Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Stop Believing The 'Economy' Is The Same As The Stock Market - 12th Jul 20
Spotify Recealed as The “Next Netflix” - 12th Jul 20
Getting Ahead of the Game: What Determines the Prices of Oil? - 12th Jul 20
The Big Short 2020 – World Pushes Credit/Investments Into Risk Again - 11th Jul 20
The Bearish Combination of Soaring Silver and Lagging GDX Miners - 11th Jul 20
Stock Market: "Relevant Waves Vs. Irrelevant News" - 10th Jul 20
Prepare for the global impact of US COVID-19 resurgence - 10th Jul 20
Golds quick price move increases the odds of a correction - 10th Jul 20
Declaring Your Independence from Currency Debasement - 10th Jul 20
Tech Stocks Trending Towards the Quantum AI EXPLOSION! - 9th Jul 20
Gold and Silver Seasonal Trend Analysis - 9th Jul 20
Facebook and IBM Tech Stocks for Machine Learning Mega-Trend Investing 2020 - 9th Jul 20
LandRover Discovery Sport Service Blues, How Long Before Oil Change is Actually Due? - 9th Jul 20
Following the Gold Stock Leaders as the Fed Prints - 9th Jul 20
Gold RESET Breakout on 10 Reasons - 9th Jul 20
Fintech facilitating huge growth in online gambling - 9th Jul 20
Online Creative Software Development Service Conceptual Approach - 9th Jul 20
Coronavirus Pandemic UK and US Second Waves, and the Influenza Doomsday Scenario - 8th Jul 20
States “On the Cusp of Losing Control” and the Impact on the Economy - 8th Jul 20
Gold During Covid-19 Pandemic and Beyond - 8th Jul 20
UK Holidays 2020 - Driving on Cornwall's Narrow Roads to Bude Caravan Holiday Resort - 8th Jul 20
Five Reasons Covid Will Change SEO - 8th Jul 20
What Makes Internet Packages Different? - 8th Jul 20
Saudi Arabia Eyes Total Dominance In Oil And Gas Markets - 7th Jul 20
These Are the Times That Call for Gold - 7th Jul 20
A Reason to be "Extra-Attentive" to Stock Market Sentiment Measures - 7th Jul 20
The Beatings Will Continue Until the Economy Improves - 6th Jul 20
The Corona Economic Depression Is Here - 6th Jul 20
Stock Market Short-term Peaking - 6th Jul 20
Gold’s Major Reversal to Create the “Handle” - 5th July 20
Gold Market Manipulation And The Federal Reserve - 5th July 20
Overclockers UK Custom Build PC Review - 1. Ordering / Stock Issues - 5th July 20
How to Bond With Your Budgie / Parakeet With Morning Song and Dance - 5th July 20
Silver Price Trend Forecast Summer 2020 - 3rd Jul 20
Silver Market Is at a Critical Juncture - 3rd Jul 20
Gold Stocks Breakout Not Confirmed Yet - 3rd Jul 20
Coronavirus Strikes Back. But Force Is Strong With Gold - 3rd Jul 20
Stock Market Russell 2000 Gaps Present Real Targets - 3rd Jul 20
Johnson & Johnson (JNJ) Big Pharma Stock for Machine Learning Life Extension Investing - 2nd Jul 20
All Eyes on Markets to Get a Refreshed Outlook - 2nd Jul 20
The Darkening Clouds on the Stock Market S&P 500 Horizon - 2nd Jul 20
US Fourth Turning Reaches Boiling Point as America Bends its Knee - 2nd Jul 20
After 2nd Quarter Economic Carnage, the Quest for Philippine Recovery - 2nd Jul 20
Gold Completes Another Washout Rotation – Here We Go - 2nd Jul 20
Roosevelt 2.0 and ‘here, hold my beer' - 2nd Jul 20
U.S. Dollar: When Almost Everyone Is Bearish... - 1st Jul 20
Politicians Prepare New Money Drops as US Dollar Weakens - 1st Jul 20
Gold Stocks Still Undervalued - 1st Jul 20
High Premiums in Physical Gold Market: Scam or Supply Crisis? - 1st Jul 20
US Stock Markets Enter Parabolic Price Move - 1st Jul 20
In The Year 2025 If Fiat Currency Can Survive - 30th Jun 20
Gold Likes the IMF Predicting a Deeper Recession - 30th Jun 20
Silver Is Still Cheap For Now - 30th Jun 20
More Stock Market Selling Ahead - 30th Jun 20
Trending Ecommerce Sites in 2020 - 30th Jun 20
Stock Market S&P 500 Approaching the Precipice - 29th Jun 20
APPLE Tech Stock for Investing to Profit from the Machine Learning Mega trend - 29th Jun 20
Student / Gamer Custom System Build June 2020 Proving Impossible - Overclockers UK - 29th Jun 20
US Dollar with Ney and Gann Angles - 29th Jun 20
Europe's Banking Sector: When (and Why) the Rout Really Began - 29th Jun 20
Will People Accept Rampant Inflation? Hell, No! - 29th Jun 20
Gold & Silver Begin The Move To New All-Time Highs - 29th Jun 20
US Stock Market Enters Parabolic Price Move – Be Prepared - 29th Jun 20
Meet BlackRock, the New Great Vampire Squid - 28th Jun 20
Stock Market S&P 500 Approaching a Defining Moment - 28th Jun 20

