January 24, 2020
How many 1,000% gains have you personally experienced?
I have to admit, I’ve got zero to my name – at least with regular stocks.
Don’t get me wrong… I’ve had plenty of winners. And I’ve even owned several stocks that went on to become 10-baggers. But I’ve always sold too soon…
For example, one of my best returns was an early stake in Tesla at about $36 per share. The problem is, I sold it at $180… when valuations started getting crazy.
Tesla has since soared to more than $550 today.
So when American Consequences feature contributors Matt McCall and Dr. Steve Sjuggerud – who between them have dozens of 1,000%-returning stocks – say that it’s time to “get out of cash”… I’m very interested.
As they recently detailed in an exclusive video, only half of Americans have any money invested in stocks. As Dr. Sjuggerud put it:
If all of your market information is coming from the news, it’s almost impossible to know exactly what to do right now. Remember, the financial media is beholden to advertisers and sponsors, I’m not.
So if you’ve missed out on the runup so far, you aren’t alone – and it certainly isn’t your fault.
But as they explain, it’s certainly not too late to take part in the massive wealth creation event that’s happening right now in the stock market.
For example, think back to 1998. We had a similar overvalued market… just like we do now. And the yield curve had inverted… just like it recently did. And thousands of market pundits said that stocks couldn’t go any higher… just like they’re saying today.
But if you had sold in 1998, you would have missed out as the Nasdaq more than doubled over the next few years. Steve notes: “Stocks have followed the same pattern throughout the last four bull market peaks in U.S. stocks… The yield curve inverts. Stocks soar for 12-24 months. And then they crash.”
It’s that eventual, inevitable crash that makes this message so dangerous.
Because yes, you can absolutely make a lot of money in the market today. But you also have to be prepared and have a plan for when the Melt Up turns into a Melt Down.
Steve goes on to say:
That’s why your actions today are so important. This could be your last chance to build a war chest of wealth that can last you through the coming crisis. Opportunities like this happen only a few times in a lifetime.
But knowing when to get out of stocks and escape the inevitable crash is just as crucial. You need to know how to protect your profits.
And below, we’re featuring an essay from Steve about the one thing that really matters if you’re an investor today…
A Controversial Truth About the Financial Markets
Dr. Steve Sjuggerud
There’s a controversial truth about markets…
It’s simple, but it’s counterintuitive. And you’ll need a big scoop of humility if you’re going to take advantage of it.
Are you ready? Here it is… You need to accept that you can’t know everything.
The simple fact is that we live in a world of information. It invades our everyday lives. And it invades our investment decisions, too.
Do a Google search for “outlook on tech stocks” or “stock market valuations,” and you’ll get millions of results. There’s no end to the opinions on the market. And this leads to a common logical “hiccup”…
Learning more won’t necessarily make you a better investor.
You shouldn’t embrace ignorance, of course. But you can’t know everything. And the good news is, you don’t need to.
Today, I’ll share why…
I’ve been in the investment world for two and a half decades. I’ve learned a lot over the years. But this might be the single most valuable lesson…
About 95% of the investment information out there is useless. The hard part is figuring out the 5% that matters.
I’ve put this to work with great success throughout my career…
In the mid-2000s, I began studying and eventually recommending gold and gold coins. The metal was coming off a 20-year bear market. But I saw the writing on the wall from the Federal Reserve.
We had entered a period of easy money. And after decades of losses for the metal, that made a major rally a near-certainty. Gold went on to rally from less than $400 an ounce to nearly $2,000 an ounce.
I didn’t need to understand mine supply or global demand to figure out what would happen with gold. Those pieces were secondary to the big idea. I found the 5% of information that mattered – and ignored the rest.
I did this again in 2010. That’s when I unveiled my “Bernanke Asset Bubble” thesis.
It was a simple idea. I noted that the Federal Reserve would do anything necessary to boost stocks and the economy. It wanted to keep the easy money flowing. So my simple thesis was…
Interest rates would stay lower than anyone could imagine for longer than anyone could imagine. And that would cause asset prices to soar.
Sure, we were just a year removed from the worst stock bust in nearly a century. Europe was in a debt spiral. The U.S. debt problem was far from fixed… And the global economy in general was on shaky ground.
The 95% of information contained plenty of warning signs. But none of it mattered.
The 5% – the part that did matter – told me that stocks and real estate could soar. So I pounded the table. And I’ve been doing so ever since.
That has been the right call. Stocks and real estate have soared. And I’ve stayed bullish because the 5% that matters continues to point me in that direction.
Today’s 5% is the massive market Melt Up that’s currently underway. It seems like no matter the negative headlines, stocks continue pushing higher. We’re late in this bull market, but gains are accelerating.
I’ve seen this before. It’s exactly what happened in the late 1990s during the run-up to the dot-com peak.
Of course, the bust that followed was brutal. But savvy investors who followed the market higher – and smartly got out – made a killing. That’s what I plan to do this time around, too.
For now, the 5% of information driving the market says the Melt Up is in full force. And that means we want to stay long.
Now here are some of the stories we’re reading…
P.J. in the Washington Post: We need a political system that isn’t so sure of itself
If today’s political leaders would rather burn the milquetoast and ignore the wishes of the wishy-washy, Extreme Moderates should hang them out with the wash and they’ll be toast. Mixed-metaphorically speaking, of course, because harsh words and rash actions are not our style.
Trump’s comments on Musk come as shares of Tesla have surged recently, more than doubling since late September, and hitting all-time high after all-time high. The stock market value of Tesla set to reach $100 billion. Its market capitalization is greater than those of General Motors and Ford combined.
The Pentagon made $35 trillion in accounting adjustments last year alone – a total that’s larger than the entire U.S. economy and underscores the Defense Department’s continuing difficulty in balancing its books.
While living in the high-end digs, Biden has been fighting a court order to turn over his financial information as part of a paternity suit in Arkansas. On Tuesday, Circuit Judge Holly Meyer ordered Biden to appear in court on Jan. 29 and “show cause, if any exists, as to why he should not be held in contempt” for allegedly failing to submit the information by the court’s deadline earlier this month.
Bankrate reports indicate that the percentage of U.S. adults who would use their savings to cover a $1,000 emergency room visit or car repair has remained within the range of 37% to 41% since 2014.
And let us know what you’re reading at [email protected].
Publisher, American Consequences
With P.J. O’Rourke and the Editorial Staff
January 24, 2020