfully become cynical about falling in love with any economist or blogger, who claims to see the future.

Look at the data to draw conclusions about the PRESENT, instead of focusing your energy and time on building a map of the future.

For now, here’s what we know:

  1. U.S. companies hired 71% more staff than expected over the holiday season.
     
  2. Employees got paid 3.2% more this past December than they did in the previous year.

That’s not all, though.

A decrease in hiring preceded every recession since 1968, but today we actually see an increase.

Investors are also deeply concerned with credit growth and leverage. CEOs know that they are leveraged the same as we do. In 2011 and in 2016, the last time credit posed a problem, the markets tumbled, as they did in December. CEOs got the warning signs, internalized them, and acted accordingly.

Courtesy: Zerohedge.com

Balance sheets are certainly leveraged, according to investors, but stock prices have come down as well, pricing-in these concerns.

93% Of Investors Generate Annual Returns, Which Barely Beat Inflation.

Wealth Education and Investment Principles Are Hidden From Public Database On Purpose!

Build The Knowledge Base To Set Yourself Up For A Wealthy Retirement and Leverage The Relationships We Are Forming With Proven Small-Cap Management Teams To Hit Grand-Slams!

    As I write this, I also check simple indicators of a slowdown, ones from the real world. Where I am, retail traffic at the malls is healthy; restaurants are full; hotels are enjoying high occupancy rates; people are spending.

    Yes, there are many problems, but I can go back to any calendar year in this bull market and find an overwhelming amount of gloomy headlines as well. Reasons to be bearish are always there.

    The bottom line is that, judging by data and by real measures, for now, a recession isn’t likely in the near-term.

    It doesn’t mean we’re out of the woods when it comes to government debt or to personal loans, but it does mean that our theme from 2018 of a Blow-off Top to end this bull market, remains intact.

    Courtesy: Zerohedge.com

    As you can see, the markets are mimicking ’07-’09 price action quite eerily, so in the weeks ahead, we’ll be able to tell if the party is over, or if this was merely a coffee break between DJ sets and the party people still have energy to take stocks even further.

    Best Regards,

    Tom Beck
    Research Partner, PortfolioWealthGlobal.com

    Protect Yourself Now, By Building A Fully-Hedged Financial Fortress!

    Governments Have Amassed ungodly Debt Piles and Have Promised Retirees Unreasonable Amounts of Entitlements, Not In Line with Income Tax Collections. The House of Cards Is Set To Be Worse than 2008! Rising Interest Rates Can Topple The Fiat Monetary Structure, Leaving Investors with Less Than Half of Their Equity Intact!

      Legal Notice:
      This work is based on SEC filings, current events, interviews, corporate press releases and what we’ve learned as financial journalists. It may contain errors and you shouldn’t make any investment decision based solely on what you read here. It’s your money and your responsibility. The information herein is not intended to be personal legal or investment advice and may not be appropriate or applicable for all readers. If personal advice is needed, the services of a qualified legal, investment or tax professional should be sought.Please read our full disclaimer at PortfolioWealthGlobal.com/disclaimer
      Putin Leveraging… Biden’s Costly Mistakes

      Putin Leveraging… Biden’s Costly Mistakes

      The Wagner Group is comprised of about 50,000 soldiers. While I was in the French Alps in late June, my phone blew up with breaking news alerts about an armed rebellion in Russia led by Yevgeny Prigozhin (we know what happened to him…). When he left his battle station along with some 20,000 mercenaries after months of criticism directed towards the Kremlin, he attempted to storm the capital.

      read more
      We’ll See OUTRAGEOUS Gold Prices Soon

      We’ll See OUTRAGEOUS Gold Prices Soon

      More cash is accumulating in money market accounts than ever before. For now, these highly liquid interest-bearing financial assets generate the type of yields that everyday savers could have only dreamed of in the past 15 years, but there are hidden costs attached to this juicy return.

      read more
      An Insidious National Security Threat

      An Insidious National Security Threat

      Most educated Americans would let their minds pivot towards the national debt, when listing the country’s greatest and most monumental national security threats, but that just doesn’t seem to be the consensus.

      read more