Market Oracle FREE Newsletter

AI Stocks 2020-2035 15 Year Trend Forecast

America's Financial Apocalypse, What Can YOU Do as an Investor?

Stock-Markets / Financial Crash Sep 25, 2008 - 04:53 PM GMT

By: Mike_Stathis

Stock-Markets Diamond Rated - Best Financial Markets Analysis ArticleDividends
At this point, there is very little you can do. If you have suffered large losses, you either have traditional mutual funds or you believed what the “experts” told you on television; perhaps both. If you have not already liquidated your holdings in the stock and bond markets, you might consider doing so after some market strength, if in fact that occurs anytime in the near future. Your ultimate decision should depend in part on your tolerance for more downside, your investment horizon, and whether you can write-off your losses. If you insist on remaining in the market, I continue to recommend healthcare, oil trusts, and cash.


If you are going to expose yourself to this market you had better be collecting large dividends from companies that have a strong dividend policy. I particularly like Pfizer and Pen Growth. But once again, understand that there is considerable downside to the market, which means even the best investments can decline in price.

Manage Risk

Depending how you define a bear market, there have been about 13 over the past 7 decades, averaging about 31% down (If you trace the data back further the numbers would be even worse). Ask yourself how “average” the current crisis is, and then you will get a better idea of the downside risk. Finally, as I discussed in my book and more recently in a previous article, http://www.marketoracle.co.uk/Article5809.html drawing a rough least-squares line through the 100-year performance chart of the Dow, the fair market value lands around 8500. And that's without a crisis.

Also note that corrections tend to overshoot this fair value mark. In other words, the possibility of a Dow below 8000 is not out of the question. But such low values are more probable for crash scenarios. If a stock market crash is averted, the market is likely to trade sideways with smaller sell-offs and rallies for a number of years, as the fair market value increases due to progression of this slope through time. This is basic information every sophisticated investor should know. Wall Street won't point it out because they are either too ignorant or don't want you to know the reality; perhaps a combination of both. But these scenarios are not based solely on charting. You also have to understand the macroeconomic picture. I wrote about this previously. I advise you to revisit this piece. http://www.marketoracle.co.uk/Article5809.html

Precious Metals

For those who continue their love affair with gold and silver, remember you need to trade the volatility. Gold is likely to reach $2000 over the next few years, perhaps sooner as one can ever predict exact timing (similar to the unexpected surge in oil prices). Either way, holding gold is a sucker's move (as is silver) for reasons discussed in my previous articles and detailed in my book. In short, if you are not able to trade gold's tremendous volatility you are exposing yourself to a good deal of risk the higher price you buy it. You need to remember that gold will eventually reverse its longer-term trend and settle in the $200 to $400 range, where it could remain for many years. If you do not agree, I suggest you study the 100-year chart.

It's gold. It's not a growth stock. It goes up and it comes down. You might want to check Kitco. You'll notice they only have gold charts going back to 1975. I wonder why. The answer should be obvious. Don't be naïve. Be smart and look at the 100- or even 200-year price chart of gold. You'll only get the unbiased truth from me because I'm not offering any gold for sell nor am I trying to gain your investment business. My only clients are institutions, not individuals.

You should also note that gold is NOT a hedge against inflation. It is a hedge against deflation. Anyone claiming gold to be a direct hedge against inflation simply has no idea what they are talking about – virtually everyone who mentions gold as an investment. It is also a hedge against a falling dollar which is sometimes linked to inflation. In the current economic environment, the dollar's fall has been linked to inflation so there is an indirect and inverse correlation with inflation and the dollar. Gold mainly rises during periods of crisis. You can confirm this if you track the spikes in gold throughout 2008 upon problems with the financials.

As the dollar continues to be debased, gold will continue to rise. And you had better believe the dollar will continue to be debased. Destroying the dollar appears to be Bernanke's main goal. But why might the Fed want to debase the dollar? As mentioned in “ America 's Financial Apocalypse” and even in my landmark article (which warned investors to sell the market and re-short the financials when the Dow was 13,200) a weak dollar would help cut the trade deficit. And the inflation created by the Fed would make it easier for Washington to pay off its staggering $10-plus federal debt, which will soon soar further from these bailouts alone.

As you may already know, SKF is an exchange-traded fund (ETF) which tracks the performance of the inverse performance of the financials, but does so by a larger magnitude. You can think of it as a fund that uses leverage to short the financials. As you might expect, the year-to-date price chart for gold shows similarities to that of SKF.

Foreign Currencies

You also might want to protect what I expect to be a continued fall in the dollar by investing in foreign currencies like the Yen and Swiss Franc. Make no mistake. As I have mentioned many times in the past, the real dollar crisis is ahead. The dollar could very well lose 50% of current values. One thing I am sure of. The dollar will make new lows.

Cash for Opportunities

Cash is the best way to position yourself to take advantage of America 's financial apocalypse – an historic event that promises to only get worse. But once the global recession subsides in a few years, Asia and Latin America will mount a strong recovery while America lingers in a silent depression, unbeknownst to most. Those who have cash to buy Chinese and Brazilian stocks will fare particularly well. My investment stance has not changed since writing “ America 's Financial Apocalypse” in 2006. Valuable forecasts and investment guidance don't change every month. They persist and are modified only after material events surface and alter the long-term trends. Always remember that.

By Mike Stathis
mike@apexva.com

Copyright © 2008. All Rights Reserved. Mike Stathis.

Mike Stathis is the Managing Principal of Apex Venture Advisors , a business and investment intelligence firm serving the needs of venture firms, corporations and hedge funds on a variety of projects. Mike's work in the private markets includes valuation analysis, deal structuring, and business strategy. In the public markets he has assisted hedge funds with investment strategy, valuation analysis, market forecasting, risk management, and distressed securities analysis. Prior to Apex Advisors, Mike worked at UBS and Bear Stearns, focusing on asset management and merchant banking.

The accuracy of his predictions and insights detailed in the 2006 release of America's Financial Apocalypse and Cashing in on the Real Estate Bubble have positioned him as one of America's most insightful and creative financial minds. These books serve as proof that he remains well ahead of the curve, as he continues to position his clients with a unique competitive advantage. His first book, The Startup Company Bible for Entrepreneurs has become required reading for high-tech entrepreneurs, and is used in several business schools as a required text for completion of the MBA program.

Restrictions Against Reproduction: No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without the prior written permission of the copyright owner and the Publisher. These articles and commentaries cannot be reposted or used in any publications for which there is any revenue generated directly or indirectly. These articles cannot be used to enhance the viewer appeal of any website, including any ad revenue on the website, other than those sites for which specific written permission has been granted. Any such violations are unlawful and violators will be prosecuted in accordance with these laws.

Requests to the Publisher for permission or further information should be sent to info@apexva.com

Books Published
"America's Financial Apocalypse" (Condensed Version)  http://www.amazon.com/...

"Cashing in on the Real Estate Bubble"  http://www.amazon.com/...

"The Startup Company Bible for Entrepreneurs"   http://www.amazon.com...

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Mike Stathis Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules